Questions about purchasing bicycles and parts
Appliances Online are already doing that pretty damn well. Service and delivery is tops and prices are very good. They phone to make a 2-hour booking window, and stick to it. Also will take away your old appliance (if you wish) at no charge. Kogan have the computer, electronics and TV market well sorted too. Australian operations BTW. I will never be going to Hardly Normal or similar for domestic goods again I reckon.
Riding bikes in traffic - what seems dangerous is usually safe; what seems safe is often more dangerous.
Wish I'd known this 3 weeks ago, the BS associated with finding AND getting delivered a new oven, cooktop, rangehood and sink to fit in with the other tradies schedules made me wanna burn the house down and start from scratch.
...whatever the road rules, self-preservation is the absolute priority for a cyclist when mixing it with motorised traffic.
London Boy 29/12/2011
I just checked out Appliances Online out of curiousity, I checked out a variety of whitegoods and appliances and compared prices in Google where I could.
Funnily enough, there was only one item that (when able to compare price) was cheaper, the rest could be found at other retailers for similar or cheaper prices.
I've said this before in this thread but the reason why overseas is so cheap (and conversely why Australia is so expensive) is scale. There aren't enough people in Australia and we are too far away from the rest of the world. Sure, we have high overheads and costs to do business but we also have extremely high wages. Absolute population size, concentration of people in disparate cities and isolation from the rest of the world are what have us hamstrung.
People often complain about distribution channels being the major causal factor of high pricing, but that is a symptom of the problem rather than the cause. Europe and the states both have similar distribution models for foreign brands minus the high prices that we pay.
If a wiggle-esque o/s whitegoods retailer actively targeted Australia, then Gerry would seriously be packing his pants. Any local online-only entrants are no threat whatsoever.
It is not just about price. We brought our new washing machine from Appliances Online on Christmas Day, had it delivered and installed for free at the specified time on day after boxing day and had the old one removed. So the whole process was at our convenience, done from the armchair so to speak and was painless. It was not just about the price, it was the "experience" as well.
The buying of a new TV took ages going from store to store and whilst we got Sunday delivery and "install" it cost $65 on top of the TV price. Had I had my way and Appliances Online had the TV we wanted I would simply have gone with them. Not worth the time and hassle of shopping in bricks and mortar when up against the convenience of the likes of Appliances Online which BTW has a bricks and mortar store as well.
Will we see a Bunnings/masters of bikes? They aren't worried about overseas hardware retailers. 3 shops to start - Melbourne, Sydney, Brisbane. No home brands (like Anaconda and Fluid) but the same stuff as wiggle /CRC, but on the shelf? Could it compete? Would it work? Don't know. Depends a lot on the suppliers I would think. Would it kill 80% of the LBSs? Probably! Some would survive, based on service and expertise, or niche product, but not many. Would we support it? That would be the question someone would need to know before they stumped up Millions to set it up.
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I think it would need to be an Australian branch of one of the big established UK shops such as Wiggle. I don't think it would kill the LBS', probably have an impact, but not kill them as it would still have a lot of the problems facing a LBS such as customers needing to drive to get there and then try and find parking etc. This is one of the great attractions with online shopping, to avoid the travelling and parking hassle.
The average commuter or mum & dad buying a bike or parts for little Jimmy or Mary are probably still going to buy from their closest LBS.
Bunnings works (and is very profitable) because almost every home owner (and non-home owner too) needs hardware stuff on a somewhat regular basis. It's not quite fast moving consumer good (FMCG) a la Woolies/Safeway and Coles but it's close.
We might see sports and outdoor stores (A-mart, Anaconda, et al) attempt and perhaps even succeed at breaking into the cycling market. But for a business to specifically target cycling by using scale of operations, in a country like Australia, I'd imagine unlikely.
An overseas entrant could pull it off, but I imagine they may find themselves hamstrung having to use Australian distribution channels for their operations locally. And there goes the price advantage.
yes, they have done that with a few stores
I've used Appliances Online before for a fridge and a vacuum cleaner. They took the old fridge away too and when I accidentally bought the wrong fridge (and realised immediately after I'd pressed the purchase button) they fixed up the issue and honoured the initial price (I accidentally bought the manual version when I wanted the electronic version of the same fridge).
If I remember correctly they have a price matching feature which I used for the vacuum cleaner (I looked at comparable Australian prices and submitted the cheapest one using the relevant button). I've been very happy with them for that kind of stuff and would happily use them again.
I always thought Rebel Sport was something to do with Gerry Harvey, but after doing a quick Google search I learn that they are part of the Super Retail Group comprising of boating, camping and fishing stores BCF and FCO, Ray's Outdoors, and Supercheap Auto, as well as Rebel and as mentioned Amart All Sports and Goldcross Cycles. -
yup. all chain sports stores on qld are owned by the one group. monopoly much?
Rebel group (rebel & amart) was owned by HN. They sold out to archer capital who stripped it out like you would expect a PE owner to do. SRG aquired it from Archer a couple of years ago. Goldcross was moved into the sports division along with Amart and Rebel post aquisition.
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Is there nothing stopping local shops buying a bunch of small ticket items from Wiggle - under $1k and then reselling them with appropriate margins here?
If a distributor is charging more than what is affordable for the business to operate, why not just buy online aswell?
Free shipping too
I think (although I'm not in the area or in the know) that if they did that and their Australian distributors found out, they'd be cut off at the knees and wouldn't be supplied with ANY products.
Not to mention any grey import/grey market issues or whatever with the manufacturer.
Yep, as Summernight says, if a shop was to circumvent the distro and purchase from an overseas retailer (or wholesaler) they'd be done over by the local distro.
But buying from overseas isn't really going to solve a whole lot. Only sometimes are Wiggle prices near or below Wholesale prices.
For instance, Shimano is often held up as the height of price gouging in the Australian cycling industry. Here are some price comparisons, assuming that shops are making 100% markup to achieve RRP.
Dura Ace 9000 C24 wheelset
Australian RRP: $1299
Wiggle Price: $775
Assumed Australian W/S: $650
If shop bought from Wiggle and sold at 100% markup: $1550
Ultegra 6700 chainset
Australian RRP: $499.95
Wiggle Price: $199.31
Assumed Australian W/S: $250
If shop bought from Wiggle and sold at 100% markup: $400
Ultegra 6700 STI lever set
Australian RRP: $699.95
Wiggle Price: $275.65
Assumed Australian W/S: $350
If shop bought from Wiggle and sold at 100% markup: $550
The Dura Ace case is a bit of a outlier, most Shimano stuff locally RRP'ed at well over twice what you can get from Wiggle... but just wanted to include that to show that the bigger ticket items don't get gouged quite so hard.
Moral of the story? Well there are two.
1. The distribution model we have in Australia adds fat to prices.
2. If a shop bought product from an Overseas retailer they still wouldn't be that much cheaper.
If a shop could deal with an overseas wholesaler, yeah now we're talking.
I am fast coming to believe that Australia's size to the rest of the world and the availability of relatively cheap air transit is removing the need for local distributors here.
What's the difference between calling a distributor in Sydney or some other country? As long as they speak english, not much.
Am unsure if they use a distribution model overseas. I thought they ordered direct?!
Yep intermediary distributors are used overseas. Varies from company to company, of course. They tend to handle local distribution (i.e. their home country) and farm out distribution rights across the world.
Historically that kind of model made a lot of sense. I think it would still make a fair bit of sense in the States and Europe - they both have large enough markets to allow distributors to take a slice of the pie without inflating prices so heavily. Economies of scale and all.
The interesting little twist with Shimano is that all the Shimano stuff comes to Australia via Shimano Australia not a third party distro. It's just a price gouge. You can't tell me having a warehouse in Australia and a handful of staff to fulfill orders here justifies double the W/S price that Wiggle would pay. Especially on high volume products like cassettes and chains.
The other comment that I would have is that I've heard anecdotally that mom and pop bike shops in the US are dealing with the same issues as we have here, i.e. having to compete with goliath online retailers (both local and O/S) who are able to access much lower wholesale prices due to volume.
Solution to that would be the manufacturers/wholesalers charging the one flat price to all shops regardless of turnover. The bigger shops will get their noses out of joint of course but that's life.
I remember years ago (I doubt anything has changed), I had a mate that owned a Pizza shop and it was cheaper for him to buy his Coke/Lemonade etc from Woolies rather than through the wholesaler.
Also, off-topic a bit, but I've been hearing lately that ACCC (?) are reading the riot-act to the big supermarkets over them bullying farmers and other suppliers over price. My tin-foil hat theory is this is exactly the excuse that Coleworth want so they can go and buy more products o/s, probably cheaper, and charge same or more RRP so making more money.
Now I know most of this thread is pie in the sky type stuff... but that takes the cake... or pie...
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