Ridiculous Prices (rant thread)

[thejester]

I work in a bike shop. I'm not going to defend pricing, I neither own nor manage it. I have authority to give minor discounts off marked retail based on overall spend.
I am amazed at the prices people are prepared to pay for things. I often want to point them to online stores or even to Kmart. I choke on some prices. But our store thrives because...
Bikes are different.
We are not hard sell retailer, my role as a sales person is talk about bikes, identify what bike suits the persons needs, explain why it suits the persons needs offer an alternative if we have one. The customer gets to test ride the bike and make a decision based on the service and information they have received to purchase or not. If the customer chooses to purchase a bike I then recommend certain items: helmet, bottle holder, under seat bag, tyre levers, spare tube, glueless patches, pump (on-bike and floor pump) and explain why. 80% of bikes we sell are entry level Giants: Boulder, Cypress, Sedona. People buying these bikes DO NOT know about bikes, they are recreational riders who want A bike to ride on a nice day down to the shops, around the lakes, to school, a short commute, maybe some really light single track in the case of a Boulder.
When a customer comes in wanting to spend $1-2k on a bike the same process applies. I explain steel vs alloy vs carbon, the variations of groupsets available and geometries of available bikes benefits of dualies vs hardtails, 26 vs 29. Let them test ride and make a decision.
Customers who come in wanting a bike worth more than $2k come into the store and TELL ME what they want. I just make sure it fits.
It is impossible for us to hold all the bits and pieces that are available on online ie: the demand for high end road wheels is not worth us holding 1 set let alone multiple brands
We have fantastic repeat business and our service department rocks.

[Baldy]

My comments about mates rates still stand though.

Which is the part I find odd. Have you never been given a discount beyond what was advertised for goods or services?

Anyone with half a brain would have heard about online shopping, they can research prices and walk into any shop and ask them to match that price. Sometimes they might get the same price and sometimes they will be given no discount. But usually it will be somewhere inbetween. Only the person parting with their cash can decide the amount they are willing to pay.

That is not mates rates. Its just smart business on both sides.

What is the difference between mates rates and a reduced rate for return customers?

Also have a think about all the places where the ONLY option is to pay the ticket price. Go ask some isle zombie at Cunnings for a discount on a lawnmower...

Look I don't care if you shop online or not. I shop online too, regularly. My problem is you're suggesting that people who get "mates rates" at a LBS are ruining it for everyone else. When the practice of given discounts for return custom is widespread across all business.

I've tried to explain myself but I'm done with this thread.

[rpmspinman]

My comments about mates rates still stand though.

Which is the part I find odd. Have you never been given a discount beyond what was advertised for goods or services?

Anyone with half a brain would have heard about online shopping, they can research prices and walk into any shop and ask them to match that price. Sometimes they might get the same price and sometimes they will be given no discount. But usually it will be somewhere inbetween. Only the person parting with their cash can decide the amount they are willing to pay.

That is not mates rates. Its just smart business on both sides.

What is the difference between mates rates and a reduced rate for return customers?

Also have a think about all the places where the ONLY option is to pay the ticket price. Go ask some isle zombie at Cunnings for a discount on a lawnmower...

Look I don't care if you shop online or not. I shop online too, regularly. My problem is you're suggesting that people who get "mates rates" at a LBS are ruining it for everyone else. When the practice of given discounts for return custom is widespread across all business.

I've tried to explain myself but I'm done with this thread.

The way I see it and in my experience only, return customers rates can vary depending on how much you have spent at that shop. Some will give 5%, others normally 10%, some 25%. It will vary for shop to shop and whether its on sale or not. With mates rates, that again is subjective and how well you know the shop owner to get the % of discount off. i.e. mate of a mate won't get as good as a direct family member or close personal friend.

[mezla]

Baldy, I think your memory might be going

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.

[Oxford]

what's the difference between reasonable and rip off? can someone quantify this as a formula that can be applied? just curious.

[rkelsen]

0 to 19% = reasonable

>20% = rip off

With things like tyres and tubes the difference is often >100%, which is a complete rip-off.

[Oxford]

% of what?

[Baalzamon]

Bought a BMX tyre and needed it for the weekend so had no choice but local
$39 locally, checked on CRC and $11.98 nuff said
Helped out the shop tho and moved one odd tyre for them

[im_no_pro]

Bypassing Aussie distributors is called grey importing, and no they can't.
For a start, Shimano has their own distribution in Australia, as do Trek and Specialized

Plus you've got individual companies and franchises too who are all competing so it essentially the same thing ; Aussie store buys their Colnago bike from FRF Sports, like every other Aussie store does, and decides how much mark up they feel comfortable with. They usually are told the minimum they can mark up the product, so other stores aren't priced out of the running.

Companies like Specialized are good like that - you'll find the RRP of their products on line - ie S-Works shoes for RRP $399 are $399 every where.

You have it the wrong way around. Grey importing can be done, but would be difficult in this industry as the retailer will have to wear higher costs through supporting warranty claims (statutory, not manufacturers) as the "official" distributor will not touch it as they didnt sell it. Go to the reject shop and read the labels on half the branded products in there, they are often in one of a number of Asian languages and are grey imports. On the other hand, a distributor enforcing a markup whether it be minimum or maximum is called resale price maintenance, and is illegal (in this country anyway). Still yet to figure out how apple have managed to get away with it for so long

[MarkG]

I was on to my mate who owns a bike store about this thread today. He told me that Shimano reps come in to his store from time to time to make sure he's doing the right thing (ie not stocking grey items). He reckons they (importers), hate Wiggle etc more than he does lol

[rkelsen]

% of what?

The cheapest price I for which I can purchase the item from an online (usually UK-based) vendor.

To illustrate my point: If a wheelset could be bought for $200 online, I'd be happy to pay up to $240 for the same set from my LBS. Especially if it means that I can walk out of the shop with them today and not have to wait two weeks for delivery. Any more than that and I'd feel like I'm being taken advantage of.

I once paid $98 for a pair of Vittoria Rubinos from a local shop. This was before I started exploring online shops. How was I supposed to feel upon finding out that I could have bought the exact same tyres for $15 each from Wiggle? If I had been charged $35 or $40 for the set, I wouldn't have minded so much... But being violated like that made me vow to never by tyres from an LBS again.

[Oxford]

So basically its a moving target (currency fluctuations) and as a result creates a flaw in the whole process, do we use what to determine cheapest price, Frugal Rouleur? What if someone just creates a bogus website to "list" cheap prices in order to drive down others trying to match? I think its best left to current market forces and caveat emptor. As soon as you try to put in place some rules like what it should or should not be, you bastardise the whole system. The system is already bastardised with current practices without laying a whole new level of rules over it.

[rkelsen]

Who mentioned putting any rules in place?

You asked for a formula to distinguish between "reasonable" and "rip-off." I gave you mine. Nothing more, nothing less. Why are you trying to read things into it?

I think its best left to current market forces and caveat emptor.

Indeed. And this is one "emptor" who has been learned to "caveat" every single purchase he makes by looking online first...

[Oxford]

0 to 19% = reasonable

>20% = rip off

With things like tyres and tubes the difference is often >100%, which is a complete rip-off.

That seems to me to be a rule to guide you as to what is reasonable and what is a rip off.

[rkelsen]

That seems to me to be a rule to guide you as to what is reasonable and what is a rip off.

Me. Yes.

You don't have to agree with it, nor follow it.

And what's wrong with capitalising on currency fluctuations?

[Oxford]

That seems to me to be a rule to guide you as to what is reasonable and what is a rip off.

Me. Yes.

You don't have to agree with it, nor follow it.

And what's wrong with capitalising on currency fluctuations?

Nothing, it just throws the rules out when they move, today's reasonable could be tomorrows rip off or vice versa, which is why I am saying trying to quantify it by numbers is not practicable. There's more to it than price alone.

[Ross]

% of what?

The cheapest price I for which I can purchase the item from an online (usually UK-based) vendor.

To illustrate my point: If a wheelset could be bought for $200 online, I'd be happy to pay up to $240 for the same set from my LBS. Especially if it means that I can walk out of the shop with them today and not have to wait two weeks for delivery. Any more than that and I'd feel like I'm being taken advantage of.

I once paid $98 for a pair of Vittoria Rubinos from a local shop. This was before I started exploring online shops. How was I supposed to feel upon finding out that I could have bought the exact same tyres for $15 each from Wiggle? If I had been charged $35 or $40 for the set, I wouldn't have minded so much... But being violated like that made me vow to never by tyres from an LBS again.

You seem to miss the point that often the LBS' are paying more from their wholesalers than what we can get the parts for online from UK. I was wanting to buy some Mavic wheels a while back and went into LBS and asked if he could price match or come close but when I told him the price I could get them for he said he pays more than that for them and offered to show me the invoice, So it's not neccassarily the LBS "ripping you off" with high prices.

Wiggle probably buy 100 tyres at once or more (probably weekly) compared to LBS' 5 or 6 every couple of months so Wiggle would get better discounts based on volume and frequency of purchasing.

[rkelsen]

There's more to it than price alone.

You're over complicating it. If the LBS price is within cooee of the online price, then they get my business. If not, I walk out the door. It's pretty simple really.

So it's not neccassarily the LBS "ripping you off" with high prices.

I don't care whose fault it is. If there is going to be significantly less money in my wallet by buying locally instead of buying online, then guess what I'm going to do? I work hard for a living, and have a young family to feed, clothe and educate. I can't justify paying a 400% premium on bicycle parts.

[DavidS]

It often isn't the LBS's fault, in fact the impression I get is that generally it isn't the fault of the LBS. But it still leaves the question open as to why we should pay heaps more for the same product. I'm not rich so I can't see why I should pay way more. I do like to support the local business and local employment but sometimes the cost is too high.

What I find irritating is that we are told (often from the same sources of information) that we live in a global capitalist system with a global marketplace, then we are told to support locals. Can't have it both ways, if it is a global market then free market economics would tell you to buy the cheapest. The reason I often buy local even if it is more expensive is that I think free market economics is a crock. There are limits though.

DS

[RonK]

You seem to miss the point that often the LBS' are paying more from their wholesalers than what we can get the parts for online from UK.

No, we don't miss that point at all. Isn't it about time the lbs' started going back to the distributors and telling them that customers won't pay those prices. After all, if the lbs' are losing business and go broke, so will the distributor, eventually. So it not just up to the retailer to price competitively.

We have for a very long time had a very cosy, monopolistic distribution model in this country which is anti-competitive and drives up prices. But the world has changed, and this distribution model must inevitably change also.

[Oxford]

There's more to it than price alone.

You're over complicating it. If the LBS price is within cooee of the online price, then they get my business. If not, I walk out the door. It's pretty simple really.

So it's not neccassarily the LBS "ripping you off" with high prices.

I don't care whose fault it is. If there is going to be significantly less money in my wallet by buying locally instead of buying online, then guess what I'm going to do? I work hard for a living, and have a young family to feed, clothe and educate. I can't justify paying a 400% premium on bicycle parts.

I don't think its complicated at all. Happy to pay "rip off" prices if I get the part immediately and I really want/need to buy it (time sensitive). Alternatively I need advice on what is the best thing to suit my needs (service/advice). So both of those factors weigh upon a price and skew the ripoff/reasonable formula one way or another. As I said price alone is not a sole factor. If a XX% premium gets me YY time XX% value in advice and/or and immediate sating of my desire for the object is that a rip off? Its an individual and case by case situation IMO.

[Ross]

You seem to miss the point that often the LBS' are paying more from their wholesalers than what we can get the parts for online from UK.

No, we don't miss that point at all. Isn't it about time the lbs' started going back to the distributors and telling them that customers won't pay those prices. After all, if the lbs' are losing business and go broke, so will the distributor, eventually. So it not just up to the retailer to price competitively.

We have for a very long time had a very cosy, monopolistic distribution model in this country which is anti-competitive and drives up prices. But the world has changed, and this distribution model must inevitably change also.

Why would the distributors lower their prices? They have a captive market, the LBS' pretty much have to buy their products from them as they are the only supplier in Australia. It's not like it is for us consumers that can pick and choose between LBS "X" and LBS "Y".

There are no LBS' closing down in my area, more have and are opening up.

As someone else pointed out earlier in the thread 80% of the bikes sold in the shop they work at are entry level MTBs and hybrids and these people just pay the RRP for the parts/accessories they need because they don't know any better and don't know what they want anyway and need LBS staff to advise them. People like us are the minority.

[mezla]

Well said Ross, but I think that it would actually increase their profits to offer reasonable prices on the components that only we the minority, are interested in... but I guess they disagree! ...and I'm sure they've done more research on it than I have

Still, it's a pity we have to put up with it. It's bad for cycling in Australia. Imagine how many more people would be into it if you could walk into a store and buy things at reasonable prices. Ahhh, it's a beautiful dream.

[JustJames]

Why would the distributors lower their prices? They have a captive market, the LBS' pretty much have to buy their products from them as they are the only supplier in Australia. It's not like it is for us consumers that can pick and choose between LBS "X" and LBS "Y".

Ross, if you'd studied marketing you'd know about the buggy whip syndrome.

Before the advent of the 'horseless carriage', most manufacturers of buggy whips thought that they had customers for ever...because you'd always need a buggy whip to make your horse/s go faster.

When the horseless carriage came along, people no longer needed buggy whips. Oooops!

The recurring point of this thread is that the distributors are emphatically not the only supplier in Australia, because many of us (as consumers) don't need the LBS at all. Sooner or later, somebody will decide to bypass the distributors because they will realise that the risks of having to provide warranty support pale into insignificance against the costs of having an empty LBS because we're all buying online. And while the gap between local price and online price remains as huge as it is, many people will buy online, not because we like waiting for stuff to turn up but because the gap between LBS price and online price is enormous.

[jasonc]

And while the gap between local price and online price remains as huge as it is, many people will buy online, not because we like waiting for stuff to turn up but because the gap between LBS price and online price is enormous.

James - also remember that delivery a lot of time is quicker than buying locally. How many comments/threads are there on here when a customer has gone to their LBS only to be stuffed around waiting for parts which they could have had cheaper purchasing online.

the distribution model in Australia is a big part of the problem. they can't keep blaming currency fluctuations.