Wiggle or LBS - a choice for charities to make

[tiretrax]

http://cyclingtips.com.au/2014/05/local-charities-partner-with-online-retailers-but-face-industry-fall-out/?utm_source=Daily+Emails&utm_medium=email&utm_campaign=c03d8578f3-RSS_EMAIL_CAMPAIGN&utm_term=0_08fd1e08bd-c03d8578f3-311597709

[oldpotatoe]

http://cyclingtips.com.au/2014/05/local-charities-partner-with-online-retailers-but-face-industry-fall-out/?utm_source=Daily+Emails&utm_medium=email&utm_campaign=c03d8578f3-RSS_EMAIL_CAMPAIGN&utm_term=0_08fd1e08bd-c03d8578f3-311597709

As I've said in two other threads, the problem isn't really distributors, retailers or consumers, the problem is with the manufacturer, almost entirely European manufacturers.

[Llewellyn]

Just sounds like sour grapes from the guy at FE Sports. Won't accept that things have changed.

[hida yanra]

there's two sides to the notion that, "things have changed"
Yes- things have changed.

On the one hand, your LBS is sore and has a right to feel so, most online stores aren't following MAP, regional guidelines, or other manufacturer imposed restrictions- and the manufacturers let them break those rules. An LBS breaking those rules probably would not be allowed to keep stocking/purchasing from a brand whose rules they broke.

On the other hand, it is fait accompli- and there's no use in crying over spilled milk 9at least, not as a small business owner). Campagnolo, Vittoria, most things will be cheaper from the EU, Shimano will be cheaper from Asia- it becomes a question of shifting the business deliverable to something that either isn't a commodity, or targeting a customer group that won't chase lowest possible price.
Examples:
$450 commuter bikes- beginner commuters usually won't buy on the internet
$6000 designer bikes- most of these aren't online
$300 used road bikes
Personal services like, picking out the right piece of clothing, adjusting sag on a fork, custom sewn handlebar bags... etc etc

The point about taxes is meaningful, but that's an issue governments are still a long way from sorting out- hopefully they do at some point. The amount of tax revenue lost is massive. (roads, healthcare, fire departments)

It is worth noting that most department stores in the US have either restructured or closed- "general-purpose, do-it-all" LBSs aren't a meaningfully different different business model. Specialization is the key, and that doesn't specifically mean "high-end bikes with ENVE carbon clinchers". I work at a shop that specializes in refurbishing low-cost used bikes and selling $375-$600 commuter bikes. It's been in business a long time now and going great- the business model is reasonable and we stay in business on the basis of solid service.

There's blame to go around for the internet killing off the LBS, Manuf/LBS/Online/Customer- everyone plays a role, but it is a seriously boring exercise. Question is, what does the ensuing opportunity lie?

[Llewellyn]

On the one hand, your LBS is sore and has a right to feel so, most online stores aren't following MAP, regional guidelines, or other manufacturer imposed restrictions

I can't speak for the US, but in Australia for decades, MAP or its equivalent has been retail industry code for charging consumers double, three times, or even more mutiples of the price that they have been able to buy the same goods overseas for.

This applies to all areas of retail, not just bike parts.

Only now, via the wonders of the internet, consumers can see what people are being charged overseas and they're voting with their wallets - more power to them I say. Retailers have gouged consumers for far too long in this country. If they want to survive then they need to adapt. Just like any other business has to.

[oldpotatoe]

I can't speak for the US, but in Australia for decades, MAP or its equivalent has been retail industry code for charging consumers double, three times, or even more mutiples of the price that they have been able to buy the same goods overseas for.

This applies to all areas of retail, not just bike parts.

Only now, via the wonders of the internet, consumers can see what people are being charged overseas and they're voting with their wallets - more power to them I say. Retailers have gouged consumers for far too long in this country. If they want to survive then they need to adapt. Just like any other business has to.

At what margin are these bike shops buying product? Fairly normal wholesale with a 'reasonable' margin applied, like 40 points(divide cost by .60 to get price) or are they operating cost plus/plus? Comparing the price of something sold zillion miles away is meaningless cuz costs are different.

[bluesea]

This drama recently played out with Sarto frames, where the later terminated his U.S. distributer due to over high mark ups.

Still if the manufacturer got involved, the wrong thing to do is changing the distribution/price structure in the UK for the benefit of LBS is the U.S. All that does is to perpetuate the over high prices for consumers.

The manufacturer needs to rein in the importer/ distributor to bring retail prices in line.