INTERNET OR LOCAL BIKE SHOP

[frenchyge]

It's nice that you misinterpreted that statement so that you could strike a defiant pose. Nice job. That's not at all what I intended, but hey: if you say it, it must be so.

I don't think I misinterpreted it at all. My intent is that the discussion need not be limited to the facts of current industry practices as you stated them, but could be expanded to include what 'should be' as well.

So, what should or shouldn't be the case *does* matter to me (even if you don't wish to discuss it in this case), hence the disagreement with your statement pushing it into irrelevance.

 

[alienator]

I don't think I misinterpreted it at all. My intent is that the discussion need not be limited to the facts of current industry practices as you stated them, but could be expanded to include what 'should be' as well.

So, what should or shouldn't be the case *does* matter to me (even if you don't wish to discuss it in this case), hence the disagreement with your statement pushing it into irrelevance.

Well, heck, if you say so, it must be.

 

[6fhscjess]

I've always supported the LBS (local bike shops) usually the one that is actually the farthest from my house but has always given me the best service, but I do purchase other items from the closer shops as needed.....but the moral question.
I'm looking at a new Selle Italia Max Flite gel team saddle and only one LBS even has one at $199.00 plus tax, the other shops say they can special order one. But I can buy one online for $149.00 with free shipping, thats over a $50 savings. Would I be wrong in buying the saddle online?

No, you would not be wrong in buying it online. Shop quilt free.

 

[dannomyte]

It all comes down to competition. The consumer wins in the end. Imagine if there was only one retailer for a product, the said retailer could charge whatever he wanted. How long do you think it would take for another opportunist to smell money and try to get in on the take?? In the case of the LBS, they could call the distributor and they probably would get a compassionate ear, but would they do anything about it? Probably not. I see it all the time in my line of work. They really don't care who they sell their products to, because they make the same money either way. They'll blow smoke up your... you know and tell you how great you are blah blah blah... and then they'll walk down the road to the next retailler and do the same thing. The internet has become one big commodity exchange for every product under the sun. You can compare prices from one retailler to the next, or you can order direct from an online supplier if you you are prepared to wait for shipping and give up service. At the end of they day, we're still going to need people to offer services and hopefully they can figure out how to make a living doing that!

 

[nbfman]

If there are contracts that require retailers to sell only at the MSRP, then it seems fair for stores to report violations. If the report is ignored, then the store has a reason to also sell below MSRP or to file a different kind of complaint.

My personal feeling about the bike market is that there is enough consumer choice to not worry about price fixing too much. I say this based on the sole fact that I am able to find stuff that satisfies me at a price and level of service that I do not mind paying. Of course, I am always happy to pay less or have higher grade products descend into my price range. I do not mind paying more at an LBS that has good, friendly service or for a name-brand part if it has assurance of quality/performance.

In JP, you see a few business approaches. Some brands list high MSRPs in their brochures, but what you pay at the store is much less. Sales typically start with a discount off the price on the tag. It is a way to hook the customer. Other brands (Trek comes to mind) require retailers to sell at the MSRP, but the prices are set lower to start with. Either way, the final price on comparable products ends up being fairly close, which I assume is a reflection of where the market currently sits.

 

[Peter@vecchios]

If it's not about price fixing, they why does the distributor care what the retailer resells them for? If distributor makes its profit on the sale to the retailer, then why refuse to sell to them again (and make that profit again) *unless* it's about pressuring that particular retailer to step in line with what the others want to charge?

I mean, I get that that's just how it works, but in all honesty it's still price fixing, right? What am I missing that makes this about "picking your customers" when a distributor only picks customers who agree to re-sell near a certain fixed price level? That sounds more like a manufacture/distributor setting prices rather than allowing competition between resellers.

The distributor/manufacturer cares because the base and foundation of his business is the LBS, brick and morter bike shop. NOT internet resellers who come and go with great frequency. PLUS when the product is cheapened(like US cars who are sold on price) then the product is perceived as cheap.

 

[dannomyte]

The distributor/manufacturer cares because the base and foundation of his business is the LBS, brick and morter bike shop. NOT internet resellers who come and go with great frequency. PLUS when the product is cheapened(like US cars who are sold on price) then the product is perceived as cheap.

Are you sure about that? Where did you find that information? How do you know they come and go and that product is cheapened? I haven't seen that! Don't get me wrong. I like the guys at my local bike shop and I like their knowledge and expertise. Fact is, they don't carry all the products I want... nor do I expect them to! The following article compares online sales vs. bricks and mortar. It's not specific to bike shops, but I think it shows general trends. Ignoring the fact that online sales are going strong is a good way to wake up one morning looking for a "Going out of business" sign. If my local bike shop had an online service I think I would support them even more.. and they'd have much better control of inventory they need/ don't neet to carry.

Big retailers take market share as online sales grow during the holidays | InternetRetailer.com - Daily News

 

[alienator]

Are you sure about that? Where did you find that information? How do you know they come and go and that product is cheapened? I haven't seen that! Don't get me wrong. I like the guys at my local bike shop and I like their knowledge and expertise. Fact is, they don't carry all the products I want... nor do I expect them to! The following article compares online sales vs. bricks and mortar. It's not specific to bike shops, but I think it shows general trends. Ignoring the fact that online sales are going strong is a good way to wake up one morning looking for a "Going out of business" sign. If my local bike shop had an online service I think I would support them even more.. and they'd have much better control of inventory they need/ don't neet to carry.

Big retailers take market share as online sales grow during the holidays | InternetRetailer.com - Daily News

Peter's not ignoring anything. That's your assumption. His statements in the past have acknowledged the success and growth of internet sales. With that said, there is and will be a lot lost if LBSs disappear or decrease even more in number. The only thing that internet shops provide is cheaper prices. They don't provide after purchase. They don't necessarily provide quality customer service or any at all. They don't necessarily provide a path or help with warrantee claims. They're not part of any community, where people actually interact face to face. They don't provide fitting services.

Before the internet, it was just as possible to find and order parts that your LBS didn't have. The difference now is that customers are pretty lazy. Anything beyond a Google search is just about out of the question.

As for product being cheapened as Peter alleges, it does happen. Just because you don't see it in your part of the world, doesn't mean it's going on. It happens in more markets than cycling, too.

Your claim about a bike shop being able to better control it's inventory by having an internet shop holds no water. It makes no sense whatsoever. Perhaps your LBS sucks, but there are many LBS that manage their inventory well.

Your remarks seem pretty dismissive of the LBS.

 

[nbfman]

If my local bike shop had an online service I think I would support them even more..and they'd have much better control of inventory they need/ don't neet to carry.

I agree that many small- and medium-sized retail stores believe that adding on-line sales is a good strategy for growth or just survival. But the opposite is also true with on-line retailers feeling the need to add a physical store, as a means of getting better exposure, gaining a local customer base, earning trust, ... direct sales is usually low on the list of reasons. Both types of businesses have their own challenges and risks, and success is hard to find.

Inventory is just as challenging on-line as it is in a physical store. It is not uncommon to hear about an on-line store making the wrong decision about inventory and paying the price.

 

[Akadat]

Welcome to the net. The world is ever changin and the net is the new wild west. Plenty of snake-oil and also pure down-to-erth puritan stuff.

Local Bike Shops are no different. There are snake-oil bike shops an puritan bike shops.

Be informed and choose wisely.

 

[Peter@vecchios]

Are you sure about that? Where did you find that information? How do you know they come and go and that product is cheapened? I haven't seen that! Don't get me wrong. I like the guys at my local bike shop and I like their knowledge and expertise. Fact is, they don't carry all the products I want... nor do I expect them to! The following article compares online sales vs. bricks and mortar. It's not specific to bike shops, but I think it shows general trends. Ignoring the fact that online sales are going strong is a good way to wake up one morning looking for a "Going out of business" sign. If my local bike shop had an online service I think I would support them even more.. and they'd have much better control of inventory they need/ don't neet to carry.

Big retailers take market share as online sales grow during the holidays | InternetRetailer.com - Daily News

Online reselling doesn't mean lower prices. Online sales are a gigantic can or worms. If some want to do this, fine and dandy. Who I am talking about are the little online resellers, who do not have a store front, who get some product, sell it at huge discounts, get discovered by the likes of shimano and are then...gone. How do I know this? 24 years in the bike business who was in a bike shop during the 'dot.bomb'. era. Nothing has really changed.

I think you are mistaken to think a store front has one price but if you go online, they have a lower price. That's the impression but it isn't really so.

Back to the OP. I completely understand the OPs situation. If somebody comes in with a $1800 Campagnolo SR groupset(as somebody just did), I say good for him..but as I'm putting it together, I am also recording the little tracking codes off the components and passing them along to Campagnolo, North America, which is what they ask us to do.....

 

[krulle]

there are some big internet stores out there which have great discounts, and even a real store on some locations.

Most of the time the service will be less good than a small LBS, but that is the trade you have to make. So you choose to pay or not to pay for that sales guy in the LBS which gives you advice/service.

But some online stores have even a toll-free number to call for advice ...

In my case, I buy most gear online (cheap ******* ), and in some occasions I go to the LBS.

It is the same discussion as: going to a big sports store or going to a small local one...

 

[alienator]

It is the same discussion as: going to a big sports store or going to a small local one...

Not really. Sports stores generally don't provide the service--in depth service at that--that bike shops provide.

 

[krulle]

Not really. Sports stores generally don't provide the service--in depth service at that--that bike shops provide.

That is what I'm trying to tell. In big sports stores and online stores, you can expect to have a lower service level.

Why choose for a big store or for a online store? Price ...

It is a trade you have to make.

 

[dhk2]

In addition to the support, the basic advantage of the LBS is that you have a simple transaction: no ordering, waiting and wondering when you will get the product, or what it will look like when it arrives. Being able check out an item and have it in hand when paying the money has to be worth something.

Case in point: I'm currently waiting for an online order of a jersey and socks; supposedly shipped on 16 Dec. Good thing it's a summer jersey

 

[frenchyge]

PLUS when the product is cheapened(like US cars who are sold on price) then the product is perceived as cheap.

What cheapens the product about discount online sales besides the lack of bright lights, glass display cases, and a suck-up sales person to tell me how wicked fast this new derailleur is going to make me? As was stated above, the difference I perceive with online sales and the discount prices is the lack of service/support/warranty assistance that accompanies my purchase, and I have to decide whether to bear the additional risk that accompanies it. Seems like the same kit comes in the box when I get it home to open it.

I mean, I get that the manufacturer's strive to achieve prestige status for their product lines (with Pro endorsements, etc) so they can generate higher profit margins, but how does LBS vs. online retail enter into that? The stuff is still expensive when purchased online, and if the reviews, etc. don't justify the cost, well..... that's not a retailer issue.

The distributor/manufacturer cares because the base and foundation of his business is the LBS, brick and morter bike shop. NOT internet resellers who come and go with great frequency.

I don't know the relative magnitudes of LBS vs. online sales as it currently stands for bike equipment, but online resellers are becoming more and more important to manufactures as another distribution channel for their products. Also, the online channel now brings it's own degree of community where word of mouth passes a lot quicker than it does locally as relates to products. Personally, I hear more about the new widgets being developed and released through the online community than I do from my LBS staff, and it wouldn't surprise me if that were widely the case.

Who I am talking about are the little online resellers, who do not have a store front, who get some product, sell it at huge discounts, get discovered by the likes of shimano and are then...gone.

With online resellers, the manufacture still makes the same margins to cover the cost of development, marketing, and manufacturing; the distributors still make the same margins to cover the cost of distribution, and any difference in price is all on the retail end. Presumably, the online retailers are still making some money even when they offer a huge discount, and possibly even more when you factor the lower operational overhead.

I can understand manufacturer's definitely wanting to crack down on black/grey market products and maybe they don't want last year's gear still circulating out there, but any actions taken to hurt/eliminate legitimate online resellers for offering products at discount still seems like protectionism or price fixing, IMO, if they really happen. The online resellers are still moving product and the manufacturer makes just as much whether a shifter is sold through an LBS or online seller, so it seems like a delicate balance for them to maintain.

Don't larger-volume LBSs also have some leverage to get somewhat better pricing from distributors than an upstart online reseller would get?

 

[frenchyge]

In addition to the support, the basic advantage of the LBS is that you have a simple transaction: no ordering, waiting and wondering when you will get the product, or what it will look like when it arrives. Being able check out an item and have it in hand when paying the money has to be worth something.

No doubt. Anyone who doesn't see a difference in the experience of buying locally vs. buying online doesn't have a very good LBS. Hopefully my comments/questions don't give the impression that I don't perceive a difference in the experience/service received when buying through my LBS*.

* fortunately, we get such awesome team discounts from my LBS that products are generally about the same price as I can find through reputable online sellers. Best of both worlds!

 

[Peter@vecchios]

What cheapens the product about discount online sales besides the lack of bright lights, glass display cases, and a suck-up sales person to tell me how wicked fast this new derailleur is going to make me? As was stated above, the difference I perceive with online sales and the discount prices is the lack of service/support/warranty assistance that accompanies my purchase, and I have to decide whether to bear the additional risk that accompanies it. Seems like the same kit comes in the box when I get it home to open it.

I mean, I get that the manufacturer's strive to achieve prestige status for their product lines (with Pro endorsements, etc) so they can generate higher profit margins, but how does LBS vs. online retail enter into that? The stuff is still expensive when purchased online, and if the reviews, etc. don't justify the cost, well..... that's not a retailer issue.



I don't know the relative magnitudes of LBS vs. online sales as it currently stands for bike equipment, but online resellers are becoming more and more important to manufactures as another distribution channel for their products. Also, the online channel now brings it's own degree of community where word of mouth passes a lot quicker than it does locally as relates to products. Personally, I hear more about the new widgets being developed and released through the online community than I do from my LBS staff, and it wouldn't surprise me if that were widely the case.



With online resellers, the manufacture still makes the same margins to cover the cost of development, marketing, and manufacturing; the distributors still make the same margins to cover the cost of distribution, and any difference in price is all on the retail end. Presumably, the online retailers are still making some money even when they offer a huge discount, and possibly even more when you factor the lower operational overhead.

I can understand manufacturer's definitely wanting to crack down on black/grey market products and maybe they don't want last year's gear still circulating out there, but any actions taken to hurt/eliminate legitimate online resellers for offering products at discount still seems like protectionism or price fixing, IMO, if they really happen. The online resellers are still moving product and the manufacturer makes just as much whether a shifter is sold through an LBS or online seller, so it seems like a delicate balance for them to maintain.

Don't larger-volume LBSs also have some leverage to get somewhat better pricing from distributors than an upstart online reseller would get?

Couple of points. If a manufacturer goes consumer direct, few bike shops will sell those 'things', whatever they are. Some can survive doing this, most cannot. When Fondriest went direct, all the bike shops carrying them dropped them. Sales almost dried up. Search what they do now.


Large volume bike shops get a break on things like BICYCLES and better terms, etc but they buy small bits from the same places I do and pay the same price.

You mentioned 'legitimate' online resellers. Most have a store front, AND an online presence. Like Excel, Colorado Cyclist, Randall Scott, Performance. They do so they CAN get product and then sell online. Most sign an agreement about pricing. Again, they can sell anything for whatever they want but they 'may' not be able to get product the 'next time'. This is how it works in the US, again to protect local bike shops. Local bike shop gross sales dwarf online bike sales.

 

[frenchyge]

If a manufacturer goes consumer direct, few bike shops will sell those 'things', whatever they are. Some can survive doing this, most cannot. When Fondriest went direct, all the bike shops carrying them dropped them. Sales almost dried up. Search what they do now.

That was kinda what I figured after thinking through this discussion -- ie, that the stores and distributors must drive the issue by swaying manufacturers to control competing channels or risk having their lines dropped.

Good discussion. Thanks.

 

[nbfman]

Local bike shop gross sales dwarf online bike sales.

This is a key point. I have bought things like jerseys and pedals on-line.
I would never buy a bike on-line, as I prefer to be able to see what I am getting at the store and have the local store support. Apparently, many still feel this way if the relative sales are as you say.

When manufacturers or distributors sell direct, I have found that they keep their prices higher (no price negotiation with individual customers) to avoid the kind of things that happened to Fondriest, or they have to keep their activities modest and off the radar screen (like having a small store at the edge of town).