[Closed] Price fixing ITS GOT TO STOP

'Price isn't what something costs, it's what the market will bear' said a visionary many years ago.

Plenty of bargains out there IMHO, even on Yetis. If you want to buy from the US, you can. But with tax and shipping, there's not much in it anyway.

If you've got a bike, ride it. You can get something new when the sales are on.

Have you looked at [url= http://www.bundlebox.com/ ]Bundlebox[/url]? Got it when [url= http://www.guardian.co.uk/technology/2010/apr/01/ipad-apple-goes-on-sale ]reading about the ipad[/url] in the UK

Google isn't the only place you can buy bikes from. Try walking into a shop.

Do the same for motorbikes, and excluding preregistered bikes you will notice the same thing. Walk into a shop and it's a different matter.

Come out for a ride with me and the other shop shop owners, we will all turn up in our rolls royces's with our man servant driving it. We usually don't even have to carry a water bottle, pay someone to do that.

Seriously, if i could charge more for some bikes, to increase my margins i would. None of us in the industry are making millions. No-one is ripping you off. Things cost what they cost. Have you seen what rent/rates/wages/utilities etc. on a shop costs these days

I think he's complaining of the price fixing rather than the price per se

But as said above - speak to the shops & they'll often negotiate, they just don't want to rock the boat by advertising the fact

+1 what uplink said

There's a few things going on here:
1. They've spent a lot of money on building their brand and don't want it cheapened. Look at commencal / merlin for an example of what happens to the perceived value when someone's knocking then out cheap.
2. If retailers could sell bikes for whatever they wanted there would be no more LBS as we know them. It would be all Internet/mail order and Halfords. You'd hear different rants then - and I'd probably have to learn to fix my own bike.
3. Why on earth shouldn't a manufacturer decide how much their product should cost through a retailer? if they were selling it direct to you you might haggle and they might drop their price a bit (same as a retailer) but if you didn't like the price they went down to would you call in the OFT?

There is a simple answer if you aren't happy with retail less 10% - wait for one of the serial bike swappers on here to get one and then really bag a bargain!

Can't remember the last time I sold a bike full price, and with companies like CRC (Retail arm of Lapierre, incidentally) selling stuff cheaper than we can buy it at trade price then I can't see any price fixing happening soon.Real shame you don't want a Lapierre after your rant, i'm sure we could cut you a bit of a deal:)

Why on earth shouldn't a manufacturer decide how much their product should cost through a retailer?

Because it's illegal
They can only suggest a retail price

You need to take in to consideration supplier costs, exchange rates, Duty, VAT and shipping costs.

Product A costs $100 in the US, supplier charges $70 shipping is $5 if it's a US product the duty and tax is minimal*

Product A costs £87.99 in the UK, supplier charges $70 shipping is $30, Duty is 12%, VAT is 17.5% and the exchange rate is 1.5

so why can i get hope kit cheaper in the states than I can in the UK?

they just don't want to rock the boat by advertising the fact

Yep- the importer/distributor etc could get upset as they dont always give the product at the same prices to ALL shops and outlets. One retailer finds out, complains and it all gets muddy.

normal LBS are at the mercy of what the rep says. Buy more from him and you'll achieve better price breaks. Thats business.

Just as BlackHorse 0% finance costs some shops to operate whereas I know of one chain who are paid a commission on a sliding scale for selling the finance.

[i]so why can i get hope kit cheaper in the states than I can in the UK?[/i]

Exchange rate? Dealers prepared to sell product with lower margins?

Exchange rate? Dealers prepared to sell product with lower margins?

Or maybe there is only one exclusive channel where the product lands and is then distributed out to the market here.

Whereas in the states there is no third party distributor/wholesaler is there?

So one greedy mouth taken out of the equation.

Why on earth shouldn't a manufacturer decide how much their product should cost through a retailer?
Because it's illegal
They can only suggest a retail price

yep, hense the "should" cost. It isn't illegal for them to try and control how their product is sold. Like several people have said, just because a particular price is quoted doesn't mean you can't haggle.

how about the in lapierres case there is no need to discount because the suppliers cant keep up with demand ?

It's not price fixing, the prices are usually suggested retail prices & you've shown two very desirable bikes, which in the case of the Zesty are hard to come by as a dealer anyway, so why would they discount them, when they know they'll sell through anyway?

We know the manufacturers set the prices

A bit like cars being advertised by manufacturers at a price? Or newspapers - they've even got the price written on them.

(I know having run a shop for the last eight years)

If you owned one shop your buying power is alot less than someone who owns six shops or ships six times as many units as you.

You can argue down cost price based on the units you shift. Shift more and you can argue for a lower cost price no? Then you can either pass on a lower retail or sit on this for yourself.

Its business- smaller businesses have less power in the market place. Chicken and egg though- how do you sell more to achieve lower prices? Retailers in the States must a very cut-throat market place of horse traders compared...

Depends on the brand hora. Show a decent commitment to a brand & you'll get on a better rate, but some high end premium brands there are only two levels, basic trade & stockist & that's it regardless of how many shops you have or how many you sell.

argue - haha

many brands will tell you to do one if you start telling them what prices you want - if they are any good they will have a queue of dealers trying to get dealerships of that brand in the area anyway

so why can i get hope kit cheaper in the states than I can in the UK?

That'll be Gordon Browns fault for cheapening the exchange rate....

Established shops will only stock a certain amount though will they? Based on risk ..how many units will sell- enough to continue turnover at break even and above this level a year before the discounting starts (which could eat into their profit levels).

Therefore you could say to a Giant rep 'you know, your brand is good but [Insert other main stream brands here] is where its at this year according to the reviews and customer feedback. Giant rep says 'ok you sold ex units last year of ours- what price etc etc'. Some dealers will have buying power and lets not forget you only have soo much physical space in even big shops.....

Online is different..

no giant rep usually says pre order X and "if you want a good price you have to shift Y units and we will give you a refund of z%"

thus guaranteeing you shift their units over others.

another shop i worked at were worried about stock levels - so bought all the remaining stock of one brands particular bike for that year - 200 bikes or so !

Spoke to a friend in a bike shop he said they had to stock 70 models of a bike to be able to offer it in their range that's some outlay, the bike shops are doing their best but with the companies and the state of the pound what can they do. Just bite the bullet and buy an 09 model with a greatly discounted price. As with Lapierres shops can't get enough in so it's demand thats keeping prices up - you're not going to get a discounted zesty or spicy if their taking orders for 2 and 3 months ahead.

I bet the mechanics really arent THAT different to a shoe shop chain.

Think about it. Returns/defects, depth of brands and sized (sku's). The only difference being the range of prices and the bigger selection (of course) of accessories and workshop.

& little stools to put your foot on

companies like CRC (Retail arm of Lapierre, incidentally)

any more incorrect 'facts' you fancy sharing?

Then a wise buyer would look at the other brands to stock than Lapierre. After all, if the demand is THAT high your not going to sell that many in a year are you?

The cost of the display model *should* in theory just be its cost price when you sell it on as ex demo.
As mentioned, you'll need to shift a certain number of units to cover your break-even. Stocking/selling the likes of Lapierre's wont achieve that. So I'd avoid and go for the best hanging fruit (brand)

TBH if I owned a bikeshop I'd stick below the £700-mainly and royally milk customers for repairs, innertubes and repairs 😉

When worked in a bike shop tubes and repairs made up much more of the income than bike sales

depends on your business model and area i guess.

After all, if the demand is THAT high your not going to sell that many in a year are you?

that is truly spectacular logic. i am in awe.

Hmmm Sexshops. I doubt you'd get many returns but the vids would only have a shelf life of 5yrs unless you had a 'classic' section.

that is truly spectacular logic. i am in awe.

If supply is low due to its popularity throughout the UK- how can you:

A, make enough profit/margin as the supplier will be more bullish
B, Satisfy your demand sufficiently? You cant sell a concept or fresh air to a customer can you? If supply is low its as good as a no-sale isnt it?

Jam Bo btw I've worked in supplychain/retailer head office's in a previous life 😉

Or maybe there is only one exclusive channel where the product lands and is then distributed out to the market here.

CK being a prime example.

Rutland have some cheap 575 frames if you are small...

[url= http://www.rutlandcycling.com/8468/Yeti-575-Frame---Special-Offer.html ]http://www.rutlandcycling.com/8468/Yeti-575-Frame---Special-Offer.html[/url]

Markd - CRC own Hotlines who distribute Lapierre, which is what Coatesy was getting at I think. They don't sell them on the website for some reason but you can buy them at the CRC shop.

All i know is this.......I wanted a Lapierre Zesty 514 but.......

...demand is very high and stocks low to non-existent. I want to sell my Orange 5 first but then i went into a bike shop whilst on holiday. Get chatting to them and they confirm that supply is indeed non-existent. There's a 514 on the shop floor which looks lovely.

I return a couple of days later and buy it at full price. I don't even bother asking for discount. Why should i? They swapped the Conti tyres to the Maxxis tyres i prefer for free. They offered great advice and service. I want the bike and feel it's great value and they're a small independant shop so i'm not going to insult them by asking for a discount.

I have no idea what any of this really means. There will always be people who are prepared/able to pay the full price.

There will always be people who are prepared/able to pay the full price.

And often in the US you only find the true price at the till (taxes).

Plus European costs are higher (many countries vs one country), and you won't fnd many LBS workers with decent heathcare cover etc...

Go live in the US?

I have no idea what any of this really means

The LBS owner has missed an opportunity to charge over the SRP for the bike?

And often in the US you only find the true price at the till (taxes).

5% in some States as opposed to [s]17.5%[/s] 20% soon to here?

Aye but VAT in this country is included in the marked price. In the US, both taxes are added on at the till.

Most retailers operate at roughly the same margin, regardless of the product. The obvious one that doesn't is fashion, but they have huge write-downs at the end of a season so it does balance in the end.

The reason for this is pretty simple. High street retailers have similar costs regardless of the business, and a certain percentage is needed to cover these costs. Go much above that, and somebody will undercut you - much below and you're out of business.

A bike shop will try to hang on to RRP as hard as they can. It's ****ing mercenary, cheeky gits want to pay their staff and rent, rates, and VAT bill and...

A well ran LBS might get to the end of a year and have made enough profit to pay the owner a salary. It might be a half decent wedge (it probably isn't more than an average teacher), but nothing spectcular. And for that he's risked his house (probably) and lost plenty sleep worrying about the resposibility he has towards his staff finances too.

A strong brand like Lapierre is a god send to an LBS (are they a strong brand, really?) because it gives them a chance to actually achieve close to recommended retail and survive for another year.

I have never met a really wealthy bike shop owner (they'd make more money as reps).

I have never met a really wealthy bike shop owner

Likewise any Retailer. You get the smaller one-shop operations and you get the more successful multi-site/mail order retailers.

How did CRC become so huge? (Circa 5,000 orders a day). It wasn't by offering a cheap symbolic 50p cup of coffee to make their customers feel cosy about spending two grand+ a year just with them was it?

They are a business like any other at the end of the day. You make out that they are 'at the heart of the community' like a small village store. Sorry, its a business. If someone is scraping by year after year then they are in the wrong location or should work for someone else IMO.

Most retailers operate at roughly the same margin

I like small bikeshops however I dont like the 'support your LBS' stuff thats sprouted on here. We all have tough jobs, so our downtime spend is SMALLER. Dont lay the guilt.

Sorry, its a business. If someone is scraping by year after year then they are in the wrong location or should work for someone else IMO.

Hang on, who are you to say that? Maybe the LBS owner really enjoys what he does or maybe he bought a dream, stuck his mortgage on it, and now is stuck there because selling the business at break even isn't an option.

I agree that there's no room for pity here, I just absolutey disagree with some of the posts (and the OP) that somebody is taking the piss somewhere. FWIW, I do shop at my LBS, but spend a lot with Wiggle, CRC and other online retailers when it suits (stock availability or offers).

That is plain crazy to make that statement.

How did CRC become so huge? (Circa 5,000 orders a day). It wasn't by offering a cheap symbolic 50p cup of coffee to make their customers feel cosy about spending two grand+ a year just with them was it?

I imagine many LBS owners don't do it to make pocket fulls of cash, but rather enjoy looking after customers and talking about bikes, rides and so on. CRC is a great business, but it's hardly a people business.

I imagine many LBS owners don't do it to make pocket fulls of cash, but rather enjoy looking after customers and talking about bikes, rides and so on.

I imagine they go into owning a shop or stay in it hoping they will make money. No one would pay corporation tax, NI, rates and take an annual risk etc etc for a hobby. They do it to make money out of what they like doing.

For instance I love coffee so if I was mad enough I'd open a bestoke Cafe. If I the balls, start up money, found an opening, a customer base/location that could make it work.

CRC make money because they found an opening, sourcing goods and not always from the official distributors in the early days? Sometimes grey-market wasnt it? Then fronting the warranty returns themselves?

(This is from memory and might be wrong so dont sue me!)

I imagine they go into owning a shop or stay in it hoping they will make money. No one would pay corporation tax, NI, rates and take an annual risk etc etc for a hobby

Of course they go it to it hoping to make money: they have to make money to pay themselves a salary.

People always assume CRC are a low margin business. I'd happily wager a nice new pair of socks that CRC's gross profit is about the same as your LBS.

Some people running LBSs just aren't quite as mercenary as you Mark - you should go into recruitment 😉

Off out for ride.

At the end of the day lapierre's are hugely popular at the moment and there is high demand as many people have decided, just as this guy has, that it's the bike for them because of great reviews and styling. Demand is higher than stock availability and shops know they probably won't be able to replace the ones they sell so why sell at a lower price? They know that in a week or two someone else will be in and pay full whack. It's basic supply and demand economics.

The medium zesty 514 is sold out for the year and the 714 and 914 is sold out in every size already so if you want one chances are you're gonna have to pay full whack. If you want somehting discounted you may just have to go for a bike or brand in less demand, although I think yo uwon't want that.

Best idea is to find your local dealer for the brand you want and go in, tell them what you want, how you intend ot finance it and see what their best deal is rather than just looking at advertised prices online.

Bike shops make a net profit of 2% on average and I think many dealers now realise they need to protect margin wherever possible by not discounting items that they can easily sell, simple business so you'll just have to face facts as it's life.

There is plenty of competition on the market, if you don't like the price of a lapierre then buy a Trek or a Giant or a Spesh or an Orange or a.... you get my drift?

Some people running LBSs just aren't quite as mercenary as you Mark

Good point, more LBS's should run cycle schemes for disadvantaged local children, donate to a local cycle group to them or offer free training classes regularly to local disadvantaged children.

After all, bike shop owners are in the game for the love of cycling and dislike customers who thrown down a wad of cash on the counter and demand service.

Whilst that is a good thought Hora we tried to donate/offload some old bikes we had kicking around to a local charity. We were obviously going to service them and make sure they were safe.

Sadly that wasn't enough for the charity, they wanted an assessment and meeting. Precious time I could do without losing.

They suggested it would be better all round if we gave them some new bikes. WTF?

They suggested it would be better all round if we gave them some new bikes. WTF?

That is genuinely sad and crackers at the sametime 🙁

MarkyD, my mistake about CRC being Lapierre retail arm, should have read that they are Lapierre's importers retail arm.Early in the morning and busy etc.

I must admit my post above Ziggy's was sarcastic however Ziggy gave me Mea Culpa
[img] [/img]

People always assume CRC are a low margin business. I'd happily wager a nice new pair of socks that CRC's gross profit is about the same as your LBS.

I suspect their margins are probably a lot bigger than most LBSs.