Distribution for Electric Bicycles In 2016 (Part Two)

  • Internet “plus showrooms" describes part of the Tesla distribution model. Test drives or rides at a location that offers only that service. Orders are placed on line, and delivery is to the buyers home via a delivery vehicle / team. Service is at the consumers home, or via a pick up and return service. Independent Bicycle Dealers are the most obvious distribution channel. They have the parts, the tools, the staff, and in most cases the consumer will assume that they are a logical place to shop for an electric bike. The challenges for these dealers are these: Staff training, inventory capital, their own culture (often shaped by athletic prowess in bicycle competitions), and a lack of marketing that will attract the different-from their-current-traffic consumers that are looking for electric bikes. Reaching the IBD is often challenging, for they are well serviced by existing suppliers (major bike brands and jobbers). They often see no need to consider additional suppliers or brands. Access to these dealers has been the key to success in the EU market in the past. However it is likely that other channels will become more important over time, especially in the USA.

  • Electric Bike Specialty Retailers (EBSRs) are an ever increasing category. Sometimes they are the same businesses as bicycle shops, with a corner or a separate show room, but owned and operated by the IBD. More often, they are new retailers with a specific focus on electric powered vehicles. It is notable that these stores sell significantly larger volumes of ebikes than their conventional IBD counterparts. But they lack the reliable turn over of the conventional bicycle retailers, and thus are challenged, at present, by limited cash flow. And often limited capital.

  • To reach the IBD or the EBSR stores, there are three paths. 1. Conventional bicycle brands that have a relationship with the stores now, and can add a product or a line. 2. Parts and accessory suppliers (Jobbers) that have access to the dealers, and an existing relationship. 3. Creating new relationships direct with the dealers - usually through visits by sales reps. And maybe #4. Have product so compelling that the dealers will reach out to the “new” brand.

  • Motor Sports Dealers would seem a logical channel. And there are many that have flirted with an electric bike offering. But the culture of the motorcycle dealer staff and consumer base is not much interested in the low speeds, modest acceleration, and energy efficiency of the electric bike. With exceptions, these have not been successful venues.

  • Automobile dealers are nearly the same story as the motorcycle dealers. Except that a well run car dealer makes so much money selling cars and servicing them that there is no room for any distraction from the core business. And for both car and motorcycle dealers, their current marketing does not bring electric bike customers into the store.

  • Flea Market / Night Market / Truckload-sale—on-the-corner retailers have done well with the lowest priced electric bike products for years. However, test rides, after sales service, and happy consumers are mostly lacking from this channel. The ordinary model is a container of cheap bikes bought from an Asian trading company and sold at a low price with no expectation by either the seller or the consumer that the product will have a long life or be serviced by the seller.

  • RV / Yacht Accessories / General Aviation Retailers are seemingly attractive. Experience is that these are very small volume channels. Price and features can be high end, but only a few consumers.

  • Government / Police / Military is another seemingly attractive channel. But the amount of labor needed to develop and serve the sale compared to the volume of sales makes it challenging to earn a profit.

One logical approach is to try to find distribution for a new product line farther up the supply system than the dealer or direct to the consumer.

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Edward Benjamin

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