Price fixing on mountain bikes ????

9designs2

9designs2

9designs2

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Been shopping around for a pair of bikes for myself and the other half.... We are not talking small money.... So I've expecting and asking for a discount for buying two.
First I notice just about all dealers and websites list the same bike always at the same price, the RRP shall we assume.

One dealer offered me 10% off, but was a month wait till they would be in.
So I phoned around eventually found a dealer who could get them in a day.
When I asked for the best prices I was told it wasn't possible to discount as he wasn't allowed by the supplier/OEM. When informed I already had a better offer I was told said first dealer was at risking of loosing his franchise by doing so....

He also said he had to be careful, as I could be from the supplier checking up on dealers to see if they offered discounts... Conversation was all in good humour and he was trying to be helpfull ... So not complaining about the service so far.

Now as far as I know and have read price fixing or price maintance is illegal, and supplier is not allowed to dictate or punish a reseller for setting his own price.

It seems in the bike market that they are getting away with it... I found similar last year when I was shopping around, but never ended up buying....

I have placed a deposite, as I don't want to wait a month, the dealer has offered to supply some extras as a means of "discount". If I don't get a good deal when there in person I will cancel.

I not impressed....... Perhaps the OFT should be looking into this, as I should be free to negotiate the best deal that suits me.
 
Say what? I've purchased loads of bikes for me and the wife and aside from one (a very popular model that was in short supply) I've always managed to get good discounts.

Sounds like you've either got a real bad LBS or have not shopped around enough.
 
I phoned 5 dealers, none had stock, all would take till end of the month on a stock order to come in..... This dealer, checked online, then made some calls, got a person to double check to find the bikes in the store and confirmed he can get them next day......
Brand is Whyte ......

I will push once in the shop, I was on the end of the phone.... If not I'll cancell and wait till the end of the month with another dealer.
 
To the OP:

What sort of margins do you expect these dealers are making?

Does buying two bikes makes you special, do you think?

Would you like these companies to make money and continue trading?

If the dealer will offer you other products at a discount as a means of doing you a deal, that's for a reason - he's not making much money on the main product. He won't discount it because he can't - he needs to make money.

He's knocking money off other bits because he wants your business and he can afford to knock money off other products because his margins are better on those.

Consider going with the shop that treats you best, not the shop that is prepared to make the least money. Why? Because the shop that treats their customers right will still be there in five years. The shop that makes the least money? Anyone's guess whether or not they'll still be trading.

There is a bad train of thought going around at the moment that any business that wants to make money are somehow bad, and this is leading us down a bad path, and it won't end well for anyone.
 
Agree with the comments about Specialised. We have a Specialised store up here and it's like they don't even want to sell you their bikes, never mind give a discount.
 
PardonTheWait said:
To the OP:

What sort of margins do you expect these dealers are making?

Does buying two bikes makes you special, do you think?

Would you like these companies to make money and continue trading?

If the dealer will offer you other products at a discount as a means of doing you a deal, that's for a reason - he's not making much money on the main product. He won't discount it because he can't - he needs to make money.

He's knocking money off other bits because he wants your business and he can afford to knock money off other products because his margins are better on those.

Consider going with the shop that treats you best, not the shop that is prepared to make the least money. Why? Because the shop that treats their customers right will still be there in five years. The shop that makes the least money? Anyone's guess whether or not they'll still be trading.

There is a bad train of thought going around at the moment that any business that wants to make money are somehow bad, and this is leading us down a bad path, and it won't end well for anyone.
Click to expand...

On 1800 quid some margin I would expect....
Yes service is important and isn't free, hence I'm going in a shop and not ordering online....
Do you pay full RRP for cars ? White goods ? And everything you buy, I guess not, so why are bikes special and exempt ?

My point was more of the price fixing suggestions than the level of discount.
In that it's an illegal act on a supplier to control the sale price through a dealer.
 
A lot of suppliers wouldn't be happy if one of their retail customers was undercutting everyone else. This is one of their concerns when a retailer wants to open a trade account. If one retailer sells close to trade prices at a ridiculously low margin, the other retailers wouldn't see the point in stocking those products. The supplier then loses out. This will affect the smaller suppliers more than the bigger boys. Also the small bike shops will lose out as they wouldn't have as bigger turnover as the likes of CRC, Wiggle etc.

9designs2 said:
I should be free to negotiate the best deal that suits me.
Click to expand...

Yes you are free to negotiate and they are free to accept or decline.
 
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Certain suppliers dont let you sell for less than 10% or so of RRP, otherwise they cut you off completly. Not uncommon, but usually only on certain products.
 
We deal with ATB sales who supply Marin,Whyte and Wilier. We are not allowed to discount them to protect the brand image and they set us on a smaller margin to force us not to. It can be better for me to sell another brand we do with 15% off to make the same money on one of those bikes.

My boss is actually driving to Largs to deliver a Marin as they are also not allowed to be sold online or delivered in a box. Personal handover and making sure the customer gets the best experience.

Another brand we do puts certain models on **** margins to stop online sellers from hammering the **** out of popular models. Also on high end bikes the margins can actually be lower,again to stop you just discounting the **** out of it.

If you want a cheap Marin you have to wait until last years models are listed on ATB sales website, as they are the only ones who sell it cheaper, they then deliver it to your local dealer who get a cut of the profit on the sale.

Edit: The reason you pay a premium for a 'premium' brand is for the service. Some of the best frames on the market,lifetime warranty on pivots and when something does go wrong the backup is excellent. We had a ten year old Marin frame crack and he got a brand new frame,shock and headset(maybe other things too) and it was a very quick turnaround as they could tell exactly when and where he bought it through registering the bike with them.

I'm probably biased but bikes shouldn't be bought the same way as a CD or a washing machine. It's a bit more personal than that and having it set up properly by a shop and the backup a local shop can bring is worth more than a few quid. Any bike I sell certainly gets set up for the customer size wise, check they know how to work the gears properly and what to do/not to do to keep the bike working properly for any length of time.
 
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A better question would be why some bikes and components cost so much. Someone somewhere in the chain is making a lot of profit and it certainly ain't the bike shops.
 
There are plenty of other companies that operate like this, the biggest of which is Apple. If you look around in any market you'll find stuff like this. It's almost always premium brands that do it.
 
Thanks for the feedback and inside info guys, confirms all what I was expecting.....
If I understand what I've read up and heard reported the practice of controlling the price is illegal and anti competive...
That said see the same going on with the quality Hi-Fi brands..... So laws and guidelines are not paid much attention to......
I 'm not knocking the dealer, so far he has made the right noises and been helpfull, just his hands shouldn't be tied.

Edit.
Oh yes Apple, don't start me in that one, it's a whole new thread ;)
 
I work in e-commerce and I can tell you that price fixing by the manufacturer is pretty common and often quite blatant. Some of the top golf brands are the worst because not only do they fix the price, they also impose stupid rules like you can't even display the price.

Unfortunately, nobody in power seems to care.
 
dfarrall said:
Certain suppliers dont let you sell for less than 10% or so of RRP, otherwise they cut you off completly. Not uncommon, but usually only on certain products.
Click to expand...

Yeah I've seen this with certain hi-fi brands, Marantz for example can be pretty fussy with their high end gear, they like dealers to stay near rrp to keep the value perception up and desirable.
 
Whilst price fixing prima facie is illegal there are so many loopholes and exceptions it's often unenforceable.

Technology tends to be exempt, and if there isn't collusion to maintain an artificial and unfair price then it is difficult to prove. Suppliers can supply who they want, for a price they want. Most will do so on credit, so it doesn't make economical sense for the shop to discount because they won't make money.

After criminal law, I'd say that competition law has the most loopholes and you'd struggle to prove anti competitive practices in a bike industry. The majority of convictions come from cartels where one company blows the whistle and gets leniency (look at Virgin Airlines and BA).
 
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