One of the main Cycle to Work scheme providers in Ireland has this morning got in touch with BikeBiz with a response to last month's comment written by Clonmel store owner, Barry Meehan of Worldwide Cycles. Meehan argued that the independent retailer finds commission charges of ten per cent, or more, too much to make voucher business worthwhile. James Leahy of Bike to Work counters below:
"Firstly, it is not fair to tarnish everyone with the same brush when it comes to payment terms. Bike to Work do not pay 'in our own good time'. We have 250 shops across Ireland and any of them will confirm that we honour our payment terms of ten days from when the voucher is redeemed.
You are right in saying that many employers are happy to deal directly with shops. However, the majority of large employers are using an administrator for a variety of valid reasons. For example many employers:
- Have complex supplier approval processes, which they are not willing to do dozens of times for individual shops.
- Have staff throughout the country and want to roll the scheme out to all employees at once.
- Want to avail of our specially designed online system to guide employees through the process and minimise the administration involved.
- Want a specialist who will provide a phone and email support service and run roadshows on the scheme.
The Scheme is not difficult to run for employers, but it needs to be integrated with their systems and there is still a minor administration burden. Some companies do not run the scheme at all, which doesn't provide much value for their employees. With 250 shops in every county and over 150 brands, employees still have almost unlimited choice with Bike to Work.
On the subject of margins, it is easy to assume that everyone else has a healthy profit margin while your own margin is tight. We operate in a competitive market and our commission at eight per cent, is 20 per cent lower than our main competitors.
It is ridiculous to suggest that Bike to Work Ltd. could offer our service for one per cent. Between advising companies, running roadshows, and dealing with queries; we often put significant time into orders. We also have overheads. For example, we have made significant investments in our IT systems, and have a sales and marketing budget, which is increasing, both the number of companies which are running the scheme, and the number of new employees who are taking up cycling."
Discussions regarding the Cycle to work scheme and its worth to the retailer are currently in focus on the BikeBiz trade-only forum.