Price fixing ITS GOT TO STOP

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  • Price fixing ITS GOT TO STOP
  • I'm sure I'm not the only one and this may have something to do with the fact that I can't afford a new bike but is anyone else getting pissed off when they put a bike in to google search for shopping and all the bikes are the same price? For example!!

    http://www.google.co.uk/products?q=lapierre+zesty+514&hl=en&aq=1&oq=lapierre+ze

    or

    http://www.google.co.uk/products?q=yeti+575+race&hl=en&aq=f

    Why is it £700 more expensive in the UK than in the states?

    We know the manufacturers set the prices.
    We know that if retailers sell more than 10% below the RRP they will not to be given more stock
    We know that almost every bike manufacturer is doing it
    Yet we put up with it because we enjoy our sport, I just want to buy the best bike I can for a fair price and without competition we are just getting ripped off.

    I'm no lawyer, but I'm sure someone out there must love getting out on to the trails at the weekend but practices law or works for the competition commision during the week. Lets do something about this and start seeing a bit of fair trade…

    If not then lets just carry on paying over the top and do the british thing and get shafted with dignity

    RANT OVER I'M GOING TO BED

    DON'T EVEN WANT A LAPIERRE ANYWAY (WOULDN'T TURN DOWN A YETI THOUGH)

    CHRIS

    ScottChegg
    Member

    '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.

    Travis
    Member

    Have you looked at Bundlebox? Got it when reading about the ipad in the UK

    solamanda
    Member

    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.

    davefarmer
    Member

    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

    uplink
    Member

    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

    Premier Icon Bregante
    Subscriber

    +1 what uplink said

    bol
    Member

    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!

    coatesy
    Member

    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:)

    uplink
    Member

    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

    Joxster
    Member

    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

    Premier Icon jam bo
    Subscriber

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

    hora
    Member

    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.

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

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

    hora
    Member

    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.

    bol
    Member

    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.

    trail_rat
    Member

    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

    How do you 'know' that? it's news to me!
    Margins on high end bikes & frames isn't as great as many people think (I know having run a shop for the last eight years)
    What do you expect dealers to do? Huge discounts & sell at a loss just to keep you happy?

    aP
    Member

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

    hora
    Member

    (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.

    trail_rat
    Member

    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

    billybob
    Member

    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….

    hora
    Member

    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..

    trail_rat
    Member

    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 !

    ash.addy
    Member

    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.

    hora
    Member

    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.

    uplink
    Member

    & little stools to put your foot on

    markd
    Member

    companies like CRC (Retail arm of Lapierre, incidentally)

    any more incorrect 'facts' you fancy sharing?

    hora
    Member

    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)

    hora
    Member

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

    thepodge
    Member

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

    trail_rat
    Member

    depends on your business model and area i guess.

    Premier Icon jam bo
    Subscriber

    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.

    hora
    Member

    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 😉

    Dibbs
    Member

    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.

    Premier Icon chakaping
    Subscriber

    Rutland have some cheap 575 frames if you are small…

    http://www.rutlandcycling.com/8468/Yeti-575-Frame—Special-Offer.html

    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.

    nickegg
    Member

    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.

    hora
    Member

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

    b r
    Member

    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?

    uplink
    Member

    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?

    hora
    Member

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

    5% in some States as opposed to 17.5% 20% soon to here?

    druidh
    Member

    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 **** 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).

    hora
    Member

    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

    That is plain crazy to make that statement.

    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.

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