And they wonder why we buy online!

open topic, for anything cycling related.

Re: And they wonder why we buy online!

Postby im_no_pro » Thu Dec 06, 2012 10:01 am

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



I dont see the issue with this? Were they not to do so they would have to include a labor component in the price of the part, which means customers who choose to cash and carry are paying for labour they dont use....
master6 wrote: Moderators are like Club Handicappers; I often think they are wrong, but I dont want the job.
User avatar
im_no_pro
Super Mod
Super Mod
 
Posts: 5694
Joined: Thu Oct 23, 2008 9:29 pm
Location: Geelong

by BNA » Thu Dec 06, 2012 10:01 am

BNA
 

Re: And they wonder why we buy online!

Postby Nobody » Thu Dec 06, 2012 10:01 am

goneriding wrote: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.
Cell claim they buy directly from the manufacturer.
http://site.cellbikes.com.au/help-centre-article?id=7
Nobody
 
Posts: 6649
Joined: Thu Sep 18, 2008 12:10 pm
Location: Sydney

Re: And they wonder why we buy online!

Postby goneriding » Thu Dec 06, 2012 10:34 am

im_no_pro wrote:
goneriding wrote:To further clarify, in addition to the parts charge they wanted to charge labour separately.



I dont see the issue with this? Were they not to do so they would have to include a labor component in the price of the part, which means customers who choose to cash and carry are paying for labour they dont use....


Typically, neither do I and in the scenario you outline it is entirely fair. The comment was meant as clarification to an earlier comment regarding overheads.
Image
User avatar
goneriding
 
Posts: 2240
Joined: Thu Nov 15, 2007 3:14 pm
Location: Strathfield

Re: And they wonder why we buy online!

Postby greyhoundtom » Thu Dec 06, 2012 10:50 am

Isn’t time the local bike shops got together and combined their purchasing power?
User avatar
greyhoundtom
 
Posts: 2555
Joined: Sun May 31, 2009 6:28 am
Location: Narre Warren, Victoria

Re: And they wonder why we buy online!

Postby MarkG » Thu Dec 06, 2012 11:20 am

The franchises do that already I assume, hence the reason for buying a franchise.
They still won't have the purchasing power that someone like CRC have tho, for the simple fact that CRC etc have a global market unlike the Aussie stores.
A mate of mine who works in a bike store here, in Vic, don't even stock Shimano anymore cos their prices are rediculous

Shimano etc wouldn't care less cos the a) the Aussie stores make up such a tiny % of their sales, and b) Shimano will sell their product to the customer either thru local sales of off the net.
Proudly "a hater of academics with helmet cams"
User avatar
MarkG
 
Posts: 2147
Joined: Mon Mar 28, 2011 1:02 pm
Location: Perth, Australia

Re: And they wonder why we buy online!

Postby DoogleDave » Thu Dec 06, 2012 11:27 am

greyhoundtom wrote:Isn’t time the local bike shops got together and combined their purchasing power?


YES, love it!
ILBSA* (Independant Local Bike Shops of Australia)

*a subsidiary of IGA :-)

And LBS's charging to install parts is perfectly fine. Even if they decide to charge a little extra if you BYO parts for them to install (or discounting installation costs for parts purchased ins-store).
But I still think that many people don't buy parts from bricks & mortar stores because it can be alot cheaper to buy online and then install themselves (or pay for their LBS to install - and still save money).
Customer service is great in theory - but money talks and the rest walks....

And the manufacturers don't care because they know if there product sales have dropped from selling from retail stores, they have increased from places like Wiggle, CRC etc (and again supply & demand takes over). Wiggle & CRC sell so much stock that you can guarantee the price they pay for the products are well below what any Aus wholesaler is paying - who still needs to add a profit margin to the product before selling to the LBS.
And because Australia is such a small percentage of the global market, no-one really cares if we're buying or not as we're not their target audience - except for Australians.

Dave
2012 Felt F75 | 105 | ProLite Braccianos | GP4000S
Image
User avatar
DoogleDave
 
Posts: 519
Joined: Mon Mar 12, 2012 6:56 pm
Location: Taylors Hill, Victoria

Re: And they wonder why we buy online!

Postby human909 » Thu Dec 06, 2012 11:56 am

MarkG wrote:The franchises do that already I assume, hence the reason for buying a franchise.


No they still are stuck in the same distributor wholesaler chain as everyone else.
human909
 
Posts: 4915
Joined: Tue Dec 01, 2009 10:48 am

Re: And they wonder why we buy online!

Postby goneriding » Thu Dec 06, 2012 12:10 pm

greyhoundtom wrote:Isn’t time the local bike shops got together and combined their purchasing power?


Surely you don't mean "Adapt or die"?
Image
User avatar
goneriding
 
Posts: 2240
Joined: Thu Nov 15, 2007 3:14 pm
Location: Strathfield

Re: And they wonder why we buy online!

Postby Ross » Thu Dec 06, 2012 12:21 pm

Image
User avatar
Ross
 
Posts: 3782
Joined: Sat Nov 07, 2009 7:53 pm

Re: And they wonder why we buy online!

Postby MarkG » Thu Dec 06, 2012 12:25 pm

human909 wrote:
MarkG wrote:The franchises do that already I assume, hence the reason for buying a franchise.


No they still are stuck in the same distributor wholesaler chain as everyone else.


Yes, to a point, but surely being part of a franchise would allow some degree of savings for buying stock, or else there's no real benefit in buying in to one.
Proudly "a hater of academics with helmet cams"
User avatar
MarkG
 
Posts: 2147
Joined: Mon Mar 28, 2011 1:02 pm
Location: Perth, Australia

Re: And they wonder why we buy online!

Postby im_no_pro » Thu Dec 06, 2012 12:29 pm

MarkG wrote:
human909 wrote:
MarkG wrote:The franchises do that already I assume, hence the reason for buying a franchise.


No they still are stuck in the same distributor wholesaler chain as everyone else.


Yes, to a point, but surely being part of a franchise would allow some degree of savings for buying stock, or else there's no real benefit in buying in to one.


Whether its franchise, a buying group or just a large business doesnt make a difference - the volume is where the discounts come in. Buying into a franchise has a number of other benefits (and disadvantages) other than buying price.

goneriding wrote:Typically, neither do I and in the scenario you outline it is entirely fair. The comment was meant as clarification to an earlier comment regarding overheads.


Yep, gotcha now.
master6 wrote: Moderators are like Club Handicappers; I often think they are wrong, but I dont want the job.
User avatar
im_no_pro
Super Mod
Super Mod
 
Posts: 5694
Joined: Thu Oct 23, 2008 9:29 pm
Location: Geelong

Re: And they wonder why we buy online!

Postby human909 » Thu Dec 06, 2012 12:39 pm

MarkG wrote:Yes, to a point, but surely being part of a franchise would allow some degree of savings for buying stock, or else there's no real benefit in buying in to one.


Generally not. The reason for buying into a franchise is assistance in learning systems and methods of running the store along with the obvious brand reputation and marketing benefits. Most franchises don't operate as a buying group, comparisons with the grocery business such as IGA are not valid.

Most retail in Australia is held to ransom by an oligopoly of distributors. It works well for the sellers as it allows everyone in the oligopoly chain to gain bigger profits, that is except the LBS as they are open to competition. The way consumers can fight it is by buying overseas. LBS need to fight it by doing the same thing.
human909
 
Posts: 4915
Joined: Tue Dec 01, 2009 10:48 am

Re: And they wonder why we buy online!

Postby TDC » Thu Dec 06, 2012 1:18 pm

ha..Maybe the LBS should be buying from wiggle, CRC etc., and on-selling.
TDC
 
Posts: 568
Joined: Fri Jun 10, 2011 8:37 pm
Location: Adelaide

Re: And they wonder why we buy online!

Postby greyhoundtom » Thu Dec 06, 2012 1:37 pm

Most retail in Australia is held to ransom by an oligopoly of distributors

Correct me if I'm wrong, but I was under the impression that price fixing as apparently practised by the wholesalers supplying bikes and bike parts to Australian bike shops was illegal. :?
User avatar
greyhoundtom
 
Posts: 2555
Joined: Sun May 31, 2009 6:28 am
Location: Narre Warren, Victoria

Re: And they wonder why we buy online!

Postby human909 » Thu Dec 06, 2012 1:54 pm

greyhoundtom wrote:
Most retail in Australia is held to ransom by an oligopoly of distributors

Correct me if I'm wrong, but I was under the impression that price fixing as apparently practised by the wholesalers supplying bikes and bike parts to Australian bike shops was illegal. :?


I don't know the exact laws but generally collusion between companies to reduce competition is generally illegal. However the freedom to choose a high price when you are the a only supplier of item XXXX is certainly not illegal!

TDC wrote:ha..Maybe the LBS should be buying from wiggle, CRC etc., and on-selling.


There is nothing to stop LBSs from doing this. However they probably won't get warranty support and they likely will not get any business from local distributors. Yes this is unfair and yes this is anti-competitive. Is it illegal? I don't know. But until the LBS throw off the yoke of the distributor model en-mass then things are not going to change.

This same excessive pricing regime occurs in MOST Australian retail except for electronics and computers (Software and Apple get away with higher prices). I did work for an Australian retailer that direct imported. However that retailer chose to charge the higher Australian prices and take the extra profit! Until retailers fight back then there will be no change.

Customers are fighting back already by buying online. :D
Last edited by human909 on Thu Dec 06, 2012 2:01 pm, edited 1 time in total.
human909
 
Posts: 4915
Joined: Tue Dec 01, 2009 10:48 am

Re: And they wonder why we buy online!

Postby biker jk » Thu Dec 06, 2012 1:56 pm

Shimano Australia is price gouging. Let's say the LBS get together and start buying from Wiggle. Shimano Australia will say it will not provide warranty on these parts not supplied by itself. It will complain to Shimano Japan who may put pressure on Wiggle not to sell to Australian LBS. But neither of these deterrents are insurmountable. In the end, the LBS need to band together and approach Shimano Japan about their problem (Shimano Australia). Indeed, this occurred in the US and Shimano Japan forced Shimano US to cut prices.
User avatar
biker jk
 
Posts: 2698
Joined: Tue Nov 17, 2009 5:18 pm
Location: Sydney

Re: And they wonder why we buy online!

Postby Riggsbie » Thu Dec 06, 2012 2:53 pm

I agree, a friend has a bike shop and he stated that Shimano Australia are the reason prices are so high and he now strips the Shimano components from bikes (coming in for service or upgrade) and fits SRAM instead as he can get better performance parts for cheaper than buying from Shimano Australia....

With any luck Shimano Australia will go bust !


Sent from my iPad using Tapatalk HD
Image
User avatar
Riggsbie
 
Posts: 654
Joined: Tue Apr 19, 2011 6:55 pm
Location: Geelong, Vic

Re: And they wonder why we buy online!

Postby sb944 » Thu Dec 06, 2012 3:18 pm

Many here might be turned off a bike service if they think they'll pay through the nose for parts, but I doubt a large enough percentage of the biking population feel the same way, and would bother to purchase the parts from overseas seperately. I think the LBS would be stupid not to charge RRP for all service parts, this is their bread and butter.
Image
sb944
 
Posts: 169
Joined: Fri Aug 24, 2012 12:58 pm

Re: And they wonder why we buy online!

Postby human909 » Thu Dec 06, 2012 4:02 pm

sb944 wrote:Many here might be turned off a bike service if they think they'll pay through the nose for parts, but I doubt a large enough percentage of the biking population feel the same way, and would bother to purchase the parts from overseas seperately. I think the LBS would be stupid not to charge RRP for all service parts, this is their bread and butter.


Most people here recognise that the prices are not the fault of the LBS. However it is up to the LBSs to fight the distributors for lower prices. Currently few are doing this. Until they do they will slowly continue to lose sales.
human909
 
Posts: 4915
Joined: Tue Dec 01, 2009 10:48 am

Re: And they wonder why we buy online!

Postby Byke » Thu Dec 06, 2012 10:29 pm

Even if the local distributors cut their margins (and that's presuming that there's enough room in the existing margins for decent cuts) it's still wishful thinking that the LBS can hope to get close on price to Chain Reaction and Wiggle.

The big internet retailers buy direct from the manufacturers in quantities that even a buying group in Australia isn't going to come close to, thus securing the lowest prices. They house the goods in a single giant warehouse in an industrial area, with low rental costs. They operate in the biggest high-end cycling market in the world and ship in huge quantities (CRC is the Northern Irish postal service's biggest individual customer) so enjoy the lowest delivery rates available. Their sales are all highly automated, with a bare minimum of human labour required, so their marginal cost per sale is really low.

Their customers are conditioned to have no expectation of being able to ask for advice on what to buy, or how to fit it, or for the purchases to be quickly mounted to a bike, or to borrow a pump for a couple of minutes, or to try on a jersey first, or to get something ordered in which isn't currently in stock. Imagine the outcry on this forum if any LBS provided such terrible 'service'.

The big boys are single-mendedly focussed on just the one part of bicycle retailing that is the most profitable - selling bike gear. They're exploiting the tools of the modern age to make selling stuff much more efficient than was possible under the old paradigm of shopfront on the local main street, and that isn't going to change.

Most LBSs are probably still doing okay because the Australian economy is doing substantially better than almost anywhere in the world, and cycling is enjoying a renaissance at the moment.

Thankfully for the LBSs, at least for the moment, the pie is still getting bigger. But it's the LBS's most profitable customers who are deserting them for the internet, and over the longer term their take of the pie is going to continue to get smaller.
byke.com.au - Find the cheapest cycling gear from your favourite stores
User avatar
Byke
 
Posts: 66
Joined: Thu Aug 30, 2012 11:09 pm

Re: And they wonder why we buy online!

Postby Big_Red » Fri Dec 07, 2012 12:32 am

Because the cost of general bike componentry is so high in Australia, i've cut out the LBS and usually buy my stuff online from Wiggle, CRC, etc unless I need a part desperately. I'm at the stage where between a mate & myself, we have the necessary tools to do about 95% of bike maintenance for the 7 or so bikes owned between us. I've learned basic things like how to change over cassettes, change & tune front & rear derailleurs, chains, cranks, chainrings, gear & brake cables, etc. My newest tool acquisition is a shiny set of cone spanners that i just couldn't resist adding for the (small) price they were to the last CRC order where i got some Giordana bibknicks (so comfortable, but cheap too compared to anywhere in Au) as well as some other bits and pieces. :roll:

Because most of the stuff are just consumables which need to be replaced on a semi-regular basis, i honestly couldn't be stuffed paying someone to do a job that i know i can do/easily learn to do, nor pay the exorbitant prices here in Australia. Recently replaced an ultegra RD & 105 cassette & chain which cost just under $125 from CRC - couldn't get it for < $230 getting quotes from about 4 LBS's.

I wouldn't say i'm mechanically adept, but a lot of this stuff ain't that hard to do, if you have the right tools.
Image
User avatar
Big_Red
 
Posts: 368
Joined: Thu Jan 14, 2010 10:00 pm
Location: Brisbane East

Re: And they wonder why we buy online!

Postby Ross » Fri Dec 07, 2012 6:41 am

Byke wrote:
The big internet retailers buy direct from the manufacturers in quantities that even a buying group in Australia isn't going to come close to, thus securing the lowest prices. They house the goods in a single giant warehouse in an industrial area, with low rental costs. They operate in the biggest high-end cycling market in the world and ship in huge quantities (CRC is the Northern Irish postal service's biggest individual customer) so enjoy the lowest delivery rates available. Their sales are all highly automated, with a bare minimum of human labour required, so their marginal cost per sale is really low.



This has been discussed before. Large online UK retailers have costs that far exceed any LBS. Wiggle have a 45,000 sq foot warehouse, do you really think that is cheaper to rent (maybe they own it?) than a normal retail shop? Wiggle carry approximately 250,000 product lines and have several hundred employees. Other online UK retailers would be similar. So many times the costs of LBSs.
Image
User avatar
Ross
 
Posts: 3782
Joined: Sat Nov 07, 2009 7:53 pm

Re: And they wonder why we buy online!

Postby Philipthelam » Fri Dec 07, 2012 8:10 am

Ross wrote:
Byke wrote:
The big internet retailers buy direct from the manufacturers in quantities that even a buying group in Australia isn't going to come close to, thus securing the lowest prices. They house the goods in a single giant warehouse in an industrial area, with low rental costs. They operate in the biggest high-end cycling market in the world and ship in huge quantities (CRC is the Northern Irish postal service's biggest individual customer) so enjoy the lowest delivery rates available. Their sales are all highly automated, with a bare minimum of human labour required, so their marginal cost per sale is really low.



This has been discussed before. Large online UK retailers have costs that far exceed any LBS. Wiggle have a 45,000 sq foot warehouse, do you really think that is cheaper to rent (maybe they own it?) than a normal retail shop? Wiggle carry approximately 250,000 product lines and have several hundred employees. Other online UK retailers would be similar. So many times the costs of LBSs.

But compared to the amount of stuff they sell...
Philipthelam
 
Posts: 323
Joined: Fri Jul 13, 2012 2:10 pm

Re: And they wonder why we buy online!

Postby sb944 » Fri Dec 07, 2012 8:41 am

Ross wrote:
Byke wrote:
The big internet retailers buy direct from the manufacturers in quantities that even a buying group in Australia isn't going to come close to, thus securing the lowest prices. They house the goods in a single giant warehouse in an industrial area, with low rental costs. They operate in the biggest high-end cycling market in the world and ship in huge quantities (CRC is the Northern Irish postal service's biggest individual customer) so enjoy the lowest delivery rates available. Their sales are all highly automated, with a bare minimum of human labour required, so their marginal cost per sale is really low.



This has been discussed before. Large online UK retailers have costs that far exceed any LBS. Wiggle have a 45,000 sq foot warehouse, do you really think that is cheaper to rent (maybe they own it?) than a normal retail shop? Wiggle carry approximately 250,000 product lines and have several hundred employees. Other online UK retailers would be similar. So many times the costs of LBSs.


Apart from the fact your LBS has 50k people reach if it's lucky and Wiggle has billions, and Wiggle probably grosses about 10000x than what a LBS does, that's a perfectly valid argument.
Image
sb944
 
Posts: 169
Joined: Fri Aug 24, 2012 12:58 pm

Re: And they wonder why we buy online!

Postby Ross » Fri Dec 07, 2012 8:50 am

I'm not saying that Wiggle et al don't have many times the turnover and customers of LBS, I was simply refuting what Byke wrote saying costs for rent and staff are greater at LBS than large online retailers.
Image
User avatar
Ross
 
Posts: 3782
Joined: Sat Nov 07, 2009 7:53 pm

PreviousNext

Return to General discussion

Who is online

Users browsing this forum: AKO, caneye, dampier, sogood, the fat climber



Popular Bike Shops
Torpedo 7 Torpedo7 AU
Ground Effect Ground Effect NZ
Chain Reaction Cycles CRC UK
Wiggle Wiggle UK
Ebay Ebay AU

“Bicycles BNA Twitter
“Bicycles BNA Facebook
“Google+ BNA Google+
“Bicycles BNA Newsletter

> FREE BNA Stickers
> BNA Cycling Kit