Say it ain't so Shimano!

"Mike Jacoubowsky/Chain Reaction Bicycles" wrote
in message ...
The idea is to get a handle on all of the re-sold gray-market OEM stuff
that's been flooding the market. Shimano sells the stuff much cheaper to
bike manufacturers, in order to keep people like TREK, Giant & Specialized
spec'ing their stuff. This strategy is used so that the bikes look like a
great value vs buying all the stuff separately (which is what makes the
product manager want to spec them).

Perceived value is the key here. If Shimano can increase the perceived
value of their components, they sell more of them. Sales to OEM dwarf
sales
to the retail channel... I doubt they really care all that much about it,
*except* for the fact that it props up the value of their components to
the
OEM.

The irony, of course, is that the OEMs are cutting their own throats by
devaluing the product in this fashion. When they backdoor stuff really
cheap, they diminish its value.

I'm not sure I follow you. If OEM's succeed in devaluing Shimano components
via back-door grey-market dealing, then Shimano loses, not them. The OEM's
reap because they can negotiate lower prices much more easily in a devalued
Shimano market. (Lower perceived value - lower market price.)

Of course, they're looking at it from the
standpoint of either having too much inventory or the opportunity to buy a
greater volume for a bigger discount.

Yes, as well as driving the price of Shimano components lower across the
entire market.

Given the relatively large number of mail-order places Shimano has
"authorized",

Six mail-order shops in the USA will be authorized, according to Branford's
phone call with the man in charge at Shimano. That's it. 1-2-3-4-5-6

I really don't think a good case can be made that Shimano is
trying to price-fix their merchandise. They are, however, trying to level
the playing field for retailers *and* increase perceived value to the OEMs
by cleaning up the supply chain.

Yes, I agree. It seems a sensible move, until you see the whole picture.
They're operating as if they have no competition.

The extent to which this increases prices remains to be seen.

Especially if they start hemorrhaging market share. It could blow up in
their face.

Overall,
Shimano will sell about the same amount of product, just less of it to
OEMs
and more of it through the normal wholesale outlets (distributors). The
effect on Shimano's bottom line will be a positive one, as higher-margin
distributor sales replace lower-margin OEM. Overall this would appear to
be
a negative to the consumer... the only way I can put a silver lining on it
is that, if Shimano makes excess profits, the laws of economics dictate
that
others will come in to fill the void. And, from a highly-biased
standpoint,
if it helps the LBS to survive, that might not be such a bad thing either.
There are a few of us who aren't total scum.

Nature abhors a vacuum. The "little guy" online shops want to keep their
customers happy. They'll start selling everything *but* Shimano. This will
increase visibility in the crucial enthusiasts market for hitherto-unknown
brands. We'll likely start to see "SST" (Shimano Suck This) types of
gruppos. If it gets bad enough, there may be a visible backlash against
Shimano. I don't think they'll let it get that bad; but they *are* openly
threatening to blacklist any unauthorized dealer who sells Shimano. I
wouldn't even be surprised to see a few lawsuits over this. The online
retailers like Branford might just have a case.

-Barry

don't worry, buy Campy :-)


"Jean" skrev i en meddelelse
...
Perhaps this is old news to most folks here, but I was looking for some
bike
parts today and I encountered the following web page:
http://www.branfordbike.com/shimano/shimano.html . The page says that only
a
few select online bike stores will be allowed to sell Shimano stuff on the
web. A little googling indicates that the authorized stores are Supergo,
Performance, Bike Nashbar, Excel, Colorado Cyclist, and REI. The web page
states that any store that is not authorized and that continues to sell
Shimano stuff online will be put a list of banned retailers that Shimano
will send to Shimano distributors.

Discounting Shimano's "ensure that consumers are provided with the highest
levels of service ...blah, blah, blah" spin about why they have done this,
what is the real reason behind the policy? Was this policy forced by the
Supergo-Bike Nashbar-Performance conglomerate and designed to kill most
other online stores? Or is someone at Shimano just trying to encourage
people like me to by Campy equipment?


Jean

When I started building bikes 13 yrs. ago, Suntour, cane creek,
later Ritchey and FSA sold small builders OE. When I called Shimano they
said: how many containerloads do you need?
This imperious attitude sent me to the competition.Maybe now the consumer
too will balk at cheap sh-t Shimano Total Integration (read wannabe
monopoly) that is not repairable,
expensive ;(Mirage ergo weighs less than Dura-ace and costs
2/3 of Tiagra). You think?
Tom
--
Bruni Bicycles
"Where art meets science"
brunibicycles.com
410.426.3420
Jean wrote in message
...
Perhaps this is old news to most folks here, but I was looking for some
bike
parts today and I encountered the following web page:
http://www.branfordbike.com/shimano/shimano.html . The page says that only
a
few select online bike stores will be allowed to sell Shimano stuff on the
web. A little googling indicates that the authorized stores are Supergo,
Performance, Bike Nashbar, Excel, Colorado Cyclist, and REI. The web page
states that any store that is not authorized and that continues to sell
Shimano stuff online will be put a list of banned retailers that Shimano
will send to Shimano distributors.

Discounting Shimano's "ensure that consumers are provided with the highest
levels of service ...blah, blah, blah" spin about why they have done this,
what is the real reason behind the policy? Was this policy forced by the
Supergo-Bike Nashbar-Performance conglomerate and designed to kill most
other online stores? Or is someone at Shimano just trying to encourage
people like me to by Campy equipment?


Jean

On Thu, 14 Aug 2003 21:57:41 GMT, Werehatrack
wrote:

On Thu, 14 Aug 2003 15:49:44 -0400, ajames54
may have said:

But the point is that a number of manufactures would / could over
order on their component groups and then sell the extras on to
different distribution points as a way of further reducing their
costs ...

Ah, now I see, you're positing the growth of an entire additional
network, with the OEM supplying grey-market distribs.

I don't know if the situation still exists but when I had my
store I could buy "boxed" or "loose" components from a couple of
my suppliers. The recommended procedure was to buy one or two
"boxed" for display and substitute "loose" when doing the
installs in the shop.

To combat this practice Rock-Shox and Pulstar (two name only two)
made visibly different products for their OEM stream ... it
didn't work perfectly but at least the consumer had some idea of
what was happening.

jean- Discounting Shimano's "ensure that consumers are provided with the
highest
levels of service ...blah, blah, blah" spin about why they have done this,
what is the real reason behind the policy? BRBR

To try to stop unrestricted OEM resale, to try to 'control' their distribution
and try to stop gray market, highly discounted resellers of their stuff...To
try to re-find smaller bike shop support for their products.

Peter Chisholm
Vecchio's Bicicletteria
1833 Pearl St.
Boulder, CO, 80302
(303)440-3535
http://www.vecchios.com
"Ruote convenzionali costruite eccezionalmente bene"

adr- They should be asking their distributor why a customer can buy the same
parts
mail order for less than they can from the distributor. It's a reasonable
question to ask. It sounds like the gouging is being done by the distributors.
BRBR

Mailorder sells at the same margn as most bike shops, they just pay less. They
get bagged components from from bike manufacturers, who pay ohhh so little when
buying OEM...mostly to get an all shimano bike. Bike maker resells what he
doesn't use to MO...Why when you buy lots of stuff MO, it comes in a bag and
not a box..that will stop as well..

Peter Chisholm
Vecchio's Bicicletteria
1833 Pearl St.
Boulder, CO, 80302
(303)440-3535
http://www.vecchios.com
"Ruote convenzionali costruite eccezionalmente bene"

ajames- But the point is that a number of manufactures would / could over
order on their component groups and then sell the extras on to
different distribution points as a way of further reducing their
costs BRBR

That is exactly what is happening and something that shimano wants to stop.

shimano supposedly will be examining where some of these MO outfits get their
stuff. Either thru packaging or barcode type things..Offending manufactureres
will be penalized, according to shimano.

Peter Chisholm
Vecchio's Bicicletteria
1833 Pearl St.
Boulder, CO, 80302
(303)440-3535
http://www.vecchios.com
"Ruote convenzionali costruite eccezionalmente bene"

jmedgar- I think the key point is that if I were a smaller independent
retailer,
there'd be no reason to _stock_ Shimano bits, because all I'd hear all day
is,

"dude, i can get this on cheapxtr.com for $30 less!" BRBR

yep, hear it all the time except that the MO outfit doesn't know what works
with what...gent gets all his stuff at MO, USA, then we sell him the proper BB,
front der, etc...

Peter Chisholm
Vecchio's Bicicletteria
1833 Pearl St.
Boulder, CO, 80302
(303)440-3535
http://www.vecchios.com
"Ruote convenzionali costruite eccezionalmente bene"

On Fri, 15 Aug 2003 08:19:50 -0400, ajames54
may have said:

I don't know if the situation still exists but when I had my
store I could buy "boxed" or "loose" components from a couple of
my suppliers. The recommended procedure was to buy one or two
"boxed" for display and substitute "loose" when doing the
installs in the shop.

Oof. That would seem to indicate that what you described is indeed
taking place, then. I can understand why Shimano would want to stop
it.

To combat this practice Rock-Shox and Pulstar (two name only two)
made visibly different products for their OEM stream ... it
didn't work perfectly but at least the consumer had some idea of
what was happening.

I would expect to see more of that. Different surface treatment
(paint color, type of plating or color of anodizing) or possibly a
stamped marking for the OEM items at the very least. This won't stop
people from selling the OEM parts as "take-offs", but it should dampen
the enthusiasm.


--
My email address is antispammed;
pull WEEDS if replying via e-mail.
Yes, I have a killfile. If I don't respond to something,
it's also possible that I'm busy.

"Werehatrack" wrote in message
...
On Thu, 14 Aug 2003 17:58:43 -0700, "Jay Beattie"
may have said:

There also is a
Performance in town, which rarely has anything in stock except
clothes
and is populated by a bunch of kids who just spew the usual urban
myths
about wheel weight ("a pound off your wheel is like a million pounds
off
your frame, dude"), etc.

Oy. Do they import these cretins from California, or californicate
them to order locally? (Isn't there a law against the latter in
Oregon?)

Hey, not to dis California (because I was born and raised there), but
the guy I was parodying was in fact a recent transplant from San Diego.
He asked me what lube I used on my chain for riding in the rain and
absolutely could not believe that I used 30 weight. I mean like really,
dude, he laughed at me. I, like, almost cancelled my Team Performance
membership, dude. -- Jay Beattie.