An Open Letter To Chain Reaction Cycles

[MARKL]

As above LBS, if they compete on service and speed, will win out in many instances. With a couple of exceptions most bike shops have decided to compete at the 'K-Mart' service level, which is fine for mum & dad buying a new bike for Johnny's third birthday but then they expect they can charge double the internet price - with no increase in standard of service (you still get the work experience kid who has :noidea it is a recipe for disaster. Probably shows how good the markup is that more of them haven't gone out of business.

Free tips for LBS...

1 - Employ a decent mechanic (not just a person to replace broken parts);
2 - Have pride in the bikes you have on display (not just clean but tyres pumped up, brakes bled, gears adjusted, cranks tight, suspensions adjusted);
3 - Employ a bike salesman (who is passionate and knowledgeable about what you sell);
4 - Talk to your customers - say hello to customers, ask what they ride, what are they interested in riding what bike/s do they currently have, how can you help them - engage the customer, they will remember and if you do it well it will result in sales down the track.
5 -and last but most important be clear as to why somebody should buy from you as opposed to CRC...and Holmesy the answer sure as fuck aint pity!

 

[Sethius]

As above LBS, if they compete on service and speed, will win out in many instances. With a couple of exceptions most bike shops have decided to compete at the 'K-Mart' service level, which is fine for mum & dad buying a new bike for Johnny's third birthday but then they expect they can charge double the internet price - with no increase in standard of service (you still get the work experience kid who has :noidea it is a recipe for disaster. Probably shows how good the markup is that more of them haven't gone out of business.

Free tips for LBS...

1 - Employ a decent mechanic (not just a person to replace broken parts);
2 - Have pride in the bikes you have on display (not just clean but tyres pumped up, brakes bled, gears adjusted, cranks tight, suspensions adjusted);
3 - Employ a bike salesman (who is passionate and knowledgeable about what you sell);
4 - Talk to your customers - say hello to customers, ask what they ride, what are they interested in riding what bike/s do they currently have, how can you help them - engage the customer, they will remember and if you do it well it will result in sales down the track.
5 -and last but most important be clear as to why somebody should buy from you as opposed to CRC...and Holmesy the answer sure as fuck aint pity!

that makes me miss working in a store.

 

[cressa]

Matt Holmes, go sit in the corner with Gerry Harvey.

The industry does not control the market. The market controls the industry. If the industry can not get it's shit together and figure out how to protect their market share from new competitors (not like they popped up over night) and/or adapt and find new revenue streams/business models then they really have no one to blame except themselves.

 

[nickz]

There is a new market though, for independant mechanics who work at an hourly rate, and just install/fix stuff.

I was just talking about this today. Definitely a solid future market. Just a workshop, service and installation. Would use one for sure.

 

[Snit]

My LBS experience today

Went to my LBS today to buy some replacement brake pads. Firstly, after standing there for a while, I was greeted with a stoney faced 'you right?' To which I asked for the brake pads and the reply was an equally stoney faced, 'I'll just have a look'. Eventually he came back and told me he had none in stock. I asked when they would have some and he replaied, 'Not sure, in the new year some time' and then he turned his back on me to continue what he was doing before I walked in.

Yeah, thanks very much for your help Pal, enjoy the rest of your day and off I went, home to order them from CRC. This is why I really don't like dealing with bike shops, there are some friendly people out there, but alot are rude and arrogant and not that helpful. I don't expect anything other than a little friendliness, half decent service and not to be ripped off.

The staff at CRC have been prompt and really helpful when I have asked for advice on line. They sent me the wrong Item once and when I contacted them, they sent me a replacement plus an extra at no cost for my troubles. And of course, the price for products at CRC is right.

Phew, got that off my chest!

 

[pharmaboy]

that makes me miss working in a store.

Went into a store this afternoon . Brand new shop , lots of high end bikes and also lots of cruisers, flat bar roadies, bmx's etc. Salesman said they have been flat out the last 2 hours, and sold 7 bikes. All sub $1000, all to bike path users etc, he even mentioned thats where the money was, they dont make enough off high end bikes, just sell the fat part of the market who wouldnt know their XT from a SRAM.

There's no emergency out there - LBS's have just become bike stores again, and not onsellers of upmarket parts anymore

 

[Sethius]

Went into a store this afternoon . Brand new shop , lots of high end bikes and also lots of cruisers, flat bar roadies, bmx's etc. Salesman said they have been flat out the last 2 hours, and sold 7 bikes. All sub $1000, all to bike path users etc, he even mentioned thats where the money was, they dont make enough off high end bikes, just sell the fat part of the market who wouldnt know their XT from a SRAM.

There's no emergency out there - LBS's have just become bike stores again, and not onsellers of upmarket parts anymore

always been that way though really, when in a store it was the constant flow of $500 decent bikes for kids to get to school on/ older people wanting to tour/commute to work etc. VERY VERY small part was actual high end gear, but we had more than most come through I guess.

 

[johnny]

I was just talking about this today. Definitely a solid future market. Just a workshop, service and installation. Would use one for sure.

I always saw you as a do it yourself bloke.

 

[dmwill]

Matt Holmes, go sit in the corner with Gerry Harvey.

This.

As an example, why would I pay $289 for a Thomson stem at a local store when I can get it for ~$90 online?

I realise there are two things to consider, one being that the shop has their overheads to pay - wages, rent, bills, a small profit for themselves and pricing is set by the distributor, the second being warranty issues can be a hassle when you have purchased from overseas. But when there is a price difference of $196 (almost 3 times as much), why would I buy from a LBS?

OK, this does not apply to everything at a local shop. I still buy consumables - chain lube and tubes, no real difference in price (when compared to online). It's the high-end parts I tend to see as being a rip off.

Service is the other thing that frustrates me. I think I have finally found the perfect store...but have had many experiences in the past where I've thought, "Nope, not going back there".

-Excessive turn around times for servicing, not getting calls - having to follow up myself (full inhouse servicing of forks and shocks, facing a head tube or BB shell).
-Staff with a 'don't care' attitude.
-Staff who think you know nothing or try and flog you off cheap old stock that you do not want.
-Items not in stock and having to wait just as long for them to come in (makes me think I should have got it online cheaper in the same time)
-Closed on a Sunday (might not be realistic though given a small shop might only have 3-4 staff - they all need a day or two off)


To be honest, I'd be happy to pay a fraction more than something online if stores offered better service and a greater range.

I work in IT (corporate support, SMB stuff). As a low-volume buyer from distributors, we cannot get items as cheap as someone who has a large account with the distributor (think retail and some online places). It seems more common for clients to find a cheaper price online after we have quoted them. This is where our service has changed, if a client says they can get the same item cheaper elsewhere, we either drop our price, of if we cannot, we offer 1hour free labour for installation, no costs for warranty related work and offer free use of loan equipment should the item have to be pulled away during the warranty period. On the other hand, if they purchase elsewhere, we will still setup, but explain there can be a greater cost - we will handle warranty issues, but as it was not purchased from us, any work involved is billable (call outs, time on phone to distributor/manufacturer, postage costs etc). Setup time could be longer too (In the case of a laptop we sell, it is prepped to our standard inhouse free of charge - if they buy elsewhere, more time is spent onsite prepping it).


If we can manage an extra sale or two because of that service (offering free installation/loan items etc) - there is no loss to us.


Bike shops need to change the way they operate to compete with online stores. Writing a letter will do nothing, you need to be proactive.

 

[static_X3]

^ Bam!!!!!!!

 

[Go]

I used to buy from my LBS, mostly because I was friends with most of the staff and on top of that got great discounts on parts and bikes, because in all honesty, the workshop was pretty average at the best of times. Said LBS doesn't exist anymore but it wasn't the internet's fault.
The thing I never really understood is how come I was able to get 30-50 % discount yet John Doe who walked in after me had to pay full retail price?
Fair enough I spent a bit of dough there. So let's meet in the middle and I pay a bit more and JD pays a bit less. Always, from the first time someone walks in. No one should pay more or less than other. This way the LBS still has a nice 50% markup to go and pay for the nasty overheads that seemingly no other industry in the country has to pay for such as rent, wages, blah blah blah.
The discount will come in the shape of a free tube every now and then or a gel learning my name or whatever. Even stickers will do. Price alone won't keep people coming back. Look after your costumers equally. If they don't spend today they may tomorrow and so will their friends. Don't discriminate based on stupid assumptions. You don't know what this person is willing to spend.

By the way, one of the best bike shops I've ever seen in Australia is a BMX shop. In terms of floor stock, prices and online shop. I suppose the people that run it have some business sense and are not sitting on the fence blaming everything else for a failing business

 

[StanTheMan]

nothing to add sorry

 

[nickz]

Johnny are you volunteering ? I can do all except build and true wheels, and drivetrain issues shit me. The rest I can do no worries.

 

[teK--]

I don't think much of paying any of my hard earned to middle men who add nothing but delays and frustration to the supply chain.

I support the LBS and online Australian stores where I can, but the reality is they cannot beat the product range and inventory levels of the big UK and USA online stores.

 

[Earlysport]

I think Holmes is being given too much credit. All I read in his letter is

"I've got 30 pages of local advertisers in my mag that will have the shits with me and threaten to pull their ads if I run a CRC ad"

mag revenue all comes from ads, particularly in his case because newsstand sales are probably poor cause all the kids just read online material now and don't buy mags.

The rest of his letter is drivel. And kids are online dude and already know about CRC.

As far as LBS go, my limited experience since getting back into the sport has been poor. I've tried to buy shock bushing reducers, Shock springs, a euro bottom bracket, AL spoke nipples, spokes, and tubeless valves from local to me brookvale LBS's and they had NONE in stock. If I have to wait for you to order it I'm going to order it myself from CRC for a lot less.

Cheers.

Ps. I thought Holmes comment about photo and videographers losing jobs was funniest. More kids ride when Bikes are cheaper. Drivel.

 

[floody]

So he's ripping into CRC so they don't destroy the local BMX retail industry? He's about a decade too late for that...Dans?Empire? That horse has well and truly bolted.

As far as LBS go, my limited experience since getting back into the sport has been poor. I've tried to buy shock bushing reducers, Shock springs, a euro bottom bracket, AL spoke nipples, spokes, and tubeless valves from local to me brookvale LBS's and they had NONE in stock. If I have to wait for you to order it I'm going to order it myself from CRC for a lot less.

So you tried to buy largely bike/application specific consumable small parts and were surprised your local shop didn't have springs in 25lb/in increments from 150lb/in to 850lb/in and beyond in every stroke length from 6.5x1.25" to 9.5x3.0" in 2 different diameters, steel and ti? Reducers which come in quite a wide variety of sizes, are costly and rarely sold?Tubeless valves for every rim/rimtape/sealant combo? A BB which could come in two different tapers, about four different splines, E-type, Standard, and a wide range of axle and shell widths for each combo? You cannot expect every LBS to have THAT kind of stock holding. You're in mainland Australia, anything in stock at a distributor should be available in your shop ~24-36 hours from the point they order.

 

[RYDA]

... You cannot expect every lbs to have that kind of stock holding. You're in mainland australia, anything in stock at a distributor should be available in your shop ~24-36 hours from the point they order.

should....

 

[Gripo]

in mainland Australia, anything in stock at a distributor should be available in your shop ~24-36 hours from the point they order.

Pffft...........shit you said "they order" god knows when that could be....once a week if they have enough orders...

 

[mik_git]

I don't understand, every time I have ordered something from the lbs, they ordered 1 item, overnight...dunno maybe a tasmanian thing, even stores I wasn't a regular at.

 

[landy_man]

LBS's will never be able to compete and will eventually close down due to US/UK "online" stores UNLESS they can start buying directly from the manufacturers NOT MIDDLEMAN DISTRIBUTORS like they have to know..

these middlemen "wholesalers" who import from the manufacturers add their markup onto the products (usually 100%) then on sell it to the LBS.. it's the same in the Moto world.. with the same wholesalers servicing both bicycle and moto markets..

One of the importer/wholesalers also owns a large chain of retail outlets/bike shops and sells their imported product through their stores cheaper than their (enforced) RRP... and here is another funny one.. when the moto industry was getting pressure from online competitors, they sent their reps into the stores and told everyone the way they are going to beat the online stores is to drop the RRP to compete with US pricing.. HOWEVER, they did not lower the wholesale price of the item.. what a joke