Interesting article: "Electric Lady’s Alex Kostelnik on why he’s closing the Central District e-bike shop"


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Interesting article, here:

Electric Lady’s Alex Kostelnik on why he’s closing the Central District e-bike shop
Posted on February 11, 2019 by Tom Fucoloro
(Link Removed - No Longer Exists)
Kostelnik celebrates opening Electric Lady in spring 2016.

Alex Kostelnik is getting out of the e-bike showroom business. After nearly three years on the front lines of a volatile e-bike industry, selling shiny new bikes out of the Central District’s Electric Lady, he finds himself looking longingly up E Union Street where, just two blocks away, his first shop 20/20 Cycle is still grinding away to keep the neighborhood rolling.

“I’ll sit on the bench in front of 20/20, and within ten minutes I’m sharing a cookie with a neighbor and petting their dog, and they sat down to join us, and they’re going to be late to wherever they were going,” said Kostelnik during a long interview on the shop floor of his soon-to-be-closed shop at 23rd and Union. “That’s what I thought I would be doing with e-bikes, but it turns out the bike industry would have none of that. Which is too bad because I would argue that my system is actually a prescription for health for the e-bike industry, and that they are absolutely missing the boat in terms of investing in actual community.”

Founded in 2016 and staffed in recent years by Anthony Beauchemin and Lee Corbin, Electric Lady (a Seattle Bike Blog sponsor) is putting its stock of e-bikes and cargo bikes on sale and will close its doors in the coming months. Their retail space is already listed online.
Kostelnik says the business is doing well financially, but he is not enjoying the work needed to navigate what he sees as an unreliable industry where companies start up, go under, fire staff and get bought constantly. And Kostelnik’s proudly anti-corporate mentality was destined to butt heads with major players in the bike industry.

So with the used-bike-focused 20/20 Cycle up the street waiting for him to return, he is getting out. 20/20 will still sell some e-bikes, but they won’t have a showroom full of them ready to test ride.

“The bike industry is insane, in constant flux, does not know its ass from its elbow, is throwing so many spaghetti noodles at the wall to see what sticks that you’re in a room full of noodles that are sticking all over the place,” he said. “The cutting edge of the bike industry is about as sharp as a butter knife. They don’t know what they’re doing and it’s random insanity.”

He also had trouble connecting with a customer base that is very different than the customers at 20/20.

“The genesis of Electric Lady was to bring a vision of electric cycling to Seattle through my experience and my expertise and to deliver that to people, and that has worked about 30 percent of the time. The other 70 percent of people are endlessly lost in user groups and social media. They’re first time riders, but they’re not first time riders that are stepping up to the plate to hear about the community or join the community. They’re sort of strange outsider, know-it-all lonely people who aren’t really part of our community, and I don’t know where to begin with them.” The shop was open during this conversation, but the customer test riding bikes must have been part of the 30 percent because she seemed amused by Kostelnik’s trademark unfiltered candor.

“So basically, I’m just using so much energy to try to present the world of e-biking to my customers that I want to, and most of that energy is going into just trying to create status quo, and for how I see fit to do things, that’s just using up my energy. And we decided that a better way to serve our customers is to cut that overhead and be more direct with people and for our community who already get a lot of it. People who are commuting because they really well need to. That’s my people.”

Ultimately, it was “a delicious concoction that includes burnout as one of its spices” that led Kostelnik to realize he would be happier if the shop just closed. Plus he wants time to build a treehouse with his kid, he said.

He is not looking to sell because the shop is so close to 20/20, so closing the doors is the only option.

“We make money. It’s been a success. We have a beautiful shop. It’s a profitable business. I did all the heavy lifting. The non-union grocery store is coming soon across the street. The super-gentrified 30,000 square feet of retail is coming on the other side of the street. We’re poised, literally poised, for our golden year, and I’m out. Because what I didn’t factor into my business plan was me. I factored in the demographic and everything else, it was me. I ended up just endlessly being in these battles, and friends of mine would say, ‘Man, you look tired.’

“There is only so much time in the day, and I just choose not to spend it going, ‘No. What? No. Why? No. Why won’t you do that for my customer? This is entirely fair. Send that part.’ And then after like eight calls, they send the part.

The bike industry at large is going through some very tough times, and e-bikes represent a growing source of sales and profit. But selling and servicing them can be a challenge when companies boom and bust, leaving bikes on the streets without a source for replacement parts. And with many makers going with a direct-to-customers sales model, it’s hard for major traditional bike retailers to stay afloat. The major industry trade show Interbike has been cancelled, which is a pretty clear omen of how things are going for the industry at large. Performance Bikes went bankrupt in November, leading to the sudden closure of more than 100 locations including in the U District, for example. And though selling direct to customers online might make the bike cheaper up front because it skips over the local retail markup, direct sales companies rely on those same shops to service their bikes. So the industry is sort of eating itself from within.

Of course, Kostelnik hasn’t shed many tears for a corporate giant like Performance. “I couldn’t be more delighted. And I’m not surprised.
“I know that bike industry. You’ve got guys with cologne in Dockers mansplaining to women about cycling who have no innovations regarding cycling whatsoever. The bike is a toy. The bike is for sports. It is none of those things, and that’s Darwin at it’s best. That’s on you, bro. That’s on you, Performance.”

He then told a story about how he used dumpster dive bikes behind the North Carolina Performance Bikes headquarters, because of course he did.
Here's another bit that the author wrote in the comments to explain why he is closing his ebike shop. It really echoes what many of us here say when we encourage folks who are shopping for ebikes to buy a high quality bike and to buy locally:

More than half of my customers at Electric Lady are first time riders- they’re just getting interested (again) in cycling. It’s wonderful in and of itself! And I am a heartfelt cycling evangelist- I’ve never owned a car, & I have biked Seattle for over 40 years. I love to share this knowledge.

But what’s interesting is that these folks are possessed by their computers. And I think they are confusing two things: talking about cycling in their social media group, (where they are bombarded with targeted advertising) and actually doing it- actually having experience- these are fundamentally two different things.

This disconnect that is happening with the consumer is palpable- it is understandable. I believe people are scared- worried they will not be able to continue to consume like they are used to. And consuming equals freedom, it equals democracy, right? Purchase power with the median and below median income folks is at an all time low.

And the web can fully surround you- in a virtual world that is also watching and listening to you. It promises to allow you to continue hoarding cheap goods, if you will.. That’s the hook. But the catch is that you are being wrapped in a web- you are being infiltrated- and your fears/needs are being manipulated. I am affected by this just as much as you.

When you sit at your computer long enough, with paypal “locked, loaded and ready to go”- watching ads, drone videos of happy cyclists who just over-consumed a whole slew of bike gear, etc. etc.- It all combines to make the perfect storm. And sooner or later we will click that mouse, right? We will find ourselves next-day shipping something to ourselves.

OK now picture me with my little shop- I am not virtual. I don’t crowd fund. I don’t make promises I can’t keep. And so I became the guy with the hard hitting news- the guy who is bumming everyone’s high- my shop is a reality check for these poor pilgrims/refugees.

“No, the bike you bought online is actually very poorly made.” “No, there will be no support from who sold it to you.” “No, it will not last. It might not even work right out of the box.” And: “No, we can’t fix it for you cheap- the cheap part was your purchase. The company that sold that crappy bike to you does not care about you in the least.”

So here I was greeting this person at the shop- (and remember I do have sympathy) listening and sharing what I have to offer- but the exchange sometimes does not take.

Surprise, surprise!

And in these situations, more often than not, the customer is flying blind yet dispensing instructions on what I should do. I don’t think they mean to be this way on purpose, it’s just that in the times we are in right now, people are kind of drunk and in a daze, wanting someone to tell them they did the right thing. Deep down they know the score- but they want others to validate their needs- and in the end it basically looks like hoarding. The consumers who are bleary eyed from e-consuming- It gets weird a lot- In this situation we can not connect.

It’s sad, these are weird times- I do not believe we appreciate the extent to how profoundly all of this has already changed. But I have a front row seat."
“The bike industry is insane, in constant flux, does not know its ass from its elbow, is throwing so many spaghetti noodles at the wall to see what sticks that you’re in a room full of noodles that are sticking all over the place,” he said. “The cutting edge of the bike industry is about as sharp as a butter knife. They don’t know what they’re doing and it’s random insanity.”

Very true!
Many companies are not concerned about the long term growth, it's a race to make money and without any standardization of any kind, it's a hard market for most shop owners except those who have deep pockets or just do aggressive marketing or just know how to survive in this dog eat dog competitive world.
100's of companies, no standardization whatsoever, prices that vary on both extremes, it's really a weird industry that is growing because the technology is too good!

Adding to the list of stores that closed:

  1. Blue Monkey Bicycles in Utah

  2. eSpokes in Utah

  3. Lectric cycles

  4. NYCE Wheels

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Selling a product and then standing behind it for the long haul is something that is very important to me as a consumer. I am not dazzled by the low price. When I buy something, I want to use it for years.

Many of us who are faithful members here repeatedly advise folks to purchase an established brand from a shop that will support the bike. Buying from a shop that will support the bike, though, only works if the shop stays in business! But, if one buys an established brand (like a Trek, Giant, Pedego, Specialised, and others that are widely known to stand behind their products), then service will still be available even if the local shop that originally sold the bike closes.
We have 2 brand new TREK stores here in Ny , they mention it very clearly-we only work and fix TREK bikes. Looks like Specilaized is opening a stand alone shop as well.
This is the way to go.
This is a "dealer model". Think Toyota, Ford, etc.--you get your car from the dealer, and you know the dealer will stand behind it. I agree that this is the way to go. With my bike (company uses the dealer model), I have no concerns about repairs, parts, etc.
Some people, I are one of them, live or lived out in the hinterlands. The nearest bike shop was a 90 mile drive. I bought my bike on line. Then I moved to a more civilized area, but still the nearest e-bike dealer is 45 miles ore so from here, and they sell one brand.

Today, I hauled my Radmini over and they replaced a brake pad. I shall return there when I need help. They were very helpful, nice, and the price was reasonable. And boy, do I have stopping power now. It will take some getting used to.
Very good article, however you do have to plan for and anticipate the challenges mentioned.

The question every single regular bike shop owner is going to have to ask themselves is why would anyone buy a regular bike that doesn't have e-assist ?

The paradigm shift has already occurred... regular bike industry has been in decline for nearly 2 decades. Since the year 2000, more than 60% of regular bike shops have gone out of business here in the US.

And Most bikes that have been purchased in the past 25 years, sit in garages, basements, and go unused or are donated.

Ebikes are a disruptive technological development, and redefining what a bike will be in the 21st century. It's an entirely new mode of transportation and mobility, opening doors for people in all walks of life.

The consumer is not asking why would I want an ebike though that is what regular bike shop owners believe they are thinking, or are refusing to acknowledge that this is not a fad, or a niche, like mtb's or recumbents. That's faulty thinking and dooming that bike shop owner into obscurity.

Consumers are demonstrating all the characteristics of "why wouldn't I want an ebike ?" Those who entertain the thought would not be ever even considering a regular bike.

It's unfortunate the shop owner had a profitable business but couldn't develop the patience to work through the new industry, or learn how to work with the new breed of consumer. I do wish him luck in his prior endeavor, but hope that more bikes shop owners think this through. My shop is frankly in business because many regular bike shops don't 'get it' who are in region I serve.
the shop owner had a profitable business but couldn't develop the patience to work through the new industry
It sounds like this is an instructive article, then, for those interested in this industry, about what is involved that might be different than conventional bike shop work.

I'm glad there are folks out there who have the stomach for this! Otherwise, where would I get my bike fixed!!!!
I liked our local Performance Bike store. Bought a regular bike there. Friendly staff. Lots of stuff. It's too bad they went bankrupt. Tough business.

I don't think Kostelnik really explained himself in his interview. Then again, he doesn't have to do that. It's a tough business to compete with online.
Based on a phone call he quoted, showing how he had to beg for parts, it sounds to me like he got very frustrated with the difficulty of getting parts to service the bikes he sold, which doesn't seem to be a problem in the conventional bike business.