Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby AUbicycles » Fri Jul 27, 2018 6:39 pm

A quick list of factors that may influence the retail price and can be specific to Australia:
- Currency exchange fluctuations
(predicting changes and also differences of price between time of purchase and payment)
- More expensive shipping
- Higher taxes / duty / customs clearance costs
- Smaller total order volumes (higher cost per item cost)
- More expensive warehousing
- More expensive transportation / logistics
- Higher importer markups
- Higher bike shop markups
- High customer 'pain threshold' (customer are accustomed or prepared to pay more)
- Less competition

A nice and specific example is that helmets need to pass the safety standard and need the testing (for each model) and approval (this is fairly expensive) along with continuing destruction testing with each batch as imports continue.

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby RonK » Fri Jul 27, 2018 7:13 pm

AUbicycles wrote:A nice and specific example is that helmets need to pass the safety standard and need the testing (for each model) and approval (this is fairly expensive) along with continuing destruction testing with each batch as imports continue.

The law has been relaxed for motorcyclist - they are now permitted to wear helmets which meet equivalent European standards. Why should this still apply to cycling helmets?
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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby AUbicycles » Sat Jul 28, 2018 12:01 am

Agree - a universal standard makes sense as I understand there are 7 standards across the globe.

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby wiggetty151 » Thu Aug 02, 2018 7:05 pm

I always buy online where i can.

The last time i bought a single non branded everyday spoke at my LBS it cost me $5 :o

I then found an online seller selling the exact same spoke for 20 cents and free postage. I bought 20 :)

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby tcdev » Thu Aug 02, 2018 9:58 pm

I like to support my LBS as far as possible, but I can't always afford to do so.

Recently searching for a cassette. $16.99 at Pushys but out of stock. $35 at the LBS, also out of stock. In a bit of a quandary on this one. $18 won't break the bank, but at 200% it feels a little like a slap in the face. At 150% I wouldn't feel like that... hmm...
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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby Ross » Sat Aug 04, 2018 3:53 pm

tcdev wrote:I like to support my LBS as far as possible, but I can't always afford to do so.

Recently searching for a cassette. $16.99 at Pushys but out of stock. $35 at the LBS, also out of stock. In a bit of a quandary on this one. $18 won't break the bank, but at 200% it feels a little like a slap in the face. At 150% I wouldn't feel like that... hmm...


Plenty of other online stores inc eBay that most likely have the cassette you want,

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby Duck! » Sat Aug 04, 2018 10:36 pm

AUbicycles wrote:A quick list of factors that may influence the retail price and can be specific to Australia:
- Currency exchange fluctuations
(predicting changes and also differences of price between time of purchase and payment)

To further complicate this aspect, most of the time, regardless of where we're buying from, we're dealing with compounded exchange rates. The Asian suppliers do all their international trade in $US, regardless of the market they're selling to. So even if you buy from an Austrailian retailer, you have the $Au->$US, then $UD->Asian supplier currency double exchange dictating things. If you buy from UK or Europe, the $Au/$US direct exchange is less relevant, but you then get $Au->GBP/Euro then GBP/Euro->$US instead. Which may or may not equalise in a direct exchange against the $US.....
I had a thought, but it got run over as it crossed my mind.

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby mangoman » Mon Aug 06, 2018 8:31 pm

Yeah its tough supporting local stores when they are that much more expensive. I have a local store (bike bug) which is very competitive on a range of items. Unfortunately they seemed to be geared up with a lot of racer grade equipment. I've used pushys for some bits and pieces and i bought my commuter and a couple of odds and ends from Reid.

Its nice being able to walk into a store and get some advice on products but even Wiggle has a chat box with customer support where you can ask them product questions (assuming you get them during their online hours) and you aren't going to feel pressured into making a bad purchase.

Unfortunately anything expensive i'll tend to get on-line its hard to justify giving away an extra $20-30 dollars here or there, especially when these stores are shipping to you for free if you spend enough. Its just now a sad fact of life that most of the time whenever you use any small bricks and mortar store (well even some big ones) you really are kind of acting like a charity for them to employ Australians.

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby eeksll » Mon Aug 06, 2018 9:49 pm

AUbicycles wrote:A quick list of factors that may influence the retail price and can be specific to Australia:
- Currency exchange fluctuations
(predicting changes and also differences of price between time of purchase and payment)
- More expensive shipping
- Higher taxes / duty / customs clearance costs
- Smaller total order volumes (higher cost per item cost)
- More expensive warehousing
- More expensive transportation / logistics
- Higher importer markups
- Higher bike shop markups
- High customer 'pain threshold' (customer are accustomed or prepared to pay more)
- Less competition

A nice and specific example is that helmets need to pass the safety standard and need the testing (for each model) and approval (this is fairly expensive) along with continuing destruction testing with each batch as imports continue.


I had kinda accepted there is more overhead to goods in Australia. However, thinking about it now, I compare a price of a landed in Australia from Wiggle, so that make me think that I am already paying the currency rates/shipping/taxes (now with GST)/transportation/logistics. Not to mention I am getting a single product so surely I would be paying more per item for shipping.

and addressing the warehousing cost, wiggle are setting up warehouses in Australia, as opposed to setting up warehouses in China and shipping from there. Makes me question "is warehousing that much more expensive?".

The only other cost is possibly higher costs for smaller production runs. Can it be that much cheaper? why aren't manufacturers helping out there, companies like SRAM, Specialised, Mavic (sure there are more) care enough to geo-block but then we get charged extraordinary prices.

sounds alot like everyone wants maximum profit to me.

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby 10speedsemiracer » Mon Aug 06, 2018 10:19 pm

AUbicycles wrote:A quick list of factors that may influence the retail price and can be specific to Australia:
- Currency exchange fluctuations
(predicting changes and also differences of price between time of purchase and payment)
- More expensive shipping
- Higher taxes / duty / customs clearance costs
- Smaller total order volumes (higher cost per item cost)
- More expensive warehousing
- More expensive transportation / logistics
- Higher importer markups
- Higher bike shop markups
- High customer 'pain threshold' (customer are accustomed or prepared to pay more)
- Less competition

A nice and specific example is that helmets need to pass the safety standard and need the testing (for each model) and approval (this is fairly expensive) along with continuing destruction testing with each batch as imports continue.


Can't help but think the distributor model we are saddled with is the big issue here. Just another layer that needs to gets paid y'all as the kids say. Any time that an unnecessary layer exists, or we allow to exist, the end user suffers whether thru ignorance or a desire for perceived convenience. Case(s) in point, Ubereats, energy privatisation etc etc.
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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby mangoman » Tue Aug 07, 2018 9:07 am

Duck! wrote:
AUbicycles wrote:The Asian suppliers do all their international trade in $US, regardless of the market they're selling to. So even if you buy from an Austrailian retailer, you have the $Au->$US, then $UD->Asian supplier currency double exchange dictating things. If you buy from UK or Europe, the $Au/$US direct exchange is less relevant, but you then get $Au->GBP/Euro then GBP/Euro->$US instead. Which may or may not equalise in a direct exchange against the $US.....


I noticed that there are some asian suppliers on alibaba which sell cheap groupsets. I look at them and wonder if they are fake. I just dont know how you can go that extra bit cheaper than the big stores, when they are possibly buying them in bulk to also fit out their own bikes?

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby Cyclophiliac » Tue Aug 07, 2018 2:40 pm

twowheels wrote:Harvey Norman aka wrestling name " The Nemesis".
Recently saw a tool recommened by RJ the Bike Guy. Followed the link to Amazon, price about USD40, started to transact, no longer able to do so due to The Nemesis pushing GST on items below $1000 & that being too much of PITA for Amazon.
So checked Amazon Oz, the price about AUD200. Tool not available in an LBS or any other local store.

That's a huge price increase, and what really p#sses me off is that our government is complicit in this organised crime.

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby 10speedsemiracer » Tue Aug 07, 2018 4:32 pm

twowheels wrote:Harvey Norman aka wrestling name " The Nemesis".
Recently saw a tool recommened by RJ the Bike Guy. Followed the link to Amazon, price about USD40, started to transact, no longer able to do so due to The Nemesis pushing GST on items below $1000 & that being too much of PITA for Amazon.
So checked Amazon Oz, the price about AUD200. Tool not available in an LBS or any other local store.


Which tool were you after? May have one floating around...
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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby twowheels » Tue Aug 07, 2018 9:10 pm

10speedsemiracer wrote:
twowheels wrote:Harvey Norman aka wrestling name " The Nemesis".
Recently saw a tool recommened by RJ the Bike Guy. Followed the link to Amazon, price about USD40, started to transact, no longer able to do so due to The Nemesis pushing GST on items below $1000 & that being too much of PITA for Amazon.
So checked Amazon Oz, the price about AUD200. Tool not available in an LBS or any other local store.


Which tool were you after? May have one floating around...


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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby 10speedsemiracer » Tue Aug 07, 2018 9:35 pm

Ah ok, not something I've even seen before. No idea where you would find something like that in Aus.
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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby BobtheBuilder » Thu Aug 09, 2018 3:18 pm

I think two things to consider when thinking about LBS vs. online (which I don't have to do, because I don't have a LBS!): -

* if they go out of business, everyone'll be buggered and you won't be able to get the stuff you do want from them (servicing, advice, parts, whatever ...), so there's a need to some extent to accept you'll pay more

* our higher prices are partly due to our higher wages - which includes your and my higher wages. Sure, you could get something from a warehouse in Britain where wages are low, conditions are terrible and the staff are miserable. Or you could pay more, because you, the business and the workers earn more.

Where that falls down of course, like in the OP, is when the differential is huge. It's likely the LBS isn't making the money. A LBS owner I talked to recently when away from home reckons the middlemen suppliers (and their semi-monopoly position) in Australia are the main reason for these outrageous prices - in one case he was undercut by a supplier selling a product in bulk to a major retail chain at a price that enabled them to retail for less than his wholesale price - he stopped stocking the (very good) product on principle, but other LBS owners might not feel they could do so.

All in all, I think we should try and look at things at a system level rather than just at the level of our individual wallet. Most of us aren't on the breadline and are funding a largely discretionary activity. Surely we can afford to pay a bit more to support some local infrastructure (LBS) that we all benefit from.

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby AUbicycles » Thu Aug 09, 2018 5:31 pm

Yes - and these are the arguments which the bicycle industry and bike shops will use. Without challenging the truth, there are a further aspects to this.

If there is demand, there will be supply. An example is when a local business such as a florist closes, then customers will change their habits such as seeking alternative solutions or travelling further to busy retail centres or ordering online. For the bike industry, mobile servicing is growing but also a number of bike shops have also moved focus to servicing.

Secondly, the arguments imply that "If you don't support us then we will be gone and you will have nothing". You can mix in 'buy local' and "local business pay hire wages and staff"... these are noble but are asking for customers to be charitable.

"We can't be competitive but demand your support without adding further value"

Again, I have understanding of the value of service, the value of quality and how a local business can support the community - but as a customer I would still have to perceive this to be worth spending 50% extra on parts... which is hard. As a customer, I am used to the service (during the sale of a part) to be 'part of the service' and not a premium. (Actual bike maintenance or repair is different, as a customer, I equate service with time to complete the task).


Returning to the core - if a customer can see a value in paying extra, that's great. From the BNA survey from 775 qualified Australian cyclists (over 1000 participants), the premium for the privilege of purchasing instore peaks at 10%. That is a reasonable premium but fighting against this is that the online purchase cost was judged at 35-50% cheaper than instore.

In closing, for passionate cyclists - it is still one part of our life. But if we should accept paying more at a bike shop (without additional return in value) shouldn't we also accept paying more at every store? For a book, you pay $30 instead of $20 (plus have to go to the book shop). With the 'Australia Tax' and high cost of living, it is noble if someone is prepared to pay more but supply and demand also says it is reasonable to put value for money in first place.

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby wiggetty151 » Thu Aug 09, 2018 5:34 pm

To add fuel to the fire....
Just got in, from the mail, a pack of 20 MTB brake cables. Cost me $5 including postage.
A LBS would cost me maybe $10 just for one!
You do the maths......

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby Ross » Thu Aug 09, 2018 8:24 pm

^But are you comparing apples with apples ie like for like? What brand/model are your MTB cables and what brand/model are the ones at the LBS?

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby BobtheBuilder » Thu Aug 09, 2018 10:20 pm

AUbicycles wrote:... these are noble but are asking for customers to be charitable.



This is what is called solidarity (or social solidarity, if you like). In some societies this is quite normal and people happily pay the extra. In the anglo countries we're going through a period of particularly virulent, and in the scheme of things unrepresentative, hyper-individualism. This attitude is part of the reason public transport (one of many examples) isn't properly funded - on an individual level it may make economic sense to take the car, but if everyone pays a bit more, public transport makes sense, is clean, cheap and convenient.

That said, what's the individual to do in a rigged system? In OPs position I'd probably buy online if I had to make the choice. But when it comes to 10% or even 30%, is it really that much money? If your LBS gives assistance when purchasing, helps you with repairs and gives you advice that saves you money in the long term, surely that's worth paying a bit more for?

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby tcdev » Thu Aug 09, 2018 11:04 pm

More on the subject of my cassette. I switched to the aforementioned LBS just recently because I wasn't happy with the price of services at my old one, and heard nothing but good things about the new one. I've had one service here in the past and although it was good value, the communications weren't the best - I was told a few days, after a week I rang and was told "Oh it's ready now".

Now after walking into this shop recently and ordering the cassette, I was told it would be "next week if the stars align". I also enquired about a particular smart trainer, thinking I'd like to support them. "Yeah I'll get back to you with a price".

A week goes by and I've heard absolutely nothing about either. I ring them and they have no knowledge of our previous conversation. There's no indication that the cassette is on order, and I'm instead told that Shimano is out of stock and "it could be a month". It's clear they know nothing about the trainer either so I simply leave it at that.

In the mean time, Pushy's have a snap sale and I order the trainer from them. I went to a third LBS and bought a cassette - not the one I was originally after, but similar enough for my purposes.

So now I'm really unimpressed with the LBS and seriously contemplating not returning there, despite the good price on their services. They know what they're doing, clearly, but the customer service is woeful. It's simply not enough to be knowledgeable and provide sound technical service if you can't even be bothered following up enquiries and even orders from customers. Is it any wonder I chose to buy online then? Why do some brick and mortar business find the recipe to success so baffling?
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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby Tamiya » Thu Aug 09, 2018 11:54 pm

twowheels wrote:
10speedsemiracer wrote:
twowheels wrote:Harvey Norman aka wrestling name " The Nemesis".
Recently saw a tool recommened by RJ the Bike Guy. Followed the link to Amazon, price about USD40, started to transact, no longer able to do so due to The Nemesis pushing GST on items below $1000 & that being too much of PITA for Amazon.
So checked Amazon Oz, the price about AUD200. Tool not available in an LBS or any other local store.


Which tool were you after? May have one floating around...



You want that lovechild of a shifter & a vicegrip?

They're around, but haven't seen them in Bunnings for a while - perhaps try one of the tools specialist like Total Tools. Bought mine 10-15yrs ago, think it's branded Stanley.

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby AUbicycles » Fri Aug 10, 2018 12:00 am

I hear you BobtheBuilder. I went through a period of getting bad bike shops and was happy to DIY. The bike shops with the great service are a step ahead and that is far easier to accept a premium.

Recently buying tyres I weighed up the difference of the tyres being in stock and the correct ones for $60 more (pair) or going online and waiting for delivery. The wife's bike needed to be done then and the staff have always been friendly. That said, it is $60 for exactly the same thing so if I have time... online would have been preferable.

So is it much money... it all adds up when you support your local bike shop, your local florist, your local butcher, your local bakery, your local hardware store, the local pool shop, the local book shop.


An important point with bike shops is that staff and owners know about the pricing and discrepancies and want to be more competitive but retain fair margins. Sometimes (but not always) it is the importers who also are at the wrong end and want better pricing and are not happy that the brand which they market and distribute will sell to overseas online retailers for less. But an interesting thing is the local online retailers... shops like Pushys have generally the same purchasing conditions as a normal retailer... they are local, employee staff and pay local taxes but are still competing.

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby Duck! » Fri Aug 10, 2018 12:37 am

AUbicycles wrote:Yes - and these are the arguments which the bicycle industry and bike shops will use. Without challenging the truth, there are a further aspects to this.

If there is demand, there will be supply. An example is when a local business such as a florist closes, then customers will change their habits such as seeking alternative solutions or travelling further to busy retail centres or ordering online. For the bike industry, mobile servicing is growing but also a number of bike shops have also moved focus to servicing.

Secondly, the arguments imply that "If you don't support us then we will be gone and you will have nothing". You can mix in 'buy local' and "local business pay hire wages and staff"... these are noble but are asking for customers to be charitable.

"We can't be competitive but demand your support without adding further value"

Again, I have understanding of the value of service, the value of quality and how a local business can support the community - but as a customer I would still have to perceive this to be worth spending 50% extra on parts... which is hard. As a customer, I am used to the service (during the sale of a part) to be 'part of the service' and not a premium. (Actual bike maintenance or repair is different, as a customer, I equate service with time to complete the task).


Returning to the core - if a customer can see a value in paying extra, that's great. From the BNA survey from 775 qualified Australian cyclists (over 1000 participants), the premium for the privilege of purchasing instore peaks at 10%. That is a reasonable premium but fighting against this is that the online purchase cost was judged at 35-50% cheaper than instore.

In closing, for passionate cyclists - it is still one part of our life. But if we should accept paying more at a bike shop (without additional return in value) shouldn't we also accept paying more at every store? For a book, you pay $30 instead of $20 (plus have to go to the book shop). With the 'Australia Tax' and high cost of living, it is noble if someone is prepared to pay more but supply and demand also says it is reasonable to put value for money in first place.

Image

source: Ultimate Guide

Many valid points, but really this serves to prove the hypocrisy that abounds in communities such as this. The vast majority of members on this forum will spend or have spent time (oops, that makes it sound like a prison sentence!) in the Australian workforce. While some degree of international trade is essential regardless of whatever field we are in, we are for the overwhelming part dependent on our fellow Australians to patronise the businesses we own or work in so they can pay us in order to house and feed ourselves and our families.

The phrase "being charitable" has been used in reference to buying locally. Balderdash. If you're buying from overseas, you're "being charitable" to that country's business owner, its staff and its tax system, funding their public infrastructure rather than ours. When you buy locally, sure some will ultimately go offshore, but in a roundabout way some of what you spend will come back to benefit you.

There's also the oft-dismissed factor of economy of scale; it plays more of a part than some would apparently believe. Our entire national population is little more than that of some individual cities around the globe, and the cycling population is a small proportion of that. Now obviously every component is going to cost a certain amount to produce, and the manufacturers will always ensure that the return is greater than the cost of each part, but they'll tend to be prepared to take a hit on the return margin if they sell more units, because on the same principle the shipping costs less per unit the more they need to move.... And that's not even accounting for each country's tax & tariff structures, which will also affect domestic prices.
I had a thought, but it got run over as it crossed my mind.

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Re: Just paid for cassette and new chain at LBS, mate told me about online shop..big savings.

Postby AUbicycles » Fri Aug 10, 2018 1:00 am

My own reference to charity is a customer who chooses to pay more locally and sees no tangible value-added. Buying overseas would not be charity in this context. However I still understand the consequences.

Perhaps a step back is asking... is the onus on the customer, the retailer or the government?

When a bike shop says customers should buy locally because otherwise bike shops will close, then they are putting the onus (or guilt) on customers. It feels like a threat which is not very motivational. I am not suggesting that they are inactive otherwise and are not working their butts off to be a good business... though in coverage of the overseas online retail threat, this is a regular theme.

Sometimes through media the full story is invisible, we only see snippets and even this thread alone (not to many many others) identifies so many different aspects.

For me, I am motivated by some the value-added factors in local bike shop; the immediate availability, the guidance to select exactly the right item, the recommendations based on experience. Sometimes there is a gap so that bike shop have different stock and brand to the usual brands available online... so I get a different choice in a bike shop... and finally, a lot of bike shops are great place to be when the staff are passionate about cycling and like their customers.

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