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Re: Cervelo share the ride "on hold" says my lbs [AustinTriCyclst] [ In reply to ]
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I agree, that sums it up pretty well. I think most of us were taken by surprise, and needed a lot more clarification.

An R5 is not a major bike we sell, and we didn't need help clearing out 2011 inventory, we did a good job of that ourselves. We did make room for new product lines, including pre-season ordering P5's.

That said, Cervelo was not out to screw anyone, and have been willing to listen to our concerns and explore all options to make this deal work for us. We also are committed to Cervelo for the long term and they have been a great company to work with.

While we might not love this program, we plan to make the best of it, and will continue the program through it's completion. It is a great deal for customers and we have no intention of ending it early.

Chris
athletes lounge
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Re: Cervelo share the ride "on hold" says my lbs [10-4] [ In reply to ]
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Total dollars (if you can figure out margin in a bike shop ... clue me in)

We also had our best total sales in December by like %20 (Cervelo sales were not responsible for much of the increase)

I think 2012 is going to be a good cycling and especially triathlon sales year.



http://www.austinTRIcyclist.com
http://www.Cannondale.com
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Re: Cervelo share the ride "on hold" says my lbs [packetloss] [ In reply to ]
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Dude, your post is absolutely ridiculous! I think your beef is with Cervelo and not the dealer. How do think the bike shop feels about being told about this great new promotion by Cervelo, and by the way you eat the $2000. You, as the consumer, aren't getting ripped off but the shop sure is.
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Re: Cervelo share the ride "on hold" says my lbs [chris b] [ In reply to ]
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chris b wrote:
While we might not love this program, we plan to make the best of it, and will continue the program through it's completion. It is a great deal for customers and we have no intention of ending it early.

This!!

Like I said, good shops will find a way to make the program beneficial for them.

Chicago Cubs - 2016 WORLD SERIES Champions!!!!

"If ever the time should come, when vain and aspiring men shall possess the highest seats in government, our country will stand in need of its experienced patriots to prevent its ruin." - Samuel Adams
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Re: Cervelo share the ride "on hold" says my lbs [Kentcart] [ In reply to ]
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Kentcart wrote:
My lbs was pretty wishy washy about the Cervelo deal when I called to make an order for 2 P3's this morning. They said they wouldn't order them until they heard back from Cervelo as they were not sure the deal was still going on. Heck, I had the credit card out and everything! They said they would take my number and call back when they knew more.

I then called a major Tri-oriented bike shop several hours away to see if they would take the order, and they outright refused. At least, however, they gave me the low down on the deal. They had decided on their own (as apparently have many other shops) to not sell the bikes under the Share the Ride program, because the economics of the deal simply didn't make sense. They pointed out that they were selling the bikes below their cost, which wasn't being made up by Cervelo. Instead, the lbs gets an aged, though top-end, frame which they then have to turn around and sell. It certainly moves inventory for Cervelo, but it does so by putting much of it into the lbs's inventory. This is a pretty creative way of converting inventory into cash for Cervelo's balance sheet, but it does so by putting the inventory (and hence less cash) onto the lbs's balance sheet.

Anyway, I figure the business aspects of this have probably already been discussed like crazy on other threads so I will stop here. As for the deal, after many phone calls today, it appears the Cervelo deal is up to the lbs to decide to honor. Some will, and others won't. In my case, it appears this deal is a no-go for me, unless I am willing to drive 4-6 hours to a dealer who might still be willing to do this. I am pretty bummed, and to be honest, a little PO'd at Cervelo at how this is going. I don't blame the lbs; business is tough enough without them holding the inventory bag for the manufacturer. I will be traveling the several hours to the tri-oriented bike shop I mentioned to place an order for a tri-bike, but at this point it probably won't be a Cervelo.

Kent you don't happen to live near Ann Arbor do you? Sounds like you called two wheel tango (thats almost exactly what they told my friend before convincing him to buy a different bike), and then you called Frasier Bikes who are no longer participating.

Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.
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Re: Cervelo share the ride "on hold" says my lbs [%FTP] [ In reply to ]
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visited the lbs thursday afternoon to consider a p3 for $2350 out the door.

they offered me their last 2011 p4 (sram red group) for $3k out the door. I paid for it on the spot.

the p4 was picked up this afternoon (saturday) from the lbs because I had no car last thursday.

andrew
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Re: Cervelo share the ride "on hold" says my lbs [Jackb] [ In reply to ]
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Two main Cervelo shops in my (very large) town. I have never warmed to one of them, but never bothered with the other. Heard about the deal, made some calls and went to the shop I had never been to. it turns out it a great shop and I picked up two cervelos on the deal. Now I will frequent this shop and tell all my friends to use this shop. Seems like win win to me.
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Re: Cervelo share the ride "on hold" says my lbs [packetloss] [ In reply to ]
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packetloss wrote:
The Real Animal wrote:
sloarunner99 wrote:
I went in to my LBS tonight to but two Cervelo RS bikes and the owner was pretty clueless. I informed him about the details of the program, and when I walked up to the counter the owner backed out and said he couldn't sell me two bikes with that type of discount. I'm still livid and will never shop at this place again.


Why? He was probably being honest. There are very thin margins on these bikes. unless he knew about the deal (not everyone is a slowtwitch faithful) he genuinely may have been thinking that selling those two at that price will cost him money.

Sounds like you went about it the wrong way.

Perhaps suggest to him to phone his distibutor and ask about the deal and the details. Give him the chance to see if the deal is still current. If he refuses to participate in the deal, then perhaps there are grounds for complaint.


That is a load of crock. Any Cervelo dealer not honoring the deal is shady. Can someone actually be in the business of selling Cervelo frames and be ignorant of this deal? Part of their "job" is keeping up on such things. You have to be aware of your competitors prices and aware of what the current prices are for the products that you sell. A clueless owner is just that; clueless.

To be fair, it would have been a LOT easier on everyone if Cervelo handled the deal with an instant rebate. As a consumer however, I could care less how the deal is handled. It's advertised as $2000 off 2 frames and I would never do business, ever, with a shop that refused to honor the deal. To the consumer it looks and feels shady. Others are clearly getting the deal. If you are not, then you are getting ripped off.....

So now some facts apparantly are dribbling through. You want a bike shop to sell two bikes at a loss, on the chance that they will be able to clear another 2011 model bike later on themselves. Not every bike shop would have the kind of turnover to confidently feel they can get rid of the the other bike. If it sits on their floor till next September they'll never get rid of it. So they are then faced with selling that one at a loss too.

But that's OK by you, you think it's fine for companies to run at a loss, otherwise they are shady....

Believe it or not, some bike shops don't sell more than a cervelo or two a month. Some bike shops sell one or two a day. Each owner is in their own circumstance. If they don't want to participate in this deal it doesn't make them shady one little bit. It simply means they have decided that can not participate and turn a profit. Now, it's ok to take a hit on a bike every now and then to keep patronidge. But once the lock in that they are participating, they are committed to offering the deal to whoever wants it - imagine the uproar if they offered it to one couple but not another.

As for each dealer knowing about it. Just think about that a little. A bike shop probably gets 50 to 100 emails a day. Some small bike shop owners wouldn't have the time to read them until a quiet time in business. They just read the ones they know they will need that day. It just so happens to be the busiest time of year for bike shops! It's hardly surprising that if it was an email that got sent out they might have left it unread because they were too busy selling and assembling bikes for customers.

I'm not sure how this whole deal was communicated to dealers either. It may have been via email, may have been via sales rep visits. Again, low turnover shops don't get as many rep visits if they get them at all.

But it's OK to bash the poor bloke trying to make an honest living selling bikes just because he hasn't cottoned on to a deal offered by one of his few dozen distributors that he sources products from.

Snap back to reality.
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Re: Cervelo share the ride "on hold" says my lbs [Power13] [ In reply to ]
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Power13 wrote:
yeah, I made that point on another thread. Dealers telling their customers "No" are probably doing 2 things:
  • losing that customer for good
  • likely nearing the end of their Cervelo dealership, whether they want to or not.

As I said, smart / good shops will find ways to make the deal work for them. Shops that are focused only on that particular sale (or as Dan correctly stated are marginal dealers) are gonna bitch about it.


I sat and discussed this with a Cervelo dealer yesterday, post ride. Good friend and I have provided business help through the years, so I know his business as well as he does, I think. He would probably disagree . . . I've seen your two bullet points twice now and both times it has made me think, so we discussed it, yesterday.

What they have experienced, so far - lots of calls from people looking for the deal. Some from several hours away. Some local. The local people ask questions and want to "understand" the deal, because it does sound too good to be true. Once they even get a little understanding, they have backed away from the deal out of concern for the dealer. Those are the customers that he wants and he is ultra-appreciative that they will pass on the discount in order to not put him in a bind. I agree with him. That's the loyal customer that every shop tries to cultivate. The ones calling from several hours away? No so much. They travel to another town, get their bikes, and disappear back to wherever they came from. No repeat business and probably not another sale to them, ever.

As for Cervelo pulling someone's dealership over this promo, I think they would have a tough time. Suggested Retail Price Maintenance (essentially "forcing" sellers to not sell below a certain price) has been through the courts and, although recent rulings sort of support the right for them to do that, there are also cases where it has been found to be illegal. My friend is entirely for the enforcement of MSRP selling because it's protects him from the online behemoths that could sell for much less, and make up for it in volume. Here's the predicament for Cervelo, though. They "ask" a dealer to sell two bikes at, what could be, a "no profit" sale for the dealer. Okay, but dealer doesn't get a straight up rebate from Cervelo, they get a frame that is valued at $4900, by Cervelo. Dealer needs to get their money back, so they choose to sell the frame for $2000. Yes, they maybe could sell it for more, but they really just care about getting their operating profit in the bank account. So, the question arose -- How can Cervelo enforce anything (I understand dealer agreements)? You must sell at a much lower price. You must sell at a much higher price. I'm not sure this would stand up well in even a lower level court. Most shops could not afford to fight Cervelo on something like this, but all it takes is one person who can afford to, for whatever reason.

The above, combined with, even just the appearance, that Cervelo pushed this deal out there to reduce their inventory, in light of the PON deal, probably would not be seen favorably in a legal setting, either. That would be my concern if I was the one trying to make that deal happen. It really is an interesting situation that Cervelo has created.
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Re: Cervelo share the ride "on hold" says my lbs [road2tri] [ In reply to ]
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So what your saying is the shop is losing money selling Cervelo bikes and frames at $1000 of retail, but has problems selling them for $2900 off retail?
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Re: Cervelo share the ride "on hold" says my lbs [DavHamm] [ In reply to ]
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My LBS is a bit further north than Tango :-) I want to work with my LBS, as I really do try to support northern Michigan businesses whenever I can, but their response was so unclear that I hung up the phone not really sure what or who was doing what as the next step. I should point out that even this LBS is over an hour drive away, so traveling a bit to get this deal was/is going to have to happen anyway. I have called several of the other Cervelo dealers in Michigan and gotten some interesting, though not helpful, responses. I respect the decision each shop must make on whether or not to do this deal. But as a customer, I am not wrong for wanting to cash in on the Cervelo deal either. Basically, this deal puts a tri-bike within the family budget and is the difference between getting a new tri-bike or riding my road bike this season.

I have to drop off my son in Ann Arbor, so I am planning on visiting Frasier Bike. They have a great reputation and everyone I have talked to likes them a lot. When I called them, they were very straight forward about what was going on and what they could and could not do. I was very impressed. I just wish they were not on the opposite corner of the state from me. I couldn't live further away from Frasier Bike short of moving to the UP :-( After sleeping on it this morning, I am not as angry (ok, disappointed) at Cervelo and this situation as I was yesterday. But I will be spending the day looking at other options, just in case!
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Re: Cervelo share the ride "on hold" says my lbs [The Real Animal] [ In reply to ]
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The Real Animal wrote:
You want a bike shop to sell two bikes at a loss,
People keep saying this, but we don't know that. It almost certainly is not true on the higher price bikes. Why do you think the P1's were not included on this promo?

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It just so happens to be the busiest time of year for bike shops!
Uh, not it's not. Not even close.

I don't know how the deal was communicated either, but people are talking about shops not knowing of the deal 1 week+ into the deal. Sorry, no excuse for that. As Dan as alluded to, and I completely agree with, most of the shops that are screaming the loudest are the marginal dealers anyway. The fact that some don't know about this deal a week or more later is further evidence of that.

*edit to fix quotes

Chicago Cubs - 2016 WORLD SERIES Champions!!!!

"If ever the time should come, when vain and aspiring men shall possess the highest seats in government, our country will stand in need of its experienced patriots to prevent its ruin." - Samuel Adams
Last edited by: Power13: Jan 1, 12 8:51
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Re: Cervelo share the ride "on hold" says my lbs [%FTP] [ In reply to ]
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So, my question is this. Why didn't Cervelo just do the deal like this. $1000 off a bike of your choice (except P1) and when a customer buys one for $1000 off MSRP, Cervelo sends a $1000 check to the dealer or credits their account or whatever. Wouldn't that move bikes all the same? Wouldn't that be better for the LBS? Seems to me that if Cervelo really cared about their dealers, they would have made it this simple. Instead it is a buy 2 bikes and 1 frame, get "$2000 off". Which it seems LBS know it is not that good of a deal for them, so they say no thank you. I know not all are saying "no", and some dealers might do ok or well with this, but seems like there are more that are not or don't know about it than those that are doing it.
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Re: Cervelo share the ride "on hold" says my lbs [andrewcasino] [ In reply to ]
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andrewcasino wrote:
visited the lbs thursday afternoon to consider a p3 for $2350 out the door.

they offered me their last 2011 p4 (sram red group) for $3k out the door. I paid for it on the spot.

the p4 was picked up this afternoon (saturday) from the lbs because I had no car last thursday.

andrew

Dayum.... And here I go thinking $3750 Can$ was a good deal.

I feel ripped off now

Citizen of the world, former drunkard. Resident Traumatic Brain Injury advocate.
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Re: Cervelo share the ride "on hold" says my lbs [Kentcart] [ In reply to ]
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Kent, Frasier Bike has it on their website and facebook that they are not doing the share the ride program. You see seem to imply that they are sort of? A co-workers wife bought a tri-bike there and was very pleased, her husband was not. Told me he won't buy his next bike there. Mostly it seemed he was not happy with the constant additional charges, even the bike fit was an additional couple hundred I think.

Very interested in hearing your take on the store.

From my Geography, and vacationing. How is cross-village (287) these days. Gotta be about the further point from Frasier without being in the UP. Though Glenn Arbor (273) might be further or maybe Northport (275) . Ok now I have to go to google maps and see. Northern Tip of Mackinac bridge (283).

Ok I need to stop stalling and go work on my dryer.

Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.
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Re: Cervelo share the ride "on hold" says my lbs [Tell3131] [ In reply to ]
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Tell3131 wrote:
So, my question is this. Why didn't Cervelo just do the deal like this. $1000 off a bike of your choice (except P1) and when a customer buys one for $1000 off MSRP, Cervelo sends a $1000 check to the dealer or credits their account or whatever. Wouldn't that move bikes all the same? Wouldn't that be better for the LBS? Seems to me that if Cervelo really cared about their dealers, they would have made it this simple. Instead it is a buy 2 bikes and 1 frame, get "$2000 off". Which it seems LBS know it is not that good of a deal for them, so they say no thank you. I know not all are saying "no", and some dealers might do ok or well with this, but seems like there are more that are not or don't know about it than those that are doing it.

Because this deal moves a lot more inventory. Honestly, I don't think dealers are losing any money from this. I just think their margins are cut down significantly. That's all, I think some are bummed out to not be keeping their typical margin level. Nevertheless, they'll make up the money difference from the lower margin by sheer volume. Which I think some dealers are seeing. The three LBS's that I know have had phones ringing off the hook
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Re: Cervelo share the ride "on hold" says my lbs [justkeepedaling] [ In reply to ]
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justkeepedaling wrote:

Because this deal moves a lot more inventory. Honestly, I don't think dealers are losing any money from this. I just think their margins are cut down significantly. That's all, I think some are bummed out to not be keeping their typical margin level. Nevertheless, they'll make up the money difference from the lower margin by sheer volume. Which I think some dealers are seeing. The three LBS's that I know have had phones ringing off the hook

In the interest of being objective, we don't know the above either. On some models, I doubt they are making much money at all, likely a break even or slightly above scenario. On other models, they are gonna do a bit better.

The end result will depend on the mix and volume sold and there is no way to make a universal assessment of the programs profitability. But absolutely agree with your last sentence....this program is definitively driving customers into stores. Whether or not the dealers choose to take advantage of that traffic is up to them.

Chicago Cubs - 2016 WORLD SERIES Champions!!!!

"If ever the time should come, when vain and aspiring men shall possess the highest seats in government, our country will stand in need of its experienced patriots to prevent its ruin." - Samuel Adams
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Re: Cervelo share the ride "on hold" says my lbs [DavHamm] [ In reply to ]
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I am in Petoskey, where we are currently getting dumped on with snow and freezing rain. So, not quite as far as Cross Village, but I do ride through there when the weather is a bit nicer :-p

I am going to Frasier even though they are not doing the Cervelo deal for three reasons. First, they were very honest and up front when I spoke with them on the phone. Second, they were already on my short list of places to get my bike fit, as they use both the Specialized BG and the FIST system. Third, I am in their neck of the woods several times a year courtesy of U of M. Now whether or not I am able to afford any bike deal I can arrange with them is another story. Besides, this is a great excuse to my wife on why I need to visit their shop!!

I did a Specialized BG fit on my road bike this year, and while it was a bit pricey, it solved the knee problem I was having. Yes, the fit was one price, and the parts needed to make it work were additional. I knew that going in, so I was not upset when I had to put on a new saddle and stem. I figure I will have the same or similiar changes on the tri bike, so I have that figured into my budget.
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Re: Cervelo share the ride "on hold" says my lbs [Power13] [ In reply to ]
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Power13 wrote:
justkeepedaling wrote:


Because this deal moves a lot more inventory. Honestly, I don't think dealers are losing any money from this. I just think their margins are cut down significantly. That's all, I think some are bummed out to not be keeping their typical margin level. Nevertheless, they'll make up the money difference from the lower margin by sheer volume. Which I think some dealers are seeing. The three LBS's that I know have had phones ringing off the hook


In the interest of being objective, we don't know the above either. On some models, I doubt they are making much money at all, likely a break even or slightly above scenario. On other models, they are gonna do a bit better.

The end result will depend on the mix and volume sold and there is no way to make a universal assessment of the programs profitability. But absolutely agree with your last sentence....this program is definitively driving customers into stores. Whether or not the dealers choose to take advantage of that traffic is up to them.

I said this or something similar on another thread or at least I think/hope it was. We tried to do business at our local dealer and was told he would not sell us anything he had in stock, he would have to order it for share a ride program, then tried to charge me $2,700 for the P3 and wasn't sure if he would be able to have it in the store in time for the deal. This was the second time we went into the shop to buy, a full week after the first time with a scheduled appointment. We also saw a P3 in what he said was my size and a P2 2011 model in my sweeties size. While I wanted to be a customer of his and have a local shop I don't think I want this type of customer service. Long story short we got home, got on the phone and have purchased two bikes both 2012, P3 & P2 both Ultegra for under $4150 out the door. We go pick them up and get our F.I.S.T. fit on Friday.

There is a good book called Customers for Life, I can't imagine going to his shop ever again.

************************
#WeAreTheForge #BlackGunsMatter

"Look, will you guys at leats accept that you are a bunch of dumb asses and just trust me on this one? Please?" BarryP 7/30/2012
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Re: Cervelo share the ride "on hold" says my lbs [andrewcasino] [ In reply to ]
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Quote:
visited the lbs thursday afternoon to consider a p3 for $2350 out the door.

they offered me their last 2011 p4 (sram red group) for $3k out the door. I paid for it on the spot.

the p4 was picked up this afternoon (saturday) from the lbs because I had no car last thursday.

andrew


That's not hard to figure out the markup on...... Wow!
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Re: Cervelo share the ride "on hold" says my lbs [Tell3131] [ In reply to ]
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Tell3131 wrote:
So, my question is this. Why didn't Cervelo just do the deal like this. $1000 off a bike of your choice (except P1) and when a customer buys one for $1000 off MSRP, Cervelo sends a $1000 check to the dealer or credits their account or whatever. Wouldn't that move bikes all the same? Wouldn't that be better for the LBS?
You need to consider why Cervelo is doing this promotion in the first place. The most likely reason is they are short on cash and have excess inventory. Given those circumstances, this arrangement converts their excess inventory into cash. They are drawing down a little of the goodwill they have built with their dealers over the years.
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Re: Cervelo share the ride "on hold" says my lbs [Kentcart] [ In reply to ]
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Kent,
Great riding places up there. We rent a cottage on the lake in Cross VIllage (well just out of town, just into the tunnel of trees). Hope you can find a good deal. So did Tango tell you they still didn't know how the program worked?

Just Triing
Triathlete since 9:56:39 AM EST Aug 20, 2006.
Be kind English is my 2nd language. My primary language is Dave it's a unique evolution of English.
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Re: Cervelo share the ride "on hold" says my lbs [Power13] [ In reply to ]
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Power13 wrote:
The Real Animal wrote:

Quote:
It just so happens to be the busiest time of year for bike shops!
Uh, not it's not. Not even close.

Really? I would have thought Christmas was the busiest time of year for bike shops. It is in most countries.

Is it because it's winter there?
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Re: Cervelo share the ride "on hold" says my lbs [The Real Animal] [ In reply to ]
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Correct. As a rule, December and January are the doldrums of the year. Expenses remain roughly the same (i.e. rent, etc) but cash flow is down considerably. Xmas helps, but hardly offsets the slow period.

Chicago Cubs - 2016 WORLD SERIES Champions!!!!

"If ever the time should come, when vain and aspiring men shall possess the highest seats in government, our country will stand in need of its experienced patriots to prevent its ruin." - Samuel Adams
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Re: Cervelo share the ride "on hold" says my lbs [gregf83] [ In reply to ]
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gregf83 wrote:
Tell3131 wrote:
So, my question is this. Why didn't Cervelo just do the deal like this. $1000 off a bike of your choice (except P1) and when a customer buys one for $1000 off MSRP, Cervelo sends a $1000 check to the dealer or credits their account or whatever. Wouldn't that move bikes all the same? Wouldn't that be better for the LBS?
You need to consider why Cervelo is doing this promotion in the first place. The most likely reason is they are short on cash and have excess inventory. Given those circumstances, this arrangement converts their excess inventory into cash. They are drawing down a little of the goodwill they have built with their dealers over the years.

And these type of gimmics typically just pull forward future sales- just like the first time home buyer program helped spur real estate sales for a while, and then they fell flat (to levels that were actually new lows), or cars/cash for clunkers pulled forward inevitable sales and then car sales fell flat for an extended period. At the end of the day- many would be Cervelo buyers have their bikes or were going to get their bikes (at higher margins) and it's only the very few that upgrade their existing P3 or P4 to a P5, etc. A tenuous business model at best, and more likely margin compression, along with a much rougher future at worst. Finally, consumers have good memories- and will want their future (or first) Cervelo to be had a sizeable discount or the purchase won't happen.
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