Yeti Cycles Goes Direct

The more you cut out bike shops, you more you remove yourself from the equation.

Douche move even if you're trying to compete with Specialized & Trek who bought out all the independent dealers.

Establish a better dealer network & work harder to keep dealers in business.

Every time you make up the excuse that buying direct doesn't affect a dealer, you're literally feeding the monster that will devour you.  The fewer humans involved with your bike company, the further removed you are from justifying the purchase to the consumer.

Selling direct turns you into a commodity like corn. You compete on price & quantity.  

Just about every brand now sells direct, coming from a Yeti dealer and 10+ year industry employee, it's the way the industry has been going for years, you dont adapt you get passed. Yeti can offer a better retail price (getting below Specialized MSRP) and lots of Yeti customers will still go to a shop as that is just the type of consumer they are. Don't think it will be a huge difference in the long game

Do you shop exclusively with your LBS for all things MTB related?

If you want to buy online go ahead!  @WillyWonka "Yeti customers will still go to a shop as that is just the type of consumer they are". Pretty much all riders end up in a bike shop, regardless of where they buy thier bike. I personally dont buy the brand-loyal-personality-typing. Unless you have $10k in tools, and a lot of experience...

We are going to see a lot of this in the coming year, more than the current trend I think. What I hear every day is that a customer is interested in buying local because they realize the impact it can have on a small business to loose even a portion of sales of an anchor brand. Yeti goes direct, I sell not-Yetis all day because Yeti went direct.

Virtually every shop I have ever been in:

“We don’t have that at the moment, but we can order it for you.”

I can order it too, and it’ll come straight to my house. I’m going to install it myself anyway regardless of where it was purchased. Why would I make a second trip?

Complete bikes are the same. I’m going to go over your build with a fine tooth comb, so why wouldn’t I just build it myself from the get-go.

I don’t understand people arguing so hard to support brick and mortar just because that is the long standing paradigm. If you don’t offer a service that is relevant, I’m not going to make my bicycling experience harder to help.

Yes, there are exceptional shops, but they are few and far between. And guess what, they will survive regardless of which brands go D2C because they offer something special. Adapt or die.

Far from the truth on several points. 

Good and competent shops are hard to find these day. No disrespect to the GREAT shops out there (because they do exist also), but they will tell you the same because they spend loads of time fixing other shops mistakes. The problem was made far worse during the pandemic when bike shops were desperate for good help and were forced to lower their standards just to get the help they needed during the boom. "You can change a flat? Sweet. You're our new mechanic." Friends who work on the inside of the industry have told me some wild mind-blowing stories about shop incompetence during these past few covid years. 

You know one of the things that shops hate the most? Special orders. You know what shop employees are reminded of constantly? "Sell what's available today" SWAT. Sell what we have....avoid special orders. Yeti speaks to this here: "One example is the deployment of Locally on Yeti’s site, a service that can show riders if a local participating shop has the bike they’re looking for in stock. " IN STOCK. The good shops have it....but most don't. Here's what happens when they don't: Customer walks into shop, "do you have yeti model X?" Shop employee: "nope but we have this brand model x and it's way better than what you want....you should buy this...blah blah blah. That story is as old as time in any retail setting....not just bikes. 

Selling direct does not turn automatically turn you into a commodity. Especially more-so since MOST brands do it these days. Despite there being so many great bikes and similar functioning bikes, brands like Transition, Santa Cruz, Specialized and others have loyal followings and riders who don't care if they are paying $500-1000 more for a comparably speced bike they could get elsewhere from a budget brand. Some budget brands also have a loyal following...for making solid bikes at a more competitive price which attracts value customers....but still not always in a commodity goods type way - they actually have brand loyalists. Are there some consumers that will price shop and care about nothing else? Sure, but they existed when B&M was the only channel as well. Once they have been in the sport for long enough, they also will probably develop allegiances to brands. Different brands play in different spaces - it's how you manage that space and own it which will dictate the brands destiny. 

This is my experience too.  Unless it's something super basic / common like derailleur cable, the idea that I'd walk into my local shop and walk out with new pads for Saint brakes or something like that seems impossible.  A new cruiser bike or something for the kiddos, absolutely, but reasonably high end, niche stuff? Fuhgedaboutit. 

And since I can do all the build and maintenance work as well, the ones around me don't have much value.  

I'm open to hearing about a killer local shop I'm missing out on.  

There are different types of customers there. Some need bikes shops, some do not. For me, they add near zero value to the equation. I can service the bike myself, I can send suspension for service myself (but I currently service it 100%), I can buy all parts online and have them (mostly) the next day. Bike shops are great for people who do not want to wrench on their bikes and those people are the majority, so good for them. Yeti simply gave people a choice and it's great for us all, it will make bike shops care more, it will make us independent people happy, competition is always good for consumers. I can't stand this "protect the bike shops" mentality. If they add value for consumers they will still be there, if they do not, let them die, simple as that.

Working in Bikeshops since several years I agree with you to a degree.

Although a lot of Companies outsource the risk and stock to dealers by forcing them to a „x“ pre-order I see way to many shops struggle with knowledge and customer service. If a company allows it the direct sales can also be a huge chance to avoid the risk of a huge stock. Example: Our whole pre order now are testbikes and we ask the customers to buy online and deliver to us. We still get a little margin and have close to zero risk of huge end of season sales. The bikes are working capital and it doesn’t hurt to sell them with 35% of.

So in my opinion a lot of shops also spend to much time complaining rather then being innovative!

Mechanics are often not good salesman, salesman often get jobs as mechanics because there is not enough labor. Testbikes are close to not existing or shops charge ridiculous prices. I know only so little shops where they do in house measurements of the customers, help the customer to setup the cockpit, try out what’s on the market, know how to setup suspension, know the difference between tubeless-sealant on water and silicon base etc…the list goes on.

If direct customer service is better then what you get in a shop, even if it’s through a chat and the person you chat with happily tells you where and when you have the chance to test the bike in a Bikepark where professionals from the company adjust the bike to you, I understand every customer who decides to buy the bike online and only goes in to a shop to get his chain and cassette changed. 
Especially if it’s a brand who offers more or less the same bike for 2/3 of the price!

So all in all I agree it’s a shitty move for some shops who lack creativity but good bikeshops (mechanic wise), at least where I live, are rare and often lack customer service. Not a lot of people in the industry dare to point that out in my opinion but it’s a huge problem I think.

IF there is something to criticize with the companies that produce bikes it is how bad warranty service got the last couple of years. If you can’t serve the customers like you want to because you have to deal with 4-10 warranty claims a and fixes a week plus you get close to nothing for your work from the bikebrand…that’s the straw the will brake the camels neck even for the best shops out there.

another thing to consider is the possibility / probability that your LBS isn't a dealer for a particular brand. this is a way for them to reach customers who otherwise wouldn't consider a particular brand because they can't get it locally. 

for instance, i live just outside one of the biggest cities on the east coast, and the closest yeti dealer to me is an hour away. same with scott and norco (in another state no less). closest devinci dealer is over 2 hrs.  plenty of trek/giant/spesh dealers within 30 minutes, but if you're looking for something other than the big 3, good luck. 

Literally yes.  It's easier for me. Call shop. Order part. Zero shipping charge .
Free shipping online has ridiculous consequences & I am sick of having a BOX in a box at my house to "recycle". It's gross to have insane amounts of packaging. I recycle but the time, effort and utter clutter & waste of ordering something to my door and it coming in another box with plastic pouches & crumpled paper is assanine.

Every time I pick up something at the shop, I'm able to be a human again. Pick up something I forgot I need. Find out a bit of news. Or...simply walk in, pay and go ride.  

Best part is...the shop has money in it's account it can spend on MY business.  I have nothing against Jenson, but if I want to keep food on my table...those folks aren't spending a DIME of my money in western North Carolina.  

5-10 years down the line and I think a lot of IBD's are going to be happy to not sell (as many) bikes anymore. It'll be a challenge to get used to having less revenue to start but in the end I think they'll be more profitable with less risk this way.

The honest to god truth of it is that bike shops are generally bad at forecasting their long term inventory needs. Get rid of the inventory and a shop's biggest liability is also their greatest profit generator: skilled labor. Imagine a shop with just mechanics, fitters/advisers, and some highly curated P&A. Hell, add some training services (suspension tuning, advanced riding skills) or even travel services (yearly shop trip to Whistler/Europe).

This, in a really funny way, puts the shops back into the driver's seat. Opt out of pre-season order and the bike brands will have to earn their way back into the shop - either with massive marketing budgets, big discounts, shop kick-backs, or something else.

I used this same type of program from Giant. Had the option to have it sent to my house or a local shop and chose the shop. I then called the shop and explained they didn't bed to build it up since I'd be swapping a mess of parts on it, so it'd be easier for all involved to leave it in the box. They got a cut of the sale withut having to do any work aside from speak to me a coupla times. Did the same from Specialized on a frame. I didn't need to have em sent to the shops per their programs, but I chose to even though I was going to do the work. Let them get their slice of the pie. I think there's a point on the enthusiast scale where folx are skilled enough in setting up their own bikes to their liking, and this is where the consumer direct model comes in handy. If it still allows access to product and allows a decent margin for the dealer while not putting em on the hook for inventory I don't see a prob. And of course, this partially remedies issues where a brand doesn't have a local dealer. I don't buy everything from my LBS's, but I don't buy everything online either. I'll wager the bulk of people looking at sites like this and others act the same. 

Nobody remembers during CORVID how utterly depressing it was to walk into a bike shop to pick up a cable or chain & there being NOTHING but townie's on the racks???

When equivalent Yetis are available at a lower consumer price than Specialized, please let us know.

If you're going to pull the waste card for online ordering, you're ignoring the waste of an item being packaged/shipped to the LBS and then you driving to the shop to pick it up vs the item going straight to your house. 

I agree with your concerns about keeping money in the local economy but where do you draw the line because basically every brand makes all of their products abroad? You're upset with Yeti for selling direct but not for them making their frames abroad? 

1. I don't own a Yeti

2. I don't own a Yeti

Butch, you go for the cheapest option available...I see all your posts.  Bike shops are often not the cheapest options.   I fully support shops (you know my background)...  Nice virtue signal.  

1. You were complaining about the waste from direct to consumer packaging. You're ignoring that the products sold at LBS first had to be packed and shipped to that LBS. On top of this, you then have to drive the shop to purchase the item and bring it home.

2. You were talking about keeping money in your local economy. I doubt most (if any) of the MTB products you buy are manufactured locally. 

Great labor will keep the good shops thriving. Even as an enthusiast who has always done everything and custom builds everything there's still I'm happy to leave bikes in good hands if I simply don't have the time. Rest of the bike shops I have no remorse for; arrogant attitudes, unjustifiable mark ups for providing no service (buying a frame is the worst!), lack of after-sales support or customer service, it just sucks. Having spent time on both sides of the counter I've heard numerous employee tirades on how pax will be completely screwed over buying from DTC brands as they are "incapable" of sending a warranty email or looking up replacement parts themselves, and how we must "out of principal" charge customers more (like 3-4x more) who come into the shop asking for a DTC boxed bike build instead of the normal special-order build charge (despite DTC bikes being nothing like a normal build as everything comes 95% perfect). I have to stop myself as there's a already surplus of catharsis for subpar bike shops all over the forums; most of which I can't disagree with.

Did the same when I bought my Stumpy, didnt need it sent to a local shop as I'm more than capable of building a bike on my own but wanted to build a relationship with the shop and wanted them to make couple bucks.

Need some Shimano brake fluid. Went to three shops today (all were sort of along the way with other things I was doing). No one had any. Was told it’s really hard to get.
Left the last shop and from my phone ordered a 1 liter bottle from Jenson for under $20 get a few other nic nacs and now free shipping. That single serving can woulda cost me like $12 at the shop. Sigh. 
 

I love the idea of supporting shops. I try to do it when I can. buying clothes and pads and shoes and helmets is much easier in a shop. The trouble is, there’s sooooo much stuff there’s just know way for a shop to keep it. The permutations of tires alone is mind boggling. 4 casings and multiple compounds for an Assegai, then stack on Schwalbe, Conti, WTB. I want 2 piston metal Shimano pads, they only got 2 piston resins or 4 piston metal. I needed some I9 aluminum spokes, literally spent a half hour calling 8 local shops before ordering them online. There are so many parts there’s no way to have what most people want or need without a damn warehouse. It’s a losing battle for a LBS.

I agree with how many variations of parts stores have to carry. It's insane. It's a really hard business model for them and the internet make everything so accessible and people become hyper price conscious as they can shop around easily. It's tough out there.

Sure, ordering certain parts from Jenson may cost more BUT you're not valuing your time. How long did it take you to drive to 3 different shops? How much fuel did you use driving? 

My 2cents, not comparing the 2 but maybe a little. I think the future of bike manufactures and bike shops is parts, expert/pro level mechanics and special order bikes/frames. Like the new model that the auto dealerships have taken in the last few years. Lower overhead with less bikes on the floor and more expert mechanics and parts is the key in todays weird market. The only thing I see the bike shops need is true expert qualified mechanics that have been trained to the highest next level. I think the direct to consumer is a start to the whole LBS doing and being the more parts and labors in the bike world. Where lately do most peeps buy a new car/truck, where they can get one. Where do most common peeps take their car/truck for service, a pro, reputable, and trust worthy auto dealership. Again just my armchair keyboard 2cents. 

Then shops better buck up and pay for said mechanics if they want to have a chance at going that route. Techs with that level of training and years of experience behind them ain’t gonna happily work for $20 an hour. When I left the largest bike shop chain in Northern California about 18 months ago they capped their service tech pay at $24 an hour, couldn’t even beg for a penny more, it was a hard line that couldn’t be budged. They are now struggling to find anyone worth hiring.

100% agree, bike mechanics need to be paid for their worth just like moto and auto mechanics.  Bike industry is way behind, and the components are only get more and more technical and digital. 

Wait a minute! There are bike shops that carry bikes other than Trek, Specialized and Giant?

Now Yeti just needs to buy Revved Carbon from GG (RIP) and you can have "Made in Colorado Carbon" bikes shipped directly to your local dentist office.

What is lost in a lot of this "armchair-internet-bike-shop consultant work" is just how razor thin a lot of these margins are for all parties involved. 

Bike shops by and large face a number of headwinds but you know who else is facing headwinds? Bike companies, component manufacturers, softgoods companies etc etc. The entire specialty bike vertical is under immense pricing pressure against a backdrop of faltering demand. What do you expect to happen?

In all industries you tend to get an erosion of margin back toward your cost of capital in lieu of some kind of crazy moat or "defensibility". Everyone here has done a good job showing from the top down why there isn't defensibility of margin in the entire space. This is why you are going to see more brands like Yeti doing whatever they need to do to sell (and fight margin erosion - which selling direct could in theory do), bike shops offering less and less while trying to capture a certain user type, and the underlying culture of how we do business changing forever (already has).

This isn't a bad thing, it isn't a good thing, it just is.

When OEMs go direct to customer are they selling to the customer at the same price they were selling to stores or are they selling at the same price as the store?

If the price is the same then why not buy through the shop and put some cash flow in the local bike scene.

If the price is lower with the OEM I need to ask what is the value to me of purchasing from the store. Do they have multiple sizes on hand for me to try? Will they swap out bars, saddles, etc at a reduced cost? 
 

What I am seeing is typically the OEM is selling at the same price as the store. They are “cutting out the middle man” and pocketing the extra margin. 
 

On the flip side I have seen local bike shops offering less and less on the service side. If bike shops want to stay in business they either need to focus on selling the customer service or focus on selling to idiots who don’t own computers.