Specialized drop prices in North America for Levo range. Permanent drop due to competitive market.

[Rás Cnoic]

From the BRAIN (bike retailers news) site:

Specialized drops prices on e-bikes at 'a competitive moment'​

Specialized drops prices on e-bikes at 'a competitive moment'

MORGAN HILL, Calif. (BRAIN) — Specialized Bicycle Components told its U.S. and Canada retailers Tuesday it is permanently lowering prices on its entire Turbo Levo e-bike lineup, with MSRP reductions from 6% to 27% and wholesale pricing drops of 3% to 27%. The largest reductions affect top spec'...

www.bicycleretailer.com

Looks like a massive battle for customers is unfolding between traditional big bike brands and the new disrupters with the likes of Avinox and Aventon. The fact it's a permanent drop is a major thing. Were they overpriced previously? Or now a desperate loss leader price cut to maintain customers/shift existing stock? Must have been some panicked dealer pushback to Spesh seeing the huge number of Amflow sales recently. With Bosch adding a big power upgrade last week export more brands to pivot to deal with this new threat. Guess the customer profits.

I wonder if they'll implement a similar permanent price cut in UK or Europe. Avinox bikes stealing all the headlines. I can't believe how many brands now run that motor.

 

[stompandgo]

Cannondale dropped dealer prices a month or so ago, giving retailers more margin for discounting, and lowered prices on their DTC platform.

A race to the bottom has only one winner.

 

[Gionnirocket]

Competition is almost always good for the consumer.

And I can't wait to hear the argument/rationale from the Specialized snobs

 

[stompandgo]

It is, until the losers go out of business, and the consumer has fewer choices.

 

[Gionnirocket]

Well I did say almost always.
But I think this will wake up the overpriced brands to reality. They've been milking customers long enough.

 

[stompandgo]

What AMFLOW is doing is squeezing the dealers, but making up for it with volume incentives. They do not pay dealers a competitive rate for bike assembly or warranty work, for example. Dealers are free to pass real costs onto the end user, which is usually not a great idea. Dealer margins are also quite a bit lower than major brands. However, they will reward volume sales with increased margins. It is a clear strategy to gain market share and drive out competition.

 

[Gionnirocket]

It's always a balance. If they push the dealers too hard, they can always drop the brand.
I worked for a large electrical contractor and the VP would come to every job and say something to the affect... "c'mon guys we need a push, we're losing money on this one." I was under the impression that he was running a charity for both the customer and his workers. Easy to understand as the margins can be tight in construction. But when you see him pull away in his new Mercedes every other year... the illusion evaporates.

 

[Rás Cnoic]

The bike biz is vicious really and goes in cycles (excuse pun). I'm old enough to remember when Spesh first appeared in Ireland & England back in the late 80s. They weren't the first US MTB brand to cross the pond, I think Diamond Back were the first, Specialized however were vicious to get market share in Europe with their Rockhppers & Stumpjumpers and had a great MTB reputation & image as a cool new brand, when MTB was the gravel bike of the time and everybody wanted an MTB - it was HUGE for bike industry. They faced competition from the old behemoth of traditional cycling brands like Raleigh and Peugeot and Motobecane and also local UK MTB upstarts like the excellent Muddy Fox. For a while it seemed like everyone had a Muddy Fox before Spesh arrived and then 2 years later Muddy Fox were gone and Raleigh was struggling- they completely screwed up their mountain bikes, thought it was a short lived craze! - and by then Specialized were well established. They used a lot of business dirty tricks - like getting Shimano to withhold parts to local small MTB brands like Overbury for months so Spesh bikes were out first, forcing them into eventual bankruptcy, and then a few years later alongside Trek they starting making big in-roads into road bikes in the age of aluminium.

And if you go further back, the rise to dominance of Raleigh in the 50s was a massive fight to gain precedence over all the other UK frame and bike builders, eventually buying up most of them a la Trek and becoming the last man standing effectively.

Aventon going international are just doing what Spesh did in the 80s. Avinox and the other Chinese brands like XDS and Goboa doing what huge Chinese companies like Merida and Giant did first - undercutting the competition by vertical intregation and cost saving with no Western middlemen.

I suspect that just before covid Trek and Spesh were locked in a death struggle, both buying up mom and pops bike shops like crazy and opening expensive concept stores that they both invested far too heavily in. Nobody could predict the chaos of covid to the bike biz and it certainly caught both of them badly. And now the new disrupters threaten both of them.

 

[Gionnirocket]

As they say... what goes around, comes around.
I'm not shedding any tears.

 

[jabberwocky]

It is, until the losers go out of business, and the consumer has fewer choices.

To be fair, this is what Specialized has done in the past and continues to try to do with their factory store model and dealer minimums and such. Over the past decade, there have been a few stores in my area that were almost driven out of business because Specialized (or Trek) decided they didn't push their brand hard enough and yanked their dealer agreement. I've been told that the percentage of the shop floor demanded by the major brands can be brutal. Specialized pushing stores to focus on selling their accessories is to the detriment of smaller accessory manufacturers. Like, when I first started cycling, you'd go into a store to get a saddle and have a choice between several brands. Now, you go into a Spec or Trek store and its just which spec or trek saddle do you want?

As Ras said, they pushed the dealer model hard (to the detriment of smaller shops and consumers who wanted more brand choice) but got screwed by covid and the rise of lower cost DTC brands. This is probably them recognizing that they were overpriced compared to the market at large and their brand premium just wasn't quite making up for it. The cheapest Levo has been priced above the mid range offerings from a lot of brands for a bit now and its not that well specced for a several thousand dollar bike.

They used a lot of business dirty tricks - like getting Shimano to withhold parts to local small MTB brands like Overbury for months so Spesh bikes were out first, forcing them into eventual bankruptcy, and then a few years later alongside Trek they starting making big in-roads into road bikes in the age of aluminium.

As they say... what goes around, comes around.
I'm not shedding any tears.

Yeah, Specialized is the last brand I'd feel any sympathy for. Say what you will about their bikes/dealer network, their business practices are among the shittiest in the industry, and have been for pretty much as long as I've been cycling.