Internet claims another LBS

[oldpotatoe]

Originally Posted by BobbyJones

Yet amazing how manufacturers and distributors have the other side of things soooooo locked up.

U.K. Distributors aren't doing anything illegal. Neither are the USA distributors who sell direct. The entity who should be controlling their distribution and pricing are the manufacturers. Them going direct to bike shops would solve a lot of this but expensive to do so.

[SpokeValley]

Originally Posted by benb

I don't even know how the US online guys are going to survive at the rate things are going...

I just got some shifters, I wanted to order them from Ribble but they were out of stock..

LBS probably would have been $500
I got them on Amazon for $360
Ribble was advertising for $200

I ordered some brake pads yesterday at one of the LBSes, they just moved into a gorgeous new facility and I noticed they are going to have a Cafe section. Smart move. Looked like it was just going to be a Keurig machine though...

Remember that the currency exchange rate has major impact on the total price.

[CunegoFan]

Originally Posted by benb

The thing is whose fault is it that the LBS pays way more wholesale for parts than the European shops can sell for? Why aren't the US shops forming some kind of group and making a stink to Shimano, etc.. to get a better rate on parts? Why aren't the Trek/Specialized/Giant dealers screaming to Trek/Specialized/Giant to get some help? If 500 dealers all of a sudden signed a letter to Trek & Shimano saying they're not selling anything till the problem is fixed I bet the problem could get fixed. We've been hearing the LBSes are getting a bum deal for as long as I've been cycling and nothing has changed in all that time.

It seems to me that the current situation helps Trekalized. The old school way of buying a frame and the LBS building it up with the desired components is dead except in the rare instances of people, mostly old guys remembering what it was like back in the day, buying a bespoke frame made by a builder that the average cyclist has never heard of; and a lot of those guys will put the bike together themselves. The prices make that option very expensive unless the customer sources the components from overseas. The high cost of replacing or upgrading components is one more thing that leads to people buying a whole new Trekalized bike.

[velomonkey]

Originally Posted by CunegoFan

The old school way of buying a frame and the LBS building it up with the desired components is dead except in the rare instances of people, mostly old guys remembering what it was like back in the day, buying a bespoke frame made by a builder that the average cyclist has never heard of; and a lot of those guys will put the bike together themselves.

I disagree - or rather, feel that it doesn't have to die. Above Category seems to be doing plenty of custom builds, veto studio in Chicago seems to - both are new shops.

[CunegoFan]

Originally Posted by velomonkey

I disagree - or rather, feel that it doesn't have to die. Above Category seems to be doing plenty of custom builds, veto studio in Chicago seems to - both are new shops.

How many people buy bare frames these days? It would be cool if it went back to that, but unless LDSes can source parts for OEM prices then that way of buying a bike is at a disadvantage to buying a bike out of a box. And there is already an attitude, which seems nearly universal, that the best bike is whatever Trekalized has slapped the highest price on.

I am just saying that even though some of the customers get screwed when it comes to replacing broken components or upgrading, the price disparities appear to help the big bike companies, so those companies might not want to pressure Shimano.

[oldpotatoe]

Originally Posted by CunegoFan

It seems to me that the current situation helps Trekalized. The old school way of buying a frame and the LBS building it up with the desired components is dead except in the rare instances of people, mostly old guys remembering what it was like back in the day, buying a bespoke frame made by a builder that the average cyclist has never heard of; and a lot of those guys will put the bike together themselves. The prices make that option very expensive unless the customer sources the components from overseas. The high cost of replacing or upgrading components is one more thing that leads to people buying a whole new Trekalized bike.

Shops like Vecchio's, that starts with a frame(like Moots) and builds it is common in Boulder and elsewhere. I think it depends on shop location and the frame. None of the big boy frame makers, Crumpton, Seven, Moots, etc, sell complete bikes. Economy of scale, knowing your market, etc. what I think is disappearing is $10,000 treks and spec-Eds.

[benb]

Isn't collusion only an issue if you're on the supply side?

E.x. it was collusion & anti-competitive behavior when Apple and the big publishing houses ganged up to try and raise bike prices.

But it's not collusion if everyone on Paceline agrees to boycott parts ordered from QBP.

In any case I'm 38.. I've only bought one road bike & one MTB complete in my life. I really don't think buying a frame & building it up is dead in any way at all or is only for old guys.

And it's not like it has to be bespoke.. I've had 2 Giants that I built up from framesets, a Trek, etc.. the only one of the bikes that wasn't a stock "big bike co." frame was my Serotta.

What is dead is that if you want a brand new current modely year frame at a good price you're not going to get it from the big companies since they refuse to sell anything but the most expensive $3k+ made in china stuff as frame only. (E.x. Trek 6, Specialized S-works, etc..) All my stuff was mostly the LBS had a frame that hadn't sold and it was a couple years old and things worked out at a decent price.

[djg21]

Originally Posted by benb

The thing is whose fault is it that the LBS pays way more wholesale for parts than the European shops can sell for? Why aren't the US shops forming some kind of group and making a stink to Shimano, etc.. to get a better rate on parts? Why aren't the Trek/Specialized/Giant dealers screaming to Trek/Specialized/Giant to get some help? If 500 dealers all of a sudden signed a letter to Trek & Shimano saying they're not selling anything till the problem is fixed I bet the problem could get fixed. We've been hearing the LBSes are getting a bum deal for as long as I've been cycling and nothing has changed in all that time.

It's called a group boycott, and it's been illegal since Section 1 of the Sherman Antitrust Act was signed into law in July 1890.

[Avincent52]

Originally Posted by djg21

It's called a group boycott, and it's been illegal since Section 1 of the Sherman Antitrust Act was signed into law in July 1890.

If Amazon is working on margins of less than 1 percent (.31 according to an earlier post) isn't *that* an anti-competitive business practice?

[benb]

Originally Posted by djg21

It's called a group boycott, and it's been illegal since Section 1 of the Sherman Antitrust Act was signed into law in July 1890.

Yah but would the shops be guilty of anti-trust for trying to get a better deal, or would the parts manufacturers be found guilty for colluding with the distributor to raise the prices in the first place?

[kevinvc]

Originally Posted by The B

I've talked about it recently, but my favorite shop, Western Bike Works, does most of their sales online. They've got a nice storefront in NW Portland, and then a huge warehouse full of parts across the river, where their online sales fly from. Nice thing is if the shop doesn't have something in stock, and they have to "order it," you can actually just go across town and pick it up right then. They do fitting and service and saddle loans and stuff at the shop, which may or may not even pay for itself... place is usually pretty empty

It's not my favorite shop, but it's a good model. They've also added a small coffee bar up front and do regular rides from the store that are open to folks other than just the team they sponsor. I've found the customer service and knowledge level to be kind of hit and miss, just like any retailer, but overall pretty good.

It's all about getting people in the door and building a certain amount of brand loyalty.

[djg21]

Originally Posted by Avincent52

If Amazon is working on margins of less than 1 percent (.31 according to an earlier post) isn't *that* an anti-competitive business practice?

Maybe if it Amazon's pricing policy is predatory, i.e., it is selling at unsustainably low margins to drive competitors from the market so it can later capture "monopoly rents" by raising prices once the competition is gone. There is a lot of competition out there, and this would b a difficult theory to prove.

[Dead Man]

Originally Posted by kevinvc

It's not my favorite shop, but it's a good model. They've also added a small coffee bar up front and do regular rides from the store that are open to folks other than just the team they sponsor. I've found the customer service and knowledge level to be kind of hit and miss, just like any retailer, but overall pretty good.

It's all about getting people in the door and building a certain amount of brand loyalty.

Who do you prefer locally? I do 100% of my own wrenching, so ive never really had to experience Western's shop service. It's their stock i love about them - which just isnt feasible for the smaller shops.

[djg21]

Originally Posted by benb

Yah but would the shops be guilty of anti-trust for trying to get a better deal, or would the parts manufacturers be found guilty for colluding with the distributor to raise the prices in the first place?

This isn't the place for a discourse of antitrust economics and jurisprudence. You can do a search of "group boycott" and find a volume of scholarly articles and discussions. Maybe start here: https://www.ftc.gov/tips-advice/comp...group-boycotts. But whenever there is an agreement between competitors to refuse to deal with a supplier, the competition can have antitrust exposure.

As to your second question, I'm not sure what you mean by "collusion" between a manufacturer and distributor. In any event, the entities have a vertical, rather than horizontal, relationship, so there is a lesser likelihood of there being antitrust issues, and a lot would depend on the market power enjoyed by the manufacturer and/or distributor. In short, it depends but probably not.

[shovelhd]

Examples of major manufacturers frame sets under $3K

Specialized Allez
Giant TCR Advanced Pro
Felt F1
Cervelo R3/S3