Local Shop v Internet

localboynoddy

Simple question, why can't my local shop get anywhere near these internet prices?

http://www.wheelies.co.uk/c1/Bikes.aspx

Why can't the big manufacturers support local shops with these discounts???????

cat_with_no_tail

Because internet shops are.... erm....... on the internet.

They can have VERY big warehouses full of stock, which they can buy in bulk, and therefore demand a bigger discount. The fact they're based out of a warehouse or 2 means less staff (porportionally). It also means they don't need to worry about space for displays, rent / mortgage on a shop in a prime location.

Your LBS can't just go out and buy a containerfull of 2yr old bikes from the manufacturer at massively reduced prices. They've got nowhere to put them.

And if they DO happen to have a few of last years model left over, they probably WILL be able to come close to matching that price.

I could go on, but I wont.

MrChuck

localboynoddy wrote:

Why can't the big manufacturers support local shops with these discounts???????

Devil's Advocate: Why should they?

Other than that, Cat has it- basically, economies of scale + lower overheads.

IBISMojoHDamon

My LBS has (in my opinion) the best mix of both internet prices and customer service.

They have an off-site storage facility for last years bikes and do the best prices (typically) for Trek, Giant, Scott and Cannondale on the internet.

On new bikes, they do 'podium points' that will save you around 25%-30% of the bikes value in free stuff..

If you were to google any of the above brands, you will find them in the top 3 of non sponsored searches!..

MrChuck

IBISMojoHDamon wrote:

My LBS has (in my opinion) the best mix of both internet prices and customer service.

They have an off-site storage facility for last years bikes and do the best prices (typically) for Trek, Giant, Scott and Cannondale on the internet.

On new bikes, they do 'podium points' that will save you around 25%-30% of the bikes value in free stuff..

If you were to google any of the above brands, you will find them in the top 3 of non sponsored searches!..

If I'm thinking of the right people, that's stretching the definition of LBS a bit I think!

IBISMojoHDamon

ha ha ;0)

1. It's local (to me)
2. It sells bikes
3. It's a shop.

Is there a definition of an LBS that I'm missing?

They started over 15 years ago in a shop the 1/3 of the size they are now, they just went about things in a different / better way than most LBS's.

MrChuck

IBISMojoHDamon wrote:

ha ha ;0)

1. It's local (to me)
2. It sells bikes
3. It's a shop.

Is there a definition of an LBS that I'm missing?

They started over 15 years ago in a shop the 1/3 of the size they are now, they just went about things in a different / better way than most LBS's.

Fair enough! I think a lot of people would take LBS to mean something like 'small independent bike shop without massive internet operation attached' though

CRC also started out as a small shop- it might still exist for all I know, but I don't think they'd claim to be an LBS any more...

IBISMojoHDamon

MrChuck wrote:

IBISMojoHDamon wrote:

ha ha ;0)

1. It's local (to me)
2. It sells bikes
3. It's a shop.

Is there a definition of an LBS that I'm missing?

They started over 15 years ago in a shop the 1/3 of the size they are now, they just went about things in a different / better way than most LBS's.

Fair enough! I think a lot of people would take LBS to mean something like 'small independent bike shop without massive internet operation attached' though

CRC also started out as a small shop- it might still exist for all I know, but I don't think they'd claim to be an LBS any more...

Understood and agree, although they ARE independent and only have the one shop, I think thy just recognised that being 'local' means more than just their immediate catchment area, a bit like HSBC being your local but global bank.

Most LBS's fail as they are just reliant on their local trade, in the off season and quiet times, LBS's struggle to survive paying the bills because of the lulls in trade, whereas 'my' LBS appeal to the whole of the UK and beyond.

This means you get the service you demand and come to expect from a LBS but the prices that compete with Wiggle / CRC / Merlin etc. ;0)

MrChuck

I think you've hit it with the catchment area thing.

To take Cat's example of a container full of 500 (say) of last year's bikes, your lot have the whole of the UK (and maybe Europe) to advertise them and sell them to. A 'normal' LBS only has their local area, and it's not going to happen unless they virtually give them away, so they can't take advantage of it.

In the wider sense I suppose it's like any other small business- some go on to be much bigger businesses, some stay the same, some go under, for a variety of reasons I suppose- including foresight and ambition among other things. Fair play to your LBS for sure.

IBISMojoHDamon

I think where they succeed is by providing internet prices and the service that a good LBS provides.

From what I know, they started with a small amount of money and organically grew.

What frustrates me about them is that they do what the 'average mainstream' person wants in terms of stock (not bikes) but what I love is that you can order anything and benefit from the same 'internet' based prices.

There are some great shops out there in terms of stock / kit but the service is just plain shocking!.

On the other hand, another LBS to me has staff that are the most excitable and helpful you'll ever meet, they just don't have the stock or can do the prices that you can get on the t'internet!

Rushmore

You can't hang around and talk bikes with a website...

IBISMojoHDamon

Rushmore wrote:

You can't hang around and talk bikes with a website...

In some shops, you can't hang around and talk bikes either... Some bike shops just want you in and out!...

supersonic

Well, sometimes they do have work to do! Though of course a personable a friendly front is needed. I'd love to sit and chatbikes all day! (actually, I do ;-))

MrChuck

Rushmore wrote:

You can't hang around and talk bikes with a website...

Well, the pros and cons of the LBS and the internet is another story isn't it? But my 2ps worth is that, like it or not, LBSs effectively want to sit between customers and the stuff they want.* If they want customers to go through them rather than go round them and go straight to the source they need to provide some incentive, and far too many of them don't IMO.

I'd happily pay a bit more if I was buying from a good, reliable shop with knowledgeable, enthusiastic and friendly staff, good mechanics, and lots of nice shiny kit to drool over, but most shops are a long way from that IME.

*Obviously that's not quite true, CRC/Wiggle and the distributors the shops use aren't the same, but I think that's effectively how it looks from the customer's point of view.

localboynoddy

I understand economies of scale and respect the fact that internet operations have a bigger audience but when talking to the local their gripe is that they can discount a bit but if they go over that discount they could have their contract to supply Giant, Specialized, Marin etc taken away from them. Why should online operations be allowed to undercut the local?

If it was a level playing field in terms of discount at least the local have a fighting chance. Everything is geared (pardon the pun) towards the internet firms. Are they even allowed to offer these discounts by the manufacturers? I got this link from a mate who works in insurance and he says it's not legit but they get away with it. What is going one and does anyone in the industry actually care about the locals??

supersonic

Some do not buy from the official UK importers. A lot of parts we see are unboxed OEM parts.

chez_m356

i was talking to one of the guys in the lbs about this recently, and he was saying one of the reasons for things like this, 'he used chains for example' we can get a 1000 chains in but they can buy a 100.000, the bigger the bulk buy the less they pay for them

localboynoddy

It is fair enough that if they buy in bulk they get better margins but then they are offering such massive discounts local shops can't compete. I know it is an open market but if the manufacturers say they support local shops then it is just a lie. The big players are the ones the manufacturers are protecting by taking away accounts from local shops if they breach their supply contracts and letting the online players offer 30-40%.

I just feel the way things are going everyone will just buy online from substandard retailers (who probably have no idea about bikes but like the margins) and the locals will die a slow death. If the manufacturers back this then they should just come out and say it or get their act together and properly support the local shop.

cat_with_no_tail

The manufacturers are not charities there to support your local bike shop. They are businesses. Many of them large multi-nationals. They are there to make a profit. Nothing more.

If an online retailer is substandard in some way, they will rapidly find they lose customers, and as such are no longer able to hold the stock levels needed to provide the big discounts. They will not meet their contract terms and will not be able to demand the prices of a good shop with high turnover.

Companies like CRC, Merlin, On-one, Wiggle etc didn't get to where they are by being sub-standard though.

A LBS can get away with charging more than the online retailers anyway because customers have the ability to pop back in with the bike and discuss any issues with a real person.

IBISMojoHDamon

Unfortunately, I can't see things changing...

The manufacturer forward orders numbers of bikes and models in a range as to how many they think they can sell, often well over a year in advance... take as an example the Trek Top Fuel... The trend has been 100mm travel, it's well spec'ed, it's a reasonable price, the colour ways are strong so they order what they feel is a good number based on how well it's sold in the past and the above factors.... The bike bombs, people go away from 100mm and want 120mm, or 130mm or people like me that want 150mm+.... Another manufacturer, say Giant, brings out another bike at the same price but with better spec... Now Trek are F*cked!... What do they do?... Offer them to the LBS?, of course they do... But how many can Jo Bloggs Bikes in Anytown take more than say 20 bikes?... They can't, they have other brands, they have other bills to pay, it's snowed and there is a recession on, people are holding onto their money and not buying bikes... Or worried about the economy.. So what do Trek do?... Sell as many as they can to bike shops or retailers that can take 100 bikes or 50 bikes at a time... They get better discounts as they are buying in bulk, they get settlement discounts because they paid in 30 days, or they get extended credit terms of 90 days....

Either way you look at it, it's kinda a perpetuating cycle... (no pun intended) What if one year a model is all the rage, and the manufacturer hasn't ordered enough.. You then get consumers complaining that the latest SB66 or 29'er whatever is not available, it's sold out... So we leave that brand and buy something else... Or worse case for the bike industry, we don't buy anything at all....

It's a tricky one as the manufacturers need to sell bikes and win against their market rivals, they don't care who pays them, just as long as they get paid...

The thing that I've always wondered about, is the bike year... It seems to end in July / August and that model years' bikes get slashed in price by one bike shop that advertises on-line, thus making the next bike shop in X town have to discount to the customer they have standing in front of them saying 'Oi, price match, or I'll buy it from whoever discounts it the most...

We are, as consumers, our own worst enemy, we don't want to pay full RRP, we want a deal, we want on-line prices that the likes of CRC, Wiggle, Merlin etc etc offer as we want to get a bargain and buy other stuff like cars, houses, strippers, suits, jeans, trainers, the latest games platform..

My only thought is to support your local bike shop as much as you can, and if you get get service, tell them and recommend them to your friends... Otherwise, there will come a time in the not to distant future where you will have no choice but to buy on-line.

bennett_346

I was hearing from a brick and mortar warehouse seller today that the importers seriously dislike the online retailers. Not sure how much truth that holds.

supersonic

Pretty true I'd say! OE stuff is not intended for aftermarket.

campbellrae1

I think a lot of it comes down to the specific importer/company. Our main clothing supplier sells to CRC/Wiggle etc but only on the basis that they can sell it at 5% bellow RRP, nothing less. Their justification is that they are protecting their brand as well as the little guys. If only more companies took this route life could be a lot easier for the LBS, not likely though! Especially when the online big-boys can just go and buy OEM stock from who-ever has some left over at silly prices.