Mountain Equipment Co-op (MEC) is a store known by pretty much every Canadian who has ever camped, traveled, rock climbed, kayaked, or participated in any number of other outdoor pursuits. Since 1971, it has built up a reputation as the destination store for anything you might need for the outdoors, at a very resonable price, run by environmentally-friendly, forward-thinking people.
An article last week in the Globe and Mail discussed a hotly debated issue surrounding MEC and their choice to begin selling bicycles at several of their locations. They have sold cycling parts and accessories for years, but had added bicycle maintenance last year, and have now fully entered the market by offering their own line of MEC-branded, Taiwanese made bicycles.
The bike shops, for the most part, are irrate. They see this as a direct infringement on their territory by a company with an unfair advantage.
As a co-operative, MEC falls under a different set of rules than most of their competitors. They are technically a not-for-profit busniess; meaning they make profits, but those profits are exempt from taxation.
The Globe article made a fairly significant error. They referred to MEC as a non-profit, instead of a not-for-profit. These may seem like interchangeable terms, but there is a very important difference (take a look at some of those distinction on Yahoo Answers).
Essentially, a not-for-profit, makes profit! Whereas a non-profit rely primarily on donations, not sales, to continue to operate and serve the community. In MEC’s case, the profit is paid out to the members (customers) after all overhead, investment in the business, and other expenses are paid.
I would be curious to know if some of these FAQ answers on MEC’s Co-op explanation page were added since this whole controversacy arose. MEC don’t exactly advertise their status, but they do make it very clear in the FAQs, and discuss some of the contreversy surrounding it. Just as the Globe wrongly referred to them as a non-profit, I would suspect alot of us, the general public, have also made that mistake when we think of what MEC really is and where the money goes.
I personally am torn on the issue. I have lived on both sides of this issue as a bike shop manager for years and now as a fairly loyal MEC customer.
One of my biggest complaints of the bike shops is what I see as their somewhat overbarring ‘old boys club’ mentality (at least here in Toronto).
In the Globe article it mentioned how some other recent actions highlight how protective the shops are of their perceived territory. The Globe discussed how a distributor recently cut their ties with a bicycle component manufacturer who decided to go into busienss with MEC.
Reading this reminded me of similar events that occured when Norco had decided to start selling their product to another retailer who wasn’t primarily selling bikes and accessories. This was seen as disloyalty and expansion beyond the traditional bike shop arena. As a result, several Toronto area shops (including the one I worked at) immediately dropped the brand, cancelled orders, and slashed prices of the Norco bikes already in stock.
Some may see this as simply the way shops stand up for each other, and protect their industry, but is it not also improper control of the market. It demostrates how the shops are using an unfair advantage to get their way. And it was this ‘unfair advantage’ that the shops are saying MEC is using to start selling bikes.
It’s a complicated matter, and will certainly mean that some bikes shops may not survive much longer in an already saturated Toronto bicycle marketplace.
Maybe MEC is the new mean green Walmart. Maybe they are the ‘corporate’ bad guys, undercutting the mom and pop shops. In the end, this is somewhat of a non-issue as there appears to be little that the bike shops can do to stop MEC, and MEC maintains that they intend to sell bikes for the foreseeable future. Public opinion on the issue (judging from comments on the Globe article) seems split. It doesn’t appear that there will be any saviour riding in on a shiny new Cervelo to save the day for the bike shops.
photo by Kamshots
{ 1 trackback }
{ 0 comments… add one now }