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Mobile shops roll ahead as alternative to brick and mortar

Published September 21, 2016
ProdecoTech CEO Robert Provost explains its mobile e-bike franchise program.

LAS VEGAS (BRAIN) — Robert Provost, the CEO of Florida electric bike maker ProdecoTech, says he can lower a retailer's overhead — to less than 9 feet.

That's the height of a specially equipped and wrapped Ford van that ProdecoTech is rolling out as a mobile e-bike sales and service store. The company is offering the vans for a new retail franchise program that it launched Wednesday at Interbike.

"We noticed as the year was going on that some dealers were not doing well and were closing up shop," Provost said. "Talking to a lot of dealers out there, you just hear over and over that a lot of them are struggling."

The company is offering a three-tier franchise program, with initial investments starting at zero and going up to $65,000.

The vans are meant to be a turnkey operation and are stocked with a full-service bike repair station and a minimum of six e-bikes. The company asks that franchisees also maintain a small storage unit where they can keep a few other bikes in stock.

Because demos are a crucial part of the e-bike sales process, Provost envisions that franchisees will use the vans to host demos in local neighborhoods and at businesses and community events.

Meanwhile, Beeline Bikes and Velofix, both at Interbike as well, continue to expand their mobile shop franchises.

At last year's show, Beeline Bikes was operating its company-owned service vans in the Bay Area but had no active franchisees. The company now has 31 franchises, with an additional half-dozen prospective franchisees in talks.

Bay Area-based Beeline returned to Interbike this year fresh off announcing its deal with Accell North America to fulfill online bike orders, starting with ANA's Raleigh brand. Beeline officials at Interbike said Wednesday that they expect the service to go live in the next week or two.

Beeline has also sold bikes from Advanced Sports International's stable of brands as well as Farraday electric bikes. And while company founder and CEO Peter Buhl said Beeline will continue to carry other bike lines, Beeline will concentrate on training franchises on the Accell product lines available in either the U.S. or Europe.

"Our view is you can only go so broad across so many brands. The great thing with Accell is they have so many brands with so many different customer segments," he said.

"In e-bikes especially, they're the largest company in the world if you look at their European presence. In our business we see e-bike customers as a huge opportunity. It's a high-price-point bike. People never put them in their cars. Most shops don't want to deal with them. They're going through brake pads and drivetrains, so there's the service," Buhl added.

Beeline also met with more than 20 of its franchisees the Tuesday before Interbike to talk company strategy and the Accell partnership. The company also shared recent data from the NPD Group on broader industry market trends.

"For a lot of guys in the day to day, you tend to be in the weeds a little bit, so it's nice to take a step back and align on some of the bigger trends going," said Pete Small, Beeline's vice president of marketing and business operations.

Following Interbike, Beeline will embark on a road show heading east to Charlotte, North Carolina, for next month's Interbike CycloFest East Coast trade and consumer event.

The company also plans to have a new distribution center in the middle country, serving franchise operators east of the Rockies, up and running by year's end. Beeline currently services its operators from its single DC in California.

For its part, Velofix has closed in on 70 franchises sold between Canada and the U.S. and has 50 operating vans on the road — 25 in Canada and the remaining in the States. And Boris Martin, head of development for Velofix, said they're pushing hard to hit close to 100 franchises sold by end of year. Velofix debuted at Interbike two years ago and has seen huge interest from traditional IBDs looking for new long-term opportunities.

New York and Chicago are the only remaining key markets where Velofix doesn't have franchisees, but Chris Guillemet, co-founder, said they've fielded interest from people in both markets to start mobile shops.

"We have plans to be in Europe next year with trucks and Australia is an interesting market for us as well, but we want to have a couple hundred of these on the road in North America next year and expand in some key markets before we go there," he said.

Guillemet noted that Velofix started as a service-based business but that it has evolved into more of a retail environment. "If you look in the van, it's like a small bike shop — a 100-square-foot bike shop," he said.

Velofix carries product from SRAM, Shimano, K-Edge, Garmin, Fizik and Abus, and also works with several bike brands as the assembly and delivery partner for Yeti, BH, Van Dessel, Ellsworth, Spot and Pure Cycles. The company also just signed a deal with e-bike brand Elby to be its "last-mile, white glove delivery partner."

In recent months, Velofix also began working with Amazon as its preferred home service partner. Consumers buying a bike on the online juggernaut can opt to have the bike assembled and delivered to their door by Velofix.

"That's a program we've been piloting the last few months and we are expanding to all the markets we're in nationwide," Martin said. "It started in Seattle, originally."

Guillemet estimates that Velofix will add four to five more bike brands following Interbike.

"We've met pretty much every major bike brand in the world in terms of being their delivery partner," he said, adding that bike delivery still only makes up 5-10 percent of overall business, with service and sale of parts and accessories still the bulk of revenue.

"I think you'll see that grow as we get more brands on board, as we do a better job and as people get more used to buying consumer direct," Guillemet added.

"The bike industry is still a long way behind shoes and things like that in terms of buying online. But the more they get educated that a service like ours will deliver the bike and build it for them, I think you're going to see online purchases go up significantly."

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