Thursday, September 12, 2019

Specialized strong arm

Big Bicycle is always putting the squeeze on independent shops. I don't know how it was in the 1970s boom, but in the 1990s, large brands like Trek, Specialized, and Cannondale put increasing pressure on shops to make large preseason commitments and meet hefty financial thresholds.

Even though technofascism and lack of industry advocacy has fragmented the market, corporate titans are still more interested in their cut from shop income than they are in the realities of daily operations on the frontiers of bike shop territory.

The latest intrusion from Specialized is their insistence that every dealer sign up for automatic bill payment, so that the Big S can suck money directly from the shop account for the full balance due. You get a few days' warning in case you have to ask for some indulgence, but the default is that they get to drain your coffers on their schedule. They feed upstream from every other expense you have, unless some other vendor has sunk a suction line that draws earlier in the month.

The rationale for such things is always the same: If you're not doing anything wrong, you have nothing to fear. Of course you will sell through by the deadline. Doesn't Specialized do everything they can to support their dealers and enhance sales?

Everyone knows that the restaurant business is tough. What are people going to feel like eating? Are they going to want to consume all of those perishable items you had to buy, or have you created a walk-in full of expensive compost? Fortunes can change at the speed of a blackening banana in hot weather. You can see the good times melt like ice cream in a power failure. Spoilage in specialty retail takes longer and does not generate as much obvious odor and muck. But we get stranded just the same. What will the fickle public feel like doing this summer? What unrequested innovation will turn expensive leftover floor stock into a clearance item and require that we buy more tools and watch more instructional videos as we record the loss?

Shops that change their focus in the winter face the added challenge of all the winter vendors playing the same financial games.

I know from previous experience that some shops play games with their vendors. Who knows how many of us have been technically bankrupt for years, dodging from debt to debt to keep from facing the fact that we will never break even? I started wondering way back around 1980 how many people called themselves millionaires because a million people owed them a dollar. The job that lured me to New Hampshire was the brain child of a guy who would purchase equipment, get the delivery guys to do a quickie, half-assed setup, and then use the equipment while withholding payment because he never got a proper setup. To this day I don't know if he was a fully calculating con man or just an idiot. Guys like that make suppliers try to secure their receivables. We all pay the price. But there is also legitimately hard luck. The con man/idiot publisher claimed it was all hard luck. That still left everyone queueing up in bankruptcy court to salvage whatever they could.

It's a hard world. Did you know that if your employer writes you a rubber paycheck, your bank will charge you for taking bad paper? Here is your lifeline, your just reward for services rendered, your ticket to be a productive citizen, but you get screwed if the "job creator" who paid you isn't really good for it. That's a sickening thrill. Then the checks you wrote against it start to bounce, and the fees really pile up.

In a diversified small business, we're always trying to balance the costs and rewards of each facet. While cross-country skiing and bicycling are pretty stupid sectors to remain in, they're not entirely dead. Cross-country is on life support worldwide, but bicycles are the transportation of the future, once the greedheads manage to collapse both the economy and the environment. We may have to learn to make our own stuff in a charcoal-heated forge, but pedal power will endure after motors can no longer be maintained. As humans breed and breed, new bike motors are manufactured every second. But, for the moment, bikes are still a luxury item and a toy. The corporations that market them look for customers with disposable income, and shops that know how to harvest a lot of it.

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