SNOWBIRD, UT (BRAIN) Wednesday July 18 2012 12:12 AM MT—Mike Sinyard is on a mission, and it’s simple: Buy bikes, components, accessories and apparel from companies that aggressively police online sales by discounters.
It’s a message he hammered home the other day at a Specialized dealer meeting and it was the same message he delivered in a separate interview. “I really feel we’re at a tipping point right now. There’s no way that dealers should become a showroom for online discounters,” he said, over an early morning coffee.
Look at what Best Buy, Wal-Mart, Target and others are doing. These retailers are trying to force some of their key suppliers to produce products that can only be bought directly from their stores or only from their websites. “They can’t sell what Amazon is selling,” he said.
While Specialized has been selling shoes and apparel online for 10 years, the company sells them at full MSRP and it collects sales taxes. “Our online sales only account for a few percentage points of our total revenue, but online sales do allow a consumer who can’t find shoes that fit at a local dealer to get it online,” he said.
Nonetheless, retailers should take note of suppliers that fail to aggressively police online sales. “Dealers are, in effect, financing their own demise. It’s just a matter of time,” Sinyard warned.
Take a look at the golf industry, he added. The independent golf retailer is almost gone. The same is true, to some degree, in the action sports industry and the ski and snowboard industry has seen a steep decline in independent retailers over the last decade.
Specialized has aggressively shut down dealers and recently cut off several in Florida that were ordering product and shipping it to South America. And the company is waging a quiet war on counterfeit products.
Wednesday evening Andrew Love, Specialized’s manager for brand security, had two S-Works road bikes outside a tent asking dealers to pick the one that was counterfeit. Love then passed around two S-Works road forks and asked dealers to pick out the fake. One look at the diameter of the carbon fiber steerer tube made it clear which was real and which was fake—the fake fork used a much thinner tube.
Love also had an array of counterfeit shoes and software on display. For most dealers it was almost impossible to discern the difference. But as Love noted, it’s one thing to buy fake apparel, a counterfeit road bike can injure or kill an unaware rider.
As the Internet, Sinyard calls it the “best invention since the wheel.” But, he adds, “we can’t allow it to hollow out IBDs. That’s the real issue to me.”