Words and interview by Peter Koch

Given its outsized reputation and massive production capacity—the world’s largest manufacturer, it can churn out 6-million-plus bicycles annually—you’d be forgiven for thinking that Giant’s brand name is a little obvious. But company founder King Liu, a Japanese-educated engineer, created the word from three kanji characters: 捷(Jie), 安(An), and 特(Tè), meaning “Fast, Safe, Special.” What he launched in the 1970s as a behind-the-scenes Taiwanese OEM company, manufacturing bikes for the likes of Schwinn (and later Specialized, Trek, Colnago, and Scott, among others), is today one of the biggest brands in cycling, known globally for its history of innovation, its “farm-to-table” approach to making and selling bikes, and—among dealers, perhaps—for its retailer-first approach to sales.

(Giant USA)

John Thompson (Giant Bicycles USA)

Nobody’s shouting that story louder or with more enthusiasm than Giant USA boss John “JT” Thompson. An outspoken advocate for independent bicycle retailers (and frequent, unwavering critic of competitors distributing outside of the IBD channel) since starting there in 2011, he’s worked closely with retail partners to ensure a closed distribution network that provides maximal benefit to IBDs, developed retail training and partnership programs and molded his staff to be more knowledgeable of the challenges unique to independent bike retail. All the while, Thompson has steadily raised the brand’s profile among North American consumers. We caught up with Thompson last month, and picked his brain about the key takeaways from 2018, what sets Giant Bicycles apart from its competition, and whether he sees any end in sight to the U.S.-China trade war.

Looking back at 2018, what were the big stories coming out of Giant USA?

A huge, ongoing story is our WebLink online sales model, which is focused on selling retail inventory first, and also shares 100% margin with stocking retailers when the rider buys direct from Giant/Liv for in-store pickup.

The new Giant Trace E+ 2 Pro trail bike features the new, Yamaha-built SyncDrive Pro motor, and 140mm Maestro rear suspension. (Giant Bicycles USA)

We also released a complete e-bike line featuring exclusive, game-changing battery and motor technology. Our updated EnergyPak batteries are managed to the individual cell level for a longer lifetime and are enclosed in a fireproof case for added safety. Giant-exclusive SyncDrive motors are manufactured by Yamaha to boost a rider’s power by up to 360%. The most important asset, though, is the exclusive and proprietary firmware—which can continually be updated and modernized via our RideControl app—created and developed by Giant to optimize performance and make the entire system shine. Giant is the one and only brand making e-bikes for the past two decades.

Our Liv bike product family remained the only pure line of women’s bikes in the industry. Designed and engineered by women for women, these bikes go well beyond the “pink-and-shrink” approach favored by our key competitors. We have an exclusive play focusing on the female body type, including form, fit, and function in regards to women’s unique body characteristics, especially regarding the strength of their upper bodies and hands.

We also had massive new technology launches in the Gravel and Trail 29 categories, and I believe our e-bikes set new benchmarks for the entire industry. And, of course, we continued to raise the bar where retailer support is concerned.

We are the most integrated cycling company in the world. From our alloy foundry to our exclusive carbon manufacturing, powerhouse engineering, manufacturing expertise, and sourcing competence all the way to our retailers’ front doors, we deliver quality control, unmatched quality, innovation, and the one and only farm-to-table processing in global cycling. We are the most authentic brand.

Giant is one of the few brands that owns and controls its entire manufacturing process. What difference does that make for consumers who buy your products?

Not one of our key competitors make! Would you eat the food at a restaurant that did not cook? We execute the most authentic cycling story (life) in this industry.

Since starting at Giant in 2011, you’ve been a powerful advocate for retailers, building retail support programs, and calling out brands with damaging omnichannel distribution strategies. Why are retailers so important to Giant, and what’s it doing to support them?

Our health as a company has a direct relationship with our retailers’ health. When they are healthy, we have much more robust partners to achieve our vision of more people on bikes—we benefit. Healthy retailers are better able to create a positive store and service experience. If you’re not having success or fun, retail is exponentially more difficult to do well.

How is Giant building upon Giant Retail Academy and the Giant Retail Partnership Program?

Owners Barry Winter, Tim Foley and Dennis Leffler partnered with Giant—through its GRP program—to open Giant Las Vegas’s Summerlin location. (Giant USA)

With Giant Retail Academy, we’re developing a new curriculum each year, plus specific subject matter to attract owners, shop managers, salespeople, service technicians, and entry-level retail staff. Here in Newbury Park, we’re blessed with one of the best riding environments in the world, with gorgeous road, gravel, and MTB options right outside our office door. What GRA teaches for half of the day is applied during the other half to a top-notch experience on the bike, right in our own backyard. We learn, we connect, and we have big fun. We share our passion for cycling with our retailers and offer them full transparency here in our home (headquarters). It’s all a part of how we support and execute, the cycling experience and way of life.

The Giant Retail Partnership Program exhausts every asset, service, and support tool at our disposal to help our retailers achieve commercial success. We learn from these inner family retailers about where we need improvement. In the end, it’s simple—we have to constantly raise our performance, and never rest because the retail environment is changing daily. It all comes down to execution.

Does Giant directly own any retail stores? How does that inform and influence the company’s dealings with its retailer network?

We own two stores, which helps keep us relevant, as well as very cognizant of how challenging retail is, and how quickly it changes. We’ve come to understand that retail is a living and evolving environment, and it’s grand experiences with riders that keep them in the family. An owner on the floor is a critical asset. Retail must be loved, nurtured, and managed with immediacy—you simply cannot do that well from afar. I know of no brand that has stores (other than Apple, perhaps) that thrive, despite a remote staff. This is especially important in an industry that’s rooted in delivering an experience. Furthermore, in our opinion, a quality experience cannot be delivered to your door in a box.

In 2016, Giant began selling direct to consumers via its website, but told retailers it was “100 percent committed to helping [IBDs] grow [their] retail store’s revenue, profits, and business relevance.” Is your direct-to-consumer program more favorable to retailers than most?

We’ve shared thousands of full-margin interactions with our participating WebLink retailers. In a huge way, our retailers are pleased with the program thus far. It’s not perfect, but certainly is the best we’ve seen that’s focused on supporting the retail network. We continue to learn and have ideas on how we can keep evolving for the retailer and rider.

How has the Liv brand set Giant apart in its commitment to growing cycling participation among women?

We believe women deserve a unique and pure product, therein delivering the most rewarding experience. Our investment strategy with Liv is higher as a percentage to the business versus Giant Bicycles and worth it!

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What else is Giant doing to move the needle on women and youth participation?

We have an army of 100-plus Liv ambassadors living the brand story and pushing it at retail, events, and festivals. As far as youths, we support on a national level Trips for Kids, Sprockids, and, through our retail partners, NICA athletes. Locally, we give bikes and equipment to the California Highway Patrol’s annual CHiPs for Kids Toy Drive.

Is Giant as heavily involved in/dedicated to building e-bikes as it is in human-powered ones? What’s it doing to advance pro-electric legislation and E-MTB access?

Yes, e-bikes are one of our fastest-growing global categories, and we’re very dedicated to them. In fact, we’ve been producing e-bikes since as far back as the 1990s. Regarding legislation, we’re fully vested with PeopleForBikes. We’ve been doing everything possible to support the entire industry to help local and federal government understand that pedal-assist bikes are no more impactful or less healthy than a traditional pedal bike. We are also supporting and promoting education and proper trail etiquette within our local trails.

What impact have the Trump admin’s tariffs had on Giant and the bike industry as a whole?

The current supply channel was created over the past three decades, and one does not change that in short order. You need a village of manufactures and suppliers to create a complete bicycle, and that village was long ago created in Southeast Asia. Ignorance is no excuse for stupidity, and this irrational view and unwillingness to understand the forces at play will certainly create challenges and, in cases, will cause bicycles to be less affordable for many Americans. Frankly, it’s everyone’s loss, as it’ll only lead to more obesity, higher health care costs, less green transport, and more dependency on the archaic transportation system we have in place today. These tariffs make bikes—and the entire bike industry, as a whole—far less beneficial to public health, to our environment, and to sustainability efforts.

Do you anticipate a near-term resolution to the trade war?

That’s well above my pay grade, but we will continue to monitor and support all cycling industry initiatives that work towards a resolution.

What are you most looking forward to in 2019?

We will continue to build and empower our Giant Bicycles USA team to assist and help our retailers build their businesses to new highs. Retailers have a super hard job, and we will do all we can to help them face the headwinds and punch through. Together, we can build the cycling culture, and create an environment that is clean, healthy, and, ultimately, life-changing.

Sprockids participants (Giant Bicycles USA)

The NBDA has been here since 1946, representing and empowering specialty bicycle dealers in the United States through education, communications, research, advocacy, member discount programs, and promotional opportunities. As shops are facing never-before-seen circumstances, these resources offer a lifeline. Together, we will weather this. We at the NBDA will not waver in our commitment to serving our members even during this challenging time—but we need your support.

Now is the time to become a member as we join together to make one another stronger. Whether you’re a retailer or an industry partner, your membership in the NBDA is one of the best investments you’ll make this year. 

Learn more about the benefits of being a member and join now.

The post Giant Bicycles: Coming Full Cycle appeared first on National Bicycle Dealers Association.

It’s the heart of summer and, if you’re in a seasonal locale, your shop has probably been slammed for weeks. The door keeps swinging, the sales floor buzzes with customers, and your mechanics are working through a week-long backlog of service orders. This is, after all, the money-making season, when you make up for all those grueling winter months of losing money to rent and utilities. But to make the most of it, you need good seasonal employees.

That’s easier said than done, especially when you consider the challenges our industry presents: relatively low wages for positions that require either 1) a specific and well-developed mechanical skill set or 2) deep knowledge of a wide range of technically complex products, and the ability to communicate their purpose and value in clear and simple terms. With that in mind, we spoke to Tom Henry of Landry’s Bicycles, who’s been developing talent across the highly successful seasonal New England retail chain for decades. He had a lot to say about how best to find high-quality seasonal employees, how to train them quickly and efficiently, and the best way to keep them sharp for summers to come.

Tom Henry of Landry’s Bicycles

How do you find quality seasonal employees?

We have a website that’s always advertising, but really we tend to hire our customers and their kids. I’ve always preached to the staff that they need to be on the lookout for good people. There wasn’t a day when I saw somebody with promise who I didn’t want to meet, who I didn’t want to have lunch with and get to know better. I was always interested in learning about the kids in the area because we have to in order to make the economics of this thing work. With a seasonal business, you depend on having some lower-paid seasonal employees.

In exchange, the kids are getting a great education along the way. We always wanted it to be a vital part of the parents’ mission to see their kids develop and grow and be mature and develop a good value system and work ethic. I always believed that Landry’s is among the finest educational institutions for a young person to be in. It sounds like I’m overreaching, perhaps, but it’s always been my attitude that we’ll be second to none in terms of education. There’s the technical stuff you’re learning, of course, but also social skills and life skills. That was always a big part of our mission, and I think we were really good at delivering, and the parents were extremely grateful for Landry’s. That’s always been the spirit of it. In the past six years since becoming an ESOP, we’ve had very little turnover, and I suppose that has something to do with having an ownership stake in the company. It felt to me like we were starting to become older as a company, but with the Baby Boomers aging out, we have a whole new generation coming in. One of the goals we’ve had more recently is to reinvigorate our outreach to young people—the 16-year-olds and 17-year-olds—in our communities. We want the best and the brightest kids to come in here and believe it’s a really awesome job to have.

How do you advertise?

Every store manager has been taught to always be looking, so you hire your customers. We start there, through word-of-mouth. That’s the key thing. We’re also very active in youth mountain bike leagues here; we’ve been working on that for years now. But it’s really word-of-mouth, it’s talking to our customers, it’s talking to their parents because you meet them when they buy a bike. That’s the simplest answer.

We also have a website, with a video about why it’s great to work at Landry’s. We’re not actively hiring right now, but when we are, we move that to the homepage, so we tend to get a lot more calls. And we’ll put signs up in the doors, and at the cash registers of all seven stores.

Do you tend to hire young people—high school or college kids—or adults?

The key is to hire the right people. We do very careful interviews, we explore very deeply who you are, what your own core values are, and whether they match up with Landry’s. We’re looking for people who have a real passion for this, who have a passion for people. Most of the hiring we do with young people is for sales, by the way, because mechanics have a longer development curve.

That said, we love it when we can find kids at the high school level; we’re hoping for a couple of years in high school. If you get people young, you can mold them and grow together. Ideally, we can get them for four years in college; we don’t expect we’ll be keeping everybody after college, but we do get some. But if you can get 4, 5, 6 seasons out of the young people, that’s usually fabulous. We’ve got some incredible young people, who are paid pretty low—usually minimum wage, which is $11/hour—but that’s decent money for a high schooler, especially if you love the work. If you hire the right young people, who are super high-energy, really bright, really good at talking with people, it can be an incredible win, because you only have them from June through the end of August/early September, and that’s when all of our business is done. We make all our money from the end of April through mid-September, so to be able to have seasonal, part-time people is enormously beneficial. To keep full-time people year-round is part of our problem financially, in terms of profitability. You can’t be keeping people in the offseason who aren’t going to be part of the rapid development of the seasonal help. So the people who stay year-round have to be good at developing people. (continued below)

We’re located in the wealthy community of Bainbridge Island, where our wages aren’t much of an enticement to teenagers to work. The island is also, for the most part, missing the 18- to 25-year-old demographic that has historically kept bike shops running across the country. When we need seasonal employees, we primarily look to retirees who want something to do with their day (many old guys insist on working for FREE!).
—Paul Johnson, Classic Cycle, Bainbridge Island, Washington

(continued from above)

How do you quickly develop people?

We have lots of systems. There’s a triad of things that most people have to be trained in:

• Systems of the Company (the procedural things, incl. IT systems for processing orders, transferring products, etc)—A new employee will be in for a number of days or even a week, just getting trained in an offsite conference room before coming into the shop.
• Product Training—The industry has gotten better and better at this piece. We do a lot of videos, and we use Miyagi, where people get ranked within the company based on how much training they’ve completed (and they can do it anytime, anywhere), so that’s been very effective. Overall, this is a combination of industry training and our own training.
• Host/Sales/Hospitality Training—We have 17 lessons, we have videos, we do live training, we do simulations and we practice. We put our new hires out on the floor fairly quickly, but they shadow experienced salespeople and get individualized coaching; plus they go back through each of the 17 lessons as they develop. After all of that, there’s still a bit of an apprenticeship, because there are some things you just can’t learn in the classroom. Sometimes we create an explicit “buddy system,” where you’re paired with somebody’s who’s going to be your mentor, and you do some shadowing and learning. And we’re really hoping to get multiple years from each hire—so you get them when they’re 17, they come back at 18 and they’re starting to really contribute and grow, and if you can keep them through the college years, then it’s miraculous because they become these bright, young, energetic, passionate, beautiful people.

Do do you hire interns?

The regulations around internships for every business in Massachusetts are really strict now. You have to pay people. We used to do them, but we don’t touch them anymore, which is a loss, because a lot of parents want us to help develop their kids.

What roles do you typically hire seasonal employees for—service, sales, or both?

Most of the hiring we do with young people is for sales because mechanics have a longer development curve.

For great mechanics, we start in the bike building, and they just learn how to work on new bikes and do that over and over and over again. Some of our mechanics come out of the bike assembly team, which is about 7 or 8 people, and we sometimes hire mechanics from outside the company, but we prefer always to be developing our own people. We’ve had some good hires from outside, but not too many, because there are so many negative cultural attitudes they’ve picked up. You keep wishing you could just hire the skills, but you also pick up some of the attitudes that are often the reason somebody’s left another shop. In terms of culture, nothing beats honesty, openness, collaborative ability, respect for others, a passion for cycling, really feeling like a missionary for cycling, and a commitment to the profitability of the company. A lot of people come from other businesses, and they’ve never had a positive feeling about the institution they worked for, they didn’t have that developed sense of respect for everything, including the finances of the business. You just can’t have negative attitudes going around inside the company; it starts to rot, and it falls apart fast.

Is there anything else special you do?

We have well-defined training modules, and people who can deliver those modules. It’s still a big challenge, by the way. It doesn’t run beautifully. We often have to get people working on the sales floor before they’re ready. We’re always striving to have it streamlined, though. Each store has to have a key coach who’s always spending time observing, coaching and developing, and bringing people up higher and higher. It doesn’t matter how much you train people, everything tends to decline if you don’t constantly bring it up.

The highest value skill—and gift, really—is to have that eye for, that passion for, that love of developing people toward perfection in what we call “The Landry’s Experience.” It’s transformational hospitality, and we want to make a big difference in people’s lives, and that comes down to every little detail—the smile, the greeting, the way you acknowledge customers as they walk in, the ability to multitask, forecasting what’s going on so your customers feel really hosted, respected and cared for—and that’s on top of the skill, professionalism and product and mechanical knowledge. If those aren’t the best, then none of the hospitality stuff works, does it? So you have to work on all three of those fronts; it’s a really complicated business. We are striving for perfection, but we are so far from it.

Now is the time to become a member as we join together to make one another stronger. Whether you’re a retailer or an industry partner, your membership in the NBDA is one of the best investments you’ll make this year. 

Learn more about the benefits of being a member and join now.

The post Ask a Dealer: Seasonal Employees appeared first on National Bicycle Dealers Association.

Words & Interview by Peter Koch

Back in January of 2017, Huffy president and CEO Bill Smith stood in front of a room packed with bike shop owners and their suppliers at the IBD Summit and made a pitch for them to become warranty service centers for Huffy. It was a bold move, considering the fact that many shop owners have long considered Huffy—with its mass-market distribution via big-box and online retail channels—to be among their chief competition, and have refused to work on their bicycles.

But Smith said he didn’t see it that way. “No other bicycle brand puts more new riders on bikes every year than Huffy,” he told the audience. “We are a gateway brand, an entry point,” he continued, adding that many more enthusiastic riders inevitably go on to buy higher-end bikes from IBDs. His point, in the end, was that his company doesn’t compete with IBDs or the brands they carry (“No one is going to say, ‘I was thinking of buying an Audi A6, but then I saw a deal on a Camry so I bought that.’ It doesn’t work that way.”), though they’re all part of the same flat industry. What’s more, he said, he was looking for more ways to cooperate with IBDs to overcome broad “social and economic and demographic” factors that have contributed to stagnant bike unit sales (of around 17.5 million bikes annually) in the last decade. The Huffy Service Centers were just intended to be the first step. “We’d like to send you some of our customers,” he said.

Bruno Maier (left) with Huffy CEO Bill Smith

Smith must’ve been convincing, because his presentation sparked a series of conversations with independent bike dealers that, earlier this Spring, led to Huffy announcing a new, IBD-only bike line, Batch Bicycles, whose products will be made with better materials and components than their typical big-box fare. The idea behind Batch Bicycles, Smith says, is to target a significant market of underserved consumers who want bicycles priced in the “white space” that exists between the offerings of big-box retailers and specialty stores. With its significant buying power, lack of overhead and century-plus experience at sourcing and building value-oriented bikes, Huffy believes it’s in a unique position to leverage its strengths and fill that niche while offering dealers great margins and a simpler business model that doesn’t require minimum buys, presale commitments or complex discount structures.

Details are still forthcoming, but the initial line, which will be launched this September at Interbike, will include a handful of models—a mountain bike, a commuter, a comfort bike, a cruiser, and three sizes of kids’ bikes, including a 10-inch balance bike—priced between $150 and $400, and spec’d with lightweight aluminum frames and Shimano components.

To get a more detailed look at what Batch Bicycles will offer consumers and IBDs, Outspokin’ chatted with Bruno Maier, a 25-year industry veteran (Huffy, Pacific Cycle, Cycling Sports Group, Bikes Belong and RockyMounts) who’s overseeing the launch of Batch Bicycles. In this Q+A, Maier outlines the strategy behind the new lines of bikes, how it’s different from traditional IBD brands, as well as how it will fit into the IBD marketplace.

How did Bill Smith’s conversations with dealers lead to Batch Bicycles being developed?  After Bill announced the Huffy Service Centers program at the IBD Summit, dealers began signing up at an accelerated pace. Many of them reached out to Bill by phone, to say they’d be interested in a deeper relationship. What Bill and others here at Huffy realized, then, is that there might be an opportunity to move some of those customers who’d bought bikes in the mass market into nicer, higher-quality bikes. If we could leverage our expertise—we’re good at sourcing bicycles and building quality bikes at a good value—and hit key price points from $150 to $400, we could meet the expectations of somebody who’s been buying bikes at a mass retailer but now wants a little more service and better quality. The added benefit for our customers is they go to a dealer and get professional assembly, as well as a bike fitted to them, plus they can buy all the accessories they need to make their ride more safe and enjoyable.

Why is now the right time for a brand like Batch Bicycles?  If you look at a lot of the research that’s coming out about consumers—specifically when it comes to Millennials and Gen Z—it says that they’re not necessarily looking for a super high-end product. Rather, they tend to be buying products that are good quality but don’t break the bank and allow them to participate in a lot of other activities, as well. So we felt that, by providing these lower price points, we have a good opportunity to attract more Millennial and Gen Z customers into the bike shop, rather than pushing them towards Dick’s Sporting Goods, Wal-Mart or Amazon.

What kind of business motivations does Huffy have for creating Batch?  From a sheer dollars and cents standpoint, we’re always looking to expand and grow the business. Independent bike dealers have long represented an untapped market for us, and this is a way for us to offer a product to anywhere from 3,000 and 6,000 new retailers. That’s a lot of retailers who we can build a relationship with, and we can offer them a great product with good margins and good value, and also create a service center for the 5-6 million bikes that we sell each year on the mass market. It’s a way for us to build a much deeper relationship and hopefully generate some revenue.

Has something changed in the big-box and online markets that’s pushing you to explore other channels?  As far as online markets are concerned, we’ve not had the attention and focus on Amazon that we’ve had in big-box retailers. We’re probably a little late to the game, but as the market shifts, we’re adjusting our behavior to provide unique solutions to Amazon that’ll help us grow our business with them. But those efforts are in regard to Huffy, and won’t compete with the Batch Bicycles brand.

More broadly, though, I’d say that the business as a whole has changed. We find more competition in our categories, but not from other bike vendors. It’s really from things like cell phones, video games, managed parental oversight of time, the increase in team sports commitments—all of those things take away disposable income from parents, take away time that children and parents can devote to cycling. All of those areas have not only had an impact on the mass-market bike business but on the independent dealer market, as well.

And so we’ve seen the bike market, as a whole, struggle for the last several years. We may be selling close to the same number of bikes that we’ve sold year-over-year, but we’ve been selling the same number of bikes in America for as long as I can remember—at least a decade—even as the population has grown significantly [by 24.5 million people, or 8.13%]. So we’re not maintaining the growth that we should expect, given the population growth. And that’s one of the things that’s driving our interest in expanding into the dealer market. We want to grow. So, if the market’s not going to grow as a whole, we’ve got to be more aggressive in how we go after our piece of the pie. And, if we want to grow our market share, we’ve got to be able to sell bikes in the mass-market, online, and through dealers. To do that, we’ve got to meet the needs of dealers—provide them something unique, provide them good value, provide them best-in-class margins—and we’re making those changes internally so that we can achieve those goals.

Children’s bikes are one of the fastest-growing segments, but IBDs are responsible for just a fraction of those sold annually. Do you think Batch can change that?  There’s so much competing for kids’ time and parents’ resources in today’s world, that I think it’s hard for parents to justify spending big bucks at the dealer on a Trek or Specialized children’s bike. They’re great quality, of course, and something that’ll last a long time, but our bikes will provide equivalent value at a better price point.

On the big-box end of the spectrum, there are a lot of bikes in the $100-$130 range that are made of steel and have plastic parts. Our products will be more like $175, but they’ll be lighter-weight aluminum, and will have better quality components, so they’ll be better bikes across the board. And you know the difference between riding a cheap, inexpensive bike and really good quality bike—it’s like night and day. If you can start those really good experiences off at a young age, it’s only going to build that love of cycling early on.

We’re also going to be able to leverage some of our licensing relationships—we’re one of Disney’s largest licensers—as well. So we’re trying to tie in all of the things that we bring to the table to help service that dealer market, and help those dealers capture every sale that they can. So, yes, I think we’ll be able to bring some of those kids’ sales back.

How do you see brick-and-mortar retailers fitting into today’s retail landscape, where consumers drive how we sell to them?  I think that you’re going to see what’s been called “the revenge of the mom-and-pop retailer.” Because everything has become so impersonal and online, people are missing that old-fashioned service. And you even see that in mass-retail, where Target and Wal-Mart are trying to provide personal shoppers and pick-up at the front door; it’s all about the service that can be delivered. I think that’s the advantage that IBDs have over everyone else in the bicycle market, is they can provide specialized services, they can provide guidance, they can provide insight and education. And, most importantly, they provide that expert assembly, and fitting to the bike—because we all know that fit and the quality of the ride make the difference between falling in love with bicycling or not. I think we’ll see strength in independent retailers. It’s going to take some time, though, and they’re going to have to compete with the online onslaught, but over time they’ll have the advantage.

How will Batch bikes differ from Huffy?  We’re changing the quality level of the product, offering aluminum frames and cranks where Huffy bikes are steel, and upgrading to aluminum rims and stainless steel spokes. We’re improving the packaging, so we can ship one or two bikes together, rather than shipping a full truckload of bikes.

We’re also doing things to provide better service to the dealers, to make it easier for them to order. They can order 100 bikes if they want, or they can order one bike at a time; we’re not going to penalize them for that. We’re offering them very good margins for their retail, and we’re monitoring retail channels to make sure nobody’s undercutting them and taking away their margin.

We’re also making some long-term investments in our own website and our own online capabilities, so we can drive consumers to those retailers. So, for instance, consumers will someday be able to buy their bike online from our website, but the only way to pick it up is from a local dealer, and the dealer will still get full margin on the sale. But that’s Phase 2, coming probably within a year or so. The point is that we’re making investments to ensure that business is all about driving revenue and margin for the dealer because that’s where the Batch consumer is going to get the best service.

How does the Batch Bicycles business model differ from that of traditional bike companies?
We’re not going to have model years, so that should make a huge difference for dealers. It’s a difficult position they’re put in each year when new bike platforms are introduced as early as June. As a dealer, how are you able to sell a $5,000 mountain bike at full price, when the customer’s already seen the great new model that’s coming out 30 days from now? It makes the manufacturers’ business model more complicated, too. So, not having model years will simplify our business model, and give us some flexibility to adjust product when it’s not selling. If bikes are selling, though, we’ll continue to make them until dealers tell us a change is required.

Also, we’re not making huge investments into a large sales force, professional racing teams, catalogs, and floor financing, so those costs aren’t worked into our business model. We’re using technology to make ordering bikes easier—we won’t need to 30 or 40 sales guys in the field—so dealers can order what they want when they want it. So, overall, we’ll be more efficient and have lower operating costs than the high-end market players. That’ll allow us to offer really good margins to dealers, and maintain those margins. We’re primed to offer between 40 and 50 points across the board, consistently. We want our products to be profit-drivers for IBDs.

How do you see this changing typical IBD sales when it comes to lower-price, entry-level bikes?  From our standpoint, it’s a way for them to draw new customers into their stores. For the customer that comes in, browses and says, ‘I don’t want to spend this much money,’ now maybe they’ve got a product that can capture that sale. We look at it as an extension of what they’re already doing and hope that it only enhances their business model.

Is there anything else you’d like to add?  The words that we use to describe Batch Bicycles are Simple, Honest, and True. The goal of our whole business model is to make it as Simple as possible, so dealers don’t have any issue carrying our product and they know exactly what to expect. As far as being Honest, we’re going to provide the margins that we say we are, in exactly the way we say we’re going to. We understand that we’ve got to prove that Simple, Honest, True tagline by living it, and until we do, there’s always going to be skepticism, but it’s what we’re hanging our hat on.

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