ParamountScapin 

Just got on BranfordBike.com to order some parts to build up a new ('89 Trek lugged steel frameset) flat-land bike and needed a headset. Was going to order a Chris King as I believe they are the best. But BB states that he will only be selling his current stock as CK has informed him that he must sell for their listed price. As BB doesn't agree with this (and neither do I) he is dropping CK. Oh, well. Guess Campy will have to do.

I personally think CK is nuts trying to force their end pricing on us. They want people to pay considerably more at retail than the current standard of $100. Too bad for them. I like to buy American where I can get quality for good value, but not where I have to pay a ridiculous price that doesn't even get back to the manufacturer.

My guess this is the same thing as the fact that one can no longer purchase groups from retailers as Shimano and Campy will no longer (as of 2003) give group pricing to retailers. Any group you see is made up by the retailer at their own risk, is my understanding. Too many complaints from the big bicycle builders is what I read somewhere. They felt that they were getting too much competition from those of us who like to buy and build our own. They don't want the competition. Pretty unAmerican, IMHO.

BikerRyan

Chris King is not trying to force their prices onto the consumer. What they are trying to do instead is weed out the retailers that offer no after-the-sale service to the customer. No one can sell King components now without having a 15 page agreement filled out along with pictures of the bike shop, pictures of the repair area, and pictures of the storefront. They are wishing to control who represents their products by only allowing legitimate bicycle dealers to sell them. Just because Branfordbike has to sell for the listed price is not why he dropping them. In fact he is not dropping anyone, the true story is King is dropping him. King has and always will hold their products to the highest possible standards, why should they compromise this by letting every schmoe who has a phone, a garage full of bike parts, and an ad in the latest magazine sell their parts?

-Ryan

Kev

I have dealt with branford bikes in the past, and always been a great experience. And they carry virtualy every campy part you could ever need. Now that said I know Supergo currently sells the CK headsets for less then $100...

ParamountScapin 

BikerRyan - I am sure that Shimano and Campy would use a similar argument (as did Mercedes when they forced their largest dealer out of business a few years ago because they sold at discount). But it holds no water. As the consumer I will choose who I buy from. Branford, for instance, offers great service on what they sell. They provide a complete Campy parts service program (rebuilding Ergo levers, etc.). One of the most knowledgeable and helpful retailers I have purchased from. And, Branford is the major supporter of the Yale University cycling team. Something very few shops do is support youth cycling of any sort. Unless you are a CK employee involved in these negotiations, I will file your response under "opinions" and not facts.

It will be interesting to see if the bigger on-line retailers, such as Super-go, etc., will still be handling CK in the next few months. While some of them may have a shop or too, the great majority of their business is done on-line by folks who will never bring a bike into their shop for support. And, does CK do their own distribution or does it go through wholesale distributors? If it is through distributors then it makes even less sense, unless this allows the distributors to raise their prices.

SamDaBikinMan

Oh my goodness! Paramount! I agree! Can you beleive it!

You hit the nail on the head pal. I buy where I can negotiate price or from whoever is offering stuff at prices I like. I will not spend 100 if I can spend 75 on the same or equivalent grade products.

The recreation biz rips off the general public as it is. look at the price of even mass produced framesets(which is most of them). It is ridiculous.

Keep supporting those who respect your desire to keep some of your hard earned money.

Rev.Chuck

BikerRyan is correct, while I am not a Chris King employee. We did have to fill outr a new dealer agreement this summer. There are two levels one for stocking dealers and one for servicing dealers.
Chris King is not afraid of competition (I feel), if they were they would lower their prices to promote sales. Unless you make your own headsets you are not competion to any headset manufacturer.
King is merely trying to(again, I feel) protect the people that made their name. The LBS. The are also price protecting their product. Branford sells King for a very low markup, everyone else is not making a huge profit on King we simply make a normal markup. I find that people who freak the most on this have never had their own business or worked in a small business where you intimately aware of margins and profit.
If this set up bothers you better not buy Sidi or Yakima as well as a host of other products that are price set by a dealer.
Have fun at Walmart.

Kev

I'm still not sure how I feel about price fixing... I understand why they do it, to hold up the reputation of their products. To help the smaller guy compete with the larger stores that can buy in larger quanities and afford a smaller markup. But I also like saving money Maybe they should go the way of some other industry's out their, where you have one model that is sold on-line, mail order etc.. and another model that is sold only through local stores. That way you don't have to worry about price fixing.

danr

Many companies that base their products on quality do this. I would rate CK up there with them. Apple computers makes their retailers sell at suggested retail prices. So does Mesa Boogie (they sell awesome guitar amps). I don't know the theory or reasoning behind it, but everything previously posted sounds good enough to me.

Richard D

I'm amazed price fixing is legal in the US - we've had some recent cases where big companies have been fined for it.

ParamountScapin 

While the Rev and Ryan sound good, just like the PR BS I received from CK when I told them what I thought of their new policy, I feel sure the pressure is actually coming from the large distributors (CK uses distributors) and the bicycle manufacturers as they respond to customer demand for CK headsets on their highend bikes. Has nothing, or at least very little, to do with the local LBS. They don't sell enough headsets to make a difference to CK. However, the distributors and bicycle manufacturers do not want the competition and this is one way to legally (unfortunately) stiffle it. I would bet that neither the Rev's nor Ryan's shop ever contacted CK to complain about on-line pricing by Branford Bike or anyone else.

Rev - you have misunderstood the competition I am talking about. CK doesn't mind the competition. They make a superior product that sells on its merits. It is their distributors and the bicycle manufacturers who mind. You can no longer buy a bare Litespeed frameset and build up is my understanding. Is all the same thing. They want not only the margin of their frames but the margins associated with the groups and wheels, etc., that go with it. While the LBS may benefit some in all of this by getting to sell a higher priced bike, the consumer certainly loses out by having his/her choices reduced and prices increased. Not my idea of competition in the marketplace.

As a retired corporate "collar", I am well aware of profit/markup/SG&A/EBIT/etc. And this has only to do with these as they effect the bigger fish in this food-chain. If you think it is about the LBS or consumer then the wool has truly been pulled over your eyes.

Big R

Folks,

I know next to nothing about Chris King, and only a little more about microeconomic theory.

However, it seems to me that this is a very reasonable (maybe not wise) marketing strategy on the part of CK. Not price-fixing, not anti-American.

That being said, it may not prove successful at all. I, for one, will always seek out a bargain whether it be online or at LBS. CK, even at a premium price, might still be a bargain. Guess what, there are plenty of attractive competing products, and if CK loses significant market share, you can bet they'll come back around.

Good luck finding significant discounts on Thule, Yakima, Allen Edmonds shoes, or Mercedes-Benz--all premium brands, with significant competition.

Hot Pepper

Just to clarify, price fixing by a manufacturer or a distributor is not legal in the US. I strongly doubt that is what is going on here, as cases of price fixing are remarkebly few, considering the amount of commerce that goes on here. If any of you bike shop guys have in your possession a document from CK stating that you must sell his product for a specific price, or you will no longer be allowed to sell the product, take it immediately to your legal councel. It might be worth a LOT of money.

Bobsled

HP,

I've told many times that Shimano does this all the time with their fishing products. You'll see ads in the paper for reels and they always sell for MSRP with some kickback from the merchant (i.e. gift card, reel filled w/ line for free, etc.). When you ask the merchant they never hesitate to tell you that if they sold it at a discount, Shimano would no longer provide them w/ their products. Don't know if any of this is in writing, but that seems to be the understanding.

Hot Pepper

Then these merchants need to get a class together and sue the crap out of Shimano. With enough testimony from enough people that they were "told" something to this efect by a Shimano rep. they'll win, and the consumer will win. Same with Chris King. If this is purely a heresay case, then a couple of thousand plaintiffs need to get a smart law firm and put a stop to it.

Free trade is what makes America great, I don't take kindly to any kind of price fixing. If I have this confirmed by my LBS's, I will never even entertain the thought of using their stuff. Besides their hubs sound like a bunch of pissed off hornets.

a2psyklnut

Yep, free trade is good, Chris King doesn't HAVE to sell to anybody! I actually sent a letter to CK asking them how a LBS is supposed to stay in business when mail-order companies are selling their products for the same price a LBS pays. Most bike manufacturer's will pull their products if the LBS sells a significant # of bikes under MSRP or on-line. A close-out year end sale isn't a big deal, but current model bikes selling for just above cost is a sign of trouble for the shop and the reps will come and pull product.

L8R

Rev.Chuck

I think that price fixing only applies when a group of businesses conspire to maintain a product at an elevated price. I think it is in the Sherman act. Hard to tell as I am not a lawyer. Interestingly, in the Clayton act, it appears to say that a business cannot sell a product to one company for one price and another company for a different price if it eliminates fair competition: RockShox sells us a fork for $150 but sells it to Performance for $80.
Excerpt from Clayton act:It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them

Hot Pepper

Clayton can be skated around, citing differences in the ways in which your customers go to market. While Clayton ensures that you and the bike shop up the road from you, are placed on level ground, a manufacturer or distributor can successfully defend based on Prformance's national marketing, volume, and catalog sales.
What you are describing as price fixing, is collusion, which is a very slippery slope. When speaking with other employees of a business engaged in the same basic trade as you, best bet is to shut up and ride on. You can be convicted for listening, and not reporting their attempt to collude. Don't discuss pricing, don't talk about specific customers.
I'm not a lawyer either, but am a Product Manager for a distribution corporation with sales in the $5,000,000,000.00 neighborhood. Once per year we all get tuned up on anti-trust stuff.

prestonjb

Is it me or is it a industry wide trend?

Not only is CK fixing prices... Shimano is creating limited mail-order suppliers.... and....

Have you noticed that wheelsets are not on sale anymore? Find MAVIC SCC or Spinergy Xaero-lites for $500 US anyplace? I remember when this was easy-peasy and now I can't find any mail order stores with sales on high-end wheels????!!!!!

As for the LBS, I support them when I can but I typically do all of my repairs including now the rebuilding of wheels because A) they suck at repairs, B) They suck at repairs. If I have to do all the work myself including truing wheels and now rebuilding them, I may as well buy everything as cheaply as I can and work it out myself... But now I can't even do that so I will just make my wheels last longer in as much as I will replace spokes and bearings instead of buying new wheels.

Grampy™

King cannot tell anyone what price they have to put on the headsets. They can tell a company that they may not advertise their product below a certain price.

If you can't advertise them at $99.99 Why sell them at $99.99 instead of the $119.99?

BAC5.2

I had to read and fill out a 15 page agreement for my shop to be allowed to sell and service CK stuff.

It's SOP really. Chris King is a man who want's the best for his products and company. BB may not have met the standards and CK dropped them. No company want's to be the "bad guy" so they blamed it on CK.

I have spoken with employees of CK and CK himself, and they want nothing more than the best part for the customer. The environmental protection processes they take is evidence enough of the amount of care they take for the customer and the dealer.

I would proudly sport CK goods on my bike.