I stumbled onto some interesting reading, I know this board is filled with bike shops and industry types. With all the recent “customer service” laden threads, this one makes for topical conversation.
http://www.specializedbicycle.blogspot.com/*** ***
I don’t know this dealer and I am not affiliated with either party.
Ouch! I’d love to hear their side of it.
so the bad business was that they want the lbs to pay according to the contract?
so the bad business was that they want the lbs to pay according to the contract?
You have got to me kidding me?
bet their side of it something like… we had a longstanding relationship with x dealer and appreciate their past efforts but we decided to go in another direction which we feel will better suit the needs of our loyal customers. Accordingly pursuant to the terms of the agreement we severed the relationship. Unfortunetly x dealer does not appear to have sufficient assets to live up to their obligations and rather than finding a way to pay what they owe us they put up a page whining that it is our fault and insinuating we are bad for expecting to get paid pursuant to the contract terms … or something like that
There are two sides to every story- no doubt.
The inability/unwillingness of either/both parties to be able to moderate that is a negative reflection on both parties. No one wins. Huge mess. Scary stuff.
scary agreed, and certainly sucks for them. when business relationships fall apart it is usually just business, not personal, for one side and very personal for the other
If that account of the events is accurate then that is just pathetic business practices. There is certainly something known as ethics in business and for them not willing to negotiate on payment terms is ridiculous. The in turn to be leaning against their personal assets is cheeky as well.
They are right, they should have read and understood the contract better and they should have set up a business entity that would have protected their assets better.
Living in San Diego I have had some dealings with them (Bicycle Wharehouse); they have always been very helpful and the wife that co-owns the business has always been a pleasure to work with. I am sorry to hear this story about them.
They may have been able to protect their personal assets by incorporating the biz. Not a smart move if you ask me.
I don’t quite understand where the almost $500,000 comes up. Did they sell the stuff and not pay specialized? If they still have the bikes, why doesn’t specialized just repo them or the shop send it back.
unfortunetly that is not an option for most small business owners as they have to personally guarantee loans/contract as no one will lend money to a corporation with few assets and no record of repaying debts
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He says they owed specialized $400k on product they already sold but didn’t have the money to pay did he use it as a loan to invest it(with no term set in the contract) or was business not so good?
Something is fishy about the story. They owe over $400,000 dollars. That is way more bikes then they have in inventory. Businesses pay on 30 days credit terms. Specialize would not sue unless they could not get there money back and they have a right to change the terms and companies do all the time to protect their interest. He is not telling the whole story.
Yup, definitely some funny business going on here. However, when you’ve been around the business long enough, you see this happen every couple of years. I believe ABG cracked down on delinquent payers a few years back - and were bashed by dealers. The sad part is that most consumers don’t use this forum, and many internet sites, and have no way to contact the manufacturer to find out their viewpoint. Most of the time, after speaking with a manufacturer, I have been able to understand their business tactic (i.e. dealers may be getting a large volume of business, but they aren’t tapping as much of the market as the manufacturer believes COULD be tapped).
I find it funny when people end up saying things like “we owed someone $400,000 but couldn’t get orders in order to sell and generate money to pay the debt” (when the $400k was owed from PREVIOUS inventory where funds should have been allocated to pay invoices). Honestly, there are so many badly managed small businesses out there, and probably why the average life span of a new bike shop is just about in alignment with all small business before shutting their doors (I thought I read the average life span was 7 years somewhere).
Some of the other things they mention seem funny, but until you hear from the manufacturer, there is absolutely NO way to know if they (Specialized) acted unusually aggressively. I do find it a bit odd that they don’t wait for the invoice dates to come due prior to suing - as someone who sat on a 3 month civil litigation trial involving retail (surf apparel) - it would definitely make the case much easier when/if the bike shop doesn’t pay by the due date either.
I guess it’s time to make a call to some contacts at Specialized and see what they know about this situation 
I bet he’s just beating the other vendors away with a stick.
Something is not right, most small businesses have to take loans to pay for inventory and sometimes that money can get misallocated to pay things like payroll, taxes, insurance, etc. But this guy is way beyond shuffling funds to pay for operating expenses. Every few years you’ll see a car dealer get busted for having multiple loans with different banks on the same inventory. Sales get slow, the banks start calling the loans, and they are in a world of shit. I’m not sayin, I’m just sayin.
Hahahahahahah, holy crap what a ridiculous, inefficient mess.
A while back I posted about how I hate the dealer model of selling things like bikes (and cars). I was told I didn’t understand how business works…well, yes I do, and it is, I think, an antiquated system.
Read that story above, and think about all the wasted time and money involved. You have you ‘regional reps’, your lawyers, your LBS, more lawyers, salesmen from specialized, salesmen at the LBS, all these people running around making complex negotiations and contracts and when I go buy a bike I get to pay for it…
When, it could work like this:
Yes, I know we all love our sacred LBS.
I am happy to pay them to fix my bike, fit me on it, and to buy powerbars at a markup there.
I thought this was going to be a thread about how ugly the Transition looks.
They may have been able to protect their personal assets by incorporating the biz. Not a smart move if you ask me.
even if they incorporated, if they signed a guaranty, they would still be personally liable.
Specialized did this to my local LBS as well…and then I had a warranty issue with a bike and it was a mess (and an 80 mile drive to the next closest LBS). Now they are back in the local…and the LBS has since been raped by Trek even worse…go figure.
it would definitely make the case much easier when/if the bike shop doesn’t pay by the due date either.
On the flip side, I would guess that the defendant creating a website and admitting liability on it makes the case a bit easier.