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Retailers Using Dealer Exchanges More

Published August 13, 2010

BY JASON NORMAN

MORGAN HILL, CA—As suppliers sold out of certain 2010 models by early spring, retailers began clamoring to get their hands on bikes, relying heavily on dealer exchange programs.

Brands often assist with the exchange of product between dealers that share a territory, either through their sales rep force or a B2B Web site.

“If you have bikes in your shop that you’d like to move you can post them for sale or if your shop is in need of something that we maybe don’t have in our warehouse—but another retailer has it—you can post bikes that you’re looking for,” said Ryan French about Specialized’s dealer exchange program on its B2B Web site.

French, director of inside sales and customer service operations for Specialized, said the program provides dealers an opportunity to connect, get the bike they need and ultimately close the sale.

“A dealer came by during our July product launch and told me what a help it’s been with the availability issues everybody has been having this year,” French said.

New Jersey’s Action Wheels had never used Specialized’s dealer exchange function until this year. “It has saved sales,” said Rich Daniluk, store manager at Action Wheels. “It’s been a lifesaver.”

In years past Daniluk said he never had a need to use the function—not when he could go straight to the supplier and expect the product to be there.

“Low inventory levels were definitely the catalyst,” Daniluk said. Oftentimes it’s come in handy in rescuing high-end sales, he added.

Other suppliers like Marin Bikes connect dealers with product from other shops in a more informal way. Typically Marin dealers will put a call into their internal sales rep looking for product. Marin will then determine what shop that product has been shipped to. That inside rep will then either contact the shop that has the wanted product or the outside rep that services that shop.

“The majority of the time the dealer calls in direct and talks to their inside rep here, and we’ll see what their needs are,” said Mark Vanek, marketing manager at Marin Bikes.

Vanek said a lot of dealers have inquired about this service in recent months, but that actual transactions between dealers has held steady.

“We’ve had a lot of people asking for it, but really most of the stuff that has gone out has already been sold or the dealers are unwilling to let it go because it’s the last of their retail sales opportunities,” Vanek said.

Raleigh handles dealer exchanges through territory managers in the field and customer service reps in the office.

“We find dealers appreciate the personal touch and it gets the job done pretty well,” said Steve Meineke, president of Raleigh USA. “Most of the exchanges that occur would be within a territory. I don’t know many instances where a cross-country exchange took place.”

Giant Bicycle supports its dealer transfers in a similar fashion, but the company is looking to implement a formal plan through its dealer ordering Web site in the future.

“The exchanges are handled through the retail network of the individual Giant account executive or between the AEs (outside sales reps),” said Gregg Frederick, director of sales and business development for Giant. “We look at their ability to move product from one Giant dealer to another as an added service of the AE that creates value in our working relationship with our retailers.

“Long-term we would like to provide the retailers the ability to post their needs on our G-Store through a bulletin board-style posting or an exchange,” Frederick added.

Specialized has offered the dealer exchange function on its B2B Web site for the past six years, but French said many retailers still don’t use the B2B Web site to its fullest extent.

“There are probably a lot of guys who use the dealer exchange, and probably quite a few who don’t even know it exists,” French said.

In these tough economic times when each sale is more important than ever, dealers appreciate this function.

“You’re the hero,” French said. “If someone’s got a sold bike and they can’t get it, and they’re able to locate it, then close the sale because of it, they’re ecstatic.”

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