In this day and age in retail. I find some people are still loyal to a store, the staff/service/labels sold.
with OS web shops coming in, many many more people are more loyal to their wallets.
When the poor old Aussie $ was holding it's own against the USD the prices did not come down at all, in fact an increase has been planned for 2009 a long time before the dollar dived hard again. The importers were enjoying it for quite a while there.
I think to get a motorcycle helmet approved with the silver sticker here in Aust, it is around the $20-25K mark. Not sure about cycling helmets in regards to those costs.
but yeah, the sticker thing. Well it's the law so you do or you don't get your helemt here, I've never heard of anyone getting trouble over not having the sticker, but I've seen them checked at races before. I think that had more to do with the race promoter (bike shop owner) though.
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Bomber the WHOLESALE in Australia for an Ionos is within a few dollars of the wiggle price.
There is no way for Australian shops to compete with internet prices.
Chris King products wholesale are more than Aspirevelotech.
Chainreaction is cheaper than many of our wholesale prices.
This is not the fault of the bike shops, and claiming that they are trying to rip you off with their pricing is insulting.
And no the helmets are not the same, Bell had to change the design of the sweep to suit Australian standard, please do not ask me what they changed, but there were changes.
No you must ride an australian approved helmet in australia.
There is no way for Australian shops to compete with internet prices.
Chris King products wholesale are more than Aspirevelotech.
Chainreaction is cheaper than many of our wholesale prices.
This is not the fault of the bike shops, and claiming that they are trying to rip you off with their pricing is insulting.
And no the helmets are not the same, Bell had to change the design of the sweep to suit Australian standard, please do not ask me what they changed, but there were changes.
No you must ride an australian approved helmet in australia.
RE:Bomber's issue with helmets -
Unfortunately we have to suck it up with helmets. It's not all about safety but also of liability. In the eyes of 'them' (insurance companies, courts of law, etc), AS (Australian Standards) certification is the flag that says 'Yes, this has been tested safe with Australian protocols' hence is recognised as 'safe' for use in Australia.
Public liability insurance has very strict conditions and any payouts will have conditions such as Australian Standards certified in terms of safety equipment used etc. For a volunteer organisation like your local bike club (and their crit races) they have to toe the line to ensure insurance coverage. Hence, they would check for the stickers (I do not think the LBS owner is that hard up that they would check riders at the local races just so they can sell a few more helmets). That is the nature of the legal climate in Australia.
Caveat - I am not a lawyer but I have had experience organising events, having and complying with public liability insurance is almost always the first requirement.
Sticker transfers will not work. They are tamper evident labels that will show up easily.
With regards to the original post by Dado, I patronise a select few LBS (I live in Brisbane) that provide good service - I tend to be reasonable about my choices but if I stand there looking at helmets for 20 minutes and your store assistant comes over and asks the guy who's just arrived *next* to me if he needs help, you're off my list. That just happened at a large bike chain a week ago.
An LBS needs to provide a differentiator for customers, develop a relationship with the customer so that they become a repeat customer -
In Australia, the prices are high enough (that's a reality of being in a small market with monopolistic distributors) that they cannot compete with internet stores (Greengoo's post confirmed this) but they can compete with personalised advice to the customer that cannot be reproduced by an internet store -
For example, when I shopped for a pair of shoes recently, I had questions like 'How should they feel on one's feet? Are they okay for summer/winter? How would it feel in a (local) race condition - ?' These are all critical questions I'd like to know that I cannot get from an internet store. To some people, it might not be important but I'm pedantic. When I drop $200-$300 on a pair of shoes, they better fit me and work in all the (reasonable) situations I plan to use it for because I don't have another $300 to spend just for shoes.
If an LBS cannot recognise that and just be a 'churn through' - (get them in the door and get them out again), then they are most vulnerable to the lower cost internet operations and I for one do not bother with buying even a tyre lever from them.
Unfortunately we have to suck it up with helmets. It's not all about safety but also of liability. In the eyes of 'them' (insurance companies, courts of law, etc), AS (Australian Standards) certification is the flag that says 'Yes, this has been tested safe with Australian protocols' hence is recognised as 'safe' for use in Australia.
Public liability insurance has very strict conditions and any payouts will have conditions such as Australian Standards certified in terms of safety equipment used etc. For a volunteer organisation like your local bike club (and their crit races) they have to toe the line to ensure insurance coverage. Hence, they would check for the stickers (I do not think the LBS owner is that hard up that they would check riders at the local races just so they can sell a few more helmets). That is the nature of the legal climate in Australia.
Caveat - I am not a lawyer but I have had experience organising events, having and complying with public liability insurance is almost always the first requirement.
Sticker transfers will not work. They are tamper evident labels that will show up easily.
With regards to the original post by Dado, I patronise a select few LBS (I live in Brisbane) that provide good service - I tend to be reasonable about my choices but if I stand there looking at helmets for 20 minutes and your store assistant comes over and asks the guy who's just arrived *next* to me if he needs help, you're off my list. That just happened at a large bike chain a week ago.
An LBS needs to provide a differentiator for customers, develop a relationship with the customer so that they become a repeat customer -
In Australia, the prices are high enough (that's a reality of being in a small market with monopolistic distributors) that they cannot compete with internet stores (Greengoo's post confirmed this) but they can compete with personalised advice to the customer that cannot be reproduced by an internet store -
For example, when I shopped for a pair of shoes recently, I had questions like 'How should they feel on one's feet? Are they okay for summer/winter? How would it feel in a (local) race condition - ?' These are all critical questions I'd like to know that I cannot get from an internet store. To some people, it might not be important but I'm pedantic. When I drop $200-$300 on a pair of shoes, they better fit me and work in all the (reasonable) situations I plan to use it for because I don't have another $300 to spend just for shoes.
If an LBS cannot recognise that and just be a 'churn through' - (get them in the door and get them out again), then they are most vulnerable to the lower cost internet operations and I for one do not bother with buying even a tyre lever from them.
The Bell Sweep I have was bought in Australia at my LBS and it did have the sticker - I just peeled it out (it left some silver pieces) 
- It annoyed me
Has my compulsive habbit cost me the price of a third helmet?
- It annoyed me
Has my compulsive habbit cost me the price of a third helmet?
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andrewgordo
- Posts: 61
- Joined: Sun Jan 27, 2008 10:40 am
I purchase my Frames and Wheels here in OZ at my LBS becuase of warranty concerns.
There are some very good mechanics in Sydney (Including the NEW National Champion) who have workshops but they dont sell any components so they are more than happy to do the work for you.
All other parts are small and cheap enough to buy from the UK or USA. Even if you have warranty concerns with groupset parts it can be cheaper to post the items back 2 or 3 times compared with the new OZ prices.
You cannot blame the LBS - It is all the importers fault! Did they drop the buy prices when the dollar was almost at parity... no... they kept the extra money and put it in their pockets. So now that the dollar is suffering they have put up all their already inflated buy prices by 20 to 30%, what rubbish. They are slowly putting themselves out of business!
There are some very good mechanics in Sydney (Including the NEW National Champion) who have workshops but they dont sell any components so they are more than happy to do the work for you.
All other parts are small and cheap enough to buy from the UK or USA. Even if you have warranty concerns with groupset parts it can be cheaper to post the items back 2 or 3 times compared with the new OZ prices.
You cannot blame the LBS - It is all the importers fault! Did they drop the buy prices when the dollar was almost at parity... no... they kept the extra money and put it in their pockets. So now that the dollar is suffering they have put up all their already inflated buy prices by 20 to 30%, what rubbish. They are slowly putting themselves out of business!
Greengoo wrote:This is not the fault of the bike shops, and claiming that they are trying to rip you off with their pricing is insulting.
@ Greengoo I am in no way having a go at the shops. I would MUCH rather buy everything from my local shop and regularly do buy the things I need from them. My comment was aimed at the importer/ distributor as believe that is where the difference in price is happening.
Greengoo wrote:Bomber the WHOLESALE in Australia for an Ionos is within a few dollars of the wiggle price.
There is no way for Australian shops to compete with internet prices.
...
Online stores do not have the associated costs that a shop front has therefore it is no surprise they are cheaper.
Greengoo - you've stated that Australian shops have a shopfront, but can't compete with internet only sellers. That might be true, but Aussie shops also can't compete with brick and mortar shops from overseas. I can buy everything from a real bike shop in the UK for less than here - usually at about 65% of RRP, sometimes under half price.
I bought Time RXS Carbon pedals for $110 from a real bike shop in the UK. I was quoted $379 by my LBS. Warranty considerations become meaningless if I can get three pedals from overseas for the price of one here and still have a fair bit of change.
Now, I understand that that might be under your wholesale price - well - to be frank - that's your problem, not just ours. If you continue to be gouged by the distributor, you will lose custom to the internet and overseas. We can't change the shocking distribution agreements you have with suppliers, but you can.
As someone who sells product in NZ I'll try posting from the other side of the fence.
The sticker price of a product isn't decided on by the retailer buy by the wholesaler / importer. These guys have some significant costs in terms of importing, paying customs / duty / environmental fees etc, and then storing the product until the retailer is ready to purchase....these costs are passed on to the retailer and eventually the customer.
Personally I think the wholesalers need to figure a way of fast-tracking their supply chain - we're at the point where a customer can order a part from a retailer in England for the same price as wholesale locally, and it arrives in 5 days (vs 2 days locally)...something is seriously wrong! In my eyes as a retailer most of the wholesalers I deal with add very little value for me: they don't stock the products I want, make it difficult for me to order non-stock items, and charge me exorbitant markups for the privilege. In many cases I'd rather import products directly and buy deal with the manufacturer for a lower price.
As a retailer I try and focus on adding as much value as possible for the customer - if I can answer questions about the product, offer suggestions, and stand behind the product should anything go wrong then I feel my margin is justified. I think this is easier to do with a product like wheels compared to a consumable like tyres, inner tubes, or even a helmet.
My biggest concern about the local bike industry is that overseas buying is taking away the local knowledge: Shop staff are not dealing with mid- to high-end product which makes them less knowledgeable...the less knowledgeable the staff are the less incentive for customers to purchase though them...the fewer order placed the less the distributor stocks and supports the product...and so the downward spiral begins. In NZ this has meant that most bike shops do not have a decent mechanic, have very little product knowledge, and have therefore focused on selling kids bikes and $1000 mtbs. The few good shop staff are not remunerated to the level they should be and thus leave the industry for something with greater earning potential which steepes the downward spiral.
The way I see things going is an increase in small one- or two-person workshops focusing on high quality repairs and actual product knowledge. Shelf stock will be low or non-existent. The majority of a shops income will be via repairs and mechanical work (ie: fitting internet or locally purchased parts.) Relationships between the workshop and customer will be strong and fair for both parties. There are a couple of guys locally who are adopting this formula and are doing well while the 'big box shops' are struggling.
The sticker price of a product isn't decided on by the retailer buy by the wholesaler / importer. These guys have some significant costs in terms of importing, paying customs / duty / environmental fees etc, and then storing the product until the retailer is ready to purchase....these costs are passed on to the retailer and eventually the customer.
Personally I think the wholesalers need to figure a way of fast-tracking their supply chain - we're at the point where a customer can order a part from a retailer in England for the same price as wholesale locally, and it arrives in 5 days (vs 2 days locally)...something is seriously wrong! In my eyes as a retailer most of the wholesalers I deal with add very little value for me: they don't stock the products I want, make it difficult for me to order non-stock items, and charge me exorbitant markups for the privilege. In many cases I'd rather import products directly and buy deal with the manufacturer for a lower price.
As a retailer I try and focus on adding as much value as possible for the customer - if I can answer questions about the product, offer suggestions, and stand behind the product should anything go wrong then I feel my margin is justified. I think this is easier to do with a product like wheels compared to a consumable like tyres, inner tubes, or even a helmet.
My biggest concern about the local bike industry is that overseas buying is taking away the local knowledge: Shop staff are not dealing with mid- to high-end product which makes them less knowledgeable...the less knowledgeable the staff are the less incentive for customers to purchase though them...the fewer order placed the less the distributor stocks and supports the product...and so the downward spiral begins. In NZ this has meant that most bike shops do not have a decent mechanic, have very little product knowledge, and have therefore focused on selling kids bikes and $1000 mtbs. The few good shop staff are not remunerated to the level they should be and thus leave the industry for something with greater earning potential which steepes the downward spiral.
The way I see things going is an increase in small one- or two-person workshops focusing on high quality repairs and actual product knowledge. Shelf stock will be low or non-existent. The majority of a shops income will be via repairs and mechanical work (ie: fitting internet or locally purchased parts.) Relationships between the workshop and customer will be strong and fair for both parties. There are a couple of guys locally who are adopting this formula and are doing well while the 'big box shops' are struggling.
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bJay wrote:The Bell Sweep I have was bought in Australia at my LBS and it did have the sticker - I just peeled it out (it left some silver pieces)
Has my compulsive habbit cost me the price of a third helmet?
You should have a serial number on the helmet, contact the local distributor and see if you can get a new sticker. Your SN should be on record as a locally distributed helmet.
Tristan wrote:The way I see things going is an increase in small one- or two-person workshops focusing on high quality repairs and actual product knowledge. Shelf stock will be low or non-existent. The majority of a shops income will be via repairs and mechanical work (ie: fitting internet or locally purchased parts.) Relationships between the workshop and customer will be strong and fair for both parties. There are a couple of guys locally who are adopting this formula and are doing well while the 'big box shops' are struggling.
I agree with so much of what you just said, specially what the end result will be like with shops.
I buy form the LBS when I need advice or expect I'll need support. Helmets, complete bikes and clothing are such examples. Most spare parts I get from overseas.
Tristan is there any chance that NZ importing could be run from Australia?
I can't contemplate how being so close to Asia that reduced shipping costs don't help keep prices lower.
I'm hoping that made in Australia will become more effective now the AUD has dropped. The problem is most things are still made in Asia then value added/assembled in Oz so get effected by exchange losses.
Maybe another solution to the effciency equation is more local rebranding/out sourcing companies. Currently
Big Brand A gets Manf B to make thier 2009 product. Brand A pays some profit to Manf B, and sells the 2009 product to Importer C with a profit margin again, who sell to small LBS D.
However if Importer C bought a 2009 product and put thier own brand on it, and sold to to shop D, then Big company A doesn't add a chunk to the final price.
We are already seeing a few brands here on WWs in the last few months who are doing this, and one wheel company is keeping costs down by selling direct even (and supporting local racing at the same time).
OK this won't work for some products, but there are a lot of good generic products that are perfectly suitable for use even if not bleeding edge.
I work for one of the largest importers in Australia - which have a bike division(which i am NOT a part of) and just wanted to get a couple of things out in the open.
Many things affect retail cost from inception to delivery. These being - but not restricted to:
If the distributor is not a subsiduary of the company, royalty fees can be as high as 20% to the brand - this one of the reasons why in the bigger countrys you can get for less
Import Duty at about 15%
Testing for AS (which can cost over $20k per helmet)
China's 9% per half inflation - wages/freight/materials cost etc increases
Airfreight / Shipping - bike frames/wheels consume alot of space, not weight thus get charged highly. Much australian product comes from US and european warehouses after being shipped from asia. So a double handling cost.
Variances in Currency - Dollar protection insurance, costing at a safe price (which in our climate HAS to be 63cents or under)
PR - importers here need to spend a higher percentage of turnover to help build/market a brand compared to europe or the US
Store rentals also dictate sticker price - rents in Australia are among the highest in the world and as such this needs to be recouped in retailers margin.
I'm not saying that this means you have to buy here, but to say that all aussie importers/retailers are gouging pricing is just plain wrong.
Many things affect retail cost from inception to delivery. These being - but not restricted to:
If the distributor is not a subsiduary of the company, royalty fees can be as high as 20% to the brand - this one of the reasons why in the bigger countrys you can get for less
Import Duty at about 15%
Testing for AS (which can cost over $20k per helmet)
China's 9% per half inflation - wages/freight/materials cost etc increases
Airfreight / Shipping - bike frames/wheels consume alot of space, not weight thus get charged highly. Much australian product comes from US and european warehouses after being shipped from asia. So a double handling cost.
Variances in Currency - Dollar protection insurance, costing at a safe price (which in our climate HAS to be 63cents or under)
PR - importers here need to spend a higher percentage of turnover to help build/market a brand compared to europe or the US
Store rentals also dictate sticker price - rents in Australia are among the highest in the world and as such this needs to be recouped in retailers margin.
I'm not saying that this means you have to buy here, but to say that all aussie importers/retailers are gouging pricing is just plain wrong.
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synchronicity
- Posts: 2027
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Here's why I'm not really keen on entering the distribution chain with my product.
This applies to any purchase over about grand doesn't it? Even with that, it's still cheaper to buy it overseas yourself.
Do the distributors really lump this cost? I'd be suprised if they do. It is up to the manufacturers to do the standards testing.
This affects everyone, including chainreactioncycles.com not just distributors...
So they should each employ an asian immigrant to deal with taiwan directly. And don't tell me this would increase costs...
People are quoting *shipped* from overseas prices less than that of the Australian wholesale. It costs less to send something in bulk, not more.
Fair enough, but as mentioned before, you don't hesitate in raising prices when the ozzy dollar plunges.
I quote BS on that one. I suspect that is what the PR agents spout out to justify their salaries.
So get a cheaper warehouse out west?
I agree with a lot of what Tristan says, especially the new wave of focus on quality repairs & installation for small bike shops.
I also foresee the opening of a few direct warehouse online shops in Australia à la chainreaction.com in the UK. They could potentially take up a lot of market share for high-end bike components in Australia.
Australians do prefer to buy Australian. Sure the prices of chainreaction would still be lower, but at least we could save a few Aussie jobs and get the stuff within a day or two instead of 2-3 weeks.
I also reckon that with the proliferation of brands on the market, what could happen particularly in Australia is that each shop could theoretically represent a new brand and be the direct importer of it. Then they could each offer less choice but sensational prices. Then in turn, they'd sell more instead of having stuff hanging on their walls all season.
haydos wrote:Import Duty at about 15%
This applies to any purchase over about grand doesn't it? Even with that, it's still cheaper to buy it overseas yourself.
haydos wrote:Testing for AS (which can cost over $20k per helmet)
Do the distributors really lump this cost? I'd be suprised if they do. It is up to the manufacturers to do the standards testing.
haydos wrote:China's 9% per half inflation - wages/freight/materials cost etc increases
This affects everyone, including chainreactioncycles.com not just distributors...
haydos wrote:Airfreight / Shipping - bike frames/wheels consume alot of space, not weight thus get charged highly. Much australian product comes from US and european warehouses after being shipped from asia. So a double handling cost.
So they should each employ an asian immigrant to deal with taiwan directly. And don't tell me this would increase costs...
People are quoting *shipped* from overseas prices less than that of the Australian wholesale. It costs less to send something in bulk, not more.
haydos wrote:Variances in Currency - Dollar protection insurance, costing at a safe price (which in our climate HAS to be 63cents or under)
Fair enough, but as mentioned before, you don't hesitate in raising prices when the ozzy dollar plunges.
haydos wrote:PR - importers here need to spend a higher percentage of turnover to help build/market a brand compared to europe or the US
I quote BS on that one. I suspect that is what the PR agents spout out to justify their salaries.
haydos wrote:Store rentals also dictate sticker price - rents in Australia are among the highest in the world and as such this needs to be recouped in retailers margin.
So get a cheaper warehouse out west?
I agree with a lot of what Tristan says, especially the new wave of focus on quality repairs & installation for small bike shops.
I also foresee the opening of a few direct warehouse online shops in Australia à la chainreaction.com in the UK. They could potentially take up a lot of market share for high-end bike components in Australia.
Australians do prefer to buy Australian. Sure the prices of chainreaction would still be lower, but at least we could save a few Aussie jobs and get the stuff within a day or two instead of 2-3 weeks.
I also reckon that with the proliferation of brands on the market, what could happen particularly in Australia is that each shop could theoretically represent a new brand and be the direct importer of it. Then they could each offer less choice but sensational prices. Then in turn, they'd sell more instead of having stuff hanging on their walls all season.
In reply...
No mention of Royalties? Unfortunately part of being from a small country. When Adidas became a subsidary here, prices dropped 20-30% as did Nike.
My product you can buy online from US retailers at about australian wholesale. Can I do anything about it? no. Would I like to? Yes. So in the end i dont worry about it and just get on with things.
Different industry but look at Anaconda's business model. ala REI etc. Problem is you end up with only house brands and no heritage brands in store.
It's true that many wholesalers are moving into retail to cut out one hand in the pie and help margin - thus they also can also pass on savings when they want to.
Look at the new Macpac business model for eg.
The importer is lumped with the testing cost of the helmets. Sh_t I know.
Most australian "bulk" does not meet asian minimums so we are lugged with euro / US stock and sometimes pay US/Euro wholesale for fringe product.
PR - i'm talking about team sponsorships / race sponsorships etc not yuppie product launches.
I accept that w/s prices did not come down when the dollar was high - however fuel was crazy too at the time and oil accounts for almost all polyester/synthetic material aswell as freight...It explains some of it - but not all!
I work in footwear and some chinese government subsidy changes also affected prices that we had to wear that no consumer would have ever heard about..
In all though I don't disagree with buying off the net - it's your money and do what you like with it.
I buy parts online, but frames from a brick and mortar store.
If only we got into this discussion about motor cars...now that is a joke.
No mention of Royalties? Unfortunately part of being from a small country. When Adidas became a subsidary here, prices dropped 20-30% as did Nike.
My product you can buy online from US retailers at about australian wholesale. Can I do anything about it? no. Would I like to? Yes. So in the end i dont worry about it and just get on with things.
Different industry but look at Anaconda's business model. ala REI etc. Problem is you end up with only house brands and no heritage brands in store.
It's true that many wholesalers are moving into retail to cut out one hand in the pie and help margin - thus they also can also pass on savings when they want to.
Look at the new Macpac business model for eg.
The importer is lumped with the testing cost of the helmets. Sh_t I know.
Most australian "bulk" does not meet asian minimums so we are lugged with euro / US stock and sometimes pay US/Euro wholesale for fringe product.
PR - i'm talking about team sponsorships / race sponsorships etc not yuppie product launches.
I accept that w/s prices did not come down when the dollar was high - however fuel was crazy too at the time and oil accounts for almost all polyester/synthetic material aswell as freight...It explains some of it - but not all!
I work in footwear and some chinese government subsidy changes also affected prices that we had to wear that no consumer would have ever heard about..
In all though I don't disagree with buying off the net - it's your money and do what you like with it.
I buy parts online, but frames from a brick and mortar store.
If only we got into this discussion about motor cars...now that is a joke.
I think the one issue that everyone has missed is the scale of the australian bike industry. Its all fine and well claiming that the distributors are ripping people off, but its as much to do with wholesaler's wholesale. They are not buying anywhere near the volume of the european distributors, I know that ONE shop in London was selling more sets of a certain brands high end pedals than were sold in the whole of australia.
The economies of scale cannot compete.
I looked at setting up a small scale importation with a couple of british componenet and frame makers. In the end it worked that, through no fault of them, that my wholesale was almost uk retail as I could not buy enough product to make it worth a large discount.
As I stated before, the way to get cheaper parts in Australia is to buy in Australia.
The economies of scale cannot compete.
I looked at setting up a small scale importation with a couple of british componenet and frame makers. In the end it worked that, through no fault of them, that my wholesale was almost uk retail as I could not buy enough product to make it worth a large discount.
As I stated before, the way to get cheaper parts in Australia is to buy in Australia.
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