HerrKaLeun

I heard on a podcast that shimano apparently promised US dealers that they will prevent EU dealers to sell to US customers (same way SRAM already does). I also found similar rumors of them preventing sales to australia. nothing substantiated, though.

Does anyone know more?

On that podacst (Mountain Bike Radio) the hosts are also shop owners and always complain about that they have to pay more wholesale in the US than CRC sells to customers and Shimano forces them to sell at Minimum Advertised Price (MAP). Obviously my solution would be for shimano to sell to US stores the same way they sell to european stores. but unfortunately the rumor has it they decide to not allow EU dealers to sell to the US. Obviously this would mean quite higher prices for US.

Hope this doesn't come true. I found a 2019 MAP policy for "soft goods and pedals", but it didn't mention actual components (drivetrain, hubs, brakes etc.)

Lazyass

Shimano lowered prices in the USA in 2016 because of this issue.

https://www.bicycling.com/bikes-gear...ces-in-the-us/

mtbikerinpa

Certainly interested to find out. It was an eye opener to work on the inside of a shop and find out the online vs at-cost wholesale that the shop employees get was not as advantageous as thought.

Kedosto

Teamprovicycle

Im so rired if the giant centralized powers jerking people around , just give me my damn parts and get screwed .

Dave Mayer

Yikes: If true, this would be a major impediment to buyers, in terms of cost and availability. I bought an electronic-install only carbon frame a year ago, and I've spent months turning myself inside-out trying to source an Etap group. Impossible.

If Shimano goes this way, hopefully Alibaba-delivered gruppos by Sensah and Microshift can fill the supply gap.

bluehills3149

As someone who grew up in Australia, this was a common practice pre-internet days when Oz buyers regularly paid triple the world price on basically everything imported and both wholesalers and overseas manufacturers gorged themselves fat on the easy money. Both these groups want to return to the "good old days" of protectionism rather than compete on price + quality. I hope they fail. If Shimano et al. can make a profit selling for x Euros then they should be able to sell to everyone for x euros.

fishboat

If I were to guess..and this is a guess only..the wholesale in EU and US, and final pricing to the customer in both, has much to do with the US customers not paying the VAT that EU customers pay. I've ordered things from EU suppliers and have never paid the VAT. Avoiding the tax-man via a loophole seldom lasts forever. I'd expect the EU suppliers have an entry in their annual tax wrapup that quantifies the volume of product they've moved without collecting the VAT...to which the tax-man says..wtf? Though..certainly.. Shimano's dealers getting undercut by EU suppliers would raise lots of angst that Shimano would have to address.

unterhausen

Shimano sells to those online shops at oem pricing because they supposedly are bicycle manufacturers. So they are getting components at the same price that a wholesaler gets them. If Shimano wants a dealer network, which they do, they need to stop this practice. Either stop selling at OEM to fake bike manufacturers, or limit where they can sell. Nobody is getting fat off of normal retail markups in the bike business. If a dealer gets a part at the same price as you can get it from overseas, what are they supposed to do, give it to you at cost? Other than this, the problem with Shimano's new scheme is they have been a really horrible supplier with no stock on popular items. If they didn't have the OEM market cornered, they would be in real trouble.

Sy Reene

I thought the issue was the distributorship-model in the US, with this middle tier wetting its beak. Not sure it's just an OEM thing. Doesn't the price difference extend to various other bike equipment and/or clothing. Also, if it was just an OEM pricing thing, then theoretically Nashbar (which 'makes' its own brand of bikes) could have been selling groupsets at pricing to compete with the UK?

JonathanGennick 

I hope not. I'll be dead-on honest here: I'm happy for disintermediation and the opportunities for greater selection and lower pricing. My enjoyment of cycling has been substantially enhanced by discounters such as Jenson USA and Chain Reaction Cycles. I'm happy for the opportunity -- though leery of it -- of buying directly from Taiwan and China. European pricing shows just how much inefficiency there is to be squeezed out and removed from the U.S. distribution model.

unterhausen

Yes, it is as simple as them getting distributor pricing and then selling at normal retail markups. It has been long demonstrated that nobody stays in business in retail if they don't charge normal markups. Shimano does a fairly good job of controlling pricing in the U.S. from U.S. companies. The European mail order companies might shave margins just a little because they don't have the same costs as a storefront, but generally you can rest assured that a bike shop and the Europeans are "gouging" you by the same percentage on your purchases.

People have long speculated that they are getting OEM surplus, but they are the OEMs. If they were getting surplus, supply would be less and their prices would probably be higher. If Shimano carries through on this, I think we will still see OEM surplus online on ebay, but it isn't going to be as plentiful or convenient.

Shimano has a fairly decent model otherwise. It's obvious now that they tried and are failing to be their own distributor that distributors earn their markup. Campagnolo always had a ridiculous model of selling to Campy USA and then to distributors and then to bike shops. So there is an extra 60% markup early in the margin chain. I don't know if they fixed this, but it's too late. Only a few specialty shops support their products now.

HerrKaLeun

true, even Jenson has limited selection compared to CRC et al

As much as I love shimano products, I would go out of my way to support a manufacturer that let's me buy wherever i want. I think many people avoid SRAM because they are so expensive due to market protection. If shimano effectively increases our prices, many people may as well buy SRAM. they may shoot themselves in their foot with that.

VAT would just make everything in the EU more expensive, OEM don't lower prices for that. (consumer carries the burden of VAT, OEM and dealers just collect the tax).
the solution would be that OEM sell to all markets at the same rate.

I don't think shimano cares if you build bikes or sell parts... it is about how many units you buy. More units = better price. why would a bike manufacturer get better prices if they buy the same number of units like CRC for example?

Yeah, i probably would upgrade less if they increase my effective price.

CliffordK

It isn't VAT, but rather the $800 Tariff exemption that mail order individuals get. And Trump's trade war makes it worse. Plus the sales taxes that get ignored for many locations (not an issue in Oregon).

If we're seeing Nashbar and Niagara both suffering in this economic climate, then the issue goes much deeper than the LBS.

I've decided to no longer buy Shimano chains. I have to think about other parts. Cassettes?

Fortunately my next major purchase will be tires not covered by Shimano's boycott.

I've been wanting to start a small business, and it has become more and more obvious that Shimano is not a company that I wish to deal with.

fietsbob

Post Brexit , UK may be doing it differently..

CliffordK

Possibly. I'm doubting we'll be seeing any huge changes.

I've done a few orders from Germany and Europe. It is quite possible that someone will be ready to step up.

I've also encountered many Chinese sellers selling direct, as well as a few Japanese sellers selling direct.

Shimano may end up playing whack-a-mole to try to keep their products out of the USA.

HerrKaLeun

The $800 exemption is not the problem. the problem is there are tariffs (= US consumer-paid tax). then we could have an even more efficient distribution. right now the products go Asia-EU-US. We could just go Asia-US.

It will be hard to avoid shimano. If you boycott shimano for such practices, you also should boycott all SRAM brands since they have prevented this EU-US trade for a long time.


that is a manufacturer policy (armwringing) and not related to politics.

Marcus_Ti

US distributors are lobbying to drop that $800 exemption to $80. They'll probably get it.

CliffordK

Maybe.

Part of the reason for the $800 exemption is that it is a major headache for government, mail companies, and individuals to collect those tiny tariffs.

And, of course the international traveler that brings some personal items with them, and returns with some personal items.

They'd do much better to fix the mail system that makes it cheaper to ship an item from China than it is to ship across the street.

US/Australia small item trade would boom, if only we had good 2-way mail. Likely trade to other countries as well.

CliffordK

I wonder if cycling is a unique niche for international trade in that it has a lot of very small light items that are very expensive. So it is easy to order a couple hundred bux worth of items that will fit in a small box. And do so repeatedly.

So far, the only other thing that I've ordered through international suppliers was vintage car parts of foreign origin.

Demands for tariff exemption changes are likely very much bicycle based. Nobody cares about tariffs on antique cars.

Perhaps one could scroll through Alibaba or AliExpress and find a few other target industries. I've got my eye on a Laser Cutter. Still, the issues with some of the tools is the local distribution network, rather than direct foreign shipments.

A good local distribution network should be able to undercut the direct foreign shipments if done right (and note many foreign E-Bay shippers now are using local warehouses).

Of course, this is all about resellers which is an important part of our economy, but it isn't core manufacturing which should be the main target of tariffs.

Why should I be REQUIRED to hire a "personal shopper" that does a piss poor job of getting stuff I need to me when I can do the shopping myself?

unterhausen

I'm not sure what happened to Niagara, but their shipping was slow because they mostly just ordered your stuff from QBP and then shipped it to you. And their prices weren't that great. I could get 95% of the stuff they sold faster and cheaper from my LBS

When Performance's parent company bought Nashbar, they turned it into a dumping ground for anything they couldn't sell. I don't know what Nashbar's numbers were like, but I don't think them failing is really representative of the state of the bike business as a whole. Performance had too much debt and occupied too many high-end retail locations. The general slowdown in bike sales did them in.

Bike shops have been under sales pressure for years now. I don't see any upswing in demand to help. Maybe ebikes will save some, but that is a really price-sensitive market

CliffordK

They could double bicycle demand overnight by adding a $5 per gallon gas tax.

Of course, department stores would pick up some of the slack, but LBS stores would also see a boom.

Marcus_Ti

Nope. People in the USA would bend over and pay it. Because, for most everyone, bicycles are not a tenable form of transit. Distances from suburbs to work are too large, weather often too foul, cities and workplaces are too non-bike friendly, and kids need drive to school and groceries bought en masse from warehouse-size grocery stores.

Gasoline prices have doubled twice in the last decade in huge spikes...and gasoline consumption and miles-driven barely registered a blip in change.

CliffordK

A couple of years ago I tried to start a small bike business, and got slapped in the face by Shimano refusing to sell to me (too small of a small business).

I talked to a couple of companies. Questions like hitting minimum orders (which were quite low for wholesale... so YES)... still, refusal to work with me.

I still have to follow up with other suppliers, but I have no love for Shimano and Shimano wholesale redistributors.

I realize they're trying to deal with a changing world, but not doing well.

I wasn't intending to dump parts directly on the web, but intended to do value added building and modification. The very thing that should be encouraged with small businesses.

Dave Mayer

The first order of business would be to un-elect those individuals who imposed such a tax. It might take as long as a 4-year election cycle, but the complicit state and federal officials would be gone, and then the tax. In the slim event the tax stuck, it would dramatically shrink the US economy, taking millions of vehicles off of the road. Manufacturing and other domestic businesses would further escape offshore to jurisdictions with more favorable policies and prices.


With respect to cycling under these conditions, I would be terrified, due to running the gauntlet hordes of desperate unemployed. And a rash of newly-minted cyclists would increase accident and injury rates dramatically. I remember the last wide-scale bus strike in our city: this was about as close as I've been to getting killed on a bike due to the influx of inexperienced riders on ancient crappy bikes. It was the wrong-way Freds that nearly did me in.


Actually (car) driving during our last bus strike improved substantially. Taking slow-moving vehicles off of the roads substantially helped reduce the gridlock. I've seen traffic simulations in which the ultimate solution to urban gridlock is to provide every commuter with a one-seater sports car, with the most beneficial attribute being fast acceleration. In this way, intersections can be cleared in the least amount of time. Both in theory, and my observation, it is slow-moving, frequently vehicles stopping such as busses and trucks that cause the most traffic chaos.