Direct to consumer bike companies and when I’m talking direct to consumer, I mean high end mountain bikes.
For those not familiar with this concept, which if fairly new for the Australian market, the idea is that instead of going through the traditional bike selling model of visiting a local bike store to purchase your latest, shiny new thing, selected bike companies are now willing to forgo the traditional bike dealer network, for a direct to consumer model of distribution.
The upshot is that the manufacturer can make more margin and the consumer can be (sometimes) be offered a better ticket price on a like for like model, versus competitors. This is achieved by removing 1-2 layers of additional mark-up (brand distributor and bike shop margin) and passing that saving on (see the Canyon diagram on the left).
OK so direct-to-consumer is not new, but what is interesting is that higher end brands are pushing into markets that have previously been dominated by a network of bike shops and local distributors.
The brands that have recently entered the Australian market are reasonably new or have had a limited presence, essentially providing them with a nothing-to-lose opportunity, to see if this concept works for this region. Brands like YT Industries, Commencal and Orange have proven themselves overseas and now have an opportunity to go direct, investing in connecting directly with the consumer and utilising their race team and ambassador sponsorship, to drive brand presence and relevance, to the likes of you and me.
Doing this provides them with a direct line of communication with the end user, which could allow for a faster response to feedback and eschewing the additional costs of managing a wide (and in some cases splintered) network of bike dealers.
Challenges of the Direct-to-Consumer Model
But direct to consumer models are not without their own challenges, including the ability of tapping into experienced and knowledgeable floor/shop staff, bike mechanic & assembly, demo and test rides, tech support and local customer service. These services can add to a positive buying experience, and can often be the deciding factor in getting someone over the line, especially when we are talking $5k+ bikes.
To date though the appetite for a direct model, especially when competing on price, with operators such as Reid and Cell, have proven that the concept works. However both these operators did open storefronts as well, to address the very points mentioned above.
There is no doubt that the traditional bike shop in Australia (and in many cases around the world) are under significant pressure, with closures of well know, long term stores shutting down around the country. Some of these operators have seen the emergence of the direct to consumer model and have started to adjust their own business model and offer service and assembly only, to cater for this growing trend.
OK that’s great, but why should I care?
Benefits of MTB Direct-to-Consumer Sales Model
Well as a consumer, on the positive side you get:
- A better deal – Everyone loves finding a great deal – the thrill of the chase is alive & well
- A direct line to the manufacturer (no dealer, or store as a middle man) for direct feedback
- A world class, high end frame or complete bike at a very competitive price
- A bike that isn’t one of the ‘big three’ eg Giant, Trek & Specialized – there are plenty of riders out there that would pay a premium for a boutique bike, let alone a great online deal.
For example lets take at two bikes that may be weighed up. Both targeted at the All Mountain rider / Enduro racer.
Direct vs Traditional Model: KONA Process 153 DL and the YT INDUSTRIES Capra CF
Kona is distributed in Australia by Groupe Sportif to a traditional network of bike dealers. The YT is a direct to consumer model.
Same Fork: Rock Shox Lyrik 160mm
Same Rear Shock: Monarch Plus RC3
Same Drive Train: SRAM X1
Frameset Material: Kona – 6061 Aluminium / YT Industries – Carbon
Arguably they stack up pretty similar…. except for the fact that one offers a carbon frame (Capra CF) and the fact that the Capra CF is also $1500 less than the Kona.
That price difference alone is enough to make you think if the service and assembly requirements and shop floor knowledge are absolutely necessary or if some of that $1700 could be used for a separate mechanic only service.
So who are these direct to consumer companies?
Well the list below is current (July 2017) of operators providing a direct to consumer bike sales model.
2017 Best Direct to Consumer MTB Brands
The below 5 brands are some of the premium brands that are offering direct sales to Australia (and many parts of the world). If you have been riding for a awhile, all these brands will be reasonably familiar to you, but you now have the bonus of getting a bike delivered direct to your door.
The YT Industries brand presence has exploded in the last 18 months with the signing of well known riders for their DH team (ex Trek riders Aaron Gwin and Neko Mulally) as well as the likes of Cam Zink and Brett Tippie for their race & ride team, gaining valuable data and insight from these riders. The signing of big name riders adds credibility, trust and familiarity with the perception that if their bikes are good enough for those racing on the world cup circuit, then they must be pretty good for your local trails. This has been a smart move by YT and a recent poll on pinkbike had suggested that YT was high on the wish list of many as their next bike, beating many well-known brands in the process.
Their website is well designed and easy to navigate, making it easy to purchase and address many questions that you have regarding the process and how to assemble.
Most markets are covered by YT including USA, Canada, Europe, UK/Ireland, Australia & New Zealand to name a few.
Canyon have been at the direct to consumer game for a long time, with 25 years under their belt, but have only recently ventured beyond the EU. Their brand recognition has been on the rise, with a similar approach to that of YT, making good choices with their rider and team sponsorship and increasing their relevance with end consumers. Their bikes have been winning podiums and the praise of the mountain bike media and now buyers in the Australia and now have the opportunity to purchase.
Their website is world class, with easy navigation and a clear checkout process, supported by quality images and bike spec layouts.
Looking forward to if they offer their kids range (Young Heroes) to the southern hemisphere in 2018.
Commencal are not new in Australia, however they have shifted their model to direct to consumer, utilising an intermediary for customer service and warehousing, via Pushys (stores in Canberra, Brisbane and Albury).
Having been in the direct to consumer game for about 4 years, Commencal have cut their teeth on ironing out the kinks of this approach and are working with Pushys to deliver a successful approach this in Australia. They have a selection of 2017 models available now, with a full launch to the local market with their 2018 range in August.
A cult brand in the UK, Orange have been around for many years, often adoring the pages of the MTB media, as the union jack flag waver in a sea of US and European brands. Since 1988 Orange have been building mountain bikes in the Yorkshire town of Halifax and have a full selection of bikes available, including 4” and 5” trail bikes, Enduro/AM bikes, DH, hardtails and even cross bikes. The Five in particular, is a bike that has won countless praise for its versatility and performance.
The Australian Orange Bikes online store directs you to the UK store to select your bike and upgrade/build options – of which there are plenty to customise and tweak. Whilst this is the UK site, it gives you the pricing in $AUD. Once you have selected your bike and build, you confirm the bike with Orange Bikes Australia, via phone or email to arrange for payment and delivery.
Turner bikes have been in operation since 1994 and their Flux trail model has been on the wish list for many years. When you read more about the company, you get the sense of a talented, and passionate team that live their mission of ‘Rider inspired, trail tuned.’ Offering a tight and focused range for the mountain biker with Enduro, Trail, XC and Cross, their refined styling keeps them relevant, without being over the top.
While not specifically an Australian portal, they ship to Australia for between $700-$1000, depending on the model. This shipping cost may significantly reduce the savings of going direct, but you are still getting a sweet, boutique bike.
Turner makes it easy to upgrade the running gear, shock and wheelset, to adjust for a budget that suits you. To have Turner bikes shipping direct was a surprise and bridges the gap between southern hemisphere riders and classic American bike brands, which may have been previously difficult to find or out of reach.
Now while this article has been written from the perspective of a consumer in Australia, the above brands and websites are doing a direct to consumer offer in many other markets around the world. Visit their websites to see if your region or country is included in their dispatch destination.
It’s exciting to see different business models evolving within the mountain bike industry. As we have seen over the last 10 years in other industries, every product category seems to have 1-2 disruptors who are utilising the internet, e-commerce and global distribution to their advantage, shaking up the traditional approach that brands, retailers and consumers have been comfortable with and accustomed to. The challenge will be to determine if a pure online model can work, or if we will see a shift to a more hybrid approach by brands and stores, similar to what Commencal are doing with a local retailer, to distribute their products with an agreement on assembly, servicing and warranty.
Yes there is no doubt that many stores will find this threatening, as it is new, different and requires a shift in how to combat it, but being on the front foot with being a premium service dealer, building a strong and involved community around the individual stores brand and offering exceptional levels of service and a curated P&A selection, will always get punters through the door and on the shop rides. We will be watching with great interest on how the mtb direct-to-consumer concept evolves, and how the industry reacts. In the end, it will be the rider/buyer who decides if it will work.
If you know of any other high end mountain bike companies doing a direct to consumer model, please list in the comments below.