The biggest commercial trends in cycling are…?
eBikes certainly. Gravel. Stationary. This has been my consistent theme for the past three years and I’ve silently patted myself on the back for being the Sage of Cycling. But until now I’ve whiffed at a major industry pitch thrown right past me, the ball in plain sight. In fact, I’ve participated in this major market move in numerous ways without realizing its significance.
It’s the secondary market. Used stuff. Bicycles, wheels, wetsuits. Yes, there’s always been used stuff for sale in our sport. My first race bike was a Raleigh International, which I purchased used in 1976. I upgraded to a used Colnago frame in 1979 (I swapped the parts over). After I picked up my registration package for the 1981 Hawaiian Ironman I turned to walk away and there was Cowman walking up to pick up his packet, rolling his Raleigh International that I recognized as my old frame (which he bought from the fellow to whom I sold it). Below is that prized used Colnago in the 1981 Ironman. The used market has always been with us; but recent events have conspired to make this a major industrial category in a way it never was.
As I wrote in my coverage of Cervelo’s new bikes this brand, which has dominated triathlon bike sales for a generation, has now set $3,200 as its entry-level price. This is a market-driven decision, because triathletes now require a minimum feature set on any new bike they buy. But $3,200 is a lot of money and this requires a robust secondary market. For most bike shops this is an uncomfortable conversation, and few accept used equipment in trade. This is no longer a defensible position. Below I’ll tell you why. But first a short paragraph of history.
When I made and sold bikes there was a market in used bikes, but the pathways were clunky. The first internet shock wave to strike retail bike shops wasn’t Amazon, it was eBay, and that shock was felt right about the turn of the century. The problem wasn’t the secondary market per se – auto dealerships have found ways to earn rather than lose money through used car sales – it was the pent up supply of used bikes immediately unleashed on the bike market through a slick pathway. The Classifieds Forum here on Slowtwitch wasn’t designed as a way to make money, but to keep such postings from cluttering the main forum. Nevertheless, each new platform – from eBay to Slowtwitch Classifieds to Craigslist – made it easier to pair buyers with sellers.
I started thinking about this as I got to the know the folks at The Pro’s Closet. This enterprise started as a way for pro athletes to dispose of their gear as they moved to new model years, or changed sponsors. As with a lot of startups, the mission has expanded as their fertile minds conceived of how to leverage this platform. Last month we helped Zipp with its Trade-in, Speed-up project, and that was a triangular deal between the wheel maker, its bike shop retailers, and The Pro’s Closet.
The secondary market is now a mandatory for shops, not an elective that most elect to ignore.
Several wheel companies – ENVE and Zipp directly, and HED through certain retailers like PlayTri – already take your used wheels as Lucky Bucks toward the purchase of their new wheels. (ENVE’s is called Trade-In, Trade-Up and includes an aluminum wheel credit of $600 thru December 2, as well as a $900 carbon wheel credit).
There is no reason I can think of why bike shops shouldn’t take in your wetsuits, wheels, bikes in trade. If they don’t want to deal with your wheels and wetsuits, The Pro’s Closet sits there like a used car brokerage inoculating the bike shop from the messiness associated with the sale of used products. Or they can realize that The Pro’s Closet makes a margin, and shops can take that margin for themselves. I mentioned used wetsuits. I have never owned a bike shop, so I can’t lecture on a business of which I’m naïve. But I have a lot of experience selling wetsuits at race expos, and when we did so as a matter of course we took wetsuits in on trade. This lubricated the sale of a new wetsuit and it gave our customers the hope of a wetsuit they could afford. Yes, sometimes it took two sales to make one margin (selling you a new wetsuit, and then selling your used wetsuit we took in on trade). But hard work never hurt anyone and while our method of selling wetsuits always seemed to suck the oxygen out of every other wetsuit seller’s booth.
The used market is just not done in the bike market. But that’s no longer sustainable. Prices for a good long-armed wetsuits are $600 or $700 or more, not the $220 I sold them for in the late 1980s. Good tri bikes were sold for $2,000. Today most of you won’t buy a new tri bike without a sleek carbon frame, internally routed cables and hydraulic-powered disc brakes, and that’s a $3,200 bike. That’s what I would have paid for my first new car (a Volkswagen Beetle in the mid 1970s), except back then I could only afford a used Beetle, and this is my point I guess: There was a market for a used Beetle. The used bike market – at your local bike shop – needs to come out of the closet.
I’m coming across people who’re incorporating this into their business models. Neil Pollard attended a bike fit workshop of mine earlier this month. His business, 2ndtri.com, is coaching, bike fitting, and used bikes and gear. Another attendee of that same workshop said one of his ardent missions was putting his friends and clients together with the right used bike. When I asked Ahmed Zaher, owner of PlayTri, a fast-expanding triathlon retailer, he’s been taking used bikes and wheels in trade for years.
Your typical bike shop has resisted this. I asked Trent Nix, formerly of Trishop in Texas, one of the smarter retailers I’ve known. “We didn’t have the space,” he told me, and “We didn’t have the knowledge of the value bikes had on the used market.” Also there was the Sword of Damocles in the form of the new bike inventory he must sell. But the sorts of bikes most triathletes want can’t be had for the prices many want to pay, hence the need for the used market. Trent isn’t in the retail game any longer but admits the sale of used bikes by today’s bike dealers, “probably is required.”
The more I thought about this the more it occurred to me what a dummy I’ve been. The Pro’s Closet now removes any objection your LBS might have erected keeping him from accepting bikes in trade. Further, I suspect Zipp and ENVE are just the beginning. It’s quite clear that bike brands will contract with The Pro’s Closet as well, lubricating your new bike purchase by providing an easy method for turning your used bike into cash, lessening the pain of that new purchase. This will help, not hurt, your LBS, as they can sell you that new bike for a lesser price without taking a margin haircut.
Last but not least, the consumer can now purchase used bikes with a patina of comfort not enjoyed in a user-to-user transaction. Some shops, like Playtri, realize that The Pro’s Closet is making a margin, and will want to keep that margin for themselves. Start-ups, like 2ndtri, will find the secondary market an easier point of entry, without the minimums, the risk, the required floor space, and the closed territories typical of the new bike dealership.