Shimano (and others) OEM component stream...

ajames-<< Ten years ago it was possible by buying small lots of naked frames for a larger sized
retail store to get OEM pricing from Shimano (and others). There did not really seem to be any firm
check that the number of component groups matched the number of frames. Some component makers
(Pulstar and Rock-Shox spring to mind) made slightly inferior versions of their retail product for
the OEM stream.

How have things changed in the last few years? Has it become harder to get OEM pricing? I see far
fewer obviously OEM components for sale lately.. ..just wondering >><BR><BR>

Recently shimano has publically stated that it will try to control OEM resale to MO, because in
their words, smaller bike shops have reduced their support of shimano products. One way they are
attempting to do this is to have shimano stuff be resold only in their boxes, whereas OEM receives
stuff not in boxes so if a MO place has a bunch of shimano in plastic bags, it is resold OEM...BUT
I find it unlikely that shimano will go to TREK, for instance, and spank their hand for selling
1500 ultegra groups to MO outlets. I just don't see any teeth in this shimano policy. A DA rear der
still sells in MO for about $65-$69 and it still cost me about $55. MO sells using the same or
similar margin as
me...They just pay less.

You can still as a frame maker get a OEM 'deal' from shimano...VERY attractive, one wonders if they
are selling close to or below their cost, just to get shimano onto bikes...

Peter Chisholm Vecchio's Bicicletteria 1833 Pearl St. Boulder, CO, 80302
(303)440-3535 vecchios.comvecchios.comOpen ↗ "Ruote convenzionali costruite eccezionalmente bene"

(Qui si parla Campagnolo) said:

..just wondering >><BR><BR>

Recently shimano has publically stated that it will try to control OEM resale to MO, because in
their words, smaller bike shops have reduced their support of shimano products. One way they are
attempting to do this is to have shimano stuff be resold only in their boxes, whereas OEM receives
stuff not in boxes so if a MO place has a bunch of shimano in plastic bags, it is resold OEM...BUT
I find it unlikely that shimano will go to TREK, for instance, and spank their hand for selling
1500 ultegra groups to MO outlets. I just don't see any teeth in this shimano policy. A DA rear der
still sells in MO for about $65-$69 and it still cost me about $55. MO sells using the same or
similar margin as
me...They just pay less.

You can still as a frame maker get a OEM 'deal' from shimano...VERY attractive, one wonders if they
are selling close to or below their cost, just to get shimano onto bikes...

Thanks... FWIW when I had my shop the OEM deal (for MTB components) was rumored to be around 60% off
the regular whole-sale price ..

Qui si parla Campagnolo said:

Quoted message said:

I just don't see any teeth in this shimano policy.

Then that ought to tell you just how much they really value the small shop supply chain: they don't.
If you can't get the "policy" in writing (so you can have *some* chance of successfully suing them),
then it and 50 cents will get you a cup of coffee.

Quoted message said:

You can still as a frame maker get a OEM 'deal' from shimano...VERY attractive,

Then *do it*, or buy from the same "OEM resale" as the MO outfits buy from.

Quoted message said:

one wonders if they are selling close to or below their cost, just to get shimano onto bikes...

Every corp would like to dominate markets if they could, but they can't "dump" forever, because
they'll go broke if they do -- since dumping by definition is selling at a loss to obtain *some*
market share, or even dominate if possible. There is no question Shimano is making an overall profit
since they would otherwise have been selling at a loss for what... around 15 years or more?

And why would you care if they were selling at "near cost?" This is pretty funny: most folks
complain because corps try to profit too much (the dreaded "corporate greed"😉; you complain that
Shimano is trying to profit too little. Sounds like a good deal to me (for me).

So just to get it straight: you complain because Shimano is using their marketplace dominance to
sell stuff at low profit margins. What a horrible world we live in, hah hah. In that case, I wish
every large corp was as evil as Shimano.

Funny stuff Peter, funny funny stuff.

(Qui si parla Campagnolo) may have said:

You can still as a frame maker get a OEM 'deal' from shimano...VERY attractive, one wonders if they
are selling close to or below their cost, just to get shimano onto bikes...

They are probably not losing money. The charges to manufacturing are typically handled differently
for the OEM stream than they are for the retail stream. When you are an OEM that is dealing with
General Motors, for instance, buying certain components that GM regularly sells to the OEM stream
(for stationary and industiral equipment use, as an example) will get you their parts for about half
the price that a distribution warehouse would pay for the same product as a spare part. Sometimes
the difference is even greater. Some of this is due to the reduced cost of packaging, but a large
part of it is the fact that typically, the OEM-stream cost accounting process does not include
allowances for sales support, service support, or spare parts support. Shimano probably has a
similar policy, albeit they probably do make an allowance for parts and service support since the
warranty claims would be through the usual channels for their products.

When OEM goods go into the retail stream, they do so at a lower price because there's little or no
cost of advertising included, at the very least.

--
My email address is antispammed; pull WEEDS if replying via e-mail. Yes, I have a killfile. If I
don't respond to something, it's also possible that I'm busy.

[email hidden] (Qui si parla Campagnolo) wrote:

<snip>

Quoted message said:

Recently shimano has publically stated that it will try to control OEM resale to MO, because in
their words, smaller bike shops have reduced their support of shimano products. One way they are
attempting to do this is to have shimano stuff be resold only in their boxes, whereas OEM receives
stuff not in boxes so if a MO place has a bunch of shimano in plastic bags, it is resold OEM...BUT
I find it unlikely that shimano will go to TREK, for instance, and spank their hand for selling
1500 ultegra groups to MO outlets. I just don't see any teeth in this shimano policy.

Isn't the fact that Shimano has designated only six official online dealers a sign that they're
serious about this? See <www.branfordbike.com/shimano/shimano.html> If anyone sells Shimano stuff
online and isn't one of those six, then Shimano will know it's greymarket and can take action. I'm
not saying they will....

Is this new policy going to prevent Sheldon from selling Shimano stuff over the Harris website? It
would be a shame if they hurt one of their biggest boosters.

(Gary Young) said:

Isn't the fact that Shimano has designated only six official online dealers a sign that they're
serious about this? See <www.branfordbike.com/shimano/shimano.html> If anyone sells Shimano stuff
online and isn't one of those six, then Shimano will know it's greymarket and can take action. I'm
not saying they will....

Is this new policy going to prevent Sheldon from selling Shimano stuff over the Harris website? It
would be a shame if they hurt one of their biggest boosters.

You don't think they give a s**t about Sheldon any more than they do about the rest of us, do you?
He doesn't order thousands of gruppos either.

It's easy to build a bike without a speck of their junk on it; I've been doing so for years. I had
made an exception of late for their 11-34 7-speed freewheel, but now I have yet another reason to
reconsider that exception.

Just say no to Shimano's aftermarket parts. Let them make low-margin components for OEM bikes--
those parts are apt to be junk in any case. Any enthusiast with enough wits about him to spec his
own machine can and should avoid Shimano.

Chalo Colina

(Chalo) may have said:

Any enthusiast with enough wits about him to spec his own machine can and should avoid Shimano.

Unless that's all that fits in the budget. Not everyone can even afford new, let alone
really good new.

When you're building for the market that can afford good stuff, it makes sense to use it. When
you're not part of that market, you pick what's acceptable from what's affordable, assuming that the
two groups overlap.

--
My email address is antispammed; pull WEEDS if replying via e-mail. Yes, I have a killfile. If I
don't respond to something, it's also possible that I'm busy.

Chalo said:

(Gary Young) said:

Isn't the fact that Shimano has designated only six official online dealers a sign that they're
serious about this? See <www.branfordbike.com/shimano/shimano.html> If anyone sells Shimano
stuff online and isn't one of those six, then Shimano will know it's greymarket and can take
action. I'm not saying they will....

Is this new policy going to prevent Sheldon from selling Shimano stuff over the Harris website?
It would be a shame if they hurt one of their biggest boosters.

You don't think they give a s**t about Sheldon any more than they do about the rest of us, do you?

That's pretty much my point and points to the good thing about capitalism. But some suckers think
lip service and waving hands mean something. Consider how entities act, not what they say.

Quoted message said:

He doesn't order thousands of gruppos either.

Which is, in the end, why QPSC pays a much higher price than OEMs, a point seemingly lost upon him.

Quoted message said:

It's easy to build a bike without a speck of their junk on it; I've been doing so for years. I had
made an exception of late for their 11-34 7-speed freewheel, but now I have yet another reason to
reconsider that exception.

So? You've got a big bad boner for Shimano -- why should anyone else care?

Quoted message said:

Just say no to Shimano's aftermarket parts. Let them make low-margin components for OEM bikes--
those parts are apt to be junk in any case.

I have cheap parts -- they're generally just fine considering their relative cost.

Quoted message said:

Any enthusiast with enough wits about him to spec his own machine can and should avoid Shimano.

Who gives a [censored] about avoiding or favoring? I care about what is in my interests, not the LBS,
KMART, Ace Hardware, Shimano, Campy, SunRace, or whomever else.

I could not care less if my components say "campy, shimano, SunRace, falcon,..... or whatever" as
long as they work and fit within my budget. I have some Shim comps and they work just fine,
including the Sora/RSX level. I've had some marginal stuff from many manufacturers. Screw any
bizarre sense of loyalty. These are just bike parts we're talking about. If you're a sucker for
marketing, then that is your problem, not mine.

In article <[email hidden]>, Gary Young

Quoted message said:

Isn't the fact that Shimano has designated only six official online dealers a sign that they're
serious about this? See <www.branfordbike.com/shimano/shimano.html> If anyone sells Shimano stuff
online and isn't one of those six, then Shimano will know it's greymarket and can take action. I'm
not saying they will....

Anyone know who the "six" are?

--
Mike Iglesias Email: [email hidden] University of California, Irvine phone: 949-824-6926
Network & Academic Computing Services FAX: 949-824-2069

Quoted post said:

Originally posted by Mike Iglesias
In article <[email hidden]>, Gary Young

Quoted message said:

Isn't the fact that Shimano has designated only six official online dealers a sign that they're
serious about this? See <www.branfordbike.com/shimano/shimano.html> If anyone sells Shimano stuff
online and isn't one of those six, then Shimano will know it's greymarket and can take action. I'm
not saying they will....

Anyone know who the "six" are?

--
Mike Iglesias Email: [email hidden] University of California, Irvine phone: 949-824-6926
Network & Academic Computing Services FAX: 949-824-2069

Unofficially:
Performance
Nashbar
Supergo
Colorado Cyclist
Excel Sports Boulder
REI

(Note that Performance owns Nashbar and Supergo - could be some serious market manipulation there).

Werehatrack said:

(Chalo) may have said:

Any enthusiast with enough wits about him to spec his own machine can and should avoid Shimano.

Unless that's all that fits in the budget. Not everyone can even afford new, let alone really
good new.

A fair point. Actually I find that it's a bit easier to build a quality non-Shimano bike out of
pre-8-speed parts than out of new parts, because of Shimano's growing domination of the market.

I suppose that the strength and virtue of Shimano parts from a consumer standpoint is that they may
be the cheapest means for a rider of average needs to build a reliable, functional daily use bike.
If budget is the decisive factor, a less-fashionable grade of Shimano drivetrain may be the best
route. (If Sunrace decide to pay more attention to the retail aftermarket, that could could change
in a jiffy.)

I don't usually see folks building up their own bikes when cost effectiveness is paramount, though.
More often there is a confluence of experimentation, self-expression, and bike lust that serves as
the motivating force. All those elements are best fulfilled by working around, rather than with,
Shimano parts.

Chalo Colina

Precious Pup said:

Chalo said:

Any enthusiast with enough wits about him to spec his own machine can and should avoid Shimano.

Who gives a [censored] about avoiding or favoring? I care about what is in my interests, not the LBS,
KMART, Ace Hardware, Shimano, Campy, SunRace, or whomever else.

I could not care less if my components say "campy, shimano, SunRace, falcon,..... or whatever" as
long as they work and fit within my budget.

...

Quoted message said:

Screw any bizarre sense of loyalty.

If you buy from a manufacturer whose trade practices eradicate variety in the market, you act to
reduce your own range of choices. Buying Shimano works for you if you only ever want Shimano parts.
But if you like having other options to choose from, buying Shimano works against the existence of
those options, by means known to encompass both "fair" and "unfair" trade practices.

The ability to spec one's own bike, rather than simply having Shimano Inc. decide what parts you
want and in what combinations, depends on maintaining some other options. The choices available have
deteriorated enough lately that it's irresponsible to give Shimano any money if you value having
other products to choose from.

To adopt a wider focus:

Pup, you have too much faith in the capitalist so-called "free market". It is good at some things,
like maximizing consumption, but not so good at others, like conserving finite resources. It rewards
skills combined with greed, but it punishes those who are not greedy, no matter how virtuous they
may be. It's terrific at pandering to the lowest common denominator, but it sucks at serving
uncommon needs.

You, Pup, may not care whether there is variety in the marketplace, clean water in the river, and
room for folks without ambitions to have a comfortable living. But many people do. And unbridled
capitalist practice acts to eradicate all these things.

Chalo Colina

DiabloScott said:

Quoted message said:

(Note that Performance owns Nashbar and Supergo - could be some serious market
manipulation there).

Their prices are distinctly lower than LBSs. So I can take that sort of "manipulation" easily.

If the practices are clearly anti-competetive, then competiting retail outlets should be able to
file a class action suit. I wonder why they haven't, but I hope they do if the complaint is true.
After all, I like more competition because it tends to push the price down, other things equal.

Chalo said:

Quoted message said:

If you buy from a manufacturer whose trade practices eradicate variety in the market, you act to
reduce your own range of choices.

No, the market is open to anyone -- if you knew more about how cut-throat the high volume
manufacturing business is in Taiwan, you would realize that Shimano gets onto bikes (except
top-of-the-line where the Campy and Shimano names seem to be important) mostly by price. _Every_
maker of widgets would like to be dominant and be able to charge the higher prices that being fully
dominant allows -- there is nothing unique about Shimano in that way. Shimano keeps their prices
down because they know the market is open to anyone, despite the fact that they are dominant. You
can say what you want, but the fact is that Shimano delivers functional parts at relatively low
cost. That doesn't mean I like everything Shimano makes or does, I certainly don't.

I would very much like to see "someone like" SunRace grab more market share. That said, I won't
shoot myself in the foot when selecting a component. If it happens to be Shimano, then I'll buy it.
Moreover, I don't delude myself into thinking my choices will be noticable to companies selling huge
quantities.

Precious Pup said:

I don't delude myself into thinking my choices will be noticable to companies selling huge
quantities.

And the watershed won't really be harmed if you dump just your own used motor oil, right?

Collective trends are made one individual at a time. Where you spend your dollars is more
influential than where you spend your vote.

Chalo Colina

Precious Pup said:

I don't delude myself into thinking my choices will be noticable to companies selling huge
quantities.

And the watershed won't really be harmed if you dump just your own used motor oil, right?

Collective trends are made one individual at a time. Where you spend your dollars is more
influential than where you spend your vote.

Chalo Colina

Chalo said:

Precious Pup said:

I don't delude myself into thinking my choices will be noticable to companies selling huge
quantities.

And the watershed won't really be harmed if you dump just your own used motor oil, right?

Please give me a break.

Quoted message said:

Collective trends are made one individual at a time. Where you spend your dollars is more
influential than where you spend your vote.

Okay. I spend on me and I vote for me; it is the only ethical and sensible thing to do. If the
purchase happens to be Shimano, then so be it. I won't shed one tear.