Open letter to Chain Reaction Cycles

[kandui]

Buy where you like and be done with it. 99,9% of all bike parts we need are imported anyway, so whom are we protecting? If the local supply chain pushes the price of a part too high, buy overseas.

CRC still need staff to process orders, deal with marketing and logistics and they're holding mountains of stock. So the argument of online businesses having less overheads doesn't wash.

If the LBS moans about the price the distributor charges, then please, show me the numbers and be honest about it. I don't begrudge anyone a fair profit, but hiding behind blanket accusations is rubbish.

It's like the argument the Supermarket puts forward when we complain about the increase in the price of milk. "No, it's the Producer". The Producer says, "No, it's the agent". Everyone passes the buck.

It's a Third Force!

 

If I was a bike shop owner, I would band together with a couple of others, bypass the Distributor and speak to the Manufacturer about direct ordering.

Set a minimum order volume and go for it.

Shake up the industry if you feel the Distributors are ripping you off.

Or speak to CRC about setting up a Dealer Supply Chain.

[YUMEYA]

How many bike shops are mutli million Rand companies that employ more than 100 people?

 

Economies of scale.

 

The clever ones

[YUMEYA]

http://www.chainreactioncycles.com/Images/News/photos/25years/Images/letter.gif

 

ow entering the twenty fifth year of trading, Chain Reaction Cycles are well known throughout the world shipping daily to every corner of the globe. The world's largest online bike store has grown through hard work, a strong family ethos and investment in stock, systems and most importantly people. Here's the story of how we came to be where we are today.

It was in 1984 that George and Janice Watson made the decision to open a bike shop, which saw George leaving his job in the road service and embark on their journey into bicycle retailing and repair. Thoughts of worldwide success weren’t the main priority when, armed with just a £1500 bank loan, they set up Ballynure Cycles, in the small village of Ballynure in Northern Ireland.

[Java001]

Buy where you like and be done with it. 99,9% of all bike parts we need are imported anyway, so whom are we protecting? If the local supply chain pushes the price of a part too high, buy overseas.

CRC still need staff to process orders, deal with marketing and logistics and they're holding mountains of stock. So the argument of online businesses having less overheads doesn't wash.

If the LBS moans about the price the distributor charges, then please, show me the numbers and be honest about it. I don't begrudge anyone a fair profit, but hiding behind blanket accusations is rubbish.

It's like the argument the Supermarket puts forward when we complain about the increase in the price of milk. "No, it's the Producer". The Producer says, "No, it's the agent". Everyone passes the buck.

It's a Third Force!

 

If I was a bike shop owner, I would band together with a couple of others, bypass the Distributor and speak to the Manufacturer about direct ordering.

Set a minimum order volume and go for it.

Shake up the industry if you feel the Distributors are ripping you off.

Or speak to CRC about setting up a Dealer Supply Chain.

 

We might be shocked to hear how many bike shops are already buying from CRC in order to drop their own acquistion cost on certain items; I know of quite a few ! Also remember when we as customers buy from CRC we have to absorb 14% VAT on the import - the bike shop also pays it, but claims it back as input tax, so his CRC cost is even "lower".

[Joe Low]

Pretty silly letter, as most people are saying.

 

Its not just about the bike(shop), it applies to e-commerce in general & thats not going away any time soon, if ever.

[Kranky]

http://www.chainreactioncycles.com/Images/News/photos/25years/Images/letter.gif

 

ow entering the twenty fifth year of trading, Chain Reaction Cycles are well known throughout the world shipping daily to every corner of the globe. The world's largest online bike store has grown through hard work, a strong family ethos and investment in stock, systems and most importantly people. Here's the story of how we came to be where we are today.

It was in 1984 that George and Janice Watson made the decision to open a bike shop, which saw George leaving his job in the road service and embark on their journey into bicycle retailing and repair. Thoughts of worldwide success weren’t the main priority when, armed with just a £1500 bank loan, they set up Ballynure Cycles, in the small village of Ballynure in Northern Ireland.

 

Thanks for the info. Not just a corporate beast but a LBS that saw a gap Imagine ordering parts via mail order.

[GrumpyOldGuy]

Pretty silly letter, as most people are saying.

 

Its not just about the bike(shop), it applies to e-commerce in general & thats not going away any time soon, if ever.

 

Absolutely, seems he wants a "closed business policy" so that he has no external opposition and can operate within his own comfortable narrow field of business.

 

The global economy is huge, companies that will prosper going forward have realized that not only do they have a mobile customer base now but that the international retail world is only a click away, the clients choice of retail shopping has broadened a 100 fold.

 

Prosperous manufacturers / distributors are trying to get closer to their client base every day, not further away.

Edited November 16, 2012 by GrumpyOldGuy

[Tumbleweed]

get together and make plans... but dont go out on a crooked leg and blame and open free market...

 

Erm...

[Tumbleweed]

how many LBS owners do you see driving Porche's??

There is your answer...

 

Okay, I give up. How many?

[patches]

I'm a consumer, not an LBS owner... so whoever gives me the range of products I'm looking for at the best price, is a winner in my books. Simple as that.

 

If someones little bike shop can't compete with CRC then boo-hoo! Dry your eyes! Either drop your prices (cos some of those markups are ridiculous), offer something unique, or up your service game.

 

If you keep massive markups, don't bother to stock anything unique from what every other LBS stocks, and keep your workshop run by guys off the side of the road who just know how to turn screws, then you kinda deserve to die out. Sorry, but it's true.

Edited November 16, 2012 by patches

[HappyMartin]

Never bought from CRC and be surprised if I ever do. I support my LBS. The same with my photographic gear and that runs into millions over the last 15 years. I believe that what goes around comes around. I like loyalty and like to get it from my clients so I give it to my suppliers.

 

Business is pretty good and my suppliers are now my friends. I like it like that

 

Reminds me of how McDonalds in the States only ever had one supplier of buns. The founder was told how he had made the supplier rich and he could get cheaper buns. He said he didn't want cheaper buns and he was pleased the supplier had become wealthy. Like that

 

Don't rip my hide off now guys. This is just the way I do things and I have no opinion on other views. Just do what works for you and what makes you feel good.

[HeyYou]

Will 2020 BMX Magazine be around in 10 years?

 

A Magazine?

 

Somehow I don't think so.

 

Will CRC be around in 10 years?

 

Judging by their performance over the last 10, YES.

[Iwan Kemp]

I also dont get it. as far as i see it, it is not CRC that is affecting local sales and development, but rather the suppliers who supply local shops. If CRC are able to source parts and still make a profit then surely local suppliers can still do the same. I think the whole model here in SA especially needs to be rethought.

 

Secondally, with regard to development, sure some local shops provide development and event sponsorship, buton the whole, it is independant skills courses, and event organisers who are responsible for the events.

 

that said i only buy major parts from CRC - everything else is from my LBS

 

How it works:

 

At the quantities CRC buys and sells the get to import some, if not most of their stuff direct from the East. They dont order 5 or 6 "Brand X" handlebars, they order boxes full of each model. I'm sure they also they also get additional discount for qty and save further by buying direct from Brand X and not Brand X's UK distributor. Then they save on shipping by having it shipped to them directly from the factory. All of these savings add up.

 

A local distributor mentioned CRC is selling gear for cheaper than what he gets it from the factory for. So theres NO change of him growing the brand and getting it in your LBS.

[Chris Willemse]

Most of the local wholesalers en dealers must wake up. CRC is getting stronger and stronger. Forget about talking neg re this group CRC. Cut your price, give better service and if your local agent cant give you a good deal then stuff them too.

[BrianPivo]

I do the sums. CRC seems to be about 30% cheaper than local retail (if they have the item in stock), landed with VAT and duties. That's the upside. But how big is the upside?

- Not all my overseas orders arrive. Many disappear in the mail;

- My LBS generally discounts between 10% and 20%;

- My LBS changes out immediately any defective parts or workmanship, even stripping a bike on their floor if needed;

- I get to see in the flesh potential new stuff. I'm more selective and therefore save, when I buy off the floor;

- My LBS trades in my old stuff on new at realistic prices and straight away (no waiting for weeks or months for a nibble on TheHub);

 

The savings from dealing with a conscientious and well-run shop have exceeded the discounts on CRC's prices in the long run for me.

 

But I've also had rough experiences with bike shops (one in particular) other than my preferred shop and I well understand how customer loyalty can be lost. Conceivably forever to the likes of CRC for some.

[CAAD4]

Then we might as well boycott Park tool too as they publish a big blue book, showing riders how to service their own bikes...