Open letter to Chain Reaction Cycles

[Big H*]

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

 

O ja, I remember that book now, it is the one they us at my LBS

[Paul Ruinaard]

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.

 

I want to know who your LBS is?

[HairyLegs]

So, all that this twit has done, by writing this letter, is given CRC some free advertising. Should've rather taken their money for an ad.

[Paul Ruinaard]

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.

When people start to get how technology drives cost down then they will see the lbs is just one of many business models that are being changed by This.

 

The LBS won't go out of business, but their customers are not captive to them and a few like the Hubbers who realize MTB'S are not a black art and won't buy the bs about warranty etc on bicycles, will be able to choose. Some people will choose to buy from them, some not, You as the customer benefit as you have choice.

 

I don't buy my bikes locally,as I can save lots of money (new Cannondale scalpel 2 for R 35k landed compared to R54k in the shop in SA was a recent example).

 

I use a local LBS for service. They get lots of business on servicing as they are good at it and as i am anal they charge me more but service brilliantly. I sent them at least 4 mates as they were so good. Their business is growing and they know that I was the person that helped them with word of mouth so they treat me well.

 

I work too hard for my bucks so if I can save 30 % relatively easily then I will.

[Lucky Luke.]

When people start to get how technology drives cost down then they will see the lbs is just one of many business models that are being changed by This.

 

Agreed, the local shops should accept CRC and use their status as part of the local bike scene / community or whatever you want to call it, to distinguish themselves.

 

They might as well put a few computers in the store and let the customers order CRC stuff on their shop account. Charge a handling fee and fit the parts where appropriate. Sell them a nice cup of coffee while they're doing it. Offer advice on what to buy. Order placed? Collect at the shop and save on delivery. The customer must now visit you again - more feet through the front door.

 

Use specialised product lines, put on local events, sponsor them, sell training and maintenance clinics - anything that focuses upon building a relationship with local riders - use this stuff to distinguish yourself from the CRC experience. It really is a no-brainer.

 

After all, for me at least, the point of going to an LBS, in most cases, is to talk to a friendly face you can trust, who can keep you up to date on what's happening in the local cycling scene, who might already know your bike etc etc.

 

If this type of thinking is too far out of the LBS comfort zone - unfortunately the commercial landscape has already changed - it's adapt or die.

 

No amount of cry-baby letters is going to change the basic economics of the situation. Don't hate the playa hate the game as they say.

Edited November 17, 2012 by Lucky Luke.

[javadude]

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

 

You must be really unlucky. I have over 50 seperate orders on ebay and about 10 from crc and have never lost a single item.

[mazambaan]

@Lucky Luke; I think you are on the right track. Some LBS may go or shrink but maybe they'll have to focus on service and expertise to set up, improve and service bicycles and particularly the bits a little tricky for home mechanics like rims, brake internals and shocks. I've had some ridiculously poor service from disinterested lighties at my LBS.

[The Guy in Pink]

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

There is your answer...

You know, the owner of the bike shop where I bought my first lightweight equipment from (It was then little place in Main Street Jhb before they moved to make room for the Carlton Hotel) bought a Ferrari when he eventually sold his business.

Ok, was not a Porche but only a Ferrari Dino, but he built his business at a time when a major cycling event in Johannesburg would expect to attact as many as 100 riders.

[Lotus]

 

Ok, was not a Porche but only a Ferrari Dino,

 

A Dino is arguably far more valuable today than any Porsche (with the possible exception of the Carrera GT or the GT1). Top quality Dino's went through the roof in terms of prices during the 2000s, and have kept value (more or less).

 

I was offered a clean Dino around 1985 for R30000 - still regretting not taking it!

 

Back to the original post now - I don't suppose the publisher of this BMX mag has any qualms about dispensing advice to his readers? Advice that might do the Aussie LBS out of some business, like how to maintain your BMX?

 

This article really makes the point for Darwinism and survival of the fittest (okay, Darwin didn't exactly say that but it sort of comes down to it).

[The Guy in Pink]

I have been trying to buy a bike for my daughter who relocated to Perth from London.

She sold her bike in London when she left and I said I will replace it for her.

 

So I contacted 5 Perth Bike shops via their very nice web sites this week.

Only one bothered to respond and he did not offer any discounts so CRC will be cheaper even with the postage etc.

[javadude]

I have been trying to buy a bike for my daughter who relocated to Perth from London.

She sold her bike in London when she left and I said I will replace it for her.

 

So I contacted 5 Perth Bike shops via their very nice web sites this week.

Only one bothered to respond and he did not offer any discounts so CRC will be cheaper even with the postage etc.

 

And if the price of the bike is under $1000(aus) she wont have to pay tax or import duties.

[Music Pirate]

This debate reminds me of the late '50's/early 60's controversy regarding the advent of supermarkets in SA..... cries of anguish from corner grocers, butchers, dairy outlets, etc, etc........ it was indeed the death knell for many of these "Ma & Pa" shops, but to the advantage of the consumer, due to greater buying power, economies of scale and supposedly lower prices......... please note the word supposedly...... we have no way of knowing whether or not we are currently benefiting from lower prices (nothing to compare the supermarket prices against)...... maybe we are left with an oligopoly that manipulates/fixes prices anyway?

[Adrian4Four]

The fact of the matter is also, that SA is so over priced with many things... Just look at cars. Buy a car from another country and you pay less for it, even in Bots its cheaper. Look at tyres for your car. Its cheaper everywhere else even in Bots. The suppliers make such huge profit margins on everything and the consumer must just cough up and for what??? Why not look after your own pocket instead of the local fat cats? Im not saying that LBS are make a killing, but probably the supplier themselves as Stretch has mentioned. yes many things are not worth importing cause of cost difference, but there are definitely a lot thats worthwhile importing and its up to the local suppliers to cut their profit margins and make it easier for us to just buy locally.

 

Ideally it would be nicer to buy everything you want locally or just down the road from your LBS, but with some of the price differences being so high that you pay twice as much and sometimes even 4 times much locally, why would people not rather use CRC to buy the same good for soooo much less... Its time for local distributors to come to the party, cycling is already such an expensive sport, come "fat cats" make a plan!

[Goodbadugly]

The last time I ordered articles form CRC, the order was incomplete. But I paid for everything.

I emailed them. They requested a photo of the box the goods were shipped in and the invoice. I obliged. The next day I received a tracking nr for the missing articles. And received it in the next week. Now THAT is good for an online shop.

A few months ago I ordered grips form CWC. The set I get had 2 left hand grips. I phoned them. The next day I got a parcel with the correct stuff. And their courier picked up the odd pair of grips. Now that is excellent.

[JGR]

I didnt read the entire thread so this might have been mentioned - the kodak story. Once the market leader in their industry and now its gone due to technology/digital ect. I think his point is valid regarding involvement at grass roots/events ect. There will always be a place for the LBS but the relationships/sales will be build on trust/service rather than price which perhaps is a good thing?

[Zook]

Wallmart has built an empire from undercutting local business. It sucks for the small businesses, but in general consumers still get lower prices. Lower prices are generally linked to more purchases, so if prices of bikes are lower, more people will buy bikes, and more often. That sounds great. Similarly with Amazon. Currently, I rarely buy from Exclusive Books because my Kindle is good enough, and I get the book immediately, and I can read ratings.

 

I suspect the social and local organisation of bike-related industry will change as this filters from the relative cycling insiders to everybody. When your mom knows she can get a cheaper bike on CRC, it's pretty much a new world. Those local-organising services might just move to different industry bodies.

 

However, not all is lost:

• Firstly, some functions just won't work over the web. Can't get advice about which brands have the best local service. Can't get bikes serviced online. Can't feel it, and try it out. I remember doing a project on a LBS, and services seemed to be great income. A business focused mainly on that could probably fly. I forget the numbers, though, but obviously less floorspace, holding cost, salespeople. Just good solid bike services from great mechanics that care about bikes.
  
• Secondly, economics also provides for self-selection, where someone who values things other than money will want to get a bike from Pricy Cycling. They want an exact fit, maybe an integrated seatpost, maybe the bike today, maybe a couple upgrades. Fashion is important to many, as with cars and clothing. Local advice from the race snake who knows which bike will suit your wife, or who knows how you ride and can make suggestions. The customer wants to feel good about their purchase, as if they're buying a luxury good. This traditionally wanes when the economy is low - people get more price sensitive. Luckily, when the economy improves people want luxury and good service again. So as a bike-shop, you need to know how to weather the tough times by e.g. changing the product mix, or upping your marketing game to look after the big spenders.
  

Personally, I like supporting the LBS. When they do a good job and build trust, I send them my own work and take friends to look for bikes. I've done that for lots of people. When they treat me like a commodity customer and just want the sale, they lose out in the end - I move LBS'.

 

There are still ways to combat the move to bikes-as-commodity, but the way to do it is to know where the market is going and have a plan for that, rather than putting all your eggs in the basket of combating the change. You can fight it with emotion, marketing, calls to "our local industry", but that industry will change. Find the real underlying advantages you have (or build some), and leverage those.