Chris Willemse on imports

[MAESTRO's]

This thread is crying out for an injection of fire, something that will keep this thread going for at least another 20 pages, a broad sweeping statement, thoughtless and unfounded, uttered in the heat of the moment...

 

It is rumoured that CWC bring their cheap imports into the country in suit cases, bypassing customs and avoiding the heavy duties on imports, transferring the money they cheated SARS out of on to their customers as a saving. At our Christmas Day lunch I asked my uncle Trevor what his view was on this sort of 'smokkeling' and he assured me that such criminal activities are viewed in a very dim light. I was surprised that he referred to it as criminal activities but then again, Tax evasion is a criminal offence. But I quickly had to pretend that I didn't know anybody from CWC just in case I became implicated in abetting these nefarious crooks. All Trevor's words I promise...

 

 

Suffice to say that if CWC does honestly declare the likes of his Sidi shoes, Lazer helmets and what ever clothing brands he carries to customs, then I have no problem with him bypassing the local importer. If this is not the case however, well I think the competition board will most certainly have their work cut out to resolve this fiasco. 

[Brakkies Sport Fotos]

scorps, as I said before, he got containers with stock sitting at Customs to be cleared before his new On-Line site can go live.

 

 

 

So, Yes he is paying the VAT and import duties

 

 

 

 

[MAESTRO's]

As long as the playing fields are level, I'm happy

[quinton]

My understanding is that you could bring sporting goods in your suitcase that exempt from import duties as long as it is for your own use...

[Iwan Kemp]

Great weather in Cape Town todayThe Crow2008-01-03 10:21:43

[Windbreaker]

After reading all of this I have my 2c worth!

 

CWC knows how to work the "bleeding heart" system and "no publicity is bad publicity". Personally, I think that his original posting is in bad taste. Unless he was making specific statements about specific issues then he is using this forum to pursue his own agenda and the distributors have the right to respond.

 

I think that he is going to have a problem convincing the competition board that the "distributors" are being anti-competitive. His own actions of bypassing them (when it suits him) prove the point. As Brandon Els states everyone has the right to do business with whom they wish. They are excersizing the same right that he is excersizing. All you guys taking Els to task for his posting about the 60-90 days you seem to have missed the point that CWC started the fight.

 

As for the Cartel thing (had CWC named them he would have my vote as the shining knight) if it exists then it should be pursued but it sounds to me a little bit like "he wants his cake and eat it too". "I'll bypass you when it suits me but when I want to buy from you you must sell to me and I want it on terms like everyone else". Get real!

 

I think that we need a thread on this forum that publishes the pricing from all the major LBS as well as the online shops compared with a few of the overseas online shops. That will soon expose where all the "loot" is being hidden.

 

I shop around for the best service and usually price is secondary except where it is over the top.

 

[Craven]

Thank you Windbreaker! You have just saved my sanity and my belief in thehub.

[Chrispy]

My 2 cents worth:

Mr Els as a MD of a company one would expect that you get your facts correct when responding.

 1. The post was done by Chris Willemse Snr as can be seen when you check the person's profile. You keep on attacking Chris Willemse Jnr.

 

2. Your financial dept gives the thumbs up on the debtor's days outstanding for CWC. Yet you argue the point and want to disclose the past 5 years debtors book.

 

On a positive note: CWC and CWC Online keep on giving the excellent service  you guys are giving to the cyclist out there!!!!!

 

Who needs enemies when you have friends like Pro-bike

 

 

 

[steve]

My 2 cents worth:

 

Mr Els as a MD of a company one would expect that you get your facts correct when responding.

1. The post was done by Chris Willemse Snr as can be seen when you check the person's profile. You keep on attacking Chris Willemse Jnr.

 

2. Your financial dept gives the thumbs up on the debtor's days outstanding for CWC. Yet you argue the point and want to disclose the past 5 years debtors book.

 

On a positive note: CWC and CWC Online keep on giving the excellent service you guys are giving to the cyclist out there!!!!!

 

Who needs enemies when you have friends like Pro-bike

 

 

 

........ so when was the account rectified? Could it have been sorted only after Mr Els made its status public or uh, never mind, I must finish my ritilin

[Wolweseun]

It is now 2008 (believe it or not)

The cycling industry is stuck in a paradigm and the the current model of doing business is changing and a lot of people stuck in a comfort zone are kicking against it!

Unfortunately some good people may be lost, but that is business!

Expect to see more online Shops and more wholesale warehouses direct to the public, as low margin higher volume stores take over.

Why did we stop shopping at the corner cafe and go to pick n pay.

 

The small pharmacy with unrealistic margins is dying I now go to Dis Chem for better deals sure I miss the warm fuzzy feeling of personal attention but I go back to Dis Chem

 

There probably will be a market for boutiuqe type personal bike shop's but I believe the industry players must Adapt or Die.

 

 

[Brandon Els]

 

 

My 2 cents worth:

 

Mr Els as a MD of a company one would expect that you get your facts correct when responding.

1. The post was done by Chris Willemse Snr as can be seen when you check the person's profile. You keep on attacking Chris Willemse Jnr.

 

2. Your financial dept gives the thumbs up on the debtor's days outstanding for CWC. Yet you argue the point and want to disclose the past 5 years debtors book.

 

On a positive note: CWC and CWC Online keep on giving the excellent service you guys are giving to the cyclist out there!!!!!

 

Who needs enemies when you have friends like Pro-bike

 

 

 

........ so when was the account rectified? Could it have been sorted only after Mr Els made its status public or uh, never mind, I must finish my ritilin

 

Here's what happened: our AS400 was updated 2 days late and CWC paid on 28.12.2007 which was the due date. The payment was put through by Probike after I studied the account history.

 

Chris Snr should follow the posts on the hub that are made about wholesalers that at times have seen him through trying times and my business partner Peter Miller is one of those people who made sure that happened.

 

So when wholesalers who have shown this support read on a public forum that their industry is now headed for litigation by the very people they helped keep the doors open then excuse a tongue in cheek comment based on the mental history of the status of the account.

 

The bicycle industry is not silly games. Millions and millions are invested in people, square meters that is consumed by the volumetric nature of the product and marketing. The people that make these capital investments have helped people without the floor space and capital to make a living over the years like Probike has done for CWC.

 

Don't post silly messages about dragging people to court that have helped you because they may want that capital back - which is the point of the public response of if we are good enough to be seen in court then pay up your account and close it.

 

Probike today continues to finance a very large % of the bike industry and its our pleasure because we deal with great people.

[goofs]

[quote=Willehond

 

Buy from a real shop like CWC.  Cheap AND good service!

 

Cant say i has the same CWC good service experience' date= put in an order for a  tool set advertised on special together with a few other items. Received a mail stating they were out of stock with the tool set but would contact me when they had. Waited a week nothing, sent 2 follow up email's enquiring whats happening, to date still nothing.

 

[/quote]

 

I cant believe that.

I mail chris last night for 2 tyre and he responded immediately. (while being on holiday)

i'm sure there must have been a problem and your mail not gone through.

 

No, pretty sure my mail was working correctly. I see the same toolkit is still advertised on the CWC site, 2 options - either my order was not all that large +/- R1500 total so he did not see it worth his while or his promise to contact me when stock arrived means didly squat.

goofs2008-01-03 13:26:47

[straatvark]

I never used online cycling retailers before (local or international) I only bought panniers direct from US & Canadian manufactures when it was not available here.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

 

The LBS (those offering good service) might become less but will never, ever disappear:  we (Willehond that is me and the missus) & other cyclists don?t go to malls ? but go to the LBS any time. (But we use PnP online home shopping every month)

 

I?m extremely loyal to the PEOPLE at the LBS. But people (cyclists) are different so different LBS will be the ?perfect LBS? for different cyclist. And that is what do it for me. I did try CWC and it was not a match, end of story.

 

My first memory before I could even cycle of a LBS is where the owner of a shop in Stellenbosh allowed me to pick up silver ball bearings from the wooden floor at that stage. Many, many (sigh/sug/sulk) years later he and his staff still greet me on the street. Today I?m a bit out of the area but my current LBS cheered for us on the tandem at the top of Helshoogte in the Burger 2007 because they know us. Guess where i will get met my alternative hub when i dont get love from the Mavic importers? (Ok with my results i need to buy supporters)

 

Rumors of cartels and <?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Bermuda triangles where heart rate monitor dealerships disappear is sickening. Please smoke them out!

 

The account issue (not the topic) seems to be explained but the "cartel meetings" are not commented on or just ignored. hmm...

[Korbach]

This is going to be a bit long winded but it will give some insight into the grey market pricing being practised by CWC.

 

Manufacturers of bicycle components number in their thousands around the world and the fight for market share is fierce. Big volume orders which are awarded to any manufacturer, means the economies of scale kick in and they in turn, can push for higher discounts from their own suppliers of either raw material or finished and semi finished components.

 

Bicycle manufacturers are the best source of big volume orders for component manufacturers as they have annualised production runs of tens, to hundreds of thousands, of units per bike model. Any component supplier winning a contract to supply these bike manufacturers becomes an OE (Original Equipment) or OEM (Original Equipment Manufacturer) supplier.

 

Component manufacturers and suppliers are forced to discount their products heavily to win these contracts. They are prepared to do this in the interests of exposure for their brands in the retail markets of the world. A second important factor is that they are automatically the first consideration for replacement or upgrade by cyclists owning machines with these parts fitted as original equipment. Keeps the wheels turning.

 

The working profit for component manufacturers comes from the retail trade, not from parts supplied as OE at huge discounts.

 

This working profit operates throughout the supply chain and is what keeps the industry alive. We are now talking about the entire profit structure which is essential to keep cycling a going concern. The  manufacturer sells to the wholesaler, the wholesaler to the retailer, and the retailer to the end-user. Each of these is entitled to a reasonable profit (they would be dead without it), and market forces, as in everything else, will keep these prices honest.

 

Manufacturers have to factor in warranty claim costs (nothing is 100% perfect), wholesalers have to factor in promotional, advertising, and distribution/delivery costs, and bike shops have their own long list of expenses from stock holding through to rent, staff, advertising, etc.

 

So, how are Chris Willemse and other grey market distributors able to sell goods in their retail shops at prices which are often cheaper (believe it or not) than the importer or wholesale distributor can buy from their own suppliers overseas who are, often as not, also the manufacturers of the components?  It boils down to two things. Greed, and unscrupulous business practices. Here's what happens in the main.

 

Bicycle manufacturer ABC calls for contract tenders on a planned production run of 250,000 premium grade bikes. To a wheel rim, or crank, or tyre manufacturer, that means a standing production run in their factory of 500,000 units if their product has been accepted and specced on the bike. Unhappily, saddle or handle bar manufacturers will only get orders for 250,000 units if they win a contract!

 

This is business to die for. There are (say), maybe 5 or 6 manufacturers who can supply the volumes of this size with the necessary quality control measures to ensure the integrity of the brand-name bike being built.  These component manufacturers now submit their tender contracts with prices shaved to the bone as the orders are big enough to keep their production lines running for months. They are all in a severe price war where  winner takes all.

 

It is under these conditions that the greed and unscrupulous business methods emerge. Let's let's assume ABC Bikes wants to make some quick easy money on the side. Here's what he does.

 

He has actually planned to produce 240,000 bikes, not the 250,000 he's asked for tenders for. He knows that the wheel, or tyre, or group-set manufacturer he awards the supply contract to, has come in with prices which are even lower than those extended to their own distributors around the world. The wheel maker may have gone in at cost plus 10% or 15%. The tyre guys may be looking at 5% or 10% and the group-set maker at 20%, give or take a few percent. Only the huge manufacturing volumes are able to sustain such low pricing. Correcting profits have to be recovered from supplies to wholesale purchasers at normal margins (say 50% mark-up), so the manufacturer can survive.  

 

ABC Bikes now cashes in on the extra 10,000 wheels (and cranks, tyres, levers, etc) by selling them off as loose parts for cash at (say)

cost plus 20%, to anyone willing to buy them. ABS Bikes may even smoke-screen this by saying they're selling the stuff as OE replacement parts. Brand name products like Mavic, Shimano, Campagnolo, Continental,  Michelin, Fizik, etc etc, are generally the hardest hit by this type of marketing because of their status as industry leaders where quality comes at a price which makes these discounts financially rewardable. 

 

CWC is doing nothing wrong. He has, in some way, found a supplier or suppliers probably selling under these circumstances and, because of it, has an unfair pricing advantage over local retailers.  Great for CWC who advertises retail prices at (or even below), dealer cost in nationally distributed magazines and is regarded (by some), as the saviour of cyclists in South Africa. The situation is false and raises huge negative perceptions in an industry which (on the whole), is a long way from being owned or run by wealthy people.

 

The sad point to the whole scenario is that distrust is developing at all levels in the cycling fraternity. Cyclists think their regular shop is ripping them off. Shops who experience lost business to CWC think their wholesalers are ripping them off. Wholesalers (who's prices are dictated by market competition, not huge profit margins) suspect that their own manufacturing suppliers are profiteering at their expense. The whole thing is destabilsing the cycle trade here and around the world and creating an unhealthy atmosphere of mistrust between suppliers, cycle shops, and cyclists.

 

CWC is not looking after cyclists (as many appear to believe judging by comments now being posted on this forum).  He's looking after No. 1 and it's costing him very little. He does not have to carry the costs of nationwide distribution, sponsorship of cycle teams like Microsft MTN, Proline, Neotel, Harmony Gold , or pay for expensive national promotional and advertising programs and campaigns for the products he is importing.

 

The official importers of the brand-name products which CWC pirates carry these costs for him, yet he points a finger at them because these costs have made the goods more expensive.  CWC is merchandising brand-name components and accessories without any commitment to things like product loyalty or passion for the brand. He merely makes money out of them and when they are no longer available, he'll move onto something else. And make more money.

 

CWC's confrontational attitude and threats of legal action against people involved in the industry are not going to do it any good. There are precious few bike shops that make a lot of money, and to point a finger at them and their suppliers and say they are rip-off artists is unfair and opportunistic.  

 

 

 

 

[steve]

........... jislaaik!!

 

Seriously, makes a lot of sense. I do believe the motor trade parts industry has similar issues/scenarios and no doubt so do most industries.

 

I'm a Pro-Bike fan. When I was new to the sport I met Robbie Powell (now in NZ?) and he sold me on the Raleigh brand ....... I've got a GT though, but only because when I wanted a full susser Raleigh didn't have one that took V brakes. My road bike is a Raleigh.

 

I've never been to CWC, perhaps because I'm in JHB and I've never bought anything on mail order either.

 

I'm going to bed .........

[Willehond]

My lasting impression of this thread will be one of slight disillusionment.  Neither Chris Willemse nor Brandon Els comes out smelling of roses and have both appeared flawed and petty.  A pity because I have supported both of them for a long time and respected their contributions to the bike industry in SA.

 

I got my first Raleigh when I was 12 and I bought one two years ago because I thought that they represented excellent value and performance.  Still do and I would like to be proud of it (there are enough people denouncing it as 'common'!), but this thread has dented my pride a bit.

 

Once my dikwiel Raleigh got stolen from in front of the Bellville library (way back in the 80's), my dad took me to Chris Willemse's bike shop in Voortrekker road and I got a ligh blue/metallic blue bike with yellow "Chris Willemse" stickers (I wanted a Peugeot Rapport, but that's another story!).  Loved it and used to stare at the Eddy Merkx bikes hanging high on the wall!  Great memories.  I will cling to them when days get dark and the fighting gets ugly.

 

So they are both part of this Bellville boytjies memories.  Just a pity that we all grow up and the illusion of the friendly old bike shop (and industry) gets blown to bits by the people running it.  Come on, kiss and make up and continue to give us (and our kids) great memories!