Chris Willemse on imports

[Icycling]

Now you guys have raised the next point on what the local importors end up being - and that is the BANK for about 90% of the shops in the country! I.e. most shops buy on accounts and either pay on time or late.

[ewep]

 

Icycling' date=' 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. [/quote'] And you think Mr Price makes less markup than Edgars??? Poor Ewep!!!! You are so innocent!!!!

 

Cruxie, hul markup is laer, alhoewel nog steeds hoog.

 

[MAESTRO's]

Now you guys have raised the next point on what the local importors end up being - and that is the BANK for about 90% of the shops in the country! I.e. most shops buy on accounts and either pay on time or late.

 

 

Now that is another story that we'll be able to debate for the next year. 

[madmarc]

Now you guys have raised the next point on what the local importors end up being - and that is the BANK for about 90% of the shops in the country! I.e. most shops buy on accounts and either pay on time or late.

 

Which supports my "OUT OF THE BOX" idea. Deal with cycle clubs direct on a COD basis. You will move a sh*tload more stock and have a sh*tload more money in the bank

[Jules]

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!

 

 

 

If we were to follow this logic, then all retailers with single-digit markups should close shop and buy the All Share Index.

 

 

 

Oh wait: why was the lowest-margin retailer (Shoprite) the best-performing retail share on the JSE in 2007?

 

 

 

 

[KlapperKnop]

The old saying from Hi-Fi Corp is still true : "Cut the middle man out" Exactly what Chris does!!!

[fandacious]

Oh wait: why was the lowest-margin retailer (Shoprite) the best-performing retail share on the JSE in 2007?

 

Coz shoprite pay their suppliers after 30-60 days and sit on the cash. The cash they sit on is invested in different unit trusts etc....

[KlapperKnop]

Oh wait: why was the lowest-margin retailer (Shoprite) the best-performing retail share on the JSE in 2007?

 

cos they when for the masses / volumes ...

 

masses x lower margins = huge profits!!!!

[Icycling]

Too add weight! How long can fresh produce sit on the floor - about a week? so they turn over their profit 52 times in a year - not on all their goods but about 1/3. Cycle retailer as mentioned before turn their stock over on avg about 3 to 4 times per year - ecconomics and we all eat we dont all cycle!

[Icycling]

Klapperkop - and for Cycling in SA this made lead to an implosion and not an explosion of cyclists on the road / cycle industry - that my fear!

 

 

 

I am fortunate enough that I am able to chose Chris's parth or stay the traditional part and my feeling is the traditional parth will sustain cycling in the country and Chris's parth could bring it back to the size of the sport it was when Chris SNR raced! Very small! I personnel do not want to see that happen.

[Willehond]

Too add weight! How long can fresh produce sit on the floor - about a week? so they turn over their profit 52 times in a year - not on all their goods but about 1/3. Cycle retailer as mentioned before turn their stock over on avg about 3 to 4 times per year - ecconomics and we all eat we dont all cycle!

 

Ag shame, think about the poor fruit farmers who turn over their stock/trees once a year!  Shame, they must be REALLY poor if I use your analogy  Plus their fruit have a much higher failure rate which must make them REALLY REALLY poor.

 

Tell you what; I'd swop places with those poor one-turnover-per-annum fruit farmers any day and you should see how THEY get screwed over by their middle men...

[linnega]

Your comparisons to food and apparel retailers makes for reading but it is not a good comparison.  You also cannot compare to agriculture as that is a closer to manufacturing than retail.  The main reason is exactly the that Icycling has highlighted. 

Stockturn drives retail margins.  It costs money to hold stock as money invested in stock does not earn a return until is is sold.  I imagine many bike retailers are operating closer to 2.5 to 3 as their stockturn, food retailers close to 40 (across the store) and good apparel retailers above 10.  As a result food retailers can do some smart financing and operate at around 2-5% margins, apparel retailers at around 65% and cycle retailers at between 100 and 120% on cost to make a good profit.

[madmarc]

Klapperkop - and for Cycling in SA this made lead to an implosion and not an explosion of cyclists on the road / cycle industry - that my fear!

I am fortunate enough that I am able to chose Chris's parth or stay the traditional part and my feeling is the traditional parth will sustain cycling in the country and Chris's parth could bring it back to the size of the sport it was when Chris SNR raced! Very small! I personnel do not want to see that happen.

 

As a businessman i think you are being very short sighted here. I honestly don't think your business will grow at the rate that the industry is growing if you follow a protectionist antiquated system of selling, which is what all the agents are currently doing. Lets be honest the agents are all sh*t scared of the LBS and their dictatorial stance with threats of not selling your product if you don't jump to their tune.

Well get some balls and show them the finger, their attitude will be their own demise - if they don't have products to sell they are out of business.

to protect your business interests, you need to deal with the end user who (and I repeat) are in fact your customers. I estimate 80 - 90% of your income will be generated by this new system and its all COD

 

Become the rain maker. Don't be part of the umbrella

[Icycling]

I suspect that my wealth will increase 10 fold in manufacturing for the world market where you can control the price and not as "LBS" - beleive it or not that is where my energy now lies!

 

 

 

Been as "Willehond" put it been the "fruit farmer" - and only making 5% off the world market.

[steve]

As a customer I'm free to shop wherever I want. 

 

Cajees isn't far away, but they aint cheap. Another cycling shop is 4km away but the one I choose is 11km away. They organise weekend and mid-week rides and I get a cup of cofee.

 

I have yet to see the Post Office or courier company organise a mid-week ride or offer me a cup of cofee that's why I don't buy on mail order.

 

Cycling is a social sport/pastime/hobby and I enjoy the social side of buying things from Finish Line Cycles. I can also walk around the shop, touch things and ask questions about the thing I'm about to buy. When I've paid for it I take it home and for that priviledge I'll pay a bit more!!!

 

But if the shop was full of arseholes I wouldn't go there ....... I'd find another one.

[Icycling]

Steve - I on your side here - but as madmarc has indicated importor should become retailer etc. If this were to close finish Line cycles and the other shop in the area how do you think this would affect the cycling comunity in your area or even you own motivation to cycle?