New Shimano discount parts

john said:

Hi All

Untill the last 2 or 3 years, new Shimano oem parts were readily
available in plastic bags, @ large discounts, from Cambria Bike,
Supergo, & numerious others. Now everything seems to come in boxes w/
instructions. What has happened to this source of parts?

As I understand it, Shimano stopped this to protect their image as a
high end component maker. Those items were all OEM parts meant for
builders, sold at big discounts. Now there is some sort of contract
between Shimano and the sellers prohibiting the sale of OEM parts to
end users. You can find the stuff still, but I think you forfeit your
warranty when buying from a non " Shimano Authorized Internet
Retailer."

-nate

Agree, the OP may want to read this artidcle:

http://www.branfordbike.com/cgi-bin/perlshop/perlshop.cgi?ACTION=push&thispage=shimano/shimano.html&ORDER_ID=246368102

john said:

Hi All

Untill the last 2 or 3 years, new Shimano oem parts were readily
available in plastic bags, @ large discounts, from Cambria Bike,
Supergo, & numerious others. Now everything seems to come in boxes w/
instructions. What has happened to this source of parts?

Please don't bother to flame my spelling, I have no way to correct it @
this time, John

shimano realized that bike shops were being hurt by unrestricted OEM
resale from some of the large bike makers. In essence, bike maker would
buy 10,000 ultegra groups at screaming good OEM prices and turn around
and resell 2500 of them to mailorder. shimano stopped this as best they
could. Why bike shop prices of shimano is about what MO prices now
are....good. shimano also restricted who could sell their stuff
mailorder or on the web...good again.

john said:

Hi All

Untill the last 2 or 3 years, new Shimano oem parts were readily
available in plastic bags, @ large discounts, from Cambria Bike,
Supergo, & numerious others. Now everything seems to come in boxes w/
instructions. What has happened to this source of parts?

Shimano engaged in de facto price fixing by creating a closed
distribution network. There is still some small leakage; at least two
salvage specialists get small quantities of legitimately surplus OEM
material and market them on eBay, but the selection is meager and the
prices vary quite a bit.

SRAM has, as a consequence, been making significant inroads into the
spares market. I believe that eventually, competition will finally
compel Shimano to either abandon the use of distributors, selling
direct to dealers at a more attactive price which permits a lower MSRP
(which they can then enforce legally), or to resume their old business
model but with the OEM goods marked in a manner that makes it obvious
that they are unsupported no-factory-warranty items.
--
Typoes are a feature, not a bug.
Some gardening required to reply via email.
Words processed in a facility that contains nuts.

Quoted message said:

Shimano engaged in de facto price fixing by creating a closed
distribution network. There is still some small leakage; at least two
salvage specialists get small quantities of legitimately surplus OEM
material and market them on eBay, but the selection is meager and the
prices vary quite a bit.

It's not price fixing, but rather an attempt to level out the pricing that a
shop pays vs mail-order. In the past, retail stores have been "used" by
mail-order outlets to establish a retail value for a product, which they
could then undercut (by purchasing excess inventory from bike manufacturers)
the retailer by a considerable amount of money, and often make a better
margin than the LBS.

Yes, the initial effect is that mail order pricing may rise a bit (I'm not
convinced that distribution isn't still leaky enough that prices won't still
be lower). But if the pricing is higher than people want to pay, then
Shimano will have to drop them across the board (except at OEM level),
essentially leveling things out. Ultimately, the only person who determines
final pricing is the customer. If people are unwilling to pay what Shimano
is charging, they will go elsewhere. Campagnolo & SRAM.

So if you can't get the super-cheapie mail-order pricing you require, vote
with your wallet and buy a different brand, but please don't blame the LBS.
The higher pricing is not their fault, and the previous system (that heavily
favored the mail-order outlets) was extremely unfair to the retailer.

--Mike Jacoubowsky
Chain Reaction Bicycles
www.ChainReaction.com
Redwood City & Los Altos, CA USA

"Werehatrack" <[email hidden]> wrote in message
news:[email hidden]...

Quoted message said:

john said:

Hi All

Untill the last 2 or 3 years, new Shimano oem parts were readily
available in plastic bags, @ large discounts, from Cambria Bike,
Supergo, & numerious others. Now everything seems to come in boxes w/
instructions. What has happened to this source of parts?

Shimano engaged in de facto price fixing by creating a closed
distribution network. There is still some small leakage; at least two
salvage specialists get small quantities of legitimately surplus OEM
material and market them on eBay, but the selection is meager and the
prices vary quite a bit.

SRAM has, as a consequence, been making significant inroads into the
spares market. I believe that eventually, competition will finally
compel Shimano to either abandon the use of distributors, selling
direct to dealers at a more attactive price which permits a lower MSRP
(which they can then enforce legally), or to resume their old business
model but with the OEM goods marked in a manner that makes it obvious
that they are unsupported no-factory-warranty items.
--
Typoes are a feature, not a bug.
Some gardening required to reply via email.
Words processed in a facility that contains nuts.

Mike Jacoubowsky said:

It's not price fixing, but rather an attempt to level out the
pricing that a shop pays vs mail-order. In the past, retail stores
have been "used" by mail-order outlets to establish a retail value
for a product, which they could then undercut (by purchasing
excess inventory from bike manufacturers) the retailer by a
considerable amount of money, and often make a better margin than
the LBS.

According to my LBS sometimes offering end user prices below the
price the LBS has to pay...

--
MfG/Best regards
helmut springer

Mike Jacoubowsky said:

Quoted message said:

Shimano engaged in de facto price fixing by creating a closed
distribution network. There is still some small leakage; at least two
salvage specialists get small quantities of legitimately surplus OEM
material and market them on eBay, but the selection is meager and the
prices vary quite a bit.

It's not price fixing,

Inasmuch as they reportedly established a policy of prohibiting
selling to "unauthorized" MO outlets *at all* (directly interfering in
the distributors' business by telling them who they could and could
not have as customers), it's price fixing. Shimano should let the
distributors choose their customers themselves. I believe that the
only reason that this has not resulted in a lawsuit or a trade
restriction violation action thus far is that the parties cut off do
not have the clout or the resources to throw enough lawyers at the
problem. Had Shimano simply plugged the OEM-goods leak and not cut
off the normal boxed-goods sales to the MO outlets involved, there
would have been no price-fixing, and the pricing would have levelled
anyway, though with a healthier degree of competition than is
currently being seen.

Quoted message said:

but rather an attempt to level out the pricing that a
shop pays vs mail-order. In the past, retail stores have been "used" by
mail-order outlets to establish a retail value for a product, which they
could then undercut (by purchasing excess inventory from bike manufacturers)
the retailer by a considerable amount of money, and often make a better
margin than the LBS.

Yes, the initial effect is that mail order pricing may rise a bit (I'm not
convinced that distribution isn't still leaky enough that prices won't still
be lower).

Given the small number of MO outlets still actively selling Shimano
bits, and given the scant few items they're actually discounting to
any significant extent, it doesn't look to me like there's any leakage
into those sellers at all. It appears that there are some specialists
who are buying entire inventories of certain overproduced bikes and/or
genuine overstocks of bits that were ordered for production and not
used; the bits and pieces from this trickle show up on eBay. That
these specialists have no access to the full Shimano line is readily
apparent; the number of items on offer is small, and IMO they are
having little effect on the market.

Quoted message said:

But if the pricing is higher than people want to pay, then
Shimano will have to drop them across the board (except at OEM level),
essentially leveling things out. Ultimately, the only person who determines
final pricing is the customer. If people are unwilling to pay what Shimano
is charging, they will go elsewhere. Campagnolo & SRAM.

This is the effect that will eventually be seen, IMO, and in the long
run the consumer will benefit from having a stronger second source
stream available; I have to wonder of SRAM would have been able to
make the inroads we've seen into the aftermarket stream had Shimano
not paved the way by boosting the mail-order prices.

Quoted message said:

So if you can't get the super-cheapie mail-order pricing you require, vote
with your wallet and buy a different brand,

There has to be a competitively-oriented second source before the vote
can be cast; in a race with only one cadidate, it's hard to get people
to the polls.

Campy pretty much ignores the mtb market, and SRAM hasn't been as
successful (yet) in coming out with the stuff that the consumers want
as some of us would like, but if the aftermarket is big enough to
merit their attention, I suspect that we'll see more moves from both
of them along with some additional players cropping up from China.

Quoted message said:

but please don't blame the LBS.

I never did; I'm well aware of the costs involved in operating a small
business, and the reasons why the small business can't usually compete
with the low-overhead high-volume discounters both mail-order and
in-town.

Quoted message said:

The higher pricing is not their fault, and the previous system (that heavily
favored the mail-order outlets) was extremely unfair to the retailer.

It remains to be seen if Shimano will move away from their current
overly restrictive paradigm. I suspect that the US aftermarket sales
stream is a mere trickle by comparison to the OEM stream that's
delivered both here and overseas; it's quite possible that Shimano
really doesn't care whether it has a strong aftermarket sales network
in the US since historically in that market, the vast majority of the
bikes sold never have any major components replaced at all. If
bicycle usage increases and the demand for economically-priced
components goes up, they'll either have to adjust their prices or see
the competition grabbing a larger share of the sales. SRAM has done
what appears to me to be an excellent job of swallowing the chain
market; the handwriting is on the wall IMO. What is really needed in
order to compel a change is a bike usage boom. It could happen, but I
doubt that it will take place overnight.
--
Typoes are a feature, not a bug.
Some gardening required to reply via email.
Words processed in a facility that contains nuts.

Werehatrack said:

Mike Jacoubowsky said:

Quoted message said:

Shimano engaged in de facto price fixing by creating a closed
distribution network. There is still some small leakage; at least two
salvage specialists get small quantities of legitimately surplus OEM
material and market them on eBay, but the selection is meager and the
prices vary quite a bit.

It's not price fixing,

Inasmuch as they reportedly established a policy of prohibiting
selling to "unauthorized" MO outlets *at all* (directly interfering in
the distributors' business by telling them who they could and could
not have as customers), it's price fixing.

NOT price fixing. A mailorder outlet can resell shimano anything for
any price it wishes. BUT in the future, the MO outfit may find it
diffucult for them to buy again.

Shimano should let the

Quoted message said:

distributors choose their customers themselves.

No reseller is entitled to anything. Just like a retailer, a
manufacturer has the right to refuse service to anyone, for any reason.

I believe that the

Quoted message said:

only reason that this has not resulted in a lawsuit or a trade
restriction violation action thus far is that the parties cut off do
not have the clout or the resources to throw enough lawyers at the
problem. Had Shimano simply plugged the OEM-goods leak and not cut
off the normal boxed-goods sales to the MO outlets involved, there
would have been no price-fixing, and the pricing would have levelled
anyway, though with a healthier degree of competition than is
currently being seen.

Quoted message said:

but rather an attempt to level out the pricing that a
shop pays vs mail-order. In the past, retail stores have been "used" by
mail-order outlets to establish a retail value for a product, which they
could then undercut (by purchasing excess inventory from bike manufacturers)
the retailer by a considerable amount of money, and often make a better
margin than the LBS.

Yes, the initial effect is that mail order pricing may rise a bit (I'm not
convinced that distribution isn't still leaky enough that prices won't still
be lower).

Given the small number of MO outlets still actively selling Shimano
bits, and given the scant few items they're actually discounting to
any significant extent, it doesn't look to me like there's any leakage
into those sellers at all. It appears that there are some specialists
who are buying entire inventories of certain overproduced bikes and/or
genuine overstocks of bits that were ordered for production and not
used; the bits and pieces from this trickle show up on eBay. That
these specialists have no access to the full Shimano line is readily
apparent; the number of items on offer is small, and IMO they are
having little effect on the market.

Quoted message said:

But if the pricing is higher than people want to pay, then
Shimano will have to drop them across the board (except at OEM level),
essentially leveling things out. Ultimately, the only person who determines
final pricing is the customer. If people are unwilling to pay what Shimano
is charging, they will go elsewhere. Campagnolo & SRAM.

This is the effect that will eventually be seen, IMO, and in the long
run the consumer will benefit from having a stronger second source
stream available; I have to wonder of SRAM would have been able to
make the inroads we've seen into the aftermarket stream had Shimano
not paved the way by boosting the mail-order prices.

Quoted message said:

So if you can't get the super-cheapie mail-order pricing you require, vote
with your wallet and buy a different brand,

There has to be a competitively-oriented second source before the vote
can be cast; in a race with only one cadidate, it's hard to get people
to the polls.

Campy pretty much ignores the mtb market, and SRAM hasn't been as
successful (yet) in coming out with the stuff that the consumers want
as some of us would like, but if the aftermarket is big enough to
merit their attention, I suspect that we'll see more moves from both
of them along with some additional players cropping up from China.

Quoted message said:

but please don't blame the LBS.

I never did; I'm well aware of the costs involved in operating a small
business, and the reasons why the small business can't usually compete
with the low-overhead high-volume discounters both mail-order and
in-town.

Quoted message said:

The higher pricing is not their fault, and the previous system (that heavily
favored the mail-order outlets) was extremely unfair to the retailer.

It remains to be seen if Shimano will move away from their current
overly restrictive paradigm. I suspect that the US aftermarket sales
stream is a mere trickle by comparison to the OEM stream that's
delivered both here and overseas; it's quite possible that Shimano
really doesn't care whether it has a strong aftermarket sales network
in the US since historically in that market, the vast majority of the
bikes sold never have any major components replaced at all. If
bicycle usage increases and the demand for economically-priced
components goes up, they'll either have to adjust their prices or see
the competition grabbing a larger share of the sales. SRAM has done
what appears to me to be an excellent job of swallowing the chain
market; the handwriting is on the wall IMO. What is really needed in
order to compel a change is a bike usage boom. It could happen, but I
doubt that it will take place overnight.
--
Typoes are a feature, not a bug.
Some gardening required to reply via email.
Words processed in a facility that contains nuts.

Qui si parla Campagnolo said:

shimano realized that bike shops were being hurt by unrestricted OEM
resale from some of the large bike makers. In essence, bike maker would
buy 10,000 ultegra groups at screaming good OEM prices and turn around
and resell 2500 of them to mailorder. shimano stopped this as best they
could. Why bike shop prices of shimano is about what MO prices now
are....good. shimano also restricted who could sell their stuff
mailorder or on the web...good again.

Price fixing by a near-monopolist: illegal.

Jasper

On 9 Apr 2006 11:36:01 GMT, Helmut Springer <[email hidden]>

Quoted message said:

Mike Jacoubowsky said:

It's not price fixing, but rather an attempt to level out the
pricing that a shop pays vs mail-order. In the past, retail stores
have been "used" by mail-order outlets to establish a retail value
for a product, which they could then undercut (by purchasing
excess inventory from bike manufacturers) the retailer by a
considerable amount of money, and often make a better margin than
the LBS.

According to my LBS sometimes offering end user prices below the
price the LBS has to pay...

In that case, the LBS is clearly sourcing its parts in the wrong place.

Jasper

Jasper Janssen said:

Quoted message said:

According to my LBS sometimes offering end user prices below the
price the LBS has to pay...

In that case, the LBS is clearly sourcing its parts in the wrong
place.

Read the thread again. No way for him to come to the cost a large
OEM buyer gets even if you count in a small margin for the mail
order shop making a special offer.

--
MfG/Best regards
helmut springer

Werehatrack wrote:

<snipped>

-on Shimano's restrictive trade policies-

Quoted message said:

It remains to be seen if Shimano will move away from their current
overly restrictive paradigm. I suspect that the US aftermarket sales
stream is a mere trickle by comparison to the OEM stream that's
delivered both here and overseas; it's quite possible that Shimano
really doesn't care whether it has a strong aftermarket sales network
in the US since historically in that market, the vast majority of the
bikes sold never have any major components replaced at all.

That's it *exactly*, IMO. The very low MO prices reflected the true
(i.e., OEM) costs of Shimano's goods. These decreased prices served to
undercut the end user's perception of "value" regarding mass-produced,
commodity bikes fitted with Shimano components. Shimano wasn't moving
to protect the LBS, but rather to protect their most important
customers (especially in the US market), the OEMs. Any benefit to the
LBS was strictly ancillary.

Quoted message said:

If
bicycle usage increases and the demand for economically-priced
components goes up, they'll either have to adjust their prices or see
the competition grabbing a larger share of the sales. SRAM has done
what appears to me to be an excellent job of swallowing the chain
market; the handwriting is on the wall IMO. What is really needed in
order to compel a change is a bike usage boom. It could happen, but I
doubt that it will take place overnight.
--
Typoes are a feature, not a bug.
Some gardening required to reply via email.
Words processed in a facility that contains nuts.

Qui si parla Campagnolo wrote:

<snipped>

-did someone say "combination in restraint of trade"?-

Quoted message said:

NOT price fixing. A mailorder outlet can resell shimano anything for
any price it wishes. BUT in the future, the MO outfit may find it
diffucult for them to buy again.

This is the same "legal" dodge that Mavic has used for many years. And
the same dodge many consumer electronics companies have used, for
retailers as well as MO, since the courts struck down the so-called
"Fair Trade" laws many years ago.

Price fixing by any other name smells as foul.

Qui si parla Campagnolo said:

Werehatrack said:

Mike Jacoubowsky said:

>Shimano engaged in de facto price fixing by creating a closed
>distribution network. There is still some small leakage; at least two
>salvage specialists get small quantities of legitimately surplus OEM
>material and market them on eBay, but the selection is meager and the
>prices vary quite a bit.

It's not price fixing,

Inasmuch as they reportedly established a policy of prohibiting
selling to "unauthorized" MO outlets *at all* (directly interfering in
the distributors' business by telling them who they could and could
not have as customers), it's price fixing.

NOT price fixing. A mailorder outlet can resell shimano anything for
any price it wishes. BUT in the future, the MO outfit may find it
diffucult for them to buy again.

So you mean price fixing. I worked at Answer and we cut dealers off who
sold forks under MSRP thereby fixing prices. If you eliminate those who
sell below your target price then you're price fixing.

Greg

--
"All my time I spent in heaven
Revelries of dance and wine
Waking to the sound of laughter
Up I'd rise and kiss the sky" - The Mekons

Helmut Springer said:

Jasper Janssen said:

Quoted message said:

According to my LBS sometimes offering end user prices below the
price the LBS has to pay...

In that case, the LBS is clearly sourcing its parts in the wrong
place.

Read the thread again. No way for him to come to the cost a large
OEM buyer gets even if you count in a small margin for the mail
order shop making a special offer.

The LBS should be buying from the same place the MO shop is buying from
then.

Greg

--
"All my time I spent in heaven
Revelries of dance and wine
Waking to the sound of laughter
Up I'd rise and kiss the sky" - The Mekons

G.T. said:

Qui si parla Campagnolo said:

Werehatrack said:

On Sat, 08 Apr 2006 19:26:26 GMT, "Mike Jacoubowsky"
<[email hidden]> wrote:

>>Shimano engaged in de facto price fixing by creating a closed
>>distribution network. There is still some small leakage; at least two
>>salvage specialists get small quantities of legitimately surplus OEM
>>material and market them on eBay, but the selection is meager and the
>>prices vary quite a bit.
>
>It's not price fixing,

Inasmuch as they reportedly established a policy of prohibiting
selling to "unauthorized" MO outlets *at all* (directly interfering in
the distributors' business by telling them who they could and could
not have as customers), it's price fixing.

NOT price fixing. A mailorder outlet can resell shimano anything for
any price it wishes. BUT in the future, the MO outfit may find it
diffucult for them to buy again.

So you mean price fixing. I worked at Answer and we cut dealers off who
sold forks under MSRP thereby fixing prices. If you eliminate those who
sell below your target price then you're price fixing.

If it quacks like a duck....

G.T. said:

Quoted message said:

OEM buyer gets even if you count in a small margin for the mail

The LBS should be buying from the same place the MO shop is buying
from then.

He can't. This shouldn't be hard to understand: fist those are not
offers given in catalogs, second few LBS would be able to order in
the magnitude of hundreds.

--
MfG/Best regards
helmut springer

Quoted message said:

The LBS should be buying from the same place the MO shop is buying from
then.

Greg

We don't have the choice. The MO places create huge 3 or 4-line orders for
the OEMs that might take care of their entire overstock, which is a whole
lot easier than dealing with maybe 50 dealers buying 1/50th as much each.

Also, dealers are constrained by Shimano's dealer agreement, which says we
cannot sell via mail-order and certainly not eBay without jumping through
all manner of legal hoops. Thus the risk of buying too much is far greater
for a dealer than for either an established MO *or* someone who's willing to
say they don't care about the dealer agreement, they'll just sell
anonymously and to heck with Shimano. We won't do that; if there's an
agreement that we're party to, we'll live up to it. If we don't find that
possible, we won't engage in the agreement in the first place. As to *why* a
dealer would be party to such an agreement, it's so they can buy parts
directly from Shimano... parts which aren't available through distributors.
That would include wheels, shoes (a big thing for many shops) and many small
replacement parts.

--Mike-- Chain Reaction Bicycles
www.ChainReactionBicycles.com

"G.T." <[email hidden]> wrote in message
news:[email hidden]...

Quoted message said:

Helmut Springer said:

Jasper Janssen said:

>According to my LBS sometimes offering end user prices below the
>price the LBS has to pay...

In that case, the LBS is clearly sourcing its parts in the wrong
place.

Read the thread again. No way for him to come to the cost a large
OEM buyer gets even if you count in a small margin for the mail
order shop making a special offer.

The LBS should be buying from the same place the MO shop is buying from
then.

Greg

--
"All my time I spent in heaven
Revelries of dance and wine
Waking to the sound of laughter
Up I'd rise and kiss the sky" - The Mekons

On 9 Apr 2006 17:53:41 GMT, Helmut Springer <[email hidden]>

Quoted message said:

Jasper Janssen said:

Quoted message said:

According to my LBS sometimes offering end user prices below the
price the LBS has to pay...

In that case, the LBS is clearly sourcing its parts in the wrong
place.

Read the thread again. No way for him to come to the cost a large
OEM buyer gets even if you count in a small margin for the mail
order shop making a special offer.

If the LBS is buying its parts from its wholesaler for more than the
mail-order place *retails*, then the LBS is sourcing its parts from the
wrong supplier -- he should be buying from the MO place. At retail, if
necessary.

Jasper