Spoke Magazine

Shops vs Internet vs Customers

Posted by pieter on Monday September 23 2013

Chicken and the Egg

“Hey Mate! Check out all the parts I got for my bike from the internet! My bike is going to look pimp. That local bike shop is ripping us off, I bought all of these parts for nearly half the price they quoted me on. I just wish I knew how to fit them all, then I wouldn’t even need them anymore!”

“Hey Mate! Have you checked out the local bike shop lately? It’s gone bust! I needed a tube for my ride and it’s gone! The local race series is cancelled because they sponsored and organised it. Not only that, the local trail building is taking a backwards step too, because they were going to all the council meetings and talking to the local Park Ranger. I just wish I knew how much we needed them.”

“Hey Bro! What mid-nineties dream are you living in? My local shop hasn’t done any of that for years. My local race series is organised by a local wholesaler and that wheel demo we both went along to was by another one. The local trail building is done by the club and won’t be affected in my area. Besides; Jimmy opened up a service centre where he can fix our bikes and either sell you new parts or fit the ones you got off the internet. I think the days of the shop are gone.”

Categories: Exclusives

  • Bryce Lyall

    At my lbs they organise stuff, fix my push bicycles, a Chap Named trevor works there and occasionally they give me free beer. Long live the non-chain lbs.

  • andyb

    I really like my shop. Brilliant people, great advice, top quality work. I find it a real dilemma when it comes to parts – knowing that buying from the web is killing the shops, but buying from the shop means paying double for the same thing. I’ve needed a new Bb for weeks now but I can’t resolve who to get it from. If the difference .was 20% rather than 50% it would be an easy choice.

  • PJ

    Evolve or die. There is a niche out there for every retailer, they just have to take the time to understand their customer first. Surviving until the ‘good old days’ of pre-internet come back is not a business strategy.

  • kylane

    It’s not the shops ripping you off – its the wholesalers. They’re doing deals to big warehouses, and leaving the LBS high and dry.

  • jamie r

    Nobody is being ‘ripped off’ its a geography and volume thing. The whole of nz sells less bike goods than an average size US or European City would. And we’re on the farside of the world. A wholesaler has to buy and import enough stock to represent a brand properly, store it and then ship to shops. There is F-all margin on anything in the bike industry except for tubes and cables.
    If a shop or distributer could sell for anywhere near an online retailer they would. It’s not greed but survival that has the prices where they are.

  • Keep it local

    The “rip off” margins (30-50%) are what pays the landlord (local), staff (local),power (local) sponsorship (local riders, schools), advertisers (local), GST, ACC etc. etc. after the shop pays the wholesaler for the goods. The owner does not pocket it as straight profit. Time everyone did Level 1 economics. Overseas online buying means $$$ straight out of NZ – no local jobs supported except the courier companies, no training or skills maintained, no local sponsorship – be careful what you wish for!

  • Karlos

    “Overseas online $$$ going straight out of NZ???”
    Yes there are so many bike parts made in NZ!! So where do the parts in LBS come from….hmmmm?? So the money you pay parts for at the bike shop is going overseas. Consumers are really going to care about the landlord and the power company, and tax.
    Quoting level 1 economics also means that individuals are going to respond to incentives – and for many that is to go for the cheapest outcome.

    • Keep it Local

      You will if your job disappears or is outsourced overseas. Should your employer goes for the cheapest outcome – immigrants, overseas? A community is supported by those in it – hospitals roads etc are run by NZ consumers. Will Amazon sponsor your school raffle or donate to Straship?

      $100 item purchased from local supplier = $50 to overseas supplier, $ 50 to local jobs staff, advertiser, cleaner, accountant, GST, owner; VS $50 to overseas online shop = $10 to courier, $40 to overseas supplier!!

  • Bikegeekazoid

    Wholesalers & retailers are doing everything in there power the be more competitive, just recently all the Shimano pricing came down to be more competitive with the internet. Support your like bike shop and they will continue to look after you and build relationships with the community.

  • Powerpaw

    As someone who goes out of their way to support local businesses where possible, I get totally frustrated with many LBS’s here in Melbourne. Having a surly 20 something guy snarl at me, and then not having the most basic parts in stock, makes me question why I should even bother. I pay almost the same hourly rate for labour on servicing as I get paid, then my bike comes back with mismatched spokes/the wrong QR skewers/the problem not fixed, with no courtesy call to let me know before I go into the shop.
    The days of bike shops being able to survive on taking advantage of entry level riders, and doing deals for their mates is over.
    The internet is impacting on retail in many ways, and businesses unable to exploit a niche are suffering. Why should I subsidise someone who can’t treat me as a customer rather than money in their till?

  • Ned Ludd

    Really? Level 1 Economics, bull. I work hard to pay for my bike gear and when the local guy drives up in a late model gas guzzler tricked out and I strap my bike to 15 yr+ old functional transporter you have your answer. Fat margins should die. We live in a global village. Protection for these dinosaurs? I support local as much as I can but not to the point I have to ride a second class bike while they trick out another OTT 4WD trolley and cruise past on the latest carbon titanium thingy on the trail. Service will be rewarded but greed is finally getting it’s dues, long live the internet (though the luddites want to tax that as well). Adapt or stop trying to prevent others from adapting.

    • Bob

      Bring it on – no more greedy shop owners filling our main streets and parking their porsches in our faces. It will be great when all we have are restaurants and green spaces to enjoy in our towns and we can shop from home while saving the planet. Dinosaurs are extinct and we don’t miss them!