SAN LUIS OBISPO, Calif. (BRAIN) — John Neugent, a longtime industry veteran and the former president of Sachs USA, has shut down his online company, Neuvation Cycling, in part due to ever-increasing competition among online sellers.
"While bike shops feel the effect of Amazon.com, it's pure online retailers who feel the stiffest breezes. Sales are off about 60 percent from where they were at the peak of 2010. And the continuing influence of online Chinese factory-direct sales have also been a factor," Neugent said.
"Neuvation Cycling has been a value-based business, and that format is now degenerating to its lowest possible common denominator because of those influences. It's a trend that is only going to get stronger," he added. Neugent launched the company in this California coastal community in 2002.
Neugent's operation was simple. With years of experience in the industry, he had developed key contacts among a variety of key Taiwanese manufacturers, particularly wheel makers. He would then buy direct from the factory and sell his wheels consumer direct. He also sold alloy and carbon fiber bikes either as framesets or spec'd with Shimano or SRAM kits. Quality was high and consumer prices were low.
Recently, Neugent sent an email newsletter to thousands of his customers telling them that it was time to shut the door, but hinting that he would be back later in the year. In the meantime, Neugent said he continues to honor all warranty issues involving his wheelsets and bikes as well as any protection plans consumers may have bought.
All too often people who fail point fingers at their competitors, Neugent said. "I don't. The competition isn't the problem — it's the customers who buy from them. If the customers want to buy from them instead of me, that means I haven't done my job. You can slice it and dice it anyway you want but that's the truth," he said.
Nonetheless, Neugent said shutting down Neuvation Cycling gives him a chance to start over with a clean slate and fresh ideas coupled with a lot more experience in online sales. "I am looking forward to it," he said.
Neugent has worked in the industry since 1973, when he and a partner opened up a shop. He then went on to work as a sales rep, product manager, sales and marketing executive and was president of Sachs USA for 10 years until it was bought by SRAM. He also consulted with Lee Iacocca on an early version of electric bikes. Neugent can be reached at JohnNeugent@aol.com.