Say it aint so Shimano ... PART 2

Discussion in 'Cycling Equipment' started by Donald Gillies, Aug 18, 2003.

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  1. Looks to me Japan-style price deflation is taking down prices of engineered bicycle components
    everywhere. Shimano isn't the only component-maker trying to prop up prices to stay alive. See the
    recent notice from Chris King, listed below, for another desperate attempt to maintain prices in the
    market channel. Perhaps new Chinese components will be hitting the USA mainland soon ??

    - Don Gillies San Diego, CA

    ================= From www.branfordbike.com ===============

    Chris King Headsets - are being discontinued

    We have used Chris King headsets for over twenty years with excellent results. Like Phil Wood bottom
    brackets, Chris King headsets spin smoother and last longer than anything else available. They come
    in a wide variety of bright colors and in several sizes and configurations to fit almost any
    bicycle. Chris King headsets used sealed cartridge bearings that are easy to open, clean and
    re-lube. Simply pop out the metal split ring, flush with WD-40 and regrease with Le Tour Whisper
    White. Spare parts are readily available and every Chris King headset comes with a 10 year warranty.

    Chris King recently changed their pricing policy. They now require all dealers to consent in writing
    that Chris King products will be advertised at a price that Chris King believes riders should pay.
    The new, fixed retail price would be the same for all Chris King dealers and higher than what we
    currently charge. In a recent phone conversation a Chris King representative stated that if we did
    not sign the agreement they would no longer sell their products to us. They would also ban their
    distributors from selling to us. As a result we are discontinuing all Chris King products. The
    following items are currently in stock and will be deleted as we sell out.

    You may call Chris King at 800-523-6008 or email them at <mailto:[email protected]?subject=Retail
    Price Fixing>[email protected] for further information or to let them know what you think.

    ===========================================================
     
    Tags:


  2. Bfd

    Bfd Guest

    "Donald Gillies" <[email protected]> wrote in message news:[email protected]...
    > Looks to me Japan-style price deflation is taking down prices of engineered bicycle components
    > everywhere. Shimano isn't the only component-maker trying to prop up prices to stay alive. See the
    > recent notice from Chris King, listed below, for another desperate attempt to maintain prices in
    > the market channel. Perhaps new Chinese components will be hitting the USA mainland soon ??
    >
    Interesting, but are Chinese made components going to be able to compete with the likes of Chris
    King? Does anyone make headsets comparable to Chris King? At any price? I think not! At around $100
    or less, CK headsets are arguably the best. What do you have?

    > ================= From www.branfordbike.com ===============
    >
    > Chris King Headsets - are being discontinued
    >
    > We have used Chris King headsets for over twenty years with excellent results. Like Phil Wood
    > bottom brackets, Chris King headsets spin smoother and last longer than anything else available.
    > They come in a wide variety of bright colors and in several sizes and configurations to fit almost
    > any bicycle. Chris King headsets used sealed cartridge bearings that are easy to open, clean and
    > re-lube. Simply pop out the metal split ring, flush
    with
    > WD-40 and regrease with Le Tour Whisper White. Spare parts are readily available and every Chris
    > King headset comes with a 10 year warranty.
    >
    > Chris King recently changed their pricing policy. They now require all dealers to consent in
    > writing that Chris King products will be advertised at a price that Chris King believes riders
    > should pay. The new, fixed retail price would be the same for all Chris King dealers and higher
    > than what we currently charge. In a recent phone conversation a Chris King representative stated
    > that if we did not sign the agreement they would no longer sell their products to us. They would
    > also ban their distributors from selling to us. As a result we are discontinuing all Chris King
    > products. The following items are currently in stock and will be deleted
    as
    > we sell out.
    >
    > You may call Chris King at 800-523-6008 or email them at <mailto:[email protected]?subject=Retail
    > Price Fixing>[email protected] for further information or to let them know what you think.
    >
    > ===========================================================
     
  3. In article <[email protected]>,
    [email protected] (Donald Gillies) wrote:

    > Looks to me Japan-style price deflation is taking down prices of engineered bicycle components
    > everywhere. Shimano isn't the only component-maker trying to prop up prices to stay alive. See the
    > recent notice from Chris King, listed below, for another desperate attempt to maintain prices in
    > the market channel. Perhaps new Chinese components will be hitting the USA mainland soon ??
    >
    > - Don Gillies San Diego, CA
    >
    > ================= From www.branfordbike.com ===============
    >
    > Chris King Headsets - are being discontinued

    > Chris King recently changed their pricing policy. They now require all dealers to consent in
    > writing that Chris King products will be advertised at a price that Chris King believes riders
    > should pay. The new, fixed retail price would be the same for all Chris King dealers and higher
    > than what we currently charge. In a recent phone conversation a Chris King representative stated
    > that if we did not sign the agreement they would no longer sell their products to us. They would
    > also ban their distributors from selling to us. As a result we are discontinuing all Chris King
    > products. The following items are currently in stock and will be deleted as we sell out.

    The Chris King corporation seems to be not just flirting with US anti-trust law, but actually
    getting the phone number of it and planning to make a rendezvous at a sleazy hotel on the outskirts
    of town ASAP.

    There's a grey area by which a company can run a "promotional program" whereby they pay money to
    vendors to support the costs of advertising their product, on certain conditions (mainly, that the
    price in the ad conform to a minimum stipulated in the contract). I'm not sure they can cut off
    vendors for not participating, though.

    It's hard to say what exactly is happening here. I bet that there is more to this.

    --
    Ryan Cousineau, [email protected] http://www.sfu.ca/~rcousine President, Fabrizio Mazzoleni Fan Club
     
  4. Kenny Lee

    Kenny Lee Guest

    bfd wrote:
    > "Donald Gillies" <[email protected]> wrote in message news:[email protected]...
    >
    >>Looks to me Japan-style price deflation is taking down prices of engineered bicycle components
    >>everywhere. Shimano isn't the only component-maker trying to prop up prices to stay alive. See the
    >>recent notice from Chris King, listed below, for another desperate attempt to maintain prices in
    >>the market channel. Perhaps new Chinese components will be hitting the USA mainland soon ??
    >>
    >
    > Interesting, but are Chinese made components going to be able to compete with the likes of Chris
    > King? Does anyone make headsets comparable to Chris King? At any price? I think not! At around
    > $100 or less, CK headsets are arguably the best. What do you have?
    >
    >
    >
    >>================= From www.branfordbike.com ===============
    >>
    >>Chris King Headsets - are being discontinued
    >>
    >>We have used Chris King headsets for over twenty years with excellent results. Like Phil Wood
    >>bottom brackets, Chris King headsets spin smoother and last longer than anything else available.
    >>They come in a wide variety of bright colors and in several sizes and configurations to fit almost
    >>any bicycle. Chris King headsets used sealed cartridge bearings that are easy to open, clean and
    >>re-lube. Simply pop out the metal split ring, flush
    >
    > with
    >
    >>WD-40 and regrease with Le Tour Whisper White. Spare parts are readily available and every Chris
    >>King headset comes with a 10 year warranty.
    >>
    >>Chris King recently changed their pricing policy. They now require all dealers to consent in
    >>writing that Chris King products will be advertised at a price that Chris King believes riders
    >>should pay. The new, fixed retail price would be the same for all Chris King dealers and higher
    >>than what we currently charge. In a recent phone conversation a Chris King representative stated
    >>that if we did not sign the agreement they would no longer sell their products to us. They would
    >>also ban their distributors from selling to us. As a result we are discontinuing all Chris King
    >>products. The following items are currently in stock and will be deleted
    >
    > as
    >
    >>we sell out.
    >>
    >>You may call Chris King at 800-523-6008 or email them at <mailto:[email protected]?subject=Retail
    >>Price Fixing>[email protected] for further information or to let them know what you think.
    >>
    >>===========================================================
    >
    >
    I live and ride in Taiwan. I've been told that Campy, Look, SRAM, TREK and a whole bunch of others
    are doing a whole lot of business here in Taiwan.

    I can bear witness that the people here and in China have the resources and the ability to
    manufacture bike parts to NASA specs, be it metal or
    CF. I've seen them, bought them and am using them right now. The prices are unbelivable. Sorry to
    say this but, if I were CK or PW I'd seriouly consider moving my production to Taiwan.

    The following link points to a company that makes world class quality CF parts, CHEAP. For prices
    contact them directly.

    http://www.pazzaz.com/

    Kenny Lee
     
  5. Donald Gillies wrote:
    > Chris King recently changed their pricing policy. They now require all dealers to consent in
    > writing that Chris King products will be advertised at a price that Chris King believes riders
    > should pay. The new, fixed retail price would be the same for all Chris King dealers and higher
    > than what we currently charge. In a recent phone conversation a Chris King representative stated
    > that if we did not sign the agreement they would no longer sell their products to us. They would
    > also ban their distributors from selling to us.

    This is clear and blatant price fixing. It's illegal. Branford should get a lawyer. Better yet, all
    shops hit by this should get together and file a class action suit.

    --Bill Davidson
    --
    Please remove ".nospam" from my address for email replies.

    I'm a 17 year veteran of usenet -- you'd think I'd be over it by now
     
  6. Richard Ney

    Richard Ney Guest

    Ryan Cousineau writes:

    >> Looks to me Japan-style price deflation is taking down prices of engineered bicycle components
    >> everywhere. Shimano isn't the only component-maker trying to prop up prices to stay alive. See
    >> the recent notice from Chris King, listed below, for another desperate attempt to maintain prices
    >> in the market channel. Perhaps new Chinese components will be hitting the USA mainland soon ??
    >>
    >>
    >> Chris King recently changed their pricing policy. They now require all dealers to consent in
    >> writing that Chris King products will be advertised at a price that Chris King believes riders
    >> should pay. The new, fixed retail price would be the same for all Chris King dealers and higher
    >> than what we currently charge. In a recent phone conversation a Chris King representative stated
    >> that if we did not sign the agreement they would no longer sell their products to us. They would
    >> also ban their distributors from selling to us. As a result we are discontinuing all Chris King
    >> products. The following items are currently in stock and will be deleted as we sell out.
    >
    > The Chris King corporation seems to be not just flirting with US anti-trust law, but actually
    > getting the phone number of it and planning to make a rendezvous at a sleazy hotel on the
    > outskirts of town ASAP.
    >
    > There's a grey area by which a company can run a "promotional program" whereby they pay money to
    > vendors to support the costs of advertising their product, on certain conditions (mainly, that the
    > price in the ad conform to a minimum stipulated in the contract). I'm not sure they can cut off
    > vendors for not participating, though.
    >
    > It's hard to say what exactly is happening here. I bet that there is more to this.

    Chris King probably flies well under the radar screen of the US DOJ.

    Nike and MS would get their respective heads handed to them.
     
  7. Mark Hickey

    Mark Hickey Guest

    "bfd" <[email protected]> wrote:

    >Interesting, but are Chinese made components going to be able to compete with the likes of Chris
    >King? Does anyone make headsets comparable to Chris King? At any price? I think not! At around $100
    >or less, CK headsets are arguably the best. What do you have?

    CK makes nice headsets, but it's really not necessary to spend $100 or more to get a light, high
    quality headset that will last for many tens of thousands of miles.

    It WILL cost you that much to get one with the manufacturer's name written garishly around it
    though... ;-)

    Mark Hickey Habanero Cycles http://www.habcycles.com Home of the $695 ti frame
     
  8. > Chris King probably flies well under the radar screen of the US DOJ.
    >
    > Nike and MS would get their respective heads handed to them.

    well, in all likelihood MS would get their heads handed to them, after which DOJ would
    apologize profusely, sew the head back on and offer the heads of several competitors by way of
    further apology.

    if history is any guide.

    fc
     
  9. from branford-<< We have used Chris King headsets for over twenty years with excellent results. Like
    Phil Wood bottom brackets, Chris King headsets spin smoother and last longer than anything else
    available >><BR><BR>

    etc...<< Chris King recently changed their pricing policy. They now require all

    dealers to consent in writing that Chris King products will be advertised at a price that Chris King
    believes riders should pay. The new, fixed retail price would be the same for all Chris King dealers
    and higher than what we currently charge. >><BR><BR>

    Why don't they just ask the higher price? Sounds like they are making a political statement, not a
    business one...particularly if they think it's such a fine piece of gear. Why not just use a
    'normal' mark-up, not trying to devalue the product?

    You can CK hs from me, btw..'cutting off nose to spite face' comes to mind.

    Peter Chisholm Vecchio's Bicicletteria 1833 Pearl St. Boulder, CO, 80302
    (303)440-3535 http://www.vecchios.com "Ruote convenzionali costruite eccezionalmente bene"
     
  10. billdav-<< This is clear and blatant price fixing. It's illegal. Branford should get a lawyer.
    Better yet, all shops hit by this should get together and file a class action suit. >><BR><BR>

    Pass...I think it's fine and dandy, as do most other 'shops' that see cut-rate, below a
    sustainable margin, pricing. It's not illegal to ask to sell at MSRP, and not supply something to
    somebody if they don't. That happens all the time in lots of stuff...Why tires are the same price
    at MO as at shops.

    All it took for us is to fill the piece of paper out and send it back...We don't discount CK HSs...

    Peter Chisholm Vecchio's Bicicletteria 1833 Pearl St. Boulder, CO, 80302
    (303)440-3535 http://www.vecchios.com "Ruote convenzionali costruite eccezionalmente bene"
     
  11. David Kunz

    David Kunz Guest

    Qui si parla Campagnolo wrote:

    > billdav-<< This is clear and blatant price fixing. It's illegal. Branford should get a lawyer.
    > Better yet, all shops hit by this should get together and file a class action suit. >><BR><BR>
    >
    > Pass...I think it's fine and dandy, as do most other 'shops' that see cut-rate, below a
    > sustainable margin, pricing. It's not illegal to ask to sell at MSRP, and not supply something to
    > somebody if they don't. That happens all the time in lots of stuff...Why tires are the same price
    > at MO as at shops.
    >
    > All it took for us is to fill the piece of paper out and send it back...We don't discount
    > CK HSs...
    >
    > Peter Chisholm Vecchio's Bicicletteria 1833 Pearl St. Boulder, CO, 80302
    > (303)440-3535 http://www.vecchios.com "Ruote convenzionali costruite eccezionalmente bene"

    Yes, but it is reasonable to preclude anyone from doing so? I don't think that it is. To me, it's
    price fixing. I certainly don't expect a shop to sell at a loss, but I expect to get a decent price.

    David
     
  12. In article <[email protected]>, [email protected] says...

    >You do get a 'decent' price when you pay MSRP, a price determined to be fair and based on the
    >shop's expenses.

    How does the manufacturer determine your expenses when they come up with the MSRP? A well managed
    bike shop will have lower expenses than a poorly managed bike shop. Why should they be forced to
    charge more? They could attract more customers to their shop by charging a lower price. Then the
    customer would get a good product from a good bike shop. I'm sure that as a
    r.b.t regular you have seen the many thread on the crappy service some shops provide, not yours
    of course.

    >CK isn't trying to tell people what to charge,

    Yes they are.

    >they are just trying to protect their distribution. Charge $80 for a CK HS, just don't expect to be
    >able to BUY any more.

    This scheme is just suporting those shops that don't know how to run a business.
    -----------------
    Alex __O _-\<,_ (_)/ (_)
     
  13. In article <[email protected]>, [email protected] says...
    >CK makes nice headsets, but it's really not necessary to spend $100 or more to get a light, high
    >quality headset that will last for many tens of thousands of miles.

    Who else makes as nice a HS as CK? I have a Shimano Ultegra HS on my bike. It works well, but it is
    no where near as smooth as a CK.

    >It WILL cost you that much to get one with the manufacturer's name written garishly around it
    >though... ;-)

    I agree. In the past when I could not afford one I always wanted to get one. Then when I could
    afford it, they started putting thier name in huge letters on it, and now I would not spend my
    money on it.
    -----------------
    Alex __O _-\<,_ (_)/ (_)
     
  14. Dion Dock

    Dion Dock Guest

    It is illegal for a manufacturer make retailers agree to sell their product for a given price. It
    is not illegal for a manufacturer to make retailers agree to _advertise_ their product only at a
    given price.

    This means you won't be able to get catalogs and print ads with King headsets priced much lower than
    your local shop. Ever wonder why you see "call for lowest price"?

    (BTW, you can get King headsets without the "King" written all over the races. It takes a special
    order but I didn't have to wait more than a week for mine.)

    I also agree, there are other fine headsets that cost less than Kings, they're just harder to find
    in stock and they won't be anodized to match your bike.

    -Dion

    "Bill Davidson" <[email protected]> wrote in message news:[email protected]...
    > Donald Gillies wrote:
    > > Chris King recently changed their pricing policy. They now require all dealers to consent in
    > > writing that Chris King products will be
    advertised
    > > at a price that Chris King believes riders should pay. The new, fixed retail price would be the
    > > same for all Chris King dealers and higher
    than
    > > what we currently charge. In a recent phone conversation a Chris King representative stated that
    > > if we did not sign the agreement they would
    no
    > > longer sell their products to us. They would also ban their distributors from selling to us.
     
  15. Tom Ace

    Tom Ace Guest

    Peter Chisholm wrote:

    > You do get a 'decent' price when you pay MSRP, a price determined to be fair and based on the
    > shop's expenses.

    For many products, MSRPs are set somewhat above a typical selling price. It's a game, it's a way of
    making the usual selling price appear to be a discount, and thus seem like a better deal.

    > CK isn't trying to tell people what to charge,

    The hell they aren't.

    > they are just trying to protect their distribution.
    > Charge $80 for a CK HS, just don't expect to be
    > able to BUY any more.

    Tom Ace
     
  16. Paul Kopit

    Paul Kopit Guest

    On Tue, 19 Aug 2003 11:19:16 -0400, Alex Rodriguez <[email protected]> wrote:

    >A well managed bike shop will have lower expenses than a poorly managed bike shop.

    Not at all true. Rentals in places like Santa Monica are astounding. Helen's is a wonderful shop and
    sells some stuff at above MSRP. That is true for components, clothing and bicycles. They do have
    specials and still compete effectively with Supergo, about 1 mile down the street. Supergo's prices
    at the shop are no bargain normally either and they don't meet their own catalog price either.

    Most of the people in the shop are quite knowledgeable and their serevice is fine. I heard 2 in
    conversation refer to Supergo customers as "bottom feeders" but I'd doubt that is the prevailing
    attitude of the management there. They may be the #1 or #2 Cannondale dealer in USA. They have good
    inventories of many items.
     
  17. Jim Edgar

    Jim Edgar Guest

    Alex Rodriguez at [email protected] wrote on 8/19/03 8:19 AM:
    > How does the manufacturer determine your expenses when they come up with the MSRP? A well managed
    > bike shop will have lower expenses than a poorly managed bike shop. Why should they be forced to
    > charge more? They could attract more customers to their shop by charging a lower price. Then the
    > customer would get a good product from a good bike shop. I'm sure that as a
    > r.b.t regular you have seen the many thread on the crappy service some shops provide, not yours of
    > course.

    I think the issue is that CK is tired of seeing their $120 headset on sale at $88. It makes people
    think it's an $88 headset. Then it makes people think that their full-service bike shop should
    charge $88 for it. Then the full-service bike shop gets pissed and calls CK and asks why some wanker
    with a resale license and a yahoo.com shop can be undercutting them.

    If the "well managed" shop you speak of has better service, customer relations, reputation, store
    quality, etc., - and they manage to articulate that difference in word and action - then they will
    get more customers - far more than they would get by cutting their margin on a headset.

    Good retailers keep their prices in line and do what they can to lower costs or make effective use
    of their resources.

    Good manufacturers support their retail distribution chain, or they figure out how to make work on a
    direct basis.

    > This scheme is just suporting those shops that don't know how to run a business.

    I beg to differ - plenty of people manage to lose their ass in retail. CK headsets aren't going to
    make the difference for a loser shop.

    And for the loser shops who don't understand margin, there are plenty of other manufacturers who
    wouldn't care a speck if their stuff gets sold at $1 over wholesale, as long as they get paid. They
    can sell a ton of stuff at cheap, cheap prices and then wonder why they can't pay any bills.

    The quality shop has a right to make more margin on one item to support lower margins on other
    things, not to mention the costs inherent in carrying inventory in the shop, so we can all go in and
    drool over cool gear and things.

    -- Jim
     
  18. Mike S.

    Mike S. Guest

    The quality shop has a right to make more margin on one item to support lower margins on other
    things, not to mention the costs inherent in carrying inventory in the shop, so we can all go in and
    drool over cool gear and things.

    That's called Labor. Where do you think shops make their money? It certainly ain't on parts!

    Mike
     
  19. Jim Edgar

    Jim Edgar Guest

    I wrote:
    >> The quality shop has a right to make more margin on one item to support lower margins on other
    >> things, not to mention the costs inherent in carrying inventory in the shop, so we can all go in
    >> and drool over cool gear and things.
    >>

    Mike S. at [email protected] wrote on 8/19/03 1:03 PM:
    > That's called Labor. Where do you think shops make their money? It certainly ain't on parts!

    Parts is Parts. Labor isn't what we're talking about here.

    The issue at hand is that another poster stated that maintaining MSRP's somehow subsidizes shops
    which aren't well run.

    Not all margins are the same. Sometimes a superior product like the Chris King headsets have a lower
    margin, while the "bread & butter" replacement stuff has a great margin. When the margin is below a
    certain level, there's no reason for a shop to stock something.

    For the manufacturer of a quality product, the issue is that they have to ask a retailer to stock
    their product, which might sit there for a bit longer than the $20 no-name brand version. Why is it
    in the retailer's interest to do so if they are only going to make 5% on something?

    It seems like CK is weeding out the guys who want to place the order with them _after_ they take the
    customer's money. They want to support their dealers who have the stuff in stock - and they realize
    that costs money for the dealer.

    -- Jim

    ps - please take a look at your newsreader quoting. it ain't.
     
  20. Mark Wolfe

    Mark Wolfe Guest

    It's price fixing. Why not let the market decide the what it will fetch. I gave 100 for mine and
    didn't have an issue with it because of the reputation and the quality of the headset. They don't
    need to go to these tatics to set a price. As a shop, you've got your cost on the part, if CK wants
    to bring the price up for all bike shops, they need to increase what they charge for the part and
    let the bike shops decide on what sort of profit they make. Not make the shops sign an agreement to
    maintain a certain price.

    Mark

    Qui si parla Campagnolo wrote:

    > from branford-<< We have used Chris King headsets for over twenty years
    with
    > excellent results. Like Phil Wood bottom brackets, Chris King headsets spin smoother and last
    > longer than anything else available >><BR><BR>
    >
    > etc...<< Chris King recently changed their pricing policy. They now
    require all
    >
    > dealers to consent in writing that Chris King products will be advertised at a price that Chris
    > King believes riders should pay. The new, fixed retail price would be the same for all Chris King
    > dealers and higher than what we currently charge. >><BR><BR>
    >
    > Why don't they just ask the higher price? Sounds like they are making a political statement, not a
    > business one...particularly if they think it's
    such
    > a fine piece of gear. Why not just use a 'normal' mark-up, not trying to devalue the product?
    >
    > You can CK hs from me, btw..'cutting off nose to spite face' comes to
    mind.
    >
    > Peter Chisholm Vecchio's Bicicletteria 1833 Pearl St. Boulder, CO, 80302
    > (303)440-3535 http://www.vecchios.com "Ruote convenzionali costruite eccezionalmente bene"

    --
    Mark Wolfe http://www.wolfenet.org gpg fingerprint = 42B6 EFEB 5414 AA18 01B7 64AC EF46 F7E6 82F6
    8C71 "Anyone attempting to generate random numbers by deterministic means is, of course, living in a
    state of sin."
    - John Von Neumann
     
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