gauvins

Noticed a few weeks ago that online German retailers have either dropped Shimano from their catalog (Rosebikes) or no longer deliver to North America (bike24, bike-components, bike-discount). Was looking for a crankset. Nothing on ChainReaction either.

You know what's happening with them?

3alarmer 

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...yes, this has happened on a few of the UK discounters I used to order Shimano stuff from as well. I assumed it had something to do with the North American domestic marketers being unwilling/unable to compete on pricing, and thus a corporate decision was made in this direction. I've read some stuff in other threads about it, but I have little inside the industry insight myself.

2old

CRC stated at the start of the year they wouldn't be supplying Shimano parts. Pretty sure Shimano got rid of the "non-full retail" suppliers. I know that many times CRC's price was lower than my LBS's wholesale price. Also with Price Point gone (years ago) and Performance (with Nashbar) bankrupt, the LBS's are going crazy with price increases. Looked at tubes the other day - $9.00.

3alarmer 

...I can't see this ending well.

02Giant 

Tubeless it is!

Marcus_Ti

Shimano is forcing you to pay US retail through US distributors. Went into effect back in July.

jad3675

It looks like you can still order Shimano bits from merlincycles in the UK. Wonder how much longer that will last?

John

unterhausen

anyone in Europe that is still selling Shimano to the U.S. at below wholesale is not getting the parts from Shimano. I'm not sure that Shimano has gotten to the point of tracking individual parts to see who the grey market suppliers are, but I think it's possible.

The Europeans were getting the parts at OEM prices and selling them retail, so of course the parts were cheaper. OEM parts are supposed to be warrantied by the OEM, so this is generally not allowed. But Shimano was tolerating it for a long time. They finally realized they need bike shops. That's where virtually all their parts are sold and supported, aftermarket is a small percentage of OEM.

I was looking at some Shimano parts recently and realized I can get them cheaper from my LBS than mail order. I'm generally willing to pay a premium from them, but I usually don't have to.

squirtdad

I have followed and used for one groupset, the UK bike shops for a few years. This explains why i have not seen as many shimano groupsets. Am guessing they are selling out their inventory and then that will be that for groups.

tires are still a really good deal...wonder when that will change

Andrew R Stewart 

This topic is called either good or bad depending on one's placement in the manufacturer to consumer chain. Shimano is trying to produce a product with certain intangible qualities (along with all the cosmetic and mechanical features and functions). Two of these intangibles are customer service and perceived value.

Taking the US market as example- Why would a retailer or a supplier (and Shimano is a supplier here in the USA, no factory is in the US) want to loose money and service a product sold other through them? They (suppliers and shops) know that the warranty claim customer will just go back to the cheapest source the next time they need another Shimano part. Certainly the amount of references to over seas sources that we see posted here on Bike Forums speaks to this human behavior. But Shimano' manufacturing branch knows that their future value is somewhat dependent of the end user being able to get that warranty service. This is a part of the perceived value intangible. Shimano it trying to establish a level playing field for their US supplier branch, allowing the US sold bikes that use Shimano (the vastly larger part of Shimano's overall business, the after market is relatively small in comparison) to have quick and professional tech and warranty support.

When I read the claims as to how terrible the shutting down of grey market sources is I often wonder what business/work the writers do. I suspect that there's many examples of when these writers have said that protection for their products is good. Yet here they are bad mouthing this very thing when it costs them money.

Unrelated to what a product costs is the other shoe to drop. Where do you want your money to go? Are you good with sending it away from your community? (In this case your community is also your nation). Or do you like it when the guy/gal that sold you something can turn around and buy your product too. For all of Henry Ford's faults (politically really ugly ones too) he had the right idea about wanting his employees to be able to afford the cars Ford produced. Andy

dedhed

[QUOTE=Andrew R Stewart;21136538Unrelated to what a product costs is the other shoe to drop. Where do you want your money to go? Are you good with sending it away from your community? (In this case your community is also your nation). Or do you like it when the guy/gal that sold you something can turn around and buy your product too. For all of Henry Ford's faults (politically really ugly ones too) he had the right idea about wanting his employees to be able to afford the cars Ford produced. Andy[/QUOTE]

I'd suspect the bulk of the cost is going to Shimano with a % going to CRC/Merlin/etc. What % is my LBS making? Is it the same as the UK dealers or more? Any money I saved is going to be spread within my community, just not necessarily at the LBS.

CliffordK

Fortunately Shimano isn't selling tubes.

Obviously there is a tremendous variation in tubes and prices. Wide, narrow, big, small, thornproof, slime, etc.

It looks like Road Tubes have gone up. I bought some Lifeline Tubes from Wiggle in 2017 for $1.30 each (10 packs).

Now up to a whopping $2.54 each (10 pack).

https://www.wiggle.com/lifeline-road-inner-tube/

Still, those are retail prices, and a little shy of the $9 you're reporting at bike shops. I got hit by $8 road bike tubes (similar to the Wiggle tubes) a few years ago, and haven't been back to that shop since.

2old

The $9 price was for "normal" 26" X 1.9 - 2.35 tubes (big deal; they had a 25% off sale). Fortunately, I purchased a large supply at 90% off the last day Performance was in business. However, my wife is using them at a higher than normal rate, ergo checking the price at my LBS.

HillRider

The one potential problem is obtaining components Shimano doesn't import to the US, for example their "Trekking" groups. I used to see them offered by German on-line shops but they now say they won't deliver to the US. No domestic shop carries them and Shimano's web site doesn't even list a US distributor for these groups.

CliffordK

Historically there seem to be issues purchasing subcomponents too.

I.E. Any sprocket, cone, axle, screw, or bearing with a part number should be available, but frequently seems to be difficult to source, at least online.

gauvins

Which is precisely what I am in the market for (FC-T8000). Fortunately I can use a European shipping address so this is a non issue. eBay is another possibility.

Strange situation. Usually the American market is very competitive. This is the exception that confirms the rule, I guess

Andrew R Stewart 

When I owned Bike One I cleared a few percentage points after all was done. But if I didn't make a sale I got nothing. My employees didn't get anything. Their children didn't get anything. get the idea. I know my view isn't popular one but it's how it works.

BTW what do your do? Who pays for your life? Andy

Leinster

I think this was the problem. American retailers told Shimano "we need our wholesale prices to be lower than what European OEMs can ship to the US for." And Shimano said "We hear you. So we will stop allowing the OEMs to sell things so cheap."

Nobody's ever explained why Shimano just couldn't lower their wholesale prices in the US.

Andrew R Stewart 

ROI. Andy

2old

When my shop has reasonable prices I always try to use them, but obscene profits force me to the internet. Fortunately, Shimano parts are available, and even though the profit margin might be high, the prices are low enough to not make this an issue.

AnkleWork

I've always wondered what those are but nobody has ever given an objective definition. Funny how we never hear complaints of obscene losses.

gauvins

Things are possibly a little more complicated than it appeared. Comparing a few prices between German online and Amazon.com, I found them to be very close, and sometimes lower at Amazon. Because I am in the market for a trekking crank, it doesn't solve my (more) local availability problem. But I am no longer convinced that European consumer-facing sites are always much cheaper. Sure thing is that things have changed. Why and how, not clear. Upshot is that the situation in North America may be improving.

dedhed

Sewer & Water aren't going away and can't be offshored or onlined. Infrastructure construction and maintenance is pretty much a local, or at least regional, thing.
The ratepayers support my bike stuff. If it makes you feel better, we only specify domestic materials on most everything we buy

Andrew R Stewart 

dedhed- Yes I agree to a very large degree. But even with the basic social services we see out sourcing, privet contracting what had been classically a government supplied service. And the loss of feedback/control enters. I talked about intangibles being part of the situation, it if here that even basic services can falter with the loss of local oversight.

But you do make a good point. Not much to do with manufactures consumer goods, or having a choice to source form elsewhere. But a good point. Andy

cpach

Working in the US bike industry, it was an annoying fact of life that some products were available near or actually below dealer cost. Businesses like CRC were buying parts outside of Shimano's normal supply chain, which US distributors would love to do, but cannot, and often relied on parts intended for the OEM market ending up in the aftermarket. Hey, I've actually ordered Shimano parts from CRC myself because it was cheaper than the 30% below wholesale I can get for completing all their training. I have heard of US shops ordering from CRC selectively.

In most of the EU there isn't legal enforceability of MAP, which is arguably a good policy, but really what accounts for the difference in price between the US and the EU is whether things come from Shimano NA's supply chain, another official Shimano supply chain, or diverted from OEM equipment. To my knowledge, in both China and in the EU it is an enforceable contract to stipulate that parts are to be installed on complete retail bicycles, and this has been ignored to a significant degree.

Unintended consequence on the trekking stuff and parts not intended for the NA market.

There's some shift in the industry towards focusing on service as a profit center because the real end margins on hard goods is typically pretty bad.

As or the price of tubes etc--on a lot of things, fully assembled bikes and other high price components, consumers shop prices pretty aggressively and/or they have pretty high risk or other costs (like the time to assemble bicycles, the space they consume, and the high rate of depreciation they have) and thus have actually very low margins, and in many cases actually result in a loss when all business costs are factored--so yeah, for some items that are not aggressively shopped margins are sometimes very high--classically, for tubes. Its pretty much a convenience tax for the very high costs of physically having a brick and mortar business. We pretty much assume if you are an enthusiast rider and you go through a lot of tubes and are sweating the cost, you're going to buy those online, although many shops will in fact sell at a much more ordinary margin if you want a bunch.