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What is Shimano doing?

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Old 01-31-19, 07:15 PM
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Originally Posted by kingston View Post
This whole thread is about what Shimano is doing. It's not unreasonable for me to ask the people who are defending Shimano for examples of other companies that behave the same way in a similar situation. I still haven't heard one by the way.
bikes. Bikes can cost hundreds different compared to exchange rates(both present and within the year) just because they are sold in Europe or Australia or the US or Canada. Furthermore, i cant buy from one of those overseas stores.
same thing as what you are ranting about.

also, I wouldn't call most of this 'defending'. Its simply responding without emotion by citing reasons and historical precedence.
I dont like being cut off from lower prices for the same item, but I am able to understand with and dont think it's unique to a specific company.
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Old 01-31-19, 07:19 PM
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Originally Posted by Sy Reene View Post
So this seems the singlemost straightforward reason that costs have to be higher thru US channels of distibution, yet I don't see very many folks challenging Shimano on this singular point? Is there an interview question out there asked/answered on this issue?

So how does Wiggle or Merlin or Ribble or whatnot buy their parts, and why can't at least Amazon or Competitive Cyclist (and I would have suggested Nashbar/performance, but let's not go there) do the same in the same manner.

You can't solve anything unless you figure out the root cause.
some European retailers sell for less because they buy for less due to wholesale cost differences.
some European retailers sell for less because theybare registered as bike manufacturers and get OEM pricing then sell some products for above OEM but under retail. That's gray market. Its why a brand new chain is delivered in a clear plastic bag or other components arrive without the retail packaging.
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Old 01-31-19, 07:22 PM
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Do EU Bike shops get their parts directly from the port pf entry?, probably Rotterdam
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Old 01-31-19, 07:29 PM
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Originally Posted by Maelochs View Post
Why? Why should the U.S. get to determine business law for the rest of the world? After all, we have tariffs and trade agreements which distort the supposed “free market” just like every other nation. Why should U.S. ideas about “business fairness” determine the laws in other countries?
We don't determine the worlds business law. We determine our own. We should hold ourselves accountable to the tennant that for a free market to work, there must by a functioning framework and consistant rules for it to operate in.

We don’t have a free-market economy in the U.S. right now. Ask, say, the people who make solar panels. Ask how they feel about oil companies getting cheap leases for drilling, and tax breaks for “exploration” of resources which properly belong to the entire U.S. population.
You are correct. What you are missing is the whole "governing" part of government. From time to time governments enact policies to encourage certain behaviors or developments for the common good. Subsidies for Solar development, Green energy, etc, is one such policy. Lets not do the P&R thing. There is 3 models for development. I don't want to argue the merits of one model vs any other. All 3 are absolutely necessary, viable, and dependent on the others. Such a direction will hopelessly get mired in ideology. Let's stick to trade.

Shimano doesn’t draw the boundaries. Individual nations of trading blocs do.
Except Shimano North America is the problem, operating under boundarys they themselves hold relevant with out regard to actual market forces.

Apparently you Do think we deserve the lowest possible prices.
I don't think Americans deserve the lowest price. I think the market price shouldn't be manipulated by monopolistic behaviour.

ECON 101 , for people like yourself demanding a “Free Market Economy”: The seller sets the price. Whatever price. The seller charges As Much as the seller wants … in a free-market economy.
Except this is is not consistant with a minimum price structure or seller harming agreements.

People either buy or do not buy. If the seller decides, the seller can raise or lower the sales price to make more profit per unit or to try to stimulate sales.
No body is arguing that. People are arguing Shimano's policy hurts shops, it harms consumers, it's self serving at yours and market expense. How many shops go out because they are held to a price point beyond what the market will bear? That is harm. We all suffer for it, industry wide.

So … Shimano charging different prices in different markets is EXACTLY the “Free-market Economy” you think we should have.
Except what you don't seem to understand is that if goods & services are easily transported from one place to another, those places are then a single market. Markets are defined by the ease/difficulty to exchange goods & services. The ease with which goods/services travel back & forth from North America to Europe, both first world nations with comparable economies, populations, ease of communications and ease of travel makes both continents effectively 1single market. Well, for bicycle commodities, at least. It is Shimano that is forcing what is now in the age of globalization a forced & arbitrary distinctation with out regards to actual market borders. Welcome to 2019.

Hello.
Hi!
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Old 01-31-19, 07:32 PM
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Originally Posted by Maelochs View Post
ECON 101 , for people like yourself demanding a “Free Market Economy”: The seller sets the price. Whatever price. The seller charges As Much as the seller wants … in a free-market economy.

People either buy or do not buy. If the seller decides, the seller can raise or lower the sales price to make more profit per unit or to try to stimulate sales.

So … Shimano charging different prices in different markets is EXACTLY the “Free-market Economy” you think we should have.

Hello.
Isn't part of the "free market" economy that if I don't like the prices or service at one store, I can go down the street and buy the product at another store.

Except that is EXACTLY what Shimano is trying to prevent.
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Old 01-31-19, 07:46 PM
  #81  
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Originally Posted by mstateglfr View Post
some European retailers sell for less because they buy for less due to wholesale cost differences.
some European retailers sell for less because theybare registered as bike manufacturers and get OEM pricing then sell some products for above OEM but under retail. That's gray market. Its why a brand new chain is delivered in a clear plastic bag or other components arrive without the retail packaging.
For your first suggestion, yes, that sounds reasonable, though who sets the wholesale prices -- Shimano or the distributors of the Shimano products? Are US wholesale prices higher due to an inefficient distribution model, or just because Shimano/distributor want to try and make more unit profit? If your LBS could purchase parts from a UK retailer and have them shipped, why are they prevented from doing so? Or, why can't LBS purchase from UK wholesalers. Is it all about protecting some random (is it QBP?) distributor and for what reason?

Your second suggestion I've seen before, and I can't believe that's the case because there have certainly been (and are still?) bike making companies that also sell parts. Until recently there was Nashbar who had their own line of bikes. Competitive cyclist owned the Merlin brand for a while; not sure if they own any at the moment. Any independent bike maker in the US (Moots, Dean, Allied, ?) could then theoretically become a kick-ass Shimano parts reseller. LBS stores in many major city are now Trek owned.. are they selling Shimano parts with OEM preferential rates?
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Old 01-31-19, 07:56 PM
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On E-Bay, it is cool to see parts in 50 year old boxes (although there is also a market for buying and selling empty boxes, so a boxed part didn't necessarily come from THAT box).

But, in general, I'm happy enough to get a bulk packaged part without instructions.

How much is a box worth? $200? WHEW... that must be some box!!!!

Note, I've bought miscellaneous parts online. I think I've gotten a few bulk packaged tubes, tires, chains, and cassettes.

Almost everything else that was bought new came individually packaged in boxes.
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Old 02-01-19, 03:29 AM
  #83  
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Originally Posted by CliffordK View Post
Isn't part of the "free market" economy that if I don't like the prices or service at one store, I can go down the street and buy the product at another store.
Yes, in fact, but in the way you mean it, No, it is not.

The seller sets the price. if you don't like it, you buy a Different product. If I wholesale products to 20 stores, and approach all 20 stores with a contract saying they must charge $X, And they agree and sign it .... that's business. They can refuse. I am not obligated to sell. They Are obligated to honor the contract.

The free market means, in effect, i am free to charge whatever i want, and you are free to buy whatever is for sale. I am not obligated to supply Any retail outlet, nor am I required to sell at a low price. You are free to go down the street and buy the same product at another store, but I am free to seel to that store at whatever price. That store decides to buy or not. You are free Not to buy. You are not guaranteed that the two stores will compete to lower the price.

High-end stuff sells like that. Retailers cannot use discounts and rebates and such crap when selling yachts and exotic cars, because the manufacturers don't want to see the price structure collapse. if I decide to sell some Ferraris at a loss to try to attract business, i cheapen All Ferraris .... so a Ferrari dealer who did the stupid gimmick ads with "We give triple rebates" and the stuff dealers use to sell Kias and Hyundais, wouldn't get any more cars. Image is important.

Shimano wants a minimum price at all its outlets, and in a truly free market, has that right. Dealers who don't want to sell Shimano parts at that price are free not to.

The idea of the free market is that competition will drive down prices, that demand will increase prices, and "the invisible hand of the market" will regulate affairs so no one overcharges or too severely undercuts, because at both extremes the businesses fail.

In the real world, different nations have different laws. Apparently the EU has laws against manufacturers setting minimum retail prices. If you think the U.S. should too, lobby Congress, don't complain about Shimano making money.

And if small shops cannot sell components competitively, and go out of business ... that is not on Shimano. It is not Shimano's business to keep Mom & Pop bike shops alive. it is Shmano's responsibility to make money selling its products, and if it is doing well enough selling to bike manufacturers,

If people want the "Free market," then .... Caveat Emptor. it is a tough environment for buyers and sellers.

if people want more government price controls (which a lot of people call wise regulation, and a lot of people call socialism) then lobby for that. Personally i think we need regulations because people like to both bend the rules and cheat, and the "invisible hand of the market" doesn't work when people can cheat. But as for Shimano having any responsibility beyond fallowing the Existing laws in the countries where it does business .... its only responsibility is to make as much money as it can--and that responsibility is to the shareholders, not the customers.

I am not saying that I Like the fact that I cannot get cheap Shimano group sets as easily as I once could... I am saying that to complain about Shimano is to entirely miss the point. If Shimano is not breaking any laws, it can do whatever else it wants for its own benefit.

People here seem to think Shimano should operate for the Customer's benefit. And people seem to think individual retail customers are an important part of that business.

Giant, Trek, Specialized, Cannondale ... all the MTB brands, and smaller brands ... all the Euro and Asian brands ... Those are Shimano's "customer base." Shimano is never going to make or lose significant money either by servicing or losing individual customers upgrading or building their own bikes. We are a fragment of a drop in a huge bucket.

Until either the laws change, or Shimano's bottom line is seriously affected ... why should Shimano change?

Look how many companies simply don't bother selling components to the public, because it is more efficient (more predictable) to deal only with corporate customers.

But, whatever. If the price of wheat, corn, cotton, whatever fluctuates, we never notice, but when it is bike parts .....
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Old 02-01-19, 05:42 AM
  #84  
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Love and Hate Relation

I appreciate SHimano inventing so many products which won't be invented by small-er companies or will be very hard due to their financial and technical capabilities.

But also I hate Shimano as they are 90% a monopoly. If there are other players in market it is just because Shimano let them to survive.

There is no way Magura, Tektro, Nuvinci can survive if shimano decide to destroy them. Shimano can accept to burn money until those players are out of business. They have more than enough cash to burn for several years.

Lucky in e-bike area there is a bigger player they need to compete "bosch". And I enjoy Shimano is tasting their food by others.
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Old 02-01-19, 07:49 AM
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Thanks to those of you who responded to my request for examples. As several of you pointed out, MAP agreements and evolving dealer/distribution networks aren't unique to Shimano. What is unique is the ineptitude with which Shimano is dealing with those two things. I can think of lots of examples of manufacturers that are in the process of modernizing their distribution networks, but I can't think of any examples of manufacturers that are doing it as clumsily as Shimano. Those were the examples I was looking for, an analog to show that what Shimano is doing isn't that bad as some of you seem to claim.
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Old 02-01-19, 09:41 AM
  #86  
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Originally Posted by Maelochs View Post
Yes, in fact, but in the way you mean it, No, it is not.

The seller sets the price. if you don't like it, you buy a Different product. If I wholesale products to 20 stores, and approach all 20 stores with a contract saying they must charge $X, And they agree and sign it .... that's business. They can refuse. I am not obligated to sell. They Are obligated to honor the contract.
....
Shimano wants a minimum price at all its outlets, and in a truly free market, has that right. Dealers who don't want to sell Shimano parts at that price are free not to.
....
In the real world, different nations have different laws. Apparently the EU has laws against manufacturers setting minimum retail prices. If you think the U.S. should too, lobby Congress, don't complain about Shimano making money.
..
An interesting read:

Shimano MAP Policy
additional reading of interest that compares MAP vs "Resale Price Maintenance agreements". MAP and Antitrust
The wording of Shimano's "MAP" policy seems to pretty much make it impossible to sell a product online for less than MAP thru automated means, even though in theory a retailer should be allowed to if they don't "Advertise" that they're doing so.

I recall the stereo and camera industries (maybe it was Crutchfield?) would have a simple "Call for Current Price" option. In today's world, maybe theoretically an online seller could accomplish similar with Livechat functionality?
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Old 02-01-19, 01:32 PM
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Originally Posted by Sy Reene View Post
I recall the stereo and camera industries (maybe it was Crutchfield?) would have a simple "Call for Current Price" option. In today's world, maybe theoretically an online seller could accomplish similar with Livechat functionality?
Possibly ... but I doubt Shimano's lawyers would be fooled for long.

Originally Posted by kingston View Post
Thanks to those of you who responded to my request for examples. As several of you pointed out, MAP agreements and evolving dealer/distribution networks aren't unique to Shimano. What is unique is the ineptitude with which Shimano is dealing with those two things. I can think of lots of examples of manufacturers that are in the process of modernizing their distribution networks, but I can't think of any examples of manufacturers that are doing it as clumsily as Shimano. Those were the examples I was looking for, an analog to show that what Shimano is doing isn't that bad as some of you seem to claim.
This seems a more rational view (to me … and I am far from rational … reader beware?)

Shimano has not managed its price structure well, and has (possibly) caused a small furor. (Maybe they just didn’t and don’t care, I cannot say.) But the people painting Shimano as an incarnation of Satan are going overboard.

These are people who don’t care when the Chinese market baby formula with industrial waste intentionally added, but when Shimano raises the price on that ultimate necessity—Bike Parts—“Break out the pitchforks and torches!”

I think Shimano didn’t get called on this stuff for a while, and suddenly they are, and cyclists, being passionate, are maybe over-reacting.

If I were in the middle of a build I might think differently myself.
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Old 02-01-19, 01:43 PM
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Originally Posted by Maelochs View Post
Possibly ... but I doubt Shimano's lawyers would be fooled for long.
.
It's not about trying to fool them; it's about following the agreement to not advertise a lower price. Negotiating a lower price is allowed at an LBS or at an online retailer (as long as they have a phone number or other way to have 2-way communication with them). If a LBS says to your face that they're not allowed to sell a product for less than Shimano tells them, I'm not certain they're correct and it's possible they're misleading you.
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Old 02-01-19, 09:02 PM
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Is Shimano is doing anything illegal?

If not, then the free market should rule. Manufactures can charge what they want, and buyers can purchase or boycott what they want. It'll all work out.
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Old 02-02-19, 02:02 PM
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I guarantee you if we were talking about toxic baby formula from China, half the posters here would be just as happy if the infants died of kidney failure or not ... just don't mess with Bike Parts.

The rest are actually discussing law and economics and can't see what the fuss is about.
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Old 02-02-19, 02:37 PM
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Shimano's actions here make perfect business sense and have been predictable.

Shimano sells low-margin groupsets to bike manufacturers in order to create market share among the bike buying public. It highly encourages (!) the bike brands to adhere to this all-Shimano solution. As an aside, it also uses patent lawsuits and proprietary standards to assist with this strategy. So the overall objective here is to as lock up the OEM market.

Aftermarket bike components are priced much higher simply because they can be. Once a rider is locked into the Shimano system, and they break a derailleur, then they are motivated to pay a lot more, as the alternative is a new bike.

The problem for Shimano is that mail-order houses have been buying up large lots of OEM parts, targeted for whole bike builds, and then selling them at a discount to Shimano's aftermarket parts pricing.

Bottom line is that the mail-order houses have have been putting a stick in the spokes of Shimano's corporate strategy.

So Shimano needs to shut this end-run down.

​​​​​​​The ultimate goal is monopoly control of the supply chain, including the OEM market. If this is possible, then the price of new bike groupsets could jump substantially, as there would be no practical alternative.
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Old 02-02-19, 03:20 PM
  #92  
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Originally Posted by Dave Mayer View Post
Shimano's actions here make perfect business sense and have been predictable.

Shimano sells low-margin groupsets to bike manufacturers in order to create market share among the bike buying public. It highly encourages (!) the bike brands to adhere to this all-Shimano solution. As an aside, it also uses patent lawsuits and proprietary standards to assist with this strategy. So the overall objective here is to as lock up the OEM market.

Aftermarket bike components are priced much higher simply because they can be. Once a rider is locked into the Shimano system, and they break a derailleur, then they are motivated to pay a lot more, as the alternative is a new bike.

The problem for Shimano is that mail-order houses have been buying up large lots of OEM parts, targeted for whole bike builds, and then selling them at a discount to Shimano's aftermarket parts pricing.

Bottom line is that the mail-order houses have have been putting a stick in the spokes of Shimano's corporate strategy.

So Shimano needs to shut this end-run down.

The ultimate goal is monopoly control of the supply chain, including the OEM market. If this is possible, then the price of new bike groupsets could jump substantially, as there would be no practical alternative.
Sounds like the inkjet printer market... I recall buying an higher end Epson a number of years back that of course comes with a set of ink. A replacement set of ink costs almost as much as the fancy printer with a set of ink.

Your explanation only goes part way though, as it doesn't address why the UK shops are the only ones in the world (?) who were able to work this system. Why weren't Nashbar or Trek or Waterford, etc etc.. or whoever else who has their own line of bikes doing this end-run (if that's what it is)? For that matter and a bit OT but perhaps related if we know the answer, why aren't there more US stores that have branded their own bike lines like Ribble, Merlin, PlanetX, etc?
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Old 02-02-19, 06:42 PM
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Originally Posted by Sy Reene View Post
Your explanation only goes part way though, as it doesn't address why the UK shops are the only ones in the world (?) who were able to work this system. Why weren't Nashbar or Trek or Waterford, etc etc.. or whoever else who has their own line of bikes doing this end-run (if that's what it is)? For that matter and a bit OT but perhaps related if we know the answer, why aren't there more US stores that have branded their own bike lines like Ribble, Merlin, PlanetX, etc?
I believe it was mentioned above that the EU prohibits MAP contracts ... sellers cannot demand minimum advertised prices. With Brexit, that option will be going away, I suppose.
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Old 02-03-19, 08:20 AM
  #94  
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Originally Posted by Maelochs View Post
I believe it was mentioned above that the EU prohibits MAP contracts ... sellers cannot demand minimum advertised prices. With Brexit, that option will be going away, I suppose.
Hmm.. so you're implying that US bike companies could get Shimano parts cheaper than usual wholesale (which we've heard is about the same as the UK retail price), and could sell them at prices more competitive with the UK shops if they figure out a way to not advertise their pricing?
I wonder if bundling lots of things into 'build kits', like Adrenaline does, works with the MAP agreements? example:
Component Build Kits - Adrenaline
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Old 02-03-19, 09:03 AM
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Shimano is a for-profit business, answerable to its shareholders and, to some extent, to regulatory agencies.

If people don’t like Shimano’s pricing tactics they have two choices:

1. Ask for government intervention—not always a good idea; or

2. Look for alternative products that work better and are priced lower.

I am sure that others will point out third, fourth, etc alternatives.



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Old 02-03-19, 04:03 PM
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Originally Posted by eja_ bottecchia View Post
Shimano is a for-profit business, answerable to its shareholders and, to some extent, to regulatory agencies.

If people don’t like Shimano’s pricing tactics they have two choices:

1. Ask for government intervention—not always a good idea; or

2. Look for alternative products that work better and are priced lower.

I am sure that others will point out third, fourth, etc alternatives.


3. Complain about it on BF.
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Old 02-03-19, 04:06 PM
  #97  
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Originally Posted by AlmostTrick View Post
3. Complain about it on BF.

LOL...touche!
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Old 02-04-19, 01:57 PM
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Competitive innovative brands

Proud to be a Retrogrouch ... if in the late 1980/early 1990s Suntour had made better design and marketing decisions, imagine how today Shimano wouldn’t have a death grip on components
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Old 02-04-19, 02:54 PM
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About time the Americans have deal with what Europeans and Canadians have dealt with forever.

Simply book a holiday and shop.

Last time I needed a MacBookPro, I went to Japan and bought one and savings compared to EUR paid for the flight.

Two weeks back I even did a round trip London to NOLA flight for $400 on a B787.
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Old 02-04-19, 04:54 PM
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Ski equipment companies have been doing this for a long time. Try taking 5 yr. old boots/bindings in to get them adjusted, cleaned, etc. Any ski shop that knows its stuff will say "No!". Claim it has to do with safety. Last time I tried that at REI, the guy took out a book that listed the equipment that was NOT to be serviced (usually defined by age).

It's called "Planned Obsolescence"

Originally Posted by drlogik View Post
Shimano is on my 5hitlist too but for another reason. I bought a really really nice Shimano fishing reel about 10 years ago. I used it twice and then we packed up and moved and it got lost in the move. I found it when packing for another move two years ago. This virtually a brand new reel but it is 10 years old. I went out fishing with it and the crank stopped and "click". A small part broke inside the reel. I called Shimano and they won't even look at it. It's "too old, and we don't have parts". Don't have parts.....

I take the reel apart and figure out it's a teeny tiny little part on the worm drive that broke. I search and search and nobody has this part. Now I have a $300 spinning reel that is non-operational. I have 40 year old D.A.M. Quick spin reels that are still going strong. I have 50 year old Zebco reels that are still working. The 10 year old Shimano Rolls Royce model? Nope.

On a side note, this reel is WAAAAYY too complicated for a spinning reel. There are dozens of little plastic parts inside this reel. Every one of them fragile. I should have known, a reel that smooth isn't rugged and won't last, lesson learned. The Quick reels? maybe 12 parts total, made in Germany and bullet proof. That's why even 50 year old Quick reels command decent money on eBay, they last forever.

I'm done with Shimano.


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