The smart bike shops are the ones who don't sell product that can be bought over the net. For most other items there is little reason why I would throw away my hard earned money just to be a good samaritan.
Show me the money
· 4 months ago
Along similar lines - Why are advances in technology and rising popularity driving costs of our sport UP?! Look at the computer industry - loads of competition, loads of development, and every day prices DROP. Motor vehicles also fall in this category - low end cars come with a lot of mod-cons only seen in high end cars.
But the cycling industry seems to follow the opposite trend. A few years ago here in AU we were paying around $3000 for a full carbon bike with Ultegra level group-set... now bikes are showing up on the shop floor with 105 level equipment for RRP $3700+.... R&D, Shop running costs, yadda yadda yadda, aussis$ vs usd$, just doesn't cut it. Plane and simple RRP on bikes and equipment locally are highway robbery. PBK and Wiggle are shipping frames and I know many people who are importing them. A few years back importing a frame would be simply out of the question.
I'd love to see the local industry thrive/boom/support local clubs/sponsor real teams/etc, but unless there is a major shake up somewhere along the supply line, it won't happen.
Mellow Velo
· 4 months ago
It makes me wonder about Performance Bike, which is sarcastically called the "Wal-Mart" of bike stores here in the U.S. There is almost never a moment when their bikes (Schwinn + Fuji) aren't "on sale."
I would be most likely to support my LBS if they were nice to me. That's all I ask. As a young person, a woman and an amateur, the cards are stacked against me. I have a nice bike but still ask stupid questions sometimes, so I get a lot of flak despite my deep interest and desire to improve. I'm so desperate for someone to NOT be a jerk to me, that I can overlook the exorbitant shop prices most of the time.
I was lucky enough to buy my bike from a "pro" bike shop (young children not allowed inside) and to be treated well, although that was only after the guys got to know me. Chatting up the owner about why he sells what he sells helped a lot. Their stuff is expensive, but I had a good experience with the testing, fitting and service. Tune ups are free for life, the guys who work there have been there forever so I trust their knowledge, and even though I'm not the most serious customer, they remember me BY NAME every time I come in and ask how I'm enjoying the bike.
The experience of being treated as a "real" cyclist who is part of the brotherhood is worth my time and money. (But, I confess, I do buy tubes, tires and PowerBars as cheaply as possible...)
Mellow Velo
· 4 months ago
I'd like to know more about that, as well. My bike retailed for $2500 USD in 2008. The 2009 price jumped by $500. Were there $500 worth of upgrades done to the frame? (Parts the same.) If you consider man-hours and research, maybe so. But to ME, lowly consumer, is it really worth such a jump? Do I really have to pay the engineers' salaries? Crossing the $3000 USD threshold puts bikes on a whole new level. It also puts Felt's entry carbon race bike way out of reach of most. (I got mine deeply discounted on 2008 clearance.)
That said, despite cycling's growing popularity, I have never seen another Felt F4 on the road. Granted, not many people cycle where I live, but there are so many options and so few riders that I think the higher-end companies can easily keep their nice bikes priced high and keep us thinking they're worth that. They also last a long time. Only the most serious wear them out as fast as some of us wear out our cars. The only bikes I ever see more than once on the road are the super-entry-level Fujis and Treks that are constantly on sale at our local LBS stores. Sightings of specific high-end bikes are like rare wildlife. Look! A Pinarello Prince! Probably the only one in the city.
I'm also a pilot, and the same is true for private airplanes. Engines have hardly changed in decades (other than switching to fuel injection) but composites are still relatively "new," as are the fancy computer components that allow you to see moving weather radar maps and have GPS units in the cockpit, so new airplanes keep going up and up in price. But - those improvements are HUGE leaps and bounds, and general aviation airplanes often live well for decades. I trained on an early 1960s workhorse.
There is a movement in the general aviation industry to build a private jet for under $1 million USD. They're starting to realize that prices need to start leveling off and coming down if they're to stay alive. The competition hasn't succeeded yet (jet engines VERY pricey), but their efforts are helping to stabilize things.
(These are rudimentary understandings of what's going on...)
pmark1bike
· 4 months ago
I am a parts manager at a car dealership, most Australian distributers of cars in Australia have been battling what we call grey market imports, which are genuine car parts brought in by private businesses. To compete with these grey imports both the distributors and dealers have had to take a large cut in profits. LBS have a similar problem! If they want to compete they need to work with the bike distributors and try to be price competitive. I would use my LBS more if the difference was only 20% instead of 50%
Dunc
· 4 months ago
Cellbikes and Torpedo7 are showing you can sell stuff cheaply, locally (or NZ in AU$).
It takes longer to order stuff in locally too - if I order something from the LBS it can take a month or more. I'd be crazy not to buy the same item half the price from Wiggle and have it in my hands in the same week. Order Monday, receive Friday, free shipping if I order >$100 of stuff, what's not to like?
Like the previous post said - nobody buys computers from the UK for half price, do they? Fix the distribution network?
James L
· 4 months ago
I would have to say that if a LBS provided the right type of service and support, they will always get my $$. The long and short of it though is that many still want to have it both ways, that is still make money off the bike / parts (understandable) but then slug you hard for minor service work. One particular LBS (that is very popular) I went to with the intent of giving them a go for longer term business, then they stung me badly for a very minor fix. I have also bought a bike off them beofre too! It partly comes down to which business model they are chasing, the newbie customer, spends $500-$1000, the more experienced rider, more discerning but more regular and more $$ to spend. Knowing which clientle is your aim will drive things like staff hours worked, as more discerning / serious riders will shop in certain hours meaning you can possibly reduce staff hours over periods in a week, reducing costs.
Here is a couple of suggestions that an LBS could look at: - disount service days for 'regular shoppers', minor alterations and fixes such as a cassette change, bike adjustment, new chain (etc) is done 1 day a week for a reduced flat fee. - partnering with other providers such as nutritions, coaches for regular clinics, again models could be constructed for bulk discounts, i.e. Thur night $10 for a coaching clinic in store. - Reduced / Targetted opening hours focusing on late afternoons and late Sat / Sun to allow workers time to get in regularly. - demo days - 'real demo days' again where regular shoppers can really test stuff out without having to pre arrange for weeks and fill in a detailed questionairre. Im not sure about everyone else but who has demoed 3-4 saddles before choosing on one? its just impossible.
Some thoughts worth discussion, it would be good to get feedback from LBS's on some of these to see of the feasibility....I think implementing some of these will go a long way to brand / loyalty building.
James
Anonymous
· 4 months ago
I once thought that establishing a relationship with a bikeshop would help me in the long term. I tried with 3 different bikeshops on different occasions and every time there some new kid helping me out who I never see again. I get stung every time for simple adjustments because the same guy never sees me twice. Now I hop from shop to shop only looking at price and show loyalty to no one.
Anon
· 4 months ago
I once read "I'd rather have a relationship with my wife, not the guy at the local bike store". Truer words have never been spoken.
Paul
· 4 months ago
Why can't distributors latch on to orders made by larger markets (eg. North America, Europe) to get the buying power to reduce the costs and then just ship over to Aus? I know of other industries who do this.
Lance
· 4 months ago
Distribution of bicycles is similar to the mobile phone sector.
Importers gain exclusive distribution over a territory like say Specialized/Avanti (very powerful group and may cause my post to be removed). They have Australia/NZ.
Dealers (or Service Providers in the mobile sector) onsell from distributors. Dealer networks get preferential treatment when they align themselves with distributors (just like the mobile sector). This essentially controls/sets the cost of entry into the cycle distribution sector.
If you think you can just setup a dealership and sell bikes... forget it.
So the question becomes: Can the internet effectively undermine the barrier/cost of entry? And thereby enhance competition and reduce prices.
It would appear that the old business models may under some pressure as reflected by this discussion (although Avanti have a lovely new building complete with a little BMX/MTB track in NZ - i.e. they have money).
The best defence the sector has against evil "grey importers" is brand building. Essentially, the only way you're going to buy a Specialized bike is through an authorized dealer.
And what's so bad about that, apart from the price we all have to pay. After all they (the manufacturers and their distribution networks) do sponsor our cycling hero's in the Tour de France! Furthermore you can actually go down to the LBS and buy that part you need. And there is someone there who knows how to fix it (it is actually harder than you think to fix that top end bike properly).
So if you want to ride a no name brand bike that you fix yourself, then internet direct distribution is for you. I personally have both types of bikes. I like the eBay, Wiggle, Torpedo7, ProBikeKit and my LBS. I don't like Big-W/K-Mart bikes though. I've even purchased a Specialized from Fiztroy's and *always* received outstanding service (for which I pay a fair and reasonable price).
cyclingtips
· 4 months ago
Thanks for your candidness Lance. You can rest assured that your post won't be removed. The wonderful thing about me having no commercial interests on this site is that I have nothing to lose. The credibility and trust that I've hopefully built with you guys is the only thing I have and that's exactly what I'd lose if I removed your post.
If on the other hand there are no updated posts for the next few days it most likely means that the US government has taken me to Guantanamo and they're trying to get my admin password.
Drew Johnston
· 4 months ago
Lance, Unlike the mobile phone sector there seems to be very little real competition in the local cycling industry.
Perhaps the ACCC should investigate the way that cycling gear is priced, and the exclusive distribution deals. But at the end of the day, one thing we can do is vote with our feet - which many of us our now doing.
The other industry that is simliar in my mind is Winter Ski Gear (my other passsion): where you can usually save 60-70% off the prices in Aussie retailers if you buy online, or even more if you buy at a store in Canada or the States.
jay pee
· 4 months ago
thanks Wade I,m a long time supporter of the local and probably a bit of slut as I frequent a few depending on my needs.I still ebay a bit for the stuff you cannot find or source locally,ie the old school steel mongraphed forks or that rare Mapei jersey The local industry whilst needs to adjust to the times and ensuring their servicing is first class as I don,t mind paying even more for a realiable service and parts as long as they allow the time for the mechanic to give it the love. There are no short cuts and the keen serving mechanic will pickup that hairline crack or worn rim that may cost you a accident. Support the local as these guys are generally putting back ie race sponsorship etc
Bryan
· 4 months ago
I live in the US and was also fed up with the high costs of cycling equipment and it prompted me to write a post about The Fleecing of Cyclists. I received varied opinions on the topic and got some push back in the comments and on Twitter. Turns out one of my readers had worked in the cycling industry at the shop, vendor and brand levels and offered to write a guest post about why things cost the way they do. What he says makes sense but it's still hard to support the LBS when their costs to the customer are huge and they make you feel like another spoke in their wheel that they can squeeze a buck out of.
Personally, I like your effort to support the LBS. I think it should be that way but for small (low traffic) blogs/sites (like mine) we don't have that option and have to resort to the traditional affiliate marketing methods to cover costs. I'd be curious to see how your advertiser leverages your readership base in order to boost their business. If they do correctly it could be great for them, you, and your readers.
Jon
· 4 months ago
This is an interesting topic which obviously affects all of us living in Australia. While I understand the reasons why bikes, parts, clothing and accessories are ‘more’ expensive here than in other countries, I have never understood why they are SO much more.
I have a few hobbies: cycling, photography, touring/backpacking, hifi/music equipment etc. – all of these hobbies are quite expensive with bulky items – I buy all my gear for all my hobbies in Australia EXCEPT for cycling gear. When I found places like wiggle and pro bike kit I was amazed that I could save around 50% with minimal (or no) postage costs. I tried to find equivalent international online shops for photography, camping gear and hifi and have found the prices overseas to be comparable to local shop prices, sometimes much more expensive. Why is cycling gear SO much cheaper overseas?
As has been commented above, there must be some issue unique to the cycling distribution chain that leads to local prices being so much higher. Are there too many ‘middle-men’?
CP
· 4 months ago
I work in the transport industry where we ask ourselves similar questions every day. Why buy genuine, we not the alternative. There are benefits to genuine purchases made through authorized dealers, but as Wade mentioned the price difference often makes the risk of not doing so acceptable. As we see much of the problem is with the authorized importer. Europe / Asia and America don't recognize the size of our market. Whilst we might think selling "x" number of bikes a year into the Aussie market is outstnding, compared to the other developed coutries around the world. Our numbers are small. The geographical location and freight costs, complicated importation laws and a small range of transpot options means it is much easier to asign the import rights to one company to manage the entire process, rather than manage it themselves or invite competition the manufacturerpasses releases their obligation. The return doesn't match the investment. Much like our airlines, our commideties and resources until we see competition our distributors are holding the consumer to ransom.
Don't blame the shop - blame the distributors.
Mean while I'll do what I can for my shop, but until Australia moves forward I can't afford to neglect the internet.
Mikie
· 4 months ago
I'm definitely struggling to find the ballance between supporting my LBS and being reckless with my money. The problem is the 20-100+% premium you might pay on a part bought locally, rarely provides enough tangable value from my point of view. If a shop consistently provides friendly, expert service; that is a tangable benefit. And for small purchases, the cost to support that benefit is easily justified. I'm happy to 'pay for the service'. It's trickier for larger purchases though. If i choose to save $1500 on a grupo overseas, there's still a local shop or two at the top of my list for installing and maintaining it. Their service, and technicians are excellent, even if the coponents they sell are not priced competitively. If a bike shop is struggling due to a low turnover of stock, maybe their expectations or busness model needs to change. The reality is, there will always be someone willing to sell something cheaper. This cost reduction will come at the expense of something else, but innovation can always combat this. Not selling enough parts? Start selling some coffee/food. Not selling enough parts? Have demo days. Not selling enough Parts? Sell them cheaper so you sell more of them. (there's a shop in Melbourne I buy all my pro race 3's from becasue they priced as overseas, and invariably buy something else while I'm there) Not selling ehough parts? Try a membership/rewards program.
Don't just sit there on your thumbs and complain that no one is buying. Welcome to the global free market economy. This situation is not at all unique to cycling.
Derek
· 4 months ago
I too support my LBS with major components, frames, rims etc. However I was informed a few years ago by my brother in law, who worked in an industry which imported gear worn mainly by Triathletes (!) that the mark up on some of this gear was as high as 300%. So for me tyres and clothing is purchased on line. PS My LBS owner ( a really nice helpful guy) recently retired. He drives a Porsche and races a Ferrari !!!
Anonymous
· 4 months ago
F@ck the LBS
Nathan Merckx
· 4 months ago
LBS have had ample warning and time to change business model's as online stores have slowly crept up on us...
I buy all my accessories from Wiggle (always linked through your site Wade to get you the commission) and PBK.
I won't buy a bike online, and you certainly can't get a bike serviced online, so this is where bike shops need to be.
Andy
· 4 months ago
What does the LBS have that the online stores don't? People I can stand in front of and talk to about my requirements. Sadly, this is where the LBS has lost my business as I have tired of having to correct or educate the people who should be telling me how it is. Often this is after only 15mins of online research. Product knowledge is critical to credibility. Where the LBS will really win me is if they have staff who have actually used the latest product and tell me how they found it because the manufacturer, distributor and retailer have a vested interest in telling you how you can't live without it. People who know their stuff and have first-hand experience to share - it's not rocket science. If they can remember me as the guy who spent $5K in their shop this year, that would be a nice touch too. BTW - a decent LBS is 20-30mins drive from my place so it's an investment in time that expect to get value from, but currently don't.
Haywarm
· 4 months ago
I have been buying tyres etc from the UK, and other smaller bits from ebay sellers local and OS. Last November I was looking to get a new wheelset. I have a mate who has a small LBS, and I wanted to support him. I also thought that spending the extra locally, I would be looked after in the case of things going wrong. So, unbeknownst to my wife, I spent $800 instead of around $550 online. Even then he said he had made an error with the pricing and undercharged me.
5 months down the track, and a rear spoke breaks during a race. Bugger, race over, tyre rubbed through paint to carbon on chainstay.. blah blah blah.
Glad I bought them locally!! Just under ten weeks later, I had to pay for the spoke and give my mate a few dollars for his trouble. TEN F@RKING WEEKS for A SPOKE!!!!! Just a straight pull SS spoke on a set of Easton EA70s, not an unusual proprietary one. I should add that this one-man LBS is mostly mountain bikes and cruisers, so he can't carry lots of stock of higher end stuff, so he was waiting on the distributor.
I still check out stuff at various LBS.
As for the servicing side of things. People, get yourselves a set of allen keys, and spend some time reading on the internet. They are bicycles, not gas turbines, or Swiss watches. The only bike specific tools I have are a BB spanner and a cassette tool, both about $15. My multi tool is my chain breaker.
Changing the business model is a great idea. Would always pick the bike-specific cafe for a stop.
Keep up the great work WW/CT
The Big Ring
· 4 months ago
LBS are aware of the problem of Internet purchasing. I think it is encumbent on them to do something about it, if they wish to remain in the business of selling those same items. Whether that's tying servicing to product or ganging up on distributors or manufacturers, I really do not mind, but it's their jobs and their job to keep that job - assuming they want it. Some do not, and are changing their focus to a more service-oriented and "quick fix" model.
Innovate or die.
I called a LBS to price a high-end frame. In my most friendly, charming manner, I could not squeeze him one dollar on RRP. So I ordered the frame from the UK and had it delivered to my door, 5 days later, $2000 below his RRP. Even if I spend a ridiculous amount of $500 on having a LBS build that bike up for me (and I won't, there's as much satisfaction doing the building as there is in racing the final product) I would still be ahead by a ridiculous amount. The UK seller is an authorised dealer so my warranty is fine.
IMO, servicing, specialised knowledge and custom-build is the way forward for LBS. And to do that, they are going to have to give a damn about customer service and keeping abreast of current technologies.
Not stupid
· 4 months ago
Hell I know for a fact that there are some in the trade who are buying stocks from these traders and still selling them at RRP.
Often the reason for this is the simple inability to source the goods in a timely manner from the Aus suppliers.
Of course if they could clamp down on this they would, but they can't. It's a foregone conclusion that as internet shopping competition increases, prices and shipping charges will drop and soon we'll be seeing far more imported wheels, frames etc etc appearing on our shores, those items which were, up until recent times prohibitively expensive to import on a private level - UNLESS the importers and wholesalers start getting serious about being competitive globally.
The customer good-will will only go so far, and it's those retailers that are realising this sooner rather than later that will work out where their income stream needs to comes from.
Sure, internet shopping is not without drawbacks, and there are many, but as has been proven, if you win nine times out of ten you are still way in front.
Hell, I love my LBS and the guys there, but I'd rather put my saved $$ toward my massive mortgage instead of the 20 inch wheels on the owners car.
I am kidding myself if I think if I keep going there to buy my chains, tyres and carbon wheelsets he's going to pay me (a roof tiler) $16000 to tile his house if he can get a guy from the next town to do it for $8000.
Mark
· 4 months ago
I must have lucked in, when I first purchased a bike it was 2 one for me and one for the better half. At that time I dealt with the owner of the shop and since then have had nothing but outstanding service. Recently I updated my group set fot a top level Campag, and got it here (vic) for $200 under PBK offer at the time, he gave me a price before I checkede the internet. I guess my regular support has paid off and I have NEVER paid the marked price yet getting on average 20% off.
jens
· 4 months ago
I think supporting your bike shop should be prefferable. You can try making deals with them like riding in their kit getting there buisness seen while they give you free service and or parts and acceroies at discounted prices. I am all up for buying socks and hats off line but i can never trust the sizes of jerseys knicks or the quality of items. PBK are very good with there sizes and quality though
Justin
· 4 months ago
Hey I'm all for supporting the LBS whenever I can... However, they definitely ARE aware of the overseas import problem. A fact which became very clear the last time I tried to support the local with the purchase of a pair of SIDI's...
At the time I thought to myself: "Hell, it's only $90 more to buy them here, and hey, I get to try them on before I buy! Win!". However upon visiting a certain cyclery in Richmond I was confronted with a salesman who, with a very straight face, asked me to pay 30 bucks for the privilege of trying anything on... (I assume to stop people from trying on instore and then ordering online)
Now I'm f..king sorry but that is just not on, and frankly they will be lucky if I ever drop another dollar in that particular shop again. However the much bigger issue is that next time I am tossing up where to spend my hard earned I am much more likely to just say "bugger it" and go with someone online...This is what the LBS needs to overcome if they plan on having a future...
On the fence
· 4 months ago
Justin - that $30 was no doubt going to be a deposit if you ended up buying from that store. And if you didn't buy from them but used their store as a free fitting service prior an internet purchase, then I am not f..king sorry, they have every right to charge you.
Justin
· 4 months ago
I find the fact that people may use the shop as a fitting room pretty bad form personally - not something I had any plans on doing. But tell me - lets say I was to try them on to evaluate if they are right for me and the fit is not good? Or I need to go away and think about it? (which is MY RIGHT as a customer, they are a massive investment) What then!? Do they do some sort of character profiling on me and decided the strength of my moral fiber as to whether I get my $$$ back? Or is this just a punitive way of them covering the fact that they KNOW they aren't price competitive and assume that everyone who comes in is trying to rip them off...
No i'm sorry that is total bullshit, and quite frankly I was pretty insulted at the time.
Will T
· 4 months ago
I think maybe they need to spell out a little bit clearer how this "fitting fee/deposit" works.
As I understand it, it is a deposit that can be used against any purchase instore, assuming you don't want to use it against the shoes because the don't fit etc. (i.e. don't like the Sidis but the Shimano shoes fit then can use it against that).
I have no problem with the idea, it is fair enough, especially considering the price of the shoes, and as as far as I know, it is the sidi distributor who is super expensive not the dealer applying ridiculous markup.
Justin
· 4 months ago
Hmmm thanks for the clarification Will - I must admit I kinda left after I found out and didn't ask alot of questions...
I guess in that case it's a bit more understandable, although I still think the only person it ends up punishing is the customer who was actually going to spend their $$$ in the shop... I mean the douchebags who would just come in to try stuff on won't be phased - they'll still just order online...
parawolf
· 4 months ago
Supporting the LBS is noble concept; but one I cannot support any longer. Costs of racing and then consumable parts keeps me just out of trouble with the wife when buying the parts and tools online, and i've got it easy, she races also!!
My road bike, built from the ground up about 18 months ago hasn't seen the inside of a bike shop ever, apart from when the frameset was retailed to me.
I'm over the kids (for the majority) that touch bikes without torque wrenches, or use a torque wrench for things like undoing bolts! Good mech's that you can trust are few and far between, and i've just learnt to do everything myself. Means I tinker once a week when i'm wiping down my bike with Mr Sheen, I just run over the shifting braking. Check the bearings, check the bar tape.
It's a shame, but it's life. $100 service at the LBS or a new tool for the collection a new tyre, and something else online delivered in a few days, and I do the same thing myself and I know what i've done.
Big Spender (not)
· 4 months ago
I'm into this riding and life thing for the relationships, not just the $$$, so, when I can, I spend at the LBS. That said, I'm not a big spender OS or in AUS.
From what I've read here there's a few individuals with a bit to lose:
Riders who spend a lot / can save a lot CT - who has made the choice to support the LBS.
Telling by the comments here, 5% of what gets spent by CT's readers could add up to a bit! Nice one CT to put your money where your morals are. See you down the LBS!
Marchello
· 4 months ago
The LBS are doing themselves out of $$. I used to be the person that dumps the bike off for a service pays the premium for the parts and then pick the bike up...
but after realising I was paying far too much for parts (and not always getting a good service) I order them online, save on petrol/time because the parts arrive at my front door, and I have learnt to put a bike together (personnel satisfaction) and tune it - as said before its not rocket science. So they have lost the service $$ and parts $$.
Between my wife and I we have MTB, road and track bikes, so keeping them all running costs FAR too much money with the LBS.
There are a few guys at my work that ride, and in the last couple of months not a week has gone by where a box from wiggle/pbk hasnt turned up with wheels/tyres/chains etc.
Anonymous
· 4 months ago
Why is it that I can buy 2XU gear cheaper from PBK then I can in Australia?!?
Paul
· 4 months ago
Same with Knog!
Billy Buster
· 4 months ago
Because Knog is made in China! The shame is that as consumers (not just cycling), we're being seriously screwed over. This is the a huge bug-up-my-as$. Stuff made in China is so rediculously cheap, but sold at prices just below similar items made in AU/USA/Euro.
if you look in the right places, you can find Chinese manufacturers selling a full carbon frame & fork set for US$300. Chances are the same company makes a known Italian brand. Look at Colnago & Pinarello, both stste their carbon frames are 'finished in Italy' [translation: painted]
cyclingtips
· 4 months ago
I know someone who bought a cheap Taiwanese made frame in the and it was complete garbage. It wasn't a complete shot in the dark - he had all the "specs" and the sales pitch was good. In the end there wasn't enough clearance for a 23mm tyre (had to use a 19mm or else it rubbed), cracks everywhere after a month. He's already scrapped it and bought something else.
Marchello
· 4 months ago
Having just said the above, I did just purchase a bike stand and maintenance stand. I went to one LBS saw the outrageous prices, and looked online, as I was filling in the details I realised that it was not from the UK, but a local LBS!!!
I refuse to go back the the 1st LBS as I asked how best to deal with used gel wrappers, and the owner said he just throws them in the gutter!!! (It is using a large amount of restraint not to name this popular LBS)
Anon
· 4 months ago
I'll support the LBS when they get some person with half a brain in there... I'll support the LBS when they start stocking brands other than BBB... I'll support the LBS when they get some decent stock of bikes... I'll support the LBS when the service doesnt take 3 weeks.... I'll support the LBS when its not run by idiots... I'll support the LBS when the parts I order take less time than it does from the 'net... I'll support the LBS when they support the local club...
Tommy P
· 4 months ago
Takes some time to find a good LBS but once you do it can be a beautiful thing. I tend to shop from the guys I ride with. They know me, I know them and if I need something they are happy to help me out. For example, the last couple of groupsets I bought I was able to source them at a very competitive price by having the LBS remove them from a run out mainstream bike model (50% off) someone else got a good deal on a carbon frame, wheels etc. What I paid was comparable to prices online. Everyone was happy and manufacturer got to offload some old stock. I also come in to read magazines and use the workshop on occasions or just to talk some trash.
I also tend to be an opportunist with my equipment. Someone ordered some wheels and didn't pick them up, now they are old stock.. I need new wheels.. these will do and LBS keen to offload for cheap(ish) etc.
My other favourite thing is to contact my mates. I have plenty of mates who are tinkers and go through loads of gear trying to dial in their position, therefore have a huge surplus of various bits. If I need a stem/bars/seatpost a certain size its usually just a couple of emails away. CT, you know who I'm talking about.
Lee
· 4 months ago
Having moved to Australia 12 months ago from the UK I was extremely happy to see the overseas shipping service provided by Wiggle extended to Australia, after happily buying parts and accessories from them for years. Even back in the UK I struggled with the dilemma of buying online vs supporting the LBS. But I'm afraid to say that lower prices and excellent service, albeit online, swung it for me on the majority of occasions. I actually enjoy the whole online shopping process, especially reading other buyers reviews etc. As a result of not qualifying for the much coveted 'after sales service', I have had to learn out of necessity how to carry out most of the basis bike maintenance skills, which will no doubt save my pocket a small fortune down the road and has only added to my satisfaction and enjoyment as a cyclist.
I seem to find myself wanting to support Wiggle over the LBS and as a result have recently purchased one of their excellent Focus road bikes which, if anyone is interested, I couldn't be happier with. As a couple of the earlier posters state, it comes down to individual moral standing. But if an outlet, whether it be online or locally provides a level of service and a price point which its target customer is more than happy with then they will never be short of a loyal customer base.
shaninsa
· 4 months ago
what ever happened to 2 bike guys web site??
Retail Is Detail
· 4 months ago
Change is the law of life. And those who look only to the past or present are certain to miss the future. John F Kennedy
Technological change is like an axe in the hands of a pathological criminal. Albert Einstein
Andy
· 4 months ago
This discussion makes me think of Kodak and how they put their head in the sand as digital photography dawned. They went from industry pioneer and market leader to market share also-ran because they refused to accept that the game had changed until it was too late. Maybe they thought their loyal customers would support them and make a moral choice to keep buying the 'real' stuff - and they did, the only problem with that was those customers made up half of one-poofteenth of the market (and they just stopped making Kodachrome - the choice of absolute die-hards). I reckon the bike industry isn't all that different. Support the LBS, but be bloody demanding. I get all kinds of suppliers contacting me wanting to know if they did a good job, was I happy, could they do anything better and some of them have a customer for life while those that don't now know why, which is better than nothing. I can't remember a bike shop asking me if there was something else that I wanted that maybe they didn't provide. Ever. I'm not going to put bike shops out of business by buying on line, just like I haven't put photo shops out of business by not buying a roll of film in the last 9 years. Photo shops look a hell of a lot different these days, but bike shops don't - yet. It will happen, the question is whose sign will be hanging out the front?
Best Melbourne LBS is in Malve
· 4 months ago
For what I believe is an LBS that is sustainable in the internet world, go to Cycle-inn in Malvern Rd Malvern. Matt, the owner, is an old school bike racer and very good mechanic - but most importantly, he is there pretty much the whole time and he is the guy who does the work on your bike. The shop isn't huge and he doesn't stock a huge amount of gear, but certainly enough to keep you going with anything you need in the way of consumables if the two week internet delay doesn't suit. Looks to me like he has set himself up so that servicing is the primary earner. Give him a try - your bike will thank you for it.
Billy Buster
· 4 months ago
Take a look at Abbotsford Cycles @ Richmond station. No shit, just down-to-earth people & sevice.
Aaron
· 4 months ago
LBS support has to be a 2 way street. If the LBS wants what the consumer has to offer (their money) then the LBS needs to give the consumer what they want which is in part cheaper prices. As beautifully romantic the notion of supporting the LBS is I work too hard for my money to have to prop up a LBS that isn't servicing my needs. I don't think it's all the LBS's fault but the business model has to change and the winging needs to stop. The internet isn't going away. They need to adapt to survive and part of that adaption is to make the distributors more accountable. At the moment the distributors are the ones killing the LBS. If they looked after the LBS better then the LBS could look after the customer better and more business would flow through them both. Support the LBS? I'd love to but they need to support me as well.
Ben
· 4 months ago
I have a good friend who works in my local bike shop, and she has informed me that the standard mark up on all of their merchandise is 50% regardless of manufacturer. She has also told me that it is standard practice for those who work in LBS to be able to purchase a bike "at true cost" if the manufacturer has an agreement with the store, which is pretty common if the LBS is an authorized dealer for the brand. She is putting down roughly $800 USD for a bike that routinely sells for well over five times that amount.
So my advice.... get a part time job in your LBS!
Anon
· 4 months ago
I just got back from skiing in Queenstown, NZ. I hired demo skis from a place called Browns. Not cheap but not exxy - very reasonable. If I wanted the skis tuned, waxed, or edges sharpened, they would come to my apartment at around 07:00am, pick up the skis, leave another high-end set for me to use that day, carry out the service and deliver the skis back to me that night at around 7pm. All at no additional cost - just part of their standard practice.
Whenever I need my bike serviced, I need to take time out of work to drop off the bike as they only open at 9:30, get told it'll need to stay in the shop for 3-4 days (for a 30 min service), catch a tram back to the office then take time off work again to go pick up the bike so I can get there before their 5:30 closing time.
Just a thought.
Anonymous
· 4 months ago
Here's a good example of price difference in Australia. Shimano 105 group set alone - Cecil Walker sells for $1329 CELL BIKES sell a carbon frame bike with a 105 gruppo for $1399. So pay $70 more and get a bike. My LBS Sell a GIANT complete with 105 for $2700. The frames are Asian made and the wheels may differ, but (based on a 105 gruppo) that's a huge difference in prices right there.
Anonymous
· 4 months ago
At the end of the day, what makes people come back is the impression they leave with. You can fleece a customer for money, and he will keep returning as long as he / she can find value in what is being supplied, be it goods or service. LBS in Melbourne at least seem to want it both ways, there might be exceptions but they are hard to find it would seem. Riding with the local riders in the bunch rides, giving out a bit of kit, or some free tyres to a local blogger dosent make you a value proposition. Whining about the cost of rent, the AUD exchange etc dosent make you a value proposition. Dude, noone asked you to own / work in a bike shop, you do it either to make money or because you want to be involved in the industry?. The internet offers value, and the online retailer has come an awfully long way in terms of service, price and value. In the bad old days you couldnt trust the online retailers, freight was expensive, and you were lucky to get your order!. I shop at chainreactioncycles.com, order in lots of more than 500 and the freight is free, 4-5 days later your stuff arrives, easy, good value!. If I have a need to go to an LBS its a chore, and this is supposed to be a leisure time / money activity?. CT I applaude your stand for the LBS, obviously they see value in sponsoring your blogsite, and I guess they should, you bring them great exposure, and you probably get some free stuff to try out as a result. But the real issue here is not in giving the LBS more free exposure, its in convincing the trade in Australia that the customer is king, the cycling market is undergoing massive growth, and they need to adapt to take advantage of that, not get greedy and arrogant about it.
Anonymous
· 4 months ago
Seems like the shops are fine in helping out their racing club mates, but ignore their largest market.. the rest of us! These snobs get all they deserve. Treat us all as needed customers and then you'll get some loyalty.
softie
· 4 months ago
for me it's a balance.
when I need something quickly I go to a bike shop (drive to carnegie is 25 minutes for me) and pay a bit more but get what I need on the spot ... stuff like chain, cluster.
for tyres, tubes stuff like that , things that I dont need right away I order online and get it way cheaper.
so it's a balance for me ....
Abby
· 4 months ago
Surely cycling must be the only consume industry where the shops blame the cutomers (and NOT their business models) when they aren't profitable....!?!?
Maybe if the LBS's spent more time studying consumer trends, etc, and less time whining about the internet, then maybe they could come up with a solution. Its not MY job, as a consuer, to come up with that solution for them....
As for my vison for the future - I ahve always thought it would move towards a model where we stores would become "mechanical service centres", with parts, etc, more of a minor sideline. Much like the automotive industry, where you have the parts retailers (like Repco, Superchap, Autobarn, etc), and seperate to them you have the mechanics and repairers (like your local service garage, etc).
Jon
· 4 months ago
agreed, it kind of reminds me of the large record companies attempts to deal with online music distribution.
Brad
· 4 months ago
Are there too many bike shops? Does the oversupply make it unviable to run a predominantly repair-based service as people are suggesting is the future in an Internet world? Maybe we need some structural adjustment and that there simply isn't enough local business (for non-Internet purchases) to go `round...
Dave
· 4 months ago
Hey Wade, Your blog is great. I read it all the time. For my 5cents – working in online marketing – many things are becoming commoditised in the market – whether it be private label goods at supermarkets (vs established labels like Corn Flakes) , free media online (vs newspapers), SMS you can buy for 5 cents (it used to be 25cents), and the internet of course is having an effect on the supply of mass manufactured goods across the globe. It’s no longer a business just to provide a product at a competitive price to compete. Branding, service, added value, bundled goods, memberships, specials, loss leaders etc… Its been around for a while, it just takes some time to filter through all the industries
How do you compete? Do you compete? Of course you do – but not head to head. You either have to look at increasing your volume (can you increase your sales by 20%, and reduce your price by 10%), or by adding they mysterious term ‘value’. The value add is providing something that people perhaps cannot buy. Its knowing the bike store owner who’ll tweak your bike for free when you drop in, or invite you on a group ride on the weekend. You can’t get that online. It’s the successful bike shops which create their own community and offer more than just products.
MrT
· 4 months ago
Excuse the below paragraph re-posted from yesterdays topic. The new market calls for innovation and value adding, not just selling bikes and parts for big profits to a captive market. Thanks to online shopping we are no longer captives. The LBS needs to adapt, or perish.
A good example of this would be Abbotsford Cycles. They don't sell bikes. They only do repairs and mostly sell parts that you can't get elsewhere. They 'value add' with hints, tips and advice. They have a loyal, and growing, customer base and they've been doing it for years.... and with a smile.
cyclingtips
· 4 months ago
Folks, Some great discussion and feedback here. Hopefully some LBS's see this as an opportunity to improve.
This is however turning into a forum for venting your frustrations and I do ask that if you are naming bikeshops and have negative remarks towards them then please state your REAL NAME and your EMAIL ADDRESS. I don't think it's cool that they get publicly grilled by someone who remains anonymous. At least give them the opportunity to contact you if they wish so they can fix your negative experience.
Thanks
pmark1bike
· 4 months ago
Gee Wade, you have opened a can of worms!!!!!!!!!! Yes I agree that naming shops isn't the correct way to vent on this Blog!
Anonymous
· 4 months ago
I guess thats just the internet in action. You can always walk into your LBS and complain directly, but chances are they wont listen. The LBS's named here aren't the victims, just seeing the comments should give them food for thought, no matter whether they have the persons name or not. They hang a sign over the door and call themselves a bike shop.
Justin
· 4 months ago
I think the response to this post is awesome. By far the most common response seems to be people who do want to support the LBS.
If I were running a LBS I would see this as a massive opportunity I think... If you can get it right the support is out there! Furthermore, I think Dave is spot on with the points he makes. For me these are the areas that the LBS will always have over some anonymous online shop, and the reason I will always endeavor to shop locally...
Komo
· 4 months ago
I believe that there is a place for both the LBS and online stores to flourish. I would never consider purchasing a bike online and will happily pay the extra $$$ and purchase a new bike from a LBS which I have done (I've both a P3C and Pinarello in my current stable).
A good LBS (Ivanhoe Cycles) allows you to test ride several bikes you may consider purchasing. This together with free servicing, the guarantee and a physical presence in case of major issues in my opinion is worth the extra $$$.
That said, I still cannot go past the fact that I can at times get 2 for 1 from online stores. As an example, I purchased some TACX Antares Rollers online for approx. $250 AUD from the UK, ordered Fri PM, arrived Tue AM. Outstanding!
So why would I pay $450 for the same rollers to support the LBS?
There are far too many examples when it comes to parts etc and given my hard earned does not grow on a tree out the back, I refuse to part company with it just for the sake of supporting the LBS.
Marchello
· 4 months ago
It is very commendable of CT to support the local guys and remove wiggle etc from the blog
From the above comments, CT stands to loose quite a lot of money (assuming everyone here was purchasing through this blog - I have on a number of occasions)
Lets hope that some LBS owners get to read these comments. It would be interesting to know how much $$ worth of bike stuff wiggle / PBK / torpedo 7 etc ship to Australia each year.
cyclingtips
· 4 months ago
I may have just shut all doors for advertising! What LBS would want to advertise on here now after this roast?! ;-)
solution
· 4 months ago
Maybe you could put PBK, Wiggle et al back up (people will still buy from there regardless of your banners) and give the proceeds to various nearby LBS' so they can hire nice service people. Everyone wins!
Wade Kudos for ditching the net ads and choosing to support the local shops who are the guys who support the local racing scene. When I see wiggle pump in some cash to sponsor the sun tour or a Melbourne club team, then maybe i will buy online. But for now it is the local industry that supports the sport so I will choose to support them.
Oh and on that note everyone should go buy a Jayco. They just put an extra $3,000,000 sponsorship into the AIS for next year.
cyclingtips
· 4 months ago
Steffo, don't be too surprised to see PBK sponsoring a team here in Melbourne this summer.
A topic that is well worn on cycling fora around the world.
I think the distributors here have a lot to answer for.
A recent example - the aussie peso appreciated against the USD to $US0.80 in 06/07 - it was only SRAM that brought down component pricing to any extent. However when the peso tanked again in 08 prices on everything were marched up and bikes specced down ASAP. Now we are back up to over US$0.80 and yet again distributors are quietly pocketing to FX gains. Yes there is stock holding cost and so forth but it just defies logic.
Do you notice how most shops just pull out the catalogue and quote you RRP? Nothing illegal in that but I dont think they get all that much pricing discretion.
Why can I buy a wheelset worth of DT Competition spokes including postage from Germany for half the price I get quoted locally?
I've tried the support the LBS concept but between the pricing and struggling to find a decent mechanic its tough - so I will stay with the internet for purchases and a copy of Zinn for maintenance......and spend the not inconsiderable savings
awakebikeshopguys
· 4 months ago
Hi Wade, I've been following this string, holding back, but I gotta say it - you're just doing yourself out of royalties, put the links back up.
The enthusiasts reading this blog and using the links are still going to buy online and/or use the LBS as they were, they'll just go direct and you miss out. If you've got riding colleagues/mates/acquintances that are putting pressure on you tell them as nicely as possible to pull their heads out of the sand, I'm sure the love of this great thing called cycling only takes you so far.
I worked in bike shop here in Canberra until recently (not the owner, but for a few years) and we know fully well what is happening. We service customers bikes all the time with consumables they have brought with them; bar tape, chains, cassettes etc etc etc. After much discussion the alternative was pretty grim. We 'service' the customer or we LOSE the customer.
As a result turnover has actually picked up, as has our customer base and the service book is full, even through winter.
Racers for the most part are savvy and as they go through so much gear are always looking to save money where they can, it's a given. Add to that that most shops will give you 10% discount on parts just for being a member of a club so you margin on those items are cut anyway.
It's the ma and pa riders, the commuters, the weekend wanderers and also hugely the referalls (ie the friends etc of the racers) that pay the bills.
Here is my point - the LBS needs to look after the enthusiast racer (or as we sometimes called the 'alpha racer') as much as financially possible because they are the guys and girls that are often the one that says EITHER - "go and see so and so at xxxx bike shop, they'll sort you out" OR "just go to xxxxx.com and get em cheap".
Sadly, there are plenty of bitter and frustrated people at the retail end of this industry that probably shouldn't be the front guy/girl at the counter, BUT there are also some absolute gems, you just gotta find them, and when you do, look after them and they'll look after you.
I wouldn't advise a punter to rock up with a box load of parts and ask them to perform miracles for $20 per hour, I'd say establish a bit of a rapport, ask them 'what if' and go from there.
J
· 4 months ago
Wow, heated thread...
I race and I know quite a bit about bikes. I don't need a shop when I source parts. I can buy them online cheaper and support the online retailer who also pays taxes, employs workers and drives our economy. I have no guilt whatsoever.
There's an online retailer who, for a small fee (that can be applied toward the later purchase) will send you a case of saddles to try... or a bike to demo... this is a brilliant idea yet I've never been to a shop that will let me demo anything... Before I drop $200 on a new saddle (that can be bought online for $110) I'd like to know if it fits me well... When the LBS gets this then I'll start frequenting them more...
Aimz
· 4 months ago
Hi J,
My LBS (Cyclespeed in Gardenvale) do actually run a saddle testing program. Same deal, you pay a deposit, and can then try as many of the saddles in the shop as you need to until you find the right one. Once you find the right one, you pay the difference. Took me about 4 to get the right one! I think the record is over 10 though.....
Lance
· 4 months ago
BryceRider is right on the money here.
The ACCC proceedings and their success in the courts clear evidence that bicycle sector has no issues with engaging in illegal retail price maintenance type activities.
Outstanding research there BryceRider (obviously a lawyer).
On the other hand how does a manufacturer get distribution within Australia? Distributors obviously invest in the manufacturers product line and stock warehouses with materiel. Distributors then become something of a monopoly by virtue of an exclusive distribution agreement enforced under external foreign law.
Perhaps this monopoly aspect is what gets up peoples noses here in the Australian context.
And that is where the Internet helps. It breaks monopolistic distribution agreements to an extent.
However, those manufacturers will naturally try to kill any bike shop that attempts to grey import products to sell against their channel (which cost them a lot to setup). Imagine grey Specialized bikes for example (please don't sue me, it's just a hypothetical. To my knowledge Avanti and Specialized do not engage in activities noted in those court judgements).
So the internet may not help the LBS to scale up what many individuals do via ProBikeKit, eBay etc.. etc. I see lots of people get a small club together and buy 50 tyres and 10 chains. But that's a long way from 5,000 tyres and 300 bikes in direct competition to the distributors.
Why doesn't it happen if there's such a big difference in price as noted by almost every post so far.
Why doesn't PBK just set up an office right here in Melbourne and sell Shimano at ridiculously low prices?
Anonymous
· 4 months ago
The distribution agreements suck and only keep prices high. I play a different sport with expensive equipment and found Easton have their licences set up so that noone overseas can ship their product to Australia. So instead of paying $500 for it in a store here, I buy a competitors, similar, item online and pay $150-200. (In cycling terms, think buying SRAM instead of SHIMANO and you'll get the idea.)
Lance
· 4 months ago
I think "only" is a bit strong. The distribution channel does a bit more than that (I hope). I'm sure they add value somewhere (don't they?).
Here's a pic of one distributor's warehouse demonstrating the scale we're talking about. Distribution is a *big* job not to be taken lightly.
They actually help bring cycling to the masses on an industrial scale (which we all want - and there's no point showing a factory photo in Australia/NZ because pretty much nobody here makes bikes on that scale).
Distributors please say something.
smoke dog
· 4 months ago
i dont have clients coming into my office with 6 packs of beer/pizza/blank cheques for my service so why should i treat a bike shop like this?
Anonymous
· 4 months ago
Until the local bike industry embraces online sales and removes a so called genltemans agreement to sell products online, consumers will be paying for the over inflated costs. How many times have you seen with reputable bike stores where the bike is only avialble for sale in store.
For example, a high end aluminium frame can be purchased in the US for AUD$1200, in Australia the same frame costs AUD$3000+.
Timbo
· 4 months ago
Great topic.
This reminds me of the snowboard/ski industry to be honest.
My thoughts are: - if a shop is not adding value, they shouldn't be selling that item (think, tubes, nutrition etc) - if they can add value (think, a ski boot fitter), then you show them loyalty
Shops are businesses. There is no, and can not ever be an, excuse for allowing exclusive contracts etc (which if you think about it might even breach TPA) that allow for the construction of pricing in a manner that reduces competition. If you are losing money on a line, don't stock it. Whingeing and protecting sales and having this whole emotional byline about jobs etc is ridiculous. This is how countries allow immoral farm subsidies to inefficient and poorly managed farms.
Either get can-do about your business and manage it properly and add value and be competitive, or don't be in the business.
Simple.
I support a Mel bike shop - highly visible - because - they treat me as a person, not a piggy bank - I give them free advertising and send them sales, so I get a discount
So, it cuts both ways. I'll quite honestly say I buy commodity items online and put them on myself. And they will just have to live with it. It's not their fault, I think the distros have a bit to answer for here to be honest.
This goes to what was said above about: - making people feel like a part of the clique or a real person, and - being more than just a bike shop
It all goes to being a smart business manager, and if you have read Godin, Lindstrom, et all, you'll know what I mean.
Sweet as
Tim
Lance
· 4 months ago
Hi Tim,
This point of view more or less discounts the investment made by the sales channel.
Let me explain. Essentially, the first and most direct point is, the manufacturer has carved off a piece of territory and handed it exclusively to a distributor in return for some "things" like advertising and promotion.
Take the (over used) example of Specialized. In Australia, the distributor ploughed in some hard earned cash to throw TV advertising aimed at us all during the TdF. Mike Tomalaris won't be drawn on how much he coughed up for the TdF TV rights to Aumery Publications in France. Nevertheless, I reckon it was a lot for poor old SBS. Specialized/Avanti spent good money on placing their dealers and products in front of the SBS TV audience.
They (Specialized/Avanti) want their money back (and then some). The distribution agreements reflect this. Your proposition is that anyone should be allowed to compete and bypass the channel and deprive Specialized/Avanti of their return on advertising. So a competitor could benefit from Specialized/Avanti's advertising and brand building.
They will fight you.
That brand is powerful (Specialized). People buy it because Cancellara rides that brand in the TdF on TV. That sort of promotion costs *BIG* bucks. Crikey Cancellara's annual salary alone probably puts him in the top 100 salary earners in Australia. Every Specialized owner has paid for that. And willingly too I'll bet.
That's marketing.
Compare that to the Ridley brand (McEwan used to ride these - don't know what Katousha rides). They're probably more expensive, comparable quality maybe even better. But no distribution (sorry distributor - but that's my perception). No TV ads, hardly anyone knows Robbie used to ride one, and Cadel. All this equals low sales volumes. Now if you had a lazy couple of mil. you could get that distribution agreement and go for it. That would inject some competition into Australia.
Pacific Brands is having a crack at it with the Malvern Star Oppy. Haven't seen many yet. They have one stuck up on the wall at Cafe Racer. Maybe they can do it. It pretty much comes out of the same factory in Taiwan if you believe the talk around the place. But Cancellara doesn't ride one (and you can bet this single fact eats them right up too).
Oops I'm raving on again... sorry.
Anyway this is the "value" distributors bring to the table. And it is proven to work. No channel equals no sales.
Can the Internet break this old addage? It is working for some there can be no doubt about that. Can it scale up to kill off the distributors, that's another question. Maybe. Are the distributors moving to the Internet and competing with themselves (and their own LBS resellers)?
Michael
· 4 months ago
Pacific Brands also have the Ridley distribution agreement. I found that out through having a warranty issue with my Ridley Noah Frame recently...luckily i bought through the LBS and they took care of everything (I spent less than a day without a bike - thanks to TFM and got a new frame in the process!). If Pacific Brands is pushing the Oppy you would have the question their logic - are you sure it isn't the manufactures that push the products not the wholesalers and distributors??
Lance
· 4 months ago
Oops, the bike on the wall at Cafe Racer is in fact a Ridley. But it was a Malvern Star 'cause I asked!
I saw Kevin (rep. of Mr. Ridley in Oz if I'm not mistaken) at Racer this morning. Armed with this info you've just pointed out, I'll pose the question next time I see him and see what he says (then he'll figure out I am - doh! there goes my credibility again).
Do the manufacturers push the product and not the distributors? Well that depends on who is more powerful. If you sell milk, then you probably have a weaker position with Woolworths than if you're Apple selling iPhones to Optus (Apple condition: no competing product within 2 meters of an iPhone display. Actually the Optus network begs Apple to let them have some but technically it's called a sale).
So I imagine the Pacific Brands, Ridley, Oppy example falls somewhere in between. So the manufacturer may be expected to contribute to the cost of TV ads to suck the product through the channel. However, an exclusive changes that a bit because there is only a single route to the market.
And so maybe the complaints listed in this thread just gained a bit more weight. Distribution is even more concentrated than I thought.
Then we could have a test case around the internet breaking this perceived market abuse. I have no doubt there are many cycle-lawyers reading this right now. All they'd need is some funding mechanism to start the legal feeding frenzy (errr... process) in motion.
Business case for lawyers: Just imagine the cost of discovery on any/all of the parties! Many sizeable distribution operations could be joined. The distributors may need an assessment of how much trouble they could be in. You'd better show them those judgements pointed out earlier.
Oh gee, that all sounds very expensive to me.
"Friends of Cyclebits"
Danny
· 4 months ago
I agree with most of the posts here about the overpriced LBS'. I am building a high end bike from ebay and internet shops. I could never afford the same bike if I bought it from a shop. Yet despite all of these protests the shops dont seem to be closing down. I can only guess that the bloggers here are a minority and eithr the majority has not yet discovered PBK or Wiggle etc. or they have buckets of money and prefer to spend it locally.
Interesting to hear what they think about the wholesalers here.
IMPORTANT ANNOUNCEMENT: cyclebits.com will cease trading as of 30 June 2009. cyclebits.com has ceased trading as of 30 June 2009. We appreciate the loyal clientele who supported us. Our goal from the outset was to bring competitive prices on cycling consumables to training cyclists and triathletes. Had we gained the support of Australian distributors we feel certain that we would have been able to be competitive, however it would appear that the vast majority of Australian wholesalers are happy to lose millions of dollars to the huge overseas online stores in England, Ireland and the US and refuse to supply Australian online stores.
It is with regret that we have elected to cease trading.
SuperCheap Auto tried the LBS game with Goldcross Cycles (11 stores in Melbourne and a couple in S.E. QLD). Their annual report details how dismally distributors treated them and how they lost millions. $19.1 million in sales and $4.0 million in losses after store development costs.
Ouch. No doubt this has effected the groups share price. (just published today by Sydney Morning Herald)
All Comments
But the cycling industry seems to follow the opposite trend. A few years ago here in AU we were paying around $3000 for a full carbon bike with Ultegra level group-set... now bikes are showing up on the shop floor with 105 level equipment for RRP $3700+.... R&D, Shop running costs, yadda yadda yadda, aussis$ vs usd$, just doesn't cut it. Plane and simple RRP on bikes and equipment locally are highway robbery. PBK and Wiggle are shipping frames and I know many people who are importing them. A few years back importing a frame would be simply out of the question.
I'd love to see the local industry thrive/boom/support local clubs/sponsor real teams/etc, but unless there is a major shake up somewhere along the supply line, it won't happen.
I would be most likely to support my LBS if they were nice to me. That's all I ask. As a young person, a woman and an amateur, the cards are stacked against me. I have a nice bike but still ask stupid questions sometimes, so I get a lot of flak despite my deep interest and desire to improve. I'm so desperate for someone to NOT be a jerk to me, that I can overlook the exorbitant shop prices most of the time.
I was lucky enough to buy my bike from a "pro" bike shop (young children not allowed inside) and to be treated well, although that was only after the guys got to know me. Chatting up the owner about why he sells what he sells helped a lot. Their stuff is expensive, but I had a good experience with the testing, fitting and service. Tune ups are free for life, the guys who work there have been there forever so I trust their knowledge, and even though I'm not the most serious customer, they remember me BY NAME every time I come in and ask how I'm enjoying the bike.
The experience of being treated as a "real" cyclist who is part of the brotherhood is worth my time and money. (But, I confess, I do buy tubes, tires and PowerBars as cheaply as possible...)
That said, despite cycling's growing popularity, I have never seen another Felt F4 on the road. Granted, not many people cycle where I live, but there are so many options and so few riders that I think the higher-end companies can easily keep their nice bikes priced high and keep us thinking they're worth that. They also last a long time. Only the most serious wear them out as fast as some of us wear out our cars. The only bikes I ever see more than once on the road are the super-entry-level Fujis and Treks that are constantly on sale at our local LBS stores. Sightings of specific high-end bikes are like rare wildlife. Look! A Pinarello Prince! Probably the only one in the city.
I'm also a pilot, and the same is true for private airplanes. Engines have hardly changed in decades (other than switching to fuel injection) but composites are still relatively "new," as are the fancy computer components that allow you to see moving weather radar maps and have GPS units in the cockpit, so new airplanes keep going up and up in price. But - those improvements are HUGE leaps and bounds, and general aviation airplanes often live well for decades. I trained on an early 1960s workhorse.
There is a movement in the general aviation industry to build a private jet for under $1 million USD. They're starting to realize that prices need to start leveling off and coming down if they're to stay alive. The competition hasn't succeeded yet (jet engines VERY pricey), but their efforts are helping to stabilize things.
(These are rudimentary understandings of what's going on...)
It takes longer to order stuff in locally too - if I order something from the LBS it can take a month or more. I'd be crazy not to buy the same item half the price from Wiggle and have it in my hands in the same week. Order Monday, receive Friday, free shipping if I order >$100 of stuff, what's not to like?
Like the previous post said - nobody buys computers from the UK for half price, do they? Fix the distribution network?
Here is a couple of suggestions that an LBS could look at:
- disount service days for 'regular shoppers', minor alterations and fixes such as a cassette change, bike adjustment, new chain (etc) is done 1 day a week for a reduced flat fee.
- partnering with other providers such as nutritions, coaches for regular clinics, again models could be constructed for bulk discounts, i.e. Thur night $10 for a coaching clinic in store.
- Reduced / Targetted opening hours focusing on late afternoons and late Sat / Sun to allow workers time to get in regularly.
- demo days - 'real demo days' again where regular shoppers can really test stuff out without having to pre arrange for weeks and fill in a detailed questionairre. Im not sure about everyone else but who has demoed 3-4 saddles before choosing on one? its just impossible.
Some thoughts worth discussion, it would be good to get feedback from LBS's on some of these to see of the feasibility....I think implementing some of these will go a long way to brand / loyalty building.
James
Importers gain exclusive distribution over a territory like say Specialized/Avanti (very powerful group and may cause my post to be removed). They have Australia/NZ.
Dealers (or Service Providers in the mobile sector) onsell from distributors. Dealer networks get preferential treatment when they align themselves with distributors (just like the mobile sector). This essentially controls/sets the cost of entry into the cycle distribution sector.
If you think you can just setup a dealership and sell bikes... forget it.
So the question becomes: Can the internet effectively undermine the barrier/cost of entry? And thereby enhance competition and reduce prices.
It would appear that the old business models may under some pressure as reflected by this discussion (although Avanti have a lovely new building complete with a little BMX/MTB track in NZ - i.e. they have money).
The best defence the sector has against evil "grey importers" is brand building. Essentially, the only way you're going to buy a Specialized bike is through an authorized dealer.
And what's so bad about that, apart from the price we all have to pay. After all they (the manufacturers and their distribution networks) do sponsor our cycling hero's in the Tour de France! Furthermore you can actually go down to the LBS and buy that part you need. And there is someone there who knows how to fix it (it is actually harder than you think to fix that top end bike properly).
So if you want to ride a no name brand bike that you fix yourself, then internet direct distribution is for you. I personally have both types of bikes. I like the eBay, Wiggle, Torpedo7, ProBikeKit and my LBS. I don't like Big-W/K-Mart bikes though. I've even purchased a Specialized from Fiztroy's and *always* received outstanding service (for which I pay a fair and reasonable price).
If on the other hand there are no updated posts for the next few days it most likely means that the US government has taken me to Guantanamo and they're trying to get my admin password.
Unlike the mobile phone sector there seems to be very little real competition in the local cycling industry.
Perhaps the ACCC should investigate the way that cycling gear is priced, and the exclusive distribution deals. But at the end of the day, one thing we can do is vote with our feet - which many of us our now doing.
The other industry that is simliar in my mind is Winter Ski Gear (my other passsion): where you can usually save 60-70% off the prices in Aussie retailers if you buy online, or even more if you buy at a store in Canada or the States.
The local industry whilst needs to adjust to the times and ensuring their servicing is first class as I don,t mind paying even more for a realiable service and parts as long as they allow the time for the mechanic to give it the love.
There are no short cuts and the keen serving mechanic will pickup that hairline crack or worn rim that may cost you a accident.
Support the local as these guys are generally putting back ie race sponsorship etc
Personally, I like your effort to support the LBS. I think it should be that way but for small (low traffic) blogs/sites (like mine) we don't have that option and have to resort to the traditional affiliate marketing methods to cover costs. I'd be curious to see how your advertiser leverages your readership base in order to boost their business. If they do correctly it could be great for them, you, and your readers.
I have a few hobbies: cycling, photography, touring/backpacking, hifi/music equipment etc. – all of these hobbies are quite expensive with bulky items – I buy all my gear for all my hobbies in Australia EXCEPT for cycling gear. When I found places like wiggle and pro bike kit I was amazed that I could save around 50% with minimal (or no) postage costs. I tried to find equivalent international online shops for photography, camping gear and hifi and have found the prices overseas to be comparable to local shop prices, sometimes much more expensive. Why is cycling gear SO much cheaper overseas?
As has been commented above, there must be some issue unique to the cycling distribution chain that leads to local prices being so much higher. Are there too many ‘middle-men’?
The return doesn't match the investment.
Much like our airlines, our commideties and resources until we see competition our distributors are holding the consumer to ransom.
Don't blame the shop - blame the distributors.
Mean while I'll do what I can for my shop, but until Australia moves forward I can't afford to neglect the internet.
Don't just sit there on your thumbs and complain that no one is buying. Welcome to the global free market economy. This situation is not at all unique to cycling.
PS My LBS owner ( a really nice helpful guy) recently retired. He drives a Porsche and races a Ferrari !!!
I buy all my accessories from Wiggle (always linked through your site Wade to get you the commission) and PBK.
I won't buy a bike online, and you certainly can't get a bike serviced online, so this is where bike shops need to be.
Last November I was looking to get a new wheelset.
I have a mate who has a small LBS, and I wanted to support him. I also thought that spending the extra locally, I would be looked after in the case of things going wrong.
So, unbeknownst to my wife, I spent $800 instead of around $550 online. Even then he said he had made an error with the pricing and undercharged me.
5 months down the track, and a rear spoke breaks during a race. Bugger, race over, tyre rubbed through paint to carbon on chainstay.. blah blah blah.
Glad I bought them locally!!
Just under ten weeks later, I had to pay for the spoke and give my mate a few dollars for his trouble.
TEN F@RKING WEEKS for A SPOKE!!!!!
Just a straight pull SS spoke on a set of Easton EA70s, not an unusual proprietary one. I should add that this one-man LBS is mostly mountain bikes and cruisers, so he can't carry lots of stock of higher end stuff, so he was waiting on the distributor.
I still check out stuff at various LBS.
As for the servicing side of things. People, get yourselves a set of allen keys, and spend some time reading on the internet. They are bicycles, not gas turbines, or Swiss watches. The only bike specific tools I have are a BB spanner and a cassette tool, both about $15. My multi tool is my chain breaker.
Changing the business model is a great idea. Would always pick the bike-specific cafe for a stop.
Keep up the great work WW/CT
Innovate or die.
I called a LBS to price a high-end frame. In my most friendly, charming manner, I could not squeeze him one dollar on RRP. So I ordered the frame from the UK and had it delivered to my door, 5 days later, $2000 below his RRP. Even if I spend a ridiculous amount of $500 on having a LBS build that bike up for me (and I won't, there's as much satisfaction doing the building as there is in racing the final product) I would still be ahead by a ridiculous amount. The UK seller is an authorised dealer so my warranty is fine.
IMO, servicing, specialised knowledge and custom-build is the way forward for LBS. And to do that, they are going to have to give a damn about customer service and keeping abreast of current technologies.
Often the reason for this is the simple inability to source the goods in a timely manner from the Aus suppliers.
Of course if they could clamp down on this they would, but they can't.
It's a foregone conclusion that as internet shopping competition increases, prices and shipping charges will drop and soon we'll be seeing far more imported wheels, frames etc etc appearing on our shores, those items which were, up until recent times prohibitively expensive to import on a private level - UNLESS the importers and wholesalers start getting serious about being competitive globally.
The customer good-will will only go so far, and it's those retailers that are realising this sooner rather than later that will work out where their income stream needs to comes from.
Sure, internet shopping is not without drawbacks, and there are many, but as has been proven, if you win nine times out of ten you are still way in front.
Hell, I love my LBS and the guys there, but I'd rather put my saved $$ toward my massive mortgage instead of the 20 inch wheels on the owners car.
I am kidding myself if I think if I keep going there to buy my chains, tyres and carbon wheelsets he's going to pay me (a roof tiler) $16000 to tile his house if he can get a guy from the next town to do it for $8000.
However, they definitely ARE aware of the overseas import problem. A fact which became very clear the last time I tried to support the local with the purchase of a pair of SIDI's...
At the time I thought to myself: "Hell, it's only $90 more to buy them here, and hey, I get to try them on before I buy! Win!". However upon visiting a certain cyclery in Richmond I was confronted with a salesman who, with a very straight face, asked me to pay 30 bucks for the privilege of trying anything on... (I assume to stop people from trying on instore and then ordering online)
Now I'm f..king sorry but that is just not on, and frankly they will be lucky if I ever drop another dollar in that particular shop again. However the much bigger issue is that next time I am tossing up where to spend my hard earned I am much more likely to just say "bugger it" and go with someone online...This is what the LBS needs to overcome if they plan on having a future...
No i'm sorry that is total bullshit, and quite frankly I was pretty insulted at the time.
As I understand it, it is a deposit that can be used against any purchase instore, assuming you don't want to use it against the shoes because the don't fit etc. (i.e. don't like the Sidis but the Shimano shoes fit then can use it against that).
I have no problem with the idea, it is fair enough, especially considering the price of the shoes, and as as far as I know, it is the sidi distributor who is super expensive not the dealer applying ridiculous markup.
I guess in that case it's a bit more understandable, although I still think the only person it ends up punishing is the customer who was actually going to spend their $$$ in the shop... I mean the douchebags who would just come in to try stuff on won't be phased - they'll still just order online...
My road bike, built from the ground up about 18 months ago hasn't seen the inside of a bike shop ever, apart from when the frameset was retailed to me.
I'm over the kids (for the majority) that touch bikes without torque wrenches, or use a torque wrench for things like undoing bolts! Good mech's that you can trust are few and far between, and i've just learnt to do everything myself. Means I tinker once a week when i'm wiping down my bike with Mr Sheen, I just run over the shifting braking. Check the bearings, check the bar tape.
It's a shame, but it's life. $100 service at the LBS or a new tool for the collection a new tyre, and something else online delivered in a few days, and I do the same thing myself and I know what i've done.
From what I've read here there's a few individuals with a bit to lose:
Riders who spend a lot / can save a lot
CT - who has made the choice to support the LBS.
Telling by the comments here, 5% of what gets spent by CT's readers could add up to a bit! Nice one CT to put your money where your morals are. See you down the LBS!
but after realising I was paying far too much for parts (and not always getting a good service) I order them online, save on petrol/time because the parts arrive at my front door, and I have learnt to put a bike together (personnel satisfaction) and tune it - as said before its not rocket science. So they have lost the service $$ and parts $$.
Between my wife and I we have MTB, road and track bikes, so keeping them all running costs FAR too much money with the LBS.
There are a few guys at my work that ride, and in the last couple of months not a week has gone by where a box from wiggle/pbk hasnt turned up with wheels/tyres/chains etc.
if you look in the right places, you can find Chinese manufacturers selling a full carbon frame & fork set for US$300. Chances are the same company makes a known Italian brand. Look at Colnago & Pinarello, both stste their carbon frames are 'finished in Italy' [translation: painted]
I refuse to go back the the 1st LBS as I asked how best to deal with used gel wrappers, and the owner said he just throws them in the gutter!!! (It is using a large amount of restraint not to name this popular LBS)
I'll support the LBS when they start stocking brands other than BBB...
I'll support the LBS when they get some decent stock of bikes...
I'll support the LBS when the service doesnt take 3 weeks....
I'll support the LBS when its not run by idiots...
I'll support the LBS when the parts I order take less time than it does from the 'net...
I'll support the LBS when they support the local club...
I also tend to be an opportunist with my equipment. Someone ordered some wheels and didn't pick them up, now they are old stock.. I need new wheels.. these will do and LBS keen to offload for cheap(ish) etc.
My other favourite thing is to contact my mates. I have plenty of mates who are tinkers and go through loads of gear trying to dial in their position, therefore have a huge surplus of various bits. If I need a stem/bars/seatpost a certain size its usually just a couple of emails away. CT, you know who I'm talking about.
I seem to find myself wanting to support Wiggle over the LBS and as a result have recently purchased one of their excellent Focus road bikes which, if anyone is interested, I couldn't be happier with. As a couple of the earlier posters state, it comes down to individual moral standing. But if an outlet, whether it be online or locally provides a level of service and a price point which its target customer is more than happy with then they will never be short of a loyal customer base.
John F Kennedy
Technological change is like an axe in the hands of a pathological criminal.
Albert Einstein
So my advice.... get a part time job in your LBS!
Whenever I need my bike serviced, I need to take time out of work to drop off the bike as they only open at 9:30, get told it'll need to stay in the shop for 3-4 days (for a 30 min service), catch a tram back to the office then take time off work again to go pick up the bike so I can get there before their 5:30 closing time.
Just a thought.
Shimano 105 group set alone - Cecil Walker sells for $1329
CELL BIKES sell a carbon frame bike with a 105 gruppo for $1399. So pay $70 more and get a bike.
My LBS Sell a GIANT complete with 105 for $2700.
The frames are Asian made and the wheels may differ, but (based on a 105 gruppo) that's a huge difference in prices right there.
when I need something quickly I go to a bike shop (drive to carnegie is 25 minutes for me) and pay a bit more but get what I need on the spot ... stuff like chain, cluster.
for tyres, tubes stuff like that , things that I dont need right away I order online and get it way cheaper.
so it's a balance for me ....
Maybe if the LBS's spent more time studying consumer trends, etc, and less time whining about the internet, then maybe they could come up with a solution. Its not MY job, as a consuer, to come up with that solution for them....
As for my vison for the future - I ahve always thought it would move towards a model where we stores would become "mechanical service centres", with parts, etc, more of a minor sideline. Much like the automotive industry, where you have the parts retailers (like Repco, Superchap, Autobarn, etc), and seperate to them you have the mechanics and repairers (like your local service garage, etc).
Your blog is great. I read it all the time.
For my 5cents – working in online marketing – many things are becoming commoditised in the market – whether it be private label goods at supermarkets (vs established labels like Corn Flakes) , free media online (vs newspapers), SMS you can buy for 5 cents (it used to be 25cents), and the internet of course is having an effect on the supply of mass manufactured goods across the globe. It’s no longer a business just to provide a product at a competitive price to compete. Branding, service, added value, bundled goods, memberships, specials, loss leaders etc… Its been around for a while, it just takes some time to filter through all the industries
How do you compete? Do you compete? Of course you do – but not head to head. You either have to look at increasing your volume (can you increase your sales by 20%, and reduce your price by 10%), or by adding they mysterious term ‘value’. The value add is providing something that people perhaps cannot buy. Its knowing the bike store owner who’ll tweak your bike for free when you drop in, or invite you on a group ride on the weekend. You can’t get that online. It’s the successful bike shops which create their own community and offer more than just products.
The new market calls for innovation and value adding, not just selling bikes and parts for big profits to a captive market. Thanks to online shopping we are no longer captives. The LBS needs to adapt, or perish.
A good example of this would be Abbotsford Cycles. They don't sell bikes. They only do repairs and mostly sell parts that you can't get elsewhere. They 'value add' with hints, tips and advice. They have a loyal, and growing, customer base and they've been doing it for years.... and with a smile.
Some great discussion and feedback here. Hopefully some LBS's see this as an opportunity to improve.
This is however turning into a forum for venting your frustrations and I do ask that if you are naming bikeshops and have negative remarks towards them then please state your REAL NAME and your EMAIL ADDRESS. I don't think it's cool that they get publicly grilled by someone who remains anonymous. At least give them the opportunity to contact you if they wish so they can fix your negative experience.
Thanks
If I were running a LBS I would see this as a massive opportunity I think... If you can get it right the support is out there! Furthermore, I think Dave is spot on with the points he makes. For me these are the areas that the LBS will always have over some anonymous online shop, and the reason I will always endeavor to shop locally...
A good LBS (Ivanhoe Cycles) allows you to test ride several bikes you may consider purchasing. This together with free servicing, the guarantee and a physical presence in case of major issues in my opinion is worth the extra $$$.
That said, I still cannot go past the fact that I can at times get 2 for 1 from online stores. As an example, I purchased some TACX Antares Rollers online for approx. $250 AUD from the UK, ordered Fri PM, arrived Tue AM. Outstanding!
So why would I pay $450 for the same rollers to support the LBS?
There are far too many examples when it comes to parts etc and given my hard earned does not grow on a tree out the back, I refuse to part company with it just for the sake of supporting the LBS.
From the above comments, CT stands to loose quite a lot of money (assuming everyone here was purchasing through this blog - I have on a number of occasions)
Lets hope that some LBS owners get to read these comments. It would be interesting to know how much $$ worth of bike stuff wiggle / PBK / torpedo 7 etc ship to Australia each year.
Oh and on that note everyone should go buy a Jayco. They just put an extra $3,000,000 sponsorship into the AIS for next year.
http://www.pbkblog.com/?page_id=59
I think the distributors here have a lot to answer for.
A recent example - the aussie peso appreciated against the USD to $US0.80 in 06/07 - it was only SRAM that brought down component pricing to any extent. However when the peso tanked again in 08 prices on everything were marched up and bikes specced down ASAP. Now we are back up to over US$0.80 and yet again distributors are quietly pocketing to FX gains. Yes there is stock holding cost and so forth but it just defies logic.
I also point out:
http://www.accc.gov.au/content/index.phtml/item...
and this one:
http://www.accc.gov.au/content/index.phtml/item...
Anyone else playing the same game?
Do you notice how most shops just pull out the catalogue and quote you RRP? Nothing illegal in that but I dont think they get all that much pricing discretion.
Why can I buy a wheelset worth of DT Competition spokes including postage from Germany for half the price I get quoted locally?
I've tried the support the LBS concept but between the pricing and struggling to find a decent mechanic its tough - so I will stay with the internet for purchases and a copy of Zinn for maintenance......and spend the not inconsiderable savings
The enthusiasts reading this blog and using the links are still going to buy online and/or use the LBS as they were, they'll just go direct and you miss out. If you've got riding colleagues/mates/acquintances that are putting pressure on you tell them as nicely as possible to pull their heads out of the sand, I'm sure the love of this great thing called cycling only takes you so far.
I worked in bike shop here in Canberra until recently (not the owner, but for a few years) and we know fully well what is happening. We service customers bikes all the time with consumables they have brought with them; bar tape, chains, cassettes etc etc etc. After much discussion the alternative was pretty grim. We 'service' the customer or we LOSE the customer.
As a result turnover has actually picked up, as has our customer base and the service book is full, even through winter.
Racers for the most part are savvy and as they go through so much gear are always looking to save money where they can, it's a given. Add to that that most shops will give you 10% discount on parts just for being a member of a club so you margin on those items are cut anyway.
It's the ma and pa riders, the commuters, the weekend wanderers and also hugely the referalls (ie the friends etc of the racers) that pay the bills.
Here is my point - the LBS needs to look after the enthusiast racer (or as we sometimes called the 'alpha racer') as much as financially possible because they are the guys and girls that are often the one that says EITHER - "go and see so and so at xxxx bike shop, they'll sort you out" OR "just go to xxxxx.com and get em cheap".
Sadly, there are plenty of bitter and frustrated people at the retail end of this industry that probably shouldn't be the front guy/girl at the counter, BUT there are also some absolute gems, you just gotta find them, and when you do, look after them and they'll look after you.
I wouldn't advise a punter to rock up with a box load of parts and ask them to perform miracles for $20 per hour, I'd say establish a bit of a rapport, ask them 'what if' and go from there.
I race and I know quite a bit about bikes. I don't need a shop when I source parts. I can buy them online cheaper and support the online retailer who also pays taxes, employs workers and drives our economy. I have no guilt whatsoever.
There's an online retailer who, for a small fee (that can be applied toward the later purchase) will send you a case of saddles to try... or a bike to demo... this is a brilliant idea yet I've never been to a shop that will let me demo anything... Before I drop $200 on a new saddle (that can be bought online for $110) I'd like to know if it fits me well... When the LBS gets this then I'll start frequenting them more...
My LBS (Cyclespeed in Gardenvale) do actually run a saddle testing program. Same deal, you pay a deposit, and can then try as many of the saddles in the shop as you need to until you find the right one. Once you find the right one, you pay the difference.
Took me about 4 to get the right one! I think the record is over 10 though.....
The ACCC proceedings and their success in the courts clear evidence that bicycle sector has no issues with engaging in illegal retail price maintenance type activities.
Outstanding research there BryceRider (obviously a lawyer).
On the other hand how does a manufacturer get distribution within Australia? Distributors obviously invest in the manufacturers product line and stock warehouses with materiel. Distributors then become something of a monopoly by virtue of an exclusive distribution agreement enforced under external foreign law.
Perhaps this monopoly aspect is what gets up peoples noses here in the Australian context.
And that is where the Internet helps. It breaks monopolistic distribution agreements to an extent.
However, those manufacturers will naturally try to kill any bike shop that attempts to grey import products to sell against their channel (which cost them a lot to setup). Imagine grey Specialized bikes for example (please don't sue me, it's just a hypothetical. To my knowledge Avanti and Specialized do not engage in activities noted in those court judgements).
So the internet may not help the LBS to scale up what many individuals do via ProBikeKit, eBay etc.. etc. I see lots of people get a small club together and buy 50 tyres and 10 chains. But that's a long way from 5,000 tyres and 300 bikes in direct competition to the distributors.
Why doesn't it happen if there's such a big difference in price as noted by almost every post so far.
Why doesn't PBK just set up an office right here in Melbourne and sell Shimano at ridiculously low prices?
Here's a pic of one distributor's warehouse demonstrating the scale we're talking about. Distribution is a *big* job not to be taken lightly.
http://twitpic.com/ebpno
They actually help bring cycling to the masses on an industrial scale (which we all want - and there's no point showing a factory photo in Australia/NZ because pretty much nobody here makes bikes on that scale).
Distributors please say something.
For example, a high end aluminium frame can be purchased in the US for AUD$1200, in Australia the same frame costs AUD$3000+.
This reminds me of the snowboard/ski industry to be honest.
My thoughts are:
- if a shop is not adding value, they shouldn't be selling that item (think, tubes, nutrition etc)
- if they can add value (think, a ski boot fitter), then you show them loyalty
Shops are businesses. There is no, and can not ever be an, excuse for allowing exclusive contracts etc (which if you think about it might even breach TPA) that allow for the construction of pricing in a manner that reduces competition. If you are losing money on a line, don't stock it. Whingeing and protecting sales and having this whole emotional byline about jobs etc is ridiculous. This is how countries allow immoral farm subsidies to inefficient and poorly managed farms.
Either get can-do about your business and manage it properly and add value and be competitive, or don't be in the business.
Simple.
I support a Mel bike shop - highly visible - because
- they treat me as a person, not a piggy bank
- I give them free advertising and send them sales, so I get a discount
So, it cuts both ways. I'll quite honestly say I buy commodity items online and put them on myself. And they will just have to live with it. It's not their fault, I think the distros have a bit to answer for here to be honest.
This goes to what was said above about:
- making people feel like a part of the clique or a real person, and
- being more than just a bike shop
It all goes to being a smart business manager, and if you have read Godin, Lindstrom, et all, you'll know what I mean.
Sweet as
Tim
This point of view more or less discounts the investment made by the sales channel.
Let me explain. Essentially, the first and most direct point is, the manufacturer has carved off a piece of territory and handed it exclusively to a distributor in return for some "things" like advertising and promotion.
Take the (over used) example of Specialized. In Australia, the distributor ploughed in some hard earned cash to throw TV advertising aimed at us all during the TdF. Mike Tomalaris won't be drawn on how much he coughed up for the TdF TV rights to Aumery Publications in France. Nevertheless, I reckon it was a lot for poor old SBS. Specialized/Avanti spent good money on placing their dealers and products in front of the SBS TV audience.
They (Specialized/Avanti) want their money back (and then some). The distribution agreements reflect this. Your proposition is that anyone should be allowed to compete and bypass the channel and deprive Specialized/Avanti of their return on advertising. So a competitor could benefit from Specialized/Avanti's advertising and brand building.
They will fight you.
That brand is powerful (Specialized). People buy it because Cancellara rides that brand in the TdF on TV. That sort of promotion costs *BIG* bucks. Crikey Cancellara's annual salary alone probably puts him in the top 100 salary earners in Australia. Every Specialized owner has paid for that. And willingly too I'll bet.
That's marketing.
Compare that to the Ridley brand (McEwan used to ride these - don't know what Katousha rides). They're probably more expensive, comparable quality maybe even better. But no distribution (sorry distributor - but that's my perception). No TV ads, hardly anyone knows Robbie used to ride one, and Cadel. All this equals low sales volumes. Now if you had a lazy couple of mil. you could get that distribution agreement and go for it. That would inject some competition into Australia.
Pacific Brands is having a crack at it with the Malvern Star Oppy. Haven't seen many yet. They have one stuck up on the wall at Cafe Racer. Maybe they can do it. It pretty much comes out of the same factory in Taiwan if you believe the talk around the place. But Cancellara doesn't ride one (and you can bet this single fact eats them right up too).
Oops I'm raving on again... sorry.
Anyway this is the "value" distributors bring to the table. And it is proven to work. No channel equals no sales.
Can the Internet break this old addage? It is working for some there can be no doubt about that. Can it scale up to kill off the distributors, that's another question. Maybe. Are the distributors moving to the Internet and competing with themselves (and their own LBS resellers)?
I saw Kevin (rep. of Mr. Ridley in Oz if I'm not mistaken) at Racer this morning. Armed with this info you've just pointed out, I'll pose the question next time I see him and see what he says (then he'll figure out I am - doh! there goes my credibility again).
Do the manufacturers push the product and not the distributors? Well that depends on who is more powerful. If you sell milk, then you probably have a weaker position with Woolworths than if you're Apple selling iPhones to Optus (Apple condition: no competing product within 2 meters of an iPhone display. Actually the Optus network begs Apple to let them have some but technically it's called a sale).
So I imagine the Pacific Brands, Ridley, Oppy example falls somewhere in between. So the manufacturer may be expected to contribute to the cost of TV ads to suck the product through the channel. However, an exclusive changes that a bit because there is only a single route to the market.
And so maybe the complaints listed in this thread just gained a bit more weight. Distribution is even more concentrated than I thought.
I've also read the cyclebits post a bit further down. I reckon it may be time for someone to lodge a complaint with the ACCC (http://www.accc.gov.au/content/index.phtml/item...).
Perhaps the management at Cyclebits.
Then we could have a test case around the internet breaking this perceived market abuse. I have no doubt there are many cycle-lawyers reading this right now. All they'd need is some funding mechanism to start the legal feeding frenzy (errr... process) in motion.
Business case for lawyers: Just imagine the cost of discovery on any/all of the parties! Many sizeable distribution operations could be joined. The distributors may need an assessment of how much trouble they could be in. You'd better show them those judgements pointed out earlier.
Oh gee, that all sounds very expensive to me.
"Friends of Cyclebits"
Interesting to hear what they think about the wholesalers here.
IMPORTANT ANNOUNCEMENT: cyclebits.com will cease trading as of 30 June 2009.
cyclebits.com has ceased trading as of 30 June 2009. We appreciate the loyal clientele who supported us. Our goal from the outset was to bring competitive prices on cycling consumables to training cyclists and triathletes. Had we gained the support of Australian distributors we feel certain that we would have been able to be competitive, however it would appear that the vast majority of Australian wholesalers are happy to lose millions of dollars to the huge overseas online stores in England, Ireland and the US and refuse to supply Australian online stores.
It is with regret that we have elected to cease trading.
- Management
cyclebits.com
Ouch. No doubt this has effected the groups share price. (just published today by Sydney Morning Herald)
http://newsstore.smh.com.au/apps/previewDocumen...