Ridiculous Prices (rant thread)

[ldrcycles]

Bypassing Aussie distributors is called grey importing, and no they can't.

Why not? If a distributor is charging them more than the overseas retail why can't they buy elsewhere?

[MarkG]

Lack of warranty for one thing I'd say..but there's probably taxes etc that may limit its viability.. there's obviously some (Govt) measures put in place to protect the local market..

[Baldy]

If you have to "get along well with" your local bike shop staff in order to get reasonable pricing, then they are poor business people, not to mention morally questionable, but in the majority of cases I don't believe this applies.

So... can Aussie bike shops form some sort of buying conglomerate that ships to Australia in bulk and bypasses the current distributors? Remove the extra layer of profit?

Reasonably priced stores would allow the Aussie cycling scene to thrive so much more than it already is.

That's the post I was reply to.

I don't want to start an argument. I thought giving regulars a discount was a pretty standard sort of thing.

I dunno, are you saying it but then saying I dont think it happens much so im not saying it?

Am I being punked or something ?

[zero]

Lack of warranty for one thing I'd say..but there's probably taxes etc that may limit its viability.. there's obviously some (Govt) measures put in place to protect the local market..

Australian law pretty much allows for the parallel import of goods, at least with respect to bicycles. If shimano applies their trademark to an object and sells it anywhere in the world to anyone, then that anyone is allowed to import it here and represent it as product of shimano without infringing the trademark.

The main problem is not that bicycle stores etc couldn't get spares via gray supply, the problem is that they need to have a complete range of spares, and relatively ontap. Gray suppliers have 50 of 3 things, and none of 50 other things.

[adrian_d]

2 particular LBS that I visit have a shop as well as an online ordering system and nearly every price that they have online and in shop are at least 20% off rrp, some of which have been 40-70% on one particular part. I also believe that Recommended Retail Prices are always just an indication on what is a fair price so that there is a level of consistency throughout other shops. Its the shops that offer some cheaper prices and that can still offer the fantastic service that gets my call. I always feel embarassed when asking for a better price, but in the end its your money and theres no harm in asking for a better deal.

[bychosis]

Visited a couple of LBSs last week to fill in some free time. I was horrified at some of the prices of stuff having done most of my purchasing online in the last few years, for both convenience and price. how many people actually pay what is on the sticker for those items? Or are the items mostly sold at a significant discount in a bundle with a bike?

I really don't like the model of retail that marks up shelf prices so that they can give you a bigger discount. Seems to be too common. I like to see a decent price on the sticker and then am happy to pay it. I dislike that a bigger discount makes it appear to be better value for some people.

[mezla]

I don't want to start an argument. I thought giving regulars a discount was a pretty standard sort of thing.

Man... I have no interest in arguing either, but you keep misrepresenting what I've said, so I have no choice. I'll spell it out.
I have no quarrel with regulars getting discounts, but that has nothing to do with giving non-regulars "reasonable prices".

It should be:
Regulars: Mates rates woot!
Non-regulars: Reasonable prices.

NOT
Regulars: Mates rates woot!
Non-regulars: Massive rip-off.

[MarkG]

its not that they cannot do grey importing, its that if Shimano find out, they will cut off their domestic supply of the entire Shimano catalogue. then the LBS is left having to get all Shimano product from O/S which is not always possible.

Exactly.

If Orbea for example found out a bike shop was bringing in Northwave shoes via this means, then they would cut them off from EVERYTHING that Orbea distributes in Australia, ie Orbea Bikes, Northwave shoes, and more.

I'm sure bike shops have 'entertained' the idea in their head at some stage or another but I'm sure that's as far as they'd ever be willing to go!

[ldrcycles]

Well then isn't that anti competitive behaviour, and against free markets and whatnot?

[JustJames]

So, if the Aussie distributor is greedy, either the LBS buys through grey channels and risks being cut off at the knees by the distributor, or the LBS can get supply and wonders why they hear the wind whistling as the occasional tumbleweed blows by...

There are no local markets any more, only local patches of a global market.

[MarkG]

to an extent that's correct.

Retailers in Australia have always been at the mercy of the distributor, there's nothing new there at all.
Take IGA for example. Pre-IGA most of those stores were independent one off shops who's prices were always cheaper than the corner deli, but more expensive than Coles and Woolies for the simple reason that they couldn't afford to buy the same huge quantities as the big two, so weren't getting the same discounted prices.
Someone then came up with the idea to form the Independent Grocers of Australia which was essentially a means of tying all these shops under an umbrella to get the same discounts from wholesalers.
They figured that 1000 smaller shops buying from the same wholesaler would get a better rate than 1 or 2 shops buying at one time.

Bike stores though, although most are suffering in a similar vein, are all competing against each other, so don't really have that luxury. Even franchises like BikeForce still can't command the discounts that Wiggle etc do, as they sell Aus-wide only, as opposed to world wide.

I guess that's why most of them are leaning more towards beginner bikes, servicing and consumables like tubes etc...

Who knows for sure..but it's tough out there..

[Ross]

its not that they cannot do grey importing, its that if Shimano find out, they will cut off their domestic supply of the entire Shimano catalogue. then the LBS is left having to get all Shimano product from O/S which is not always possible.

I don't understand the problem. There have been numerous stories on here and I've heard it first hand from people who work in bike stores that Shimano Australia are hopeless with supply so why don't the LBS' tell Shimano to ge their act together or they will start buying from Wiggle et al. I find it hard to believe that there would be a product that you couldn''t get at one of the online retailers. As far as warranty goes, if a part or bike fails or is faulty, you take a photo and email it the supplier and most times they'll tell the LBS to chuck it out and they'll send a new one straight away (usually to arrive within the week). Seems like a win/win situation to me for LBS.

[Baldy]

I don't want to start an argument. I thought giving regulars a discount was a pretty standard sort of thing.

Man... I have no interest in arguing either, but you keep misrepresenting what I've said, so I have no choice. I'll spell it out.
I have no quarrel with regulars getting discounts, but that has nothing to do with giving non-regulars "reasonable prices".

It should be:
Regulars: Mates rates woot!
Non-regulars: Reasonable prices.

NOT
Regulars: Mates rates woot!
Non-regulars: Massive rip-off.

Ah yep I was confused for sure, it read that way but I was almost sure you wouldn't say something like that because I had pegged you as a nice bloke with a sense of humour

I pretty much agree with you

The only thing I can think of in the LBS defence is they dont always set the RRP? Or do they? I had just assumed it was a distributor thing, like Shimano/SRAM?Zipp...whoever, decide the rrp.

For small stuff like a tube or 2 I think people will just pay retail price and not think about it. When the price range goes up a bit I reckon only mugs pay full retail.

That said, a small discount off an already bloated retail price is the problem.

I dunno mate, if I did I would be training on a Mclaren Venge and not a 09 ali Trek with sora

[MarkG]

The distributor sets the rrp and usually allows a certain deviation from that.
Its usually when other shops see one of their competitors selling the same product too cheap that they complain to the distributor.

[mezla]

Doesn't the alleged behaviour of Shimano Australia violate anti-monopoly pro-competition laws... or something?

Seems strange that it would be legal.

Class action lawsuit from all Australian cyclists IMO. Power to the pedal people!

[MarkG]

What alleged behaviour?
Shimano Australia are the only official importer and distributor for Shimano parts in to Australia.
What monopoly are you going on about?
That's like saying Nissan are violating some law for being the only official importer of Nissan in to Australia.
Any one can import their own Nissan Skyline in to Australia, but don't expect Nissan Australia to offer a warranty on it, same as if you bring in your own imported bike.
A guy on here I know purchased some Look Keo pedals from the net, they broke, he tried to get them replaced via the Aussie importer, who rightly told him to send back to where he got them.

I don't actually understand what point you're trying to make?

[__PG__]

In order to bring action against Shimano you'd have to prove that the wholesale price in Australia was vastly different to that offered in the UK or the USA.

I recall similar issues surrounding Apple, Adobe etc. for the differences in prices charged on software and itunes downloads in the USA and Australia. There were some political rumblings about it but it would take some concerted political action to alter Apple and Adobe's pricing policies.

[MarkG]

In order to bring action against Shimano you'd have to prove that the wholesale price in Australia was vastly different to that offered in the UK or the USA.

I recall similar issues surrounding Apple, Adobe etc. for the differences in prices charged on software and itunes downloads in the USA and Australia. There were some political rumblings about it but it would take some concerted political action to alter Apple and Adobe's pricing policies.

That's right PG!
Shimano's only fault is probably making the initial cost to the shops expensive, but apart from that there's no crime being committed.
It's not like they're even prohibiting people buying their products from over seas websites.

[Baalzamon]

In order to bring action against Shimano you'd have to prove that the wholesale price in Australia was vastly different to that offered in the UK or the USA.

I recall similar issues surrounding Apple, Adobe etc. for the differences in prices charged on software and itunes downloads in the USA and Australia. There were some political rumblings about it but it would take some concerted political action to alter Apple and Adobe's pricing policies.

Not exactly same scenario.
You are talking about physical hardware vs software that is delivered electronically.
Why is an app in USA worh $1 when here it is $4
Why is music sold in itunes in USA $10 and here $20
Why is a game sold on steam in USA for $50 and here $85
All of that is delivered electronically. Once you commit to buying it, it gets instantly downloaded and what should be the case is Apple should have a fixed price worldwide and then apply local charges like GST/VAT. Same for Steam. But instead they have different prices for each locale and there is no extra distribution costs involved here.

[thomashouseman]

Why is a game sold on steam in USA for $50 and here $85
All of that is delivered electronically. Once you commit to buying it, it gets instantly downloaded and what should be the case is Apple should have a fixed price worldwide and then apply local charges like GST/VAT. Same for Steam. But instead they have different prices for each locale and there is no extra distribution costs involved here.

Slightly offtopic....

I rarely buy direct from Steam these days. A lot of their authorised Steam Key resellers such as GreenManGaming sell the same steam keys for much less. Even physical stores like EBgames are cheaper in some instances (Bioshock for example).

[Ross]

Because as soon as they start making noise Shimano will find a reason to cut them off. Shimano being a significant % of their product for bikes is not something to mess with.

I don't think you read my post properly. Australian LBS' need to stop buying from Australian wholesalers that are aren't competitive in price and/or have bad service. Not buy from them. At all. Ever.

Ever wondered why you cannot get a Yeti frame from USA? Its because one person literally went into a bike shop and asked the store to match the online price. The store owner pushed the issue back onto the distributor, who pushed back on Yeti, who in turn introduced new distributor arrangements in the USA preventing sales to non USA addresses. Silly because the price differential alone is more than a reasonable airfare on many of their frames, so you could conceivably take a holiday in the USA, build up a bike (which was already funded anyway), ride it, bring it back 2nd hand (no GST etc) and still be no worse off.

Not every LBS sells every brand of bike and part now. Seems like win/win for the LBS, cheaper pricesand better/faster service (and probably greater variety of bikes and parts to choose from).

[RonK]

Have a read of this Cycling IQ series about the modern bicycle industry.

I'm sure some websites sell 'boxed' components, but a lot sell old OEM stock.

The Cycling IQ series is well-written and the arguments seem quite cogent, until they get to the claims that bike manufacturers routinely over-order stock and then dump the excess on the market.

It beggars belief that any modern manufacturer could be so inefficient and remain in business, paricularly one making low-margin high-volume products such as bicycles in a very competitive market. And using components that have a short one-year model cycle.

It's been quite a few years since Toyota introduced just-in-time production methods, and they are widely understood and imitated. So manufacturers are now tightly integrated with their supply chain and large over-orders of components would be very rare.

More likely it's the component manfufacturers themselves (yes, Shimano et al) who are responsible, and this would also account for the plain packaging. Why wouldn't they sell a large quantity of components to Mr Wiggle, unpackaged to further reduce costs, when every item sold adds to the profitably of the production run?

[Xplora]

Mezla, I think you are expecting far too much from a competitive (but protected) environment.

Get on well with the shop: Reasonable pricing and discounts to get there
Joe bloggs: Full retail, maybe a catalogue discount

Your "mate's rate" is the sum you are prepared to pay all the time, and you can't expect it when you don't have the relationship... you also forget that times ARE tough, and they won't give those discounts to just anyone. They know your buying habits. They know your loyalty. They know. It is a shame you don't seem to realise that the mate's rate is simply what you can get from c r c or Wiggle all the time, and you have to "earn it" to get a similar price from the LBS.

You must not know anyone in small business or in retailing????? I know what markups I had to put on parts when I wrote bills. I wouldn't accept the same pricing in the first instance, but I realised I'm not poor and LBSs employ Australians (blah blah blah). My hobbies are all high markup goods... guitars, drums, bikes... and these things require staff for shops to try before you buy... at least I'm not buying clothes and perfume eh?

[__PG__]

It's been quite a few years since Toyota introduced just-in-time production methods, and they are widely understood and imitated. So manufacturers are now tightly integrated with their supply chain and large over-orders of components would be very rare.

More likely it's the component manfufacturers themselves (yes, Shimano et al) who are responsible, and this would also account for the plain packaging. Why wouldn't they sell a large quantity of components to Mr Wiggle, unpackaged to further reduce costs, when every item sold adds to the profitably of the production run?

If you speak to a local bike manufacturer he will liken Shimano to General Motors of the 1960s. A huge industrial conglomerate that create products with massive production runs that bears no resemblance to the stereotypical 'lean and mean' Japanese manufacturing companies.

[mezla]

As long as LBSs keep offering terrible prices, smart people will keep shopping online. It's pretty simple really.

The mates rates thing is not a sustainable business model, nor an ethical one. It means a brand new cyclist wandering into a shop will basically be ripped off until they've been ripped off enough times to be regarded a "mate", and then they'll get good prices. That is obviously not ok. It's bad for the shops, and it's bad for cycling in Australia.

Cliques - not a good thing.