News: Trek to start selling bikes online

Local dealers will receive and assemble bikes in exchange for commission

This Trek store has an impressive showcase of bikes.

This Trek store has an impressive showcase of bikes (click to enlarge).

Trek to sell direct with Trek Connect

Trek boldly announced that beginning in September, consumers will be able to buy complete bikes directly from the Trek website. The bike will then be shipped to a dealer of the customer’s choice and that dealer will get a commission on the sale in exchange for handling final build-up.

Called Trek Connect E-commerce, the new program is designed to support a new omni-channel strategy along with Trek Connect Retail Marketing, which is a suite of digital, direct mail, and seasonal point-of-purchase assets. Bike shops will be able to get their own Trek E-commerce website with personalized branding.

“This is a massive investment in the long-term success of our brand and our retailers,” said Trek president John Burke. “We believe the most successful companies in the future will all be omni-channel enabled and we are doing everything we can to make sure that future for our retailers is bright.”

Bontrager’s broad range of accessories will be part of the new program.

Bontrager’s broad range of accessories will be part of the new program (click to enlarge).

Unlike bikes, which will only be shipped to a Trek dealer, consumers will have the option to ship accessory purchases to their home address or to a retailer for pickup, a process referred to as “click and collect.” In this case the consumer will bear the shipping costs. The local dealer chosen by the customer will still get a commission when the product is shipped direct to the consumer.

Big Investment

John Burke referred to this move as the biggest investment Trek has ever made. The lynch pin is a robust and clean website that had to be designed from the ground up. Comprehensive catalogs, photos, information and inventory control had to be integrated to allow the consumer to look through the product line-up, make an intelligent decision, and purchase a product based on available inventory. Additionally, online and telephone support staff will be put in place, and a massive warehousing operation will be established to build up and store these bikes so that they can be shipped quickly and efficiently. Time and money was also spent reaching out and educating Trek’s dealer network. As the program matures, Trek will glean a lot more information about its customers, creating a multitude of possibilities for customer personalization, marketing and outreach.

This Trek commuter bike sports integrated head lights and tail lights.

Bikes such as this Trek commuter with integrated head lights and tail lights will be part of the new program (click to enlarge).

Will consumer costs go down?

The short answer is no. With this initial rollout of Trek Connect, bikes will be sold at advertised retail price. There will be no undercutting of the local bike shops or other retail channels.

So what is the benefit to the consumer? Initially, this is just another way for consumers to shop. Many bike buyers prefer to shop online where they can do research, customization and view inventory all from the comfort of their home. How the program evolves down the road remains to be seen.

How are returns handled and who pays for it?

One of the sticky areas of online buying, especially for a complex fitted item such as a bike, are returns. In this case it’s not a huge issue. If the bike doesn’t fit, the consumer simply returns it to the local bike shop where they picked it up.

On the back end, that returned bike will be moved into store inventory and the commission will be reversed. But Trek believes that when you factor the number of bikes they expect to ship and average return rate, the rate of return will be low.

Trek Project One bikes are assembled and customized in Madison, WI.

Trek Project One custom bikes can now be purchased on-line (click to enlarge).

Good and bad for dealers

It’s obvious that the internet is not going away so the role of the local bike shop has to change in order to add value and thrive in a changing marketplace. In this initial model, the local bike shop can potentially reap thousands of dollars in commission inventory on each bike while taking on fewer costs. And the process of putting a bike together and handing it off to a customer is fairly simple. There is also the potential for the formation of a lasting relationship between the customer and the shop.

On the downside is the prospect of dealing with multiple returns. The local bike shop will bear the brunt of unhappy customers who ordered the wrong size bike or parts, and the prospect for such errors increases when purchases are made on-line.

And of course there is the increasing uncertainty that comes with change. This is the opening act in an evolving saga in which the local bike shop has little control. Instead the bike manufacturer holds most of the cards, forcing shops to find new ways to add genuine value to the bike buying experience.

Direct-to-consumer companies such as Bikesdirect and Fezzari have been growing steadily in recent years. And popular brands such as Canyon and YT Industries are eyeing the US market. But Trek’s announcement is the most significant thus far. Will they be alone in this online model or will Specialized, Cannondale, Giant and the other big brands follow suit? Only time will tell.

About the author: Francis Cebedo

The founder of mtbr and roadbikereview, Francis Cebedo believes that every cyclist has a lot to teach and a lot to learn. "Our websites are communal hubs for sharing cycling experiences, trading adventure stories, and passing along product information and opinions." Francis' favorite bike is the last bike he rode, whether it's a dirt jumper, singlespeed, trail bike, lugged commuter or ultralight carbon road steed. Indeed, Francis loves cycling in all its forms and is happiest when infecting others with that same passion. Francis also believes that IPA will save America.

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  • marcel courchesne says:

    i will never buy trek again. im not giving a commission to bie shops to do absolutly nothing. pay me to do nothing, sure il open a shop then, to get commissions from people who buy online and will never see, i will not sell anything or repair anything just a local empty space with a sign that says im a trek dealer and collect the checks lol

    • Jonathan says:

      marcel- you are paying the shop, if nothing else, to assemble, fit, and tune the bike for you. the last time I assembled a Speed Concept, it took me well over an hour in the shop. lots of delicate carbon parts that require a torque wrench, internal cable routing, etc. modern mountain bikes with hydraulic dropper posts, hydro brakes, presss-fit bottom brackets, etc. not something you want to mess with at home. you probably get some free labor later too. if you don’t like the idea of your LBS getting money for a bike that they did not sell you, then go visit your LBS and make them work for it. Trek is not selling bikes this way and only this way, you can still talk to a local bike person about your purchase, which is something you do not get from other online sellers.

    • Aaron says:

      The bike shop builds and tunes your bike, and facilitated the sale. Yes, they deserve a commission regardless of whether you want to pay it or not… they are in this to put food on the table too. The bike shop won’t be some empty room… empty rooms don’t sell bikes. Another sales channel is just another way for a shop to make a sale, not the end-all be-all.

  • MIke says:

    I think Trek is going to hurt the local bike shops that have been good dealers for Trek.When i buy a bike i like to sit on it and make sure the size is correct going by a size chart on line will not fit everyone the same. I think local shops might want to start looking for another brand to carry good luck to local mom and pop bike shops.

  • jiw71 says:

    Buying a bike online will do absolutely nothing to benefit the consumer. There will be no advantage – particularly when the bike is going to be shipped to a LBS for final assembly anyway. Where’s the logic? advantage? I just purchased a 2016 Trek Stache 9. I researched the bike thoroughly online. Confident that I possessed enough info about the bike (no need to “test ride”) I walked into a LBS and ordered the bike. The service was excellent! BTW: the LBS sold it for $600.00 less that the listed price on the Trek website.

    • ellen says:

      jiw71, This wasn’t done to benefit the customer. It was done because bike shops are no longer profitable and Trek wants to get its money back from these retailers and they don’t see any other way to do it.

      As much as the consumer is in charge, they don’t realize it, but it’s quite possible they’re cutting their own throats in the race for lowest prices. When the local shops go out, cycling advocacy is going to disappear, new ridership will decline even further, and you’ll have a whole bunch of people who hate riding because they’re on junk or expensive bikes they can’t fix with a YouTube video.

  • Sean says:

    so the dealer doesn’t have to order tens of thousands of dollars of inventory in September for next spring? doesn’t have to store and build it all up, only to discount a large chunk of it to move it late in the season? Still gets a profit on the sales and face time with the consumer? ya, its going to ruin them…

  • Midwest rider says:

    Based on this description I see nothing positive for anyone except Trek. The consumer cannot test ride bikes or get properly fit on an actual bike, nor can they negotiate any discount that good repeat customers often get now from local LBS. The dealer seems to lose $$ on each bike returned. The new ‘delivery-only’ scheme hurts a good LBS’s ability to cultivate ongoing relationships with their customers. Typical Trek customer demands more service than just simple assembly. And BTW- MSRP on many Treks is significantly above other big competitors at similar spec points (Madone vs Cdale SuperSixEvo vs Spec Venge). Many times that dealer discount is what keeps a Trek reasonably competitive on price.

  • Tom Leigh says:

    Trek has been undercutting dealers for some time, by opening their own “corporate” stores in the same market areas (often just down the street) as well-established Trek dealers. Bike shops in most cases make their money on entry and mid-level buyers that ride occasionally, not avid cyclists. The best thing to reduce costs is to stop buying the latest thing when the previous latest thing is not nearly worn out. Does Boost 148 ring a bell? 27.5 wheel sizes? 1×11? Does this stuff really make you a better rider? Are you having that much more fun? Blame ourselves for increasing prices and disappearing bike shops.

  • Lance legStrong says:

    “he local dealer chosen by the customer will still get a commission when the product is shipped direct to the consumer.”

    what’s the point? If it is an issue of returns, where the customer doesn’t know his/her bike size and has to return, then penalize the return, that is penalize stupidity.

    how about choice? that is, if you know your bike, have it delivered to your home, you build it up. Many bikers are capable.

    as one blogger noted “some are not comfortable in a bike shop” that goes for me, it’s not much different from a used car lot. I always get some smug know-it-all punk kid who is asking me tens of questions: where do ride? you looking to buy? than the sales pitch, “This bike is so hot, carbon-fiber, 11 spd. xx1 bla bla bla”.

    eliminate the middle-man shop for some, and eliminate the cost from the brick and mortar, just like every where else it’s being done.

    There will always be a need for a shop: repairs, advice, bike trials, etc., but don’t add cost where it isn’t justified.

    just saying….

  • duder says:

    This is dumb. No savings for consumers, so no additional sales…the people buying a trek are still buying a trek just not in store. Doesn’t bring in the sales of us that build our own bikes (bought online) and know what size to get and how to set it up. It changes nothing for the better, and adds something worse…noobs buying the wrong size bike online and the bike shop has to deal with the mistake vs them going in store and getting the correct fit. Online research can be done regardless of buying in store or online…still have to head into the shop to get your bike.

  • Rob says:

    Way to go TREK. Gee you have worked so hard on building the brand in Australia and it has been working. I see this as a huge step back for retailers and the brand. I see retailers ordering less stock, having less of your brand on the floor and potential issues with returns will just leave a sour taste in the mouth of the consumer. I can see many trek dealers now also supplying other brands that cannot be purchased online as floor stock.

    I see a lot of rolling repair shops etc.I can see this decision creating more of these. Gone will be the days you can walk into a shop and take a bike for a test ride to understand how it feels and rides.

    I have a lot of faith in your brand I have been riding them for almost 20 years and was considering purchasing the new aero in December when available in Australia but this now may change in order to get a test ride in !!

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