Comments on: MEC’s “controversial” plan to sell bikes

By: Paul

Paul — Wed, 06 Jan 2010 21:07:50 +0000

These people criticizing MEC for its tax-advantaged co-op status are hilarious. Nothing stops a competitor taking the same status. The only problem is that you don’t get rich running a co-op. You might get rich running a sole proprietorship or a corporation. It’s your choice.
For the record, I buy my bikes at a local bike shop that includes free tune-ups. I buy some of my outdoor gear at MEC, but most at local stores. My decision is based on price, quality and service, not legal structure.

By: Doug Smith

Doug Smith — Sun, 27 Dec 2009 17:37:20 +0000

One thing that bothers me is that I’ve been reading posts where people have already said they will buy a bike from MEC because of better pricing and better product. I recently compared two styles of bikes, an internal gear commuter and a cyclocross, at different LBS and MEC. In no way did MEC have the better product or pricing on these bikes. I found both their Hold Steady and Cote to be no cheaper than other offerings from Rocky, Brodie, etc. In fact, the Hold Steady was almost $400 more than the Rocky Metropolis. Granted, it had a nicer fork and slightly better brakes, and maybe this matters to some people. The point is that it was absolutely no better in terms of bang for buck, and certainly an upgraded fork is not a requirement for hassle-free commuting. So will MEC sell bikes because they have a better product for less money? Absolutely not! Will they sell bikes because of better service? I have no complaints with the LBS that I use, so I say no to this. Ultimately they will sell bikes because of their buying power and size.

By: youloveme

youloveme — Fri, 11 Dec 2009 20:39:41 +0000

Perhaps they didn’t start out that way but now MEC is just another gross consumer-identity-lifestyle brand a la Starbucks or Ikea.The overall quality of their merchandise has gone down drastically and the prices have disproportionately gone up. All they have going for them is a no questions asked return policy (which you will need w/ their crappy tools and planet bike stuff). Their bikes are not particularly good or any sort of bargain.

Small indepandant cycle shops can’t compete with MEC on such a narrow margin of retail mark resulting in their getting squeezed out. It’s big box predatory pricing/marketing similar to the Wal-Mart effect.

By: Richard B

Richard B — Thu, 05 Nov 2009 22:27:08 +0000

Interesting comment about MEC putting outdoor gear shops in Victoria out of business. I moved to Victoria from Vancouver long before there was a MEC on the Island. I was absolutely appalled at the prices local shops were charging for outdoor gear. A basic gore tex jacket was about $450 in Victoria, with the similar goods in Vancouver about $175. Needless to say, I shopped in Vancouver as did many people I know.

My local bike shop had basic lights starting at about $50. Hmmm. So I tried not to ride at night. Then MEC comes along and they can sell a similar light for about $10. What is up with that? Are you telling me this is because of their tax free status? I don’t believe it.

How is it that in Vancouver stores compete with MEC on price? MEC is just one place I go, and often I find the same thing cheaper elsewhere. Not in Victoria. That is why MEC kicked their butts.

The bikes came out this week. I was a bit disappointed to see they are not really much cheaper than similar Norcos or Devincis at the other shops. That’s probably because local bike shops were already extremely competitive on bikes, and margins were not obscene. Still, I will buy the MEC bike to support them.

Former Victoria outdoor gear shops Rest in Peace.

By: Herb

Herb — Thu, 05 Nov 2009 14:35:51 +0000

The biggest complaint leveled against MEC is that it is somehow tax exempt because it gives out patronage dividends as a way to “avoid taxation”. This is wrong (www.coopzone.coop/files/Co-op Taxation.doc). Patrongage dividends are like coupons – they work to adjust the price that the customer pays. At the end of the year if MEC has a surplus the rest is given out as patronage dividends.

When a member gets that rebate they are required to claim it on their own income tax if what they bought was a business expense because the rebate is reducing their expense.

MEC members have voted that the patronage dividends be held by the co-op as shares and paid out to the membership occasionally. Given that MEC has no other access to cheap capital like a corporation with stock, it’s only fair that MEC members be able to keep their shares in MEC as a way to fund MEC’s ongoing operations.

By: Herb

Herb — Thu, 05 Nov 2009 14:14:12 +0000

@Gee “MEC is a proud Canadian outdoorsy version of Wal Mart. MEC were even smarter than Mr. Walton though because they started out as a Coop.”

Yes, you’ve hit the nail on the head. MEC members will get rich by buying so much outgear that they’ll get millions of dollars in refunds (ie. patronage dividends).

I don’t think you understand how people get rich. Mr. Walton owned all the stores 100%. There is absolutely no way any one MEC member can get rich off of MEC – you can only get back a portion of what you put in.

—

@Gee – Do you really think that if you keep buying things at your local bike store that somehow a bike factory will pop up in your neighbourhood? Bike accessories and bikes almost completely come from Asia. There is virtually nothing in a bike store that is made locally.

Bike stores have no buying power and little capital to start a factory. If anything MEC has a much bigger chance of starting a bike factory in Canada. They’ve done it before with outdoor gear (though it closed down).

By: spiny norman

spiny norman — Wed, 04 Nov 2009 00:42:55 +0000

MEC is a not for profit member owned co-op, and as such they get tax breaks, it’s not “exploiting a loophole” (if you really want to talk retail juggernaut and tax loopholes, look at large publicly traded corporations). You don’t like it or you think it’s communism? Fine, say so, but don’t lie about what it is it to promote your far right ideology.

Saw the bikes today. Most of it is practical mid range stuff that most bike shops don’t even sell (including one of the best designed city bikes I’ve seen) – they might have something similar, but not quite equivalent, or at a different price point. Conversely if I want either a really cheap or a performance bike I’d shop at a bike shop. Still think I’ll get my next bike at my local bike shop, since they know bikes, have better selection, will swap out parts for me, and can order whatever I want.

See? That’s how you compete with MEC. Selection and service.

By: Steve

Steve — Mon, 02 Nov 2009 20:06:39 +0000

If local bike shops carried what I wanted, at a reasonably comparable price, I would support them. I think a lot of cyclists probably support a “buy local” mentality. However, when I can get a 2 Watt LED bike light at MEC for $35, and none of the local shops carry PlanetBike, and typically don’t have ANY decent lights for less than $50… you can guess where my money is going. I checked out all the LBS’s here recently. A large portion of their floor space was dedicated to Mountain Bikes with front suspension or full suspension – certainly not what the average consumer needs or wants. MEC has 2 cyclocross bikes in their 10 bike selection. Less than half of the LBS’s here carry cyclocross bikes.

From my point of view, MEC isn’t competing with local bike shops. They are offering what the local bike shop isn’t.

By: MEC rolls out bikes? - Cycling in Ottawa

MEC rolls out bikes? - Cycling in Ottawa — Tue, 27 Oct 2009 18:50:06 +0000

[...] the comments on a post that is still getting new comments, which is worth highlighting 0n the main page: I just dropped by the MEC downtown Toronto and… I [...]

By: Rod

Rod — Tue, 27 Oct 2009 18:12:21 +0000

I just dropped by the MEC downtown Toronto and… I see the bikes! They have some really nice models, I like what I see. (I’m liking the hub gear ones and they even have fixie.) Based on the prices and the models I saw, they are competing with mid to high-end small bike shops, like the local bikes shops that sell nicer Trek, Devinci, or nicer Norcos.