[Closed] Fox Forx - Massive mark up or clearance sale?

Bought OE, massive overstocks, get rid cheap and turn into cash.

They buy in such obscene quantities they are able to squeeze margins all the way down the chain.

I remember when Avid first did the Juicy Carbon brakes, they were £175 each, there were quantity discounts (fairly healthy ones) for buying 2, 4 and 8 units in the Fisher trade book, you could mix F/R and rotor sizes. CRC bought... 200 of each size.

With that sort of purchasing power they'll get far far better margins than 'normal'.

So... sort of. Prepared to wager a fair few people will have taken a cut on their margins to get to that price, but I imagine everyone will still take something home. That's not 'normal' though.

The mark up on things is obscene. I was looking at getting some Crank Bro's Candy 2's and the guy at the bike shop was showing me what was available in the catalogue they had. They bought them in for £30 and then the RRP was £70 😯

Destined for Original Equipment or distributor in another county... not used due to supply problems or not sold... offered to the market to reduce stock at which point CRC buy them and flog them on to us... pisses of the official distributor channels no end.

The mark up on things is obscene.

These comments always make me smile.. firstly that £70 rrp will include VAT, so to compare that to the trade price either add VAT to trade price or subtract it from rrp (and I know that VAT on buying is offset against VAT in rrp).

Also when we sold t-shirts and skiing gear, we were always laughed at as we used to multiply trade by 1.7, our suppliers would suggest between 2.35 and 3. So as an example an Animal tee we would but in at approx £8-9 (inc vat) and sell at £25 (inc vat).

Best not look at multipliers on sandwiches....

Thats the way it needs to be shop rates/bills wages etc.Life.

I wonder of the Fox forks sold how many are actually sold at anywhere near list price?

............are you sure they are kashima?

Thats the way it needs to be shop rates/bills wages etc.Life.

Exactly

Was it these ones..

[url= http://www.chainreactioncycles.com/Models.aspx?ModelID=94944 ]Fox Floats on CRC[/url]

They're not the kashmina coated stanchions..but that is a good price.

I reckon there cheap because there seems to be lots of tapered or 1.5in steerers
CRC always seem to do good deals on these but not 1 1/8in forks

I've got Floats and they are brilliant

Madisons have just announced that they were dropping the lines they carry from Easton-Bell, including Giro, due to the volume of grey products available.

Bit of an eye opener, though I'm not sure how whether it's a stand or just an acceptance of reality- they haven't dropped Shimano it seems.

I wonder of the Fox forks sold how many are actually sold at anywhere near list price?

You might be surprised. Speaking to a number of shops and it's apparent that CRC's ability to sell Fox forks is diminishing as Mojo apparently now won't deal with them. So they're constrained to getting OEM kit on a 'WIGIG' basis. I've noticed over the last few years that they have less availability of Fox forks.

The other thing is that there are quite a few 'shops' that have been dabbling in OEM as well lately. Those shops that have distributor relationships with bike brands have been quietly buying OE kit through their distributor channel and then selling in the shop, usually heavily discounted.

It's a smart way to do business in one sense and pretty dumb in another.

I bought a set and can confirm they are 150 mm tapered kashima float rlcs with 15mm thru axle 🙂

I bought a set and can confirm they are 150 mm tapered kashima float rlcs with 15mm thru axle

for £349.... complete and utter bargain

£338 with quidco 3% cashback 😉

They bought them in for £30 and then the RRP was £70

Even then, that's not a normal margin for parts unless you're buying bigger quantities. Then you add the VAT etc as said above.

Bike shop mark ups certainly aren't obscene compared to many industries!

.

Going slightly off topic a pal of mine bought what he thought was a kashima coated rp2 off crc last week the display picture showed a kashima rp23 the product arrived and it was one of their evolution factory series shocks so not even kashima coated and was just a rp2 he complained to crc and they refunded him £60 he paid in the end £100 for the shock. Refund was given in crc vouchers.

Hang about, so they're RLCS with a 15mm through axle.. not 9mm qr open bath like the description states? That's a bit of a steal isn't it.. they're what; £8-900 rrp?

Are CRC being a little coy about the description hoping that the main distributors wont notice?

not used due to supply problems or not sold... offered to the market to reduce stock at which point CRC buy them and flog them on to us... pisses of the official distributor channels no end.

The thing is, its the official distributor channels that make the most money by keeping the price up. RRP is just laughable on most products because if [i]anyone[/i] including official channels can reduce something by 50 odd percent in a sale, it means it was too expensive to start with.

I'm not against people making a living, but lets be honest the price of bike components have gone up by ridiculous amounts in the past 3 years. There would probably far less supply problems and stockpiles if the price was kept to a sensible level in the 1st place.

For some reason, bike products have gone from leisure items that anyone can access to premium lifestyle objects that provide a commentary on the kind of person you are. It all balls. The prices are artifically high - the sale price is probably closer to what the RRP should be.

[url= http://www.chainreactioncycles.com/Models.aspx?ModelID=94614 ]This was the ad![/url]

These are the forks but there was a 150mm option until they sold out (in a few hours). They were part of a 10% reducer style sale. RRP of forks is ridiculous!

if anyone including official channels can reduce something by 50 odd percent in a sale, it means it was too expensive to start with.

Not really. At 50% off it could still be being sold at less than you bought them for so as to limit the size of the loss. You're assuming everyone sells at a profit 100% of the time and that's not the case.

I get a lot of Adidas kit at cost price, due to having a family member who is pretty damn high up the Adidas food chain. You should see what they buy their products for if you think bike parts have a huge mark up.

£350 for some forks..... yup, bargain.

Yep they are defo Kashima!
I was watching the 10%s add up and ordered just after the price had been updated on the website.
If the rrp is £800+ then the mark up is obscene.
I wonder how much my lbs would buy a pair in at? 25% less than the rrp at a guess.
Just imagine how much profit Fox/SRAM etc are making?
But I guess the rrp must reflect the R&D costs and the ongoing product updates/branding etc.
Still I'm chuffed to bits 😆
Should of bought a few pairs and flogged 'em on Fleabay............

Part of the problem is that the marketing man ages every product so quickly in order to fool the gullible (myself included) into buying the latest iPad, Fox fork, 661 glove etc.
These annual updates rarely see a massive progress from the previous version!
What's next, 2013 Shimano chain?
That's consumerism I guess.

Just imagine how much profit Fox/SRAM etc are making?

I am willing to bet you it's around 9% EBIT on sales

Today I took delivery of some f100 rl's - just what I needed for an old school style orange R8 - £269 from je James, 2010 model, but perfect for my function 🙂

I too am a happy fork purchaser 🙂

@geetee1972
You reckon it's a low as 9% 😯
Who is making all the money then?
Too many links in the chain?

I've seen products on CRC that are a good bit cheaper than trade prices. How they do it, or why. I have no idea.

"I guess the rrp must reflect the R&D costs and the ongoing product updates/branding etc"
On the face of it, it would appear fox RRPs are based on Rockshox/everyone elses and then add £100, being more expensive 'must' make them betterer (Fox Doss?)
It would appear everyone else then has to up their RRP so they don't look devalued compared to fox (KS Lev?)

Or that could be tosh

@geetee1972
You reckon it's a low as 9%
Who is making all the money then?
Too many links in the chain?

No I reckon it could be as [i]high[/i] as 9%. They'd be doing well to make that given the nature of their business.

9% is a world average for all business of all types. It's a reasonable yardstick to use. Some businesses make a lot less, like Tesco or Sainsburys which will make about 1% maybe 2% (although on a very large number and their stock turn is so fast they can generate cash four times over before they have to pay their creditors). Others will make a lot more, like consulting and B2B services which might make upwards of 20%.

If a bicycle component manufacturer was making the average, 9%, I think they could be very pleased with that. We may never know as they are private held although They have been rumoured to be floating soon so we should then start to get published accounts and then we can find out for sure.

In answer to your question its a combination of the value chain and the discounted price you sometimes pay not necessarily being one that yields a profit for the seller. £300 is what I would expect the distributor to be buying a fork at that retails for £800-900 so if you've bought one for £340, there's barely any profit in it for anyone.

That is certainly will below even distributor cost price. They could be buying OE at that price.

I've seen products on CRC that are a good bit cheaper than trade prices. How they do it, or why. I have no idea.

They could like right now be running way too heavy on stock, hence blowing stuff out, quite often at less than cost, because on the stock line they have already turned a decent profit. It happens quite regularly.

Here's an example of Fox pricing btw... For the DOSS seatpost:

December 10, 2012 at 8:08 am

“Rarely do we have the opportunity to inform our customers of such good news regarding pricing. Many of our key markets have reported feedback that the cost of the product versus features is preventing consumers from choosing the DOSS over other market competitors. In an effort to overcome these objections, we have decided to reduce DOSS retail pricing to get the product out on the trails and being ridden.". $100 pricedrop.

Or in other words- "we can sell this for $100 less than we do now, we just thought people would pay this much"

Northwind : You get the mtbr email as well then?

Massive Volumes, OEM Stock (below normal trade Price), not s standard market product (IE downspecced OEM), very low sales overhead, no need to fit or deal with silly set up quetions, clearing stock covering cost + something etc.

It's a different business model. Both sides need to come together a bit.

Also the number of people buying aftermarket taper or 1.5" forks is still lower. There are never any decent bargains on 1 1/8th as they are still very popular.

somafunk - Member

Northwind : You get the mtbr email as well then?

Aye, just read it and thought of this thread.

The $100 happened with the DOSS here in Oz. More the fact that it's only got 3 positions and the lever is huge might be putting people off though.

Agree there is margin out there but using CRC sales as the base point is a bit wrong. Especially as no supplier is obliged to state if products are OEM etc. Having to use CRC for returns would put me off.

£338 with quidco 3% cashback

Great bargain - buy yourself a drink!

I just spent £250 on F120 Kashima upgrade and £300 on some second hand float 36s......and on the latter I thought I got a good deal! More fool me

Simple market economics - charge the maximum you can before the customers stop paying. When they stop, reduce the price until they come back...

Some of us will always buy 99% of our kit on the second hand market (except pads, cables, etc etc) and be just as happy without the latest ultra-damping fork technology (which, lets face it, makes zero impact on your riding ability... the advertisers just tell us it will)

(which, lets face it, makes zero impact on your riding ability

That's true but that's also like saying the weather conditions have zero impact on your riding ability, or the tyres you chose have zero impact on your riding ability.

Kit never has an impact on your riding ability. It only changes how quick you're able to ride with that ability.

The damping in modern forks and shocks is so good in general these days that the marginal difference between one product and the next is really rather small. But that's not the same as saying that it's not important. It's just that everyone has raised the bar so high you largely don't need to worry about it.

Perhaps 'ability' is probably the wrong word. Either way, as you say, the bar has been raised so high by all the players, the difference between the models is almost insignificant (in practise).

Credit due to the advertising department at Fox/RS/Bos...

Perhaps 'ability' is probably the wrong word.

I get what you're saying. I also think that people make choices for other reasons that improving their speed or performance. I'd also say that we as consumers have got very good at creating and defining characteristics among the products we buy. I'm not sure that the marketing departments of the big bike companies are terribly sophisticated, at least not in the grand scheme of product marketing, for example within FMCG. I think they do an OK job but I think that we are filling in a lot of blanks as consumers.

Some of us will always buy 99% of our kit on the second hand market (except pads, cables, etc etc) and be just as happy without the latest ultra-damping fork technology (which, lets face it, makes zero impact on your riding ability... the advertisers just tell us it will)

For me it's that I don't buy forks every year. The last new set was 2004. Each set is a massive improvement in damping control weight and stiffness. If I got a new bike every year I'd not be as amazed just poorer.