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  1. #1
    Senior Member CCFISH81's Avatar
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    Closing Parts at Cost thread.

    Yesterday in the road bike forums a member boasted that he had a catalog that listed various bike parts, and complete bikes at dealer costs. The member then went on to list a few various parts at dealer cost. Soon the thread was edited for content, then locked. The reason was "For violating trust" or some variation of that.

    How does everyone feel about closing that thread. I thought keeping a thread like that open could help local LBS more than hurt them. Suppose we found out there was only a 25% markup on products, so we should support them because they are as offering as fair a deal as reasonably possible.

    When did it become the purpose of bike forums to protect the business model of local bike shops? I am not advocating never closing threads, or creating threads that could potentially be harmful to sponsors, I am merely trying to understand how the forum feels about closing threads such as those.

  2. #2
    Senior Member Michigander's Avatar
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    I don't know anything about the thread, but what I will say is that I used to work for a shop, and things like cables have a tendency to be marked up 10 x past their cost. Other things like tubes and camelback bladders might be 3x their cost. The web is the place to buy bike stuff, outside of possibly a new bike.
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  3. #3
    Legs of Steel chrisvu05's Avatar
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    Quote Originally Posted by Michigander
    I don't know anything about the thread, but what I will say is that I used to work for a shop, and things like cables have a tendency to be marked up 10 x past their cost. Other things like tubes and camelback bladders might be 3x their cost. The web is the place to buy bike stuff, outside of possibly a new bike.
    +1...25% mark up would be super...trust me...it is much more than that in all cases!

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    Upgrading my engine DXchulo's Avatar
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    I think the idea was that the OP was publishing "inside information" that he could have gotten fired for posting. Kind of like someone posting KFC's secret recipe. Bad example, but you get the idea.

    Every business marks up prices. I worked at Arby's in high school and it's crazy how little it costs them to buy things like bread, fries, etc. If I remember correctly, an entire roast, which provides enough meat for hundreds of sandwiches, cost them less than the price of some of the sandwiches on sale at the time.
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  5. #5
    Senior Member Michigander's Avatar
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    Thing is, they gotta make money. Shops pay their employees lower end wages, and the owners certainly aren't on any top wealth lists. For penny pinching, I go web all the way. Or for when I want good parts my slow to order LBS won't have for litteraly 2 months. But I do like to support them occasionaly when I can. Good for the economy.
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  6. #6
    Hey guyz? Guyz? Wait up!! Siu Blue Wind's Avatar
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    Here is the thread you are talking about.
    I've got a 850 page porno on my lap

    I think it WAS a betrayal of trust, as stated by the mod who closed it. I'm glad that he did.

    That catalog was privvy to dealers only. That dealer allowed that person to have the opportunity to recieve parts at wholesale, at his discretion. When he put on the net how much he can get the parts for, that violated the trust the person put forth in him. Not only that but it exposes how much LBS's make from retail. If one is concerned about price, then shop around. If the LBS is selling it for less, then it's obvious he is making less on that particular part. SHOP AROUND.

    You must realize that LBS don't make that much from selling bikes. It's service and parts that keep them alive. It is their business and their discretion who gets what info. It's nobody else's business. ESPECIALLY the public.

    Keep in mind how much it costs to run a shop. Rent goes by square foot of floor space - there is electricity to pay for. Employees, insurance. They have losses due to theft. That goes with any business. And to make $1.00 off of a tube? How many tubes do you need to sell? Bikes themselves have hardly any mark up. How much is knowledge worth??? Are you willing to pay for someones expertise??

    It may not be the purpose of Bike Forums to protect businesses but it is their forum to run with good morals. If those prices were meant to be public, the website WOULD NOT say "dealers only".

    Another note to make would be that since he's posted that I am sure someone must have asked for a hook up. So how much do LBS's make if he were to hook up eveyone on BF?? I know there are a few of us here on Foo that have advantages...we are a cycling community for gosh sakes. And I find it particularly rude to ask for discounts. It becomes a thing where someone takes advantage of it and turns around and sells the parts on ebay. I've seen it happen here already.

    So yes, I am VERY glad it was shut down. It was rude and that person took advantage of whomever gave him the password. Besides, what was the point of that thread anyway, to brag?? Make the rest of us feel like we get ripped off?

    I will buy from my LBS to support them. If it is something I cannot get easlily, I have an alternate means. And that alternate means I WILL NOT take advantage of.
    Last edited by Siu Blue Wind; 06-27-07 at 07:55 PM.

  7. #7
    phony collective progress x136's Avatar
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    I caught a glance at some of the shop prices in the QBP book when I was selecting parts for my bike. I was kind of surprised at the profit the bike shop is able to make, and to be honest, I don't mind one bit. The prices I paid still met or beat most of the prices I saw for things online.

    I got a good price, while the shop is making enough to stay in business. Works for me.

  8. #8
    Unique Vintage Steel cuda2k's Avatar
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    A few of the mods around here work in shops (and we have more than a few members who are shop workers and/or owners). They are aware of the agreements that are made between distributors and the tread was a direct violation of those agreements, and the trust between the member and the person who gave him the catalog. For those reasons the moderators felt there was no other option but to remove the information from the thread. Simple as that.

  9. #9
    Senior Member CCFISH81's Avatar
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    Quote Originally Posted by Siu Blue Wind
    I think it WAS a betrayal of trust, as stated by the mod who closed it. I'm glad that he did.

    That catalog was privvy to dealers only. That dealer allowed that person to have the opportunity to recieve parts at wholesale, at his discretion. When he put on the net how much he can get the parts for, that violated the trust the person put forth in him. Not only that but it exposes how much LBS's make from retail. If one is concerned about price, then shop around. If the LBS is selling it for less, then it's obvious he is making less on that particular part. SHOP AROUND.

    You must realize that LBS don't make that much from selling bikes. It's service and parts that keep them alive. It is their business and their discretion who gets what info. It's nobody else's business. ESPECIALLY the public.

    I will buy from my LBS to support them. If it is something I cannot get easlily, I have an alternate means. And that alternate means I WILL NOT take advantage of.

    Knowing the markup on a product does not tell you "how much money" a shop makes on a product, it fails to include the cost of overhead, labor, inventory carrying costs, taxes, and a myriad of other costs. So claiming that knowing how much the dealer cost of a bike part is somehow hurting their private business model is rediculous. Its akin to knowing how much a truck full of concrete costs when it comes to building swimming pools. There are just too many other variables.

    Often times, the most loyal advocates for LBS and their "proprietary knowledge" love to get equipment at dealer cost,, which contributes little to nothing to the operating revenue of the shop.

    My point is, it really doesn't matter if the world knows what the markup is on products. Anyone with an eighth grade education should understand the basics of retail sales. So closing the thread was basically keeping the uninformed ignorant and/or protecting the struggling business model of the LBS.

  10. #10
    Senior Member CCFISH81's Avatar
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    Quote Originally Posted by cuda2k
    A few of the mods around here work in shops (and we have more than a few members who are shop workers and/or owners). They are aware of the agreements that are made between distributors and the tread was a direct violation of those agreements, and the trust between the member and the person who gave him the catalog. For those reasons the moderators felt there was no other option but to remove the information from the thread. Simple as that.
    This is a very simple and direct answer. Not stirring the trouble pot too much, but when people post, "Hey I just got my new Zipps, sponsored by the LBS at cost, I only paid 1K for them!!!!" Will we close those threads?

    I don't really care of have an opinion either way, and I understand the shops do not believe it is in their interest to have that information floating around. However, maybe I am missing the point, do the shops not want this info floating around because they believe it will hurt sales, or do they not want to be the leak of the information that could result in loss of dealer status?

  11. #11
    phony collective progress x136's Avatar
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    Quote Originally Posted by CCFISH81
    My point is, it really doesn't matter if the world knows what the markup is on products. Anyone with an eighth grade education should understand the basics of retail sales.
    Ah, I do believe you overestimate the general buying public.

  12. #12
    Chairman of the Bored catatonic's Avatar
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    That was just tasteless....there's a reason this stuff costs what it does.

    1) bike parts do not sell in the volumes that would allow for small-margin sales (the wal-mart model)
    2) people are addicted to teh wal-mart model (why should I pay $40 for 4 rocks glasses when I can buy some similar at wally world for $6?)
    3) people tend to villify the places that won't run a business using the wal-mart model (despite knowing such business would not be around if they tried that).

    All that ended up being was a prime exmaple of how obsessed we are with the absolute lowest price, and nothing more. I've given up that ghost a while ago now....only reason I go shopping at the places I do....location. I'm not going to add an hour to my round-trip time just to buy the exact same item somewhere else, regardless of price.
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  13. #13
    Upgrading my engine DXchulo's Avatar
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    Quote Originally Posted by CCFISH81
    My point is, it really doesn't matter if the world knows what the markup is on products.
    True, but neither the LBS nor the product makers want you to know those prices, and both have an agreement not to share that information. I'm not sure it's your right to know, even if an employee got excited and shared too much.

    I'm sure I could have been fired from Arby's if I went around telling customers how much a sack of fries costs Arby's to buy. Would it really hurt Arby's if everyone knew that information? Who knows.
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  14. #14
    Hey guyz? Guyz? Wait up!! Siu Blue Wind's Avatar
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    Quote Originally Posted by CCFISH81
    Knowing the markup on a product does not tell you "how much money" a shop makes on a product, it fails to include the cost of overhead, labor, inventory carrying costs, taxes, and a myriad of other costs. So claiming that knowing how much the dealer cost of a bike part is somehow hurting their private business model is rediculous. Its akin to knowing how much a truck full of concrete costs when it comes to building swimming pools. There are just too many other variables.

    Often times, the most loyal advocates for LBS and their "proprietary knowledge" love to get equipment at dealer cost,, which contributes little to nothing to the operating revenue of the shop.

    My point is, it really doesn't matter if the world knows what the markup is on products. Anyone with an eighth grade education should understand the basics of retail sales. So closing the thread was basically keeping the uninformed ignorant and/or protecting the struggling business model of the LBS.
    I disagree with you on this. Yes you CAN pretty much tell by a business sense about how much a shop makes on a part. Of couse you have to factor in expense, as I had stated in my previous post. What I don't understand is how you feel that this would benefit the LBS.

    I asked a question earlier, and I will ask it again: So how much do LBS's make if he were to hook up eveyone on BF??

  15. #15
    Super Moderator Allen's Avatar
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    My brother in law owns a women's clothing store. 100-300% mark ups are not uncommon and not unreasonable given the overhead costs (god knows his inventory costs, 10 employs, health insurance, $30 a square foot rent, etc.)
    I sell my large photographs for at least 10 times what I have in materials, and even then a good living is hard. Especially given that I can't do a cut rate sale to dump my inventory or I bring the value of my work down (I'm not about to set up a tent at a craft fair, ugh).

    The old adage, "buy for a dollar and sell for two", is a one hundred percent mark up and really ain't that much money.

  16. #16
    Senior Member Brian's Avatar
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    Quote Originally Posted by Michigander
    Thing is, they gotta make money. Shops pay their employees lower end wages, and the owners certainly aren't on any top wealth lists.
    Indeed. Everyone knows how to make a million dollars in the bicycle retail business - start with 2 million.

    Quote Originally Posted by CCFISH81
    This is a very simple and direct answer. Not stirring the trouble pot too much, but when people post, "Hey I just got my new Zipps, sponsored by the LBS at cost, I only paid 1K for them!!!!" Will we close those threads?

    I don't really care of have an opinion either way, and I understand the shops do not believe it is in their interest to have that information floating around. However, maybe I am missing the point, do the shops not want this info floating around because they believe it will hurt sales, or do they not want to be the leak of the information that could result in loss of dealer status?
    I used to be an importer/online retailer, and I've worked at a shop, so I have a bit of experience here. While your LBS might give you a look at their catalog, neither the retailer nor the distributor wants the wholesale prices made public. And the OP of the other thread violated that trust. He has since apologized for it as well.

    Publishing the wholesale cost only hurts the shop, and not for reasons of greed. Siu was nice enough to point out that overhead for a shop takes a huge chunk of that markup. And many consumers are not able to do the math, even those that passed year 8.

  17. #17
    Senior Member CCFISH81's Avatar
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    [QUOTE=Siu Blue Wind] So how much do LBS's make if he were to hook up eveyone on BF??[/QUOTE

    Twice as much as they made when you got your "Hook Up"

    The point of the thread isn't we should let him sell products cheaper through bike forums, but rather is there harm done to the LBS? Do we/ Should we/ Why do we/ care about people publishing dealer costs? What should we do in the future?

  18. #18
    That darn Yankee TexasGuy's Avatar
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    Giving out information hurts all LBSes. It's probably pretty difficult to understand unless you actually ran your own business. The "insider information for all" is about as practical as "socialism, communism, welfare or *** control"
    Life is about hanging onto what you think is important and finding out what really is important.
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  19. #19
    Hey guyz? Guyz? Wait up!! Siu Blue Wind's Avatar
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    Quote Originally Posted by CCFISH81

    Twice as much as they made when you got your "Hook Up"

    The point of the thread isn't we should let him sell products cheaper through bike forums, but rather is there harm done to the LBS? Do we/ Should we/ Why do we/ care about people publishing dealer costs? What should we do in the future?

    Can you please explain this? How can an LBS make anything if they aren't getting the business?

    It harms the LBS because of the contract to keep business between the LBS and the distributor is to be left between the LBS and the distributor. At that point the LBS is now violating the contract, and the distributor has every right to cut them off.

    Displaying wholesale prices on the web will certainly cause others to ask for hook ups.
    Last edited by Siu Blue Wind; 06-27-07 at 08:52 PM.

  20. #20
    Senior Member CCFISH81's Avatar
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    Blah, Insider information means precisely squat when it comes to running a business. It means even less in retail sales. It's not really insider if everyone in the world understands that business mark up their prices in order to achieve this Einsteinium concept of "Profit".

    Insider information is not as insider as anyone wants you to believe.

  21. #21
    Hey guyz? Guyz? Wait up!! Siu Blue Wind's Avatar
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    I must be doing something wrong then.

  22. #22
    cab horn
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    Quote Originally Posted by AllenG
    My brother in law owns a women's clothing store. 100-300% mark ups are not uncommon and not unreasonable given the overhead costs (god knows his inventory costs, 10 employs, health insurance, $30 a square foot rent, etc.)
    I sell my large photographs for at least 10 times what I have in materials, and even then a good living is hard. Especially given that I can't do a cut rate sale to dump my inventory or I bring the value of my work down (I'm not about to set up a tent at a craft fair, ugh).

    The old adage, "buy for a dollar and sell for two", is a one hundred percent mark up and really ain't that much money.
    Yes how about we up that to buy for 10k and sell for 20k. That hundred percent mark up is now 10k. K thx.
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  23. #23
    phony collective progress x136's Avatar
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    Quote Originally Posted by CCFISH81
    It's not really insider if everyone in the world understands that business mark up their prices in order to achieve this Einsteinium concept of "Profit".
    Again, you overestimate the general public. As has been mentioned, people are unfortunately conditioned to look at cost first, and nothing else second. If people know that Part Y costs the shop Z dollars, they're going to be upset or angry with the shop for asking Z+1 dollars or more. The shop is trying to rip them off!

  24. #24
    Senior Member CCFISH81's Avatar
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    ^ Perhaps I believe the general cycling public is slightly more enlightened then Z+1 = rip off

  25. #25
    Super Moderator Allen's Avatar
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    Quote Originally Posted by operator
    Yes how about we up that to buy for 10k and sell for 20k. That hundred percent mark up is now 10k. K thx.
    If your inventory is one item that's great. You can afford to replace that one item. Say to make you store look viable and have a little bit of selection you need fifty widgets at 10K @, and 60% sell? Where are you then? Plus rent, employs, insurance, replacing inventory, etc.

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