By Bert Zethof

Some members of the bicycle industry are upset about Mountain Equipment Co-op's (MEC) decision to procure bicycles on behalf of its members. While the co-op has handled bike parts for many years it only recently added bikes to the product line.

Specialty bike shops and distributors complain about a "Wal-mart style money grab" and an unlevel playing field with respect to income taxes.

A useful perpective on this dust-up is a quote by Peter Drucker: "The purpose of a business is to create and keep a customer." He didn't say that the purpose of a business is to eliminate the competition, although that is a common modus operandi.

Bike shops, like any business, need to differentiate themselves and offer a customer value proposition that is so appealing that the customer has no reason to buy through the co-op.

And, by the way, price is not the only differentiator - there are many dimensions along which bike shops are already being attractive other than low price, such as product knowledge, specialty products, customized bike fitting, training, etc.

People choosing to buy through a co-op model is itself a sign that the business community isn't meeting the market's needs. Businesses really need to be brutally honest about the merits of their own value proposition before complaining about people buying their own stuff through a co-op model.

It's instructive for bike shops to look at the Ikea phenomenon. I seem to recall some grumblings from independent furniture stores when Ikea first arrived on the scene. But I believe Ikea has been a boon to the furniture industry as a whole.

Ikea has raised awareness about design and furniture among the masses and has made new furniture more accessible. This has led to spin-off benefits for specialty furniture sellers. For example, we now see them clustering their stores around Ikea stores to tap into the large volumes of customer traffic.

Bike store owners, know that the big picture trend towards "buy local" is in your favour. Now it's up to you to offer value, and that doesn't mean "low price," although it could depending on what you choose as your differentiator.