I’ve been looking at a new bike and narrowed it down to one or two. Then was alerted of another supplier who were doing a deal on them, by a substantial margin. So I phoned my local dealer where I’d prefer to buy from to give them heads up and the chance to call the manufacturer and see if they can get the same deal to pass on to me and so get the business. If it was pennies I wouldn’t bother but this is well over £100 difference.

LBS has now just called me back to say they can’t do that price, but i won’t be able to get it from the other dealer either because the manufacturer doesn’t allow this level of discounting and will be refusing to supply them the bike if they don’t already have it in stock.

I’ve placed my order online and am awaiting a delivery confirmation. Nothing so far to suggest it won’t be.

Thoughts? Was I unreasonable in at least giving them a bite at it? Are they being unreasonable if they’ve exerted pressure on the manufacturer to scupper my deal? Are the manufacturer in danger of a call from the Competition and Markets authority if they have scuppered my purchase (ie do i call them and fill in the names)?

I’ve done this before with other purchases. One time the LBS offered me a similar deal where the difference was small enough for me to swallow, another time they gave in with good grace and admitted they couldn’t get close and that i should buy online. I’m on good terms with both those LBS’s still and use them at various times.

Anything along those lines is illegal as far as I’m aware. Manufacturers can give a Recommended Retail Price, but the key is the ‘Recommended’ part

Maybe the cheaper dealer is sourcing his stock from overseas? If the dealer you spoke to already has stock then its unlikely that the distributor can do anything to help them as they will have already been paid for.

Maybe the cheaper dealer is sourcing his stock from overseas?

I don’t think so – it’s a large reputable dealer with several outlets as well as a web presence. And the LBS told me that the manufacturer (maybe distributor) was going to cut their supply line so i may as well buy from them anyway.

Many bike companies are doing this now, Trek and Specialized certainly do. I used to work in a shop when Trek started doing it – you would get a letter round every year saying how much you could discount the outgoing model year’s bike by and that was the only discount they allowed you to do.

I doubted it was legal.

I think manufacturers might not be able to make people sell at the price they want but they can choose who to let sell their bikes so its almost the same thing.

I’d find a new LBS!

but they can choose who to let sell their bikes so its almost the same thing.

If a manufacturer sells to a shop at a price, and the shop’s prepared to work on lower margin to get more volume, why does it benefit the manufacturer to then cut supply to that shop? Other than to keep all their other shops sweet (who might not be happy to work at that margin)

At the cost of competition and us.

its a way of keeping brand value high, they dont want stuff being advertised cheap in case people think they are cheap or suddenly start waiting for reductions.

If a manufacturer sells to a shop at a price, and the shop’s prepared to work on lower margin to get more volume, why does it benefit the manufacturer to then cut supply to that shop? Other than to keep all their other shops sweet (who might not be happy to work at that margin)

At the cost of competition and us.

It not unheard of if “Shop A” is having cash flow issues and needs to turn some stock ASAP to get some money in they can sell at no margin, sometimes even a loss. It’s not a sustainable business practice, and all it does is reduce the perceived value of other dealers stock. So you can see why “Shop B” may be annoyed.

Not saying that’s what has happened in this case, maybe your local dealer just doesn’t like you! 😉

Are the manufacturer in danger of a call from the Competition and Markets authority if they have scuppered my purchase (ie do i call them and fill in the names)?

Please do this! They’re breaking the law by stopping people from pricing things as they feel fit bullying shops into chaining prices just sounds like they deserve to be slapped by the law… its there to help us as the consumer after all.

Specialized are renowned for this, I believe the message to dealers is “no discounts till Sept or risk your franchise” and I’ve heard this from a dealer, who offered 15% of the value in gift vouchers as a compromise.

I bet it’s hard for retailers nowadays, if their hand is forced on the sale price and everyone offers 0% finance how do they add value? I’ve seen a few who’ll offer to swap stems and bars etc as a sort of fitting service, but it can’t be cheap or easy to do that.

What we really need are a few large retailers selling bikes at low/below margin so that smaller shops can’t compete.

… why does it benefit the manufacturer to then cut supply to that shop?

Because when it comes to ordering stock for next year – those shops that played ball on the guide price kick up a stink about people undercutting and killing the market.

As in every industry there is always someone prepared to work for nothing and hurt the rest of the trade.

Specialized were at this 10 years ago when I purchased my Stumpy, shame to see nothing has changed.

The last time I got a new bike I struggled to find anything more than a £5 variance in price between all sales outlets.

This seems fairly clear.

herehttps://www.gov.uk/cartels-price-fixing/overview

It’s not price fixing, it’s retail price maintenance (a different type of anticompetitive activity that is -also- usually illegal) … If it happened the way the OP describes, if it could be proved etc etc…

mean while in the other corner OPEC and the farmers union.

I knew a shop that would do almost any discount to get a sale it would seem…”the largest in my area they would claim” often id have their customers trying to get me to price match(in a couple of different shops) on bikes that were seemingly being offered at ludicris prices …..

I just said no sorry i cant get close.

The shop doing the discounting is up the swanny leaving behind a trail of destruction – so the cashflow scenario above is likely. – the shops i worked in are still there and doing well.

Twenty years ago I was told that Marin/ATB sales would stop dealing with anyone discounting thier bikes.

This isn’t cartel pricing but sounds much more like a manufacturer employing a selective distribution system.

Personally, I applaud manufacturers who effectively support their bricks and mortar retailers. The Internet is forcing a race to the bottom where price is becoming the only consideration for many. I hate how so many independent book shops have closed with the growth of Amazon and don’t want to see the same happen with LBSs.

Personally, I applaud manufacturers who effectively support their bricks and mortar retailers.

They are both bricks and mortar retailers. If what the LBS said is true and they are going to cut the supply to the other shop as ‘punishment’ for not following the RRP, how is that supporting their retailers?

The Internet is forcing a race to the bottom where price is becoming the only consideration for many.

No, it’s not the only consideration. As I said in my OP, I’ve asked in the past and been offered a deal that wasn’t as good as the online but where I can swallow the difference precisely so i can have a relationship ongoing with my LBS. But well over £100 can’t be swallowed as easily. At least I gave them the chance was my thinking; instead i feel they’re trying to pull the rug out from under my feet.

If what the LBS said is true and they are going to cut the supply to the other shop as ‘punishment’ for not following the RRP, how is that supporting their retailers?

Maybe because they would like to still have some good dealers in 5-10 years, and know that no-one can run a proper shop for long on too-tight margins.

Dealer agreements are usually yearly – you can’t make a supplier keep supplying you, if they think that you’re harming the brand or other dealers, they just won’t renew the agreement. I doubt any manufacturers would do it on a whim.

Someone I know used to have a bike shop and got out of it partly because of this nonsense. Suppliers setting a price that the shop paid for frames and then offering the same frames direct to the public via their website for £400 less than the shop could buy them for, and refusing to let the shop purchase from this website under penalty of losing the franchise.
How this is good business sense in any way, shape or form I’ll never know.

Yeah there’s clearly retail price maintenance in the bike business, which is why discounts are usually word of mouth / face-to-face rather than advertised on the web.

I know at least one bike company turned a blind eye to one of its biggest dealers regularly selling bikes at a decent discount, as long as the price didn’t go online.

which is why discounts are usually word of mouth / face-to-face rather than advertised on the web.

That’s probably more because discounts are a sales technique – a discount on the normal price to encourage a sale. If the discount is advertised, then that becomes the new normal price, the shop can’t use the discount to encourage a sale, they need to offer even more.

the big brands don’t want their retailers routinely discounting their bikes and goods – and its not hard to be “out of stock” when that retailer wants to order more stock from the distributor

as long as a shop is savvy about doing a discount that is not publicly advertised then the brands won’t have a problem, or find out

this can be offering free bike fit, free servicing plan, an apparel offer (i.e. 10% of value of bike as free goods).

Remember that while the manufacturer or disti can’t legally tell others in the channel what to sell for, they can sell to them at whatever they like, and who is going to sell at a loss?

Also, as level a playing field as you think/hope it is, there is always someone who can get a better deal than everyone else.

That’s probably more because discounts are a sales technique – a discount on the normal price to encourage a sale.

You’re right Ben, “usually” was the wrong word really as I was thinking of places that have an unofficial policy to knock 15% or whatever off the price.

Which is the exception rather than the rule, for sure.

Don’t spesh also use playboy bunnies and exploit women restrict demo models to a limited number of outlets within a given area

I wanted to buy a bike off one LBS (don’t know the surname Tom so might be you [TE in H’hd?])but spesh didn’t give them demos. so felt obliged to buy off the shop that gave me the demo. Either way restricts competition. Poor show..

Never had a problem getting a “deal” on a spesh. Now Santa Cruz/jungle/stiff, that’s a different story.

Now Santa Cruz/jungle/stiff, that’s a different story.

You aren’t trying hard enough 😉

Really rather easy. If you don’t like it buy another bike. They are much of a muchness anyway.
Its appalling that a manufacture can’t decide its own prices. No one has to buy and its not as if its clean drinking water. Its a bloody luxury. Don’t people get the idea that market forces will come into play. If something sells at a stupidly high price then everyone is happy. Look at Rapha. If it doesn’t sell then the manufacturer either drops the price or doesn’t sell.
The whole idea of expecting a discount is wrong. If you are offered one or its a sale , fair enough but to expect one? Really.
If you don’t like something don’t buy it. If you don’t like the way a shop deals, don’t go there, its there shop and no ones business how they run it.
I refuse to buy anything have to order in. I want to inspect what I buy,( the actual item) especially if its expensive.
Yeah the sofa shops lose my business. I doubt they are worried.

This is old news. This was happening 20 years ago with Cannondale and other big brands. Pretty sure Trek were at it as was Oakley.

Although I think price maintenance is wrong, I don’t think discounting helps us as consumers long-term. We end up in a desperate race to the bottom and gain poorer service and less choice. Most of the time, I buy in physical shops when I can. I like building a good relationship with a shop that gives excellent service. I would rather buy a lower-end product from a great local shop than a top-line product from a bunch of shysters.

who is going to sell at a loss?

Money is time sensitive. Money today is worth more than the same amount tomorrow.

Not a great business model though

Don’t disagree tom. Sometimes it is a tactic to improve short term cash flow.

I would rather buy a lower-end product from a great local shop than a top-line product from a bunch of shysters.

I’d rather buy the right product from a local shop that deals fairly with its customers and I’m prepared to pay a premium for that.

Sadly – I’m not prepared to pay 15% extra on a bike when that amounts to a substantial sum. What I am prepared to pay – is called negotiating.

And I’m buggered if I’ll give them the chance to close that gap only to have them throw my fairness back at me by scuppering the deal.

Caveat – I don’t know if they have, I still haven’t heard from the shop if they can get hold of the bike from the distributor or if they’ve genuinely cut the supply. If they haven’t then the LBS lied to me about the supply being cut to make me think that their offer was the only deal in town.

I wouldn’t use the word shyster, but of the two shops I’ve spoken to today, one was very helpful and the other ‘less so’.

Oh I agree with that, it just seems that some expect that all the time.

The ‘no discounting’ rule would be more accurately described if it was a ‘no overt discounting’ rule. A manufacturer isn’t going to be thrilled if a shop takes out a double spread advert in MBUK saying 30% of all that company’s current model year bikes, however they won’t mind if the shop does a deal with a customer on a sale by sale basis (they wouldn’t necessarily even find out). The problem is some shop owners will hide behind the manufacturer, telling staff and customers that they aren’t allowed to discount, as they will lose the account.

I’m not sure I really care about the thrill level of a bike manufacturer…

Its appalling that a manufacture can’t decide its own prices.

A manufacturer is perfectly entitled to decide its own prices – it just can’t decide everyone else’s.