Chris Willemse on imports

[BMCfan]

so have CWC launched their new online website yet?

[Icycling]

clothing 400%! Ok lets look at SA and what a our goverment take and to answer what most importor mark up!

 

 

 

Most importors work on a 30% to 40% mark up of which about 10% is written off straight away to freight and clearing costs so that leaves 20% to 30% to run their operations in South Africa - paying wages renting space etc.

 

 

 

Now the goverment who is the silent partner in all our business on items such as cycling shoes for example. Well 1st on everyhting they take 14% VAT and add on 2% for imported goods! But shoes - we all know we make cycling shoes in this country - where (protecting the local manufatures)? They add a 45% duty? So the silent partner take 61% whithout any risk and as the stuff arrives before the importor know if he can sell it again!

 

 

 

So what is excessive? But 40% for the retailer is reasonable in the big picture!

 

 

 

Why is Trevor Manuel the only politician we all seem to like and respect - he takes most of money?

[ewep]

Icycling, this INCLUDES a guestimate at importing costs and freight costs the 14% VAT.  40% is harsh!  Why not do 25% and get a bigger market?  Oops, I forgot, 90% of businesses in SA is in it for one thing, NAIL the bastards as hard as you can!  Why aren't our companies as old as the guys in the UK/US?  Because the businesses RIP US OFF!!!!!  Make a quick buck!  Look at the long established cycling resellers and you'll find most of them are the okes that are willing to "drop the price".

 

And you are talking about Edgars (clothing 400%).  They sell on credit, they rip you off!  Go buy your stuff at Mr Price.

[madmarc]

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.

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! [/quote']

 

You can analyse & cut it anyway you want. the fact is that the cycling market has changed drastically over the last 5 years and the industry captains are still trying to sell their products like they did 10 years ago.

 

I have been in direct sales for 20 years, so here is an "OUT OF THE BOX" sales plan for a so called agency, which will turn the industry on its head and move a lot of product to the end user @ kickass prices.

 

Instead of trying to deal direct with thousands of cyclists, deal direct with their clubs (every serious cyclist has to be a member of a club thanx to CSA) Make 1 club member your representative in the club and train him up on your products (give him the backing and the litriture). He then sells your product within the club and consolidates all club members orders and places it on the agent with one payment based on payment prior to delivery.

Your club rep then gets a small comm based on his efforts or even the club gets the comm as a form of financial support for their loyalty (all clubs are scrapping the barrel for funds)

 

As far as the LBS goes.

Get them to give you space for your products on their shop floors and design a product stand with consignment stock. the LBS then has no cash outlay and can afford to reduce his margin. Once consignment is sold he replenishes it with an order and 30 day payment.

 

You as the agent now has better control on your market and you are mostly dealing with the end user (who in fact is your customer - "the cyclist")

The LBS will take care of the beginner cyclists, until such time they become a racing snake and join a club.

 

Remember the value of your market is with the serious cyclist who is prepared to lay out thousands for equipment, not the beginner who starts with entry level cheapies.

 

Furthermore you need to introduce end of season knock down stock clearance sales through the clubs and LBS. every site you visit overseas has them (currently on 2007 stock) in anticipation of 2008 stock. But nowhere in the local LBS do you see that. My LBS is still selling 2004 components and kit at 2007 prices and no doubt will increase it to 2008 prices this year - no wonder the a-hole is still sitting with the stock.

 

STOP SELLING YOUR PRODUCT AND START MERCHANDISING IT!!!!!!! the cycling market has become a global massmart market and your overseas competitors are kicking your ass!!!!

 

Any manufacturers out their wanna give me an agency????? and i'll prove my point

 

 

[ewep]

Icycling, madmarc has a VERY good point on the beginner vs "established" cyclists.  Let's take me and a few of my friends as an example.  The following are planned upgrades:

 

1 x Shimano D/A groupset

2 x Campag Chorus g/sets

1 x Fulcrum Racing 1 w/sets

1 x Mavic UST wheelset

1 x Shimano XT groupset

1 x Easton wheelset (don't know which one, probably Vistas)

 

Now add the total cost of this.  This is for 3 guys!  Let's take a guestimate again.

1 x Shimano D/A groupset      9000

 

2 x Campag Chorus g/sets      8900 x 2

 

1 x Fulcrum Racing 1 w/sets    6500 

 

1 x Mavic UST wheelset           5000

 

1 x Shimano XT groupset        5000

 

1 x Easton wheelset (don't know which one, probably Vistas)  3500

 

Total of R62800, average of 20933 per person.  Eish, and you want to tell me a beginner that buys a full setup of R7500 is more important.  Maybe that's why the "selling" side is not going that well.

 

 

 

[ZeroPlay]

 

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.

 

[/quote']

 

You don't seem to understand the concept of a free market.  If there are enough people who don't want to travel far to buy spares, the closer, more expensive LBS will survive.  If not, they will not survive.  It's a self-regulating system that reflects the desires of the majority of customers.

 

Local bike shops and distributors need understand that they need to add value to a product that is equal to or more than the amount they mark it up by.  Otherwise, they must die a natural death.

 

 

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!

[Pantani]

 

Icycling' date=' madmarc has a VERY good point on the beginner vs "established" cyclists.  Let's take me and a few of my friends as an example.  The following are planned upgrades:

 

1 x Shimano D/A groupset

2 x Campag Chorus g/sets

1 x Fulcrum Racing 1 w/sets

1 x Mavic UST wheelset

1 x Shimano XT groupset

1 x Easton wheelset (don't know which one, probably Vistas)

 

Now add the total cost of this.  This is for 3 guys!  Let's take a guestimate again.

1 x Shimano D/A groupset      9000

 

2 x Campag Chorus g/sets      8900 x 2

 

1 x Fulcrum Racing 1 w/sets    6500 

 

1 x Mavic UST wheelset           5000

 

1 x Shimano XT groupset        5000

 

1 x Easton wheelset (don't know which one, probably Vistas)  3500

 

Total of R62800, average of 20933 per person.  Eish, and you want to tell me a beginner that buys a full setup of R7500 is more important.  Maybe that's why the "selling" side is not going that well.

 

 

 

[/quote']

 

Ewep, stop knocking the Fun Rider's!

 

[Icycling]

ewep - as mentioned before I can get more than 20% on the stock market just by buying the share index and not even watching any stocks - and no overhead costs - their are risk yes! That is yearly agreed.

 

 

 

Why for only an extra 5% would I work pay rent and have employment acts etc to contend with?

 

 

 

So if my shop has 15million rands worth of stock to just better the all share index I need to make 3 million profit - I can assure you the cycle market is not endless and no shop in this country turns over their avg stock holding more than 3 times. If the mark up was just 25% a bike shop owner would be much better off just having their investments in the shop on the stock market!

[madmarc]

clothing 400%! Ok lets look at SA and what a our goverment take and to answer what most importor mark up!

Most importors work on a 30% to 40% mark up of which about 10% is written off straight away to freight and clearing costs so that leaves 20% to 30% to run their operations in South Africa - paying wages renting space etc.

Now the goverment who is the silent partner in all our business on items such as cycling shoes for example. Well 1st on everyhting they take 14% VAT and add on 2% for imported goods! But shoes - we all know we make cycling shoes in this country - where (protecting the local manufatures)? They add a 45% duty? So the silent partner take 61% whithout any risk and as the stuff arrives before the importor know if he can sell it again!

So what is excessive? But 40% for the retailer is reasonable in the big picture!

Why is Trevor Manuel the only politician we all seem to like and respect - he takes most of money?

 

Icycling -  duty on cycling shoes is actually 30% i just brought them in so maybe agents should start using the correct tariff code.

 

Be that as it may - and i stand corrected here - I don't believe we make any cycling shoe locally in SA, so why is there a duty. furthermore if the agents wanna add value then they should make application to the dept of trade and industry to have the duty reduced or scrapped completly. Our company did this on Diesel engines last year and were able to reduce prices to our customer by 25%

 

But once again the agents are happy to sit on their complacent backsides and do nothing.

[Icycling]

Zeroplay _ I do! This is why the 7/11 can sell a 2 litre Coke for R14.00 and Pick 'n Pay is R9.95! The coffee shop sell a 200ml Coke for R8.00! Now we talking some major mark up - we should all drink tap water!

[Icycling]

madmarc - the last time I imported shoes was back in 94! I stopped for 1 reason - 45% duty 14% vat + 2% - and then their was a 15% ser charge on all imported good. SARS 76% no risk - me 30% and then still taxed on that!

[ewep]

 

ewep - as mentioned before I can get more than 20% on the stock market just by buying the share index and not even watching any stocks - and no overhead costs - their are risk yes! That is yearly agreed.

 

 

 

Why for only an extra 5% would I work pay rent and have employment acts etc to contend with?

 

 

 

So if my shop has 15million rands worth of stock to just better the all share index I need to make 3 million profit - I can assure you the cycle market is not endless and no shop in this country turns over their avg stock holding more than 3 times. If the mark up was just 25% a bike shop owner would be much better off just having their investments in the shop on the stock market!

 

One question, how does Cajees and Westdene survive?  They have a LOT more stock in their shops than Willie E or Cyclelab or or or, but still their prices are better than the others?  Shouldn't they, according to your explanation above, have a markup of 65% to cover costs?

 

[linnega]

Go buy your stuff at Mr Price.

The smartest thing I've read all day.

[madmarc]

madmarc - the last time I imported shoes was back in 94! I stopped for 1 reason - 45% duty 14% vat + 2% - and then their was a 15% ser charge on all imported good. SARS 76% no risk - me 30% and then still taxed on that!

 

Customs Tariff Code 64.0219 "Other Sport Shoes" (therie is no specicfic traiff for cycling shoes, only ballet shoes and spiked athletic shoes, all other sport shoes are under 64.0219)

 

standard duty = 30% from EU and if you can supply a EU1 form you get it reduced to 19.5% (but this is not easy)

 

SADC countries = 26%

[AndreZA]

One question' date=' how does Cajees and Westdene survive?  They have a LOT more stock in their shops than Willie E or Cyclelab or or or, but still their prices are better than the others?  Shouldn't they, according to your explanation above, have a markup of 65% to cover costs?
[/quote']

 

Because everybody buys from them but no one actually admits it.

 

 

[Icycling]

As mentioned the last time I did shoes was in 1994 - and 2 of us fought very hard on the traiff on shoes as nobody make them in SA and you guys are now benefitting as is was brough down in I think 1997 to 30% - by then cycling shoes as a business did not interest!