Chain reaction now limiting some product availability?

[crazyjose]

product availability

I wanted some Mavic MTB shoes from CRC and got them shipped to relo's in the UK and then sent on from there, why pay 290 (and that was cheapest) when I can pay 135 (inc vat) and still get the shoe I want for less. Getting a mavic wheel set would be harder though, freight forwarding would be the answer I guess as long as the postage rates are competitive

 

[disfocus]

Can someone who understands the mysteries of commerce explain this to me in words of one syllable?
Maybe I'm a bit slow, but I just don't understand why things have to be so much more expensive in Australia. Let's take Fox forks as an example (assuming we were allowed to buy them).

They're made in Taiwan, right?
And Taiwan is much closer to Australia than the UK or the US, right?
So they should be able to ship from the factory to Australia much more cheaply too, yeah?

Then why the f**k is it apparently cheaper to ship the forks from Taiwan to the USA, pass them through the hands of importers and bike shops there (adding on their profit margins), then ship them nearly all the way back to Taiwan to my house than to get them from Taiwan to my LBS in the first place???

Apart from anything else, it offends my environmental sensibilities. Why is it cheaper for me to dramatically increase the carbon footprint of a saddle by shipping it from Taiwan to Northern Ireland then back to Australia?

The only thing I can think of is that Australian sensibilities have been shaped by a historical precedent in which 'goods of quality' were manufactured in Western Europe or the US--and attracted a stiff premium to be shipped all the way to the Antipodes--creating an environment in which Australians expected to pay more than their cousins overseas; and that someone, somewhere, is exploiting the hell out of those historical expectations in a world where the reverse should be true.

 

[Kizzmtbr]

Just a heads up, you could try using a mail forwarder, chances are it will still be cheaper than purchasing locally.

 

[retroenduro]

Can someone who understands the mysteries of commerce explain this to me in words of one syllable?
Maybe I'm a bit slow, but I just don't understand why things have to be so much more expensive in Australia. Let's take Fox forks as an example (assuming we were allowed to buy them).

They're made in Taiwan, right?
And Taiwan is much closer to Australia than the UK or the US, right?
So they should be able to ship from the factory to Australia much more cheaply too, yeah?

Then why the f**k is it apparently cheaper to ship the forks from Taiwan to the USA, pass them through the hands of importers and bike shops there (adding on their profit margins), then ship them nearly all the way back to Taiwan to my house than to get them from Taiwan to my LBS in the first place???

Apart from anything else, it offends my environmental sensibilities. Why is it cheaper for me to dramatically increase the carbon footprint of a saddle by shipping it from Taiwan to Northern Ireland then back to Australia?

The only thing I can think of is that Australian sensibilities have been shaped by a historical precedent in which 'goods of quality' were manufactured in Western Europe or the US--and attracted a stiff premium to be shipped all the way to the Antipodes--creating an environment in which Australians expected to pay more than their cousins overseas; and that someone, somewhere, is exploiting the hell out of those historical expectations in a world where the reverse should be true.

Well said!

 

[Nerf Herder]

OK prolly slitting my business throat now. So I'll keep it simple and specific to my business.

Loaded is 25 to 30% more expensive then the US online equivalent ... on the surface ... add shipping and I'm down to 15% ... add GST (which I can't avoid) then I'm down to 5% difference ... I can't compete with the range of product that you can get for way cheaper ... but at least my specific stuff is comparable.

I'm about to bring in another brand and compete directly with your favourite "empire online" store ... interestly, I've found that they actually are selling at full UK RRP ... including VAT to Australia (except clearance items - which is different to "sale" [1] items). My price will be 15% higher then their "sale" price ... purely due to shipping from what I've calculated and some dodgy FX that I'll never get ... I'm a finance guy and believe me it not be real. ... keep in mind I can't sell direct and they do.

Sooo ... I keep hearing riders are willing to support an LBS if they are within X of the overseas price. ... here you go

- Loaded approx 15% higher then my US competitors (taking into account shipping only)
- K9, pretty much on the money, taking into account GST ... you pay for shipping direct from the UK and these are not on "empire online"
- Kodex ... GST and FX ... eg my RRP on the strata stem should be $189.95 ... the and a very similar pom stem ... but I've reduced prices, because I can
- csixx ... mainly GST ... but a bit of shipping compared to US RRP. ... the chain stay protectors are US RRP ... so actually below RRP taking into account GST.

All my prices are GST inclusive.

Also Loaded will get cheaper with Volume ... approx 15% actually ... so fark ... not sure what else I can do and you have a direct say here as money talks.

To put things into a more personal perspective for you.

I've technically been doing this for a year and a bit ... but took it to the next level with advertising and shop approaches from about May / June of this year ... so starting from May ... I haven't drawn an income out of this ... and don't expect to draw an income until prolly this time next year ... its all my own money ... with my home is now double mortgaged ... you can see I have alot at risk ... actually I'm putting my family at risk too ... and again, my prices aren't bad ... sooo reading this shit which I can appreciate at many levels (and agree with to a degree) ... also annoys the crap out of me (I think I'm slitting my business throat again, but pfffft cbf redoing now as my shizz is boiling)

I say look a bit deeper and support the poor bastards trying to make a difference. [I haven't even touched on the bloody advocacy I do for bloody free]

Ask for us at your LBS. or head to Insanecycles.com.au, cycotic.com.au and Edge Cycleworks

[1] sooo are they really on sale ... the farking sad thing is they can say they are cheaper purely on shipping ... they have a good relationship with their shipper ... their shipper can take advantage of free (and substantially cheaper) space on out bound planes out of the UK ... picture the UK as one of the largest transport hubs in the world ... with empty seats and space on pretty much every plane ... this is why they are cheap and we are not. This is also one reason I don't understand why the US stores are cheaper as well .. and the only thing I can see is the US and its brand of private sector competition actually increases prices in certain sectors (like health) ... sorry waffling now.


*edit apologies ... obviously a bit ticked ... off to earn zero income now and visit some angry store owners ... and pimp my arse out to the Tax man and freight forwarder ... at least I get to see the new propains first ... you know your a cyclist when you can take it up the arse and still be hyped about seeing new kit.

 

[Sethius]

OK prolly slitting my business throat now. So I'll keep it simple and specific to my business.

Loaded is 25 to 30% more expensive then the US online equivalent ... on the surface ... add shipping and I'm down to 15% ... add GST (which I can't avoid) then I'm down to 5% difference ... I can't compete with the range of product that you can get for way cheaper ... but at least my specific stuff is comparable.

I'm about to bring in another brand and compete directly with your favourite "empire online" store ... interestly, I've found that they actually are selling at full UK RRP ... including VAT to Australia (except clearance items - which is different to "sale" [1] items). My price will be 15% higher then their "sale" price ... purely due to shipping from what I've calculated and some dodgy FX that I'll never get ... I'm a finance guy and believe me it not be real. ... keep in mind I can't sell direct and they do.

Sooo ... I keep hearing riders are willing to support an LBS if they are within X of the overseas price. ... here you go

- Loaded approx 15% higher then my US competitors (taking into account shipping only)
- K9, pretty much on the money, taking into account GST ... you pay for shipping direct from the UK and these are not on "empire online"
- Kodex ... GST and FX ... eg my RRP on the strata stem should be $189.95 ... the and a very similar pom stem ... but I've reduced prices, because I can
- csixx ... mainly GST ... but a bit of shipping compared to US RRP. ... the chain stay protectors are US RRP ... so actually below RRP taking into account GST.

All my prices are GST inclusive.

Also Loaded will get cheaper with Volume ... approx 15% actually ... so fark ... not sure what else I can do and you have a direct say here as money talks.

To put things into a more personal perspective for you.

I've technically been doing this for a year and a bit ... but took it to the next level with advertising and shop approaches from about May / June of this year ... so starting from May ... I haven't drawn an income out of this ... and don't expect to draw an income until prolly this time next year ... its all my own money ... with my home is now double mortgaged ... you can see I have alot at risk ... actually I'm putting my family at risk too ... and again, my prices aren't bad ... sooo reading this shit which I can appreciate at many levels (and agree with to a degree) ... also annoys the crap out of me (I think I'm slitting my business throat again, but pfffft cbf redoing now as my shizz is boiling)

I say look a bit deeper and support the poor bastards trying to make a difference. [I haven't even touched on the bloody advocacy I do for bloody free]

Ask for us at your LBS. or head to Insanecycles.com.au, cycotic.com.au and Edge Cycleworks

[1] sooo are they really on sale ... the farking sad thing is they can say they are cheaper purely on shipping ... they have a good relationship with their shipper ... their shipper can take advantage of free (and substantially cheaper) space on out bound planes out of the UK ... picture the UK as one of the largest transport hubs in the world ... with empty seats and space on pretty much every plane ... this is why they are cheap and we are not. This is also one reason I don't understand why the US stores are cheaper as well .. and the only thing I can see is the US and its brand of private sector competition actually increases prices in certain sectors (like health) ... sorry waffling now.


*edit apologies ... obviously a bit ticked ... off to earn zero income now and visit some angry store owners ... and pimp my arse out to the Tax man and freight forwarder ... at least I get to see the new propains first ... you know your a cyclist when you can take it up the arse and still be hyped about seeing new kit.

Well said nerf! loving the last line too, so true at times, tis one of highlights of the job for sure, you'll get through it though!

I think a few of us smaller importers are doing a really good job, you guys are on the ball, Crankin is on par, DIYmtb is doing pretty bloody well at it, 88spices seem to be close, and we are in the same boat with Solid ( I just had a look, we are actually cheaper after GST before/after shipping cost then the Euro RRP on the solid bikes and that's before we see the 2012 pricing, hopefully it's come down after a 17% increase from them in two years which we've not passed on.).

We have to be to survive against the overseas players. I think CRC etc has honestly just become easier for people, no searching, theres a product to do the job in one spot, they stock a HUGE amount of stuff so there is generally no waiting and faster postage than Auspost can deliver. (eg I know for fact it's quicker for people in Perth to order a item from OS vs me sending it the same day as express to them...)

I think the shift for AUS has been happening but we've been caught up in the ease of OS sales, but how do dealers feel about it all, are they willing to play the game as well?

 

[Yowie]

but how do dealers feel about it all, are they willing to play the game as well?

Sadly on the most part probably no, I have always tried to be competitive with OS as much as I could be with out cutting my own throat. Quite often after helping someone out word would get around and another local stores employee would ring the distro whining and bitching about it, thankfully another shop has opened up 340 k's down the coast and they now seem to be in this guys sights now. Nerf I have a strong feeling you will experience this sort of crap real soon.

So in short yes some lbs will be willing to give the os stores a shake with the help of local distro's but it looks like a long hard fight.

Remember those who can do, those who can't whinge about those who do.

 

[silentbutdeadly]

I suspect that half the trick for the local distro's (especially the smaller guys) is to work to your advantages. Most of your lines are in the category of hard to get. That will only continue as the mega outlets such as CRC and Jenson continue their hunt for growth. They can only do that by either increasing volumes or reducing the number of lines they offer. They'll get more vanilla as time goes on. That's their only option.

There are already a great number of niche online outlets both in the UK and the States that cater for specific markets in the cycling world and they offer a unique product range the CRCs and Jensons just can't do. However, their pricing is more street typical. And our local blokes are often competitive with these lads.

Bigger distributors are coming to the party - Maxxis, Geax, WTB and Vittoria tyres are often just as cheap locally as they are offshore for example. And their are others - Monza have been doing some Sram stuff for very decent local prices and Dirtworks has been able to bring in some brands at pretty tight RRPs. Only Shimano Australia seems to be a hold out....if they continue to play the fishes bum game then they'll only have themselves to blame. Of course some of the manufacturers just tell the distro's what the go is....nothing the local blokes can do about it. No point the consumer whinging about it either.

I would think that the lads who've piped in above and put their money where their mouths are know what their strengths are - play to the uniqueness of what you have to offer - it might take a bit more effort in terms of marketing but you'll have to work at the point of differences! I've spent a bit of time at the Fearless for example....I know what they sell but the website doesn't often tell me if it'll suit my XC rig or what it might be equivalent to at the supermarkets....as somebody pointed out - the supermarkets provide a limited but well known range of brands...if you are offering something similar but brand unknown then give us more info as to why we should buy from you rather than in Europe or the US....

In the meantime, leave the vanilla to the supermarkets.

 

[mtb101]

My understanding of why prices (bike parts and components) are so high in AU compared to US and particularly the UK is because AU uses a pre-internet business model where Distributors have a monopoly on the product that they supply to the LBSs. The poor old LBS is locked into a business model that has no other option but to buy from distributors who are operating with a monopoly on the product and can therefore have uncompetitive pricing.

Where CRC for example are OEM builders and therefore have direct product access to products from manufacturers i.e. shimano, fox etc.

What does this mean for the cycling industry, well at the moment they are in Harvey Norman denial and have no understanding about how to address this issue, the distributors have feed them the right propaganda to keep them aligned so they won't/can't go outside the monopoly they control. (a few have tried (BikePro from memory) and guess what? Cycling magazines refused to run their ads!

One thing I learned early on with business is you need to source products directly from the manufacturer and/or have the buying power to get competitive pricing. At the moment, seems to me that LBS pricing is out of whack with the reality of a global market with buyers who have global buying potential. So we will continue to shop around for the best deal.

 

[jda]

Can someone who understands the mysteries of commerce explain this to me in words of one syllable?
Maybe I'm a bit slow, but I just don't understand why things have to be so much more expensive in Australia. Let's take Fox forks as an example (assuming we were allowed to buy them).

They're made in Taiwan, right?
And Taiwan is much closer to Australia than the UK or the US, right?
So they should be able to ship from the factory to Australia much more cheaply too, yeah?

Then why the f**k is it apparently cheaper to ship the forks from Taiwan to the USA, pass them through the hands of importers and bike shops there (adding on their profit margins), then ship them nearly all the way back to Taiwan to my house than to get them from Taiwan to my LBS in the first place???

Apart from anything else, it offends my environmental sensibilities. Why is it cheaper for me to dramatically increase the carbon footprint of a saddle by shipping it from Taiwan to Northern Ireland then back to Australia?

The only thing I can think of is that Australian sensibilities have been shaped by a historical precedent in which 'goods of quality' were manufactured in Western Europe or the US--and attracted a stiff premium to be shipped all the way to the Antipodes--creating an environment in which Australians expected to pay more than their cousins overseas; and that someone, somewhere, is exploiting the hell out of those historical expectations in a world where the reverse should be true.

short answer is the market is bigger in the USA so they can move more product at a lower price, 300 million people versus 20 million. I sell DVD in Aus and USA, price is cheaper in USA because I sell 10 times more DVD.

Slightly OT but I just got a quote to replace the clutch on my Subaru, dealership price on parts was just over 1k, I ordered the parts today from a dealership in the USA for $516 express delivery.

 

[efto]

This has also been slowly happening for motorbike parts and equipment for the last 12 months. The easiest way around it and a popular way now is to set up an account with a freight forwarder. When buying in the US a lot of people swear by http://www.shipito.com/ .They provide you with a US postal address (which is there own warehouse, then forward it on to you) The cost is minimal and gets round the current anti competitive behaviour by some suppliers.

 

[rearviewmirror]

I've been noticing on Wiggle that parts are showing "discontinued, no longer available", then I switch to GBP and they are available. SKS is the brand I was looking at. I hope this isn't the case, I want Aussie retailers to compete on price, not on export controls.

 

[Sethius]

I would think that the lads who've piped in above and put their money where their mouths are know what their strengths are - play to the uniqueness of what you have to offer - it might take a bit more effort in terms of marketing but you'll have to work at the point of differences! I've spent a bit of time at the Fearless for example....I know what they sell but the website doesn't often tell me if it'll suit my XC rig or what it might be equivalent to at the supermarkets....as somebody pointed out - the supermarkets provide a limited but well known range of brands...if you are offering something similar but brand unknown then give us more info as to why we should buy from you rather than in Europe or the US....

In the meantime, leave the vanilla to the supermarkets.

Would you like to see more intensive descriptions or do you mean more the intro page of the site/bring back the about us tab? or a sub header prehaps giving a brief description of our market. I'd love to hear more about this, really appreciate the feedback! We are working on the 2012 updates and I'd love to include things people want to see, the customer gallery should get a huge update, fresh images from Army, Weeze will be hooked up, Solid's stuff re-organized etc we have over 2000 products/options now, kind of daunting!

The pricing for completes will include a per week option too for finance. ( it's also been available just not integrated.)