Australian Cycling Forums - Bicycles Network Australia

Yes, exactly. The reasons/excuses are completely irrelevant.

We live in a capitalist world (unfortunately?)... compete or die...

mezla wrote:Yes, exactly. The reasons/excuses are completely irrelevant.

We live in a capitalist world (unfortunately?)... compete or die...

Somewhat related - but your signature proves that there is more than just survival of the fittest at play in life. Why should you give a free kick to cancer sufferers? Pay your way, hospital bludgers!

There is more risk in dealing with Australia versus USA or EU - a container load of cassettes is cheaper to send to those places. The cost of the ship is cheaper because there are more boats going to the same place and they can use bigger boats to do the shipping (plus they will have more efficiency in delivery, you ever seen a queue of ships for Newcastle coal??)

If you have 200 11-21 DuraAce cassettes then you bear a lot less risk in warranty claims than for 5 cassettes which are sold in a week and then you have to ship warranties by air freight to keep your seriously wealthy customers happy (I imagine that the shops moving a lot of DA parts are higher on the distro's list to make sure that the end customers are happy to keep them off Campy and SRAM). This happens at a brand, distro and LBS level. If you are OK with your countrymen living in 3rd world conditions, then just cutting the throat of the distro chain would be a good idea - but you would probably end up with the situation that occurred 50 years old where OS products were hard to come by, and shipping was expensive to boot. It's not like you could just pop down to the local to pick it up, right?

Xplora wrote:...If you are OK with your countrymen living in 3rd world conditions, then just cutting the throat of the distro chain would be a good idea...

Turn that logic on its head: Are you prepared to pay over the odds to keep your countrymen employed where they add no value?

If you answer "yes" to that question, then a career in the Politburo Central Planning Office awaits, comrade.

If you answer "yes" to that question, then a career in the Politburo Central Planning Office awaits, comrade.

Because political and economic opinion is black and white, yeah?

Carriage wrote:

If you answer "yes" to that question, then a career in the Politburo Central Planning Office awaits, comrade.

Because political and economic opinion is black and white, yeah?

Opinion? No.

But I like to keep my charitable giving and rational, economic purchasing separate.

The fact that chainwigglereaction sell as much as they do tells me that many other people think the same way.

Xplora wrote:

mezla wrote:Yes, exactly. The reasons/excuses are completely irrelevant.

We live in a capitalist world (unfortunately?)... compete or die...

Somewhat related - but your signature proves that there is more than just survival of the fittest at play in life. Why should you give a free kick to cancer sufferers? Pay your way, hospital bludgers!

There is more risk in dealing with Australia versus USA or EU - a container load of cassettes is cheaper to send to those places. The cost of the ship is cheaper because there are more boats going to the same place and they can use bigger boats to do the shipping (plus they will have more efficiency in delivery, you ever seen a queue of ships for Newcastle coal??)

If you have 200 11-21 DuraAce cassettes then you bear a lot less risk in warranty claims than for 5 cassettes which are sold in a week and then you have to ship warranties by air freight to keep your seriously wealthy customers happy (I imagine that the shops moving a lot of DA parts are higher on the distro's list to make sure that the end customers are happy to keep them off Campy and SRAM). This happens at a brand, distro and LBS level. If you are OK with your countrymen living in 3rd world conditions, then just cutting the throat of the distro chain would be a good idea - but you would probably end up with the situation that occurred 50 years old where OS products were hard to come by, and shipping was expensive to boot. It's not like you could just pop down to the local to pick it up, right?

I don't think your comparison of the metaphorical death of a business to a human dying of cancer is appropriate. Somewhat insensitive to say the least.

The example you provide of transport costs seems odd. Most of the cycling products are made in Asia which is much closer to Australia than the US or Europe.

I don't see how a cut in Shimano Australia's distribution margins would result in "3rd world conditions".

The small percentage of imports 50 years ago was due to protectionism (high tariffs) and thankfully this has ended.

biker jk wrote:I don't think your comparison of the metaphorical death of a business to a human dying of cancer is appropriate. Somewhat insensitive to say the least.

The example you provide of transport costs seems odd. Most of the cycling products are made in Asia which is much closer to Australia than the US or Europe.

I don't see how a cut in Shimano Australia's distribution margins would result in "3rd world conditions".

The small percentage of imports 50 years ago was due to protectionism (high tariffs) and thankfully this has ended.

Insensitive, but true - business is not some amorphous beast, it is the livelihood of real people. People that I would hope you care about. What do YOU do for a living? Do you think the LBS owner should care about you?

The shipping costs are two fold - distance, and volume of freight. It is cheaper to go to USA because there are more/bigger/more efficient ships out there... there are more containers, and more stock in them. Over an entire year with 20 ships, that adds up. A LOT. Fuel isn't the biggest cost to a brand.

The relationship between BSG and punter is a commercial one.

Punters spend where they get best value. (Note: Not necessarily lowest price.)

Over time, BSG and punter may begin to care about one another's wellbeing beyond the commercial relationship, but I can't see that care extending to a hand in a pocket if the LBS can't afford the rent or if the punter can no longer afford to buy bike bits. If the care does extend to that level, then either it is no longer a commercial relationship or the nature of the relationship has changed. F'rinstance, the erstwhile punter may become a part owner of the LBS or the BSG may sponsor the punter.

JustJames wrote:....if the punter can no longer afford to buy bike bits.
If the care does extend to that level, then either it is no longer a commercial relationship or the nature of the relationship has changed.

All GOOD brands these days attempt to engage their customer base, and connect on an emotional level. Professional and A grade amateurs NEED DuraAce/Super Record for that little bit extra, but a lot more than these groups use DuraAce. There is more to that product than just its function. There is a certain mystique as well. Campagnolo is an ABSOLUTE CLASSIC with this. "True Religion" as the meme goes.

Cycling is NOT an unemotional product for the majority of the big spenders, the people who are heading overseas to save 1000 bucks a year. These people have money, and they choose to spend it on bikes. When I sunk 3K into a bike I wasn't going to ride to work on, I realised that I have been an unnecessary tightass in the past. I need more support than I have gotten from c r c and Wiggle. A LOT more. I am a good enough rider that I'm hitting roadblocks in the gear... and I need an LBS to fill that gap. I need a specialist to help.

Everyone can afford a bike. Even a homeless guy can get a bike. They just can't afford a Dogma2 with SR EPS. But there is no point complaining about price gouging by the LBS on this product, because Pinny and Campy are already gouging you. And they should, to maintain their mystique.

If you can't appreciate this level of marketing, I am guessing you don't have good relationships with the people you spend money with. It is worth noting that NO ONE survives long term by being the cheapest, because price isn't the only thing you consider when buying. (which was noted before)

Xplora wrote:
But there is no point complaining about price gouging by the LBS on this product

I thought it was the distributor adding the extra cost layer was the main reason for higher LBS prices?

Ross wrote:

Xplora wrote:
But there is no point complaining about price gouging by the LBS on this product

I thought it was the distributor adding the extra cost layer was the main reason for higher LBS prices?

The extra layer is one half of the problem, but the price that they are able to purchase it at (i.e. their purchasing power) is the other.

I dare say that Wiggle et al is purchasing their product at prices our distros dream of.

Xplora wrote: If you can't appreciate this level of marketing, I am guessing you don't have good relationships with the people you spend money with. It is worth noting that NO ONE survives long term by being the cheapest, because price isn't the only thing you consider when buying. (which was noted before)

Low price / high volume is a proven business strategy, you just need the market slash customers.

jimboss wrote:Low price / high volume is a proven business strategy, you just need the market slash customers.

that's how JB HiFi started

jasonc wrote:

jimboss wrote:Low price / high volume is a proven business strategy, you just need the market slash customers.

that's how JB HiFi started

And it works cause most people buy electronics / music / DVDs / whateverelsejbhifisells

But most people aren't bicycle enthusiasts. And this is where the issue arises with a locally owned low price high volume bike store.

Xplora wrote: NO ONE survives long term by being the cheapest

I dunno, Cell bikes seem to be making a pretty good go of it.

ldrcycles wrote:

Xplora wrote: NO ONE survives long term by being the cheapest

I dunno, Cell bikes seem to be making a pretty good go of it.

Cell is good at getting runout specials going, but they aren't the cheapest every time I go to their site. Far from it. They are an LBS with a strong internet presence - but they are, at best, only equal to the best UK price.

They also are prepared to sell BSOs. No one is talking about BSO level stuff. 200-300 for a bike isn't what people are complaining about - it is the people paying 200-300 for a cassette or a pair of shoes that aren't happy.

Low price high volume IS a proven business strategy, and consider how much "hobbyist/amateur" grade stuff these shops sell. Is it basically nothing? That's right. DuraAce isn't a high volume product. Even 105 isn't high volume... maybe Sora or Tourney Campy clearly doesn't care that their stuff is always more expensive. If price is your only concern, then you will only get a price. At the level many of us are at - 50-100kms on the weekend a couple times a month - we are well beyond the "BSO" stage. There is no Kmart for DuraAce.

Xplora wrote:Everyone can afford a bike. Even a homeless guy can get a bike. They just can't afford a Dogma2 with SR EPS. But there is no point complaining about price gouging by the LBS on this product, because Pinny and Campy are already gouging you. And they should, to maintain their mystique.

Gouging us? We all understand that premium products attract premium prices. The gouging persists even for premium products. Your comment is irrelevant.

This is gouging - Colnago CX-1 Evo Ultegra Di2:

FRF Sports RRP = $5999
Wiggle Price = $4331

True, the CX1 is not exactly a premium model, but Colnago is a premium brand.

Yes, that is the distributors RRP, but it's unlikely to be discounted much. On the other hand, even in the unlikely event that shipping and GST costs amount $1000 you'll still be well ahead buying from Wiggle.

Why does UK seem to be the place for most of these mega stores like Wiggle, c r c etc? Why not USA that has potentially more buying power (much greater population)?
How do Oz shops like Cell and Cycling Express do cheap deals on some stuff (equal or better than big UK) but same as LBS on most of the other stuff? Do they deliberately lose money on their "specials" just get people in the door/to the website so hopefully while they are buying "x" on special they will buy a "y" and "z" while they are there and so that's how they make their money?

Ross wrote:Why does UK seem to be the place for most of these mega stores like Wiggle, c r c etc? Why not USA that has potentially more buying power (much greater population)?

I've often pondered the same thing. There must be some reason for it, but I don't know. Would be really interested to find out actually.

Ross wrote:How do Oz shops like Cell and Cycling Express do cheap deals on some stuff (equal or better than big UK) but same as LBS on most of the other stuff? Do they deliberately lose money on their "specials" just get people in the door/to the website so hopefully while they are buying "x" on special they will buy a "y" and "z" while they are there and so that's how they make their money?

As someone else mentioned above, shops like Cell and CE tend to be on par with O/S on some products, while fairly average on others.

I have a funny feeling they might be grey importing their specials.

Either that or like you say, they are loss-leading (losing money / breaking even / making tiny profits).

Ross wrote:Why does UK seem to be the place for most of these mega stores like Wiggle, c r c etc?

Many US sites offer very competitive pricing, but often these are offset by expensive shipping charges. And many US businesses seem to be bound by exclusive distribution arrangements not sell outside the US.
It seems the Royal Mail is one of the most efficient and inexpensive postal services in the world. Even the stores in Germany cannot match the UK shipping arrangements.

I suspect also that exclusive distribution arrangements may not be allowed in the EU.

Ross wrote:How do Oz shops like Cell and Cycling Express do cheap deals on some stuff (equal or better than big UK) but same as LBS on most of the other stuff?

That is pretty much explained in this article from the Cycling Innovation series of articles, linked in an earlier post. Since they are manufacturers of bicycles, they have access to certain components at much lower prices.

RonK wrote:

Ross wrote:Why does UK seem to be the place for most of these mega stores like Wiggle, c r c etc?

Many US sites offer very competitive pricing, but often these are offset by expensive shipping charges. And many US businesses seem to be bound by exclusive distribution arrangements not sell outside the US.
It seems the Royal Mail is one of the most efficient and inexpensive postal services in the world. Even the stores in Germany cannot match the UK shipping arrangements.

I suspect also that exclusive distribution arrangements may not be allowed in the EU.

Is Royal Mail subsidised by the taxpayer? Or commercial business like Aus Post?

jimboss wrote:Is Royal Mail subsidised by the taxpayer? Or commercial business like Aus Post?

I am certain there is complete subsidisation. AusPost can't provide even remotely competitive pricing. There is a reason... and it keeps UK people in jobs, so I guess it's working.

The value of something is only what will be paid. Your example about a bike rrp being under cut by Wiggle by 28% is pointless - end of year runout will see that price in every shop around the world. You admit it is a distro RRP, but then made the courageous presumption that this would not be discounted much - it already IS being disounted elsewhere. If you can't muster up enough dollars to convince the shop to give you a discount, then perhaps you aren't the retail genius you are making yourself out to be

You have a choice. Just remember that you don't have a local bike culture without the local bike shop to nurture and feed it. I look at the people I see riding around and they can't be reliant solely on c r c for their bikes and things.

Xplora wrote:

jimboss wrote:Is Royal Mail subsidised by the taxpayer? Or commercial business like Aus Post?

I am certain there is complete subsidisation. AusPost can't provide even remotely competitive pricing. There is a reason... and it keeps UK people in jobs, so I guess it's working.

The value of something is only what will be paid. Your example about a bike rrp being under cut by Wiggle by 28% is pointless - end of year runout will see that price in every shop around the world. You admit it is a distro RRP, but then made the courageous presumption that this would not be discounted much - it already IS being disounted elsewhere. If you can't muster up enough dollars to convince the shop to give you a discount, then perhaps you aren't the retail genius you are making yourself out to be

You have a choice. Just remember that you don't have a local bike culture without the local bike shop to nurture and feed it. I look at the people I see riding around and they can't be reliant solely on c r c for their bikes and things.

That's interesting RE: subsidisation. I'd be interested to find out more!

Not sure if para 2 and 3 were directed at me, I wasn't comparing prices and have taken a pretty pragmatic position in this discussion

jimboss wrote:and have taken a pretty pragmatic position in this discussion

In your opinion.

rkelsen wrote:

jimboss wrote:and have taken a pretty pragmatic position in this discussion

In your opinion.

I figure understanding the pressures that shops, distributors and brands face and then taking a middle of the road approach... Neither condemning nor praising... And making varied purchasing decisions... Could best be termed pragmatic.

Regardless of your thoughts, I would be in agreeance with

Xplora wrote:
The value of something is only what will be paid. Your example about a bike rrp being under cut by Wiggle by 28% is pointless - end of year runout will see that price in every shop around the world. You admit it is a distro RRP, but then made the courageous presumption that this would not be discounted much - it already IS being disounted elsewhere. If you can't muster up enough dollars to convince the shop to give you a discount, then perhaps you aren't the retail genius you are making yourself out to be

You have a choice. Just remember that you don't have a local bike culture without the local bike shop to nurture and feed it. I look at the people I see riding around and they can't be reliant solely on c r c for their bikes and things.

^^ Maybe it is cognitive dissonance in action, but I knowingly spent about 700 bucks more than expected and budgetted for to buy from Trek Rouse Hill... I go for the rides each Saturday there, they are pretty friendly and helpful guys, and they do the right thing out on the road. They support the culture, they aren't at work when they are rolling up at 6:30am.

They don't have a job if I just get all my gear from c r c, they don't have a store if I get everything from c r c. I don't have a bunch of blokes to ride with on Saturday if I get everything from c r c. I guess I understand that I don't HAVE to have Ultegra. I've ridden Tiagra and even Tourney quite a bit. But once you spend 3K on a bike, you aren't a Kmart customer, and you can't be upset when a store treats you like a cashcow because your purchase means you ARE. Even imagining 100% markup, Campy 11 speed starting at 300 bucks is stupid expensive for most people!

Issues with respect and service are shop specific, not "distribution model" specific. I'm aware that stores in my local area have correlations between their bunch riding/culture support and the way they treat their customers... and let's face it, if you aren't prepared to pay, you aren't prepared to play.