What's the deal with Walmart and Shimano?
01-20-24, 09:05 AM
#26
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I think it was touched on up thread a bit but not really unpacked. There is a reason the WalMart commercials use the verbage "Same brands" and not "same products." It is because a lot of manufacturers will create a WalMart specific product SKU that invariably has a lower production cost in some way. It may be a bushing instead of a bearing. It could be a thinner injection mold. It could be a different electric motor. Or heck even the same motor with a different cooling fan. Whatever. The point is: When WalMart renews a contract with a manufacturer they will tend to demand a lower price and they order enough that the other company can't do without the contract. The manufacturer doesn't really have a choice other than figure out a way to cheapen the product but do so in a way customers won't notice or care about when it finally does break. That is unless they want to break the addiction to WM & make less money.
The same tactic is mercilessly used to exploit smaller manufacturers and after the first order WM comes a long to demand an order so big the only way a Ma&Pa can fulfill it is to leverage themselves with huge loans and liabilities to meet WM's order demands only to be told on the next order (number 3) of the price they thought they were working for has now changed to near zero and either fulfil the order or go bankrupt.
Like Uber and Lyft drivers with their related automobile costs: Brands sold in Walmart are invariably borrowing against the equity of their future brands value. We know Shimano Tourney is crap. Did you know Shimano has a WM Tourney line that is even worse? Tourney TX.
The same tactic is mercilessly used to exploit smaller manufacturers and after the first order WM comes a long to demand an order so big the only way a Ma&Pa can fulfill it is to leverage themselves with huge loans and liabilities to meet WM's order demands only to be told on the next order (number 3) of the price they thought they were working for has now changed to near zero and either fulfil the order or go bankrupt.
Like Uber and Lyft drivers with their related automobile costs: Brands sold in Walmart are invariably borrowing against the equity of their future brands value. We know Shimano Tourney is crap. Did you know Shimano has a WM Tourney line that is even worse? Tourney TX.
Related to this subject, I own an industrial tools business/distributor. More than a few years ago, a national sales manager asked me why I didn't sell many of one of their products. I told him the Lowes a mile away sells it for $50 cheaper than I can buy it from your company. He said Lowes was their biggest customer nationwide, so they get a cheaper price. I told him I understood, so why did he even ask me the question in the first place. Stupid is as stupid does.
Last edited by seypat; 01-20-24 at 10:15 AM.
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01-20-24, 11:37 AM
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The real mystery is why GMC allows its brand to be put on (exclusively) garbage bikes. Especially their GMC Denali brand, which is supposed to be their upmarket trim. Why is that licensed to bottom of the barrel Wally bikes?
01-20-24, 12:07 PM
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It's hard to believe the questions in this thread are serious.
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01-20-24, 12:14 PM
#30
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Why would John Deere allow their name to be put on a bike when it won't pull a plow?
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01-20-24, 12:30 PM
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It is funny how Shimano has been able to pull off what Wilson tried to do and failed. Wilson is involved in so many sports, but their golf clubs were once the premier brand used by professional golfers. Wilson tried to corner all aspects of the golf market, and increase profits, by offering Wilson golf clubs at big box discount stores. The move nearly put Wilson golf out of business. It has never recovered; although it has been offering high quality players clubs for the last 15 years.
Shimano's association with Walmart is because Shimano is the dominant brand in bicycle components. Shimano nearly has a monopoly when it comes to the market with a 75% share. When everyone else has to fight over a share of the remaining 25%, Shimano has few concerns about tarnishing their name as long as they continue to produce quality components at higher levels.
The other aspect is that professional cycling doesn't drive bicycling component sales. I doubt many people even know Jonas Vingegaard is sponsored by SRAM, I didn't, and probably fewer would be influenced by it to buy a SRAM equipped bike because of him. In 1995 Tiger Woods signed with Nike and they suddenly were producing clubs with zero heritage in the club making industry. They have since abandoned club making, but the influence of professionals on the buying public differs between sports.
Trek may have taken a hit with their association with Lance Armstrong, but Shimano, (and specifically Dura Ace), didn't miss a beat. I would think owning an entire NOS 25th anniversary 7700 groupset would be quite the prize for a number of people. Not so much a US Postal Service badged 5XXX series bike.
John
Shimano's association with Walmart is because Shimano is the dominant brand in bicycle components. Shimano nearly has a monopoly when it comes to the market with a 75% share. When everyone else has to fight over a share of the remaining 25%, Shimano has few concerns about tarnishing their name as long as they continue to produce quality components at higher levels.
The other aspect is that professional cycling doesn't drive bicycling component sales. I doubt many people even know Jonas Vingegaard is sponsored by SRAM, I didn't, and probably fewer would be influenced by it to buy a SRAM equipped bike because of him. In 1995 Tiger Woods signed with Nike and they suddenly were producing clubs with zero heritage in the club making industry. They have since abandoned club making, but the influence of professionals on the buying public differs between sports.
Trek may have taken a hit with their association with Lance Armstrong, but Shimano, (and specifically Dura Ace), didn't miss a beat. I would think owning an entire NOS 25th anniversary 7700 groupset would be quite the prize for a number of people. Not so much a US Postal Service badged 5XXX series bike.
John
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01-20-24, 12:46 PM
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Where's the PTO?
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01-20-24, 12:50 PM
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I'm enraged at our local Walmart as they lied to me regarding a deli order for a bike get-together last night (said they'd have the items, then lied and said they never made that commitment and yelled at me for not knowing their (unposted) food prep hours). And they were out of an item my family really wanted, and said they had a non-abrasive hand cleaner for my wife, but all they had on the shelf was pumice-packed. Grrr.
Wait, I think my Great Value Mexican-style lasagna is ready in the microwave...
Wait, I think my Great Value Mexican-style lasagna is ready in the microwave...
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01-20-24, 12:53 PM
#34
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A few years ago, I met up with a group of older riders riding very nice bikes. I was riding my bike which is equipped with a mixed Record/ Chorus 10 speed group. I was admiring one of the bikes which was nicely equipped with Dura Ace components. He looked at my bike and asked me if my components were above or below Ultegra in the Shimano lineup. I had to explain that Campagnolo was an entirely different company
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01-20-24, 01:00 PM
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You would think, but Shimano cycling and Shimano fishing are run like 2 separate companies, and fishing is a weird segment, manufacturers sell to middlemen distributors.
01-20-24, 01:30 PM
#38
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Shimano bicycle got rich/became big by selling Shimano Eagle , by the billions. Ugly, cheap, heavy but it worked. As for the stickers, any publicity is good publicity.
01-20-24, 02:41 PM
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Campagnolo Syncho and Suntour Accushift were distant seconds and thirds. Campagnolo mountain bike groups were such a disaster that they gave up on them.
Profs to SRAM for their later mountain groups being good enough, maybe better, than Shimano.
John
01-20-24, 02:50 PM
#41
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I was shopping at Walmart the other day and puttered back to look at the bikes. The featured bikes on the end of the aisle had "Shimano" in big, bold letters on the frame as well as in regular-sized letters on the rear derailleurs. Now I ride with $15 Shimano Tourney derailleurs on my bike, but mine looked pretty darn fancy compared to the Walmart ones.
So what's the deal? I would call Shimano a reputable brand, so I totally understand why Walmart would want to use their logo. The thing I don't get is what exactly is in it for Shimano? Why does Shimano want their name associated with truly bottom of the barrel parts? Doesn't that harm the brand's image?
So what's the deal? I would call Shimano a reputable brand, so I totally understand why Walmart would want to use their logo. The thing I don't get is what exactly is in it for Shimano? Why does Shimano want their name associated with truly bottom of the barrel parts? Doesn't that harm the brand's image?
01-20-24, 03:51 PM
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01-20-24, 05:18 PM
#43
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As to Shimano: if they can sell 1,000,000 Walmart special groupsets with a margin of $1 each, and 5,000 Dura Ace groupsets with a margin of $100 each, they're making more money at Walmart. And nobody shopping for Dura Ace is looking at Walmart but the reputation of "pros use this brand" will rub off a little bit the other way. Everybody who cares knows it's an entirely different product, nothing is being diluted.
01-20-24, 05:52 PM
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I realize I didn't and neither did anyone else post this yet:
01-20-24, 07:02 PM
#45
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You’ll find the fishing gear aisle at Walmart within sight of the bicycle aisle. My grandfather was an avid fisherman. He wasn’t a fan of anything not made in the USA, and as a WW2 vet who had fought in the Pacific, he didn’t like anything made in Japan, with one exception. And that exception was Shimano fishing reels, which he considered a big upgrade over the Zebco equipment which was most popular back then.
01-20-24, 09:02 PM
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Not so much that Shimano is selling to Walmart, but that whoever is building the Mongoose/Schwinn/Hyper bikes is putting “Shimano Equipped “ decals on those $250-$300 bikes to upsell those models from the really bargain-barrel $150 ones with SunRun or no-name 3rd party components
01-20-24, 09:19 PM
#48
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Most cyclists don't think of anything GMC as up scale. So no reputable bicycle manufacturer would put that crap on their product. Or were you being sarcastic?
01-21-24, 12:34 AM
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I wonder if anyone who buys a Denali thinks it is the same "GMC" brand which makes GMC cars?
01-21-24, 12:48 AM
#50
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