Gray Market Bicycle Parts

[The Gnome]

Thought you were a 'wrench'? Any Campagnolo 10s rear der works just fine with Campagnolo 9s (and 8s!!) shifters. Campagnolo still makes 9s cogsets, use any 9s chain. Use any front derailleur...blah, blah.

hey thanks...you always so snotty? oh yeah, you are! I did know that but if you read a little closer you will see I am trying to keep it original...that took 20 seconds I would guess...I must owe you ten bucks for the golden, experienced advice I believe? send me your paypal account...

 

[biker77]

hey thanks...you always so snotty? oh yeah, you are! I did know that but if you read a little closer you will see I am trying to keep it original...that took 20 seconds I would guess...I must owe you ten bucks for the golden, experienced advice I believe? send me your paypal account...

Hi Gnome - Busted gave you some free and good advice - like he does to many on the forum quite frequently. Thanks would have been a better reply.

You and I are home wrenches. I accept the fact that my work takes a bit longer than the pros. My knowledge is limited to my bike, but I if I buy something different I will learn. The $30/hr you quoted seems fair to me but the owners have explained that this is not viable.

 

[The Gnome]

Hi Gnome - Busted gave you some free and good advice - like he does to many on the forum quite frequently. Thanks would have been a better reply.

You and I are home wrenches. I accept the fact that my work takes a bit longer than the pros. My knowledge is limited to my bike, but I if I buy something different I will learn. The $30/hr you quoted seems fair to me but the owners have explained that this is not viable.

gee...get off your knees man...do you not know what has already been understood? whipe the white stuff offa your chin...man up...but THANKS>>>

 

[The Gnome]

Hi Gnome - Busted gave you some free and good advice - like he does to many on the forum quite frequently. Thanks would have been a better reply.

You and I are home wrenches. I accept the fact that my work takes a bit longer than the pros. My knowledge is limited to my bike, but I if I buy something different I will learn. The $30/hr you quoted seems fair to me but the owners have explained that this is not viable.

we need to buy kneepads is my guess...

 

[BroDeal]

gee...get off your knees man...do you not know what has already been understood? whipe the white stuff offa your chin...man up...but THANKS>>>

Classy.....

 

[The Gnome]

Classy.....

bro... I deleted that...30 secs after I wrote it...but you publish? seriously...just become a moderator...or a wanna be mod I guess...again, you want to talk class?

 

[The Gnome]

Classy.....

I am just going to say this and if I get banned...it is fine...but you are just such an A hole...quote that Ahole...baby hall monitor stuff...

 

[BroDeal]

I am just going to say this and if I get banned...it is fine...but you are just such an A hole...quote that Ahole...baby hall monitor stuff...

Keep going.

Next stop: Start asking to fight people.

 

[RDV4ROUBAIX]

Next person to post anything not related to this thread is going on a week vacation from here. ie The Gnome.

 

[Moose McKnuckles]

Next person to post anything not related to this thread is going on a week vacation from here. ie The Gnome.

Thank you. This was getting out of hand.

Back to the discussion. I feel that the bike shops provide a very valuable service, yet the industry has placed them in a disadvantaged position.

QBP is taking a nice cut. The manufacturers are taking a VERY generous cut, partly because they are spending egregious amounts on sponsorship and advertising.

Part of the problem, I think, is that companies like Rosetti, etc., can just source parts at OEM prices. PBK can do so as well, I believe, since they have their own bike brand.

I'm not exactly sure how shops can compete against that. Are we essentially moving to the business model where the bike shop is just a service center, rather than a retail source? The Chinese manufacturers have figured out that the companies are basically middlemen. So, they've moved to selling directly to customers. Molds are brazenly copied. Customers are figuring out that, hey, I can get a Pinarello clone for $600, a Campy SR kit for $2000, carbon wheels for $400, bars, etc. for $200, and presto! I've built a "Dogma" for $3200 rather than $11,000.

 

[BroDeal]

I'm not exactly sure how shops can compete against that. Are we essentially moving to the business model where the bike shop is just a service center, rather than a retail source? The Chinese manufacturers have figured out that the companies are basically middlemen. So, they've moved to selling directly to customers. Molds are brazenly copied. Customers are figuring out that, hey, I can get a Pinarello clone for $600, a Campy SR kit for $2000, carbon wheels for $400, bars, etc. for $200, and presto! I've built a "Dogma" for $3200 rather than $11,000.

That would seem to be the eventual outcome.

Things will get very interesting once Deng Fu, Cycling Yong, Miracle Trade, and what not get their act together. Right now their frames have various issues and dealing with them through email is kind of a joke, but eventually they will get solid products that don't require any jerry rigging to build and easy to use web ordering systems. Then it is bye bye to most of the mid-sized bike companies. It will pull down the price that the larger companies can charge and probably destroy most of them.

Team Flybike wins the 2020 Tour de France.

 

[Race Radio]

That would seem to be the eventual outcome.

Things will get very interesting once Deng Fu, Cycling Yong, Miracle Trade, and what not get their act together. Right now their frames have various issues and dealing with them through email is kind of a joke, but eventually they will get solid products that don't require any jerry rigging to build and easy to use web ordering systems. Then it is bye bye to most of the mid-sized bike companies. It will pull down the price that the larger companies can charge and probably destroy most of them.

Team Flybike wins the 2020 Tour de France.

Image this

*Interbike has a Public Day, like Eurobike does
*Deng Fu, Ribble, Pedal Force, Gigantex, etc show up

What happens next?

 

[ElChingon]

Image this

*Interbike has a Public Day, like Eurobike does
*Deng Fu, Ribble, Pedal Force, Gigantex, etc show up

What happens next?

I ton of disgruntled ex-customers show up and rabble rouse the living daylights out of them for all the crappy products that they've produced so far. The news stories goes ballistic and everyone shy's away from buying anything that has a hint of those manufactures touching a product. Yes, anyone one out of the loop will buy based on price and look of the higher end products but will quickly learn what did wrong.

Not sure about the rest of you's but who buys products that are not known to be good and have a solid known warrantee?

 

[DirtyWorks]

Are we essentially moving to the business model where the bike shop is just a service center, rather than a retail source?

Yes, unless you go vertical. Meaning stocking 100% Trek/Cannondale/Specialized bikes/parts/accessories. That's been the way for a while. Even then, some manufacturers use service as a profit center cutting the shop out entirely.

The Chinese manufacturers have figured out that the companies are basically middlemen. So, they've moved to selling directly to customers. Molds are brazenly copied. Customers are figuring out that, hey, I can get a Pinarello clone for $600, a Campy SR kit for $2000, carbon wheels for $400, bars, etc. for $200, and presto! I've built a "Dogma" for $3200 rather than $11,000.

Try telling people most of the bikes at most lower price points come from maybe two manufacturers, (Giant/Kinesis) so just get one from a shop you like and be done. Branding is THE major accomplishment of the current market leaders. Not the bikes themselves.

Show them it's either a Kinesis or a Giant and it's like they are hearing that Santa is not real for the first time. So they don't take it in and go right back to Specialized and pay top dollar.

ElChingon, you will likely be very dismayed to hear many of those brands have added actual warranty service. A warranty is not a traditional part of Chinese/Taiwanese consumer culture. So, it took a while. Some of the well-known direct sellers paid and passed independent CEN testing. They are catching on. And the product is good!

 

[Parera]

Vertical integration is just such a gross shop model, at least for me...nothing is more unappealing as a consumer than walking into a bike shop and being bombarded by Bontrager/Specialized bars, stems, saddles, shoes, clothes, helmets, tires, pumps, etc. A local Trek dealer has slowly gone this route in the past three years, and it has now reached a point where I won't even really bother going in to buy stuff. They used to have a nice selection of shoes from Sidi, Shimano, Pearl Izumi, & Lake, but now it's wall-to-wall Bontrager junk. Clothing has gone the same route. Castelli, Pearl Izumi, Hincapie, et al replaced by the terribly dull Bontrager stuff.

Maybe my memory is playing tricks on me, but it never seemed like inventory stagnated when they were selling from a variety of companies. Merchandies seemed to move. But now, this Bontrager crap sits there forever. It seems like their inventory never changes, and this seems to play out when I'm riding my bike. I NEVER see people using this stuff save for the people who bought complete bikes. I know for a fact the shop owner claims he can't buy inventory like he did a few years ago because of the internet, but honestly this model seems like it a temporary fix to a larger problem.

The whole gray market BS must be super frustrating for shop owners, but getting back to the OP, I don't think a viable solution is to take these frustrations out on paying customers whether that manifests as being a ****** with customers wanting to install gray market parts OR crippling your inventory for the sake of comfier margins.

 

[LugHugger]

snip

Not sure about the rest of you's but who buys products that are not known to be good and have a solid known warrantee?

Well, after reading several hundred pages on the RBR Chinese Carbon thread, I did in May 2011. $530 buys you a very nice FM-015 ISP frame from Deng Fu.

Add to that Ultegra groupset and Ritchey alloy components (sourced from Ribble) plus a pair of 32h hand built wheels. Weight? 16.75lbs on the nose with pedals.

Total cost $2,750 including $175 labour at my LBS (actually £1,775 in local currency)

Mileage since end of May - 4,250. Performance - flawless.

Anyhoo, enough about me

At a conservative estimate, a similarly specced bike from Ridley, for example, would have cost an additional $1,000. I have no doubts that a Ridley goes through better QC and is warrantied for more than 12 months (5 years I believe) but the saving pays for 2 replacement frames if neccessary.

So, consumer sourcing results in a $1,000 saving at a bike level. Very few people can afford to ignore a 35% saving.

Our LBS owner recognises that the retail environment has changed in the last 10 years. His long term riders and customers are acting in the same way and self-sourcing. Instead of tilting at windmills, he is adapting the 'top end' of his business to reflect the current purchasing patterns and publishes a service centre tariff. Nobody argues, nobody asks for a discount. He is taking on staff rather than laying them off and now has an additional wrench at both of his stores qualified to Cytech Technical 3. Apparently, these guys will be making actual bottom line profit for him from the 1st January (tomorrow) and he employed them at Easter. He estimates an additional profit of $15k/store/pa derived from this investment in skills and labour. And no peed off customers. Not too shabby, eh?

 

[Bustedknuckle]

hey thanks...you always so snotty? oh yeah, you are! I did know that but if you read a little closer you will see I am trying to keep it original...that took 20 seconds I would guess...I must owe you ten bucks for the golden, experienced advice I believe? send me your paypal account...

Xenon? Token?

$20, gotta put gas in the Mercedes

me@gonnagoride.com

 

[Race Radio]

I ton of disgruntled ex-customers show up and rabble rouse the living daylights out of them for all the crappy products that they've produced so far. The news stories goes ballistic and everyone shy's away from buying anything that has a hint of those manufactures touching a product. Yes, anyone one out of the loop will buy based on price and look of the higher end products but will quickly learn what did wrong.

Not sure about the rest of you's but who buys products that are not known to be good and have a solid known warrantee?

Hardly.

Have you been to Italy lately? At any GF you see a sea of these bikes, often with the sticker of the LBS brand on them. I remember when they first started showing up a few years ago and I am always shocked at how quickly they gained market share.

I have started to see the same in the US. While some buy direct from various websites for $500 there are also multiple companies that are branding frames and wheels from these manufactures. Many with warranties and good reputations.

I don't see myself buying one but many have.

 

[richwagmn]

So what does it do financially for a bike shop when they go purely vertical (ie specialized, trek). Are they getting a better deal? Does the mfg float their inventory for them?

 

[Moose McKnuckles]

So what does it do financially for a bike shop when they go purely vertical (ie specialized, trek). Are they getting a better deal? Does the mfg float their inventory for them?

They borrow from the manufacturer. When they can't pay it back, Specialized takes their store. Presto! Now it's a Specialized company store.

Based on what I have heard, that's what happens.

 

[Bustedknuckle]

So what does it do financially for a bike shop when they go purely vertical (ie specialized, trek). Are they getting a better deal? Does the mfg float their inventory for them?

Somewhat similar to auto dealerships. Altho they are not 'owned' by the manufacturer(altho like car dealers, some are wholly owned by the manufacturer), they get financing, kickbacks, tech and merchandising, advertising 'help'.

In exchange for above, they get direction by the manufacturer on what to display, how to display it, what to sell. At the extreme, no Trek store is gonna sell anything but Trek products. Same for Specialized and Giant 'stores'. Other 'concept' stores, sell Giant, for instance, but are free to sell other products, like Felt and Kona, right down the street, but do that under the watchful eye of Giant(not TOO much Kona or Felt).

 

[Moose McKnuckles]

I'm somewhat at a loss as to the advantages of say, buying a Ridley or a Focus or even a Pinarello vs. some open mold from Flybike's vendors (DengFu, HongFu, CyclingYong, etc.). If the latter are now CEN certified and reviews of these frames have been stellar, what do you get extra in terms of performance, etc. with the name brands that are manufactured in the Far East anyway?

 

[FignonLeGrand]

I have to wonder if Campagnolo is seeing any incremental increase in sales. It appears the strategy is only cannibalizing off the US based market.

I know a lot of people who ride Campy and they all get their stuff from the UK. I can't image that is good for North America's business. If TK had hair he would be pulling it out

With the value and fluctuation of US dollar, if you can replace the US revenue with Pounds or Euro from EU distribution you are on to a winner. Who cares if you then cannibalize less profitable sales.

 

[Race Radio]

With the value and fluctuation of US dollar, if you can replace the US revenue with Pounds or Euro from EU distribution you are on to a winner. Who cares if you then cannibalize less profitable sales.

The dollar has gained over 10% on the Euro and close to 10% on the Pound in the last 6 months. Campy's base is Euros so that increase is pure profit.

Campy is a cycling manufacture, not a currency trader. They likely have some hedging strategy to limit their exposure to large fluctuations. It would be foolish for their long term strategy to be based on short term market fluctuations.

 

[FignonLeGrand]

The dollar has gained over 10% on the Euro and close to 10% on the Pound in the last 6 months. Campy's base is Euros so that increase is pure profit.

Campy is a cycling manufacture, not a currency trader. They likely have some hedging strategy to limit their exposure to large fluctuations. It would be foolish for their long term strategy to be based on short term market fluctuations.

hhmm true but 10% growth on a very weak position is often still weak. I agree that they are unlikely to be hedging but as I was replying on a post about losing US LBS sales to UK wholesalers I dont think they are going to worry too much.