Independents' Day

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In one year, YaYa has recruited 67 independent bike dealers (IBDs) with 100 store locations in 23 states and aggregate sales of $75 million. It also has signed 18 preferred suppliers, who are cutting YaYa a special deal because of its 100 locations. Such progress makes Dupuis happy.

But YaYa has its detractors, too. "I'm not sure I see the usefulness of it. I already have really strong relationships with my suppliers," says Chris Zane, owner of Zane's Cycles, in Branford, Conn. But Zane is exceptional among IBDs. With revenues approaching $6 million, Zane is the exclusive dealer in his area for brands like Trek. If he joined an alliance, he says, "I know my suppliers would give me a hard time."

YaYa president Bob Friedman, who is based in San Diego, admits that in his first six months of recruiting, he struck out repeatedly. Despite hard times that saw at least 800 stores shutter their doors in 2001, many IBDs were skeptical of the new group. "They'd say, What suppliers do you have? I'd say, I don't have any yet. And the reply was, Call me back when you have big players like Giant," Friedman says. In fact, YaYa is still seeking a deal with a top-tier bike manufacturer. It may take a while.

Friedman says from the start the word among suppliers was "Don't work with YaYa and they'll go away." There was reason to fear the fledgling alliance. In Europe three bike-dealer cooperatives wield considerable power because they move so many bikes. In the United States some suppliers fear "they're going to help us get healthy, and then we're going to turn around and bite them," says Friedman. "That's happened to some extent in Europe."

But then a few suppliers broke rank, and more followed. What's more, grizzled retail veterans like Ron Kozy, owner of Kozy's Cyclery, in Chicago, decided to join, encouraging other IBDs to do the same.

Some store owners were initially skittish because they recalled a motley group of retailers that had tried to organize an alliance a few years earlier and failed miserably. But YaYa took a different tack from the start. It was organized as an official business cooperative under the direction of co-op expert David Leppert. In a cooperative every member is also a shareholder. The YaYa chairman is a bike dealer.

Now YaYa wants 1,000 members, or about 20% of the IBDs, by 2006. That's a tall order. "I'm asking a store owner to write a check for $2,000. It's not an easy check to write, especially when the payoff is downstream," Friedman says. He expects that the first rebate checks will go out to members in 2003.

Also downstream: a line of private-label bike products under the YaYa brand (or another name of members' choosing) made by the alliance's preferred suppliers and available only to members. Friedman sees a Wal-Mart-busting line of simple products like shorts and wheel tubes. "These guys sell tons of tubes, so why not their own?" he asks.

Ultimately, Friedman envisions YaYa members launching comarketing campaigns under the alliance's banner. And why not put the YaYa logo on store marquees? As Friedman talks, the alliance's mission starts to sound suspiciously like that of another co-op that started out so many years ago as a renegade group of independent stores. Those stores are now known by one name: Ace Hardware.

Agents for Change

The Alliance: Strategic Independent Agents Alliance (www.siaa.net)
Founded: November 1996
Members: 1,000 insurance agencies nationwide
Driver: The consolidation of insurance carriers is leading to increased demands on insurance agents

"In our state alone, there are probably half as many independent agents as there were 10 years ago, and that number will probably continue to be reduced annually," says Tim Hyland, president of Hyland, Block, & Hyland, in Louisville. Local insurance agents, long a fixture in small towns across the country, are struggling for survival, according to Hyland, as insurance carriers grow larger and raise the minimum premium volume they require of agents who do business with them. "The companies that we represent want more volume from fewer agents," he explains. Since 1997, Hyland has found refuge from the turbulent insurance market as a member of the Strategic Independent Agents Alliance, a national network of small and midsize independent agents.

SIAA can trace its roots back nearly 20 years. In 1983, SIAA chairman Jim Masiello, founder of the SAN Group, was running a small agency in Keene, N.H., and thinking about growth. "I didn't want to invest in branch offices," he says. Instead, Masiello joined forces with two other New Hampshire agents to aggregate their premium volume and gain clout with regional carriers. Over the years, with consolidation increasing, the lopsided relationship between independent agents and powerful insurance companies got only worse. In 1996, in response to that trend, Masiello took his partner concept and expanded it to start SIAA, which now has nearly 1,000 members in 48 states. Together, the members generate enough business to meet the premium volume minimums set by giant national insurance carriers as a prerequisite of representing them. "In the 1970s and '80s it was easy for somebody to start from scratch, find appointments, and write enough business to get a contract with a big insurance carrier," says Madelyn Flannagan of the Independent Insurance Agents & Brokers of America Inc., a trade association in Alexandria, Va. "That's virtually impossible today."

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