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Pricing Differentials; Store Vs Online

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Old 02-19-15, 07:06 PM
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Originally Posted by dwmckee
The 'Greedy LBS' owner probably clears $35k a year if he is lucky. I meant greedy, but in case of LBS - unsuccessful business behavior. The guy that runs my LBS does not even take a salary anymore. The seasonal business sits nearly idle for 6 months in winter with the only reduction from summer costs is to lay off the mechanics. If we want te LBS around in the next decade to keep us rolling, we have to consider maybe we need to support at least the good ones that do deserve our support. Paying an extra $3 for a set of gloves is a very small premium to me to ensure I have someone around to adjust my gears and BS with about the new DI2 systems and great old steel rides. Amen to that. What has become of 'relationships' in this online world? If I am in a pinch my LBS will fix my bike while I wait and even show up early for me so I can pick up something I need on the way to work. Try to get that from Performance Bike. And hanging out in my LBS is a pleasure I occasionally indulge in on a Saturday morning when I want to get out of the house for a while. When I do that I also pick up a set of tires I do not need or buy another new seat. They earn my money far more than Performance does, even if they are a couple of bucks more expensive. My relationship with LBS is non existent. Performance Bike is the only place I feel important as a customer. I guess It's just a personal luck.
^^^^^^^^^^^
I wonder if anyone knows any bicycle brick and mortar store that is doing great and growing in a nice rate each year. I'm not talking about big, national chain, or the ones that do mostly online sales... I believe that some in big cities or the ones on university campuses have their chance to grow.
I see a lot of talking about saving local stores, but I don't see us sharing names and good experience with them. Help your lbs to get more business using this forum. The best and the most flexible will survive.

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Old 02-19-15, 08:31 PM
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Originally Posted by dwmckee
The 'Greedy LBS' owner probably clears $35k a year if he is lucky. The guy that runs my LBS does not even take a salary anymore. The seasonal business sits nearly idle for 6 months in winter with the only reduction from summer costs is to lay off the mechanics...
The issue, if there is one, doesn't seem to be with local store owners but with a distribution system that doesn't seem to give them a level playing field. It seems a bit much to expect them to live on customers who will voluntarily pay more for exactly the same merchandise. Customers have their own financial concerns.
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Old 02-19-15, 10:18 PM
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Originally Posted by asmac
It seems a bit much to expect them to live on customers who will voluntarily pay more for exactly the same merchandise.
It is actually a much broader issue. I willingly pay a little more for some things not out of charity, but because I am paying for the total value a great bike shop brings to me. I have friends there. I buy lunch for the mechanic and have given him Christmas presents. They do me favors that they do not charge me for. I am doing what I can to be sure they are around when I need them later. It is not as simple as saving money on a single transaction.

I get lots of free advice and when I need something in a pinch they help me out too.
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Old 02-19-15, 10:22 PM
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Originally Posted by asmac
The issue, if there is one, doesn't seem to be with local store owners but with a distribution system that doesn't seem to give them a level playing field. It seems a bit much to expect them to live on customers who will voluntarily pay more for exactly the same merchandise. Customers have their own financial concerns.
I really can do nothing to fix the distribution system, but I can do what I can, which is bring most of my business to a great shop that has been good to me in return.
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Old 02-19-15, 10:27 PM
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Originally Posted by lopek77
^^^^^^^^^^^
My relationship with LBS is non existent. Performance Bike is the only place I feel important as a customer. I guess It's just a personal luck.
Do you shop at Walmart and eat at TGIFridays too?
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Old 02-19-15, 10:47 PM
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Originally Posted by dwmckee
Do you shop at Walmart and eat at TGIFridays too?
Smart shopper that knows how to cook delicious food
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Old 02-19-15, 11:03 PM
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Originally Posted by lopek77
^^^^^^^^^^^
I wonder if anyone knows any bicycle brick and mortar store that is doing great and growing in a nice rate each year. I'm not talking about big, national chain, or the ones that do mostly online sales... I believe that some in big cities or the ones on university campuses have their chance to grow.
I see a lot of talking about saving local stores, but I don't see us sharing names and good experience with them. Help your lbs to get more business using this forum. The best and the most flexible will survive.
There are a lot of great shops doing well, but for each of those there are 5 that are struggling. (Search for article on America's top 50 bike shops.) Some struggling because they lack business skills and some struggling because too many younger customers never even go in a bike shop because all they know is to buy everything online.

https://www.theactivetimes.com/50-bes...s-america-2014
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Old 02-19-15, 11:07 PM
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This one? @dwmckee
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Old 02-19-15, 11:09 PM
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Originally Posted by lopek77
That is it! I just added to my post above. It makes you want to just go and visit one of those shops...
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Old 02-19-15, 11:19 PM
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Yes! Amazing read! And the store I was talking about in previous posts is # 16 on that list lol
Damn...my lbs are terrible co paring to these...
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Old 02-20-15, 06:42 AM
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My LBS works with me on many items. I know what the online pricing is, He knows I know and he also knows what it is and and accepts that "A SALE" a better than "NO SALE" , his words. On those deals he throws them in on other orders so shipping is a non issue for him, and I usually pay with cash up front. That said , I am in there at least twice a month buying consumables at his pricing. Their is more than one type of customer, he knows this and adapts.
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Old 02-20-15, 07:35 AM
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And the store is......., located in........ Share it please!
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Old 02-23-15, 02:36 PM
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Here are some things to consider when shopping EU - USA...

https://www.bikeforums.net/road-cycli...-websites.html

PBK and Wiggle now using brokerages - with fees. Not so hot deal.
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Old 02-23-15, 03:16 PM
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Originally Posted by lopek77
I did a Ribble order last fall. Couple hundred? Free shipping, no hidden fees. And, NO VAT (which means US pricing may be lower than UK pricing).
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Old 03-02-15, 07:36 AM
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Originally Posted by lopek77
Design of Shimano distribution tree has no impact on cycling customer. That will not change prices in LBS, they will be high as always. Average customers just needs to find the cheapest distributor, which will be an online source.
It's a fact that buying power shape the price. Chain Reaction as the biggest online store in the world, is providing one of the lowest prices on the market. They still make money sending their items from Europe to USA, sometimes even offering free shipping.
What an average person doesn't know, is that the part which cost $50 at LBS, was sold to the distributor for $10, $20 bucks? Everything in between is a profit and/or cost for the next guy. If there is a direct sale Factory-Distributor/Dealer-End customer, there is a potential huge saving, which dealer can pocket it, or share with the customer. That's what we see with Chain Reaction Cycles store.
American distributors selling products to LBS, wanted to kill all the distribution channels that online stores were using. It was a big battle... Greedy LBS wanted to be better than greedy online stores...Business is business...It's all about making money. They dont care about customer....all the care is their bottom line. What they forgot is that it's the customer who will decide who will win the battle.
We know that online model is better, is growing fast, and people are price shopping. LBS has no chance to survive if their bottom line is based on selling stuff to a walk in customers...
You can provide the greatest customer service in the world. If you're not making money you won't be around long. You have to support your customers, dealers and OEM's or someone else will.

Poon
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Old 03-02-15, 08:14 AM
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According to The Gluskin Townley Group, an industry research firm: "2.8 million fewer adults who own a bicycle visited a U.S. bike shop in 2013 compared to 2011."
That was on average about 700 customers less each year for each shop... It's loss of tens of thousands of $ in potential sales... These people went somewhere...and the somewhere is online.
I wanted to buy Park Tool PCS-9 repair stand. Online price at LIS (Lovely Internet Store) - no tax and with free shipping - $139. LBS price - $160 + tax for a total of $170. It's a difference of $31.

If I ordered it today, the soonest this stand will be shipped to
LBS is 7 days. LIS (Amazon in that case) can get it to my doors in 2 days, and for $31 cheaper.... It's a no-brainer.

I found this stand in stock (open/demo item) at one of my LBS. I asked them if they are willing to match Amazons price on that stand to make a sale... their short answer was NO.

That reminds me little bit of convenience stores at gas stations around here. They buy Coca Cola 2 liter bottles at Costco for around $1.25 each, and sell them for $2.09-$2.50. Tell me why to buy there, if Walmart, ALDI or Meijer (biggest chain here) have that same Coca Cola for $0.99-$1. Is this the same idea as with LBS? Not quite...convenience store will have your Coca Cola...LBS most likely won't have your overpriced part in stock when you need it.
It's up to us to decide if we want to support our LBS stores, which have higher prices, most items are not in stock, and owners that are not willing to adjust to quickly changing market.
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Old 03-02-15, 08:31 AM
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Originally Posted by lopek77
According to The Gluskin Townley Group, an industry research firm: "2.8 million fewer adults who own a bicycle visited a U.S. bike shop in 2013 compared to 2011."
That was on average about 700 customers less each year for each shop... It's loss of tens of thousands of $ in potential sales... These people went somewhere...and the somewhere is online.
I wanted to buy Park Tool PCS-9 repair stand. Online price at LIS (Lovely Internet Store) - no tax and with free shipping - $139. LBS price - $160 + tax for a total of $170. It's a difference of $31.

If I ordered it today, the soonest this stand will be shipped to
LBS is 7 days. LIS (Amazon in that case) can get it to my doors in 2 days, and for $31 cheaper.... It's a no-brainer.

I found this stand in stock (open/demo item) at one of my LBS. I asked them if they are willing to match Amazons price on that stand to make a sale... their short answer was NO.

That reminds me little bit of convenience stores at gas stations around here. They buy Coca Cola 2 liter bottles at Costco for around $1.25 each, and sell them for $2.09-$2.50. Tell me why to buy there, if Walmart, ALDI or Meijer (biggest chain here) have that same Coca Cola for $0.99-$1. Is this the same idea as with LBS? Not quite...convenience store will have your Coca Cola...LBS most likely won't have your overpriced part in stock when you need it.
It's up to us to decide if we want to support our LBS stores, which have higher prices, most items are not in stock, and owners that are not willing to adjust to quickly changing market.
The real winners, other than the online distributors, are the tool companies. Park is doing well, and so are Pedro's and the importers of cheaper tools from the Far East. People are learning to work on their own bikes again and becoming more self-sufficient. There is more to it than just the cost in dollars that the LBS squeezes out of your wallet, but the cost in time and effort to haul a bike to the LBS in your automobile, and then return in a number of days to come pick it back up again (if it is even ready) Being able to wrench on your own bikes frees a bike owner from the tyranny of the local bike shop.

Newer bikes are getting easier and easier to work on too. Threadless headsets, 2-piece cranksets, and finally electronic shifting will take a LOT of the fiddling out of not just high-end road bikes but also will be showing up on more and more bikes of all types and price points. Once they start producing that stuff in economies of scale the costs will come down to even lower price points than mechanical shifting, and the labor to set it up will be less too. Once it is set up, it'll say set up and not need nearly as much adjustments as mechanical. Remember carburetors on cars? Di2 and other electronic shifting systems will displace mechanical cables and complex & finicky clockwork shifters soon. In 10 years time you might not be able to find many new bikes with mechanical cable-operated shifters.
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Old 03-02-15, 08:35 AM
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@Amesja, do you expect to see cable-less electronic brakes, too? Running the cables is one thing I don't enjoy doing.
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Old 03-02-15, 08:43 AM
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Originally Posted by lopek77
This can't be right, Kraynick's bike shop didn't make the list.
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Old 03-02-15, 08:58 AM
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Originally Posted by edthesped
This can't be right, Kraynick's bike shop didn't make the list.


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Old 03-02-15, 09:03 AM
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This would be a management nightmare but is an interesting model for LBS survival:
Velo Cult in Portland OR has a stage for events, a really good selection of craft beers, a theater downstairs and is a best vintage bike museum I have ever seen.
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Old 03-02-15, 09:21 AM
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Originally Posted by noglider
@Amesja, do you expect to see cable-less electronic brakes, too? Running the cables is one thing I don't enjoy doing.
No, but the degree of accuracy and precision on a brake cable is nothing at all like what is necessary for indexed shift cables. If the indexing on a shifter gets off even a millimeter the shifting goes to heck. Most consumers have no clue how to adjust their indexing and tuning their shifters is a black art full of voodoo. And when the shifter itself starts to age and get full of grit and the grease dries up then all sorts of issues develop. Brifters are extremely complicated clockwork mechanisms, nearly as bad as old-style wristwatches. You don't see many watches still made with mechanical movements. Quartz movements with tiny motors and a battery have replaced springs and the rotating "balance wheel" escarpment. Only really expensive high-end watches still use this technology. You can't make a mechanical watch and compete with a $10-20 quartz watch these days. Even the "cheapo chinese" automatic-winding watches start at the $100-120 range and go up from there.

But I think that disc brakes will eventually evolve to make even the chores of maintaining a finicky rim brake caliper obsolete with the consumer bike market. I'm not so sure about hydraulics though. I think that cable/hydraulic hybrids will be the best of both worlds with the cable adjustment not being so finicky as hydraulics yet still having a hydraulic circuit within the caliper itself to provide the mechanical advantage. But the master and slave cylinders will be an all in one contained closed-loop system with mechanical linkage to the outside world for the cable to attach to. I could be wrong and some great technological advances will make hydraulic cabling to the lever become cheap, light, easy to work on, and dependable. But I'm not seeing it. Dealing with a simple wire in a housing isn't a burden in a brake system. Automatic brake adjusters have come and gone (remember the automatic-adjusting mechanisms on the Raleigh Sports at the end?) but people have been dealing with cable-operated brakes on bicycles for a hundred years and I think they will continue for a long time until "fly by wire" electric brakes are perfected. I don't see that any time soon being an economical or robust system.

But for shifting? I see electronic taking over very soon. With indexing, cables pretty much such as far as complexity, longevity, user-serviceability, and dependability. Once the price comes down (and it always comes down with volume production) it'll be just like carburetors and fuel injection. The entire industry on the production end is going to flip almost overnight.
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Old 03-02-15, 10:20 AM
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Interesting perspectives, @Amesja, and they may prove to work out as you predict.
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Old 03-02-15, 10:23 AM
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OMG, that Kraynick's place makes me incredibly uncomfortable just to watch. I can't (personally) imagine trying to work in an environment like that.

Lots of comments that Internet supplies are "No Tax". They aren't, you are just (legally speaking) evading the tax at your end, at least in my state, where the individual tax return has a box to enter use taxes on those purchases. It's a terrible state of affairs that big internet retailers - who already enjoy the advantages of volume pricing - get handed an automatic ~5% advantage over the Mom & Pops. I'm all for imposing collection requirements on the Internet giants.
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Old 03-02-15, 10:25 AM
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I think even more interesting changes will come about when 3D printing really starts to become a thing. Not just cheesy plastic parts, but actually printing metal that is suitable for use as real bike parts and even tools. Tools are bone-simple objects. Why go to your LBS to buy stuff, or even order it online when you can print your own? imagine being able to scan or download a scan a part/tool and print an exact duplicate? That's a few years off I bet. But with some plastic parts it could be done now. I'd like to make a model of an all-plastic Morningstar Freehub Buddy. You'd just have to add a couple of o-rings from a hardware store. It's an unobtanium item right now as the estate hasn't yet started licensing his tools for remanufacturing. Pedro's would be a company that should market that tool. But I would love to be able to print a plastic one.

That's when the real IP wars will begin.

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