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The Honeymoon is Over.
Editorial by Tom Demerly.


Tom, Army Ranger


It’s the beginning of the bicycle retail season and, just like every year; the “industry honeymoon” is over faster than Britney Spears’ 55 hour marriage.

This is worth knowing about since it happens every year and it effects how you buy things and what you pay for them.

Along about September of every year the Interbike trade show is held. Interbike is an enormous show for the bicycle industry a lot like the Detroit Auto Show is for the automotive industry. Within the bicycle industry, it is an enormous happening- biggest of the year. Everything new is there, almost every company large and small is represented.

The last few years it’s been in Las Vegas. It’s a perfect match for Interbike since Las Vegas is known for quick and easy marriages and divorces, gambling and prostitution, just like the bike business. So it’s a match made in heaven.

Here’s how it works: Before Interbike you start getting a lot of polite phone calls, e-mails and even elaborate post cards inviting you to steak barbecues, demo rides, technical clinics, etc. Sales reps want to schedule appointments to meet you in Las Vegas, show you their wares and give you the pitch. You get free water bottles, stickers, calendars (some pretty cool too), energy bars and T-shirts. It’s the courtship phase of the year. Promises are made with little concern over whether they can be kept.

On the plus side, we learn a lot about the industry and get to meet other retailers and share ideas, complaints and bitch at and about each other face to face. So it is a constructive use of time. The technical clinics are valuable and we accomplish a year’s worth of buying work in a few days while blowing off steam with the bike shop guys at the same time. This year we took pretty much the entire crew out to L.V. and we had a rollicking good time. I did some great training runs up and down the strip in the early A.M. also. That was fun. You see some amazing things running at 6:30 A.M. on the strip in Las Vegas. The industry also hosts a demo day out in the desert where you can see, feel, touch and ride some new equipment. It’s a good place to get some sun and spend a day in the desert.

However, Las Vegas is the honeymoon for the cycling season. The courtship is over and you tie the knot in Las Vegas. You leave Las Vegas “married” to the bike lines you will have for the year. The commitments are made, now all everyone has to do is deliver on the commitments. But by this time of year- January, the honeymoon is over and the marriage is on the rocks.

At Interbike this year if a dealer ordered a few components groups from a specific company they got a free watch. It was a nice watch too. You also got “favored shipping status” for when the parts actually appeared. Now, in January, 04 when you try to order the exact same parts kit, not only do you not get a watch, you don’t even get your components. And, they just announced a 10% price increase for these non-existent components. So you have the honor of paying more for something you can’t even get. And no watch either. They should give you a calendar to keep track of how long it will take to get your components.

Another Interbike, honeymoon night phenomenon is vaporware. Vaporware is the beautiful stuff you see at Interbike- the carbon fiber this and the titanium that. All of it is revolutionary and all of it is beautiful. None of it exists. There is enough of it to show at Interbike, but God forbid you actually try to buy any of it. The maker of any given vaporware busts ass to have their “production prototypes” done by Interbike. They collect a stack of orders at Interbike, go to the bank with the orders and say, “Hey, I can make this bike gadget and I have 2,000 orders for it- can you front me some cash to get the things made?” Then they hire a company somewhere to make it and hopefully it shows up, eventually.

But in between a lot can go wrong. Financing can fall through, the initial production may not be up to the designer’s standards, there may be problems with international shipping like terrorism, S.A.R.S., customs, tariffs, storms at sea for seaborne freight.

I’m not sure if this is true, but I recall an urban legend of a ship sinking in a storm with containers of Nike shoes on board. The story alleges the shoes were washing up on the beach in Oregon and Washington State. The bike industry could learn something from that. Sometimes I think if they just threw things in the ocean off Taiwan they would get here faster.

In fairness to bike companies there are solid reasons for delays and price increases. The exchange rates from Yen to U.S. Dollar and Euro Dollar to U.S. Dollar have been unfavorable to the U.S. Dollar. That means it takes more U.S. dollars to buy Japanese, Taiwanese and Italian bike parts and bring them to the U.S. That means you pay more.

Another thing creating delays is security. In the Tom Clancy book “Sum of All Fears” a terrorist organization smuggles a tactical nuclear warhead stolen from the Israelis into the U.S. via a seaborne port. They detonate it in a packed football stadium. Before you dismiss this as terrifying fiction, consider this: In August of 1994 G.P. Putnam & Sons published the first edition of Tom Clancy’s book “Debt of Honor”. At the climax of the book an airliner is used in a suicide attack on the White House. That was 1994.

Seaborne containerized freight is an enormous hole in the wide security net cast around the U.S. since September 11, 2001. To prevent the entry of everything from narcotics to phony Oakleys, illegal immigrants, nuclear and biological weapons and counterfeit Rolexes the U.S. Customs and Immigration service and Homeland Security as well as the prospective port authorities have to laboriously inspect the written manifest of every container entering the U.S. by sea and match it to the actual items. If you have ever been to the Port of Seattle to watch this in action you will understand why there are delays. I have been to Seattle seven times and seen the Port each time. Now you can’t even get to the freight terminals without clearance. That part is not the bike industry’s fault.

For people whose concept of a “reality show” is “The Bachelor” instead of CNN they will never understand this. All those things that happen on CNN, they affect how soon you get your bike.

Another thing that ends the Honeymoon is the “bait and switch”. You enter into an agreement under one set of terms and circumstances that is represented to you in September and by this time of year the whole thing has changed. We got the bait and switch in a big way this year from one bike company. On our wedding night in Las Vegas we gave them a $45,000 order at wholesale for bicycles. In exchange our blushing bride promised us a certain sales rep, the “bait”, would maintain our account. Two weeks before Christmas we got the “switch”- a new sales rep that had no technical familiarization with their product. He didn’t even know what an Italian bottom bracket is. Just like Britney Spears, we filed for, and got, an annulment. No more bikes from them. From what I hear they are out courting others right now. I wonder when they’ll “switch” them.

One thing that typifies these marriages of convenience at Interbike is the frequently misused term “commitment”. That’s the buzzword preached to us by bike companies at Interbike: “What level do you want to commit at?” It’s like a Vegas poker game. You think to yourself, “How much stuff can these guys actually, really produce?” If you get the vibe they will never be able to fill every order it makes sense to sign on at the highest level for the best pricing and free freight. You also get bumped to the top of the “ship to” list if anything ever does actually materialize. So you step up to the plate and order 100 handlebars. You know this company will never make 100 handlebars in their entire history, but you get the 100-piece price, free freight and preferential shipping. You also only get ten pairs of bars when you ordered 100- but really only needed 20. It is a high stakes poker game, and you need to be prepared to lose. Just like the tables in Vegas, don’t bet more than you can lose. If those 100 pairs of handlebars show up when promised you better be able to sell some handlebars. However, in 23 years in the bike industry I’ve never lost that bet. George Bush Senior said it best when he was CIA director, “If you are going to take a hard line bargaining position you need be prepared for the consequences if you lose.” That goes both ways.

And the final phase of the Vegas honeymoon is the popular wedding dance, the “Lead Time Hustle”. That’s when you sign the order, sign the dealer agreement and ask, “When will this stuff be here?” Then you get the classic answer: “Ahh, well, some time in January…”

Well, its January.

January turns to March, March turns to June and June turns to, “Are you coming to Interbike in 2004? We have some great new stuff we want to show you for 2005!” It is the same stuff you ordered in September of 2003. And guess what. It will be ready in January. Of 2005.

So with all these shenanigans you may wonder how anything ever shows up on time. Well, there are those companies that I have walked the aisle with every year and will continue to do so. They have proven their competence and ability to deliver on their commitments to us, even during times when I have not honored my commitments to them. These are the gold key companies. When you buy something from them you can be assured they will deliver on time at a fair price. They do it consistently and honorably. These companies deserve recognition: Speedplay, Ritchey, Cervelo, Felt, Guru, Cannondale, Fisher, LeMond, Quality Bicycle Parts, Zipp, Bell Sports and Giro, HED, Oakley, Aquaman, Quintana Roo, Litespeed, Orca, Sugoi, Louis Garneau, Pearl Izumi, Camelbak and quite a few others. We’ve done business with these guys and, despite the frequent mistakes I make dealing with them they are always ready to help us out, they almost always get things here on time and the stuff is always top notch. It is a pleasure to work with these companies.

So its January and the cycle begins again. With some companies the honeymoon is over and we wind up standing in line behind Jason and Britney filing for an annulment. With others we will pop the cork next year to celebrate another fine anniversary in the city known for fast weddings and short marriages.

 

 
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