Bike Cafe · Public discussion

What the bicycling industry needs.

Started by Blademun · · Last activity · 12 posts · 1,472 views

Thread navigation

Jump through the discussion

Go to the original post, the replies on this page, or the latest preserved contribution.

Thread details

What we know about this thread

Original section
Bike Cafe
Published
23 August 2006
Last activity
29 September 2015
Original author
Blademun
Posts
12
Discussion status
Public discussion
Total views
1,472
Views / 30 days
27

The navigation and discussion metadata provide context. Posts remain in their original chronological order.

Showing posts 1–12 of 12
Posts remain in their original chronological order.

Text size
  1. I am close friends with a Lbs owner, and I work in the computer field. One thing that drives me nuts are all the price-controls in the bicycling market. Protecting the little guy? The outdated buisness model of selling bikes out of little mon-and-pop stores is destroying the industry. Bulk selling and buying would bring prices back down to a less then astronomical level. Average people would start considering riding quality bikes. THe market would GROW!! People could put more faith in a very-large manufacturer who provides real warranty, repair and replacement garantees..not a tiny bike-shop who's service can vary wildly in quality.

    The computer market has no controls, its completely free-market. That is the thing that has caused computer prices to drop steadily for the last decade, while quality has gone up significantly, and you can purchase the parts individually(you don't need to own a shop, sites like Newegg.com make it happen) and build yourself a computer for alot less then buying from Dell, Compaq, ect (assuming you have the technical know-how). In the bike world its the other way round..if you have the knowledge and tools to build a bike part for part, you end up paying more then if you had bought a bike for whole.

    To compare, imagine if you could purchase a bike, or bike parts, at a price similar to what your LBS gets. Yep, thats what we get in the Computer Market, no buisness account required. Dell and COmpaq remain competitive because they deal in huge volume, and work out deals that allow them even LOWER prices for the components they need to build their systems. The market isn't all split up between a hundred or so companies..so money and resources and assets are more concentrated (essentially allowing greater R&D potiential and services offered, at the cost of higher corruption). We would see prices decrease, but at the same time, the market would increase, so profits would remain and eventually grow as service and market trust increases.

    What prevents this from happening is the terrible fracturing of bike OEM assemblers. There are only a handfull of major part producers(Sram, Shimano, Campagnolo, Easton, Mavic, Alex, DT swiss.). Just as in the computer buisness there are only a handfull of major players producing the raw componenetry. (intel and AMd for Procs, Nvidia and ATI for video..)

    But then, you have over a hundred or so OEM assemblers taking these quality components and turning them into a bike. These companies are relatively small, deal in smaller quantities, and thus to meet their bottom line they impose price controls and sell through small-channel methods and specialty dealers, forcing bicycling to remain a fringe activity to most people. I belive the bike market needs to see some major buy-outs, and a major reduction in bicycle producers. Since actual Production has already been moved to asia by almost every bicycle producer, production quality is not a issue here. If we had maybe 5 or so major bike producers, along with a handfull of specialty producers, we would have a ideal market thats alot more inviting. There would be less choice, but overall quality consistency would be good, if not better due to fiercer competion between a few companys that have alot more resources to fight it out with. Needless to say prices would drop like a rock. Bikes that sell for 1500$ now could be going for 500-800$ in just a few years.

    No one can argue that if more people begin riding quality bikes, then things can only change for the better. The secret to riding is that you need to love your bike. If you don't love it, you won't ride it. Wal-mart bikes as they are do not inspire much love, thus little riding do we see. Put more people on better bikes, and you will see more riding, more bike-friendly laws, and a greater public awareness. (not to mention a reduction to national obesity and pollution levels.)

    Anyway, sorry for the rant. Just read some posts in the forum that got me thinking, and I ended up creating this.(Edit:Oh, and college begins tommorow, I guess I am mentally getting in gear to turn out college papers..wee..)

  2. Sorry, don't agree in the slightest. Although (IMO) the local bicycle retail industry could well do with a shake-up in terms of logistics and distribution*, I think your idea would do much more harm than good.

    (In any case, there are discount online stores in the bicycle industry too.. quite often these places sell components for significantly less than the bike store's wholesale price. And if it's a high quality, well-priced, well-specced bike from a megacorp you're looking for, they already exist too -- Giant, etc.)

    With a massive consolidation of the industry, you will kill diversity in the market. (Don't take my word for it -- look at what's happened in the automotive industry of the past 10-20 years.) It's this diversity that lets one find the 'perfect' bike for their needs and wants, and helps breed the passion amongst enthusiasts.

    Walmart bikes don't breed the passion not because they are cheap. It's because they are cynical cookie-cutter stock-keeping-units that have been designed and built in a way to serve the wishes and motives of the manufacturer and retailer, and not the end user. Price has little to do with it.

    If the bicycle industry were to follow this path, there is a very real risk we'd end up with nothing more than a small selection of expensive, high-quality cookie-cutter stock-keeping-units at our local Bike-Mega-Mart, to go alongside the cheap stuff. Would these be cheaper than the bikes currently available to us? Yes. But just because things are cheaper to purchase, doesn't mean the industry is any better for it.

    Big example, and the one most obvious to the average consumer that is supposed to "benefit" from this change: support. Outside of enterprise-grade support contracts, customer service (especially after-sales) in the computer industry is SHOCKINGLY APPALING.

    I also doubt the assertion that the quality of computer hardware has significantly improved.. look at recent industry history ... [censored]-poor EMI sheilding on analog circuitry, hard disk warranties and rated duty-cycle going down the tubes, ever poorer build quality and tolerances in manufacture (shoddily fitting, cheap feeling plastics used on devices, lest you buy anything less than the highest-end model), firmware/hardware bugs that remain unresolved for years (if at all), ...

    .. but hey, I can buy a $29 inkjet printer! 🙄

    * -- with this I'm talking about the "oh no the online stores/eBay are killing us!" thing. Then again, locally I've found stores that have broken through this barrier and are very successful because of it. And -- surprise surprise -- their successes have nothing to do with pricing.

  3. Excellent post Rex. The last thing we need is choosing one of five bike brands available uniformly worldwide, with Campy Record/Chorus or the entire Shimano line-up. Sheesh! 🙄

  4. In a world where no matter where you go on the planet- you find everyone wearing clothes from Old Navy, buying their hardware goods from Home Depot, consuming the ubiquitous starbucks and mcdonalds...

    i take extreme comfort in the fact that i consider my LBS as a friend. i value his experience, his advise, his talents, etc. and am actually willing to pay more (god forbid!) to ensure that he stays in business- so he's there to tune for me, to guide me, and offer me assistance in the future. the guy has raced more than some have ever ridden and laced more spokes than i could ever imagine.

    a good case in point is mentioned above- HOME DEPOT. they came into Anytown, USA and sprouted a store. they had good prices, plenty of helpful people in orange vests in every isle to answer question, and the store itself was something just to experience.

    they drove the small mom and pop hardward stores out of business. like the dinosaurs... they went extinct.

    well, now with no competition- prices are not really that "special" anymore- their service is abominable- and just TRY to find anybody in a orange vest that can even tell time, let alone help you figure out what sort of nails to use...

    and now, we cry that there is no local hardware store to offer advise, supply something special or to help with projects...

    now- imagine BIKEMART sprouting up right next door. you walk in and the've 75 Pinarellos, 85 Kuotas, lines of Colnagos.... all at terrific prices. great right?

    then, five years later, when the cash registers are manned with high school drop outs- whos answer to the simplest of questions is- "huh?"... and the quality of those great names has gone to [censored] becaused of the volume being produced...

    and you're going to cry that no one's there to actually HELP you. just an internet sight problem solving flow chart... that inevitably ends with a virtual shopping cart.

    i really like the fact that my LBS measured me, helped me pick out my frame size and manufacturer- helped me sort out the wheel choice, advised me on components- and then assembled it to my specs.

    i can stop in and they tune it up- make all those little sounds go away- for no charge- and offer discounts, let you borrow a tool, or throw a small part at you for no charge...

    try that thru an internet site or mega dealer that simply charges your credit card and ships you a box.

    yes, there is a time and a place for everything under heaven... but this "screw the LBS, put it all in a computer market, and lets burn it all to the ground so i can have an Eddie Merckx for $29.99" is doing a whole hell of a lot of more harm than good.

  5. I don't want the Walmart marketing stretegy adopted by the bike industry. It would absolutely ruin one of the last ma-and-pa holdouts in a world over-run by homogeneity. If you kiss the LBS goodbye, then also say your so-longs to all of the "cottage" builders and tinkerers who keep planet bike interesting and fun through diversity.

  6. another thought-

    with the demise of the LBS and the rise of your "computer market"...

    whos going to sponsor the local races and racers? where's the next young Geoge Hincapie going to hang out, get a jersey for free, and fall in love with the sport?

    grass roots racing will wither and die

  7. schmuzzy said:

    another thought-

    with the demise of the LBS and the rise of your "computer market"...

    whos going to sponsor the local races and racers? where's the next young Geoge Hincapie going to hang out, get a jersey for free, and fall in love with the sport?

    grass roots racing will wither and die

    Uhm, I know you probably don't know about this but Lan partys are being held all over the world with prizes exceeding over 100,000$. Where does that price money come from? Hmm..sponsors..like AMD..Intel..Nvidia..Microsoft...and they got the $$$ to back their gaming teams.

    Quoted post said:

    i take extreme comfort in the fact that i consider my LBS as a friend. i value his experience, his advise, his talents, etc. and am actually willing to pay more (god forbid!) to ensure that he stays in business- so he's there to tune for me, to guide me, and offer me assistance in the future. the guy has raced more than some have ever ridden and laced more spokes than i could ever imagine.

    Thats nice, but like I mentioned in my earlier post, not all LBS's are made the same. Its great that you foun a good one, but for every good one there can be several bad ones. They may be a fraction the size of a department store, but they treat you like [censored] unless your eyeing their most expensive item..or they just generally rip everyone off right and left. I've seen it all, trust me..Its disgusting.

    Quoted post said:

    With a massive consolidation of the industry, you will kill diversity in the market. (Don't take my word for it -- look at what's happened in the automotive industry of the past 10-20 years.) It's this diversity that lets one find the 'perfect' bike for their needs and wants, and helps breed the passion amongst enthusiasts.

    We've got Tons of companys, all making basicly the same bike already, under different names. KHS, Giant, Specialized, Marin, Trek, Cannondale, Iron Horse, Fuji, Pacific Cycles, Yeti, ect, ect. They don't work with you..they make a few models of bikes, with different frame sizes, and thats as custom as it gets. The bikes are inherently the same, with minor variations in frame geometry and construction. Even that is minimal, since the vast majority of these manufactures all get their bikes made out of the same chinese factorys. I guess if you might count the hundred different kinds of paint jobs you can get as "Diversity" that we might lose..

    Quoted post said:

    a good case in point is mentioned above- HOME DEPOT. they came into Anytown, USA and sprouted a store. they had good prices, plenty of helpful people in orange vests in every isle to answer question, and the store itself was something just to experience.

    they drove the small mom and pop hardward stores out of business. like the dinosaurs... they went extinct.

    well, now with no competition- prices are not really that "special" anymore- their service is abominable- and just TRY to find anybody in a orange vest that can even tell time, let alone help you figure out what sort of nails to use...

    I don't think the correlation with Home Depot is right either. Generic bikes are sold out of a generic store, and it would be expected, like at a car dealership, that they have a good, trained staff of car mechanics(er, Bike mechanics in this case) to help fit, fix and get you going on your generic bike. Bikes arn't nails after all..they are vehicles, and I imagine that the experience would be closer to a car dealership then a hardware store...🙄

    Anyway, you would have smaller bike shops still, that sell more 'exotic' bikes and also work closely with custom builders to get you a unique, custom ride tailored to you. Even the price of custom bikes would be lower, because Shimano and other component companys would be selling in higher volume and thus less price. Not only that, they'd have the same, friendly, highly skilled bike mechanics your used to dealing with today. I work in a local Computer shop, thats how we are, hell we even have customers that will sit with my co-worker and they'll kick back a couple beers together while they work on his computer.

    Quoted post said:

    then, five years later, when the cash registers are manned with high school drop outs- whos answer to the simplest of questions is- "huh?"... and the quality of those great names has gone to [censored] becaused of the volume being produced...

    This is a aboslute farce. Bikes are already being mass produced in china by most of the 'big' producers. THe only thing that will change is they might have to build another factory to turn out bikes. And like I said before, I would expect customer service to be akin to a car dealership rather then a mc-donald..gezz..

    Quoted post said:

    Big example, and the one most obvious to the average consumer that is supposed to "benefit" from this change: support. Outside of enterprise-grade support contracts, customer service (especially after-sales) in the computer industry is SHOCKINGLY APPALING.

    I also doubt the assertion that the quality of computer hardware has significantly improved.. look at recent industry history ... [censored]-poor EMI sheilding on analog circuitry, hard disk warranties and rated duty-cycle going down the tubes, ever poorer build quality and tolerances in manufacture (shoddily fitting, cheap feeling plastics used on devices, lest you buy anything less than the highest-end model), firmware/hardware bugs that remain unresolved for years (if at all), ...

    I totally disagree, since 8 years ago..how big was your hard drive? Not much I bet..if you had a 10 gig you were king of the hill. Not even a decade later we have 750 Gig drives. Why? Computer buisness is more lucrative and produces more revenue..that means more money for R&D. Have you ever looked at a Dell omniplex made back in the late 90's? I have..I have had the displeasure of working on them. Trust me, I think I know this more then you..computer quality HAS gone up. I'd rather have a largely plastic computer that looks decent compared to the corrugated metal, 2 ton eyesores we had not too long ago.

    As it is in the Bike world, this is what you get for service: A Warranty that baisicly says "It has a life time warranty..until it breaks". A hit or miss system of LBS's to repair your bike, and a custom fit job..if you want to spend the extra 200 dollars for it. This might seem insignificant to someone spending a few grand on their bike..but to some one only willing to put down 400, thats a 50% increase in cost for that "customized" fit you get at a lbs.

    _________________________

    At any rate, even I don't think this would work..BUT not for the reasons you guys have come up with. All I've heard is alot of knee-jerk reactions to sweeping change that people always seem to be able to belch up...

    I will offer the real reason this won't work. Lack Of Demand. Bikes arn't a "must have one in every household to function" comodity, like a Car or a Computer or a TV even. That is what condemns them to the obscurity they exist in now. Of Course, when Oil runs out 20 years from now, and we don't have any other method of transportation..that could all change. Then like it or not, the model I described above will be the one that the industry switches too. Then again..it wouldn't last, since us lazy humans don't like to use our muscles for anything...

    Its nice to think about it though, in my opinion..and I still would like to see at least some of the major generic bike producers merge. I am so sick of looking at a specialized, then a Trek, then a KHS, and see not a damn real difference between them..when they could be working together to make their generic bike at a lower price with better technology. Thats my idea in a nutshell.

  8. i think the whole industry should do price protection that would save it

  9. Quoted post said:

    We've got Tons of companys, all making basicly the same bike already, under different names. KHS, Giant, Specialized, Marin, Trek, Cannondale, Iron Horse, Fuji, Pacific Cycles, Yeti, ect, ect. They don't work with you..they make a few models of bikes, with different frame sizes, and thats as custom as it gets.


    Basically the same bike? 🙄 I guess there's no difference between a Giant OCR, Scott CR1, Specialized Roubaix, Look 585, Cannondale CAAD8, or anything else then. Let's not even begin with mountain bikes, where there are so many varieties and nuances on suspension design it's virtually impossible to not find one that matches your riding style perfectly..

    Yes, each manufacturer makes a few models of bikes, but this is done with their own take on geometry, materials and construction, weight vs. longevity, stiffness vs. compliance, etc... and the sheer number of 'non-custom' manufacturers (the thing you're proposing we get rid of) virtually guarantees that you'll be able to find something that matches both your riding style and physical measurements.

    Quoted post said:

    The bikes are inherently the same, with minor variations in frame geometry and construction. Even that is minimal, since the vast majority of these manufactures all get their bikes made out of the same chinese factorys.


    Just because some companies may contract out their manufacturing to the same off-shore factory (or a factory that happens to be in the same country as another), doesn't mean the design, manufacture, or QA/attention to build quality is identical.

    Quoted post said:

    I don't think the correlation with Home Depot is right either. Generic bikes are sold out of a generic store, and it would be expected, like at a car dealership, that they have a good, trained staff of car mechanics(er, Bike mechanics in this case) to help fit, fix and get you going on your generic bike.


    A generic bike to call my very own! It will fit so well with my white Toyota Camry, in the garage of my McMansion situated in an exurban cul-de-sac full of fittings and knick-nacks from the Super Walmart 20 km down the road! 😉

    Quoted post said:

    Anyway, you would have smaller bike shops still, that sell more 'exotic' bikes and also work closely with custom builders to get you a unique, custom ride tailored to you. Even the price of custom bikes would be lower, because Shimano and other component companys would be selling in higher volume and thus less price. Not only that, they'd have the same, friendly, highly skilled bike mechanics your used to dealing with today.


    I don't think anyone is doubting this. There will always be the Richard Sachses and Serottas of the world. The issue a lot of people have with this idea is that in order to get a bike that matches their exact requirements, they'll end up forced to go to these no-expense-spared custom builders, because the wide variety of mainstream choices offered by the current marketplace no longer exist.

    Quoted post said:

    I work in a local Computer shop, thats how we are, hell we even have customers that will sit with my co-worker and they'll kick back a couple beers together while they work on his computer.


    No doubt your prices, especially at the low to medium end, have no hope in matching what Dell can offer. (Let alone some of those crazy loss-leader sales they run from time to time)

    It's quite likely that customers choose your shop because you offer this level of service and attention to detail, despite the fact that things cost a little bit more.

    Quoted post said:

    This is a aboslute farce. Bikes are already being mass produced in china by most of the 'big' producers.


    Only the mass-produced, decent yet cost-effective and not all that 'exotic' ones. The bikes purchased by people who want a modest yet reliable set of wheels. Basically, it's simply a reflection that the production efficiencies you propose, for all practical purposes, already exist in the sectors of the bicycle market where it makes most sense.

    Quoted post said:

    I totally disagree, since 8 years ago..how big was your hard drive? Not much I bet..if you had a 10 gig you were king of the hill. Not even a decade later we have 750 Gig drives.


    I think you're conflating capacity and technological development, with reliability and quality of manufacture. The two are not interchangable.

    Quoted post said:

    Have you ever looked at a Dell omniplex made back in the late 90's? I have..I have had the displeasure of working on them. Trust me, I think I know this more then you..computer quality HAS gone up. I'd rather have a largely plastic computer that looks decent compared to the corrugated metal, 2 ton eyesores we had not too long ago.


    This may just be a humble cycling forum, but I think you'd be surprised at the varied backgrounds we all have..

    External appearance of quality and ease-of-maintenance is not what I'm talking about here. I'm talking about the compromises in engineering which have meant that many components are built to be barely 'good enough for consumer use', so that they can be sold cheaply.

    The computer industry went through a very ugly race to the bottom in the early 90s. Forever chasing a better price point, system board and component quality went down the tubes. The time of cheap and nasty Kalok hard drives, PC-Chips motherboards, and the unforgettable 'fake cache' scandal (This is my favourite. They would mount solid plastic cache-chip-looking blobs on the motherboard, and then hard-code the BIOS to report cache was present -- this saved a good $10 or so on manufacture, and hey, all motherboards look the same, so they must all be the same, no?)

    Fortunately cooler heads prevailed in the market and stopped the chasing-price-at-all-costs insanity. Still, nowadays we still have modern examples of similar antics happening:

    * hard disk manufacturers stripping their warranties and load-ratings bare, trying to placate consumers with a line such as, "You don't really need hard disks that are that reliable. Look! You'll save $20!" Fortunately customers fought back vigorously (data is a valuable asset), and now you can buy higher-quality hard disks again (for a nominal extra charge, of course.. a charge that's higher than what the cost saving was in the first place)
    * unscrupulous CPU distributors (and some retailers) re-marking processors with a higher speed-grade and surreptitiously overclocking them
    * power supplies that are bundled with many low end cases, that are utterly unable to cope with the load ratings they are specified for.. the resulting 'brown-outs' on the logic voltage lines causing system corruption and instability.
    * the 'leaky capacitor' fiasco. Some major manufacturers of passive components switched to a cheaper 'counterfeit' dielectic medium for their capacitors, which over time causes excessive gas build-up in the can, causing them to 'pop' and leak [censored] all over circuit boards. Despite these leaky caps being used by almost all circuit board factories in the early 00's, only a handful of companies even admitted there was any problem.
    * the Apple iBook logic board fiasco. Revision after revision of notebook logic boards that had critical weak-points, with the replacements continuing to fail, Apple sometimes refusing to honour repeat warranty obligations and/or using it as an opportunity to sell an extended warranty (!) It took a class-action lawsuit to get anything to happen.

    I could go on, but I think that's enough to illustrate the point of what happens when you concentrate on price as the sole arbiter of 'progress'.

    Quoted post said:

    As it is in the Bike world, this is what you get for service: A Warranty that baisicly says "It has a life time warranty..until it breaks".


    That most definitely hasn't been my experience.

    About 8 or 9 months into buying my first road bike, the rear rim started cracking at the eyelets. Rim was replaced with a higher quality replacement. No fuss, no charge.

    I bought a second-hand lightweight wheelset from one bike store, and rear spokes started having a habit of breaking. After it happened for the second time, they called the wheel distributor for new set of spokes and rim, and completely rebuilt the wheel. No fuss, no charge.

    I'm going through a 'warranty' claim right now with the suspension fork on my mountain bike -- except technically speaking, it's no longer under warranty. The fork internals crapped out, covering my wheel and front disc brake with gooey junk.

    The bike shop (who I didn't buy the bike from!) fixed up the front brake at no charge, while overhauling the front fork at their standard regular service fee. However problems still remained, so they got the shock expert from Cannondale in to overhaul it again, free of charge. Problem still present. The fork then went under more intense scrutiny at Cannondale's regional office, who have pronounced the shock dead. Their response? We can replace the fork for you, or if you want to pay a little extra, we'll give you the option of upgrading to a better model.

    Not bad for something they had every right to throw back at me and say, "Yep, dead fork, no warranty. Have a nice day! By the way, don't use your front brake"

    Compare this to the universally bad experience people tend to have with computer industry service and support. Heck, forums just like these are a great example... the tech help given in cycling forums such as these is often because people don't want to bother going to their LBS for service, or they want to learn about stuff. And if the problem is too hard, the catch-all solution to the problem is, "This sounds difficult. Drop by your LBS and get them to sort it out"

    Compare this to computing forums, where the tech-help boards are full of people who have all manner of problems with their computer, forced to rely on those forums for help because the manufacturers' [censored]-poor excuse for customer support has left them high and dry.

    Quoted post said:

    A hit or miss system of LBS's to repair your bike, and a custom fit job..if you want to spend the extra 200 dollars for it. This might seem insignificant to someone spending a few grand on their bike..but to some one only willing to put down 400, thats a 50% increase in cost for that "customized" fit you get at a lbs.


    I don't expect these fly-by-night bike shops you're talking about to be in the business more than a couple of months, with the sort of behaviour you're talking about.

    All the shops I've seen go through a fitting and at least some sort of customisation process for all the bikes they sell, be it a $200 low end mountain bike for the local paths, or a $12,000 Carbon-Unobtanium alloy road bike.. along with free servicing for the first few months, as componentry beds in.

    Quoted post said:

    Of Course, when Oil runs out 20 years from now, and we don't have any other method of transportation..that could all change. Then like it or not, the model I described above will be the one that the industry switches too. Then again..it wouldn't last, since us lazy humans don't like to use our muscles for anything...


    Unfortunately though, for the very same reason cars lose favour, we'd be forced to localise industries -- in light of skyrocketing energy costs, the act of shipping generic bikes from massive factories half way around the world will lose its price advantage.

    Taken to its extreme, it gets worse: in the process of all this mass-consolidation we'll have destroyed the very industry that could have blunted the fall. We'd be left with a batch of bikes in the Taipei dock-yards we can't possibly afford to bring home! 🙁

    Heck, even the regional just-in-time logistics systems (economically efficient only due to the low cost of energy and transportation) would start to become unfeasible. Forget bikes, think of what will happen to the Wal-Mart business model itself, that so many supermarkets and other 'critical' shops now rely on :eek: Scary thought. Let's hope it doesn't get to that. (Worse still, the oil doesn't have to run out as such, it just has to get sufficiently expensive)

    Quoted post said:

    Its nice to think about it though, in my opinion..and I still would like to see at least some of the major generic bike producers merge.


    Don't worry, those in the industry that share your view (at least to some degree) have carved out their own place in the industry. The great thing about the free market is choice: that we can both get what we want, according to our own priorities: it doesn't have to be one way or the other.

    The Trek bicycle group is a merger of Trek, Klein, Gary Fisher, LeMond, Bontrager, and probably a few others I can't remember. Giant is a massive manufacturing concern based in Taiwan. They contract out their massive factory production space to anyone who wants them to do their dirty work. All according to the customer's unique design and QA standard of course.

    There's enough economy of scale in those two juggernauts alone to produce the benefits you want. Except pesky Gary Fisher and LeMond, they're ruining the Grand Generic Dream by making their own unique designs that are completely different to Trek's :p And how dare Giant allow their contract customers dictate their own terms on design and quality. Gotta eek out that extra 0.1% of operational efficiency.. 😉

    On the retail side: there already are massive bike store chains selling quality yet not-so-exotic bicycles, at a price point that beats the smaller time bicycle brands and retail stores. If that's the purchasing experience you're looking for -- there you go. Vote with your dollars, the free market in action.

    Quoted post said:

    I am so sick of looking at a specialized, then a Trek, then a KHS, and see not a damn real difference between them..when they could be working together to make their generic bike at a lower price with better technology. Thats my idea in a nutshell.


    Maybe you're not looking hard enough.

    Some of the lower-end bikes from each company are quite similar; this is mainly because in that part of the market, the margins are so thin, there is no "wiggle room" to allow for R&D or anything too fancy. It has to come from the higher-end, higher-margin bikes and trickle down to the cheaper ones as manufacturing costs allow.

    Mass rebadging of the same generic item has often shown not to work in many sectors that have tried it. Let's take for example the car industry, which has tried it many times, often with failure. One of the few that have been able to make it work is VAG: the "VW Golf" chassis design (let's say this is roughly analogous to a bike frame) is used on the VW Golf/Beetle/Jetta, Audi A3, Audi TT, Skoda Octavia, and Seat Leon. The only way they made it work is by a having significant amount of differentiation from one version to the next (build quality, handling traits, interior appointments, form factor etc.)

    In a complicated system of components like a car, there's scope to use only a few basic platforms like this and still provide enough differentiation for each of them to work in the marketplace. For something simple like a bicycle frame, it's easier for each company to just design and build their own frame according to what they want.

  10. I agree with blademum.

    The bicycle industry market structure cannot be categorized into a single market category. It is in fact a rough blend of two. It is oligopolistic as well as monopolistically competetive. On one hand, it has oligopolistic characteristics, lending it simliarities to the monopolistic type industries. On the other hand, it is also monopolistically competetive -i.e towards the perfectly competetive market structure end of the spectrum.

    What do i mean by all these? Simply put, in the bike industry, there are two separate sub-industries which makes up the two. There is the equipment/component manufacturers, who are dominated mainly by the big boys (campagnolo, shimano,) and there are fringe manufacturers comprising of smaller companies. The 2nd sub-industry is the bicycle service sector- or if you would like, the LBS.

    By understanding that there is a LBS industry supporting the main bicycle industry, we can than make comments on what is best.

    The main equipment suppliers will never sell direct. Period. It costs too much. This involves advertising, customer support etc. They employ the help of distributors for that very purpose- i.e LBS or Bicycle companies like Giant etc. By dealing only with suppliers, this helps reduce overheads for them, as they can focus on selling in bulk- e.g 10,000 units of shimana dura ace groupsets to cervelo. Make no mistake, this means cheaper products.

    It is the existence of reselling of products that makes bicycles costly. e.g, Shimano sells components to giant, giant sells bikes to distributor, LBS gets from distributor, we get from LBS.

    In summary, the bicycle industry will always be expensive as long as LBS are going to be the middle man so to speak. The question you must ask yourselves is, do you still want your MA & PA cottage industry LBS, or do you want cheaper goods? Online bikeshops are the beginning of the possibility of change which would make LBS obsolete as bicycle suppliers. But this does not mean it cannot survive as a service provider.

  11. Blademun said:

    I am close friends with a Lbs owner, and I work in the computer field. One thing that drives me nuts are all the price-controls in the bicycling market. Protecting the little guy? The outdated buisness model of selling bikes out of little mon-and-pop stores is destroying the industry. Bulk selling and buying would bring prices back down to a less then astronomical level. Average people would start considering riding quality bikes. THe market would GROW!! People could put more faith in a very-large manufacturer who provides real warranty, repair and replacement garantees..not a tiny bike-shop who's service can vary wildly in quality.

    The computer market has no controls, its completely free-market. That is the thing that has caused computer prices to drop steadily for the last decade, while quality has gone up significantly, and you can purchase the parts individually(you don't need to own a shop, sites like Newegg.com make it happen) and build yourself a computer for alot less then buying from Dell, Compaq, ect (assuming you have the technical know-how). In the bike world its the other way round..if you have the knowledge and tools to build a bike part for part, you end up paying more then if you had bought a bike for whole.

    To compare, imagine if you could purchase a bike, or bike parts, at a price similar to what your LBS gets. Yep, thats what we get in the Computer Market, no buisness account required. Dell and COmpaq remain competitive because they deal in huge volume, and work out deals that allow them even LOWER prices for the components they need to build their systems. The market isn't all split up between a hundred or so companies..so money and resources and assets are more concentrated (essentially allowing greater R&D potiential and services offered, at the cost of higher corruption). We would see prices decrease, but at the same time, the market would increase, so profits would remain and eventually grow as service and market trust increases.

    What prevents this from happening is the terrible fracturing of bike OEM assemblers. There are only a handfull of major part producers(Sram, Shimano, Campagnolo, Easton, Mavic, Alex, DT swiss.). Just as in the computer buisness there are only a handfull of major players producing the raw componenetry. (intel and AMd for Procs, Nvidia and ATI for video..)

    But then, you have over a hundred or so OEM assemblers taking these quality components and turning them into a bike. These companies are relatively small, deal in smaller quantities, and thus to meet their bottom line they impose price controls and sell through small-channel methods and specialty dealers, forcing bicycling to remain a fringe activity to most people. I belive the bike market needs to see some major buy-outs, and a major reduction in bicycle producers. Since actual Production has already been moved to asia by almost every bicycle producer, production quality is not a issue here. If we had maybe 5 or so major bike producers, along with a handfull of specialty producers, we would have a ideal market thats alot more inviting. There would be less choice, but overall quality consistency would be good, if not better due to fiercer competion between a few companys that have alot more resources to fight it out with. Needless to say prices would drop like a rock. Bikes that sell for 1500$ now could be going for 500-800$ in just a few years.

    No one can argue that if more people begin riding quality bikes, then things can only change for the better. The secret to riding is that you need to love your bike. If you don't love it, you won't ride it. Wal-mart bikes as they are do not inspire much love, thus little riding do we see. Put more people on better bikes, and you will see more riding, more bike-friendly laws, and a greater public awareness. (not to mention a reduction to national obesity and pollution levels.)

    Anyway, sorry for the rant. Just read some posts in the forum that got me thinking, and I ended up creating this.(Edit:Oh, and college begins tommorow, I guess I am mentally getting in gear to turn out college papers..wee..)


    Survival of the fittest, adapt or die!

  12. People like to buy things in person. They want to see it and touch it. A bike that costs a decent amount should be seen in person. Its like unless you know what you are looking at. Every area of the country and world is different. You see different cars in metropolitan areas and smaller towns buy more american cars. So bikes are the same way. People buy what they think they can afford. It makes no sense to buy things out of your means to impress other people.
    Economy dictates spending.

Active in the last 60 minutes

Active in this thread

0 users · 0 guests ·0 bots ·0 total

No signed-in users are active right now.

No known search crawlers active right now.