When I came back from Europe, I saw that the whole of Europe was online; the States, everything just works online, and in South Africa there's nothing like it. From the beginning I told my old man I don't actually want to sell bikes, I don't want to be a salesman on the floor, standing all day on the floor and sell bicycles for a living; I want to try something different. And then I wanted to start online and my dad though, 'This is the worst thing ever', the whole generation, they hate the internet -- it just doesn't gel.What actually happened was that we had a guy that offered to buy ten Dura Ace group sets from me and I phoned the local distributors in South Africa and asked them for a better deal on the groupsets and they told me 'no'. Apparently there was another bike shop that also got the same request, so the guy was shopping around, and they didn't want to give me the same deal they gave the other bike shop. I was really, really disappointed. And because we were really good friends with Mario Cippolini at the time, my dad actually phoned him and asked him if it's possible to get a hold of Shimano groupsets, and he said, 'no problem'. I mean, in Europe you can get cycling equipment anywhere. And he came back with a price, and it was like 4 grand cheaper than what I could get it locally for. Then I contacted the client and immediately he took it. And then we just decided, there's a big gap; somebody, somewhere, some okes are making a lot of money in this country, they've basically got a monopoly; they can ask what they want for the components because nobody's importing. So then we were sourcing more and more, and we saw that this is a big opportunity.
Chris Willemse Jr.
Price and Availability
Chris Willemse Jnr
CWC haven't chosen to stock niche products for the most part, instead supplying the most popular. It's the two extremities. On the one hand you sell to the main market: all the most popular manufacturers and best selling products for the masses, but only occupying a piece of the market. And on the other you have a niche market: most of what you sell is sold only by you, but your market is significantly smaller. CWC are on the former hand and it brings its own sorts of problems.
The first two years it was grafting and we were getting a lot of slack from the local distributors. Then the big thing when we went to court - Mavic International took us to court because we were importing the wheels. The South African law protects you, you can import anything, as long as you pay your duties, your VAT. They were contesting grey imports, but as long as it's original, you pay duties and your VAT, and the local distributors don't have to cover the warranty on that product.After two years we won the court case and then after we won that then all the wholesalers were like, 'If Mavic International fought for two years and couldn't get it right, then I'm sure the guy around the corner is not going to get anything right and it's not worth taking them to court'… Wholesalers are still complaining, because we basically cut out the middle man. If we cut out the middle man with some products or some brands that we can, we try and sell it to the public at what the rest of our competition and other bike shops buy the item for. It actually helped us go that way and now we are not actually importing that much any more and buy bulk from the local guys. They saw the light, as there's no point because you can't stop us and now we rather go to the supplier… and some of the okes are flexible and go the extra mile and give us better deals, and the guys that don't, then we just keep on importing. It's become such a competitive market now that there's no loyalty. I need to go where I get the best deal. If it's 5% more expensive then I'll buy it local, I'll support guy, but when it starts, 20, 30% then at the end of the day I'll gain his cut prices and be cheaper than the rest, so we need to do it. Sometimes it's not nice to think there's a guy with his business, he's importing into the country and I undercut, or cut them out and basically import it direct, but then again that's how I survive.
Service CWC has had some difficulty with stocking items, at times even selling the last of one item twice in 5 minutes. This has been down to the fact that the CWC online shop is connected to their Tygervalley store, so stock between the two can get messy.
The problem is we've got the online store combined with this shop. So we've got people walking in, we've got a sale running in the back, we've got the client taking the item off the shelf; somebody buys it on the website while this guy's walking around here for 1 hour with the item in his hand. You can't actually tell the guy, 'Sorry I've just sold that, please give it back.' Or the one guy buys it with a credit card, the other guy has it in his cart, he's doing the EFT in the next 15 minutes, and now one guy's upset and we try and give him something better or something more or less the same. But it does happen and all because it happened too quick.
CWC have come to the conclusion that a shop-front with an online store in the back doesn't work. There's too many double orders to the point that their stock cannot keep up. So in order to solve this they are looking to separate the LBS from online, with an independent warehouse and a small showroom in case a customer wants to pick up their products or see what is on offer in person. It will basically be a distribution warehouse where the online will be held and where distribution to their shops will also take place.What this will surely help with it keeping the two kinds of shops separate and allow them to focus on the different kinds of services that each shop needs. LBS's need to give individual and personable attention. Customers mostly come into the shop if they want to talk to someone face to face, and they especially want to be able to take their time. So for the shop to worry about an item being carried around while it has already being bought online is not ideal. Online shops need to be accurate in their service. If something says it's in stock, then it should be. If you've ordered and have paid for something, you want to receive it. Keeping the online store separate will also allow more individual attention to be paid to online customers, making them feel like it is not only a store that sells things, but also a place where you can get information about the products being sold. Chris Willemse Cycles: www.cwcycles.co.za
Part 2: Evo Bikes Part 3: Dial'd Bikes Part 4: Conclusion