Chris Willemse on imports

[madmarc]

CWC YOU GUYS ROCK!!!!!!!

 

But you need to do all us hubbers a favour.

 

Every wholesaler who closes your account or tries to, you must list them in this forum (Name them and Shame them)

All hubbers must then boycott buying their products locally and either buy from CWC or online overseas.

 

In the 90's the largest local steel merchant was fined 120 bar by the competition commission for price fixing (I worked for them)

ISCOR got nailed in 2006 for their Import Price Parity policy on local prices for flat steel products - (they payed big time)

2007 saw a big bread manufacturer get nailed for 90 bar for collusion in fixing the price of bread (the CEO also lost his job)

 

the kicker is!!!!! the customers who payed the higher prices get nothing back, it all goes to the goverment coffers - but i suppose they gonna need it to put Zuma in Jail

[Jules]

Seems opinion is overwhelmingly in favour of the free market. I'm no expert' date=' but I disagree with the statement that the days of distributors are numbered. As long as you can provide a good service at a good price, you will be alright. [/quote']

 

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...............I said "the days are numbered in a SMALL economy like SA"?.

 

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The distributors in small markets (cycles) in small economies (SA)?need every sale?to stay economically viable and in business.

 

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Why do you think they are fighting this so vehemently?They are loosing a market share. Its simple.

 

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If there are?2 or 3?parallell importers, plus on-line sales etc?of any product all undercutting the distributor, he is only getting 1/3 or less?of the market.

 

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Which means he may not be able to stay in business.

 

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Dont think they care about you and me and a non existant service ethic, they dont, .............its all about the bottom line and how much?financially?they stand to loose.

 

?

 

 

 

Agreed, but Probike seems to be thriving in a SMALL economy like SA. What are they doing right that J&J and others are not?

 

 

 

CWC is not trying to undercut Probike. It is undercutting the likes of J&J and Coolheat.

 

 

 

And why did J&J lose Northwave to Probike? Food for thought...

[Icycling]

Did not really want to work today, but a couple of points:

 

 

 

What would happen to the market if J & J and Coolheat just opened their doors to the public (or online shop)? They then sold the stuff to you the end user at the same cost they give it to your local bike dealer - naturally you would get the cash discount as you do not have an account! WHY NOT? CWC would probably start to look expensive on some items!

 

 

 

I am sure that within a few month a lot off your local bike shop would be closed - quite a few people would go out of business etc. Not to mention you the bike rider would have to ride quite a lot further to buy a spare tube or get your bike serviced. Is this I good thing? Personally I do not think so - why? Well take for example the Cape Argus Pick 'n Pay cycle tour each year about 40% of the entry are 1st time Cycle Tour riders - that quite a large group of cyclist probably about half of those only started riding that year - I suspect these guy buy their 1st bike from the Local bike shop (as apposed to online) who probably offer the best advise they can on set up etc. Now my fear is that if the local bike shops population reducers by say 50% then the new entry into the sport of cycling will diminish due to lack of ability to buy bike and spares etc.

 

 

 

You may ask well how does this affect me I already have all the know how and I am in the sport already - and I know who to buy online spares from already? Well no doubt funride numbers would start to drop and the number of funrides would ultimately decline. On the other hand I am a believer that the more cyclist on the road that are training the more awareness their is of cyclist by our fellow road users and we can only HOPE the more they will consider and respect us cyclist as fellow road users without the intent of getting in their "4X4" to see how many cyclist they can knock over that day (some Facebook groups have been started over this). Maybe now these "4x4" owners will have friends or family members who also enjoy cycling and won't be so intent on killing cyclist - this may just be a HOPE of course! Also goverment may start to increase the number of bike lanes - so we can ride safe.

 

 

 

Their are a whole bunch of other reasons why the 3 tiered system (supplier/ manufacturer - Importer/ distributor - cycle retailer) in the cycle industry is better than a 2 tiered system (supplier / manufacturer - cycle retailer) but I really do not want to spend the whole day in front of my computer. As I am in the business in possibly all chains from the export of carbon fibre wheels for the worlds biggest cycle brand made in Cape Town - all the way through to owning a local bike shop - I can assure you that the margin for anyone in the cycle trade are reasonable and certainly acceptable and nowhere close to that of what for argument sake the clothing industry works on!

[GFishy]

Maybe J&J wasn't moving enough stock to Northwaves liking. If Probike cut their profit margin, more shoes will be worn by cyclist out there...

[David #7]

The things is what the bike shops/local agents don't realise is that if we don't buy from CWC we will be buying from online retailers who can supply quicker than they can service the components.  I even get my clusters online because they actually have the combinations I want in stock!

I am very ken to order some mtb wheels (XTR hubs' date=' Mavic rims, DT Swiss spokes) from Chainreactioncycles who will build it and supply it to me at a fraction of the price of local wheels!  That way I can get anyone to fix it for me if it breaks and if the rims have warrany issues I just get new ones cause they are so darn cheap!  Part of my personal warrantee scheme...

However, if I can source it locally cheap from CWC, I might as well get it from them and get them to service it as well.  In the end any bike shop will service it because they charge you real money for it.  Don't feel scared/guilty, buy from CWC and online and bugger the rest!

[/quote']

My thoughts exactly.

David #72008-01-02 04:53:34

[ewep]

Icycling, yes, the LBS and distributor have their place in the distribution chain, BUT does this give them the right to overcharge on such a "grand scale" that the end-user, i.e. us, doesn't want to buy the stuff?!

[ewep]

Net so by the way, what does it take to become a distributor?

[Mudsimus]

Net so by the way' date=' what does it take to become a distributor? [/quote']

 

A phonecall.

[#Pete#]

I'm with CWC on this one 100% and will support them fully. If I can find a LBS that sells at a reasonable price and offers a good service, I'll happily support them and would be prepared to pay more to have such a 'service' available.

 

On-line sales will only increase here - bike shops are going to have to pull socks up and offer more than just a good price to keep customers, and as far as I'm concerned, that's a good thing.

 

[Icycling]

Ok what is overcharge? Let look at a bike shop across the road to CWC - Willie Engelbrecht. Maybe this is the best pro shop of all the pro shops in the country! He probably has about 15million rands worth of stock in his shop at any one time - that his cost price! Most of it paid for. Well for doing nothing and having that 15million on the stock market this year just buy the all share index he would have made just over 20%- that is 3 milion rand - is this a good benchmark to work from - I personnaly think so! So for working his ass (in his case his leg) off how much more should he make? He also has the overheads of rent, staff and old stock etc - which on the stock market he would not! So to have say a 50% mark up which then he offer less 10% almost to all his customers is this overcharging? I personnally don't think so! For all that extra effort and hassel and risk!

[AndreZA]

Net so by the way' date=' what does it take to become a distributor? [/quote']

 

A phonecall.

 

I think it's gonna take a bit more then that. I got a phone call this morning but I'm not a distributor yet.

 

Okay, I'll get my coat.

 

 

[widget]

Sure, Pro-Bike is doing well because they are probably the biggest fish in a very small pool so Its difficult to ignore them.

 

They have been clever in that they have not concentrated on the elite market but have cultivated a huge mass market appeal, (ie) they sell everything from the cheapest kiddies bike to the dik wiel to the top end ranges, they also have a huge footprint in the mass retailers, which gives them a readily acceptable and known brand without any advertising (when last did you see an advert for a dik wiel - but they sell thousands) so to a degree, pro shops are somewhat forced to stock their lines if they want to sell to the mass market.

 

Mass market products are well priced, so a distributor can make a reasonable margin, although I believe that a certain amount of cross subsidation also gos on at Pro-Bike, its the top end brands that become expensive through distribution channels and here Pro-Bike was very clever with thier own Raleigh brand - no competition at all.

 

Elite brands have a much smaller market to sell to and have no cross subsidation so every sale is important and this is where CWC has scored a good market.

 

................but that said, I also believe, if the local distributors of elite brands stopped acting like sheep following the herd, and started thinking for themselves, they would realise that their is a massive untapped source of goodwill by servicing "parallell imports" and "on-line" sales warranty and product issues, and perhaps regain some lost goodwill, but with the immature attitude they presently have, it seems to me  they just polarise themselves further and further from the market on a daily basis.

 

 

widget2008-01-02 05:12:15

[AndreZA]

Ok what is overcharge? Let look at a bike shop across the road to CWC - Willie Engelbrecht. Maybe this is the best pro shop of all the pro shops in the country! He probably has about 15million rands worth of stock in his shop at any one time - that his cost price! Most of it paid for. Well for doing nothing and having that 15million on the stock market this year just buy the all share index he would have made just over 20%- that is 3 milion rand - is this a good benchmark to work from - I personnaly think so! So for working his ass (in his case his leg) off how much more should he make? He also has the overheads of rent' date=' staff and old stock etc - which on the stock market he would not! So to have say a 50% mark up which then he offer less 10% almost to all his customers is this overcharging? I personnally don't think so! For all that extra effort and hassel and risk![/quote']

 

Icycling, i don't think the problem is with the shops, it's more with the distributors. They are the ones making all the money.

 

 

[Jules]

Did not really want to work today' date=' but a couple of points:

 

 

 

What would happen to the market if J & J and Coolheat just opened their doors to the public (or online shop)? They then sold the stuff to you the end user at the same cost they give it to your local bike dealer - naturally you would get the cash discount as you do not have an account! WHY NOT? CWC would probably start to look expensive on some items!

 

 

 

I am sure that within a few month a lot off your local bike shop would be closed - quite a few people would go out of business etc. Not to mention you the bike rider would have to ride quite a lot further to buy a spare tube or get your bike serviced. Is this I good thing? Personally I do not think so - why? Well take for example the Cape Argus Pick 'n Pay cycle tour each year about 40% of the entry are 1st time Cycle Tour riders - that quite a large group of cyclist probably about half of those only started riding that year - I suspect these guy buy their 1st bike from the Local bike shop (as apposed to online) who probably offer the best advise they can on set up etc. Now my fear is that if the local bike shops population reducers by say 50% then the new entry into the sport of cycling will diminish due to lack of ability to buy bike and spares etc.

 

 

 

You may ask well how does this affect me I already have all the know how and I am in the sport already - and I know who to buy online spares from already? Well no doubt funride numbers would start to drop and the number of funrides would ultimately decline. On the other hand I am a believer that the more cyclist on the road that are training the more awareness their is of cyclist by our fellow road users and we can only HOPE the more they will consider and respect us cyclist as fellow road users without the intent of getting in their "4X4" to see how many cyclist they can knock over that day (some Facebook groups have been started over this). Maybe now these "4x4" owners will have friends or family members who also enjoy cycling and won't be so intent on killing cyclist - this may just be a HOPE of course! Also goverment may start to increase the number of bike lanes - so we can ride safe.

 

 

 

[/quote']

 

 

 

Icycling, I think that there is a flaw in the logic of your argument.

 

 

 

To summarise, you are implying that without local bike shops, cycling would suffer. In other words, it is the local bike shops that create interest in cycling. I think that it is probably the interest in cycling that creates local bike shops.

 

 

 

I think there will always be demand for local bike shops who offer good service. Cycling is not a sport that is suited to online retailing. For example, most novices would probably buy the wrong size bike, or handlebars, crank length, etc.

 

 

 

The crux of the matter is that CWC is alleging some sort of collusion in the bike industry, which is against competition law.

 

 

 

The other important point is that there are wholesalers who distribute to local bike shops who are thriving (Probike), and as far as I'm aware, are not threatened by CWC to the extent that J&J and Coolheat are.

[Guest Big H]

The things is what the bike shops/local agents don't realise is that if we don't buy from CWC we will be buying from online retailers who can supply quicker than they can service the components.  I even get my clusters online because they actually have the combinations I want in stock!

I am very ken to order some mtb wheels (XTR hubs' date=' Mavic rims, DT Swiss spokes) from Chainreactioncycles who will build it and supply it to me at a fraction of the price of local wheels!  That way I can get anyone to fix it for me if it breaks and if the rims have warrany issues I just get new ones cause they are so darn cheap!  Part of my personal warrantee scheme...

However, if I can source it locally cheap from CWC, I might as well get it from them and get them to service it as well.  In the end any bike shop will service it because they charge you real money for it.  Don't feel scared/guilty, buy from CWC and online and bugger the rest!

[/quote']

 

Kyk so bietjie onder "Custom Mtb Wheels" op hulle website. Jy kan so jou eie wiele bou met jou eie spesifikasie. Ek het so gedoen met 36 speek wiele vir die tandem en is baie happy met wat ek gekry het.

 

Hell jy kan dalk self DT Swiss; Hope of Chris King hubs bekostig!!!!!!!!!

[ewep]

 

Ok what is overcharge? Let look at a bike shop across the road to CWC - Willie Engelbrecht. Maybe this is the best pro shop of all the pro shops in the country! He probably has about 15million rands worth of stock in his shop at any one time - that his cost price! Most of it paid for. Well for doing nothing and having that 15million on the stock market this year just buy the all share index he would have made just over 20%- that is 3 milion rand - is this a good benchmark to work from - I personnaly think so! So for working his ass (in his case his leg) off how much more should he make? He also has the overheads of rent' date=' staff and old stock etc - which on the stock market he would not! So to have say a 50% mark up which then he offer less 10% almost to all his customers is this overcharging? I personnally don't think so! For all that extra effort and hassel and risk![/quote']

 

Icycling, how does a 40% markup sound?  Is that not excessive?!  For you maybe not, but for me it's ouch.