Outside Europe, Bike Discount may not be a name on the tip of everybody's tongues, but over the last thirty years, the German mail-order specialists have earned themselves a spot as one of the big four of online sales. Starting from a tiny shop in the suburbs of Bonn they have risen to become a million order per year mail order giant. At the same time they have been building their own direct-sales bike brand too—Radon (which translates to English roughly as "Bike-on"). From building a solid base in the German market, in recent years they have come to international attention producing bikes that are not only great value but serious fun to ride. For 2017 they have stepped their racing programme into high gear too, signing Manon Carpenter to spearhead their World Cup DH team and bringing in Ralph Naef's strong Swiss-based programme for the XC. We sat down with their flamboyant owner Stahl to talk about the past, the future, and heart.
Where does the Bike Discount/Radon story begin? Where and when did it all start for you?
It was 30 years ago. We were studying, my partner and me, and during our studies, we opened our first bike shop in Bonn. We started with a little, little bike shop and it was like this room here. After that we changed - we had a larger showroom and we went to the next level. It was a bigger shop and we were a premium dealer for Rocky Mountain, GT, and other brands. We started there 25 years ago, building the first Radon bikes by ourselves. Obviously now your main business is the online shop. How did you make that transition to selling online? How did that happen for you?
It was with the internet. 20 years ago, there were just magazines like Bike Magazine and Mountain Bike Magazine, and every rider was waiting for the second or the third of the month to get the magazine and every dealer, every brand has a little advertisement in it. Everybody was looking to get a bargain, and today it's much harder than the years before. It's online, you can compare every manufacturer. The market's so open, it's very difficult to survive for a brand just selling through shops. On the internet there are a lot of comments about how online bike shops are killing the traditional bike shop, talking to most online bike shops, they all started as a bike shop, and just evolved as the business changed.
This is real, that we will kill the traditional shops. But since we have also started as a “normal” bike shop everybody is free to go the same way. Especially for the small shops, it's difficult for with brands like Specialized to sell them for the original prices. This is a problem. I see now that all the little shops have overstock problems, and they're selling with a lot of discounts. The 2016 bikes and the 2017 bikes, I think it's problem to sell it for the official price because they have 30, 40, 50% discount on the old bikes. In contrast to most of the other bike brands with a direct sales approach, we even offer partnership offer for shops with our Service Partner Network. By doing this the consumer can buy at direct sales prices but still, have local service and support. You guys have built your Megastore here, so you obviously still see there's still a place for a physical bike shop? Is that fair to say?
Yeah. This is for Radon, to show the bikes. This is our main shop. The online business is running much better, we are selling over 1 million packages a year with Bike Discount. It is much easier to sell like this, but the Megastore… My heart belongs to it because it's the feeling when you see the people coming. You see them with the bikes, and they are laughing and are happy to buy them. I think this is a main problem of the online shop. You can't touch it, so it's… I'll show you the frame here. If you have it in your hand, it's another feeling than just to see it on the website. You need to hold it.
What do you see is the future of the physical bike shop? Because obviously it's getting harder, and harder for bike shops to compete on selling bikes, but is there still a place for them?
Yeah, there are some products and services that could be a new chance for little shops in the future. Ebikes, for instance, nobody wants to buy them online. You have to try them. Older people are buying these bikes, and they don't look so much on the price. They want to have a good service, and to have a good warranty. So this is a chance for the little shops with ebikes, but with special bikes, or with parts, it's unbeatable for them. Today most customers know what they want. Before, they came in a shop with questions, and they want to get answers. They wanted the people to show them what they could buy. Today people come into the shop and say, "I want to have this, this, this, this, this." The information they have is much better. With Radon, you seem to have started in the same place most of the German brands do. There seems to be a point in the early 90s when there were a few companies who realised you could buy these bikes from Taiwan and bring them over.
Yeah. In the beginning, we just bought moulds. Shells or moulds was the name and bolted a lot of good parts on it, but I think it's 13 or 14 years ago. Then Bodo came to us. He's a famous engineer here in Germany and we started to make our own moulds. What mostly the clients don't know, that in Taiwan that two or three factories make all the carbon. If it's Santa Cruz, Canyon or Specialized, or a Radon, it's all the same manufacturer where the frames are being made. People don't know that because, in the beginning, Rocky Mountain was coming from Vancouver, and Santa Cruz was in the USA, and people bought these frames because of the history of these frames, but today mostly they are in Asia. It seems to be that the German market is quite a difficult market to compete in, because customers expect a high level of bike, but they also expect competition on price. They don't want to compromise on either front. Is that fair?
Yeah, this is a problem. On the internet when we announced we would be racing at the World Cups they all say, "Okay, now the bikes get much more expensive because of the cost of the World Cup." But this is not a good way for us to sell the bikes because people expect the low prices. They won't accept paying for a brand.
Was there a definite point with the German market where the competition changed? Because in the beginning most of the German direct sales brands started with "me too" bikes, frames from a generic supplier with high-end components to compete at a price point, but the competition seems to have moved past that and towards competing on performance and features now today.
Yeah, all the German consumer-direct brands have the same history as us. Arnold Roman was Radsport Arnold before he started Canyon, it was just a shop in Koblenz, and Rose was a shop in Bochholt. Rose was the first delivery service for parts. All three companies started at the same time building their own bikes. There was one point, in Germany, when there was a battle of prices. It was, for example, Zaskar. All three companies, Rose, Radsport Arnold, and us have the Zaskar, and the price was 1,500 Deutsche Marks. Then one of us said 1,250, we say 1,199, and the next one was 1,050. There was one time all the brands put in place ways to stop this pricing. They say it's not allowed to reduce prices, so then all of us stayed at the same prices. Then we started to build our bikes because we could do what we wanted with the prices. This is the thing, with such firms in the competition, you need elasticity of prices so that you can set your own price levels. It seems to me that the competition in the German market seems to be the strongest of anywhere.
Yeah, it's a tough challenge every day. It's interesting because for companies to survive this market, you have to be strong in every aspect, I think. Is that part of the reason why a lot of the German brands are starting to come to the forefront now on a more global level.
We educated our clients over the last 20 years, so they know everything. They know to wait until the reduction of the prices, and it's horrible. We get to Autumn and everybody is buying bikes. Now it’s our job to convince our customers to buy in spring, and not in fall [laughs]. We need to offer such an attractive package, that the customers feel that they cannot wait. Obviously the first phase in mountain bike history was very much about the US. It's where the sport came from. It seems to me that at the moment that emphasis is shifting. There's a shift and maybe Germany's starting to become more central to the industry.
Yes, well this is because of the European Union. Because without the import taxes, that means in the European Union you can sell in there wherever you want, and we've got a big market. Now it is a logical step after that to go to America or Australia… Although I can't understand the Russian market, or if there's an eastern market. They don't want bikes... In Saudi Arabia, nobody wants to have a bike. They are buying camels, but not bikes. One thing that's always interested me with German companies is that there's a very German way of doing business, where it tends to be smaller companies with one or two owners. There's not as much outside finance, maybe a longer-term approach to the business. Do you think that's fair to say?
Yeah, we were a little small here. Right now investment groups are buying all the little companies. They have asked us two or three times last year to sell it to a big firm, like when Chain Reaction was merged with Wiggle. But to be privately owned is our freedom, because we have Bike Discount, and Bike Discount is making all the money with the parts we deliver, and Radon was just for my heart. We are living this, we started mountain biking 40 years ago, and today we are riding all the day with our own bikes. We are so proud. We have nine world champion titles on our teams and if you go biking with those guys, it's unbelievable. It's so good that they are riding for us now. You get feedback from them. Bodo is just an engineer. He's a brilliant engineer, but you need a feedback from the riders. You see, last year Pinkbike tested a Slide 160, and it is a brilliant bike, but you said it didn't have a slack enough head angle. So we have changed it. Now it's much slacker, in fact, we have changed everything on the bike, and now it's much better. This was very good to give people the bikes for testing, you have a feedback, and this is the only way to make it better and better and better. Not just to wait and sit there and to say, "Hello, I have the best bike." You have to do new things every year.
It's clear, you have a strong passion for these bikes. You want to show people these bikes and it seems to be something you're very proud of.
Yeah, to see our riders winning and I expected for this. With Manon coming, the expectation that she will win, one race or two. Perhaps this would be the greatest thing for me, to see them, and I'll always have tears in my eyes if the riders are riding. But I think this is the heart you have to have in the brand. The heart of the brand, you either have it or you don't. To make such good bikes, you must have a strong passion for it. What do you see as your future What's your goal?
To get more international. In Germany, we're very, very famous, but the German market is so narrow. Does that mean America, then?
America, it's a big problem with warranty on the bikes, you need to invest in a service structure to sell there. I think with Canada, it's much better as a first step. The United Kingdom was our aim last year, to step a foot in that market, but with the Brexit, it's a problem to go into the UK market. But France is a good market, and Spain also. It's very large. This is very tricky, though, every one of the different markets, they need their own bikes. The French, they need a lot of travel - 170, 180 millimeters in the suspension. In Belgium, and in the Dutch market they want to use hardtails. In Italy, and in Spain also, road bikes are selling well. In England, you can sell road bikes up to €6,000-€7,000, they're absolutely crazy with the prices they will pay for road bikes. In Germany, everybody wants to have a road bike for €1,000-€1,500, and that is enough ... They just want to ride it. With the British, we went to the London and Birmingham roadshows, and everybody was coming said, "Hello, do you have a road bike for €3,500. Is it your starting bike?" No, it's the end of our range. It is unbelievable.
What do you see as the next big change coming to the mountain bike industry? How do you see the market changing, evolving over the next 5 years or so?
I think ebikes, they are coming more and more, but this is dependent on the law... There are rumours that they will make helmets compulsory for the rider, or to get license plates on it, or to be prohibited from riding on singletrack. This will be the end for the ebikes, but at this moment it's unbelievable. The people, they spent a lot of money without searching for a bargain. For normal mountain biking, it's 29-inch wheels, I think even for the downhill bikes, it's coming. People want to have it, and I hope we will lose some standards. It's 26", and 27.5", and 29", and it's too much. For us, for such a little company, we have 190 different models. 190... Wow.
Yeah, it's unbelievable. We have to have so much stock for them. Okay, it's just too many different things to try and cover?
Since this year, we have a size split with most of the bikes. We're producing 16", and 18", with 27.5" wheels, and 18", and 20", and 29" wheels. In the middle, you have both 27.5" and 29" models. So, you have 50 models. That's a lot.
Yeah, but you have to imagine, with all the models, you have development every two or three years. Of every bike. That's a huge amount of work.
Yeah! There are bikes where the demand is very high, and others where demand is very low. With the XC full suspension and DH bikes, it's very low. But for our all-mountain bikes in the middle, the demand is very, very, very good. To develop mid-travel bikes is not a problem, but if you have a downhill bike and you spend a lot of money on it… At the end of the day, you're only selling hundreds of them… There's not really a reason to have it, it's just there because you want to have it.