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Chain Reaction Cycles and Shimano

Old 12-20-18, 08:30 AM
  #1  
JonathanGennick 
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Chain Reaction Cycles and Shimano

Here is some news worthy of note:

https://www.bicycleretailer.com/indu...a#.XBul4Vw3lhE

Shops of course are rejoicing, but I am sitting here and dying a little bit on the inside. Because Chain Reaction has provided a glimpse of what's possible when the supply-chain is made shorter and more efficient. Few things have contributed to my enjoyment of cycling as much as the ready availability of modestly-priced parts and the wide selection that's been available on the Internet.
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Old 12-20-18, 08:55 AM
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Originally Posted by JonathanGennick View Post
Here is some news worthy of note:

https://www.bicycleretailer.com/indu...a#.XBul4Vw3lhE

Shops of course are rejoicing, but I am sitting here and dying a little bit on the inside. Because Chain Reaction has provided a glimpse of what's possible when the supply-chain is made shorter and more efficient. Few things have contributed to my enjoyment of cycling as much as the ready availability of modestly-priced parts and the wide selection that's been available on the Internet.

Shimano had better watch it--that's classic price fixing, and I'm pretty sure that they have a big enough share of the market that they could have antitrust concerns.
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Old 12-20-18, 09:23 AM
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I just won't buy any more shimano parts as long as they charge Americans higher prices for the same thing. #problemsolved
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Old 12-20-18, 09:54 AM
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Has Shimano pulled out from all of the online retailers? Or just the ones who undercut MSRP? While I love cheap parts, Apple, for example, does this all the time. They will only sell if you don't undercut the defined price they allow. It is not uncommon for manufacturers to demand a level playing field for all of their retailers.

Price fixing, yes, but extremely common.
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Old 12-20-18, 10:02 AM
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Originally Posted by Maelstrom View Post
Has Shimano pulled out from all of the online retailers? Or just the ones who undercut MSRP? While I love cheap parts, Apple, for example, does this all the time. They will only sell if you don't undercut the defined price they allow. It is not uncommon for manufacturers to demand a level playing field for all of their retailers.

Price fixing, yes, but extremely common.
I don't think in this case it counts as price fixing per se, because the limitation is on territory not on price. Chain Reaction probably can sell at whatever price, just not to the States.

And yes, Apple is very good at maintaining a stable price across all purchasing venues.
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Old 12-20-18, 10:04 AM
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Originally Posted by Maelstrom View Post
Has Shimano pulled out from all of the online retailers? Or just the ones who undercut MSRP? While I love cheap parts, Apple, for example, does this all the time. They will only sell if you don't undercut the defined price they allow. It is not uncommon for manufacturers to demand a level playing field for all of their retailers.

Price fixing, yes, but extremely common.

The difference is that Apple doesn't have anything approaching a 70% market share, and for some components, Shimano may have even higher.
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Old 12-20-18, 10:13 AM
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Time for someone to become a UK middleman
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Old 12-20-18, 11:22 AM
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I don't understand why prices are higher in the US to begin with.

Not "because Shimano sucks" or "greedy bastards" reasons but the actual financial reasons.

A Thomson seatpost is manufactured 4 hours from my house. It is $99 everywhere in the US but I can get it flown on a cargo jet from England for $79. How is this even possible? What makes it more expensive here or less expensive elsewhere?


-Tim-
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Old 12-20-18, 11:22 AM
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Originally Posted by kingston View Post
I just won't buy any more shimano parts as long as they charge Americans higher prices for the same thing. #problemsolved
Didnt SRAM do this a couple years ago?

So do you just ride Campy and Microshift at this point?
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Old 12-20-18, 11:27 AM
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Gray market Shimano components will absolutely still be available.
Euro online retailer that is also a 'bike manufacturer' gets a massive discount for OEM components and ends up selling a bunch of them as new on their site but not in the retail box for less than retail here. This announcement wont stop that practice.


I say they are addressing the wrong side of the issue. US dealer's wholesale costs needed to drop instead of closing the door to US consumers buying for cheaper overseas.

Its tough to convince people a product is worth $100usd when consumers can go online and see that its selling for only $70usd in Europe. <---hypothetical numbers
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Old 12-20-18, 11:30 AM
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Shimano have turned to junk recently
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Old 12-20-18, 11:32 AM
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I've never understood why businesses don't get it. That isn't going to push people who were buying from CRC to buy from the LBS at higher prices, if anything it may make them even more spiteful towards them. It is simply going to push them to other online retailers who still undercut the LBS, whether they be another of the UK Big 4, grey market imports, or simply ordering from Hong Kong eBay accounts and hoping for the best.
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Old 12-20-18, 11:47 AM
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Originally Posted by TimothyH View Post
I don't understand why prices are higher in the US to begin with.

Not "because Shimano sucks" or "greedy bastards" reasons but the actual financial reasons.

A Thomson seatpost is manufactured 4 hours from my house. It is $99 everywhere in the US but I can get it flown on a cargo jet from England for $79. How is this even possible? What makes it more expensive here or less expensive elsewhere?
Let me introduce you to the drug industry.

Actually, currency fluctuations might account for some of it too but your general question is a good question as far as I'm concerned.
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Old 12-20-18, 11:49 AM
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Companies setting different prices for their products in different regions is not uncommon at all. You see the same thing with Nikon, Canon, for cameras. Different pricing for USA, EU, Japan, etc. Not sure I see the logic in it, but they aren't breaking any laws.

Determined people will find another way to get the cheaper product if it's out there.
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Old 12-20-18, 11:54 AM
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Could it have something to do with the effect of a very high VAT on what the UK retailers can negotiate from Shimano for the products? The VAT probably boosts the cost of Shimano parts to US levels for UK buyers. Foreign buyers don't pay the tax, of course.
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Old 12-20-18, 11:58 AM
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Originally Posted by mstateglfr View Post
So do you just ride Campy and Microshift at this point?
My statement was forward looking, but yes campy, microshift and others will be perfectly fine with me if Shimano continues with their current US vs. Europe price disparity and also shuts down international distribution or parallel imports. Although I'm sure I will still be able to get whatever shimano replacement parts I need from German retailers who will be happy to fill the void when the British retailers stop shipping to the US. Shimano's pricing strategy has only been tolerable because prices are still low on complete bikes and replacement parts are easily available from international retailers. If that's not true anymore, I just won't buy shimano. Pretty sure the only sram part I've ever had on one of my bikes was a grip-shift on my mountain bike in the late 90's.
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Old 12-20-18, 12:04 PM
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Originally Posted by TrojanHorse View Post
Let me introduce you to the drug industry...
It's not really a good analogy because of the single-payer system in most of the world vs. our hopelessly screwed up third-party payer system in the US. None of the monopsony purchasing power or regulatory burden that causes drug price disparity is in place for bike parts.
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Old 12-20-18, 12:19 PM
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@Psimet2001 needs to chime in on this.
What are the thoughts from a jaded shop owner who doesnt really sell components?

Seriously- im interested to hear your take on the news.
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Old 12-20-18, 12:27 PM
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Originally Posted by Padj View Post
Shimano have turned to junk recently
What?

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Old 12-20-18, 12:34 PM
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Originally Posted by kingston View Post
It's not really a good analogy because of the single-payer system in most of the world vs. our hopelessly screwed up third-party payer system in the US. None of the monopsony purchasing power or regulatory burden that causes drug price disparity is in place for bike parts.
No, very different circumstance but the out-of-whack pricing is similarly head scratching.

As for resale price maintenance... tons of companies do it. Speedplay has been irritatingly consistent with it, and if you don't like you can always use Look, which I have recently found to be superior.

I got a complete 5800 drive train for... I want to say $330, a year ago. Great deal! Maybe next time I spend the money renovating the old 6500 drive train that it replaced instead. (shrug)
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Old 12-20-18, 01:51 PM
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I posted this on Slowtwitch the other day.....if you want to feel crappy.....check out the difference anywhere online versus an LBS for Conti tires.......

It's outrageous. A GP4000 tubular is $80 online........$140 in the store.

Talk about a total BS rip. I understand they run the "specials" a few times a year where you almost get a 2-for on Conti tires in brick-mortar stores........but the day to day difference is there.

Some of the disparity for online e-tail isn't just availability, shipping, and taxes.......it's manufacturers not playing nice with the rules for the small guys in the first place.

I wouldn't be surprised to start seeing a ton of "new takeoff" Shimano parts online along side a crap-ton of almost throwaway alloy generic road bike frames. Think "Nashbar CX bike".
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Old 12-20-18, 02:36 PM
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Originally Posted by JonathanGennick View Post
Here is some news worthy of note:

https://www.bicycleretailer.com/indu...a#.XBul4Vw3lhE

Shops of course are rejoicing, but I am sitting here and dying a little bit on the inside. Because Chain Reaction has provided a glimpse of what's possible when the supply-chain is made shorter and more efficient. Few things have contributed to my enjoyment of cycling as much as the ready availability of modestly-priced parts and the wide selection that's been available on the Internet.
Shops need their wholesale prices lower, not their lower priced competitor eliminated. But I guess that is not Shimano's problem
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Old 12-20-18, 02:48 PM
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Originally Posted by JonathanGennick View Post
The comments section on that article is particularly eye-opening.

One guy says the two biggest problems bike shops face is on-line competition and having to contribute to health insurance for their wage-slaves.


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Old 12-20-18, 03:50 PM
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What I'm not clear on, are LBS prices in the UK comparable to that offered by the UK online stores, or the same disparity we have here between LBS and eg. Comp Cyclist etc. Try to keep responses relevant to 'authorized' sellers.

And not sure if it's already a level playing field anyway... eg. doing a sample search on a Shimano 8050 di2 RD.. It's $207 at PBK, $217 at Merlin, though $170 at CRC. Meanwhile I think a lot of these are US etailers, correct? There's not much in it for a UK benefit for this example anyway

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Old 12-20-18, 04:12 PM
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This wouldn't have anything to do with the dotard's "trade war" tariffs, would it?
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