Comment: Are distribution models changing?

I’m sat here, post trade shows, wondering if the floodgates are about to open on a significant shift in how brands deal with retail. More than anything, it’s the thoughts of the frontline I’m most interested in, so please do get in touch and share your thoughts on the future of the distribution model.

Velocite’s announcement that it is to operate a two tier method of passing business to dealers is an interesting one. It’s a system symapthetic to the troubles retailers are facing with internet competition and direct to retail brands at present.

Unless you’re a Velocite test centre, sales are now largely set to earn retailers a commission. No compulsory stock up clogging the floor and reducing cash flow – if you partner with the brand, your store can simply earn a fee for the referral, enabling the retailer to compete on a level-ish playing field with direct to consumer products.

I watched closely as the MET helmet label parted ways with its last distributor. In the brief time before the firm set up its own UK direct to retail warehouse, we had distributors calling BikeBiz desperate to find out if it was available to snap up. Turns out, like Mavic, Kona and numerous others beforehand, MET wanted to replicate their successful direct to retail model from mainland Europe here and there was no changing their mind.

With distributors becoming increasingly capable of producing quality in-house product, largely to keep prices reasonable, combined with the difficulty in controlling the grey import of an ever growing list of brands, are things about to drastically change forever? You only have to look at the success of brands like Forme, Madison’s own-label clothing, Altura, Seventies’ Federal brand and many others and the trend is already there.

With Madison having parted ways with Easton Bell Sports entire portfolio, it’s surely only a matter of time before the Madison stamp is put on a helmet, and why not? They’ve done a great job on clothing and redeveloping Saracen in-house.

Importing an out of house label seems to have become a dicey business in a trade where prices are researched heavily by the end-user – to the point where bikes are ordered from oversees stores, rather than from the dealer down the road.