mec.ca

Resources

« Israel, Apartheid and Boycotts Part 3 | Main | Ups & Downs - Our Contract Factories »

May 04, 2009

Comments

Mark K.

I am a Canadian living in London, UK. Over here, fold-up bikes are very popular...and useful. Does anyone know of any Canadian bike companies that make a quality fold-up?

Les Grice

MEC's intention to sell bicycles is irresponsible. Bicycle repairs aren't easy. My training (BCIT) and experience repairing motorcycles, small engines, and rental equipment, plus having tool boxes full of professional tools were barely adequate for the repairs I have done recently on my MTB. The crank puller I bought form MEC didn't come close to working. I doubt the average rider has the skills, training or adequate tools to repair their own.This recession is going to put enough bike shops out of business without MEC pouncing on them. In the less populated parts of the country, which is most of it,this will leave the very people MEC was originally intended to service with otherwise perfectly good bicycles in unusable condition for lack of accessible repair shops. Consumerism wins again! This might turn out to be the dirtiest trick ever played on the self propelled recreation community. Les

HC

Hi Mark,

MEC will be retailing a folding bike. It's likely to be made in China.

HC

Hi Les,

I'm not sure what you find irresponsible about MEC and bikes. Is it selling bikes in a retailer environment dominated by independent bike dealers or is it selling bikes when technical skills are required to maintain them.

In terms of the latter, there's a bike tech guy who leads all the bike repair shops in MEC stores. He's been around and he knows his stuff.

In terms of MEC's impact on bike stores that is sensitive and controversial. MEC selling bikes will likely make the market more competitive. This is an issue that has been dealt with in length by MEC's Board.

I doubt MEC will have a huge impact in the less populated areas, as MEC doesn't retail in the those areas unless consumers shop on line.

Thanks for your comment. Bikes at MEC are controversial. I personally don't think it's a dirty trick.

Jim Bonthron

What a thought-provoking discussion !

- a couple of thoughts...

- several times I have heard the comments..."the Market is changing..", Big Box stores..", "...putting the Small Dealer out of business...".

- I have to say, I side with the "smaller is better" arguments. When I see "Made in China", or"..in Taiwan", I become incensed. If I wanted goods for the lowest price, I'd just go to a Big Box store like Wal-Mart. I'm willing to pay a premium to support Canadian, or U.S., quality goods. Perhaps many others feel the same, and the present policies and proceedures have driven all of us out of the "Market".
As far as 'competition with local bike shops', and 'encouraging bike use' are concerned, perhaps a way could be found to support local bike shops,( perhaps a subsidy for using local parts or labour), without going into direct competition with them.
...these are some thoughts on this thorny question.
Jim

HC

Hi Jim,

Thanks for your thoughtful comments. I'm obviously bias towards MEC selling bikes as I need MEC to do well in order for me to pay my mortgage and my daughter's Montessori fees.

Aside from this bias, I'm really bugged by my local bike store in Kitsalano. The guy is polite and the mechanic super helpful but the prices are horrendous. I bought a tube there for just over $5. I can get an equivalent tube at MEC for $3.50. Recently, I had to replace my entire back wheel at $155. MEC quoted me $100 - 120.

I like to support the local store but when their prices are consistently 30 - 50% higher than MEC it makes me wonder if they're grossly inefficient or just plain gouging me. All these bike parts are coming from the same group of factories in Asia and a little bit from NA.

To be frank, as my finances become tighter, I look for bigger bargains and paying 5-10% for made in Canada is within my range but 30-50% is downright fool hardy.

HC.

MT

MEC's position and stated mission to behave ethically and be socially responsible is laudable but disingenuous. While sourcing goods ethically in places like China is a priority, MEC is prepared to abandon those same principles at home in the interests of their own business objectives.

MEC's entry into bike retailing is the issue and yes MEC's competitive model is a problem. However, since you say "This huge and complex scenario will not be discussed here" let me boil it down for your readers.

MEC was established as a co-op to sell mountaineering gear that was not available in the market. That arrangement came with a big competitive advantage in that MEC paid no corporate tax. Fine. The problem was (and is) that, once a co-op was established, MEC was free to enter other areas of products regardless of the fact that those products were already available. MEC has taken full advantage of that loophole and exploited its competitive tax advantage with the result being that many outdoor retailers went out of business. Now MEC wants to sell bikes. Why???

I am a bicycle retailer in Vancouver. There are some 60 bike shops in Vancouver, doing approximately 30 million in sales. With 60 shops there is certainly no lack of selection or competitive pressure. There is an abundance of product and an abundance of places to buy that product.

Contrast that reality with the Co-operative Secretariat of Canada that lists as the benefits and objectives for co-ops to exist: job creation, correcting market imbalances, serving community needs, filling market gaps (the reason MEC first came into existence) and empowering little guys. Also, consider that all co-ops are supposed to act out of concern for the community. MEC’s own mission and value statement is that MEC will act with social leadership and community spirit.

Yet MEC, is going after the more than 60 family owned bike businesses that more than serve the market. So, rather than serving their community and empowering the little guy, MEC has grown to such arrogance of its own principles that it would rather crush the little guy to steal ever more business out of the market economy. With no tax benefit to the community, one has to wonder why government would allow this to continue, as any reason for MEC to ever exist has long since passed. Yet, they continue unchecked in their quest for growth.

MEC's own CEO attempts to sweep these issues away. Reading the transcript of a past AGM, in response to member concerns MEC is getting too big, he says their expansion is in response to “member demand”. So when he opened a new store in Montreal that devastated local retailers, was that in response to member demand?

It should be noted the MEC was formed to provide a small group of people with mountaineering gear that was not readily available in Vancouver. So, one has to ask why this has been allowed to grow into a cross Canada enterprise. Surely, the store in Halifax is not there to provide mountain gear for people in Vancouver. Yet, MEC has expanded into every major market, taking sales out of the market economy.

Furthermore, at the same AGM, the MEC CEO attempts to paint MEC as a small retailer with only 2% of the market that has lower margins and higher expenses (because they pay people more, he says) than similar businesses in the regular market.Yet, his arguments are untrue. Looking at the the financial statements of the Forzani Group, owners of Sport Chek, SportMart, Coast Mountain, Sports Experts and compare those with the numbers reported by the MEC CEO at his AGM. MEC margin was 33.7% and MEC expenses were 28.5%. Compare those with Forzani margin of 33.9% and Forzani expenses of 27.8%. The numbers are virtually the same.

Now also consider that Forzani sales were 857 million compared with 200 million for MEC. But Forzani has 260 stores in that group under many different banners. MEC has only 11 (or is it 12 now) stores all under the MEC brand. So, rather than a minor player, MEC is in fact, the largest sporting goods dealer in Canada under one banner AND their margin and expenses are no different than the other largest players. The only difference is that while Forzani struggles to deliver share value, MEC is debt free with over 100 million in the bank and intent on getting even bigger.

As I have already pointed out, there are 60 bike shops in Vancouver and MEC has already done serious damage to our industry. While the number of stores may suggest a robust industry, the truth is that there are very few healthy dealers. The reason is MEC and their entrance into the cycling clothing and accessory market several years ago. According to the CEO of MEC, cycling is now MEC’s largest area of sales. This has come at the expense of independent bike dealers who now lack a critical portion of their business (clothing and accessories) due to MEC’s aggressive pricing and sourcing practices.

Recently, MEC opened a store in Victoria. All the bike shops there report a loss in sales revenue for clothing. Consumers, persuaded by the low price of branded accessories (intended to be exclusive to bike dealers) obtained by MEC through grey market channels, are now buying their $200 Chinese made jackets at MEC.

As a result, bike shops have lost a significant portion of a critical portion of their business. The effect being that revenue and profits are reduced at the same time that there is significant upward pressure on wages. Yet, with MEC creaming off the most profitable part of our business, retailers are unable to raise wages. And now MEC also wants to sell and service bikes and are stealing our employees to do it.

None of this makes sense. MEC is taking business away from businesses that pay income tax and contribute to the tax base. For this exchange, what benefit is there to the community? MEC's paltry donations to environmental causes are an advertising expense that do not balance the damage to the local economy, private businesses and the families they support. It seems that MEC is running counter to virtually every benefit that a co-op is supposed to provide. There is no market gap, MEC is not creating jobs, MEC is not helping local economies. On the contrary, MEC is going after markets that are well served, MEC is taking jobs away from existing businesses and in every market MEC enters, existing business are damaged.

The MEC has become an 800 pound gorilla that has devastated the outdoor industry. Now they have set their sights on family owned bike shops in their quest for continued growth.

Imagine for a moment that whatever business you work for suddenly has a giant competitor move in next door. Now imagine that the government has given that competitor an indefinite tax holiday.How would you feel? Do you think that would be unfair when that business is selling exactly what you already do and giving nothing back to support the social programs and tax base on which we all rely?

Ethical and socially responsible? You decide. When MEC executives keep using words like “market share”, “expansion” and “wanting to be the numnber 1 outdoor retailer in Canada” they are more in the league of the Wal Marts of the world, than the ethical and socially responsible, community minded co-op they pretend to be.

Consider that MEC has discussed plans to open satellite stores (like North Van) in suburban communities and even catalogue type stores (remember the Sears model) in outlying areas. Do those plans show any social responsibility for the impact on the local economy. MEC members themselves, need to say enough is enough and apparently, as evidenced here, some already are.

It is some comfort to see that many others on this blog feel the same. Realizing that there may be some member resistance, it appears that the new raison d'etre proffered by MEC for getting into bikes is the suggestion (no proof has been offered) that bikes are not ethically sourced. Your readers are supposed to challenge their local bike dealer about the origin of their bikes. Be careful. I for one have visited the factories where our bikes are made both in the US and Asia. All are ISO certified and were state of the art with excellent working conditions and good wages.

So, I ask again; why is MEC getting into bikes?

MT

As an MEC member and bike dealer I have some views to share.

MEC's position and stated mission to behave ethically and be socially responsible is laudable but disingenuous. While sourcing goods ethically in places like China is a priority, MEC is prepared to abandon those same principles at home in the interests of their own business objectives.

MEC's entry into bike retailing is the issue and yes MEC's competitive model is a problem. However, since you say "This huge and complex scenario will not be discussed here" let me boil it down for your readers.

MEC was established as a co-op to sell mountaineering gear that was not available in the market. That arrangement came with a big competitive advantage in that MEC paid no corporate tax. Fine. The problem was (and is) that, once a co-op was established, MEC was free to enter other areas of products regardless of the fact that those products were already available. MEC has taken full advantage of that loophole and exploited its competitive tax advantage with the result being that many outdoor retailers went out of business. Now MEC wants to sell bikes. Why???

I am a bicycle retailer in Vancouver. There are some 60 bike shops in Vancouver, doing approximately 30 million in sales. With 60 shops there is certainly no lack of selection or competitive pressure. There is an abundance of product and an abundance of places to buy that product.

Contrast that reality with the Co-operative Secretariat of Canada that lists as the benefits and objectives for co-ops to exist: job creation, correcting market imbalances, serving community needs, filling market gaps (the reason MEC first came into existence) and empowering little guys. Also, consider that all co-ops are supposed to act out of concern for the community. MEC’s own mission and value statement is that MEC will act with social leadership and community spirit.

Yet MEC, is going after the more than 60 family owned bike businesses that more than serve the market. So, rather than serving their community and empowering the little guy, MEC has grown to such arrogance of its own principles that it would rather crush the little guy to steal ever more business out of the market economy. With no tax benefit to the community, one has to wonder why government would allow this to continue, as any reason for MEC to ever exist has long since passed. Yet, they continue unchecked in their quest for growth.

MEC's own CEO attempts to sweep these issues away. Reading the transcript of a past AGM, in response to member concerns MEC is getting too big, he says their expansion is in response to “member demand”. So when he opened a new store in Montreal that devastated local retailers, was that in response to member demand?

It should be noted the MEC was formed to provide a small group of people with mountaineering gear that was not readily available in Vancouver. So, one has to ask why this has been allowed to grow into a cross Canada enterprise. Surely, the store in Halifax is not there to provide mountain gear for people in Vancouver. Yet, MEC has expanded into every major market, taking sales out of the market economy.

Furthermore, at the same AGM, the MEC CEO attempts to paint MEC as a small retailer with only 2% of the market that has lower margins and higher expenses (because they pay people more, he says) than similar businesses in the regular market.Yet, his arguments are untrue. Looking at the the financial statements of the Forzani Group, owners of Sport Chek, SportMart, Coast Mountain, Sports Experts and compare those with the numbers reported by the MEC CEO at his AGM. MEC margin was 33.7% and MEC expenses were 28.5%. Compare those with Forzani margin of 33.9% and Forzani expenses of 27.8%. The numbers are virtually the same.

Now also consider that Forzani sales were 857 million compared with 200 million for MEC. But Forzani has 260 stores in that group under many different banners. MEC has only 11 (or is it 12 now) stores all under the MEC brand. So, rather than a minor player, MEC is in fact, the largest sporting goods dealer in Canada under one banner AND their margin and expenses are no different than the other largest players. The only difference is that while Forzani struggles to deliver share value, MEC is debt free with over 100 million in the bank and intent on getting even bigger.

As I have already pointed out, there are 60 bike shops in Vancouver and MEC has already done serious damage to our industry. While the number of stores may suggest a robust industry, the truth is that there are very few healthy dealers. The reason is MEC and their entrance into the cycling clothing and accessory market several years ago. According to the CEO of MEC, cycling is now MEC’s largest area of sales. This has come at the expense of independent bike dealers who now lack a critical portion of their business (clothing and accessories) due to MEC’s aggressive pricing and sourcing practices.

Recently, MEC opened a store in Victoria. All the bike shops there report a loss in sales revenue for clothing. Consumers, persuaded by the low price of branded accessories (intended to be exclusive to bike dealers) obtained by MEC through grey market channels, are now buying their $200 Chinese made jackets at MEC.

As a result, bike shops have lost a significant portion of a critical portion of their business. The effect being that revenue and profits are reduced at the same time that there is significant upward pressure on wages. Yet, with MEC creaming off the most profitable part of our business, retailers are unable to raise wages. And now MEC also wants to sell and service bikes and are stealing our employees to do it.

None of this makes sense. MEC is taking business away from businesses that pay income tax and contribute to the tax base. For this exchange, what benefit is there to the community? MEC's paltry donations to environmental causes are an advertising expense that do not balance the damage to the local economy, private businesses and the families they support. It seems that MEC is running counter to virtually every benefit that a co-op is supposed to provide. There is no market gap, MEC is not creating jobs, MEC is not helping local economies. On the contrary, MEC is going after markets that are well served, MEC is taking jobs away from existing businesses and in every market MEC enters, existing business are damaged.

The MEC has become an 800 pound gorilla that has devastated the outdoor industry. Now they have set their sights on family owned bike shops in their quest for continued growth.

Imagine for a moment that whatever business you work for suddenly has a giant competitor move in next door. Now imagine that the government has given that competitor an indefinite tax holiday. How would you feel? Do you think that would be unfair when that business is selling exactly what you already do and giving nothing back to support the social programs and tax base on which we all rely?

Ethical and socially responsible? You decide. When MEC executives keep using words like “market share”, “expansion” and “wanting to be the number 1 outdoor retailer in Canada” they are more in the league of the Wal-Marts of the world, than the ethical and socially responsible, community minded co-op they pretend to be.

Consider that MEC has discussed plans to open satellite stores (like North Van) in suburban communities and even catalogue type stores (remember the Sears model) in outlying areas. Do those plans show any social responsibility for the impact on the local economy? MEC members need to say enough is enough and apparently, as evidenced here, some already are.

It is some comfort to see that many others on this blog feel the same. Realizing that there may be some member resistance, it appears that the new raison d'etre proffered by MEC for getting into bikes is the suggestion (no proof has been offered) that bikes are not ethically sourced. Your readers are supposed to challenge their local bike dealer about the origin of their bikes. MEC should be more careful before trying to throw bike shops under the bus. I for one have visited the factories where our bikes are made both in the US and Asia. All are ISO certified and were state of the art with excellent working conditions and good wages.

So, I ask again; why is MEC getting into bikes?

HC

Hi MT,

Thanks for the valid comments. The economics of what you say are debatable but some of your points are true.

I would like to make a few corrections. MEC DID NOT get into bikes because of some messianic need to clean up factories. It is getting into bikes based on member demand and the goal to get Canadians more active. Of course this is debatable for some as you have noted in your earlier comment.

In terms of factories in Asia being the state of art in terms of working conditions and wages. I find that questionnable. No doubt there is likely a handful of progressive factories in Asia but the bulk have significant challenges. You're right. We don't provide proof in the public domain for verification (for libel reasons with factories). We can in private conversations.

Based on your eye-witnessed account you have not encountered any major challenges. Based on our fairly extensive work with NGO's, environmental engineers, labour auditors and other bike brands in these factories, we're seeing something else.

I hope your first hand experience is right because if you are, MEC is definitely chasing the wrong factories. And the world of Asian bike factories is not as dark as what my colleagues at other bike brands and I are are encountering.

SL

I've been a MEC member since 1990. I originally signed up as a member in Calgary. At the time I became a member because of the great selection. At the time I really didn't understand MEC's Co-op tax status.

I make an assertive effort to support my local retailers. Bean Around The World as opposed to Starbucks. My local hardware store as opposed to Canadian Tire.

MEC has now become the a big national retailer as opposed to the local independant retailer. And they've done it on the back's of their neighbours by skirting corportate taxes.

I'm an honest person who pays my share of taxes. I believe in supporting those who support me and my communities tax base. I will nolonger be making any purchases at MEC. My conscience won't allow it.

David W Dorken MEC member #3303906

"Are there ANY performance bikes truly made in Canada or the US? Unfortunately, I think I know the answer to that. If anyone out there knows better, please correct me." HC (proving once again that ignorance is bliss)

My two-year-old Rocky Mountain Trailhead (bought at my local bike store) was designed, built and painted in British Columbia, Canada. The wheels were even built here. According Rocky's website, the factory remains open.

My year-old Cannondale road bike (bought at my local bike store) says "Hand Made in USA"on it. Sadly, the company was recently bought by foreigners - from Canada - who plan to stop US production by 2010.

The folks at Pinkbike.com toured Devinci's Quebec factory last summer and watched their aluminum bikes being made. Carbon Devinci bikes come from offshore. (http://brule.pinkbike.com/album/Devinci-Trip/)

Guru even makes fine, very pricey, custom carbon bikes in Quebec.

If MEC has its way, all these factories will be boarded up, and the jobs shipped to coal-powered China factories.

I'd be happier with open Canadian factories and boarded up MEC big box stores.

snake bilsken

MEC selling private label bikes is not like a big box store selling bikes it is a big box store selling bikes. MEC has been able to exploit it's co-op status for too long. How many other outdoor stores or bike stores are allowed co-op status, 0. When the co-op was formed it was difficult for outdoor enthusiasts to get the gear they needed at reasonable price. The co-op changed that to the benefit of our community. Over the years though MEC has expanded it's product line and begun competing directly with more kinds of shops. If the co-op can make bikes why not cars or electronics. The co-op has been able to reach a dominant position in retailing in Canada by using an unfair business model. It was the same with REI in the states until ant-trust laws forced them to change how they operate.
MEC must be careful to listen to it's members and accept a reasonable market share. The ethics that MEC claims to stand for must be stringently upheld or it risks losing it's moral high ground.
chances are this won't be posted but rest assured many of your members are concerned that MEC is to big for it's britches and makes decisions based on greed and preserving the illusion that it has a moral compass.

Nicholas Sylvest

MEC has become the Wal-Mart of the Outdoor Sporting Goods and now Bike world. MEC picks and chooses the brands they wish to carry in their stores that will compliment a vast selection of their OWN poor quality branded product. With profits each year put back into the cooperative and dividends never paid out to their members MEC has amassed over their 35+ years of operation over 100 MILLION DOLLARS in tax free, interest free working capital. As the company was founded by outdoor enthusiasts who also are/were accountants they were very smart to find the loopholes in the taxation system to fund their growth. Look at their American counterparts, REI, they are of equal size and are a cooperative. The main difference is that every year, they issue a cheque to their members for the amount of profit their shares are entitled to, and they key, one does not need to be a member to shop there. Their dividend cheques can be cashed in or used to purchase gear. Unfortunately MEC doesn't do this. MEC talks about their community involvement and are very happy to talk about their membership in the 1% for the planet program. So MEC gives 1% of their 200 million plus dollars in annual sales to various causes whereas every other business in the industry must pay corporate taxes that go to fund local, provincial and federal programs such as health-care and any other government funded project or program. How is this ethical? How is it ethical to steal money from the Canadian population? I understand the purpose of a coop, but there comes a time when the co-op must acknowledge itself as a corporation that is owned by its share holders. MEC is no different than a Starbucks, Home Depot or WalMart.

MEC kills smaller companies, bypasses local distributors of products and outsources most of its production of its own products to factories outside of North America all while not contributing to the tax base. How is this ethical? Even looking at your ethical sourcing reports you employ factories that have poor working conditions, environmental issues and the worst of all utilize child labor but MEC doesn't see it beneficial to Cancel their contracts with these factories that violate MEC's ethical sourcing plan. You see fit to work with them to improve working/environmental conditions. But if you think about it, what is the incentive for the factory to change if you keep awarding them with dollars to produce goods?

There are no fewer than 5 bicycle stores within 2-3 blocks of MEC's Vancouver store. Each one having a different specialty but all serving their own niche. With MEC entering in the market to sell and repair bicycles, this directly effects each one of these stores who not only sell but service bikes as well. How does it serve the community to put five SMALL BUSINESS' in jeopardy? And let's not forget the countless other bike stores found around Vancouver and in each city that has an MEC location.

People criticize WalMart in each city that it opens. It will kill small business etc etc. MEC is guilty of this as well. With each megastore that they open and with each new product category they enter, MEC puts at risk every small business that operates in direct competition within that given community.

Please explain to me how this is ethical?

Nicholas Sylvest

I forgot to add the link to the Vancouver Sun Article in Saturday's Paper (May 9, 2009)

http://www.vancouversun.com/news/break+unfair+competitors/1578970/story.html

Steve

I take it that this blog has closed down, but wanted my comments to reach you, so I hope they do.

I would agree that the concept of the co-op has perhaps crossed the line when MEC starts assembling its own bikes. Note that I use the word 'assemble' because that is exactly what I expect will happen. You will take components spec'd by you, and will assemble these components in Canada, presumably at a cost-savings to MEC Co-Op members.

However, take note of a similar venture run for years by a retailer in Thornhill - Silent Sports. They had a very successful line of bikes known as Thin Blue Line. Metro Police bought these well spec'd bikes, and TBL bikes could be found throughout Ontario and much of Canada.
These bikes featured top-line components and excellent aluminum or CRoMo frames. You could often upgrade components at the time of purchase. At the end of the day, the cost was 10-20% below a similar-spec'd Trek, Rocky Mountain, etc..

However, several years ago, they got out of the home-grown "Thin Blue Line" business because - according to discussions I had with them - they could no longer make a reasonable profit compared to simply retailing the mainstream bike names. And, when they had a failed frame design in one model, they had to accept the loss of replacing the frames...

I mention this simply because:
1) it seems to me that MEC risks a similar fate if there is a major product failure
2) seems more appropriate that MEC find a good canadian source that will be agreeable to assembling MEC bikes, made by "xxx"
3) the only reason MEC could enter into this venture and assemble bikes more cheaply is because of the unfair co-op tax status

Consider carefully the risks of entering into this venture from insurance costs of failed assemblies or the warranty losses.

More importantly,consider carefully the impact on the existing bike retailers.
I agree with other comments that Co-op's should not have unfair competitive advantage in the existing local markets of specialty shops like bike retailers.

Steve

HC

Hi Steve,

Thanks for the thoughtful commments.

annonymous coward

"...I still hold that ideal but now at this stage of my work with various industries, brands and factories, I need to be more circumspect."

Sounds like a classic case of corporate self-censorship. Not to be mean, but you can understand my skeptisism I hope.

I cannot help but fear this push to sell bikes has less to do with 'helping members' and filling market voids and more about making money. This is hardly the first product area the Co-op has felt necessary to expand into... look at the clothing department; more than half of it is casual clothing, work, school, city. We sell briefcases and computer cases as well.

only the future can tell.

HC

Dear AC

Thanks for your thoughts. No it's not mean. Maybe it is corporate self censorship. Is the glass half full or empty. It depends on how one sees it.

The challenge with blogging is what is sensible to me or to you is not to others. What is a positive blog on a factory could be as construed as being negative by that factory.

This blog reflects my idiosyncrasies. It's not a corporate communication medium where everything is carefully thought through and then expertly written and laid out.

Anyways, I've realized that the serious conversations I have with factories about their conduct (or lack of) needs to be held behind closed doors. Getting them to be frank about their issues and then indirectly blogging about them is smarmy.

I've been troubled about this for sometime and the recent matter with bikes and my blog just expedited this simmering thought.


Cheers

KT

I'm a member in a few different co-op's including (MEC), and it's kinda funny how little the general public actually understands about co-ops and how they work.

First off anyone really interested in learning about co-ops and how they work should do some digging on the web as many points pushed by MT and Nicholas are just straight up false, or they are just merely mis-informed.

1. I'm an MEC member and have spent quite a bit there in the last few years and have received 3 dividend cheques amounting to about 10% of my purchases.

2. Co-ops are not granted tax free status, yes depending on what they choose to do with profits they can pay significantly less tax. If they retain cash they pay tax on it just like anyone else.

IE. for all you sole proprietors out there, any profit you donate to a charity you would not pay tax on. your choice.

3. Bypassing distributors un-ethical?

This would be called protectionism, to protect poorly run businesses from going out of business by refusing new-comers access to product lines. I used to work in winter sports retail and this used to be rampant in that industry, distributors would pick which shops they would supply and anyone else was out of luck, guaranteeing those shops steady income regardless of their compentency by giving them exclusive rights to certain brands that were in high demand.

In our capitalism based/free market economy i would call this un-ethical.

4. Co-ops exist to fill market gaps? nope, thats how many start out though. In other countries co-ops are becoming the predominent way of doing business, there are even mulit-natioanl co-ops.

5.If being a co-op is such a great deal/advantage and your a business owner reading this why don't you just go and incorporate your business as a co-op? You can. Go do it already.

If not would you not mind explaining why you would rather remain as a sole proprietor or partnership? (i'll be Impressed if I get a straight answer on this one)

I choose co-ops every day, whether it's for banking, grocery's, farm supplies, insurance, and yes outdoor gear too.

Annonymous Coward

I worry for the co-ops future because the current management seems hell bent on expansion... 3 new stores slated for Montreal and area (if I'm not mistaken), not to mention bikes and the ever expanding casual clothing section. Not to be elitist, but at what point does our 'membership' become indistinguishable from the general public? When MEC is serving the general public what differentiates us from Walmart (aside from sheer size)? At what point does the tax man come calling wondering why we run a business and yet pay no business tax.

When it come to bureaucratic organizations; business, governments, and co-op's(?), size erodes community. Has MEC passed this threshold? It seems to me that the community we once enjoyed as members is slipping away. I understand that MEC is riding the industy flow as far as outsourcing the manufacturing it's products, I just wish they'd make a better show of resisting the river flow or thinking of ways to get off/out.

Murr

I for one welcome MEC. If I can get a great bike at a great price why not? I care about where my goods come from and I know most of it would come from Asia. Why not though? They need money to and are willing to provide MEC with a good service. The funny thing is that MEC is doing nothing different than any other bike company out there that I'm sure all these nay sayers are riding. They are all "designed in the USA" or "California" but lets face it, 2 lines down they all say made in China. The world and market place has changed and I think it's time that we do as well.

Murr

I forgot to add one more point. Most of the bike stores I've been to on the North Shore, aka supposed shangrila of mountain biking, are pure crap. Either nobody talks to you and ignores you, they are getting drunk in the back, or they are trying to sell you something you don't want or even need. From the looks of it they don't want my business or are not willing to work for it. That's why MEC is making bikes, because all these stores suck and we the customers are sick of getting ripped off.

eMansipater

I had to add my voice as a member to the discussion of MEC's "Big Box" mentality. I am an MEC member because I care very much about the attitude of the companies I purchase from towards social and evironmental sustainability , and on those points MEC is simply second to none. If MEC had 10 or 20 or 100 times the market share, that would be 10 or 20 or 100 times the vote in the marketplace for better working conditions and better environmental practices. No company is perfect but MEC is far and away better than most retailers of its size. If I could, I would buy everything I ever purchase through MEC--from business attire, to groceries, to major appliances. I would want an MEC store in every city I would ever move to. And I would want as many people as possible from everywhere shopping there. MEC should have a tax benefit over other large retailers, because it is people first instead of profit first, which is a fundamental difference. If you don't believe this, spent any time at all working for any other 'Big Box' retailer and take a good, hard look at the decision-making processes that define them.

I know MEC is likely to stay focused on its core of, after all, "Mountain Equipment". And it should. But I welcome any and all possible expansion that MEC is able to make sustainably and without compromising its ethical edge. Ten or fifteen generations from now our children's children will measure our society by what percentage of our businesses were MEC-like in how they looked to the future, and that percentage is terribly, terribly minute.

HC

Hi eM,

Thanks for your support. It's appreciated.

Mark

Why does MEC need to compete in this market??

If MEC is a CO-OP, why does it need continual growth? How about continually supporting the COmmunity?

The comments to this entry are closed.