Shimano restricting online UK sales to the US & Canada.

[TheRich]

I can name pretty much any high end accessory and the margin will be ridiculous. The new $425 Giro Imperial shoe? $150 cost. The problem for bike shops however is the churn of selling low-end bicycles at almost loss-leader prices in hopes of attachments like helmets, clothing, flat kits, pumps, lights, cages, a bell, etc.

The one that sits on the display for six months before getting sold? (After getting tried on a few times to check the fit before ordering online)

Geez, I don't know why they don't just let it take up space for free.

[TheRich]

All these opportunities for people in the bike business, but apparently nobody wants to step up to revolutionize the industry and show all those people just now easy it is.

Weird.

[robertbb]

If it's so easy, I assume you're doing it. What's your website?

[TobinHatesYou]

I can name pretty much any high end accessory and the margin will be ridiculous. The new $425 Giro Imperial shoe? $150 cost. The problem for bike shops however is the churn of selling low-end bicycles at almost loss-leader prices in hopes of attachments like helmets, clothing, flat kits, pumps, lights, cages, a bell, etc.

The one that sits on the display for six months before getting sold? (After getting tried on a few times to check the fit before ordering online)

Geez, I don't know why they don't just let it take up space for free.

I'm really unsure what you're arguing. At no point was I whining about margins...it's why I pointed out that most sales are churn. The claim was made that high-end stuff has lower margins...they really don't.

I was also pointing out that selling more expensive goods is attractive to the LBS because of static/fixed costs.

[bm0p700f]

For me an online retailer most sales are not churn. Every sale makes a profit. If it didn't I stop selling the goods. Loss leaders is a broken model. Ever wonder why online and retail shops are closing down, simple the business model is wrong.

[ultimobici]

I can name pretty much any high end accessory and the margin will be ridiculous. The new $425 Giro Imperial shoe? $150 cost. The problem for bike shops however is the churn of selling low-end bicycles at almost loss-leader prices in hopes of attachments like helmets, clothing, flat kits, pumps, lights, cages, a bell, etc.

The one that sits on the display for six months before getting sold? (After getting tried on a few times to check the fit before ordering online)

Geez, I don't know why they don't just let it take up space for free.

I'm really unsure what you're arguing. At no point was I whining about margins...it's why I pointed out that most sales are churn. The claim was made that high-end stuff has lower margins...they really don't.

I was also pointing out that selling more expensive goods is attractive to the LBS because of static/fixed costs.

I call BS. But please tell me where this margin paradise is. I’ve just checked the uk distributor’s site. Those shoes are £375 retail here. The margin is ⅔ of the margin a mid level shoe is. To range one model of shoe usually requires a size rim from 39 to 47 or 48 in a couple of colour options at least. That’s 18 skus if you only hold while sizes. On a shoe like that consumers expect choice of colour and size and will want half sizes too taking it up to a potential 30-35 shoes. Then you have to cater for some sizes being in demand more, so you double up on the 42-46 section adding in another 20 pairs. At your costing that’s $5700 on one model of shoes. Many will sit for months and end just serving as a size guide for online buyers with no intention of buying in store. Very often they end up being cleared for cost or less.


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[zefs]

Yeah but stores don't stock up on every size and color, but based on demand.

[TobinHatesYou]

Yeah but shops don't stock up on every size and color, but based on demand.

"We can order that for you."

One local shop, for example, generally does not stock half sizes even between 41-45.

[robertbb]

Yep. "We can order that for you".

.... Uh, thanks but I can order that for myself. And probably pay less than you pay wholesale, while getting it delivered to my door quicker that you can get it in from the local supplier.

The thing is, it's not just the bike industry that's broken. It's retail in general. Those that adapt will survive (if not prosper), those that don't will die.

If I was Campagnolo right now, in the face of what Shimano and SRAM are doing, I'd be considering a direct-to-consumer online-focused model. The OEM market is lost for them despite trying to break into it. Keep the company lean. If you're buying Campy, you know you want Campy. Buy from Campy.

[TobinHatesYou]

Yep. "We can order that for you".

.... Uh, thanks but I can order that for myself. And probably pay less than you pay wholesale, while getting it delivered to my door quicker that you can get it in from the local supplier.

The thing is, it's not just the bike industry that's broken. It's retail in general. Those that adapt will survive (if not prosper), those that don't will die.

If I was Campagnolo right now, in the face of what Shimano and SRAM are doing, I'd be considering a direct-to-consumer online-focused model. The OEM market is lost for them despite trying to break into it. Keep the company lean. If you're buying Campy, you know you want Campy. Buy from Campy.

Nah at least in the US, the bike industry continues to be broken. If you own a bike shop in the US and want to order Schwalbe, Continental or Vittoria tires, they will be more expensive through the correct distributors vs buying them from EU online shops.

While all of retail is feeling a squeeze in margins, it’s rare to see such a huge price differential between eCommerce prices and local retail.

[TonyM]

The US is also known to have distributors/ wholesalers that "control" the market.
Not only in the bike industry.

[TheRich]

If it's so easy, I assume you're doing it. What's your website?

I'm one of the people saying it's not.

[TobinHatesYou]

If it's so easy, I assume you're doing it. What's your website?

I'm one of the people saying it's not.

He was confused because nobody else said it was easy.

[TonyM]

The easiest added value for consumers is to offer a lower price...LOL.

The big whebshops offer lower prices, large assortment and easy shipment/return.

The LBS who want to compete have to have a better or different model.

That's for example the case for high end bike shops who have wealthy customers who wants the latest bikes, fully assembled, custom paint job, etc...and don't mind paying a premium price. Usually in the big cities.

It is also very inetresting to see that some manufacturers have now their own shops (Giant, Trek for example).

[robertbb]

I think we're all actually in violent agreement.

Anyway, it's not the bike industry that's broken and been disrupted - it's every industry.

As always, companies will adapt or die. Just as horse breeders and cart manufacturers did when rail was invented, just as shipping companies did when planes were invented, just as (some) stores did when the Internet was invented.

I loved the comment that was made above: companies going out of their way to manufacture in countries with cheap labour, yet doing their best to block consumers trying to cross regional boundaries in search of their own cost savings. Poor behaviour, and I won't be buying from said companies. As consumers the most powerful vote we have is with our wallets. Sadly, most people are dumb.