Raleigh lowers prices

[javadude]

 

 

Remember this:

 

From: Brandon Els [mailto:brandon@probike.co.za']

Sent: 03 November 2008 09:09 AM

To: zoon@silverback.co.za

Cc: 'Dave Wyatt'

Subject: FW: Key Model Comparison 2009 V1 from Silverback

Please

ask our permission before you send out info like this in future.

Probike has the capitalization and financial resources to wipe out your

company today by selling every model you do below our cost and to

import 5 times the volume you do. Would you like me to do that?

I

can amend our pricing and issue the comparative charts and pricing

today to all dealers. You are looking for attention from Probike that

you really do not want!

 

 

I think it just happened.

 

I love capitalism, go Probike!

 

 

Does the threat contained in this  alleged email , allegedly attributed to one Brandon Els not smack of anti-competitive behaviour?

 

Should the competitions board not be interested in this (as well)?

 

Exactly the opposite of ant-competitive behaviour i would say. Whats more competitive than telling your opposition that you will crush them.

 

[porky]

Price fixing - yes the reserve bank drop the REPO rate today by 1%. Most business need money and thus most business suffer from price fixing.

This intern should mean the rand will becomes stonger as overseas markets see RSA too is part of the globle ecc' date=' and thus are more willing to invest in RSA. So its a double benefit easier for you guys to spend money and easier for the importers to buy stock at cheaper prices.

[/quote']

 

Not sure if I understand you here Icycling. The reduction in the repo rate (which is vital for the economy) will not affect the "granting of credit" to businesses or consumers, which is one of the prime reasons for the recession.

 

Credit, which is vital to get people buying again, in the short term, will remain difficult to obtain.

 

Unfortunately, for most consumers, "No credit" means generally "No spend".

 

The cycle is also far from over (again, sadly) because, as consumers get more free capital from interest rate reductions, they will generally FIRST slowly dig themselves out of small debt, like credit cards, store cards / accounts etc, then settle bigger debt like cars etc before using that free money to physically go out and buy again.

 

So this free capital is still not going back into the retail market yet, and wont be doing so for a good while, estimates are another 10-15 months, but that depends on who you talk to. 

 

The present strengthening of the rand is of course good for the importing side of the supply chain as you mention, but there are still many factors at play which could tip the scales back again and cause a flight from the rand, I would like to say the storm has past, we all would, but I think its still a bit too gloomy out there to predict with any certainty.

 

[GoLefty!!]

Rand/$ at 8.45 today if I add 30% to that I get R10.985 and the rand was trading at over 11.00 at the end of last year. So if your next shipment is coming at at 30% cheaper' date=' droping your prices by 25% probably take into account the dollar base pricing and passes that onto the consumer! Probike still are probably making the same margins - and they need too! Do any of you guys work for free? Why should they!

Who I do feel for is the LBS who have stock at the old prices - will Pro bike credit them for this or are they going to have to sell this at a loss? Remembering they would have at it on the floor for about 3 months - and that in itself cost! Or will this just mean more shops close?[/quote']

It's not that we have sold all bikes we bought at 10.20 per USD, and it's also not that all our dealers have hundreds of Raleigh bikes in their shops and already paid for those. Fact is, we are the ones, who have to pay for all our bikes, before the first one is even close to a shop, we are paying interest on the bikes in our warehouse, and we are paying interest for all the bikes in the shops, that haven't been paid yet.
At the end Probike and the shops have to work on a average markup. If you work out the profit on each single bike, then I agree with you, on bikes bought at the old price the dealer will make a loss. But at the same time it gives him the opportunity to sell many more bikes at a better price, make up that loss and get marketshare from his competitors.
And unfortunately this means, other shops and bike distributors will lose marketshare. But if sales drop countrywide obviously there will be less money to make for everyone, and some might not make it and close their business.
I've seen many threads at the hub (and even this one) where people feel ripped off by the bike industry (distributors and shops) assuming we work on super high margins. But what I see is, that many dealers are already suffering, and winter hasn't even begun. As you said we don like to work for free, but for some reason I ride a Chinese Vespa-copy scooter to work, I don't have a maid, my house only has 2 bedrooms and I couldn't afford the bikes I ride if would have to pay the full price - which is probably the real reason why I work in this industry :-).

 

 

agreed. In this small market turnover is the key to survival for any business. So youhave to sell, if it's a t a lower margin.

With consumers being cash strapped, lower prices are the only way to survive and Probike have fired the first salvo. Others will need to follow.

 

we are seeing this trend in every area from housing to commodities. The bubble has burst, the global economy is insy m**r. This is a survival tactic.

 

what is really needed is salary inflation so that the consumer can keep pace with the market. Thats sustainability. However even in todays times some moronic CEO's are still moving production to the east for short term gains.

 

[Guest Agteros]

 

 

Remember this:

 

From: Brandon Els [mailto:brandon@probike.co.za']

Sent: 03 November 2008 09:09 AM

To: zoon@silverback.co.za

Cc: 'Dave Wyatt'

Subject: FW: Key Model Comparison 2009 V1 from Silverback

Please

ask our permission before you send out info like this in future.

Probike has the capitalization and financial resources to wipe out your

company today by selling every model you do below our cost and to

import 5 times the volume you do. Would you like me to do that?

I

can amend our pricing and issue the comparative charts and pricing

today to all dealers. You are looking for attention from Probike that

you really do not want!

 

I think it just happened.

 

I love capitalism, go Probike!

 

 

Does the threat contained in this  alleged email , allegedly attributed to one Brandon Els not smack of anti-competitive behaviour?

 

Should the competitions board not be interested in this (as well)?

 

Exactly the opposite of ant-competitive behaviour i would say. Whats more competitive than telling your opposition that you will crush them.

 

selling at a loss with the sole intent just to drive somebody out of the market is not on as far as what I understand things....

 

[Free]

Comparing the new raleigh prices to the prices of competing brands it seems the raleighs are only on par now. Previously they were way overpriced. 

[louis0852]

Shouldn't anyone try and get Jan to reply to this. Want to see what long reply he could have this time. Thanks for the hubbers that took on the story

[Icycling]

Porky - Most cyclist (sport cyclist - non commutors) fall into middle to upper class. In this sector of the ecc. one of this biggest mouthly expenses (not meant to be more than 25% of income) is bond repayment. In this cycle where interest rates have already come down by 3.5% it means on 1 million rand (in the western cape not much available still at less but price seem to start at 1.5 to 2 million for an avg home in the Southern Sub) at prime the bond holder is saving about R2500.00 per month, at bonds below prime its even more. On top of that with the price of car fuel having drop quite a lot in the the past 6 month quite a lot of money has already been put back in the pockets of the public. For example a person who is paying on a bond of say 2million who should have got about 2% below prime on that bond his saving per month are already over R6000.00 per month!

 

 

 

But my point was more to do with price fixing and the fact that all business which borrows money is subjected to it as the gov. / reserve bank fixes the price of money to the banks which interm leads money to business / the public. Thus we all are subjected to price fixing as soon as we are involved at all with borrowing of money! I dont think this model will change so price fixing will always be here in some form!

[Harryn]

Porky, Porky Porky! you have done it again - only this time you have gone and upset the nice man from Raleigh. tch tch. You just could not be satisfied with running 2 oceans and riding your bike, and making sure that nobody idolises their LBS! Now you are pissing off the big boys. If Raleigh prices ever go up again, I will hold you personally liable!

[Pilks]

 

 

Remember this:

From: Brandon Els [mailto:brandon@probike.co.za']
Sent: 03 November 2008 09:09 AM
To: zoon@silverback.co.za
Cc: 'Dave Wyatt'
Subject: FW: Key Model Comparison 2009 V1 from Silverback

Please

ask our permission before you send out info like this in future.

Probike has the capitalization and financial resources to wipe out your

company today by selling every model you do below our cost and to

import 5 times the volume you do. Would you like me to do that?

I

can amend our pricing and issue the comparative charts and pricing

today to all dealers. You are looking for attention from Probike that

you really do not want!

I think it just happened.

I love capitalism, go Probike!

Does the threat contained in this? alleged email , allegedly attributed to one Brandon Els not smack of anti-competitive behaviour?

Should the competitions board not be interested in this (as well)?

Exactly the opposite of ant-competitive behaviour i would say. Whats more competitive than telling your opposition that you will crush them.

selling at a loss with the sole intent just to drive somebody out of the market is not on as far as what I understand things....

Agreed it aint morally right but it is not illegal as far as i am aware.

[KDEE]

Re post above.... could be seen as possibly a dominant player forcing a smaller one out of the market by abusing size and ability to undercut.... that was still illegal/monopolistic the last time I looked. Still Im no lawyer, so i could be way of target here..

 

The tone of Pro Bikes email makes the assumption/jump fairly easy to see how they could use the influence, especially with the other brands that they hold, and bring pressure to bear on an lbs as regards a competitor...

 

[gparsons]

My two cents worth...

Brandon 'the crusher' Els, just saying the name makes my knees shake  !! If that email was really from him then not a 'businessman' I would like to deal with!! But that's just me....

 

In SA, the economic crunch hits, prices go up, disposable income goes down and luxury good prices (e.g. cars, mbikes, bicycles) get really out of hand. In other parts of the world, suppliers offer discounts, try and move stock, etc. In SA, apart from probike it would seem, suppliers stick to prices and do not budge. Thus they will not move stock, won't get sales, and will go under if they don't have the financial means to weather this storm. So, at least the consumers and (for a change) suppliers are in the dwang together. It might be sad, but with the current status quo, what else can we expect???? Heres hoping things improve for everyone though...

 

 

 

[porky]

Porky' date=' Porky Porky! you have done it again - only this time you have gone and upset the nice man from Raleigh. tch tch. You just could not be satisfied with running 2 oceans and riding your bike, and making sure that nobody idolises their LBS! Now you are pissing off the big boys. If Raleigh prices ever go up again, I will hold you personally liable![/quote']

 

Ha,HA,Ha, Yeah,Yeah,Yeah Harryn.

 

Its all good bud, all good.!

 

 

[Shebeen]

THREAD REVIVAL!!!!

 

well not really, was searching for something else and this came up.

 

10 years later, how are Raleigh doing, did they crush Silverback like they said they would?

[Eugene]

THREAD REVIVAL!!!!

 

well not really, was searching for something else and this came up.

 

10 years later, how are Raleigh doing, did they crush Silverback like they said they would?

Raleigh as we knew it then is long gone. Silverback has grown exponentially.

 

Having said that, Raleigh disappeared for other reasons.

[Longbarn Killer]

Going back or turning back the clock, the only reason Raleigh was able to drop their prices in 2009 was because they had hiked up their margins so such a crazy extent in 2008. They wanted to play in the Pinarello, Cannondale space and it cost them dearly. People stopped buying Raleighs. That is also the reason why they had no new models for 2009, they had so much unsold stock from 2008.

 

It was a pity, we lost a really good brand when they disappeared (or became Axis).

[PhilipV]

Hmmmm. Blast from the past.

Brandon Els is now a director at Rush Sports.

Probike became Scott SA. Raleigh became Axis, Axis is now a small player, with a tiny range. Probably little scope left for them next to the Scott range that are technically in the same stable.

 

Brandon Els is also the one who paid to have an Emma letter sent to Fandacious when FanD tweeted about smelling a dopey stench around Kevin Evans. FanD wasn't wrong.

Edited November 26, 2019 by PhilipV