Open letter to Chain Reaction Cycles

[YUMEYA]

No, but it does hurt, and eventually kill off, the local business model.

Importers have to adapt but why should they, the bike shops are forced but to buy from them. I think bike shops need a CRC of their own. It is the local suppliers classic "you need me" attitude. They are happy to shaft you once a year for that emergency rear deraileur.

Lets not forget that price fixing business that went down a while back. This is what us consumers have to live with. Even with a k@k exchange I saved R3000 (that is 3k towards my daughter birthday gift/party) on a groupset. Half the time the suppliers dont have stock of what you want.

I would love to take my business to one of many shops I visit but unfortunately they can not compete. I dont mind a little above CRC prices but most of the time they cant even manage that.

Edited November 16, 2012 by YUMEYA

[Guest Omega Man]

My mates and I use a LBS that doesn't stress at all about us buying stuff from CRC and having him fit them.

 

He doesn't have the admin of dealing with warranty issues and he couldn't possibly carry the range that CRC does so he embraces it and sees himself as a fitment centre.

[ThePubSA]

Sheesh ,..true.. but unlike them we have no local industry to speak of, especially in terms of BMX.

So without CRC wed' be F@#$%^

[Big H*]

CRC is doing good business and does have a very effective business model. Essentially CRC is all about money, nothing more and nothing less.

 

The author does have a valid point in that CRC does nothing for the local cycling community, except supply cheaper components to the cyclists. They do not provide technical assistance, sponsor events, etc. Whether this is right or wrong... Each to his own.

 

Ya think the local cycling community (read shops) does what they do for the community out of compassion, nah, they do it to advertise the expensive. goods.

[javadude]

Problem in Australia is that up till now there is absolutely no tax or import duty on online goods purchased for under $1000. This isn't exactly CRC's fault, they are just a business selling their stuff. Its changing though, and the Aussie government has plans in place to start taxing all imports. It might be a bit late, Amazon has already killed most of the large Aussie book stores and all the jobs that go along with it.

[davem]

What a silly isolationist viewpoint.

 

If I look around, I see more and more bike stores. Existing ones getting bigger. Owners of bike stores and distributors clearly being financially successful.

 

CRC makes pricing transparent. I would venture that many use it as a benchmark so they make sure they get a fair deal from their LBS.

 

CRC may likely mean that people own more bikes, and thus spend more on accessories and labour in the LBS.

 

CRC is good for the sport and has probably contributed significantly to its expansion and in turn to the wealth of the LBS, its owners and employees.

[Stretch]

Amazon has already killed most of the large Aussie book stores and all the jobs that go along with it.

 

that is how any first world country operates - they buy stuff online. Why go through the schlep of going to a shop, finding if its there or not and then buying it vs click click ka-ching

[Karooryder]

Also don't see the problem here.  Looking beyond the implied injustices and emotional rants in the letter, one senses a wee bit of suurgatgeit from someone who deep inside realises that he did not keep track of the dynamic evolution of the industry he is competing in...a bit like Oscar Pistorius after he was beaten at the Olympics...

 

Adapt or die, as Gunzo says.

[Showtime]

that is how any first world country operates - they buy stuff online. Why go through the schlep of going to a shop, finding if its there or not and then buying it vs click click ka-ching

 

In some cases yes. In other cases they have seen the results of this failed social experiment. You shape your environment by your actions so would you like to get up behind the computer and take a walk outside to see there are no actual shops or people out there?

 

It's the same with buying meat from the supermarket as supposed to your local butcher. 2 Years down the line you realise you are being held ransom because one corporate is controlling your life.

 

From my observation the real first world environments are the ones where people have started supporting their butcher and are living as a community again.

 

Edit: Not all this applies to CRC because there are other factors at play like local distributors taking us for a ride and their massive range.

Edited November 16, 2012 by Showtime

[Grebel]

CRC is doing good business and does have a very effective business model. Essentially CRC is all about money, nothing more and nothing less.

 

The author does have a valid point in that CRC does nothing for the local cycling community, except supply cheaper components to the cyclists. They do not provide technical assistance, sponsor events, etc. Whether this is right or wrong... Each to his own.

 

They are doing very well because of the online facility (Which effectively equates to a good business model)

 

Seeing as they are not based here, it would be difficult to support the local cycling community. They do however support their own local cycling community by sponsoring local riders as well as having a WC DH (and XC I think) team.

 

At the end of the day, not advertising in 2020Bmxmag isn't going to sink CRC. The author does however have a right to reject "the man" and stay within his own circle of local suppliers if he so wishes and make it about the sport and the riders as opposed to the big business commercial side of things.

 

As you say, Each to his own.

[Eldron]

Matt Holems strikes me as the kind of guy that wears a tin foil hat to protect him from cellphone towers that would otherwise control him...

 

So CRC sells at budget prices. So what? Someone has to service all these parts flowing in and that someone could be you Matt Holmes (remember to charge them - alas weed is not legal tender yet...)

 

There will always be a space for the local importer and LBS - they provide the personal feel that a lot of people want or the technical info and after sales servicing that some people don't have the skills for. There is monetary value and service/tech value - monetary for CRC service/technical for LBS.

 

The tax issue I don't understand - I pay import duty, VAT and clearance fees on everything I import. Legal as can be.

 

I use CRC for most of my big ticket items - mostly because they're cheaper, faster and more efficient than my LBS - hell my LBS doesn't even know the name of half the stuff I buy. Plus locally they only have access to about 40% of the brands I buy from CRC.

 

That said I still use the LBS a lot - consumable like tubes, tyres, chamois cream (yes I said chamois cream), magazines, items I need in under 5 days, spontaneous buys I make in store, odds and ends etc.

 

Long live CRC - long live the LBS!

Edited November 16, 2012 by Eldron

[Stretch]

 

From my observation the real first world environments are the ones where people have started supporting their butcher and are living as a community again.

 

 

agree - there is a fine line between conveniance and good service...and thats why LBS's that provide service will always win ahead of conveniance. Case in point - i could buy a SS conv kit and 32 chainring from CRC for 1000, but i choose to do it from my LBS for a few hundred more cos they are going to offer advise and assistance...... a new cluster on the otherhand....will come straight from CRC

[Tjokkits]

local distributors and bike shops will certainly have less of an issue if they up the game on product availability and after sales support, in particular if it is about replacing parts in good time (under warranty or paid) quickly and keep you on your bike. If that works my price elasticity drops

[ChUkKy]

Ive avoided looking at CRC lately because I always find myself oogling over those Lynskey frames

[kandui]

I think attacking CRC is wrong. If you want to lay blame at anyone's door, then blame the Internet. How else do we access all the lower prices offshore?

And to the LBS's who complain, make the model work for you. Order from CRC instead of the local agent, if the price is lower. When I buy from CRC and something is damaged or not working, no questions asked and the item is exchanged.

Get your stock from wherever it suits you and then provide the service on the ground. I don't see how the procurement of stock has anything to do with serving the local community. That is up to the LBS to do and is built on personal interaction, not on where you sourced the rear derailleur on your shelf.

 

The justification of price and the whinging about not making a decent margin along the bike industry supply chain is a cop out. Just because CRC exists, doesn't mean I only buy from them now. I shop around and will buy where I find the best deal , availability, how I get treated as a customer and convenience. Sometimes CRC wins , but more often than not, I buy local.

 

Local distributors, especially the ones with the big brands in their stable, tend to wallow in their monopolistic position, having forgotten what it means to be price competitive.

I am not going to buy into the emotional argument of the local economy suffering, because CRC (who, by the way, also procure from the Mother company) sells at lower margin, because they work on economies of scale.

 

There are obviously enough of us South Africans buying from CRC to make an impact on the local distributor's sales. We hear it time and time again. So why doesn't local distributor X not see CRC as a direct competitor and consider reducing his margins, if he or she knows full well, that the current margins have plenty of fat to trim.

If the LBS trades on a ripoff mentality, then we as customers simply move on to the next shop ( or order online).

Edited November 16, 2012 by kandui

[DIRT EATER KZN]

This letter got me thinking whether CRC had any new toys for me. I also hope that the local BMX scene take the same stance. We don't need more people on small wheels being a menace on pavements in shopping centre parking lots. I'd be very happy if the BMX scene is happy to bend over like we all had to bend for many years before we could access a wide variety of goods at reasonable prices. CRC would do well not to respond. This was clearly done as a marketing stunt to keep his other advertisers happy and would be even more effective if CRC actually did respond.

funny you should say that im going over to the sight right now havent ben there for a while