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And Aussie Businesses wonder why we shop online?
Here is a quality example of why LBS dont get my money for ordering of parts at times.
The dust cap my RP23 has seized solid on to the Valve stem and no amount of spraying with WD40 and soaking it has managed to get the bloody thing removed. So I went up to my LBS and asked them to investigate how much a replacement valve stem would be, thinking easy part, should be no more than $20. Wrong, the distributor wants $60 for the replacement stem.
I just ordered the same part online from the UK for £7 + Postage, it should be within the week and its cost me 1/3rd of the price and to think, LBS wonder why we spend our money on, online stores?
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Last time I bought a Fox seal kit for the old Float on my Jekyll a year ago, USD6 somehow translated to AUD25.
WT?
Too many layers in the distribution chain.
I totaly underdstand where you are coming from, however if we don't support our LBS they may not be there when we need them. Instead of travelling 5 mins to get a service, repairs or some expert advice we may have to travel 30 mins.
Don't forget the reason your LBS needs to charge more than the internet is the extra overheads (rent, wages, electricity), don't get me wrong I scour the internet for a bargain but if the LBS can get with in a reasonable amount i believe it is worth giving them your business.
Disagree. CRC employs something like 434 staff and has a huge investment in systems and warehouse space to provide outstanding service at a cost-effective price, that they need to recover in their margin. So the overheads thing just doesn't wash on any kind of critical analysis.
Furthermore, most LBS generally don't stock more than a token range of parts, they usually have to order in and it generally takes longer than ordering in from offshore because they either try to wait and accumulate a bigger order or the distributor is lax about getting around to shipping the item and doesn't do same- or next-day turnaround..
The real problem is the excessive number of layers in the distribution chain and the historically poor customer service culture in Australia. There are exceptions, though.
If they could get within 20% of offshore prices and offer similar fulfulment times, I'd order local. But being double or more ... come on, really. That's insulting.
Not sure if you read my comment carefully, as I said I active look for a bargain on the net, however my point was IF you can get a what you need within a reasonable price of you LBS then you should support your LBS so essentially we are in agreement.
As for your arguement about CRC, the wage laws are completely different in the UK compared with us. Over there you can get away with paying staff next to nothing. Don't forget the UK doesn't have superannuation, add 10% onto their wage bill and see if that doesn't have an effect on the cost of parts. Also your LBS has to pay GST on everything, no VAT or GST is applied to net purchases from overseas.
I don't disaggree that CRC would have to have a large wharehouse which would not be cheap, however your LBS can pay as much 20% of its turnover in rental (as do most small businesses in Australia), this is driven by greedy landlords and shopping centre owners such as Westfield, Stocklands, etc. which in turn forces them to charge the prices they do.
I do agree that there too many steps in the supply chain, if the LBS could buy directly from the manufacturer we would see prices come down but I know for certain from working as a small business consultant that this is not the sole reason.
Getting back to my main arguement, where we can we should support our LBS, they provide all of those free of charge services that the online stores cannot. I'm NOT saying we shouldn't take advantage of a bargain if we can get it, but is it such a big deal if it costs us an extra few dollars and an extra day or two if it means our LBS stays open?
The wage laws are pretty similar over in England. There is minimum wage, there may not be Super, but there is National Insurance. While the CRC depot is probably in the middle of an out-of-town industrial estate, I'm sure their rent is a considerable amount.
It says there is no VAT added but if you change the country to UK and the currency to British Pound and the convert the amount to dollars using XE.com it works out more expensive to buy from them in the UK!
I recon the only way that CRC can offer low prices is through the massive buying power they have and their margin on each item is probably small but they sell so many items it adds up to a large profit.
understand that smaller margin= more sales and happier customers?
IMHO, its not about cost of parts it’s about service.
To the non lateral thinkers I put it to you that the low cost of bike parts on the interweb actually has the potential to create more local industry around bikes, simply put as you get more bikes and potentially more riders you get a greater need and that’s got to be a good thing for the industry?
Sure some people will compare cheap internet bike bits this with the rise in internet shopping and the corresponding decline in retail sales, but I don’t think that you can’t simply lump them in the same category, sure you can buy a cheap Tshirt or handbag off the internet, same as you can get a cheap derailleur or bottom bracket, but while almost everyone can wear a Tshirt or carry a handbag, not many people can fit that cheap bike part to their bike, and even if they did there’s a good chance that they will on sell a bike or two to the punters that will need the services of a bike shop (increasing demand for a good service industry) and enter bike related events with the money they saved building/maintaining their bike.
What does bother me is the rider that buys their cheap bits off the internet and then bugs their bike savvy mates with promises of beer and more beer to fit the cheap parts they got off ebay.. but the beer never appears or if it does its some crappy domestic brand.. (left warm on the doorstep) for this is the real crime here!!
Perhaps we are rapidly approaching the day when that warm crappy beer will be also purchased cheap off the internet.. who will save the LBS (local bottle shop..)??
My mates show up with the beer, and the bottle shops around the corner if they "forgot" it.
I try very hard to support bike shops but am yet to find one within a 45 min drive from home that I'm comfortable spending my hard earned on. I always give them a 2nd chance if they've stuffed me around but never a 3rd.
Most recent was I busted an aerolite spoke (flat bladed, light, high tension) so took my wheel into a well known shop. They said to leave it as they'd have to order the spoke. A few days later I rang to check progress to be told they couldn't get the spoke because they don't have an account with the well known distributor X and would need to order a minimum of something like 25 spokes.
Off to next shop. "Do you deal with well known distributor X?" "Yes". So left if to eventually get the same outcome as the 1st shop.
Off to 3rd shop ""Do you deal with well known distributor X?" "Yes". "I'd like to speak with the manager if that's ok to double check" Manager promised even though he didn't deal with well known distributor X he would solve my problem. Same outcome. Manager was shocked they wouldn't courier 1 spoke even though I didn't give a damn what it cost I just wanted to go riding.
After 4th shop I bought a normal round spoke and put it in and went riding...
I didnt buy the part from CRC as they dont stock it, it was from another UK Store.
My point is that whatever the reason as to why they are more expensive, be it distribution layers, margins whatever, they cant expect consumers to ignore the significant savings that can be had overseas. The constant that we hear over here is "its not fair we are being undercut" while do something about yourselves is what I say to shops.
We live in a competitive market, where the way we do business is changing everyday for the better for consumers and my thoughts are that if bike shops want to survive, then they must re-invent themselves to ensure they do. Sink or swim and stop moaning about it. Look at Rapha, expensive stuff, yet they are plenty successful....I wonder why?
As for showing up with Beer, part of the fun is putting on a new Grouppo or building up a bike and I am always willing to offer beer to mates that will help me out.
For Christmas I bought my partner a Garmin 800 pkg - I thought for sure CRC would be cheaper. I decided to call my fav local bike shop (TBSM) as I'd prefer to get it from them, lucky I did as I got it at the same price as CRC!!! Actually I think it probably worked out cheaper ifI factor in the stupid bank fee for foreign purchases on my credit card. I was stoked as not only did it mean that the Garmin came with Aussie maps but also I knew if any thing went wrong the guys at TBSM would look after us. Plus I felt happy that I spent my $$ with these guys.
I have often wondered how the bike shops survive with all the online shops, but i've actually noticed an increase in bike shops sprouting up around Sydney in the past 12-18mths - maybe the increase is related to bikes becoming 'popular'.
Let the LBS order it from overseas, whack an agreed margin on total costs (I'd be OK with 20% on small things, 10% on larger items) and then have my business to
Some shops are already doing this. I would if I knew people were going to continually buy an item. Then it's up to me to stand behind my warranty as a grey import. I know this view is simplistic in nature, BUT if enough stores started doing this, Shimano Australia etc would have to start considering their position in time.
Remember though in all these threads, the issue is normally with the distributor, not the LBS.
Smaller margins are all well and good but it comes down to scale.
CRC are world wide with massive advertising dollars behind them and if they sell 10000 parts with $1 margin they still make $10 000
The Lbs might sell 5 of those parts. if they have a $10 mark up they make $50. if the do the $1 mark up that might increase to 50 parts and thats still only $50.
We've just closed Insane Cycles. Trying to compete with these massive internet shops was not the only reason and while I try not to whinge and complain, business is business and we had a lot of loyal customers from across the country, I'd have to say it is dishearting when you put so much time and effort in the local scene only to have local riders shop else where to save $5, especially those who are happy to spend hours in your shop picking your brain or trying stuff on or complaining about the cost of fixing the stuff up they had from trying to incorrectly fit the part they bought online.
And doubly especially when they only assume they are saving. Plentyof times we had people come and sheepishly admit that they bought something out of town, only cuase it was on special and then see their face drop as the saw our price was as cheap or cheaper.
"Let the LBS order it from overseas," This suggestion pops up all the time. LBS can mostly get the gear from the wholessaler at similar prices as they can from ON shops but once they add a realistic mark up that makes it more expense. Buying it OL doesn't make it much cheaper for them and negates their ability to pass on the warrenty claim to the parent company
1. A sole trader local bike shop in a suburb will never be able to get even close to matching prices of the UK's 6th fastest growing company that sells online to every country in the world - yes even other online stores in the USA are complaining about how cheap CRC can sell their stuff.
2. You still have to get your bikes fixed. And service is where the LBS will prosper or die. If you can't sell stuff cheaply enough and you can't provide supreme service, you're going to the wall. That's why some Aussie LBS's will fail.
Mid last year I tried to buy a 2010 XTR brakeset from my LBS (which provides unbelievable service BTW and that's why I go there) and they couldn't buy the stuff from the distributor as cheaply as I could get it online.
Stuff the LBS with crap service, stuff the importers and distributors (although even they can only buy stuff from the manufacturers as cheaply as the manufacturer is prepared to sell to a country that has, what, 7% of the population of US, so maybe don't stuff the ones that try hard to get us a good deal).
Just show some love the LBS's that give good service and keep them going...
love your work!!
Great service, good prices.
Flynny
I'm sad to here that youve closed. The one time I was passing thru Lithgow, you helped me out with great service, smile, and anything is possible attitude.
Your custom will be missed.
with your service ethic I sure you will have success in whatever your next venture may be.
D
Well said Flynny and Morgan!!!
I doy own servicing, simply because i can and Really enjoy it. In saying that, I don't give a crap if my float seal kit costs $20 at my LBS and its heaps cheaper else where ( i bought one just before chrissy). The extra cost I pay is nothing compared to being able to head down there on a whims notice and be able to get my part right away (pending stock of course.)
"I doy own servicing, simply because i can and Really enjoy it."
To be honest high end customers were never the bread and butter of the LBS anyway. It was always mums and dads and beginners who weren't confident in what they were looking for and needed advice and service.
For big ticket stuff we could usually get close enough to match the on line stuff and if the customer was willing to wait for stuff we didn't have in stock we could usually get it in a reasonable time, though there were always exceptions/
Yes, Chain reaction cycles is brilliant - I highly recommend them. They truly are my local bike shop. The delivery is really fast, and I never get the feeling that they are making the price up on the spot, based on how well I am dressed at the time.
The shop down the road is strictly for servicing, for urgent parts, and for anything I need to try first.
Flynny, sorry to hear about your bike shop. I am surprised; I live in London (visiting Sydney for 3 more days) and bike shops are doing very well indeed, due to the proliferation of cycling amongst trendy young professionals.
As some comments mentioned earlier, it's the distributor that dictates pricing here. I'm well aware of how this all works after being in the surf industry for 20 years doing both retail and wholesale. Distributors are forced to create wholesale pricing based on how much of a deal the 'brand' they are buying stock from gives them. Aus usually accounts for 5% or less of global sales for a decent sized 'brand' based o/s. This means that the small Aussie distributor in the grand scheme of things has next to no hope of getting a price break to be competitive. The 'brand' doesn't care if the Aus customer buys less as the sales will be pushed across to a CRC or similar O/S online retailer who are easier for them to deal with due to big volume orders and paying on time if not COD to get the best pricing for themselves. This leaves the poor retailer in Aus with rising rent & wage costs, high pricing from distributors and less customers that are willing to pay full wack for anything. It would be horrible to be a retailer right now as they are selling less volume while people are demanding cheaper pricing. In reality for these guys to survive, they should be putting prices up. Not all stores provide good service & deserve your money, we're all aware of that. I'm happy to pay extra most of the time to my LBS that gives me great service and advice. Yes, sometimes the price gap is a joke which may force you to look around. It would be a shame to see no bike shops left, especially when you are in a rush to go riding and need a tube or some chain lube. It would also be hard to run events with no backing from the LBS or distributor. You can make your own judgements based on above. I'm keen to help an 'Aussie' out by keeping some of that money I give them here. Hey, you never know, these guys might even give your kid a job after school one day or sponsor them!
When I was living in Brisbane there were heaps of bike shops to choose from but I drove south (lived inner city) to Annerley to 'For The Riders'. Not only was this a MTB specific shop where the staff knew their stuff, but they always provided me with good service (being a girl they didn't ignore me or assume anything) and they also are great supporters of the local MTB scene, sponsoring riders and events. Big thumbs up to them.
When we moved back to Sydney we were in search of a FTR equivalent and we found that in TBSM.
We have several great bike shops around the Northern Beaches and I reckon they'll survive because they love talking bikes and this value-added is something that you can never get online. That makes it a joy to go in and discuss new bikes and they're always happy to assist with after sales help in setting the bike up, making adjustments, hearing about how the bike went in a race, etc.. For that reason I will likely always buy whole bikes from my LBS. They also supply reasonably priced servicing and whilst I do my own basic servicing, replacing parts, etc., there's nothing like the bike having a good going over by a pro to get it in awesome shape.
I then see the parts as ancillary to these two things and so if they mark up them up so that they can make a dollar from them then so be it. It's like going to the corner store because you ran out of milk instead of adding it to the weekly supermarket shop. The only other things that I'll usually buy in store are helmets and shoes (unless it is simply an exact replacement of existing shoes) as I want to try them on (and models obviously change every so often). Local LBSs seem to understand this and stock a decent number of helmets and shoes. The LBS that can adapt to this changing business environment is going to continue to do well and benefit from cycling's massive resurgence.
As for online, I find that Torpedo7 stocks more and more and is becoming more and more competitive so that will always be my first stop for online purchases. Hopefully this and using the LBS keeps enough money in Australia.
Isn't T7 a kiwi company?
...isn't New Zealand an Australian state these days?
P.S. I didn't know that but am happy to have NZ as the secondary recipient of my dollars after my LBS over CRC/Wiggle/Jenson/Etc.
Support your LBS if your happy and don't if you don't feel they give a toss about your business. Lately I have been into a LBS that gives me the feeling they think they are doing me a favor by allowing me to spend my money there. Admittedly they are very local and I shop there out of convenience but the attitude stinks- no eye contact, no pleases and thank you's, no polite conversation.
On the other side of the coin I am happy to travel to another guy for all my servicing because of his customer service. BTW I have referred others to his business and they are happy too. I predict he will grow his small business and be very successful.
Businesses big and small have competition online and off, and its only when times are tight that they ramp up their 'good ol fashioned service' pitch. Online shops are here to stay......if you cant beat 'em join 'em
"I'm happy to pay extra most of the time to my LBS that gives me great service and advice. Yes, sometimes the price gap is a joke which may force you to look around. It would be a shame to see no bike shops left, especially when you are in a rush to go riding and need a tube or some chain lube. It would also be hard to run events with no backing from the LBS or distributor. You can make your own judgements based on above. I'm keen to help an 'Aussie' out by keeping some of that money I give them here. Hey, you never know, these guys might even give your kid a job after school one day or sponsor them! "
My old local bike shop in Australia used to do exactly that - hire kids for jobs after school.
And that's exactly why I stopped purchasing things there, and started purchasing everything online. You see, hiring inexperienced kids precluded them from giving me great service and advice. Every time I'd go there, I'd be dealing with a new inexperienced kid, who really had no clue about the products he was selling.
I ended up having to find out what I needed online, from forums. And once I was online, and had the part name I needed, it really was no trouble at all to order online.
If small bike shops want to be competitive, they need to stop focussing on parts, and start focusing on:
a. Bikes
b. Great service.
Plus, cash is important. If your local service station started charging $3 a litre for petrol, and you could buy it elsewhere for $1, would you really fill up at the local place?
You could find a better store with good service, there are still some left! Not all stores are staffed like a local McDonald's. If this excuse makes you feel better about spending your money o/s. That's your call. Yes, I would fill up at the local servo still because after I spent the time and extra fuel to drive across town it would cost the same anyway.
I hardly see saving money as requiring an excuse.
Let's just agree to disagree on this one mate. If you like my points raised great, if you don't that's fine too. It's starting to get away from the subject a bit. Happy riding to you.
I think a key point that's been well expressed by several posters is that the fundamentals have changed with the availability of cheap and reliable offshore supply. Accordingly the business model of the LBS also needs to change or they will not survive. In some ways it's similar to what any number of other industries have dealt with 10-20 years ago with the availability of cheap product from China that changed the manufacturing landscape (i.e. the rag trade). They tried to fight it for years but it's a battle you can't win, get on board with the change early and work out how to adapt and profit from it.
In relation to a LBS that means focusing less on parts and more on service and bike sales. We're seeing that with several shops recently opened that just provide servicing (i.e. unique skills you can't source offshore) and will give you advice on what parts to buy and from what online store but recognise they will never want to be in the parts supply game.
As a related aside, every week I sit in the car outside Bike Addiction for an hour whilst my kids do BJJ upstairs. 80% of the bikes I see being tested or walked out the door are mid-level ($1,000) or less, not many high-end toys. That audience is never going to buy on the web so I assume it will be an ongoing staple for the LBS