INSIDE THE PRO’S CLOSET – THERE’S GOLD IN THAT USED CHAMOIS

By Zap

As often as the classic rags-to-riches story is told, it usually starts with a single person who, in the midst of just scrapping by, comes up with a simple idea that eventually leads to great success. A success that sometimes comes overnight, but usually over the course of some hard and lean years.

And as common as the rags-to-riches story may be in the tech, automobile or fashion world, similar versions are few and far between when it comes to the bike industry. Sure, in the road bike world Pinarello was sold to a big Euro luxury group, and last year the great Italian frame builder Ernesto Colnago cashed in when he sold his eponymous bike brand to some wealthy investors from Saudi Arabia. 

However, Mr. Colnago had literally spent over six decades in the trenches building and working on bikes for Eddy Merckx and countless other champions. Not to mention, in addition to the reservoir of sweat equity, for Colnago, there was always a continuous need of new investment in raw materials and new machinery.

BUT THAT’S NOT THIS STORY

Other than sharing a deep-rooted love for bicycles, 40-year-old former mountain bike racer Nick Martin has nothing in common with Ernesto Colnago. Well, except one thing. He did parlay his love of bikes with a certain intuition about how to make a business out of it. And it was an intuition that, in the end, would prove to be more successful than he (or really anyone else) could’ve ever imagined. 

The Pro’s Closet is the name of Nick’s brainchild. The concept of the business didn’t come to him like a bolt from the sky. But, from his most humble beginnings in 2006  (selling used-bike clothing while living in a van and visiting the local library for the free internet connection) to where it stands now (a worldwide, consumer-direct resource for used bikes that’s enjoyed $27 million of outside investment), the Pro’s Closet has measurably grown to now employ 100 people with an estimated value of $83 million.

GOING FULL CIRCLE

Regular readers might recall a bit of Nick’s storyline from a story I wrote about our shared experience riding the White Rim trail in 2019 on our gavel bikes (RBA, July 2020). That adventure was the culmination of an almost two-decade-long friendship and my observation that, as his company continued to enjoy explosive growth, he was getting sucked into a deepening hole of corporate obligation—and worse, not riding his bike!

Organized by Western Spirit Tours, the ride would have us off the grid for four days, a concept that neither one of us was well-adapted to. And, it was on our last night of enjoying the fruits of civilization in the town of Moab, Utah, that we sat down for a feast of Mexican food that this initial interview was begun. And then, upon returning home, the notes were stashed as I got back to my own version of a daily grind. 

Lo and behold, some nine months later, while watching last year’s coverage of the Tour de France, who would appear as the show’s daily sponsor but The Pro’s Closet. What the?! I knew that TPC had been getting big, but this PR move just seemed otherworldly! 

THE NEXT LEVEL

And then, just a few weeks following Tadej Pogacar’s historic Tour victory, I got an e-mail from Nick alerting me to some changes coming at TPC. Was he out? I wondered. A phone call was soon to follow, and Nick said that no, he was not out, but that he had decided to hand over the CEO reins to board member John Levisay, who had years of e-commerce experience. 

As Nick told me in a somewhat forlorn voice, he wasn’t handing over the reins because he didn’t care about the business anymore. In fact, having overseen its growth in status from the days of selling used-bike clothes so he could afford more Top Ramen to subsist on to the multi-million-dollar juggernaut that it had become, Nick realized that he simply cared too much for TPC to possibly screw it up for the sake of maintaining a fancy title.

In explaining the transition, Nick, as always, remained his modest and philosophical self: “TPC is like a giant flywheel rolling downhill, and while it gets easier to turn the pedals, the lessons come really fast, and crashes can have a lot bigger impact. I’m at the point where I’m pretty tired of growing the business, and to get to the next level, the coming year will be a massive climb. And to be honest, I’m not ready for it. 

“John is the real deal and is better at spreadsheets than I’ll ever be. I’m confident that he can take the brand to the next chapter. For the sake of formality, I think my new title will be something like ‘chief of brand.’ Although, I am the founder of TPC, I think the title of ‘founder’ puts you in a corner. I still have some cycles left in me here. I need a title that can make a meaningful difference to be able to still increase the piece of the pie.” 

THE VALUE THAT SURROUNDS US

Although much has changed for Nick and TPC in the last year, the real story I’ve been wanting to write about Nick had less to do with the corporate machinations of investment money and board members. The story has actually been on my mind for years, and it would get kick-started whenever we’d meet at Interbike or the North American Handmade Bike Show where we’d steal some time to reminisce about all the crazy moments of life in the bike industry.

Back in 2019, on the day before our desert foray in Moab, we were riding back from the Slickrock loop when Nick suddenly motioned me down some quiet residential street. “Hey, I’ve got to show you something that will tell you a lot about how TPC came to be.” 

Soon enough, there we stood in front of a long-abandoned graveyard of old Volkswagen cars. The sign out front read “Tom Tom Foreign Cars,” and this was where Nick said he first began to conceive of what would later become his multi-million-dollar business venture.

“Back then I was living on a $17-per-week budget, so I had a lot of motivation to be creative to make ends meet.” 

“It was 2003, and I was living out of a VW bus in Grand Junction, Colorado, and my teammate Ross Schnell and I were already spending our training rides looking in people’s backyards for old cars. When I would be scavenging parts for my bus, I would sell some excess nuts and bolts, and that was when I began to realize that everything around us has value—if not for you, then for someone else. The Tom Tom lot provided me with a field of opportunity, which for a guy living off of PowerBars, had a big impact on my daily existence.

“On one of our rides I found a 1962 split-window VW bus for $1500 and sold a LeMond road bike to buy it. I later sold the bus to someone in Holland for $12,000, and for me the lesson was as much about recognizing what would be valuable to someone else, but also how valuable the internet could be to facilitate the sales process.” 

A NEW BEGINNING

“When I was riding for the Trek/VW team, I never sold any current-year product. I knew it was important to respect the relationship with the team, but once the season was over, it was fair game to sell. Back then I was living on a $17-per-week budget, so I had a lot of motivation to be creative to make ends meet. Also, since I was living in my van, I really didn’t have any room to store stuff, so at the end of the season, selling my leftover gear not only brought in needed cash, but also gave me more room inside the van!

“Around 2004 I would be using the computer in the town library to sell stuff on eBay, then go down to the dumpster at the Vitamin Cottage store to get their discarded boxes. Finally, I’d load the boxes on my bike trailer and ride over to the post office to ship the stuff. In the first year I made about $80,000 in sales, and with 20-percent commission
and after expenses, I would make a $10,000 profit.

“I remember that when I finally moved into my own apartment, my first big expenditure was a Tempur-Pedic bed mattress. Man, after sleeping on an air mattress for years, that thing was a game-changer!  

INTO SOMETHING ELSE

“Eventually, I was selling more and more stuff and in 2014 The Pro’s Closet was named the number-one bike shop on eBay. The business kept growing, and basically that’s how we got to where we are today.”

And when Nick refers to “today,” he is referring to TPC’s growth, which has seen the business move from inside the confines of a VW bus to a newly acquired 130,000-square-foot building. 

“We get anywhere from 50–60 bikes a day, and we’re hoping to have the capacity to at least double that within the next two years. We’re selling about 12,000 bikes a year with about $40 million in revenue. The thing is, unlike all the big bike brands in the world who rely on maybe a dozen factories to get their bikes, our inventory supply chain is in every garage in the country. I truly think the secondary bike market is like the Trojan Horse in the industry. Best of all, we’re not tied to just selling a single brand or two. 

THE PROCESS

“Looking back, I think TPC’s biggest moment came when we created our own website in 2014 and moved away from eBay. And unlike bike shops that have to rely on getting people into the store, our biggest challenge is driving eyeballs to the digital space, which, when viewed from a contemporary consumer’s lens, is how they’ve become accustomed to shopping.

“Our current business model is not the original picture that we painted, but we’ve recognized the need to evolve and adopt to serve the customer better. It’s what the whole bike industry has to do!  

“When bikes arrive, they go through a 140-point visual inspection at stations manned by trained mechanics. We use a Boeing decibel hammer to tap on every carbon frame to listen for cracks. Right now, we’re only accepting bikes within a four-year-old range. Once the bike is in the system, it gets stored, photographed and posted on the site. Each bike has a warranty, and we also offer a trade-in policy. The whole operation is geared to maximizing the experience for the customer.”

AS FOR THE FUTURE

The last time I spoke to Nick, he seemed a bit flummoxed over what his future role was to include: “This is my last day as a CEO. I started the week with John unpacking incoming bikes. To me, you can’t be a good general without being a good soldier, so we spent time in the trenches where it all starts each day. The thing is,” he added jokingly, “now I don’t have anything to else to do!”

The moment reminded me of the time Nick asked me to meet him for lunch a few years ago at the Interbike trade show. As we sat poolside at the Mandalay Bay Hotel, he shared that some of his investors were pressuring him to change the name of the company, something he was less than excited about doing. It seems the money guys were afraid that the company’s growth could be stilted by a name, which to some (investor’s) ears had less to do about bikes and more bedroom remodeling. 

“The thing is, unlike all the big bike brands in the world who rely on maybe a dozen factories to get their bikes, our inventory supply chain is in every garage in the country.” 

Nick ran some new names by me, which, although patterned for bigger growth, just sounded dumb. After reminding him that I should be the last guy to ever give business advice, I couldn’t help but relate the many other cycling industry stories I’d witnessed where the “money guys,” knowing nothing of the culture and passion of cycling, would roll into a growing business and just screw everything up. In the end, my advice was to stick to his gut feeling, because it was his passion and vision that already made the company the success that it was. 

DON’T DIE WONDERING

As Nick and I spoke on the phone about TPC’s future, it seemed all too obvious that the most likely next step would probably be to not only go public, but also expand overseas. Luckily, as inevitable as growth is for TPC, Nick is no less assured of still growing himself—as a businessman, but more than anything as a husband and father to his wife Elizabeth and their young son James, who at 2 years old is already ripping it up at the Valmont Bike Park
in Boulder. 

When asked if he had enjoyed a singular “best moment” in his rise to success, Nick quickly replied: “I don’t know how to do it all, but by layering the expertise of our team, I think the best is still to come. I know what the bike has meant to me, and when I see the smile on James’ face when he’s riding his bike, I know there’s no other toy in his toy box that does that for him—or me!”  

Imagine all that from some bicycle-crazed kid from Wisconsin who, in realizing that there was a market for used chamois, went from living out of a VW bus to overseeing a multi-million-dollar bike-industry juggernaut. More than just fabulous, it’s testament to the wonder of life and where a combination of passion and genius can take any
of us.

THE MUSEUM

 

“Of the 300 or so bikes we have on display, I think we actually own about 50. I really don’t have any need to say ‘I own it,’ about any of the bikes. I just want to be the caretaker and be able to tell and share the story. Besides, it’s hard to tell our investors that we’re spending that kind of money to basically put pictures—or bikes—on the wall! 

“I’ll never forget when and where it all began. I had heard that Bob Roll was thinking about selling off some of his old gear, so we jumped in a van and drove to his old house in Durango and loaded it up. For me, the prize was his old 7-Eleven team helmet that had a hidden message beneath the nylon cover that read, ‘Let them hate so long as they fear,’ and that was the first museum piece we had.

THE HOLY GRAIL

“Although we have over 200 bikes and a similar amount of small items in the museum, I’m partial to race bikes in our collection and the history they hold. Anyone can restore a pristine example of a specific model, but race bikes are special, as there is only that one bike that shared a moment with the rider. There are three race-ridden bikes in the museum that I would consider the Holy Grails because of their race pedigree: 

1. Tinker Juarez’s 1993 Klein Team Storm

“This bike is unmistakable, and anyone following mountain bike racing in the early ’90s remembers this bike. It was one of the most visually stunning bikes in NORBA racing history. Tinker was probably the most striking figure in early-’90s mountain bike racing. He looked like a comic book character come to life.”

2. Davis Phinney’s 1984 Olympic “Murray” Serotta Bike

“Before the 1984 Los Angeles Olympics, American manufacturer Murray signed on to sponsor the U.S. Cycling team, as well as the legendary 7-Eleven team. Davis is a legend that needs no introduction. This bike is complete with the Olympic rings on the chainrings and the red, white, and blue pantographed seatpost he used just for the race. Back then the riders often trained on the bikes they were racing on, and this bike is full of bumps and bruises that highlighted Davis’ aggressive racing style. 

3. Julie Furtado’s 1990 World Championship Yeti C-26

“This was such a controversial bike, as the team was sponsored by Campagnolo, but she had the bike swapped over to Shimano the night before the race. Julie rode this bike to win the XC race at the first-ever Mountain Bike World Championships in Durango, Colorado. If there was one race I wish I could travel back in time to watch, it would be the 1990 Durango World Championships. The scene at that time was electric, and Yeti was at the center of it all. Julie lived and raced by the motto written across the C-26’s fork arch: ‘Ride fast, take chances.’ 

“When I got home, I knew there was an expensive team jacket that was abandoned in a ditch, and all I needed to do was ride for four hours to get it. When I told Tyler my plan, he said I was welcome to it. I made $200! Like I said, there is value all around us!” 

“At some point [Yeti Cycles founder] John Parker sold the bike to a guy in Germany, and after he saw the video we made about the bike, he contacted us to tell us that this historic bike was just sitting in his garage and wondered
if we’d be interested in taking it off
his hands.

“He said he didn’t really need the money, but that he’d swap it out for a 1957 Chevy Nomad, so I scoured eBay until I found one, and I still remember how I had to explain to our CFO why the car was in our parking lot for six months! Eventually, the guy flew out to Colorado, handed over the bike and drove the car to Florida before shipping it back to Germany.”

TYLER’S JACKET STORY

Of the many stories that Nick’s told me to describe his path to success, I think the most telling involves a rainy-day training ride he was on in Boulder back in 2004. 

“Yeah, that was back when Tyler would come to Boulder in the winter, and we’d show him all the local trails. This was when he was riding for Phonak, and on this one day he decided to join the group road ride. I remember we were climbing the St. Vrain road, and he was tearing our legs off riding a fixed-gear bike. When we came to a fork in the road, the plan was to do a loop and come back to that same spot, so he took his rain jacket off and ditched it in a culvert. 

At some point we made the decision to take a different route, so he never got to go back to fetch that jacket. When I got home, I knew there was an expensive team jacket that was abandoned in a ditch, and all I needed to do was ride for four hours to get it. When I told Tyler my plan, he said I was welcome to it. I made $200! Like I said, there is value all around us!”

THE COLNAGO FUTURA STORY

“For sure one of the defining moments in TPC’s history was in 2014 when our growth necessitated the need for more people and more computers. The problem was that we really didn’t have the money to make that happen. Luckily, right about the same time Veltec was clearing out all their warranty frames, which included six Master Pista frames. The invoice just listed them as having ‘custom paint,’ and we didn’t know what that meant, but figured if we bought each frame for $600, we could probably sell them for around $800. 

“Not knowing what the price should be, I wasn’t sure where to begin, so I figured I’d let the market decide and started the eBay auction off at 99 cents. I sold them all for $12,000 to $14,000 each, and that ended up being the infusion of capital that we needed for the business. As a matter of fact, I kept one of them, which still hangs in my office. My thought was that it would act like a ‘break glass in case of emergency’ frame to sell, and since
it’s still hanging there, I guess we’re doing okay!”

 

For more: The Pro’s Closet