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Allied Cycle Works launching new US-made model and new IBD program

Published May 29, 2019

BENTONVILLE, Ark. (BRAIN) — Allied Cycle Works is launching a new U.S.-made bike model this week at the Dirty Kanza, where several athletes will race on the new machine. The company also is unveiling a new IBD program as it seeks to emphasize dealer sales over consumer-direct sales.

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Details of the new bike are, for now, under wraps. But Allied CEO Sam Pickman was happy to share the nuts and bolts of the dealer program from the brand that launched in 2016 and began delivering bikes in 2017.

Allied has done a significant amount of its sales through IBDs since its launch, but Pickman, who became CEO in January, said he believes Allied's future is deeper in the IBD (see related story).

"I don't believe you can build a high-end brand in the U.S. with consumer-direct only. The dealer plays too pivotal a role in the sales process. There are a lot of things that are very difficult to do at a distance that are required for customers to have a really good experience."

Pickman said high-end brands that don't have physical stores are at a disadvantage. "This is an expensive good, and there's a lot of competition. There are a lot of very good brands available at IBDs where people can go and touch and ride them," he said.

Allied will continue its consumer direct sales, which includes offering custom paint and other options to online buyers.

But for the new bike model, the company is developing a dealer program built around a "virtual warehouse."

The new model will be offered in two colors, six sizes and three build kit options — a greatly reduced selection compared to Allied's usual array of custom options.

"There are a lot of very good brands available at IBDs where people can go and touch and ride them," Pickman said.

Participating retailers in a region will be able to share inventory between themselves. When a customer needs a size, color or build kit of the new model that a dealer doesn't have in stock, the dealer can ask Allied if any regional dealers have it.

Allied will ask dealers who have the model in stock if they are willing to send it to the first dealer. If so, Allied pays for shipping and a labor credit, and ships a replacement bike to the shipping dealer at new net terms.

The dealer with the customer would buy the bike from Allied as if she was buying it from the company warehouse.

Because Allied will be shipping the new model in three boxes (frameset, build kit with size-agnostic parts, and build kit with sized cranks, stem and handlebars), only the frameset will have to be shipped between dealers in most cases.

Participating dealers also will be offered the opportunity to fulfill consumer-direct orders that come through Allied's website. It's not a click-and-collect program, though. Instead, dealers who have the desired bike in stock can opt to pack it up, largely assembled, and ship it to the consumer. The dealer would receive a commission and Allied would ship the dealer a replacement at new net terms.

The program thus gives retailers three ways to sell a bike: off the sales floor, from the "virtual warehouse" of other dealers, or to a consumer via an online order.

"Every IBD is terrified of expensive inventory, as they should be: There's a lot of risk built into that inventory," Pickman said. "To alleviate that risk, we are offering three ways to move that inventory and we work with you to do that."

He said about 11 U.S. dealers are signed up for the program, and that Allied is shipping the new bike model out to them this week so that it's available on sales floors as it is launched at Dirty Kanza and through the media later this week.

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