OS vs. Local purchasing

[toodles]

I'm not usually one to shop overseas (more due to laziness/fear of being ripped off) but I thought I'd share my current amazement at the differences between local and OS prices. I'd heard there was money to be saved in buying OS but not this much.

Hope Bulb hubs (20mm & 12mm thru axle, black, 32 hole) Prices are for the pair. All prices in Australian dollars.

Local shop (ticket price, no bargaining) - $708

NZ Internet order - $569

UK Internet order - $469

US - $326

Am I missing something here? How the hell can it cost double just to cross the equator? WTF? No wonder so many people are buying through internet retailers. The next time someone says "don't buy off the internet - support your LBS" in a little whiny voice like I'm murdering a care bear I'm going to headbutt them. Yeah I'm sure it's the personal service I'm paying extra for - do you want me to suggest what kind of "personal service" I could get for my $382 in other industries...

You'd have to be on drugs to keep blowing that kind of money for local service.

[jaebo]

while stuff like this is true....

the middleman must be raking in the benjamins....

the only drama that i can think of is chasing up warranty...
while this in majority of cases is unlikely, the cost to resend the package overseas, get is assessed and returned etc = more time without your bike, and a possible greater cost...

[bighitter]

have you ever tried getting things warrantied here ? its just as bad !

I have found that warranty's are basically useless, and with the cash you saved buying the hubs in the first place , you can just snap yourself up a new pair IF they brake a couple of years down the track

[apsilon]

the middleman must be raking in the benjamins....

Agree 100% as the LBS sure isn't.

As for warranty when you're saving that much it's a 2:1 ratio so even if you throw it away and buy another you've only just spent what you would've on one locally. Also how many times have you seen the excuse "that's normal wear so it's not covered by warranty" or "that's caused by abuse so it's not covered by warranty".

The bike I'm currently building up will be 99% parts bought OS (even the bike specific tools I'm using).

[udi]

Am I missing something here? How the hell can it cost double just to cross the equator?

Warranty, which is a pitiful excuse when you can just buy yourself another set of whatever it is and still be under what it costs to buy just one locally. You also have to pay the distributors wages, the lbs owners wages, and dont forget the lbs worker kids who are always so smart and helpful. :rolleyes:

There's great shops out there as well as plenty of crappy ones, but at the end of the day i'm a poor kid, not a charity. Still, at least 80% of the money I spend is local/national, I help keep the farkin for-sale crew in business :)

[bighitter]

and i have found that i can place an order in the states, and have them here days, if not weeks before my LBS can even confirm that they are able to get them, let alone have them

[ona rampage]

I think part of the problem must be the number of hands the hubs go through on their journey to the land time forgot.
From the manufacturer, probably to a shipping agent or another buyer in that country, to an importer here, paying taxes and freight, through to a shop, with all of them taking a mark up on the purchase price. Hey presto, double the dollars.
There are many stories of buying OS and saving massive $$$: I think it is only going to get worse. If only shipping a frame wasn't so expensive....

[toodles]

have you ever tried getting things warrantied here ? its just as bad !

Yeah that's what settles it for me. I don't even bother trying to warranty stuff unless it's particularly expensive. Too many times I get told things weren't installed properly or they were abused/ridden too hard. I might not be a bike mechanic (I wasn't allowed - I finished school :D ) but I'm fairly positive I know when something fails due to poor construction.

[apsilon]

If only shipping a frame wasn't so expensive....

Still cheaper than buying locally. I'll be posting areview on my experience in about a month...

[Misplaced]

Dont forget to buy the front 20mm -->QR adaptor too Trent.

[ona rampage]

I agree, it is still a lot cheaper buying the frame OS, but I am waiting on a friend to be back in the US on a business trip to get my frame I think, and save on the $250US postage fee... That make it really cheap!

[Dicky]

Dont forget to buy the front 20mm -->QR adaptor too Trent.

...and the rear axle conversion kit too. You'll need two separate parts, the axle kit and a non drive side spacer.

[dunk]

and i have found that i can place an order in the states, and have them here days, if not weeks before my LBS can even confirm that they are able to get them, let alone have them

too true...... I waited two weeks for an answer from one shop about some parts. I gave them a call back to find out what was happening. I was told they'd get back to me in a month when the boss came back! WTF!

[SillyBoy]

It is definitely cheaper buying overseas...even with freight and insurance cost included. most of my gear (I mean everything) with the exception of a shock pump (needed it urgently) are bought in either Singapore, Taiwan and USA. The prices they have are so competitive that makes you wonder...who is making all the money here? How many "middle people" are there? I agree with totally supporting your LBS but with such high prices charged by LBS, there is no way that I will pay double for what I can get overseas..Think about it..if the prices weren't so high here...we would have more people joining the sport...more people cycling on the roads....less pollution....less people will buy those dangerous and cheap huffys.....The sport is definitely too expensive in Australia.

[DW-1]

too true...... I waited two weeks for an answer from one shop about some parts. I gave them a call back to find out what was happening. I was told they'd get back to me in a month when the boss came back! WTF!

Too many shops are not on the ball with this.

If your LBS isn't helping you, just contact the w/saler direct. On average we get about 35 emails a day that are nothing but product availability or price enquiries.

We try to get an answer out same day.

But back to this topic in general. Hope are probably not the best example to work from.

Try Fox forks.

Elvis.
waiting for the attack.

[apsilon]

Try Fox forks.

Elvis.
waiting for the attack.

$1311 vs ~$840 delivered for my '05 TALAS RLC

Then again aren't Fox one of the ones who just jumped on the "retailers not to ship OS" bandwagon? Makes it harder if you don't have contacts.

Hey, you said you were waiting :D

EDIT: oh and it came with a free King headset.

[DW-1]

who is making all the money here? How many "middle people" are there?

In many cases the manufacturers price is not crash hot in relation to their US or UK rrp.

An example.
Recently we looked at a new brand. based on their overseas rrp, I worked out projected Australian retail pricing. With freight, gst etc it tallied well up against what you would expect to pay based on US pricing.

{With new products now, we work out what the consumer should expect to pay if they mail-ordered it and paid all duty, tax, freight etc. Then work out dealer price and our margin from there... it is the backward way I know, but it makes for fairer pricing}

Anyway all looks good so far.

Then I get the suppliers cost to me... wooh... no way can I sell the product at a price that will allow the dealer to sell it for what is expected. Hell... I'd be pushing it to sell it direct to the public for that price.

The (potential) suppliers pricing structure: distributor - dealer - RRP was unworkable. (in this example)

I'm not claiming that this is the same for all. Just one example of what can (and often does) happen.

Elvis.
(yes... I know it was long)

[DW-1]

$1311 vs ~$840 delivered for my '05 TALAS RLC

Then again aren't Fox one of the ones who just jumped on the "retailers not to ship OS" bandwagon? Makes it harder if you don't have contacts.

Hey, you said you were waiting :D

EDIT: oh and it came with a free King headset.

damn...

I should have expected that. What did it cost US?

Elvis.

[apsilon]

I should have expected that. What did it cost US?

US$670 inc shipping.

[DW-1]

US$670 inc shipping.

That's either free freight or they dumped the MSRP considerably.

Ah well. I knew sticking my head out would get me smacked with something.

Hang on... US$670 divided by exchange rate..

670 divided by 0.79 = Aus $848.

So it shipped with US mail and you avoided customs, gst and clearance.

Elvis.

[nickz]

As much I am for saving money along with everyone else, I'd probably only buy components from OS online stores unless I was actually going over to the US and bought a bike or frame while I was there. I bought a hardtail frame in the states last year and brought it back with me so I wasn't slugged for shipping, however the I cracked the frame ( luckily I got it warrantied via photos of the frame as Mountain Cycle are great people). Normally you'd have to send the frame back at your own expense, and if it actually got warrantied, you'd have to pay shipping of the replacement frame at your own expense too, which is a lot of time off the bike not to mention money. Thankfully all I have to pay for is the shipping of the new frame which is not so bad, but even still it's a shitfight. I would have been pissed had I bought it online and paid for 3 shipping charges . Buying a frame here means if there's a problem, it goes to someone local to evaluate which is so much better as it's faster and cheaper And for people who are trying to save money in the first place, the possible shipping expenses later for warranty cancel out any bargain you might have had originally.

[apsilon]

So it shipped with US mail and you avoided customs, gst and clearance.

Correct and yes it was an excellent price. Would be about US$720 now and there's the issue with the US retailers not being allowed to ship OS which means I'd have to ship it to a friend first and have him forward it on.

[toodles]

Then I get the suppliers cost to me... wooh... no way can I sell the product at a price that will allow the dealer to sell it for what is expected. Hell... I'd be pushing it to sell it direct to the public for that price.

We've already seen how much of a difference this makes to prices on imported gear (Turner, SIC) and it can really make the difference between being able to afford shiny flashy new stuff, bought locally, supporting the local industry, blah, blah, blah and being forced to buy OS in order to make quality parts reasonably priced.

Anyway, we know distributors don't want to do a dodgy on shops and sells the same products they're supplying to the shops for a fraction of the price direct to public. But why can't certain selections of the range, or certain high-cost items be sold direct to public? Is this an unwillingness to turn retail from a distributor point of view? Or are there other issues I'm unaware of here?

Because I'm a greedy, penny-pinching downhilling bastard and DW-1 is already answering some questions for us - I'll use Fox Forks as an example. Super-bling but high-dollar. Could the lower end stuff be sold through shops and the high end (mmm... DH40) stuff be sold direct to the public? We're already aware of the cost saving available by purchasing OS, but on this kind of product we'd all prefer warranty if possible. It sort of leaves us stuck in the middle - we don't want to feel like suckers paying an extra $800 for a set of forks, but we don't want to be found crying in the corner when our dropout cracks or something because we've got no warranty. The extra $200 - $500 (not precisely sure on the amount here - just comparing to markups I'm aware of on other similarly-priced products) that goes to the shop is the difference between affordability or not.

Shops still make their bread and butter installing and servicing forks in the long run, the money we save only end up being spent on other bike parts anyway (well mine will) so I don't see anyone being hard done by.

I'd like to think dealer-direct is quite possibly the future for Australian sales of high-end products. We're already getting caned on extra shipping and whatnot from our Northern parts suppliers and it's the only way to make prices comparable to OS internet retailers. Even if the price difference remain but is reduced, I'd expect to see a substantial increase in the proportion of Brand X product sold through local distributors, as the hassle-free convenience of local purchasing and warranty backup outweigh the few dollars saved by shopping OS.

*disclaimer* - I don't really know anything about marketing and whatnot so this is probably all going to be shot down by some law or regulation I don't know about.

*disclaimer 2* - I'm also going to win the DH40s in the Revolution giveaway so really dont care if the price drops or not - mwahahahaha

[DW-1]

We've already seen how much of a difference this makes to prices on imported gear (Turner, SIC) and it can really make the difference between being able to afford shiny flashy new stuff, bought locally, supporting the local industry, blah, blah, blah and being forced to buy OS in order to make quality parts reasonably priced.

Keep in mind much of (for example) apsilon's saving comes from avoiding the dutys, taxes and costs etc that are LEGALLY REQUIRED. Because our customs system is horribly underfunded, so much gear slips in "under the radar".

If everyone had to pay all the associated costs then the pricing wouldn't be so dramatic.

Also in his own example, his supplier, gave him a sizable discount. Something that your LBS might be willing to do for you too, (if you were a regular customer)

Anyway, we know distributors don't want to do a dodgy on shops and sells the same products they're supplying to the shops for a fraction of the price direct to public. But why can't certain selections of the range, or certain high-cost items be sold direct to public? Is this an unwillingness to turn retail from a distributor point of view? Or are there other issues I'm unaware of here?

yeh. The dealers (stores) saying basically F%^K YOU and refusing to buy ANYTHING from you. (er... us)

We opened a showroom/"store" at Glenbrook in Sydney. man... you do not want to know how many dealers got all upset over that one.

You want to know WHY we did it???

Because we got sick of consumers constantly asking "where can I see your high end product?"

Oh and consumers being told by dealers that "DWA don't have that in stock... they're slack like that"

Which is why we now have a STOCK LIST on our website. The more likely reason for your dealer to tell you that (on a normal stock item) is that their account is on stop due to lack of payment...

oh dear... I've spoiled a few dealers days now haven't I. Still the better ones, (you know who you are) will have no problem with anything I just said.

Because I'm a greedy, penny-pinching downhilling bastard and DW-1 is already answering some questions for us - I'll use Fox Forks as an example. Super-bling but high-dollar. Could the lower end stuff be sold through shops and the high end (mmm... DH40) stuff be sold direct to the public?

see above. most stores just can't get their head around this sort of thing. Earth Cycle tried it many years ago with Foes. The dealers has a "hissy fit" over it.

And at the end of the day, your turnover, your sales that pay wages for staff, come from the "bread and butter" products.


We're already aware of the cost saving available by purchasing OS, but on this kind of product we'd all prefer warranty if possible. It sort of leaves us stuck in the middle - we don't want to feel like suckers paying an extra $800 for a set of forks, but we don't want to be found crying in the corner when our dropout cracks or something because we've got no warranty. The extra $200 - $500 (not precisely sure on the amount here - just comparing to markups I'm aware of on other similarly-priced products) that goes to the shop is the difference between affordability or not.

Just curious. Until now (and at my suggestion) we've compared Fox. What are the other brands like??

Shops still make their bread and butter installing and servicing forks in the long run, the money we save only end up being spent on other bike parts anyway (well mine will) so I don't see anyone being hard done by.

*disclaimer 2* - I'm also going to win the DH40s in the Revolution giveaway so really dont care if the price drops or not - mwahahahaha

Note to Matt Holmes: No 40 fork to QLD.

for what it is worth.

And whether you all hate my guts or not...

How many other importers are here discussing this with you?

(on that matter, we had some excellent advice offered from a customer last week in regards to service work and we have adopted it... so your opinions and thoughts do count, and we do actually listen)

Elvis.

[DW-1]

hey, I just looked at my posting above, can one of you admin' guys fix it so that the quoted bits sit in betwen my replies (and in blue) like they are supposed to...

Thanks...

Elvis.
(still a newbie here)

[apsilon]

Keep in mind much of (for example) apsilon's saving comes from avoiding the dutys, taxes and costs etc that are LEGALLY REQUIRED. Because our customs system is horribly underfunded, so much gear slips in "under the radar".

That's not neccessarily true. Most bicycle components are actually duty free these days. As for GST you just have to learn the system, there's thresholds in place where they don't bother charging it. There's also a reason why I use insured postal services rather than couriers and it's not just the cost saving.

I've been personally importing stuff, not just bicycle related, for more than a decade so I know what I'm doing by now and make the system work for me but even now I do all my calculations before ordering to make sure that even in the worst possible case that I'm making a significant saving over buying locally. I'm all for supporting local business, hell I *have* a local business, but local business needs to realise that today they're competing on a global market and not just with the store two streets over. Consumers are aware of the value of these goods in other markets and when it comes down to it, it's their own hip pocket that counts.

Going back to the example of the fork I actually picked up that package from customs (as I do with probably 70% of my OS orders) at Granville where it was opened and inspected. They were fully aware of the contents and value but there was no applicable charge.

[DW-1]

That's not neccessarily true. Most bicycle components are actually duty free these days. As for GST you just have to learn the system, there's thresholds in place where they don't bother charging it. There's also a reason why I use insured postal services rather than couriers and it's not just the cost saving.

I've been personally importing stuff, not just bicycle related, for more than a decade so I know what I'm doing by now and make the system work for me but even now I do all my calculations before ordering to make sure that even in the worst possible case that I'm making a significant saving over buying locally. I'm all for supporting local business, hell I *have* a local business, but local business needs to realise that today they're competing on a global market and not just with the store two streets over. Consumers are aware of the value of these goods in other markets and when it comes down to it, it's their own hip pocket that counts.

Going back to the example of the fork I actually picked up that package from customs (as I do with probably 70% of my OS orders) at Granville where it was opened and inspected. They were fully aware of the contents and value but there was no applicable charge.

Suspension forks carry a 5% duty. (it's an old stupid rule that we and other suppliers are fighting to change)

As to customs seeing your gear and not charging you.

As I said, underfunded and just plain slack. If they were doing their job, you would have been charged for duty & gst (after the stupid 20% up-charge).

As I said all along, most of the saving comes from

a) a customs system that just plain doesn't care

b) a US dealer that is willing to set his pricing lower due to the fact that he only has to sell it, not provide any form of back up support.

When Dirt Works import a product, we pay all the legal duties, taxes and clearance costs.

Elvis.

[SillyBoy]

Keep in mind much of (for example) apsilon's saving comes from avoiding the dutys, taxes and costs etc that are LEGALLY REQUIRED. Because our customs system is horribly underfunded, so much gear slips in "under the radar".

If everyone had to pay all the associated costs then the pricing wouldn't be so dramatic.


Seriously even with customs duties and GST included, it is still much much cheaper to buy OS. For example - I bought a 2005 Fox F80X for A$650 from Taiwan. Add A$30 delivery, 10% GST and 5% customs duties...You do the maths...Under A$800!!!!!! Compared to A$1509 RRP here...I can get TWO forks for the price of one here.....

I would definitely buy it here if the price can be matched...

[toodles]

Keep in mind much of (for example) apsilon's saving comes from avoiding the dutys, taxes and costs etc that are LEGALLY REQUIRED. Because our customs system is horribly underfunded, so much gear slips in "under the radar".

Yeah but I was comapring to Turner frames and SIC components, both available here dealer direct, and with substantial price point benefits. In the US, Turner frames are comparable in price to most of the other boutique frames like Santa Cruz and whatnot, yet here they're around a grand cheaper. And a grand buys a lot of whiskey and cheesburgers.


How many other importers are here discussing this with you?

(on that matter, we had some excellent advice offered from a customer last week in regards to service work and we have adopted it... so your opinions and thoughts do count, and we do actually listen)

We've got a couple of other importers here - Norco, Turner and Iron Horse I think as well as a few manufacturers dropping by from time to time.

What was the service advice you mentioned?

[DW-1]

What was the service advice you mentioned?

OFF TOPIC:
Just to require that ALL incoming jobs include a direct contact for the customer. (not just the store)

ie: a daytime email address, mobile or work number. This will allow for quotes when the shock/brake etc is opened up and the damage is way worse than expected. Or for trouble shooting with the owner of the product to sort out niggling little "you can only feel it when your've been riding for 2 hours" problems.

Saves shocks/forks/brakes sitting on the work benches while the store tries to contact the owner then call us back. (which we have seen, may take the store a few days if they are busy)

Elvis.

[DW-1]

Seriously even with customs duties and GST included, it is still much much cheaper to buy OS. For example - I bought a 2005 Fox F80X for A$650 from Taiwan. Add A$30 delivery, 10% GST and 5% customs duties...You do the maths...Under A$800!!!!!! Compared to A$1509 RRP here...I can get TWO forks for the price of one here.....

I would definitely buy it here if the price can be matched...

You got an 05 F80X for $650 Australian??? Man, that is surprising as an international distributor couldn't BUY one for that price.

Tell you what...

Contact me off list elvis@dirtworks.com.au

If you can provide proof (real proof) that you really paid that little... I'll give you goods to the value of Aus$200 from our catalogue.

Elvis.

[SillyBoy]

Sent you an email....

[DW-1]

Sent you an email....

working on it now.

Elvis.

[CHEWY]

I recently bought about AU$350 worth of stuff for my dub from california.
It all sounded nice and cheap at the start but after postage ($80) GST and the shipping companies bullshit customs handling fee ($100) it ended up costing over $530.
so just watch out for those hidden costs and make sure you factor them in when ordering..

[bighitter]

Basically, if you shop overseas you can get basically any part for your bike for Half the price (if not less) of what you can get it for in australia.
I mean, if you think about it , the only thing you really need a warranty on is frame and fork, and even having a warranty means youll just be stuffed around for months not knowing whats going on and being given the run around by shops and distributers trying to avoid the issue, when all you want is your precious warranty honoured, and go out riding.

I bought a DT 240s wheelset, with dt revolution spokes, 240s hubs, and xr4.1 rims, all hand built for a total cost of $620 (which is after i paid that damn gst), now compare that to your price of around $12-1300. I can provide proof, can i have 200$ of catalogue products - please :)

[toodles]

Basically, if you shop overseas you can get basically any part for your bike for Half the price (if not less) of what you can get it for in australia.
I mean, if you think about it , the only thing you really need a warranty on is frame and fork, and even having a warranty means practically nothing anyways when something goes wrong.

I'm interested to see if our industry will react and adapt to suit the limitations they face or just continue to deal the same way. I reckon the first company to offer internet/mail order dealer direct products in Australia with warranty backup will scuttle a lot of the OS internet orders. I thought parallel imports weren't illegal in Australia?

[bighitter]

also, another thing which makes overseas buying more enticing is that you can sit on your computer look at all the ultra low prices in the states, order your parts, pay the shipping fee, wait the UNDER a week that most bigger sotres in the us get stuff to you in, And youll riding on your parts atleast a week before OR up to a few months quicker than if you ordered from a store that was 10 feet away from you.

AND ALL AT HALF THE COST AND NOT HAVING TO LISTEN TO THE BULLSHIT INDUSTRY STANDARD REPLY "IT SHOULD BE HERE IN THE NEXT COUPLE OF DAYS" ROUTINE, AND YOUR STILL WAITING 6 WEEKS LATER.....

And If anyone has ever ordered from a OS store by phone, you would have noticed that the people working there seem to actually know what they are talking about, can t say ive ever really experienced that here

[Dicky]

OFF TOPIC:
Just to require that ALL incoming jobs include a direct contact for the customer. (not just the store)

ie: a daytime email address, mobile or work number. This will allow for quotes when the shock/brake etc is opened up and the damage is way worse than expected. Or for trouble shooting with the owner of the product to sort out niggling little "you can only feel it when you've been riding for 2 hours" problems.

Saves shocks/forks/brakes sitting on the work benches while the store tries to contact the owner then call us back. (which we have seen, may take the store a few days if they are busy)

Elvis.

I was going to write 'off topic' as well, but as it's regarding local dealer/supplier support, I think it's quite relevant.

We'll quite often have up to 20 - 25 items (brakes, forks, hubs, anything really) out across the countryside at a number of suppliers.
Customer details are not usually required, just proof of purchase if it's a warranty consideration. It often seems that certain suppliers will only talk to the dealer and not the customer. I don't know if there are any laws or regulations regarding this, seems a bit silly though.
I for one will now be including contact details with everything I send off, and leave it up to the suppliers to follow suit.
Maybe they're even reading this thread...

Elvis, cheers for implementing and sharing that one.

--------

This argument was always going to be a shitfight, there are reasonable issues on both sides of the fence.

Back 'on topic' - yes, it's cheaper to buy stuff OS, which I agree is attractive if you know exactly what you're after.
Not everyone does, and this is where the knowledge and experience of the guys and girls at your LBS comes into play.

Yes, it's more expensive down here due to several factors, and that sucks for your bank account, but remember that some of your locally spent coin is effectively paying people to know the difference between one damping system and the next, and its suitability to both the local terrain and what you want to get out of your bike.
We also have the opportunity to be in constant contact with people who actually own them, and actually use them, out in the real world of your local trails. Not someone else's local trails. I don't think "asking RC" :rolleyes: is much of an alternative to that.

Admittedly, forums such as this are good for product advice, as it gives you access to people already using the part you're considering.
Internet advice needs to be taken with a grain of salt though, as there's always a grey area between comments regarding products and lack of skill/knowledge. It may well be a poor or poorly chosen product, but who's to say that the guy slagging off a cracked headset has installed it properly?
In any case, the guys at your local shop are (or should be) paying attention to what gets posted, whether it be from credible sources or otherwise, and drawing some of their shop floor advice from it. This won't always be the case, but hey, some of us are on here...

Sure, if you bypass this and get it wrong, you can just dump it onto the local market at more or less what you paid OS for it, hoping someone will buy it. It's still a headache, and it still means less riding time.
Do it once, do it properly.

[Dicky]

And If anyone has ever ordered from a OS store by phone, you would have noticed that the people working there seem to actually know what they are talking about, can't say I've ever really experienced that here

you need to get out more.

[udi]

yes, it's cheaper to buy stuff OS, which I agree is attractive if you know exactly what you're after. Not everyone does, and this is where the knowledge and experience of the guys and girls at your LBS comes into play.

Most of the experienced guys that are going to be debating this will generally know "what they are after". I don't think there are many people on here that would walk into an LBS, online store, or whatever - not knowing exactly, or having quite a good idea of what they are looking for. The only thing left to worry about is getting the best price. Whether that be Local, OS, Pre-Loved, it doesn't matter - but at least in my case, i'll generally know what I want and be looking for the cheapest place to get it.

As for the 'knowledge and experience' of the lbs guys, well that's open to discussion. I said this in an earlier post, there's plenty of good LBS's out there that are lovely to walk into, but many are just full of retards, or people that will only reccomend what they stock/sell - which is a joke. I would pay money to see them out of the bloody business rather than paying to keep them working!

[Dicky]

Most of the experienced guys that are going to be debating this will generally know "what they are after". I don't think there are many people on here that would walk into an LBS, online store, or whatever - not knowing exactly, or having quite a good idea of what they are looking for. The only thing left to worry about is getting the best price. Whether that be Local, OS, Pre-Loved, it doesn't matter - but at least in my case, i'll generally know what I want and be looking for the cheapest place to get it.

As for the 'knowledge and experience' of the lbs guys, well that's open to discussion. I said this in an earlier post, there's plenty of good LBS's out there that are lovely to walk into, but many are just full of retards, or people that will only reccomend what they stock/sell - which is a joke. I would pay money to see them out of the bloody business rather than paying to keep them working!

I agree mate, two valid and important points.
There are plenty of intelligent and experienced customers, and sadly a fair few halfwits or dodgy dealers in shops as well.
(I used to work for one at another shop. Good learning how NOT to do things. :rolleyes: oh, the stories...)

Still, not everyone has reached the enlightened bike nerd stage yet. We're working on it... :D

[toodles]

but remember that some of your locally spent coin is effectively paying people to know the difference between one damping system and the next, and its suitability to both the local terrain and what you want to get out of your bike.

Eh? You must be talking about a different kind of store than the ones I've been to.

you need to get out more.

Maybe you need to go see what kind of "useful" advice 80% of bike shops can give.

Can't be arsed stocking a range of tyres? No problem - just stock one type and tell the customer everything else is crap...

[Dicky]

Maybe you need to go see what kind of "useful" advice 80% of bike shops (that toodles has been to) can give.

Can't be arsed stocking a range of tyres? No problem - just stock one type and tell the customer everything else is crap...

Easy on the generalisations mate.

If your local shop does things like that, it's time for another shop.
Which, fair enough, you may not have access to as it's 3 hours drive away. I know some people are stuck with this situation, and online purchases start to look pretty good.

We're not all like that.

[ona rampage]

I really have to agree with Toodles. Try living out west, and finding a bike store that can tell a front wheel from the back.
My LBS is Mortdale; not all that local let me tell you. But they stock most of the gear I would like, and I know their advice is good and their service is good (Aaron looks after me pretty well, which is very nice considering I am not in there very often).
Go to Parramatta (my real LBS?), or god forbid Liverpool (where I am working at the moment) and get some 'good' advice (or high end parts).

[toodles]

Easy on the generalisations mate.

If your local shop does things like that, it's time for another shop.
Which, fair enough, you may not have access to as it's 3 hours drive away. I know some people are stuck with this situation, and online purchases start to look pretty good.

We're not all like that.

I know you're not all like that. There's a few good bike shops around, that's why I said 80% weren't much good for advice. We're talking about specialised mountain bike advice. That cuts out the 50% of shops that are primarily road or kids bike based. I think 20% is a pretty generous guess when talking about bike shops worth getting advice from.

*edit* - anyway can we get back to telling me why I'm paying $600 extra for a set for forks that I'll choose myself, have to get ordered in, would install them myself, probably not get warranty worth a damn anyhow just because I can't buy them direct?

All the bike shop has to do is take my deposit, ring the supplier and order them, receive them, add profit and give them to me. I guess 20% is a reasonable charge given the effort.... :rolleyes:

[DW-1]

after all this, I have a scenario for everyone to think about. (don't laugh, this exact thing has happened in Australia a few times already)

Customer buys high-end [product X] from OS.

This forces the local distributor and store to look at pricing to compete better.

Local distributor and store realises that they just can't compete on price and still employ workshop & service staff.

Local store won't sell product (because it is too expensive... or there is too little margin)

With no money to be made... local distributor drops product.

Now there is no warranty support (I know, I know... you save so much buying it OS that you can afford that)

There is also no warranty support for the same product that is supplied OEM either. (you don't make enough to pay wages for one technician from OEM warranty payments, let alone 2 or 3)

But there is also no way to buy spare parts locally either. So no service or repairs without ordering them from OS.

Perhaps another distributor picks it up... but business is business. and money is money. They will also discover that if there is no money to be made, then it is not worth doing.

This is reality.

Elvis.

[Dicky]

Biggest reason - because you can't have the warranty honoured.
supporting the local industry, and allowing it to support you.

supply and demand.

I remember someone telling me not long ago that the Australian bike industry is roughly on par in terms of volume with California. I don't know how true that is, but it wouldn't surprise me.

(...and yet we keep producing the fastest riders... w00t)

We're getting there, slowly. More bicycles were sold nationwide than cars last year.
(Yeah, most of them were probably sub $500 - and it's a different can of worms that has been opened elsewhere, but the statistics are still there.)

freight, and the fact that we're on the other side of the planet to a lot of the higher end stuff.

import duties.

my 2c anyway. maybe not much of a convincing argument for $600.

[DW-1]

probably not get warranty worth a damn anyhow

I guess that depends on the brands that you purchase.

warranty can be a minefield. Depending on the manufacturer.

From our own range:
Some allow us to make our own calls across the board.

Some require that we email a description of the fault to the supplier.

Some allow us to decide for ourselves WITHIN the limits imposed by the warranty document in their owners manuals.

Some even require a pic of the faulty item be emailed to them.

A couple don't care and just say to replace/repair everything no questions asked.

While others don't care at all as they don't offer repair/replacement to us at all. (we sell it, we deal with it).

Over the last 8 months, we have implimented a discount upgrade/crash replacement option for items that are not warranty when they have been inspected.

This eases the pain (on the wallet) for someone that just plain crashed and bent/broke something.

waaaaaaay off topic now.

Elvis

[and1]

I recently ordered a Sram X.0 derailleur from the states and it ended up costing $180 all up to get it here. Didn't get slugged with customs fees or anything. RRP of the x.0 is $370AUD so thats a pretty phenomenal saving...

[SillyBoy]

I understand the situation prefectly...but honestly the importers should consider selling high-end gear direct and cut out the "middle people"......I agree with Toodles completely...

The guys (most of them) here have done their own research, knows exactly what they want and need, how to put them on and set them up..We don't need the some LBS to mark up the price and pay them high prices just to order the gear and pass it on to us. Most of the time...we don't even need their advice...

But seriously...the importers should consider selling the high end stuff direct and only the high end stuff...because there are still a lot of casual bikers (who don't need the fancy gear) out there that require the LBS assistance and advice.

[toodles]

Local distributor and store realises that they just can't compete on price and still employ workshop & service staff.

Huh? Forgive my ignorance but - how can not selling an item at all, be better than selling it with less mark up?

Bike shop sells bikes and parts and makes a living. Looks into selling new Part X but must run with minimal profit margin to compete with OS suppliers. They're still not losing money on selling that item unless they go below the amount the covers wholesale price and GST. How do they lose money?

[DW-1]

Huh? Forgive my ignorance but - how can not selling an item at all, be better than selling it with less mark up?

Bike shop sells bikes and parts and makes a living. Looks into selling new Part X but must run with minimal profit margin to compete with OS suppliers. They're still not losing money on selling that item unless they go below the amount the covers wholesale price and GST. How do they lose money?

That depends how low you have to go.

Besides, you are looking at the one product that you want to buy as being somehow "seperate" from everything else that the shops sells. The shop is a business. It requires a minimum trunover and profit to function. Just like the rest of the world.

ok. there are costs involved with everything you do in a business. Everything costs money.

If you buy it in and send it out again for next to nothing, where does your profit come from? How do you pay your wages, super, shop rent, insurance, advertising, electricity? (please don't say bottom end bikes or tubes. you simply can't divide the shops income up like that)

Most dealers have a minimum mark-up that they run on (pretty much across the board) to cover their costs.

but even these guys drastically reduce the amount of mark-up on hi end stuff.

at the end of the day, with all costs (and I do mean everything) taken into account, if a bike shop can "clean" 10% they are doing well.

Now...

before you all cry bullshit and hell no... Talk to an accountant. We are talking all business expenses (including things like stock write downs because purple anno' just isn't cool this year)

10% doesn't go a long way to covering inflation and business growth (plus replacement tools etc)

Elvis.

[apsilon]

at the end of the day, with all costs (and I do mean everything) taken into account, if a bike shop can "clean" 10% they are doing well.

That sounds about right to me, there are a few industries around that work on 10%

As I said on page 1 of this thread it's not the LBS that's raking it in but someone sure is.

[DW-1]

That sounds about right to me, there are a few industries around that work on 10%

As I said on page 1 of this thread it's not the LBS that's raking it in but someone sure is.

perhaps. But it sure ain't me.

Someone else asked me (on a private message)to defend the industry for it's pricing policys and service (or lack there off)

I won't.

I can't and won't speak for everyone else. I will speak for Dirt Works though.

Up until about 8 months ago our service and support was pretty bloody average. Our approach to warranty and trunaround times was probably worse.

We have spent the last 6 months and employed 4 extra staff to improve this. And while we are still prone to the occasional screw up, we make less of them and turn both service and warranty work around faster then ever.

All of this has cost money. Wages mainly. (and also product when we offer crash replacement deals) But we are working on turning around a poor track record with warranty and service work.

Do we turn a profit? yes.

Are we making a killing? no. Every cent of profit we make goes back into both the business (staff to improve service and stock to ensure that we have things available) and the sport. Sponsorship comes from our own pockets and it is rare for the suppliers to help out. (there are exceptions, but you won't retire on it)

Yes, someone is making money. And sometimes it is the supplier. The price breaks between US dealer and international distributor costing are not
adequate.

perhaps the rest of the industry locally is making a killing and I'm a putz. (probably the later)

But I'd be surprised. (not about the putz bit though) *laughing*

Elvis.

[toodles]

If you buy it in and send it out again for next to nothing, where does your profit come from? How do you pay your wages, super, shop rent, insurance, advertising, electricity? (please don't say bottom end bikes or tubes. you simply can't divide the shops income up like that)

Most dealers have a minimum mark-up that they run on (pretty much across the board) to cover their costs.

I agree with that. Which is why I think the % increase in prices is harsh. If it was a $ figure on markup it wouldn't be so bad for the folks buying high end gear. 10-20% profit on a $2000 fork or $5000 bike stings the consumer a lot more than a 30% profit on a $300 bike.

Regardless, if it's so uneconomical to sell these parts then naturally I'd assume that the lower costs (for everybody) involved in dealer-direct purchasing would make more sense. There's no downside to the consumer and no problem for the dealer (pehaps even an increase in their profit realistically). If people want face-to-face service they can buy through shops and pay extra. But at the moment, there's no middle ground - either get "full" service and get reamed on the price or pay nearly half price and miss out on warranty.

[Juls]

Are you talking 10% profit before costs?

if so I don't believe that it's possible to run a business at that profit margin unless your turnover is not only big.. but absoluently HUGE. (like 2 Mil)

For your average small business, they turnover maybe a Million bucks a year,

with usually 2-3 staff, the cost of those 3 staff would be $120 000 a year roughly, so realistically, the business needs to make 30% Profit before costs, to cover the staff, Bills and expenses and provide a living to the owner.

That gets spread out however, your average $500 bike I imagine they would make 10-25% profit while the 1500-5000 bikes in the 10-15% range.

While parts, under $100 probably 40-60% and under $50 50-80% profit.

If they are not clearing profit like that, they cannot sustain a business, the trouble is alot of the wholesalers (not specifying any in particular) in that Under $100 range, are making 100-300% themselves, which forces the price of those cheaper items into a range which makes it unreachable for the average punter. Don't try to BS me that it doesn't happen, because it does, I've seen the numbers involved with my own eyes to my own disbelief.

I can understand when I buy a Puncture kit for $2.95 that it cost the shop $1 and the wholesaler maybe 30 cents. That seems like alot, but I couldn't expect them to get a Box of them in, pay $15 freight, then make 50 cents a piece.. just won't work. Pointless episode.

Regardless of all of that.

I still get annoyed when I see a XT Derailuer for $160 AUD, when It's only $35-49 USD in most overseas stores. or a XTR for $295 AUD !!! and overseas again only $80-90 USD. thats just not funny at all. I can't find a good explaination for that other than Anti Competitive behaviour by the wholesalers/retailers.

Regards
Juls

[DW-1]

Are you talking 10% profit before costs? Juls

no, i had to re-read that myself to check if i wrote correctly.

I did say after all costs. 10% "clean" profit.

Elvis.

[Juls]

yeh 10% clean is fair I feel,

if I'm running a business I wouldn't want to work for less than that.

regards
Juls

[rhyno]

Ok Guys,
Time to take some of the Heat off elvis.
I am also an importer/distributor (of Vario Bikes) albeit on a much much smaller scale than Elvis.

Selling Direct to Public: I wold love to, just me one store who would not boycot the brand and refuse to service our bikes or warrantied products that come oem on bikes (ie forks).

Profit: I make 0% profit. I work 4 days p/w in the local hardaware store and do 1 day per week riding and 2 days per week office and repping for Singletrack. I'm telling you right now, as a distributor i make nothing. often the manufacturers will sell to us at only a small percentage less than they will sell to the store in the same country as manufacture...
more after i take the G/f to somewhere. TBC

[Juls]

Manufacturers need to get on the bandwagon and wake up too,
I'm sure they are to blame as well,

In the R/C Cars industry, some of the major manufacturers are setting up Direct selling to the public as well as there distribution network,
which to me is probably the smartest thing to do for them to remain in business.

Small wholesaling I imagine is very difficult, because you cannot afford to advertise, or charge large margins and remain competitive.

win/lose situation.

The world is getting smaller.. thats fer sure.

Juls

[toodles]

Selling Direct to Public: I wold love to, just me one store who would not boycot the brand and refuse to service our bikes or warrantied products that come oem on bikes (ie forks).

I don't imagine it would be a problem, nor any different from a shop servicing a bike that was bought from another shop.

[rhyno]

I don't imagine it would be a problem, nor any different from a shop servicing a bike that was bought from another shop.

Initially no, as the brand name is relatively unheard of, but because of the greatly reduced costs, the name would most likely take off. Stores would now not be happy with us because they didn't make anything off the sale and as far as i know there isn't much money in repairs/service. I've been dabbling with the thought of DTP but it's just to bigger gamble to find out that i've bastardised the Vario name and i can't sell it anywhere.

To continue my bit from before.

Hypothetically, if all the bike brands were to go direct, the stores would be finished with. Who will do the servicing? Sure many of YOU guys can do your own work on your bikes (although maybe not as many as i would have initially though based on some of the queries in Parts/Stuff) but think about the other 95% of the people who buy bikes and haven't a clue how to change a tyre. What happens now? Well, the industry dies, as there are no up and coming riders, distributors aren't making as many sales and you will see less and less product choice, eventually none.
Now the above example is extreme but think about it for a while, on a smaller scale this sort of this is happening.
Next bit, though slightly off topic, give your stores a go.
Most stores simply cannot afford to cater to your very picky tastes and whims. For example, Joe at the LBS might wake up one morning and decide that he wants to try to appeal to the local DH crew and has scraped together some dosh to buy some high end stock. He looks through a catalogue and decides to get in a set of Hayes Mags, and some Diablous Cranks. Nice he thinks this will appeal to the DH riders. The latest "fashion" in mountain bikes changes so often he couldn't have got it right. Juicy Sevens and Saints are the latest fashion in this town and no-one in the 3 man DH crew will touch them with a 10 ft barge pole.
Again, a little extreme but still a point worth making.
I've seen it far too often when a rider walks into a store and acts like an arrogant wanker because the store doesn't have exactly what they want in stock. Spend some time talking to your LBS and let them know nicely what you want. Be friendly and they may take a liking to you and offer some discounts.
Guys this is my point of view on the industry,
for the record i was just another rider until a year ago when i went into business with singletrack imports. I live on the mornington peninsula and the nearest good store is Melbourne (100kms away) but i still go to the locals and have a chat (non business related) and they are nice to me and can often get the things in that i want in a relatively short time.

[Gonzo]

Biggest reason - because you can't have the warranty

freight, and the fact that we're on the other side of the planet to a lot of the higher end stuff.



We're about the same distance from Taiwan as America and Europe, if not closer. So ignoring all the other factors freight should be less technically.

[toodles]

Stores would now not be happy with us because they didn't make anything off the sale and as far as i know there isn't much money in repairs/service

How many people get their stuff serviced at a shop that they didn't buy their bike from? It's the same deal really. No shop will turn down paying service and parts business on account of where you bought the bike from. They're already installing and servicing forks and bikes bought from OS internet orders anyway. If anything were to occur as a result of DTP sales, shops might charge postage and labour for handling the returns on warranty. Or they might flat out refuse to process the warranty work, leaving consumers to return the goods to the distributor themselves. That's still better for the distributor and the consumer than if the consumer had bought the goods overseas.


Hypothetically, if all the bike brands were to go direct, the stores would be finished with. Who will do the servicing? Sure many of YOU guys can do your own work on your bikes (although maybe not as many as i would have initially though based on some of the queries in Parts/Stuff) but think about the other 95% of the people who buy bikes and haven't a clue how to change a tyre.

You're right. We should be subsidising the industry for other people. No actualy, I think shops might have to switch their focus toward service work if anything, but I still think an overestimation has occured here. DTP would not mean the end to retail sales. Thin of all the low end gear, the hundred or so brands of bike and whatnot that would still be sold through shops. I'm merely suggesting that "top end" gear and boutique items cannot afford to be sold through the current supply chain and still receive reasonable sales. This stuff is already expensive from the manufacturer, let alone after it has passed the the extra distributor, shippers, stores, customs and taxes that Australia requires.


Most stores simply cannot afford to cater to your very picky tastes and whims. For example, Joe at the LBS might wake up one morning and decide that he wants to try to appeal to the local DH crew and has scraped together some dosh to buy some high end stock. He looks through a catalogue and decides to get in a set of Hayes Mags, and some Diablous Cranks. Nice he thinks this will appeal to the DH riders. The latest "fashion" in mountain bikes changes so often he couldn't have got it right. Juicy Sevens and Saints are the latest fashion in this town and no-one in the 3 man DH crew will touch them with a 10 ft barge pole.

That's just another bonus for DTP - bike shops aren't risking as much carrying high end stock that may or may not go out of fashion very quickly. They already can't afford to carry the majority of high end range of product but still charge us their X% profit margin

I've got nothing against bike shops - I ride with bike shop staff and spend waaaay too much time and money in them already. My point is that even in the US, we're seeing the "disappearing storefront" where many LBS don't do the majority of their business to walk-in customers, instead relying on Internet orders and sales. This approach lowers the day-to-day running costs of their business and gives them a competitive advantage.

US stores can buy direct from the manufacturer and then onsell to the consumer - Australian stores can't. Our process involves the distributor, an extra set of hands that increases the cost of the end product. Coupled with our import taxes and duties, this exacerbates the situation and leads to the prices differences, subsequently causing the OS internet orders which leave our shops and distributors missing out on sales.

[DW-1]

US stores can buy direct from the manufacturer and then onsell to the consumer - Australian stores can't. Our process involves the distributor, an extra set of hands that increases the cost of the end product. Coupled with our import taxes and duties, this exacerbates the situation and leads to the prices differences, subsequently causing the OS internet orders which leave our shops and distributors missing out on sales.

ummm.

Not quite.

In some examples, stores buy direct from the manufacturer. (Intense, Turner, Santa Cruz etc)

However in most cases: (SRAM, Avid, Manitou, Marzocchi, Hayes, Hadley, DT Swiss etc etc) there is a "distributor".

Look up the following names on google.

QBP (Quality Bicycle Products)
BTI
Down East distribution
The Hawley Group.

These are just a few of the major players involved.

Just a thought.

Elvis.

[toodles]

ummm.

Not quite.

In some examples, stores buy direct from the manufacturer. (Intense, Turner, Santa Cruz etc)

However in most cases: (SRAM, Avid, Manitou, Marzocchi, Hayes, Hadley, DT Swiss etc etc) there is a "distributor".



Ok point taken. But we still get the extra middle man on pretty much everything, whereas they get cut a break on at least some components.

I'm just suggesting a rethink could actually get better sales on some of the boutique/top end gear that is practically unaffordable here by the time it gets passed through many hands. Shops don't want to stock it anyway, as they risk not being able to sell it. Consumers don't think it's affordable or that the product merits the pricetag. No one wins.

You're right about the shops discounting stuff for regular customers but people looking at the sticker prices might discount it out of hand as unaffordable straight up.