'Bicycle prices fixed'

[Nettie R]

35% on bikes

70% on parts and accessories

 

I know for a fact that some bike shops have a 100%+ mark-up on tyres.

The point is: Know your product, price etc when shopping.

[Gerhardc]

Nowadays, everything is about the consumer...National Credit Act, Consumer Protection Act, Protection of Personal Information Act, etc....and rightly so....consumers are consistantly being abused by unscrupulous companies...there's no defense for stupidity and/or ignorance!! Let them pay a high price for their actions...

[deanbean]

I hear you. But it looks more like this. R2600 + 14%=R2964

R2964+35%=R4001

R4001-10%=R3601

R3601-R2964=R637

That is a 21.5% profit.... and then comes SARS and a free service after a few weeks.

 

The wholesalers claim not to have a higher markup than the shops, but i guess in most cases we will never know. Cape Cycle Systems are working very hard with SRAM to keep prices low. I have seen some markups, and there are products where they run between 5% and 7% markup. Good thing is SRAM is growing VERY fast in SA, hence the better prices we are seeing. They are getting better pricing structures from SRAM International.

You don't think that the volume moved is a result of the prices and not as you have put it. Look at Campy, prices are inflated way above international parity with the S' and subsequently there is little on the road?

[MeridaV]

Whether your LBS is or isn't on the list is irrelevant, if you shop around for the best price when you are buying locally and you import when you can wait for the parts and don't need shop assitance, you help market forces to dictate the price. No amount of collusion will force me to buy a Chinese light set for twice the price it costs to import it from the US after some Yank imported it from China. Similarly no collusion charge will stop me shopping at my LBS or parts agents (many of whom are on the list) when I want to buy something locally (ie. urgently). I'll just be extra sure to check my prices dilligently and take responsibility for not getting ripped a new one.

 

PS. All of that said, this news has made my latest CRC shipment so much sweeter.

[greenhorn]

I bought a pair of Mavic MTB shoes from CRC two weeks go - R850

LBS (who are on 'the list') have them for R1750.

 

This kind of business model is simply not sustainable. There is a premium to be paid for 'touch and feel' in the store, but not this much.

 

Given the frequency of CRC orders, and the 'pooling' of orders that frequently occurs amoungst hubbers to save postage, maybe the hub can formalise the process, contact CRC and get additional bulk buying discounts (together with no postage costs).

 

A reasonable admin fee of a few % could be charged for the service.

[Icycling]

All I going to say Icycling has stayed completely out of this and as an importer wholesaler and retailer with some of the most aggressive pricing in the world - it should not surprise you!

 

But as I have kept my overheads low - working from home, not offering credit or consignment stock etc for the 21 years I been in the business - these aggressive prices are here to stay!

[splat]

All I going to say Icycling has stayed completely out of this and as an importer wholesaler and retailer with some of the most aggressive pricing in the world - it should not surprise you!

 

But as I have kept my overheads low - working from home, not offering credit or consignment stock etc for the 21 years I been in the business - these aggressive prices are here to stay!

 

And the consumers applaud people like you and CWC.

But how much trouble have you had from the importers and distributors a la Mavicgate @ Chris Willemse's?

[Lucky Luke.]

 

This kind of business model is simply not sustainable. There is a premium to be paid for 'touch and feel' in the store, but not this much.

 

Definitely, someone making sense here. The game is changing. Consumers are changing and the industry needs to adapt their approach to the consumer, not meet with each other behind closed doors.

 

Given the frequency of CRC orders, and the 'pooling' of orders that frequently occurs amoungst hubbers to save postage, maybe the hub can formalise the process, contact CRC and get additional bulk buying discounts (together with no postage costs).

 

A reasonable admin fee of a few % could be charged for the service.

 

Makes sense hey? What if a bike shop offered this service with a delivery discount for collecting from the shop? And what if that shop went out of it's way to stock stuff you can't get on CRC?

[Icycling]

I have had none - the bigger problem I had was from website developer / consumers - as when we started (the now dead website) in 2003. It was still very new to the industry in RSA. Thus the reason for the web site failing!

 

But with a site like this is a web site still necessary or just extra expensive? I advertise now what I have in stock via this site to the public and it seems to work well!

 

It actually been quite fun (for me that is) been the thorn in the side of the bigger importer and tacking the gaps over the years as they have opened either due to their lack of stock by the agents side or over pricing.

[AndreZA]

What if a bike shop offered this service with a delivery discount for collecting from the shop? And what if that shop went out of it's way to stock stuff you can't get on CRC?

 

okay now you are just talking k@k.

[zeepee]

Again, More SA buyers = More competitive pricing? Doesn't make sense... This does not correlate with fundamental economic principles. The more buyers there are in the market the more you can up your prices. It's especially now when there are less buyers in the market that you have to focus on competitive pricing.

 

We can overcomplicate things, but, simply put, there are two ways to maximise profit. 1 - control your costs, and 2 - sell more bikes. How do you sell more bikes? You make sure you are priced right... Make your differentiating factor the one that is most important to everyone... Money! i.e. Price.

 

price isnt your only way to improve sales, I have allot of sales guys come through here thinking sales is just about waiting for the customer to call you. Those guys do not last very long.

Same thing with cycle shops, the ones that just open up and wait for their customers are the ones that struggle. The ones that advertise aggressively and go and fetch their customers do well. Cycle Lab (bad example I know, given the topic of this thread) has been very successful with this, as has Solomons and CWC.

I'm from gauteng, but when I go to the cape and need something for my bike I'll go to CWC, because I know the brand(and I know I wont be shafted). People that start out cycling go to Cycle Lab (yes yes, I know), because they know the brand.

So marketing is just as important as pricing

[Shakes]

Whether your LBS is or isn't on the list is irrelevant, if you shop around for the best price when you are buying locally and you import when you can wait for the parts and don't need shop assitance, you help market forces to dictate the price. No amount of collusion will force me to buy a Chinese light set for twice the price it costs to import it from the US after some Yank imported it from China. Similarly no collusion charge will stop me shopping at my LBS or parts agents (many of whom are on the list) when I want to buy something locally (ie. urgently). I'll just be extra sure to check my prices dilligently and take responsibility for not getting ripped a new one.

 

PS. All of that said, this news has made my latest CRC shipment so much sweeter.

 

Smells like a bike shop

[greenhorn]

Here is an oppourtunity for a budding internet entrepreneur:

 

Set up a 'local' CRC site, consolidate orders, bring in two shipments a week via courier (one for stuff that attracts import duties, one for goods that do not)

 

I'll bet my shorts that CRC will provide an additional margin for the bulk, and courier prices are slashed if they know there are frequent orders on set days that they can plan for.

 

Charge a 10% margin on CRC prices, plus duties if applicable, and client pays for local postage (which is negligable)

 

Link in with the local guys that service and fit new components at your house (for the non techies)

[_im_from_earth]

Sorry to be naive but can anyone enlighten me as to what value a distributor adds for the consumer?

 

This is something I have been paying a lot of thought to. especially with the current business model of the industry:

 

Old model:

Brand owner/ designer: Company comes up with a concept, designs a product, MANUFACTURER's a product and markets the brand and product

Value Add:

o Design and conceptualization of product [intellectual property]

o Manufacture of product

o International marketing costs of product/ brand

 

Wholesaler: Warehouses, stocks, supports and markets "Brand owner/ Designer/ MANUFACTURER's" products

Value Add:

o Shipping logistics and management

o Warehousing, stocking and financing of stock holding

o Domestic marketing costs of product/ brand

o Technical and product support of product/ brand

Retailer: Stocks and sells products warehoused by Wholesaler.

Value Add:

o Stocking and financing of stock holding

o Merchandizing and point of sale costs

o Educating the consumer and selling the product

 

New model:

 

Brand owner/ designer: Company comes up with a concept, designs a product, OUTSOURCES the MANUFACTURE and markets the brand and product

Value Add:

o Design and conceptualization of product [intellectual property]

o International marketing costs of product/ brand

 

Manufacturer: Manufacture’s product based on above mentioned design:

Value Add:

o Manufacture of product

 

^^ THE MIDDLE MAN!! ^^

 

Wholesaler: Warehouses, stocks, supports and markets "Brand owner/ Designer/ MANUFACTURER's" products

Value Add:

o Shipping logistics and management

o Warehousing, stocking and financing of stock holding

o Domestic marketing costs of product/ brand

o Technical and product support of product/ brand

 

Retailer: Stocks and sells products warehoused by Wholesaler.

Value Add:

o Stocking and financing of stock holding

o Merchandizing and point of sale costs

o Educating the consumer and selling the product

 

Now what I believe is happening is a natural trend for most bicycle companies to farm out the manufacturing to the East to achieve lower manufacture costs. This outsourcing of manufacture does indeed decrease manufacture costs but comes with the following knock-on penalties:

 

1.) Additional logistics [lets not even get into the environmental impact of this]

2.) Increase in handling of saleable goods

3.) Decrease in stability of the brand due sever reduction in assets, main asset becomes IP as apposed to plant and equipment

 

With the above in mind I believe many businesses have been slow to react to this new model and as such the consumer is taking the brunt of additional "unforeseen" input costs as well as reduced market stability due to brands decreased investment in infrastructure. To further this, many companies simply "CREATE" brands and "BADGE ENGINEER" products. Taken a look at some lightweight stems, bars, hubs on the market lately? How about accessories? How do these "BADGE ENGINEERS" justify their value add?

[_im_from_earth]

Johan to add to the frame modding issues, how about user manuals saying that any off-road riding or the like voids the warantee, has anyone had issues with that ?

 

Got a better one: "Warranty excludes use of bicycle for competition". You bought a bike for over R5k lately and NOT entered an event? Do they know how many people ride Argus, Sani2C etc?

[jugheaddave]

This is why I have no problems buying from the NET!!!!