LBS vs Mail Order

[pdmtong]

Originally Posted by dave thompson

An issue that LBS face with special orders is that they must pay shipping on orders under a certain dollar amount, which is specified by the vendor. So the shop accumulates these special orders until the value exceeds this minimum. Shipping can add a significant percentage to the final cost.

An example would be that it costs the same to ship a one dollar bill as it would to ship a hundred dollar bill. In this example if the shipping cost were $1 for each, the one dollar bill now cost 100% more, where the hundred dollar bill would cost only 1% more.

Also the shop may get a discount on an order over a certain value.

well put. I asked my LBS to order some stuff I wanted for some work I was having them do, but I told them a few weeks in advance of when I was dropping the bike by so they had the time to accumulate orders to meet that threshold.

[Mike V]

A shop with good customer service would inform a customer of that situation.

Originally Posted by dave thompson

An issue that LBS face with special orders is that they must pay shipping on orders under a certain dollar amount, which is specified by the vendor. So the shop accumulates these special orders until the value exceeds this minimum. Shipping can add a significant percentage to the final cost.

An example would be that it costs the same to ship a one dollar bill as it would to ship a hundred dollar bill. In this example if the shipping cost were $1 for each, the one dollar bill now cost 100% more, where the hundred dollar bill would cost only 1% more.

Also the shop may get a discount on an order over a certain value.

[pdmtong]

Originally Posted by Mike V

A shop with good customer service would inform a customer of that situation.

That's true too since most customers dont know or care about that nuance.

[hokoman]

i could have shipped one out quicker!

[oldpotatoe]

Originally Posted by amerikaner

I think it's that most LBS dont make money of selling parts, but make money selling full bikes and/or service. A few of my LBS who are Trek dealers seem to place warehouse orders ok once a week...which makes sense, but what really sucks is that I'm in an area where Trek's warehouse is less than 40miles away.

There needs to be better logistics between LBS and their suppliers in order to compete with online retailers.

Sent from my SM-G973U1 using Tapatalk

As mentioned, 3 QBP warehouses means 'stuff' gets delivered in about 2 days, 3 at the most. MANY 'online retailers' ALSO do either JIT supply(order when THEY receive and order) or 'dropship', order from supplier who sends to end user.

Without similar overhead, largest $ for a storefront..rent, labor, insurance, etc..LBS will NEVER be able to really compete with MO on price..unless they go the volume route, which is tough for a relatively small business. Even BIG, chain, bike retailers are tiny when compared to some 'MO outfits'.

Some 'can' compete but backwards in that the price is mandated by the manufacturer, so MO cannot discount, otherwise lose their ability to order that 'stuff'.."Price protected'..so MO sells because of inventory/availability, not price.

PLUS, more than few 'distributors', more in Europe but in the US, operate MO 'departments', sell direct..along with selling to LBS'..
Quality Bike Parts, pretty sure, is one..Via ''Planet Cyclery", here in Broomfield.

[C40_guy]

Originally Posted by oldpotatoe

Some 'can' compete but backwards in that the price is mandated by the manufacturer, so MO cannot discount, otherwise lose their ability to order that 'stuff'.."Price protected'..so MO sells because of inventory/availability, not price.

Well, technically the manufacturer cannot mandate retail price. But with minimum advertised price guidelines driving advertising reimbursement programs, and stock management (lowballers don't get product), manufacturers have some control over the advertised price...

[oldpotatoe]

Originally Posted by C40_guy

Well, technically the manufacturer cannot mandate retail price. But with minimum advertised price guidelines driving advertising reimbursement programs, and stock management (lowballers don't get product), manufacturers have some control over the advertised price...

Correct but what they do if you sell way below MAP, they just refuse to sell to ya. I see you mentioned that. AND in the US..MUCH less restictive in Europe. The reseller signs the contract, with manufacturer and the manufacturer HAS to sell to reseller, even if they low ball the price.

[Mark McM]

Originally Posted by oldpotatoe

Correct but what they do if you sell way below MAP, they just refuse to sell to ya. I see you mentioned that. AND in the US..MUCH less restictive in Europe. The reseller signs the contract, with manufacturer and the manufacturer HAS to sell to reseller, even if they low ball the price.

Isn't that how free market capitalism is supposed to work?

[bikinchris]

Originally Posted by oldpotatoe

Correct but what they do if you sell way below MAP, they just refuse to sell to ya. I see you mentioned that. AND in the US..MUCH less restictive in Europe. The reseller signs the contract, with manufacturer and the manufacturer HAS to sell to reseller, even if they low ball the price.

Maybe they could let them sell only two or three a year at the lowball price?

[oldpotatoe]

Originally Posted by Mark McM

Isn't that how free market capitalism is supposed to work?

Well, sure, the distributor is getting THEIR margin but decent US distributors recognize their 'bread' is the IBD and they want to protect those who can't use MO/interweb and deep discount the stuff they are providing.

Why there is a large and healthy 'back door', grey/black market, 'alternative' distribution set up all over the world. PLUS, as I mentioned, more than one 'distributor' selling to LBS' AND direct to consumer(QBP)..Like I said, the distributor gets their 'margin' either way.