And they wonder why we buy online!

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And they wonder why we buy online!

Postby goneriding » Wed Dec 05, 2012 2:16 pm

Rant warning!

I just took my trusty commuter in for a service and was told that it needed a new cassette, chain, brake pads and jockey wheels. Fine, says I. How much. After being told what they wanted in terms of $$$ to do the job I said not to do anything and I'd come in to get the beastie.

Curious as to how much they were over quoting I did some light online checking (Wiggle, Cell and Torpedo7). The next most expensive cassette I was being quoted on was $30 cheaper (Cell) and $44 cheaper (Wiggle)! This was for a Sora cassette! The chain and jockey wheels were similarly discounted. In fact, I had the chain replaced on my Campag Chorus groupset which was nearly the same price as the Sora!

I find it very hard to believe that there is that much difference in cost price (including overheads) to warrant that kind of markup. In addition I have been a fairly regular customer to the store and been a supporter of theirs. After that experience - no longer. Methinks I'll be taking my money elsewhere after that revelation! Either that or it's time to get my hands dirty but being the least mechanically capable person I know that may end being even more expensive!

Most disappointing!
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by BNA » Wed Dec 05, 2012 2:26 pm

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Re: And they wonder why we buy online!

Postby scirocco » Wed Dec 05, 2012 2:26 pm

Well, yeah, that's pretty much how it works. Welcome to the world of online bike part shopping.

But don't blame the LBS - they have no option but to buy from the middleman distributors which is where your extra dollars are going (or not going in your case). :)
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Re: And they wonder why we buy online!

Postby whitey » Wed Dec 05, 2012 2:39 pm

I emailed local distributor to see whether they stock a part yesterday. Responded with a link to the LBS's on his web page along with a curt response.

Called two LBS for a quote. Neither knew about availability or price. Both said they would call me back yesterday.

I'll be buying the part off wiggle.
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Re: And they wonder why we buy online!

Postby TDC » Wed Dec 05, 2012 2:45 pm

Have a go at DIY. Basic bike maintenance is not that hard...its a long way from brain surgery. A bike is not an overly complex piece of equipment, and there are plenty guides (eg park tools web site) to read and instructional videos to watch. Bike Radar had a few good videos which you could find if you search their site. A few basic tools and you will be self sufficient.
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Re: And they wonder why we buy online!

Postby ldrcycles » Wed Dec 05, 2012 3:00 pm

+1 to searching youtube for videos, that was how i learnt to wrap bar tape. For everything else 'Zinn and the art of mountain bike maintenance' (or road bike) has been absolutely invaluable to me, $30 or 40 and it taught me pretty much everything. It's not as hard as you think, give it a go.

Re: the original topic, i recently needed a set of cranks, the local shop said they could get in a set of Sora cranks for $140, i got Tiagra online for $93.
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Re: And they wonder why we buy online!

Postby il padrone » Wed Dec 05, 2012 5:44 pm

Heard some caller on talkback 774 asking one of the government's minister when they're going to do something about GST on small-value packages. Made me laugh, because there is way more than a 10% GST that's the problem. I'll pay the GST and still buy lots of stuff on-line.

What's needed is a very serious inquiry into the importing oligopolies that are gouging all Australian pricing.

Some years back I bought a chain and cassette (in a rush of blood to the head) from the local LBS. I didn't use them straight away as I decided the drive-train had more life in it, then I have used that bike a whole lot less. Since then I've bought all chains and cassettes on-line from overseas. I still have them in their packages downstairs and on checking the price stickers on them I've shocked myself at the value of on-line shopping - 9sp Dura-ace chain for $80 and Ultegra cassette for $180 :shock: No idea how he twisted my arm into parting with that much cash for disposables :oops:
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Re: And they wonder why we buy online!

Postby dougalh » Wed Dec 05, 2012 6:12 pm

Ditto here.
my LBS quoted me $350 to replace my shimano 105 chainrings, cassette and chain after which i promptly told them I would come and pick up my bike and pay no more than my 50 bucks service. After researching on Wiggle I found I could buy all the parts for $225. Better yet I could get Ultegra parts for $295 (on enquiry the LBS quoted $685 for ultegra parts). They said they simply could not compete with the internet but will fit all my parts for $50. So to sum it up, I'm upgrading all my parts to Ultegra for less than they wanted for replacing 105.
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Re: And they wonder why we buy online!

Postby queequeg » Wed Dec 05, 2012 6:25 pm

yes, there is something wrong when I can:
1) purchase a complete bike online from the USA
2) pay $530 to have it shipped here
3) pay $430 Gst & customs processing on arrival
4) pay a bike shop $250 to assemble it

....but still come out $1000 cheaper than buying the identical bike locally, which came from the same place that I bought mine!
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Re: And they wonder why we buy online!

Postby antipodean » Wed Dec 05, 2012 8:01 pm

The most amazing part of this story is that you can't do any of those incredibly simple jobs yourself.
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Re: And they wonder why we buy online!

Postby Nobody » Wed Dec 05, 2012 8:24 pm

antipodean wrote:The most amazing part of this story is that you can't do any of those incredibly simple jobs yourself.
Not everyone is mechanically minded or wants to be. I'm sure there are other things that they can do that you and I can't. Fortunately, not everyone is the same.
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Re: And they wonder why we buy online!

Postby ZepinAtor » Wed Dec 05, 2012 8:26 pm

antipodean wrote:The most amazing part of this story is that you can't do any of those incredibly simple jobs yourself.


+1 Nobody.

The most amazing part about your statement (antipodean) is the assumption that goneriding is not capable/wanting of such tasks & may chose to save his delicate hands for life saving neuro surgery that evening.

Simple for some ? Brain surgery for others ?
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Re: And they wonder why we buy online!

Postby g-boaf » Wed Dec 05, 2012 8:30 pm

Yeah, I've done the online shopping for parts too. And fitted a few of them myself. Wrapping bar tape I know how to do thanks to youtube. Tuning gears, installing derailleurs is another one I've done thanks to youtube.

That said, sometimes I just want to let the LBS take care of it all. Anything very exotic or expensive I'll buy from the LBS.
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Re: And they wonder why we buy online!

Postby Howzat » Wed Dec 05, 2012 8:37 pm

il padrone wrote:I'll pay the GST and still buy lots of stuff on-line.

Solomon Lew was in the paper today making the same case - overseas retailers should be on the same footing as local retailers GST & customs wise.

I think it's a bit of a furphy that distributors are fat cats raking it in. Typically distributor margins are thin and they work on volume, as well as paying for local advertising and marketing events. Retailer margins are much wider.

I suspect a large part of the discrepancies come from the manufacturers charging different rates to different clients. Wiggle is able to sell (some items) at rates that even distributors envy; I read somewhere they pick up excess groupset inventory from bike manufacturers which cost next to nothing at the "per 1000" bulk rate; perhaps it's even sold to them at a loss. But if Bob's Aussie Bike Distributors wants to get a half-dozen Ultegra groupsets from Shimano, well that's what the full list prices are for.
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Re: And they wonder why we buy online!

Postby il padrone » Wed Dec 05, 2012 8:56 pm

Howzat wrote: Wiggle is able to sell (some items) at rates that even distributors envy; I read somewhere they pick up excess groupset inventory from bike manufacturers which cost next to nothing at the "per 1000" bulk rate; perhaps it's even sold to them at a loss.

Torpedo7 do this - you only need to look at their odd range of products, limited size ranges and hot products that come and soon after disappear. I really doubt that this sort of supply method is a big part of Wiggle's operation.
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Re: And they wonder why we buy online!

Postby singlespeedscott » Wed Dec 05, 2012 10:29 pm

I think this is how most of the online stores do it. They get manufactures in Asia to produce a house brand bike and in doing so are able to purchase parts at OEM prices. They then simply split the excess stock and sell it online.

Either that or they have such a huge turn over of stock they can afford to buy several thousand of a specific item at a much cheaper cost.
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Re: And they wonder why we buy online!

Postby Byke » Wed Dec 05, 2012 11:26 pm

For those happy to do their own bike maintenance then online is great. Hell, I've embraced it so much I've developed a bike gear price finding site to make it even easier.

But for those without the time, skill or inclination to do their own bike maintenance it's a bit much to begrudge the local bike store charging a decent whack more than the massive overseas stores can afford to sell at. the money to pay for labour, a workshop full of tools, retail shop rental, etc has got to come from somewhere.
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Re: And they wonder why we buy online!

Postby bychosis » Thu Dec 06, 2012 5:03 am

Byke wrote:For those happy to do their own bike maintenance then online is great. Hell, I've embraced it so much I've developed a bike gear price finding site to make it even easier.

But for those without the time, skill or inclination to do their own bike maintenance it's a bit much to begrudge the local bike store charging a decent whack more than the massive overseas stores can afford to sell at. the money to pay for labour, a workshop full of tools, retail shop rental, etc has got to come from somewhere.


And I don't think anyone begrudges the LBS making some money on top of their costs, but as consumers we are less likely to buy parts from the LBS when the difference is so great. If it were closer to 10% difference then the online stores would have reduced patronage. I know I'd rather get the gear from around the corner with local service. Retailers in general need to stop complaining that everything is so cheap everywhere else on the Internet and work out how to compete. I notice that Kmart and bigw prices for some items seem to be coming down to a level that are competitive with Internet stuff and when you get Aldi specials they are also near Internet prices.
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Re: And they wonder why we buy online!

Postby DoogleDave » Thu Dec 06, 2012 7:11 am

I think part of the reason is supply & demand.

More and more people are purchasing from the internet instead of their LBS, so like any business they either go under (which seems to be happening more and more), or they need to make up for the lack of work by charging higher prices to those that do come into the store for products and/or servicing.

I'm not saying it's right or wrong, and ideally the LBS's should find a way to compete or offer great customer service to retain customers coming back....but in this day and age good customer service doesn't seem to be enough for many.

I can just hear those customers now....."It's great that they were polite, prompt and efficient in helping me - but they were going to charge me $70 more so I bought it online instead".

At what price do you put good customer service? $20 more, $50 more, $200 more?

Maybe Wiggle should open up a franchise chain of LBS's across the country and supply them from their huge purchasing arm in the UK.
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Re: And they wonder why we buy online!

Postby human909 » Thu Dec 06, 2012 7:33 am

No what needs to happen is that the distributors need to stop charging LBSs insane prices. Or LBS need to man up and go online through wiggle themselves for their whole business!
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Re: And they wonder why we buy online!

Postby Philipthelam » Thu Dec 06, 2012 7:58 am

support your local businesses or keep the money in australia (aust online stores)
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Re: And they wonder why we buy online!

Postby sloth » Thu Dec 06, 2012 8:05 am

Philipthelam wrote:support your local businesses or keep the money in australia (aust online stores)


Why? If a business in aus can't be competitive then it shouldn't be in business. They are commercial entities not charities.

The last online order I made to an aus store took 7 weeks of constant chasing on my side to get my delivery. If the service quality isn't there then i will spend elsewhere. Commerce evolves - businesses needed to find new ways to compete or go out of business. I don't buy into this quaint notion of supporting local just because its local.
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Re: And they wonder why we buy online!

Postby diggler » Thu Dec 06, 2012 8:37 am

You could buy the parts online cheaply and pay the store to install them.
That's what a fool does. I'm invincible, I'm paying money ... uh ... The girl's happy, she's got no money, I got my rocks off. How good is this?
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Re: And they wonder why we buy online!

Postby im_no_pro » Thu Dec 06, 2012 9:27 am

goneriding wrote:I find it very hard to believe that there is that much difference in cost price (including overheads) to warrant that kind of markup.


Without wanting to go into too much detail, I have seen cost prices on many items for bike shops in Aus (and not a single store independant LBS either, so probably at the lower end of what LBS's pay for their stock) which are higher than what I can buy the same item from Wiggle/CRC/etc for.
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Re: And they wonder why we buy online!

Postby silentbutdeadly » Thu Dec 06, 2012 9:35 am

im_no_pro wrote:
goneriding wrote:I find it very hard to believe that there is that much difference in cost price (including overheads) to warrant that kind of markup.


Without wanting to go into too much detail, I have seen cost prices on many items for bike shops in Aus (and not a single store independant LBS either, so probably at the lower end of what LBS's pay for their stock) which are higher than what I can buy the same item from Wiggle/CRC/etc for.



Oh yes Oh yes Oh yes...and in many cases it would still be cheaper in the UK and Europe even if we paid their VAT. Let alone our own!
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Re: And they wonder why we buy online!

Postby goneriding » Thu Dec 06, 2012 9:35 am

antipodean wrote:The most amazing part of this story is that you can't do any of those incredibly simple jobs yourself.


I'm not saying that I can't. I just do them very badly and don't have the time to spend getting it right.

To further clarify, in addition to the parts charge they wanted to charge labour separately.

What seems to be missed in all of this is that Cell, who I suspect are bound to buy from the same distributor as my LBS, can charge $30 less online and still maintain a decent shop front. I understand that they have buying power on their side but that is a massive difference.

I'll also say that I do feel for the LBS's but this is not the first and nor will it be the last time that there are significant shifts in the way markets work. A case in point are the US online stores who charge big freighting complaining that the UK guys have an unfair advantage because of their mailing system. The Mall is killing off strip shopping. The key is adapt or die and I see this as very much a case of not adapting!
Last edited by goneriding on Thu Dec 06, 2012 10:34 am, edited 1 time in total.
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