Fecking markups

[R1madness]

I've never known it this bad, but I suspect with the economic downtown shops are reducing inventory as much as they can in order to reduce costs. Which unfortunately has the negative effect of reducing service and driving customers to alternate suppliers.

Yep, so true, the dealers rely a lot more on the importers to hold the stock. Yep it has both effects you mention.
However I do think that most dealers still try to hold what they see as "bread and butter" lines. You know, the common items that regularly move off the shelf but are very quick to kill off slow(er) moving items.
I wonder if part of the problem is that our population is spread over a wide area (for the number of people we have here) and there are still plenty of local bike shops so to set up a motorcycle MEGA store that carries 1 of everything is not an option financially. Most people here just wont travel when there is a shop down the road to buy from. Even if you set up in central Auckland most people in Pukekohe would still think you were too far away.

[scott411]

Yep, so true, the dealers rely a lot more on the importers to hold the stock. Yep it has both effects you mention.
However I do think that most dealers still try to hold what they see as "bread and butter" lines. You know, the common items that regularly move off the shelf but are very quick to kill off slow(er) moving items.
I wonder if part of the problem is that our population is spread over a wide area (for the number of people we have here) and there are still plenty of local bike shops so to set up a motorcycle MEGA store that carries 1 of everything is not an option financially. Most people here just wont travel when there is a shop down the road to buy from. Even if you set up in central Auckland most people in Pukekohe would still think you were too far away.

The superstore type store has not really been tried in NZ, a couple of reasons, 1 it is a big risk, due to big overheads and set up costs, 2 the superstores in the States are usually all 4 japanese franchises and others euro brands as well, it would be interesting to see if they would allow it, Honda has never aloud another franchise in the same store, and Suzuki will only allow one other Brand, (although there has been the odd exception to this rule over the years)

alot of the products that are not available overnight would not likely to be stocked by a superstore either, we have a very small population but a very big range of bikes here,

[Edbear]

If I run out of a couple of models I can order a one or a few in but don't get my national distributor price I pay more but can have them here in a few days.

[caspernz]

Going back to the OP, what about a second hand part? I mean it's for an older bike....

Markups are a fact of life, but hey I want to get my bike looked after by a dealer, so for the most part I buy bits and pieces locally. I've bought the odd item in from overseas, mainly because it wasn't available locally.

It may be harsh, but I reckon when someone starts crying about high markups it is, in part at least, to not seeing the big picture.

[Brian d marge]

Ya money ain’t worth a hill of beans
ya have 4 people and a blind poodle , living there, one of which needs a set of points for a NSU quickly

Ya cant be arsed getting out of bed on Sundays

and ya moan about the prices ,

Damn , even the Poms are looking saintly about now

and we invented wingin

Stephen

[ducatilover]

Speaking of mark ups...

Repco prive for VHT engine enamel (black) = $18.
PartMaster price = $12.
That's a 50% increase

[warewolf]

I would like to have local dealers everywhere, but unfortunately not at my expense. They're facing tough times and are maybe shooting themselves in the foot trying to reduce costs by reducing inventory and opening hours (and manufacturing off shore). I'm doing it tough so I'm reducing costs and maybe shooting myself in the foot by shopping off shore.

I guess my biggest, over-riding gripe with the whole situation is that the wholesale chain through to the dealer should be the fastest, most economic way to get stuff. In the information age, it's not - private import doing everything at the retail level is cheaper and faster and more reliable. Consumers have changed but the traditional business models are still being foisted on everyone down that line. Historically it has been the only way, but the world has changed... adapt or die. I've at least offered a potential solution.

PS anyone notice the similarity of what I just said with Triumph vs the Japanese invasion in the seventies??

[Robert Taylor]

As an importer, I know the difficulties of trying to keep the price as close as possible to the US price. It's a tricky calculation as I pay freight, (air), and fees and GST upon landing, I have to account for fluctuations in the exchange rate, and my last order went through just as the exchange rate dropped 6c, costing me a lot more, (you'd be surprised what a difference a day makes to your bottom line!). Customers want stable pricing, too, not up and down according to the exchange rate, I have to absorb that.

Being the sole distributor for NZ I have to carry warranties until I can send the batteries back to the US at my cost in freight, and they refund or replace, leaving me out of pocket for a couple of months. (Fortunately it is rare for a Shorai to go wrong). I cannot afford to upset my customers and dealers by making them wait and Shorai's philosophy is to satisfy the customer first, then worry about the dud.

I have to invest heavily in stock and of course the most popular sizes sell out first meaning I have to re-order with a minimum quantity before I get the money back for the previous order. I am relying on volume sales to make my money and as yet have taken very little out of the business as I need to build it up and that means putting the profits straight back into it.

Some models will take a long time to sell and they are just sitting on the shelf, money in waiting. I think I have the pricing about right even though I feel it is a wee bit more than I'd like to see. I do agree the OP's example seems a rip-off but there may well be a good reason behind it. For example I usually offer KB'rs a discount and free shipping which means I miss out on the best profit, but as I say, I am looking towards the future and increasing volume.

Hope a bit of insight to the importing business helps.

You are beating your head against a brick wall here! Someone sometime will start a new thread on the same theme and make the automatic assumption that markups are huge, which in most cases they are not. By and large the cold hard reality is that the cost of running a business in NZ is disproportionately high. The current exchange rate ( particularly against greenbacks ) and lack of interception and gst charges on a lot of private imports ( of even high value ) further exposes NZ businesses and therefore the people they employ.

[Robert Taylor]

I would like to have local dealers everywhere, but unfortunately not at my expense. They're facing tough times and are maybe shooting themselves in the foot trying to reduce costs by reducing inventory and opening hours (and manufacturing off shore). I'm doing it tough so I'm reducing costs and maybe shooting myself in the foot by shopping off shore.

I guess my biggest, over-riding gripe with the whole situation is that the wholesale chain through to the dealer should be the fastest, most economic way to get stuff. In the information age, it's not - private import doing everything at the retail level is cheaper and faster and more reliable. Consumers have changed but the traditional business models are still being foisted on everyone down that line. Historically it has been the only way, but the world has changed... adapt or die. I've at least offered a potential solution.

PS anyone notice the similarity of what I just said with Triumph vs the Japanese invasion in the seventies??

In part though distributors are tied into pre-orders months in advance, linked to scheduled production runs that have finite numbers. Every variation of goods is not available from manufacturers at all times of the year. Given that large distributors in large population countries can order huge numbers they have much more of an operating ''buffer'' and sale flexibility. Our small population and market is severly inhibited / disadvantaged in that respect.
Those of us that have adapted and / or have products that require technical expertise will survive but there are still some inequalities out there ( see my immediate previous post ) that need to be addressed.

[superman]

Some companies are terrible.

I check companies prices (not talking about bike parts...) via pricespy.co.nz, check TradeMe for recent finished auctions and the amount they've gone for and then decide upon a price to sell items for. Preferably lower than any other company (even if it means only a couple of $$ profit for me).

I source for as cheap as I possibly can, if stuff doesn't sell it gets a $1 reserve on TradeMe so a fair market price is found for the item.

Granted my only bill is a monthly $40...

[Robert Taylor]

Yes, but as DMNTD has already said, the margins a bar has allow extremely high stock levels, so high, that in some cases, PUBS ACTUALLY RUN OUT OF BEER!!!!!!!

You have demonstrated that you understand the concept that in order to survive, shops are having to lower stock levels.

Add to this the fact that, due to private imports, stock levels are lower as a result, as well as tight margins, it starts to become clear that bike shops (worldwide) are in survival mode, and most simply don't have the capital to stock parts people want, but are unwilling to pay for.

R1Madness has thrown me a bit, he has been in this game for a few decades now, and even he is (to a level) championing consumers getting their own stuff online.... I could be persuaded to consider that "special order" stuff that one person in a thousand wants is acceptable to buy online, but, things like plugs, filters, chains, sprockets??????? Support you local dealers, because if you don't, you will not be able to find a bike shop that's open 5 days a week, let alone 6! (mumble mumble, troublesome journey, mumble mumble Templeton boy)

Ditto for other businesses selling other goods, this is far far from being just a motorcycle industry problem and the smaller economies like ours can be badly affected. And I wonder aloud how many on here debating the cost of goods and availability etc ad infinitum are themselves in local industries that are seriously and adversely being affected by competition from overseas suppliers? That is not to neccessarily be read as a defence of our own people, but its a question that certainly begs some thought. If anyone cares about our own countrymen?

[thecharmed01]

In part though distributors are tied into pre-orders months in advance, linked to scheduled production runs that have finite numbers. Every variation of goods is not available from manufacturers at all times of the year. Given that large distributors in large population countries can order huge numbers they have much more of an operating ''buffer'' and sale flexibility. Our small population and market is severly inhibited / disadvantaged in that respect.
Those of us that have adapted and / or have products that require technical expertise will survive but there are still some inequalities out there ( see my immediate previous post ) that need to be addressed.

I do know SOME places work with runs, but really it's not that many!

And what I don't get, is why people spin lines like that when it's so frequently not the case at all.
I had a store clearly tell me that "oh that company only do runs of that twice a year and they have no stock left so you will have to wait for the next production run"
Ummmmm ok.
Lucky for me, I knew it was utter rubbish and what they REALLY meant is that their supplier were either too tight/too lazy/too stupid to order in the parts I wanted and hadn't kept their own system up to date with current stock, as I was there when they were called and asked if the parts were all in stock.
How you make sure you know the truth? Ring the Manufacturer direct and ask them. Then purchase direct and have said parts in your living room within 5 days (from the US) ready to fit up to your bike with the manufacturer going out of their way to give you excellent service because of the bad service from the NZ wholesaler.

[SS90]

Here in Europe, we see, directly THE REAL REASON parts go out of stock (well parts that er produced in Europe anyway)

The majority of quality components (pistons, crankshaft components etc) are produced in Italy or Spain.

In August, Italy shuts for a whole month, not just some, THE WHOLE MANUFACTURING INDUSTRY, you cannot order anything, no matter who you are, because no-one is there to answer the phone or email. That is a fact. And September, Spain does the same.

Its just how it is.
Everyone is aware of this, yet, every year we get caught out, because no one has the budget to "double order" for 3 months stock, not wholesalers, not retailers, no one.....

As a result, by the end of August, so much stock is unavailable, particularly Pistons and such like.

It is just how it is.

And with the current market (worldwide) struggling just to pay rent and wages (I personally know of 3 well established shops closing this winter already in Europe) you can be sure that shops in New Zealand are going to be able to stock even less than before for the forseeable future.

It just the reality.

The wingers on here best save their breath for a while... They are going to need it when therr actually is something to whine about.

[imdying]

If those greasy wops really do that, then they deserve for their bloody economy to go down the toilet.

[Jay GTI]

If those greasy wops really do that, then they deserve for their bloody economy to go down the toilet.

Ok cool. If that's an issue, go to a factory anywhere in NZ right now and ask them to fill a large order before the end of Jan (oooo before Xmas would be better). Good luck.

It's their summer holiday, if you actually left this small island once in a while, you'd know that Spain, Italy and a few other Eurpean countries in that area are so oppresively hot during their peak summer months, they just go on holiday instead.