I last visited the topic of outside reps back in October of 2020, right when the effects of the pandemic were being felt at every link in the supply chain. At that time, I postulated that good reps add value to the selling process by making it easier for bike shops to do business with suppliers, and vice-versa. The easier each party is to do business with, the more product gets sold and the more successful both parties are in the long term.
That hasn’t changed.
What has changed in the last two years is where reps go, how they do their jobs, and what they expect from their clients at both the supply and retail ends of the business. It’s a whole new world out there, even if some parts of it seem awfully familiar.
Preparing for this piece, I interviewed reps is seven of the largest U.S. cycling markets. None would speak on the record, nor were they willing to be identified by name, territory, or the product lines they represent. So there are a lot of unattributed quotes in the paragraphs that follow. I’ve used the unisex pronoun “they” to refer to both the men and women I talked to.
New world, new reality
“Reps are still problem solvers; what’s changed is they’re starting over, starting to reestablish these connections.”
“The reality is the rep world has been changing over the past 20 years,” one senior rep told me. “About 10 years ago it began the shift and the pandemic moved it into high gear. I do think that reps can be massively important, but what’s shifted is everyone’s gotten used to more emails and less personal presence.” They explained that nowadays, big shops might only see their reps every two to three months; they’re doing business by texts and emails. “The role is more business planning and long-term strategy. It’s almost like sales consulting,” they explained.
There is universal agreement on this topic. Another rep said, “Shops figured out how to do much of the rep stuff on their own. So what’s happening now is that reps are trying to reconnect with dealers and get that momentum going again. It’s changed repping and it’s changed retailing. It’s still evolving, but it’s starting to get back to the old model. It’s about re-establishing what a rep can contribute to (the dealer’s) business. Reps are still problem solvers; what’s changed is they’re starting over, starting to reestablish these connections that went away (during the pandemic).
“We got out of the old mode of traveling," a third rep pointed out. “And we haven’t shifted back to spending days on the road. A lot of the dealers prefer face-to-face meetings and we haven’t gotten back to that yet.”
In addition to the face-to-face aspect of the business, reps have changed their techniques, moving away from pure sales to what more than one described as “consultative selling.”
“Post pandemic, I think those two or three years, there just wasn’t space inside the bike shop, we had to manage from afar and do what we needed to do to support our retailers with inventory management and so forth,” one told me. Now those activities have changed. “We’re more consultative, there’s more product education, building brand loyalty, how to navigate the B2B, making the process more user-friendly for the retailer. We do a lot of education and technical support virtually, and now we’re back in-store. Shops are really starving for in-person education and now we can give them that.”
"You do more of the non-order-taking functions,” said another. “You help with merchandising, product knowledge, make sure they’re aware of promotions, give them content for social media, make them aware of new product and promotions. When you look at it that way, the rep is providing more long-term relationship value.”
One former rep summed up the new relationship this way: “We want the bike shops to sell products. Our job used to be to sell something to the retailers. Now our job is to help them sell. We still have sales goals, but we don’t have to be driven by getting the order on every visit. Sales is an outcome.”
Fewer trees, less fruit
“We’re all grasping at straws right now. We’re just trying to find qualified dealers who aren’t overstocked, who pay their bills and want to buy our clients’ products.”
Not to take anything away from the sales aspect of the representative’s craft, but many reps said there are just fewer orders to be had nowadays. “Sales are down; pre-season bookings are way off,” one told me. “Going back to May and June of this year, dealers have turned off their purchasing and their available-to-buy dollars; very few were buying more during those months. Booking programs have slowed down; In a normal season I would have (already) pre-booked 70% of my business for the coming year with a brand, and that’s just not possible right now, just because retailers have more product in inventory than they can manage and in many cases they’re cash-poor.”
Another challenge is that there are just fewer large accounts to sell into in major markets, because so many of the most successful shops have been acquired by Trek or Specialized.
“Company stores are closing off business to other suppliers in major metropolitan areas,” the same rep continued. “My region has been a hotbed for S and T acquisition. And every company store is one less client for my business. We’ve had to look at smaller, up-and-coming stores and looking to engage with them. But only a small handful of those stores have been able to come close to matching what some of those former IBDs were able to drive.”
A time zone away, another rep agrees. “We have lost about 25 doors in my zone to Trek and Specialized buying stores,” they said. “We just have fewer doors to call on.”
A third rep nailed the situation. “We’re all grasping at straws right now,” they told me. “We’re just trying to find qualified dealers who aren’t overstocked, who pay their bills and want to buy our clients’ products.”
The high cost of doing business
“The bottom line is, it’s just that much more difficult because the reps’ financial capacity has been reduced to such a degree.”
Not only are fewer dealers buying, outside reps’ commissions are down, costs are up, and some reps are looking to get out of the business entirely. “Commission rates have dropped a lot, by as much as half with some bike brands,” one veteran rep told me. “Territories have gotten a lot bigger; since you don’t visit as often so you can handle more shops. There are fewer reps coming into the business now; it’s harder to get established. There’s also a whole generation of reps who’ve been repping for 20, 30 years, and they’re getting ready to retire in the next few years.”
Between inflation and travel costs, it’s also more expensive than ever for reps to get out of the driveway and back on the road. One industry veteran put it this way: “Hotel prices are up, food prices are up; the cost to operate my vehicle are up. Expenses haven’t crept, they’ve jumped up,” they said. “The easiest thing for the rep to do is cut the number of days they’re on the road. I try to find ways to work around these increased expenses, but when nobody’s taking commodity products, it’s hard to justify the time. We’re all just hanging in here because those of us who are road warriors love what we do.”
“Reps are still equally valuable to a certain class of vendors, and as much or more valuable to the retailer, especially in terms of how to sell new product,” another rep said. “But the bottom line is, it’s just that much more difficult because the reps’ financial capacity has been reduced to such a degree.”
Nor does the immediate future offer a lot in the way of relief. One longtime outside rep, who has since gone into to client-side sales management, assessed the situation this way: “In some cases I think we’ve seen a lot of bike shop owners get a lot smarter, a lot savvier, but there are (also) a lot of dealers who just rode this wave and are going to be in a lot of trouble,” they said. "You hate to see it. You want every passionate bike shop owner to stay in business, big and small.”
At the end of the day, though, most reps remain engaged with what they do and are still bullish on the value they bring to both suppliers and retailers. "If anything, I feel that the outside rep is more important to the retailers than ever before,” one told me. “I have relationships with accounts that go back over 25 years. Those relationships are why I love being a sales representative. I’m not above cleaning a bathroom or taking out the trash if that’s what it takes. My voice is to try and represent the dealers I serve and allow their needs to be heard.”
