Dealer/distributor price gouging continues unabated

[Jay GTI]

What I don't understand is why come on here and whine about it.
It has been the same for years and now you have the choice of buying online.
So why do so many feel the need to come on here and gloat about "getting a great deal"?

Valid point. The interweb has changed the face of retail for good, so it is up to us as the consumers to use it to our benefit. Complaining to your local dealer about their mark-up is a waste of time, because they cannot compete with the online companies and ebay. Simply, their business model is built around the cost of providing the local service. Fair or unfair, it's what it costs.

However, as we are becoming more and more web-savvy, we are able to get around these local costs and buy products way below what a local NZ dealer can afford to sell them for. So yes, this means the big bike dealerships that have been around for 20+ years will struggle and then possibly fold, simply because the high turnover items that kept them afloat are now being bought from the internet.

The thing is, the market dictates the rules, where we as consumers choose to spend our money dictates who will be a success or won't be. We don't owe the big Suzuki, Kawasaki or whoever dealer a living, we spend our money where it suits us. This has changed the way we purchase bike and bike-related products forever, there is no going back and it's up to the dealers and suppliers to decide if they want to (or even can) adapt.

[jonbuoy]

Probably why travel agents, book shops and music stores are dissapearing.

[Bassmatt]

I can see your point but I expect there are dealers out in the states who would re-valve and re-spring before shipping. If I tell a dealer in the states I want a rear shock for a Z750, I weigh 90 kg, most of my riding is regular street riding with the occaisional weekend scratch he could probably do just as good a job as you could. I'm not having a pop at you mate, its just that things have changed and they won't ever go back. Your not the only guy in the world who knows about suspension.

(10chars)

[scott411]

Valid point. The interweb has changed the face of retail for good, so it is up to us as the consumers to use it to our benefit. Complaining to your local dealer about their mark-up is a waste of time, because they cannot compete with the online companies and ebay. Simply, their business model is built around the cost of providing the local service. Fair or unfair, it's what it costs.

However, as we are becoming more and more web-savvy, we are able to get around these local costs and buy products way below what a local NZ dealer can afford to sell them for. So yes, this means the big bike dealerships that have been around for 20+ years will struggle and then possibly fold, simply because the high turnover items that kept them afloat are now being bought from the internet.

The thing is, the market dictates the rules, where we as consumers choose to spend our money dictates who will be a success or won't be. We don't owe the big Suzuki, Kawasaki or whoever dealer a living, we spend our money where it suits us. This has changed the way we purchase bike and bike-related products forever, there is no going back and it's up to the dealers and suppliers to decide if they want to (or even can) adapt.

well said, i said this a while ago but it still rings true, every industry has changed over the last 10 years i have owned a shop, and it wll continue to change,

the attitude that some bring on here that the shop must be a lying cheating thief if i can get it cheaper elsewhere is what pisses alot of the people off,

[Robert Taylor]

Ive not suggested a model to work from.

And FYI I owned a company for 11 years on the model you guys work from now. It failed costing me a house, marriage and the ability to see my children when i want to. I now work for a business that uses the suggested model that is doing very well. So yes I know what im talking about.

I hope more dont end up In the position I am in due to lack of ability to realise what they are doing is wrong.

To give your argument some credibility you need to elaborate further about what line of business you are now in and what the volumes are. Are apples being compared with apples etc

[Robert Taylor]

I can see your point but I expect there are dealers out in the states who would re-valve and re-spring before shipping. If I tell a dealer in the states I want a rear shock for a Z750, I weigh 90 kg, most of my riding is regular street riding with the occaisional weekend scratch he could probably do just as good a job as you could. I'm not having a pop at you mate, its just that things have changed and they won't ever go back. Your not the only guy in the world who knows about suspension.

Try telling that to the Guy who bought an Elka shock because it was cheaper and it was supposedly setup for his weight etc....Try ttelling the guy with the R1200 who was dissatisfied with what the Yanks sent him. Shall I go on?

The point is there is a LOT more to respringing and revalving than is realised because there are a lot more variables to account for. For example:

1) Those side pannier bags have 25kg each in them, but what is their exact position and therefore how much leverage are they are imparting on the swingarm and shock? How can you easily do the maths for that? Being on hand with a bunch of springs, measuring and test riding is the means of achieving the very best result, no argument.

2) You have given the overseas reseller your weight but did you tell him that you are 6 feet 8 inches tall and have handlebar risers fitted? Thereby you are sitting back further on the bike and imparting more leverage on it than a rider of the same weight who is a more regular 5 feet 10 inches tall

3) Did you tell the guy you have ''lowering links'' fitted ( which almost always stuff up the suspension action.) Believe me we strike this quite often. As an aside you can instantly and emphatically call the bluff of the lowering link manufacturer by asking for an overlay graph of the original link curve against a system fitted with their links....that speaks volumes

4) Are you convinced that facelees Yank taking your money actually understands our roading conditions and that unlike their freeways we have a very high ratio of bumps.

So you recieve your suspension, the springing turns out to not quite be ideal due to another variable that cannot be imparted by spring rate calculators / maths....your own preference of ''feel''. The revalve prior to sale also turns out to not be as ideal as what would have been hoped for. Or you go to a trackday and cannot find good enough grip and tyre life. So you are unhappy ( and we have seen this happen A LOT ) Will that guy who is on the other side of the world and who has happily taken your money be no more than a $10 overnight courier away? In such scenarios he may as well be on Mars.

Purchasing items offshore that require setup skill is a sizable risk, fact. By buying locally ( where credible infrastructure exists )you remove a lot of the risk because there is someone you can access without HUGE freight return costs and phone bills or slow / unsatisfactory e-mail response. Heck if you are a track rider you may be able to access him at a track day, well theres more chance of that than your Yankee friend turning up to back up what he sells indiscrimantely around the world. How does it go? Out of sight out of mind?

[Robert Taylor]

well said, i said this a while ago but it still rings true, every industry has changed over the last 10 years i have owned a shop, and it wll continue to change,

the attitude that some bring on here that the shop must be a lying cheating thief if i can get it cheaper elsewhere is what pisses alot of the people off,

Undeniably change is constant and there are those of us that embrace it ( or fail ) but are also not afraid to point out some very real negatives as well.

With respect to your second paragraph that really irks me as well, as it would other people in many industries. There is in this new interweb world a new attitude of skepticism, '' I will do some research on this on the web''. There is a lot of good and credible information on the web but there is also a lot of abject rubbish. ''Its on the web so it must be correct, right? ''....yeah right . More than a few have come unstuck because they trusted ''the research.

[flyingcrocodile46]

Try telling that to the Guy who bought an Elka shock because it was cheaper and it was supposedly setup for his weight etc....Try ttelling the guy with the R1200 who was dissatisfied with what the Yanks sent him. Shall I go on?

The point is there is a LOT more to respringing and revalving than is realised because there are a lot more variables to account for. For example:

1) Those side pannier bags have 25kg each in them, but what is their exact position and therefore how much leverage are they are imparting on the swingarm and shock? How can you easily do the maths for that? Being on hand with a bunch of springs, measuring and test riding is the means of achieving the very best result, no argument.

2) You have given the overseas reseller your weight but did you tell him that you are 6 feet 8 inches tall and have handlebar risers fitted? Thereby you are sitting back further on the bike and imparting more leverage on it than a rider of the same weight who is a more regular 5 feet 10 inches tall

3) Did you tell the guy you have ''lowering links'' fitted ( which almost always stuff up the suspension action.) Believe me we strike this quite often. As an aside you can instantly and emphatically call the bluff of the lowering link manufacturer by asking for an overlay graph of the original link curve against a system fitted with their links....that speaks volumes

4) Are you convinced that facelees Yank taking your money actually understands our roading conditions and that unlike their freeways we have a very high ratio of bumps.

So you recieve your suspension, the springing turns out to not quite be ideal due to another variable that cannot be imparted by spring rate calculators / maths....your own preference of ''feel''. The revalve prior to sale also turns out to not be as ideal as what would have been hoped for. Or you go to a trackday and cannot find good enough grip and tyre life. So you are unhappy ( and we have seen this happen A LOT ) Will that guy who is on the other side of the world and who has happily taken your money be no more than a $10 overnight courier away? In such scenarios he may as well be on Mars.

Purchasing items offshore that require setup skill is a sizable risk, fact. By buying locally ( where credible infrastructure exists )you remove a lot of the risk because there is someone you can access without HUGE freight return costs and phone bills or slow / unsatisfactory e-mail response. Heck if you are a track rider you may be able to access him at a track day, well theres more chance of that than your Yankee friend turning up to back up what he sells indiscrimantely around the world. How does it go? Out of sight out of mind?

You made your point well.

If your selling point (and income) is the service you offer, what is the problem in providing that service to those of us who have bought our shocks overseas?

If the margins to be made on the product sales themselves isn't the big earn, and double the number of shocks are sold to Kiwis as a result of the savings (and mistakes) they made, don't you then have twice the number of customers who need your services to fix their stuff ups? I don't see the problem. Unless the cream is really in the margins.

[scott411]

Undeniably change is constant and there are those of us that embrace it ( or fail ) but are also not afraid to point out some very real negatives as well.

With respect to your second paragraph that really irks me as well, as it would other people in many industries. There is in this new interweb world a new attitude of skepticism, '' I will do some research on this on the web''. There is a lot of good and credible information on the web but there is also a lot of abject rubbish. ''Its on the web so it must be correct, right? ''....yeah right . More than a few have come unstuck because they trusted ''the research.

but what would we know Robert, i mean, i have only 10 years of owning a business and employing people, and i have forgotton how long you have been doing it but much longer,

[Robert Taylor]

You made your point well.

If your selling point (and income) is the service you offer, what is the problem in providing that service to those of us who have bought our shocks overseas?

If the margins to be made on the product sales themselves isn't the big earn, and double the number of shocks are sold to Kiwis as a result of the savings (and mistakes) they made, don't you then have twice the number of customers who need your services to fix their stuff ups? I don't see the problem. Unless the cream is really in the margins.

We do indeed provide such a service and not only for our favoured Ohlins product. In fact we are picking up the tab more and more on a couple of high profile products where a NZ Distributor exists, and because of the indolence of one said distributor.

Margins are not handsome so if its not one we sold the issue is fixed at a fair and equitable rate, its about creating new customers. If its one we sold and its not right then there is no charge, at least we have had some modicum of margin to allow same. Cant be fairer than that!

[Robert Taylor]

but what would we know Robert, i mean, i have only 10 years of owning a business and employing people, and i have forgotton how long you have been doing it but much longer,

If there is no business there is no employment, thats something we all need to be abundantly mindful of irrespective of all the whys and wherefores

[nzspokes]

To give your argument some credibility you need to elaborate further about what line of business you are now in and what the volumes are. Are apples being compared with apples etc

Meh........

[Katman]

Meh........

Wow, that's an intelligent response.

Are you sure your business didn't fail simply through ineptitude?

[jonbuoy]

Try telling that to the Guy who bought an Elka shock because it was cheaper and it was supposedly setup for his weight etc....Try ttelling the guy with the R1200 who was dissatisfied with what the Yanks sent him. Shall I go on?

The point is there is a LOT more to respringing and revalving than is realised because there are a lot more variables to account for. For example:

1) Those side pannier bags have 25kg each in them, but what is their exact position and therefore how much leverage are they are imparting on the swingarm and shock? How can you easily do the maths for that? Being on hand with a bunch of springs, measuring and test riding is the means of achieving the very best result, no argument.

2) You have given the overseas reseller your weight but did you tell him that you are 6 feet 8 inches tall and have handlebar risers fitted? Thereby you are sitting back further on the bike and imparting more leverage on it than a rider of the same weight who is a more regular 5 feet 10 inches tall

3) Did you tell the guy you have ''lowering links'' fitted ( which almost always stuff up the suspension action.) Believe me we strike this quite often. As an aside you can instantly and emphatically call the bluff of the lowering link manufacturer by asking for an overlay graph of the original link curve against a system fitted with their links....that speaks volumes

4) Are you convinced that facelees Yank taking your money actually understands our roading conditions and that unlike their freeways we have a very high ratio of bumps.

So you recieve your suspension, the springing turns out to not quite be ideal due to another variable that cannot be imparted by spring rate calculators / maths....your own preference of ''feel''. The revalve prior to sale also turns out to not be as ideal as what would have been hoped for. Or you go to a trackday and cannot find good enough grip and tyre life. So you are unhappy ( and we have seen this happen A LOT ) Will that guy who is on the other side of the world and who has happily taken your money be no more than a $10 overnight courier away? In such scenarios he may as well be on Mars.

Purchasing items offshore that require setup skill is a sizable risk, fact. By buying locally ( where credible infrastructure exists )you remove a lot of the risk because there is someone you can access without HUGE freight return costs and phone bills or slow / unsatisfactory e-mail response. Heck if you are a track rider you may be able to access him at a track day, well theres more chance of that than your Yankee friend turning up to back up what he sells indiscrimantely around the world. How does it go? Out of sight out of mind?

All good points and you go the extra mile to make sure your customers are 110% happy with the product which is probably why your still in business, I´m sure you will survive but a lot of people aren´t offering any more backup than the guy in the warehouse in the states but still charging a big premium which is why they are getting bypassed. I work in the marine industry - our markups were being chipped away by overseas sellers and management companies dealing direct with manufacturers (20% was the norm)- they still came to us for technical support when things went wrong and held up the warranty flag and we had to tow the line so to speak.

I sold my soul and now I work direct for owners myself - gotta keep that bread on the table. Evolve or become extinct.

[Robert Taylor]

All good points and you go the extra mile to make sure your customers are 110% happy with the product which is probably why your still in business, I´m sure you will survive but a lot of people aren´t offering any more backup than the guy in the warehouse in the states but still charging a big premium which is why they are getting bypassed. I work in the marine industry - our markups were being chipped away by overseas sellers and management companies dealing direct with manufacturers (20% was the norm)- they still came to us for technical support when things went wrong and held up the warranty flag and we had to tow the line so to speak.

I sold my soul and now I work direct for owners myself - gotta keep that bread on the table. Evolve or become extinct.

But isnt that the way service should be? Optimising for the market conditions, as someone who is appointed by the manufacturer to look after the appointed territory. We are into BEST VALUE AND BEST BACKUP rather than best / cheapest price. There is a big difference.

I will tell you something for free. We get a number of enquiries from Australia and doubtless a few cross over to the penal colony from our shaky isles. But we always bounce them back as we have a gentlemans agreement with the Aussie distributor to not impinge into his appointed territory and vice versa. We are not fighting each other with customers playing us off with dutch auction mentality, further eroding already thin margins and devaluing the product. Maybe thats old fashioned but Id rather have a good relationship with the next distributor at the next bus stop.

Cynically, I look back at the 70s and in those days there were many small businesses and their owners were able to make a comfortable living ( not so much to make them wealthy ) and employ a few of our own along the way. Now because of the total de-regulation of world markets ( and this is not a green light for a copy of ''War and Peace'' ) the dynamic has changed so much that many of these people can now only eke out a meager living working as ''serfs'' for big box retailers. That is a sad state of affairs and is helping to further dumb down our country. Purchasing offshore en-masse only further exacerbates this dynamic.

There is another dynamic that is a huge consideration for businesses that require a heavy technical focus such as ours. To provide a proper service you need a not insubstanial investment in tooling ( and there are always new ones to buy ) and ongoing training. We proudly do not scrimp in this department and scathingly I look at competitors and indeed many motorcycle shops that are seriously deficient in same. In our armoury beyond handtools we have a fairly substanial lathe, bench equipment, digital spring rate testing equipment, a $7000 Ohlins vacuum bleeder and most recently we have spent nearly $30,000 on a state of the art fork and shock dyno ( nearly up and running )

I stress to add though that this latest purchase was not funded at all from our supposedly exorbitant price gouging profits ( I wish ) It was purchased using a first small advance from a family legacy and competing with that was pressure from the home front to spend it there. Or if I was still that way inclined I could have bought a fairly decent motorcycle for that sort of money. Call me nuts but we want to provide even better service and understanding into the future.

Our supplier ( Ohlins racing AB Sweden ) requires that we travel to Sweden up to once every two years, sometimes annually to be schooled up with the latest technology etc. That is totally at our cost with respect to the cost of downtime, cost of airfares and accomodation, meals etc. Getting to the other side of the world and back is not insubstanial in cost.

In selling such a ( relatively )low volume product that is very specific and in a tiny market the costs of keeping up to speed can look quite disproportionate. Unless you have Briscos style turnover and margins this is something that has to be carefully weighed up. New Zealand already has a serious skills shortage in many fields, the reasons are many but the cost of keeping up with technology when you balance it out against fairly meager returns will be a contributory factor.

Every sale lost offshore ( for whatever reasons justified and arguably unjustified ) is another nail in the coffin of the total ability to provide the best possible backup service at local level. Cheapest price comes at a cost.

For our part we are doing our best to meet new and often distasteful realities.