Ridiculous Prices (rant thread)

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Re: Ridiculous Prices (rant thread)

Postby Ross » Sun Sep 30, 2012 3:27 pm

JustJames wrote:
Ross wrote:
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.


OK I see your point about the buggy whip but in my other post I mentioned that a typical LBS sells 80% entry level MTBs and hybrids (and associated parts and accessories) to people who walk in off the street and pay RRP. So if you own a business, which bunch of customers are you going to target, the minority that want to pay 10% less than your cost and want a diverse range of bikes/parts that you couldn't possibly hope to keep all in stock or the easy majority customers that want basic bikes and parts and are happy to pay RRP? I know which ones I would concentrate my efforts on.

I'd love to buy all my bikes and parts at LBS but agree that mostly the products can be sourced online for half price (or less sometimes) so instead of wasting my time and the LBS' time, that's what I do most of the time. That way the LBS can attend to the other 8 customers that they can easily please and profit from and me and my mate can look and buy online from a larger and cheaper range and we'll be happy too.
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by BNA » Sun Sep 30, 2012 4:03 pm

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Re: Ridiculous Prices (rant thread)

Postby Xplora » Sun Sep 30, 2012 4:03 pm

You will gradually see stronger and stronger protection from OS brands to ensure the LBS survives. Things like the Trek store network, where one prevailing brand steps in and takes control of the distribution chain. I'm not sure I like that model either - you can get Trek, Bontrager, Shimano from the shop stock, and a handful of other things. It is good quality stuff, but I like Topeak as well. I like the option of Campy or SRAM (this is somewhat disingenous because Campy IS the true religion at Rouse Hill LOL).

The LBS tends to be a very strong icon, from my experience - the ones that survive retain strong presence. I think most people in Parramatta know where Blackmans and certainly BikeBarn were before their move. Yes, they get bent over a bit by the distro, but there is enough space for 1 shop per half million people if you are only interested in 5K road race blockburners......
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Re: Ridiculous Prices (rant thread)

Postby im_no_pro » Mon Oct 01, 2012 10:00 am

MarkG wrote: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


Of course they do, it's costing them money. And by checking they are doing the "right thing" the Shimano rep is looking after no-one other than himself. LBS can grey import if they wish. The authorised distributor may choose to no longer do business with him as a result, but as long as LBS isnt misrepresenting anything to their customers (e.g. items will be covered by Shimano AUS warranty) they cant stop him from doing it.
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Re: Ridiculous Prices (rant thread)

Postby __PG__ » Fri Oct 05, 2012 9:50 am

Government is continuing its investigation into the pricing policies of Apple, Microsoft and Adobe.
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Re: Ridiculous Prices (rant thread)

Postby boss » Fri Oct 05, 2012 10:43 pm

mezla wrote: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?


Dream on.

End of the day, the crap shops will go under. The good ones will find away to make it work.

If the industry shrinks drastically enough then perhaps shop to brand relationships may be feasible. But let me tell you - you'd be hard pressed to find ashop owner who would actually want to take on the responsibility of importing gear themselves. It is not fun importing commercial quantities of anything and is quite a stressful exercise.

But face it. We are a tiny population halfway across the world. Our distributors have the buying power of major store in the UK. Think about that for a moment. Breathe in, breathe out. Move on.
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Re: Ridiculous Prices (rant thread)

Postby MarkG » Fri Oct 05, 2012 11:19 pm

jimboss wrote:
mezla wrote: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?


Dream on.

End of the day, the crap shops will go under. The good ones will find away to make it work.

If the industry shrinks drastically enough then perhaps shop to brand relationships may be feasible. But let me tell you - you'd be hard pressed to find ashop owner who would actually want to take on the responsibility of importing gear themselves. It is not fun importing commercial quantities of anything and is quite a stressful exercise.

But face it. We are a tiny population halfway across the world. Our distributors have the buying power of major store in the UK. Think about that for a moment. Breathe in, breathe out. Move on.


Exactly .. but mezla refuses to listen..
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Re: Ridiculous Prices (rant thread)

Postby Baalzamon » Sat Oct 06, 2012 12:21 am

And I know one shop which I will not name who goes to czech and finds what he wants and brings it back in nothing less than a full size shipping crate
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Re: Ridiculous Prices (rant thread)

Postby MarkG » Sat Oct 06, 2012 1:08 am

Baalzamon wrote:And I know one shop which I will not name who goes to czech and finds what he wants and brings it back in nothing less than a full size shipping crate


Yes.. he's an IDEAL business man lol
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Re: Ridiculous Prices (rant thread)

Postby jasonc » Sat Oct 06, 2012 5:39 am

i hate to say it, but maybe what we need it a coles or woolworths owned bike chain.?
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Re: Ridiculous Prices (rant thread)

Postby gururug » Sat Oct 06, 2012 6:37 am

If cheaper international prices did not stimulate increased consumption, brands would have stomped it out by now. It's the local retailers who get the pointy end of the stick.

I would own 1/3 of what I do if I had to buy locally.

Mavic et. al. are trying to re-instate traditional distribution boundaries........ which is fine if their pricing is more realistic and products are actually available.

Bought a new smartphone. JBHIFi says their cost price was $702. Can buy a "grey" import at $550. Hmmmmmmm.
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Re: Ridiculous Prices (rant thread)

Postby boss » Sat Oct 06, 2012 6:55 am

jasonc wrote:i hate to say it, but maybe what we need it a coles or woolworths owned bike chain.?


I preface this with the disclaimer that its just my opinion and a bunch of hot air. Think big ideas (I.e talking !! BAN ME NOW FOR SWEARING !!) round the BBQ.

If one or two big players came in, there would be some short-medium term incentive to drop prices to win market share and push out smaller shops. But I'd argue that longer term, they will trend back upwards as the big retailer(s) cash in on market power.

Why? Because they are operating to make a profit (as opposed to the greater good of the cycling community), and because they can.

Look at the UK, they have a bunch of MASSIVE shops that would probably eclipse the stock levels that our distributors carry. It's a competitive market.

If we had two big players (think Coles and Woolworths) there is way less incentive to compete.

It all comes back to being too small and too far away.

It's probably worth noting the play that Coles and Woolies are making right now. Noticed all the nice looking Woolworta brands stuff? The plan is to get people to switch over by offering a cheap price, drive consumption of brand names down, later on down the track jack prices up and cash in.
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Re: Ridiculous Prices (rant thread)

Postby RonK » Sat Oct 06, 2012 10:17 am

jimboss wrote:But face it. We are a tiny population halfway across the world. Our distributors have the buying power of major store in the UK. Think about that for a moment. Breathe in, breathe out. Move on.

Tiny? Perhaps, but no longer so remote, and significant enough that the online stores have noticed, and specifically targeted, if Wiggle's sales to Australia are any guide.
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Re: Ridiculous Prices (rant thread)

Postby JustJames » Sat Oct 06, 2012 11:15 am

jasonc wrote:i hate to say it, but maybe what we need it a coles or woolworths owned bike chain.?


Think of recreational cycling like delicatessen food consumption.

Now, if you fancy some nice air cured ham, a proper knackwurst sausage or a tangy salami you can indeed find things that answer loosely to these descriptions in a Coles or a Woolies. Or you could seek out a proper deli. At the deli, the "same" items will be more spendy. They will also be a lot nicer.

Same deal with buying cycling stuff from a mass market retailer.

In fact, it happens already...you can buy bike stuff from Aldi. The bike stuff that Aldi sells is igzackerly the kind of bike stuff that Coles or Woolies would sell.

ETA: The future of the LBS is not in trying to win the race to the bottom. The future of the LBS is in positioning itself as a premium service (and crucially, delivering a premium service) and attracting loyal customers by doing all of the warm fuzzy stuff that an online retailer can not do. In every line of business, it is always easy to do it cheaper. And often difficult to do it better.
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Re: Ridiculous Prices (rant thread)

Postby Oxford » Sat Oct 06, 2012 1:07 pm

RonK wrote:
jimboss wrote:But face it. We are a tiny population halfway across the world. Our distributors have the buying power of major store in the UK. Think about that for a moment. Breathe in, breathe out. Move on.

Tiny? Perhaps, but no longer so remote, and significant enough that the online stores have noticed, and specifically targeted, if Wiggle's sales to Australia are any guide.

Yes but W!ggle is leveraging into Australia using scale they already have from their own market. They did not wake yesterday and say hey lets market to the Aussies exclusively.
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Re: Ridiculous Prices (rant thread)

Postby Sydguy » Sat Oct 06, 2012 3:50 pm

Unrelated but I visited a bike shop on Thursday evening to schedule a test ride of a $4k bike for Saturday morning, today.

This afternoon I waltz in ready to rock and roll with, $4k in my pocket in rolled up 50's, I don't like hitting shops with merchant fees and you can get a better price with cash.

No bike. Still in a box at their storage site.

Whilst it is fantastic that the bike shop was buzzing, they were visibly being run off their feet I wanted to race the new steed tomorrow.

Anyway I'll roll in tomorrow see if they want my money.

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Re: Ridiculous Prices (rant thread)

Postby boss » Sun Oct 07, 2012 11:11 am

Oxford wrote:
RonK wrote:
jimboss wrote:But face it. We are a tiny population halfway across the world. Our distributors have the buying power of major store in the UK. Think about that for a moment. Breathe in, breathe out. Move on.

Tiny? Perhaps, but no longer so remote, and significant enough that the online stores have noticed, and specifically targeted, if Wiggle's sales to Australia are any guide.

Yes but W!ggle is leveraging into Australia using scale they already have from their own market. They did not wake yesterday and say hey lets market to the Aussies exclusively.


Exactly.

Wiggle / CRC et al are all close to the worlds major markets. I wouldn't say that Australia is an afterthought.... Our market is not to be sneezed at... But you certainly could not sustain a Wiggle-esque scale / price-point operation owned/run within Australia.

JustJames wrote:
ETA: The future of the LBS is not in trying to win the race to the bottom. The future of the LBS is in positioning itself as a premium service (and crucially, delivering a premium service) and attracting loyal customers by doing all of the warm fuzzy stuff that an online retailer can not do. In every line of business, it is always easy to do it cheaper. And often difficult to do it better.


Exactly.
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Re: Ridiculous Prices (rant thread)

Postby Xplora » Sun Oct 07, 2012 8:41 pm

Just further to my previous comment - brand to store is probably the strongest move for the brand, because they can then simply cash in on the cream that is the Aussie LBS market. I can't imagine many companies would not want to add another 10-15% to their margin in this environment. You're still cutting the distributor out - but it's a brand benefit, not a customer benefit. Honestly though - after losing an afternoon trying to make my fenders fit the front fork and attach a bike computer, I can see a LOT of value in standardising for the Giants and Meridas... if people know they can get a fender that would definitely fit within 10 minutes for their 2013 bike, they would spend the extra money. I would.
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Re: Ridiculous Prices (rant thread)

Postby Sydguy » Sun Oct 07, 2012 10:03 pm

Speaking of standard - when you buy say a Giant TCR 0, 1 or 2 they have the same frame. It is standard.

So why can't I choose say the TCR Advanced 2 frame with the Di2 Ultegra frame for my $

If your getting a Giant your budget or the groupset you want decides the colour of your bike. Why not ships frames and groupsets, and the bike shop let you choose frame.

Or am I missing something? Seems like an opportunity to me.

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Re: Ridiculous Prices (rant thread)

Postby boss » Mon Oct 08, 2012 7:18 am

Sydguy wrote:Speaking of standard - when you buy say a Giant TCR 0, 1 or 2 they have the same frame. It is standard.

So why can't I choose say the TCR Advanced 2 frame with the Di2 Ultegra frame for my $

If your getting a Giant your budget or the groupset you want decides the colour of your bike. Why not ships frames and groupsets, and the bike shop let you choose frame.

Or am I missing something? Seems like an opportunity to me.

JM


I think two things, maybe.

Firstly, logistics and cost. Who's time is going to be used to put the bike together, presumably from scratch. I believe that currently, bikes are assembled in Taiwan (or China, or wherever they are made) where the cost of labour is much, much cheaper.

Although happy to stand corrected on that first point. I know that is how it works for other segs of the bike industry, I am not super familiar with roadies.

Secondly, marketing. Makes it much easier to differentiate a $800 bikes from a $1500 bike from a $3500 bike and so forth. I totally understand where you are coming from, from a customer perspective, but it isn't in a brand's interests to let you pick and choose.

An innovative direct to market manufacturer could probably pull that sort of model off. I am pretty sure that at the low end, some of those 'clone' brands are offering customizable (in terms of colour, at least) fixies. For roadies I could imagine something like the DELL model working, but I don't know about through the existing supply chain, and I can't see the established MFG's changing their practices unless necessity requires so.
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Re: Ridiculous Prices (rant thread)

Postby jasonc » Mon Oct 08, 2012 7:56 am

Sydguy wrote:Speaking of standard - when you buy say a Giant TCR 0, 1 or 2 they have the same frame. It is standard.

So why can't I choose say the TCR Advanced 2 frame with the Di2 Ultegra frame for my $

If your getting a Giant your budget or the groupset you want decides the colour of your bike. Why not ships frames and groupsets, and the bike shop let you choose frame.

Or am I missing something? Seems like an opportunity to me.

JM


I've been at a bike shop where they were swapping a groupset for a customer at time of purchase. So some will do it, in a round-about way.
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Re: Ridiculous Prices (rant thread)

Postby Xplora » Mon Oct 08, 2012 1:36 pm

Sydguy wrote:So why can't I choose say the TCR Advanced 2 frame with the Di2 Ultegra frame for my $

Trek are a bit interesting like that - it isn't possible to do this with the Domanes because as you can change from 3 to 4 to 5 you start getting internal gears, internal brakes, different frame material, fundamentally different finishing kit (Blade vs IzoZone etc). The groupset is only part of the picture at Trek... you are getting a lot of upgrade for your dollar, and it is not just the colour.
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Re: Ridiculous Prices (rant thread)

Postby richbee » Mon Oct 08, 2012 4:39 pm

Moving over to Aus from the UK last year I straight away picked up that prices in general are higher than those in the UK. Not just in comparison with online shops, but in comparison with shops where I used to live. And it's not just bike bits, work shirts are 50-100% more expensive than UK (comparison between M&S and Meyer), and if I dare buy the cheap ones from BigW they start falling apart after a week. Books, music, even iTunes is more expensive!!! Fair enough if the stuff is produced locally and carries a "Made in Aus" tag, but when it all comes from the same factory in China/Taiwan/Thailand/Indonesia/(Insert Asian Tiger country of choice here) it's a bit much when it costs twice as much here than in Europe.

Result of the above is that my bike bits come from Wiggle, CRC, ProBikeKit and Evans, and that unless it's something that can only be bought locally because of silly regulations (Helmet standards) or quarantine laws, the LBS's lose out on my custom. Ditto for shirts (M&S Online), books (Amazon), and just about anything else I need if it can be found online. I even use my old UK iTunes account linked to my UK credit card, but I guess that options only available to expats.

BTW, to those who have said the onlike bike stores get "blow outs" from Giant/Trek, etc. That's not the case as these shops are competitive across all items, not just what would be sourced from OEM overshoots. And in the conflict between online store and LBS, while prices in UK LBS's are higher than the online stores, they are not in the range where I was quoted $199 for a Saris Bones one bike carrier from an Aussie LBS, yet bought it for $59 from Wiggle who also delivered said item within a week of pacing the order. Customer service is not worth $140...
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Re: Ridiculous Prices (rant thread)

Postby Ross » Mon Oct 08, 2012 7:18 pm

jasonc wrote:
Sydguy wrote:Speaking of standard - when you buy say a Giant TCR 0, 1 or 2 they have the same frame. It is standard.

So why can't I choose say the TCR Advanced 2 frame with the Di2 Ultegra frame for my $

If your getting a Giant your budget or the groupset you want decides the colour of your bike. Why not ships frames and groupsets, and the bike shop let you choose frame.

Or am I missing something? Seems like an opportunity to me.

JM


I've been at a bike shop where they were swapping a groupset for a customer at time of purchase. So some will do it, in a round-about way.


Is that shop in a reigonal NSW town starting with G not that far from Canberra? :wink:
You can pretty much order whatever parts combinations you want when buying a bike. If you want the entry level frame but want Super Record group they will swap all the bits and charge accordingly, usually a pretty competitive price.
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Re: Ridiculous Prices (rant thread)

Postby jasonc » Mon Oct 08, 2012 7:36 pm

Ross wrote:
jasonc wrote:I've been at a bike shop where they were swapping a groupset for a customer at time of purchase. So some will do it, in a round-about way.


Is that shop in a reigonal NSW town starting with G not that far from Canberra? :wink:
You can pretty much order whatever parts combinations you want when buying a bike. If you want the entry level frame but want Super Record group they will swap all the bits and charge accordingly, usually a pretty competitive price.


no. was in Brisbane earlier this year
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Re: Ridiculous Prices (rant thread)

Postby Sydguy » Mon Oct 08, 2012 7:47 pm

Your probably spot on that the bikes are assembled and it would add a bit of stuffing around - still it would net a few more sales and be a handy little value add for the larger brands.

Especially for Giant that would help them further dominate.

Well that's me fresh out of ideas to help the LBS/bike brands! lol

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