Chips and Salsa.

I write today with a frown.

Why?  Probably because I overreact a bit.  But it’s because of this.  If you click through, you’ll see that it’s an article from Bicycle Retailer and Industry News about how Salsa is going to start selling bikes through REI.

You know that thing where you get a new bike, and love it, and ride it, and love it, and then one day you see the first chip in the paint?  That’s where I’m at.  That first frustrating chip in the paint.

Earlier this week, I spent quite a bit of time in the saddle on the Horsethief, and I’ve been working on some writing about it.  I went for the Horsethief because I didn’t want a Trek (with their migration towards online sales), and because I really wanted to get a bike from a company that had the LBS ethos that I support.  I now find myself regretting that decision–or at least second guessing it.  I’m in that position not because the ‘thief is a bad bike.  Far from it, the ‘thief is amazing.  No, I’m in that position because I fundamentally do not want to support a company that is pivoting away from local bike shops.

In the article, Salsa indicates that they believe that this move will benefit local bike shops in the long-run.  I’m sure that this is the answer that has to be provided in response to a concern about LBS–but I’m not certain that it is true.  Salsa is starting with 11 stores…”starting small.”  But when REI sells out of their purchase for 2017 (and they will, because Salsas are great bikes), REI will come back and want to make a bigger purchase for 2018.  And if REI, with 145 stores and a massive online presence, wants to buy 10,000 bikes, versus a LBS that wants to buy 20…well, which order would you fulfill first if you were a profit-minded company?  For that matter, how long until REI is selling Salsa online…and then how long until they’re getting sold on Backcountry and the like?  When REI puts the Salsas on clearance at the end of the season, what will their pricing be?  And for that matter, will Salsa sell 10,000 bikes to REI at the same price that they sell 20 to a LBS…or will this become akin to Shimano, where volume equals discount?  If Salsa can sell to REI for cash, will it make sense to sell to LBS that have to buy on credit?

I love REI–I’ve been a member for many years.  It’s a great store and a great resource.  But quite frankly, they just don’t know bikes.  I’ve talked to their bike employees and they simply don’t know what they’re doing.  I’ve watched them work on bikes.  I’ve watched them assemble bikes.  I visit the bike department in ever REI I go to, from Chicago to Denver, because I’m a bike person.  The experience is uniform–they are a retail store that also sells bikes.

Salsa is, at least to some extent, a niche manufacturer.  Recognizing the subtle differences between their drop bar frames–one oriented more towards touring, one towards gravel, one towards endurance, etc….it requires some diligent study.  But that’s their allure.  That’s their calling.  The Cutthroat was designed to fill one very specific need.  It’s not the right bike for all applications.  The distinction between the Spearfish and Horsethief–obvious to people that study bike specs, but not so obvious to the mainstream REI consumer.  So this move will result in the dilution of Salsa’s uniqueness and their specific appeal.

I sound all retro-grouch here.  And I know a lot of people that work at Salsa…so who am I to begrudge their success?  If they can start selling at major retailers and greatly increase sales volume, that should be awesome, no?  Maybe they can spend even more on R&D and develop even more amazing bikes.  Maybe this will ultimately benefit riders–maybe it will ultimately benefit me.

But it will not benefit local bike shops.  I’m more curmudgeonly this past year than ever before, because I’ve seen the impact that having a strong LBS can have on a cycling community, and I’ve seen the impact of losing a strong LBS.  I vividly remember many times that people in Chicagoland would drive out to DeKalb to buy a Salsa at ‘the old’ NCC…because NCC was the Salsa rep in the area.  That helped drive NCC’s success and viability.  With the significant changes at NCC, they are no longer one of the few Salsa dealers in the area–a number of other shops are on board now–and I suspect that will affect NCC’s long-term profitability and viability.  But if REI was selling Salsa 5 years ago, in Chicagoland, how much different would that have been?

There are swaths of the country that don’t have an REI…and this move is starting with only 11 REI stores.  But that’s the start.  If the REI experiment is successful, would Salsa restrict sales to REI, or will this trend grow?  Salsa is a for-profit company–this trend will grow.

And so if they are for-profit, why on earth wouldn’t they sell through REI?

The challenge of that rhetorical question is all of the things that you can put after the comma.  Salsa has had a unique appeal to me because of their culture and ethos.  Because they’ve been a “big little company.”  Because they have been such staunch supporters of LBS and local events.  Because their demo events are as much about their people as about their bikes.  Because of the relationships that you build–where you get to know the regional Salsa rep through your LBS, and you feel good about working with them.  If Salsa doesn’t need those things to sell bikes, then why do those things?  Or if you still do those things, do they change?  If the Chicago REI starts selling Salsas and they sell 200 a year, will REI do a bike demo there, or with another area shop that sells 30 a year?  If they are for-profit, which makes more sense?

Sometimes, when you get that first chip in the paint, it’s just one chip.  One little mark of character that doesn’t affect anything else.  But sometimes, that little chip becomes an entree into corrosion that can start affecting the whole frame.  You start to see the paint bubble up around it, and it spreads like blight.  We’ll see which this is.

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4 thoughts on “Chips and Salsa.

  1. I think you’re missing something though. Salsa will profit more from the LBS orders. They just fill in the REI orders for some semblance of trustability in sales.

    Big box stores negotiate HARD and they want stuff CHEAP – volume is a good and bad thingy, so the profit margin for selling to local bike shops is greater.

    Take it from someone who knows. Volume is great but you really have to work for that level of stability.

  2. Salsa used to be a niche product, but not anymore. Salsa, like Surly is own by QBP and they are not easy to deal with. I bought my first before they were that common and I still use one as a commuter. The bike shop eventually dropped them (or they were dropped by Salsa) as they could not meet all their demands, including forcing the shop to stock certain number of certain bikes, which is not always viable.

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