Note : Some portions of this post are on the speculative side due to scarcity of information. A bigger discussion of this post can be viewed here, for which I thank the RBT readers.
If there's a more well known and unique-in-name local bicycle shop killer than your wife who says you can't buy any more cycling stuff this month with the savings, its got to be Nashbar.
Some also call it Trashbar.
In 1974, Arni Nashbar, a New Middletown Ohio advertising man, started a bicycle parts mail order company out of his home with $1,000. He did this possibly believing that a small company can make more money on items sold through a catalog than through retail. Since this was way back, we don't exactly know how it happened. Some people believe he bought out the business from an initial holding called Bike Warehouse, giving it his name - Nashbar LLP.
Whatever the story, ten years later, the company was grossing six million plus.
Arni's mail order business was thriving so much that in the late 80's, his bicycle mail order house had branched out, opening five stores - two in Ohio and one each near Detroit, Boston and Washington. The shops offered service, repair and discount services. Today, there appears to be one even in West Virginia.
Sometime in that age, they also began a used bikes advertising tabloid called Cycle Seller, repositioned brands,broke into the overseas markets and pretty soon called on programmers to open an e-commerce venture of the business, which is now famously your www.nashbar.com/.
Ran out of tires,tubes? Nashbar. Need cheap water bottles? Nashbar. How about a cheap bicycle, or tools, or lubes or whatever secrets you may need under your cycling tights to cope with 8 hours on the saddle?
Any bicycling accessory your poor brain can think of will be available at Nashbar.
In the late 90's, the company invested in the U.S Postal Cycling Team as a sponsor, which inturn ended up giving Postal a 1.1 million dollars in business.
Nashbar expanded its offerings and distributed catalogues overseas. Private and even branded items easily sold here for 40% or more than what one could find through independant retailers. Nashbar buyers are often the serious bicyclists - racers, touring, and MTBers who could easily spend an average of 50-70 dollars per order.
Several times I myself have had a hard time believing the discounts in Nashbar prices. There is a blowout sale every day, every week, every month, one for Christmas, New Year and maybe even for Easter and Thanksgiving. The fashion in which they present this event to us make it seem as if its THE one grandiose event on your calender.
Its funny, but as if occasions aren't enough, their latest addition is a massive LEAP YEAR blowout, prices which are 30-90% off!! It seems to me as if the only number they haven't touched upon is "FREEE"!!!!
A "Leap Year Blowout" in my email. Oops, they CLEARLY forgot Lunar Eclipse Day, how bad!!
I'm sure you have asked yourself more than a dozen times : How in the world they could possibly do this - selling so cheap?!
It beats me. If you readers can help out, that'd be amazing.
Some things I can think of are :
They buy in bulk.
They nab manufacturers' closeouts, OEM's or slow-selling models of better brands and stamp their own brand names on imports.
To get around the exclusive dealer agreements of makers of more expensive bikes, the company deals directly with manufacturers in Taiwan and Japan - the same plants making many exclusive bikes - to produce its own line. ''We have a buying advantage from sheer volume,'' said John Rossi, Nashbar's director of retail development. ''As a result, we sell for what dealers buy for.'' He added: ''We have to overcome an initial objection to the name, but we point out to customers that the bikes have the features they are looking for.'' Since they opened, the outlets have increased sales volume by 20 percent. [Source]
They also have sweet return policy. You give back things you that didn't fit you, or you didn't want, and that later sells again for a much lower margin to someone else!
Nashbar is favorable to many because of their fast shipping and handling. I'm not sure how they do this, but I keep wondering whether they actually have stock that they ship or whether they have manufacturers ship directly to the customer.
Okay, anyway - back to the Nashbar story. After the Nashbar website was well established, Arni started lending programming and development expertise to other mail order houses, some of them being quite big. They became his customers.
Soon, Arni retired and let his son open Spike Nashbar, trying to get into the baseball and volleyball market. His son took his own decisions at a young age, and almost came to a brilliant decision to shut down the software end of the business, something that a lot of their customers were upset about.
His daughter, Molly Nashbar became a TV star, sort of like Cycling's gift to the world run by the likes of Paris Hilton. A reality show on Women's Entertainment (WE) showed how she moved out to L.A without telling her folks and poured money into parties and botox treatments at her will.
So finally we now have Nashbar, having multiple locations in the United States and a thriving website. People identify them easily with CHEAP, CHEAP, CHEAP. Another favorable fact that if the store isn't in your state or city, you don't have to pay a sales tax, something thats often on the bill in your local store, isn't it?
Interestingly, Quantcast statistics says Nashbar's website reaches 154,000 unique people/customers every month. The website appeals to a primarily male, somewhat wealthy, more educated audience. Most visitors are from the 60-100 K income bracket and most are also Caucasian or folks from overseas. The typical visitor reads VeloNews, visits campmor.com, and buys from pcmag.com.
That clearly isn't me, but I do read Velonews from time to time and I'm over educated.
Fast forward...a lot of things happened between then and now. Some believe Nashbar, Supergo and Performance are all operated by the same holding company. Others have it thinking that the holding company is Performance Inc itself. This stuff is difficult to do journalism on so I'll leave that in the air and have readers help me out here.
If one of you happen to be an independent bike shop owner or work in one, comment on how your shops are coping in such a competitive retail industry.