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price fixing hey...now what? does it actually help us?


mark ellis

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Probably going to hurt us in that the fines are going to be extensive which will result in certain manufacturers having to close shop in S.A.

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Why cant you buy direct from an agent? Evn if you were to say buy yourself 10 group sets for yourself, friends or a couple other people? :unsure:

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Why cant you buy direct from an agent? Evn if you were to say buy yourself 10 group sets for yourself, friends or a couple other people? :unsure:

 

I think that (the agent only supplying the retailer)will soon become a thing of the past.

 

The market here is far too small to support the supply chain as it stands now.

 

It's also a fallacy that retailers buy 10 group sets at a time, walk around your local "Pro shop", do you see ten of anything, I dont, Shimano would do cartwheels if every shop bought 10 groupsets at a time.

 

Any supply chain is only as strong as its weakest link, here its the end user (the public) - who have realised they can get the product cheaper, quicker and with more choice by importing themselves - in my opinion the only way to strengthen that weak link, is by the agent supplying the end user directly, thereby giving him a cost advantage and keeping the money in the local market.

 

Its happened in every industry, Taps, Bathroom fittings, Tiles, Furniture, white goods, tools, you name it, ITS GOT TO HAPPEN HERE, if it hasnt happened already, it wont be long.

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Crack, nobody likes to be ripped off, that is a given. The theory of pricing of goods is a bit more complex than this forum, but simply the "correct" price from a sellers point of view is the maximum that the buyer will pay. That price shouldl be above the total cost of the goods in order to stay in business.

Now part of the cost structure is the cost of the capital tied up in the goods on the shop floor. Each day that goes by the cost of the sunk capital increases. Now to improve cash flow and liquidate the asset (goods)the seller would lower the price to move the goods quickly and convert the goods into cash. Profit low or negative, but cashflow high.

From the buyers point of view the correct price is the lowest that delivers the correct quality goods at the desired convenience. So my garage shop charges R32 for my smokes against the R28 at Makro. I pay the R32 as a premium for the convenience of shopping at 8pm close to my home. No price fixing, just convenience of buying the same product.

Bikes, cars, solar heaters, laptops,iphones all just products that need to be moved.

We have a choice that we make all the time, pay a premium for something that we really want, like the iphone4 at midnight tonight, or get a R200 brick that is still after all just a phone. But you may look cooler with and iphone4, if that is what blows your mind.

But to feel happier, lets all stop bitching and moaning, and just make the choice and live with it.

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But to feel happier, lets all stop bitching and moaning, and just make the choice and live with it.

 

.....not sure its moaning, just discussion.You dont need to take it to heart.

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What next , you wanna walk into the Nissan assembly plant in Rosslyn and buy a car ? Lets close all the dealers ? :o

 

Comparing apples and pineapples.

 

The motor industry is massive, one of the biggest industries in the country, its dominated by conglomorates like the Imperial group, Mcarthy, Bidvest etc, this is an industry vital to the economy - the cycle industry - well it's mostly independants, mostly under capitalised and the industry hardly registers in the economy.

 

The motor industry is big enough to support a supplychain of dealers, the cycle industry is not.

 

Compare the cycle industry to say the surfing business, running, skate boarding etc to understand the principle.

 

You cant even compare it to golf, which is probably 3 times or more the size of the cycle business, yet there are far fewer golf than cycle shops. More profitable too I assume.

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Ok I can go with discussion! Sometimes I think we get carried away in the passion we have for cycling. I have seen some really really nice stuff but just cant afford it. Frustrates the hell out of me and I would really like to see lower prices, but we also have a strange relationship with our suppliers (lbs). If we screew them too hard they make less profit and go out of business, leaving less competition leading to higher prices. Agreed that some should close, natural selection blah blah, but i need/like my convenient shop around the corner. He can make a reasonable margin from me, just not rip me off.

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Crack, nobody likes to be ripped off, that is a given. The theory of pricing of goods is a bit more complex than this forum, but simply the "correct" price from a sellers point of view is the maximum that the buyer will pay. That price shouldl be above the total cost of the goods in order to stay in business.

Now part of the cost structure is the cost of the capital tied up in the goods on the shop floor. Each day that goes by the cost of the sunk capital increases. Now to improve cash flow and liquidate the asset (goods)the seller would lower the price to move the goods quickly and convert the goods into cash. Profit low or negative, but cashflow high.

From the buyers point of view the correct price is the lowest that delivers the correct quality goods at the desired convenience. So my garage shop charges R32 for my smokes against the R28 at Makro. I pay the R32 as a premium for the convenience of shopping at 8pm close to my home. No price fixing, just convenience of buying the same product.

Bikes, cars, solar heaters, laptops,iphones all just products that need to be moved.

We have a choice that we make all the time, pay a premium for something that we really want, like the iphone4 at midnight tonight, or get a R200 brick that is still after all just a phone. But you may look cooler with and iphone4, if that is what blows your mind.

But to feel happier, lets all stop bitching and moaning, and just make the choice and live with it.

 

Its not a matter of bithcing and moaning, Its about the price being right. Why should I be forced overses for the same goods at a reasonable price when they can be bought here at a massive premium. Surly The agents like anyone will want more profit , and if that means cutting out the LBS so be it. We all know they have been ripping off people for long enough. Having lived in the UK for 10 years, this would not be allowed to happen, and I know it wasnt- Prices were more reasonble, cycling is not seen as an elitist sport either, as it will eventually become if things dont change.

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Epic doffness to admit to smoking! Could I edit it to say "hypothetically"?

 

:lol: :lol: - Ha,Ha, - I must have scanned over that - but I would have automatically assumed it was hypothetical anyway.! ;)

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So what should one do then, just continue to be ripped off? I hate to see anyone go out of business, but they need to be more fair, the agents as well. Otherwise it will soon be the LBS & agents seeking new employment. Surely with the numbers coming into cycling/mtbing the prices would come down :unsure: As some one said, not even the bike shops stock much in the way of parts - So "Joe Soap" should be able to order from the agents as well, if not then as people are, they go elsewhere, be it an online store with lower overheads or we go overseas, surley out economy could do with the money? Also cant understand why a major bike service is as costly as a car?,if not more(well my bakkie at least) The tyres are just as expensive as car tyres, gosh look at the size of a bike tyre compared to a car tyre, are they havin a laugh.

 

Its all just gone so out of proportion its crazy. It will now cost me an arm and a leg(maybe I could sell a kidney) for a once a year major service on 3 bikes, not too mention consumables.

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Also cant understand why a major bike service is as costly as a car?,if not more(well my bakkie at least) The tyres are just as expensive as car tyres, gosh look at the size of a bike tyre compared to a car tyre, are they havin a laugh.

 

Come now, Crack. Where can you get your bakkie serviced for R350? And, what, your bike tyres cost R2500 a shot? Methinks your argument is much more over-inflated than the mark-ups you perceive the people you have an axe to grind against use.

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Come now, Crack. Where can you get your bakkie serviced for R350? And, what, your bike tyres cost R2500 a shot? Methinks your argument is much more over-inflated than the mark-ups you perceive the people you have an axe to grind against use.

I am with Crack on the tyres, I use Firesstone ATX 15inch on my 4x4, they cost me around R850 each (boy, did I squeel!), I have seen tyres for R600-R700 for bicycles. My Mazda sting has new Continentals for R400 each. I bought a new Larsen TT wirebead 2.0 on Monday for R230. There are places where you will have a minor service for R400-499 (oil and filters changed really, quick work once you have done it a few times). Can't vouch for the quality of work though but it can be done and in todays economy, competitiveness is what will make or break you.

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So what should one do then, just continue to be ripped off?

AFAIK, the markups on new bikes are actually not that big. Something like only 20%. so the R5k bike on the shop floor is making the dealer R1k. These figures could be wrong, but just run with them for now.

 

The average bike shop owner doesn't make his his cash from selling bikes at this level, but more from accessories and labour. Selling bikes is a way to get the customer into the store and start a relationship. The other big revenue stream that some bikestores have is the dudes buying the R50k+ bikes. When I see someone on a fancy bike in Group R that he has no place riding, I remember that he's keeping a bikestore in business.

 

By driving a hard bargain at this price level, the LBS is most likely not going to bother. Sure no one is going to stop you from asking for a discount, but it's poor form. Do you ask raymond ackerman to drop his price on fattis and monnis penne because whitey basson is charging you a rand less down the road?

 

finally, where does your handle come from. Is there a crack in your bike or do you smoke it?

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