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Distributors Bringing Niche Bikes to Market

Published July 31, 2009

BY MARC SANI

ASPEN, CO—Last summer Michael Wamtler sold $79,000 worth of Storck bicycles in one week.

And Wamtler has The Hawley Company to thank after adding the high-end German brand at Interbike. “I met Marcus Storck years ago at Interbike and, for awhile, I was one of three dealers that carried them,” Wamtler recalled. But then Storck pulled out of the market.

“I was at Interbike two years ago, ran into Marcus, and he took me over to the Hawley booth. So I brought them in again,” said Wamtler, owner of Aspen Velo, a high-end pro shop tucked behind Aspen’s historic Jerome Hotel.

Distributors selling unique brands like Storck offer dealers a chance to spruce up their showroom, differentiate their product lines, attract new customers and do so with modest financial risk.

And in the right market, it could be a profitable venture putting a boutique line on the floor.

Euro Brands Gain U.S. Foothold. While a brand like Storck can give a dealer a certain cache in the market, it’s not a brand that an average dealer would want to carry, said Dave Goeppner, Storck’s division manager at Hawley.

While total unit sales for brands like Storck, Lapierre, Commencal, Cinelli, Argon 18, Ridley, BMC, Pinarello, Merckx and others is small, price tags are often hefty, margins are good, and there’s less discounting at retail. Dealers also enjoy strong territorial protection and can add these lines with minimum buy-in programs.

Preston Martin, co-founder and vice president of BTI, a Santa Fe, New Mexico, distributor, said the decision to distribute Commencal, a French line best known for its downhill and four-cross success, has shifted BTI from that of a traditional distributor to a more marketing-driven enterprise.

Besides Commencal, BTI also markets and distributes Voodoo and Cinelli. “For us, it’s about building a loyal dealer base around the country. Dealers can invest in these niche brands and add them to their product lines. At the same time they become a regular BTI customer for those brands as well as the parts and accessories that complement them,” Martin said.

Seattle Bike Supply, besides distributing house brands Torker and Redline, added Lapierre two years ago after Accell Group N.V., a Netherlands company, bought them. Before acquiring SBS, a lone Colorado rep had sold Lapierre.

“It was a fledgling start for Lapierre,” said Chuck Hooper, president of SBS. “It would be like me trying to set up something in France without a French connection.

“When Accell bought us, we didn’t have a higher priced, technically specific line,” he added. “The exclusive nature of the product is one reason we carry them.”

Not Immune to the Economy. But all is not glitter and gold for distributors who often have to step up and market these lines aggressively to gain traction in a competitive market. That demands a boost in marketing budgets for advertising, floor space at trade shows and consumer events and other sales efforts.

And like other major suppliers they are experiencing a pullback in consumer spending on high-end bikes. These brands aren’t recession proof.

For SBS’ Lapierre brand, Hooper said he’s fortunate to have the backing of a company that understands the industry and Accell helps with overall marketing. As for Hawley, the company has added two full-time staff members, stocked a truck with $250,000 worth of Storcks, and sends the team on the road to events and dealer meetings.

BTI’s Martin advertises in consumer magazines, like Bicycling, Mountain Bike and others. It’s not cheap, he said.

Most distributors also send bikes to magazine editors to test and, hopefully, earn a positive review.

A Big Pool of Resources. Argon 18, a Canadian company with offices in Montreal, has wrestled with U.S. distribution since its introduction at Interbike in 1999. Sinclair Imports recently added Argon 18 after the Verdi, Nevada, distributor saw Ridley executives move its line to Quality Bicycle Products, another key player. QBP distributes its house brands—Surly, Salsa and Civia—as well as BMC and Ridley.

Established distributors, like Sinclair and others, bring an experienced rep force to these brands. They also become a key player in building a brand name, said Sinclair Imports president Lance Donnell, citing his company’s work in giving Ridley, a Belgium company, a foothold in the U.S. market.

Gita Sporting Goods, another key player, has a long history with Pinarello and Merckx, said Sandy Nicholls, marketing director. “We’ve had Pinarello for 35 years and we’ve handled Merckx since 1985,” he said. “These brands are part of our identity. It’s what we do.”

Gita also is the sole distributor of Pegoretti bicycles—hand-made Italian steel and aluminum frames built by Dario Pegoretti. Gita consistently sells out of the frames they are allotted.

Like others, Nicholls said a minimum buy-in for a dealer is two bikes, although Gita has some tier-one dealers selling upwards of 25 units and more. Dealers also get strong territorial commitments from the company, he added.

But distributors can be picky about dealers they want to work with. Most want to be certain their brand gets proper presentation. Sticking a $5,000 Lapierre in the middle of a stack of cruisers isn’t proper presentation.

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