Shimano prices slashed in US

From our front page
http://singletrackworld.com/wp-content/uploads/2016/02/shimano-announce-huge-price-drops-in-us/

The implications and reasons are pretty complex but it could have a serious knock on affect around the industry. What do you reckon?

Interesting, although when did anyone pay more than 60% of the RRP anyway? So a 40% cut might just mean you can pick up an XT mech in your LBS at the same price as CRC/wiggle?

Is this a new XT, doesn’t look familiar (and looks prototype with no threads?)

A large reduction in RRP should be accompanied by a rebate or buy-back programme to support retailers.

But if Shimano (and others) can afford to reduce RRP then it suggests margins are currently handsome. Perhaps we’ll see less R&D spend as a result but many would suggest that the current rate of change isn’t sustainable anyway.

My guess is that this is all about regaining market share in the US market. SRAM were hammering them at the high end as US consumers have jumped on the 1x wagon on the mtb/cx side. SRAM have just released wireless for the road side, which could be a big seller.

The current low energy and shipping prices, will allow Shimano some leeway in reducing prices at the high end.

surely this is due due to lower energy + material prices.

I remember shimano stuff going up alot I think just after the recession ie 2009

any reduction in rrp here will be offset by the pounds decline vs the yen

I hope this gives a bit of competitiveness back to the LBS, when I can order a part cheaper and get it quicker from online, than my LBS can through shimano/Madison. Something isn’t right!

I know when I’ve looked into buying Shimano bits in the US it’s always been more expensive than from the likes of CRC over here, so the reasoning of it being an opportunity to tackle CRC/Bike-Discount selling to the US sounds like it has at least a bit of truth to it. This is even on the big US mail order places who do everything else much cheaper than over here.

There’s a US based road forum I often browse whilst at work. Seems most people on there buy their Shimano stuff from Ribble, Wiggle or Merlin. Same goes for Campag stuff aswell.

Last year I was given some examples of the prices Madison pay when buying from Shimano. It would upset you.

I recall a swingeing increase in Shimano parts here in 2009, too. SLX cranks went from £89.99 to £159.99 with very little warning, the increase was blamed on currency fluctuations.

I’ve no doubt that margins are very good, but it’s telling that STW’s article highlights unsold 2015 stock. Remember that the forthcoming 2016 XT caused a lot of buyers to hold off buying new components, plus SRAM seem to have an absolute stranglehold of the OEM market – every single 2015 1×11 bike and most 2×10 bikes came with SRAM kit.

Another factor here is that SRAM have been ahead of the curve ever since 2×10 became commonplace and Shimano have been playing catch up. The fact that SRAM can do a great OEM deal to kit out a bike in cranks, forks, a rear shock, brakes and groupset with desirable kit has really hurt Shimano’s market share.

Next time you look at a bike’s spec, chances are that if it has SRAM forks then it’ll come with SRAM gears, suspension and groupset. Likewise, if it’s supplied with Fox suspension then the groupset is likely to be Shimano.

Given the rapid progress of SRAM in both retail and OEM markets It’s not a great leap to imagine that overproduction of 2015 kit in 2014 has led to the glut of Shimano stuff on the market…

Can’t help but feel that Shimano missed a trick by not buying out Marzocchi and offering a rival one stop shop to SRAM…

(disclaimer – I could also be talking complete bollix of course).

I recall a swingeing increase in Shimano parts here in 2009, too

it was the tsunami was it not?, affected camera prices as well. I was able to sell some of my gear second hsnd for the price I paid new.

The problem is the U.K. What other industry is there where customers can buy products for the same or less than we can? We’ve ordered pedals from Chain Reaction and Wiggle because they were cheaper than from Shimano,” he added.

Try the German sites!!!
Given that pretty much every other bike, frame and component is significantly cheaper in the US, it’s hard to feel sorry for them.

As for OEM, I don’t think Fox are doing shimano any favours by being so expensive leaving SRAM/Rockshox able to offer the entire package at very good costs due to the economies of scale. I had always previously been a fox/shimano user and now have XX1 and pikes/monarch on my main bike. Shimano would do well to take on rockshox I reckon.

Shimano/Fox/Marzoochi, is relation to SRAM/rockshox for fitting kits looks a bit fairer though doesn’t it.

Glut of stock perhaps? Due to less people buying new bikes?

RE. UK shimano prices, despite having a Madison account I’ve bought my last 2 XT drive chains from Germany as they were cheaper 😐

Shimano could consider buying Fox. But remember mtbs only make up a portion of the total number of bikes sold and Shimano have a much bigger presence in the road market than the others. However, with SRAM Etap arriving that might be about to change, if it works as advertised.

I would refer you to a comment in yesterday’s top news article

40% of CRC’s business now comes from outside the EU.

There’s another NI dealer that we used to jokingly refer to as “Dropkick Murphys” whenever they put in a big order for our stuff.

Shimano buy Fox?

You do know that Fox don’t just make mountain bike forks, right? I know Shimano don’t just make bike components, but they aren’t going to go in to specialist automotive components!

http://www.fox-defense.com/ just what my need to get to the river with your shimano fishing gear

Fox pulled in revenue of $235.9 million in 2012.
Shimano had revenue of $2.8 BILLION in 2013.
I think it’s fair to say that if Fox were for sale, Shimano could afford to buy it. Of course, they have zero interest in making shocks for buggies and stuff, but then Fox did only buy the bike suspension bit of Marz.

China’s raw material demand reduces = cheaper metal commodities = cheaper consumer products

Someone needs to move that crank arm off that scalextric track.

China’s raw material demand reduces = cheaper metal commodities = cheaper consumer products

True, but the raw material cost of a mech is about 10p (that’s an actual cost, not made up).

Yes when you make 100,000,000 mechs it makes a difference to your bottom line if that’s 10p or 11p, but it doesn’t affect the consumer.

Yes! Looks like Shimano have listened to my request…

dear shimano can we please have silver cranks again

…unless its not finished and they intend to apply the dreaded paint..?

Yeah buy Fox and split it into 2 companies bike and automotive, then flog the latter. It would be easily done for a company of Shimano’s size, but I suspect it isn’t really on their radar.

Mike Jacoubowsky? Wasn’t he the green monster from monsters Inc?

The problem is the U.K. What other industry is there where customers can buy products for the same or less than we can? We’ve ordered pedals from Chain Reaction and Wiggle because they were cheaper than from Shimano,”

My heart bleeds purple piss mate. Come back when it’s cheaper to fly to the here buy a bike and bring it back. And God help him when he realises it’d be even cheaper if he’d gone to bike discount.

thisisnotaspoon said:

but it doesn’t affect the consumer.

whilst my post above might be too simplistic, and my understanding of macroeconomics weak, changes in raw materials costs and consumer prices always converge.
Shimano’s reasons for cutting prices are probably multiple – production costs (materials/energy/labour), supply, demand, competition, etc.

There was/is an interesting bit on the history of suntour on their wikipedia page. Basically back in the 60’s they were market (technological) leaders for bicycle drivetrains, but they sold at cost + profit margin. Whereas shimano and campag, who at that time lagged a little behind product wise, sold at what they thought the market could bear. Eventually this led to shimano and campag being seen as quality products against suntour being seen as cheap tat, which pretty much lead to their downfall.

this led to shimano and campag being seen as quality products against suntour being seen as cheap tat

Interesting, that did kind of seem to be the actuality when I started MTBing in the late 1980s to be fair.

It’s strange because I was trying to buy a 70’s/80’s suntour GT mech for my tourer recently, they’re like little forged bits of jewelry, not like the stuff Shimano literally put a sticker on at the same time.

There’s one U-brake in particular that I’m thinking of here.

I like that the US dealer blames the UK and CRC, while in the UK we’re ordering from bike-discount.de

Globalisation – with the web we’re seeing a normalisation of prices and it’s simply not possible to set artificially high RRPs in the US to ‘protect’ dealer margins when most most US states don’t have import taxes.

Last year I was given some examples of the prices Madison pay when buying from Shimano. It would upset you.

this is true. most online prices for shimano goods equates to low stockage trade price minus vat.

however the margins I think they’re referring to aren’t between trade and LBS price, but more between cost price and trade price.

Prices slashed may have something to do with this news!

http://www.pinkbike.com/news/sram-announces-nx-1×11-drivetrain-2016.html

That’s an impressively heavy cassette

Eventually this led to shimano and campag being seen as quality products against suntour being seen as cheap tat, which pretty much lead to their downfall.

Shimano indexing and STI caused their downfall. Same with Campag. The speed of Shimano’s innovation in the early 90’s blew everyone else away.

I won a Rockhopper Comp in a competition back in 1992 that came with a suntour group set including very nice thumbshifters, from what i remember it was very nicely forged and very shiny compared to the shimano group set on my Marin Eldrige Grade at the time

When I was bike mad in the early 90’s Suntour was very well regarded. They just couldn’t keep pace from their and that was that.

Hope it makes the LBS more competitive but from what I have heard, and was said earlier, they get it tough trying to compete with CRC with the Madison prices.

I’m not fussed where it comes from but having given SRAM another chance and had another failure after 2 days riding, I’ll stick with shimano. Admittedly not top notch kit but their x5 gear is absolutely dreadful in comparison to the equivalent shimano.

Some years back I was privvy to Madison’s “landed” price for xtr compared to trade (wholesale) and retail pricing. Was shocked to say the least.

Factories don’t care as long as factory is being paid and is busy producing product.

I’ve heard that aftermarket sales is no more than 5% of shimano sales with the remainder being OE customers in bike assembly plants

The rise of b2c online retailers with cash purchasing power has changed the game, without pricing parity small bricks and mortar retailers have no incentive to stock shimano beyond low value service parts

Even chain retailers who operate on bank finance for restocking (and lack cash) are struggling to make any margin when price matching against the online retailer giants

One retailer I worked for regularly placed £40’000 cash order with Dutch agent for shimano getting access to grey stock to allow price matching whilst making a functional margin