Evans no longer CTC shop provider?
- Thread starter Bollo
- Start date
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wafflycat
New Member
- Location
- middle of Norfolk
Paul_Smith SRCC
www.plsmith.co.uk
- Location
- Surrey UK
Although I no longer work at BikePlus I am quite sure it is not going back to them, I don't actually know who is going to take over the Franchise though. This is a topic that gets referred to once in a while, as a CTC member and having run the CTC shop franchise I have naturally watched with interest how it has evolved and changed since it was out sourced by the CTC.GrahamG said:
One reason for not running the shop themselves was that the CTC Organisation wanted to out source the potential risk that comes with retail, it is after all the members money that they were risking so I can see why the outsouced it in the first place.
I confess I did approve of the way they wanted BikePlus to run the shop, all the product range they had stocked were retained, they had to an extent influence of what we stocked and advertised, they wanted experienced staff with hands on access to each product so we could talk through any queries with focus primarily on customer service. The result was a shop the members seemed happy with and the turnover and profile of the CTC shop increased as a result. Over the years the criteria of what the CTC organisation wanted from the shop changed, at the time of contract renewal the focus seemed to be far more on revenue than it had been.
Evans seemed to have increased revenue to the CTC organisation even further, something they gave assurances to the CTC they would do to the extent that they guaranteed a minimum commision payment, all be it it seems at the expense of customer service, I note that they did not seem to have to meet the same criteria we did, all the lines were not retained, which would seem acceptable if they had not been popular, with mail order a retailer will often sell items that are normally hard to get, which was one reason the shop was set up, so indeed a shame that it lost this focus. Even the CTC Clothing was not updated, members now buy this from the manufacturer, this would have been through the CTC shop when I was running it, I can see why Evans may not have wanted it though, the range they inherited from BikePlus we had inturn inherited from the CTC Shop, even with BikePlus the sales were poor in the end.
The current CTC shop seems to charge RRP for many of the items less discount to the members, plus of course a percentage also goes to the CTC Organisation. I have heard that the shop generated £95k Net although I have my doubts as to how accurate that figure actually is, if this is indeed correct that is an extremely good return considering the CTC Organisation don’t have any of the risk or expense of all that goes with running the shop, all of which, staff, IT systems, stock, premises and even the advertisements were funded by the retailer, I doubt that they will get such a good deal the next time the CTC Shop franchise is renewed.
If 95K was correct I would have thought Evans would have been more enthusiastic about keeping the shop, at least renegotiating a more favourable contract, as it was 10 % off RRP plus another 10% to the CTC when you already have an even more succesful shop that doesn't have to offer either of these was never condusive to being a long term relationship as far as I was concerned, perhaps they just wanted to increase their turnover to attract investors and then once they had then simply off load anything that wasn't actually as profitable as it seemed.
Since 2001 when BikePlus took over the shop before it moved to Evans, mail order/online retailing has of course changed dramatically, I doubt few of the specialist mail order retailers who are capable of such a high turner will be that interested in having another shop that offers even further discounts, in effect competing with themselves, plus on top of that they then have to allow for the commission to the CTC Organisation, which with BikePlus was 10% of the sale regardless of the profit margin. Not to mention that if a retailer was interested in catering for the touring market they could do that under their own name without having to answer to the CTC or give them any money for doing so, when BikePlus lost the franchise to Evans we decided to run the shop under our own name, I was able to be more competitive on price, advertise what I wanted and turnover increased dramatically as a result, most retailers would also have a similar thought at some stage when considering bidding for the franchise I would have thought, yes they would get some extra business by being linked to the CTC, but would it be worth the additional costs.
One of the big retailers may well be interested in some kind of offer, although I doubt it will offer anything like 95K net per year to the CTC Organisation together with as much as 10% off the prices listed by the retailer who is running the franchise. To have such a high turnover would normally mean the shop is aggressive on price anyway, so I would expect they would offer the same prices but openly state that the CTC Organisation benefit with commission, This is in effect what we did at BikePlus although we did naturally look at new items that we thought would sell specifically through the CTC shop, we did in effect run it as independant shop.
Worth noting at this point that unlike the mail order giants who stock everything, a quality local bike shop will need to chose carefully what items to stock and the good ones will of course chose well from a large range of suppliers and manufacturers. Many CTC members and customers of the CTC shop are novices, presenting a huge choice of comparable products can be confusing, offering a more focused but well chosen range means that they could in effect use the expertise of the CTC shop as a recommendation, as such I actually reduced the range I initially offered and sales improved as a result, along the same lines I know that even with www sales accounting for a high percentage of orders many still like to talk to someone about their possible choices before hand, something the larger mail order specialists do not encourage and if they do seldom is there a touring specialist they can speak to.
The very fact that being linked to the CTC organisation will attract business does mean that someone will be interested in taking over the franchise that's for sure, extra business is extra business after all. Some possibles on my short list would be those who currently have a low profile in terms of advertisng with the CTC, perhaps one of the larger specialists who to date have had little focus with the touring market, as it would naturally be an area where they could still expect to see some potential growth, as the CTC will no doubt supply the sales history interms of items sold, as BikePlus did when the shop moved to Evans; whoever takes it over I repeat 95k revenue to the CTC will take some beating.
From the members point of view there are of course pros and cons for each type of retailer, although I realise that none will be able to tick every box I do hope that the CTC will take on board feedback from the members regarding the importance of customer service, it would be a shame if they simply went for the retailer who they felt offered the highest potential revenue.
I will be interested to see what direction the CTC Shop takes next.
Paul_Smith
Thanks for that Paul, but could you be a bit less vague next time?
IMHO the demographic of CTC membership is changing from the stereotypical cycle tourist to a much broader range of people with a stake in cycling. The CTC can therefore provide a specialist shop service that caters for a shrinking proportion of their membership, or provide a general service. Either choice is tough, as the former may not generate that much revenue and you'll be competing with SJS, Spa, some LBSs etc while with the latter you're competing with Wiggle, Chainreaction, Parker, even Evans and their economies of scale. The CTC shop could end up falling between the specialists and the generalists and pleasing no one.
Speaking personally, there's been no real attraction in buying from the CTC shop when you can get better prices, choice and service elsewhere.
Its a toughie. Unless the CTC is convinced it can make money from a new supplier, I think it should be looking at organising promotional deals through tie-ins with other online shops, in much the same way that a lot of LBSs are willing to do for CTC members, rather than fronting an entire shop itself.
Just my two cents.
IMHO the demographic of CTC membership is changing from the stereotypical cycle tourist to a much broader range of people with a stake in cycling. The CTC can therefore provide a specialist shop service that caters for a shrinking proportion of their membership, or provide a general service. Either choice is tough, as the former may not generate that much revenue and you'll be competing with SJS, Spa, some LBSs etc while with the latter you're competing with Wiggle, Chainreaction, Parker, even Evans and their economies of scale. The CTC shop could end up falling between the specialists and the generalists and pleasing no one.
Speaking personally, there's been no real attraction in buying from the CTC shop when you can get better prices, choice and service elsewhere.
Its a toughie. Unless the CTC is convinced it can make money from a new supplier, I think it should be looking at organising promotional deals through tie-ins with other online shops, in much the same way that a lot of LBSs are willing to do for CTC members, rather than fronting an entire shop itself.
Just my two cents.
