Dealer/distributor price gouging continues unabated

[Mungatoke Mad]

Many years ago in a previous life I was a test rider (ha ha) for a Harley Davidson dealership.
One very quiet day we thought we would price a 1340 Dyna Glide in parts.

This bike cost just shy of 15,000 pounds as it sat on the shop floor.
Now this was back in the days of microfiche machines and took a while to work out and………..
The sum total for this bike in parts added up to 98,000 pounds!!!!!!

Are you Sure you didn't leave out a couple of 00's

[JimO]

...its the markup that makes a difference.
Example: a brand new item was purchased two weeks ago (actually, we got it for free) but it cost $38.00 if you know the right people.
Over the counter..its $65.00

that counter is probably in a building thats either rented or the shop owner is paying a mortgage on, it may have lights and heaters, the bank and the tax man and the gst man will have their hand in the owners pocket there will be insurance plus staff to pay for, there is probably a free coffee machine and some bike mags to read and a few bikes to sit on.............all this shit costs money if the shop sells stuff for what they pay for it they wont be around long

[scumdog]

Many years ago in a previous life I was a test rider (ha ha) for a Harley Davidson dealership.
One very quiet day we thought we would price a 1340 Dyna Glide in parts.

This bike cost just shy of 15,000 pounds as it sat on the shop floor.
Now this was back in the days of microfiche machines and took a while to work out and………..
The sum total for this bike in parts added up to 98,000 pounds!!!!!!

Don’t think the parts mark up thing is unique to NZ

On the same them: back in the day when a Hillman Avenger was about $3000 we did the same excercise and found the cost of building a diff for an Avenger from the parts list was $1,600.

No logic...

[bikaholic]

You guys need to buy Yamahas, at least their dealers aren't thieving cunts.

Parts I have bought are the same price in $NZ as in $US on the interweb, including freight and shipped from aust.

So yeah, the owners of lesser brands of motorcycle are being ripped off.


In a thread about ripoff markups, you suggest buying from RS. Seriously?

With their catalogues you can pick the model you want rather than setting for one of the three the electrcal wholesalers have in stock.
Most 'not in trade' pay trade price at wholesalers so they are going to get ripped anyway, but way way cheaper than 6 hundy, and way way cheaper than trade for me.

[Maha]

that counter is probably in a building thats either rented or the shop owner is paying a mortgage on, it may have lights and heaters, the bank and the tax man and the gst man will have their hand in the owners pocket there will be insurance plus staff to pay for, there is probably a free coffee machine and some bike mags to read and a few bikes to sit on.............all this shit costs money if the shop sells stuff for what they pay for it they wont be around long

..and never the twain shall meet.

[nzspokes]

Because bike shops are gold mines.

Now if only they would open Sundays.

[spanner spinner]

Quick economics lesson, if you want to pay the same price for parts as the US have the same size market. Which means that we either make it compulsory for everyone in NZ to ride a motorbike or import 30 million odd people. (I vouch for the first option just got to get to be PM some how) And we also need to get the freight cost down as well, any one know how to move NZ closer to either Europe or the US as these are where the main distribution points are (on second thoughts as China makes most things these days might be better to snuggle in just next to Taiwan) As for the cost of the fan this would be a very slow moving part - most bikes would go from new to wreck with out ever needing a radiator fan, the cost to the manufacturer of having the item sitting on the shelf has to be factored in to the spares price as it costs the manufacturer to have this part sitting around. This is called capitalism which is still better than the option of communism where you save up for ten years then give the government your money and then wait for five years for delivery of your bike and then get the same model of bike as your neighbour bought 20 years earlier, then your spares would be cheap (if you can get them) as the government would set the cost. Having worked in the automotive industry, most dealers work on very tight margins and don't make very much out of supplying parts. Some times by the time you pay the staff and business costs the parts department is lucky to pay it's way but you have to have it to make the rest of the business work. If every one snubs the local guy you won't have a problem with the local guys prices as the NZ bike industry won't exist, look at the number of dealers who have gone in the last couple of years. This is not just related to motorcycles as Dick Smith has just informed that they are shutting 66 shops in the next few months, one of the reasons is the impact of internet sales.

[spanner spinner]

I have worked at a bike shop that was open seven days not much fun when you are at work when all your mates are out riding.

[Hitcher]

FOURTY DOLLARS.

Forty dollars, $40.

[bikaholic]

This is not just related to motorcycles as Dick Smith has just informed that they are shutting 66 shops in the next few months, one of the reasons is the impact of internet sales.

Having been in aussie quite recently it is very understandable why a startup company like JB HiFI has stolen Dick Smiths market and then doubled it, but even that does not mean success.

And is not re-lifing a used part better for the environment, apart from a few carbon miles that where going to occur anyway?

[tri boy]

I've been saying it for about five years now.
Bike shops are destined to fail if they continue with an out of date retail business model.
They are the dinosaurs of the retail motor industry.
Gone are the days of fucking the customer over, and laughing about it out the back. (It does happen, even in the so called best shops).

The owner/mechanic/small shops will survive if their staff levels remain between one -three people.
ie sole traders just buying themselves an income.

The large shops will be around for a while, as they hold market share.

The losers are the mum n dad shops that grew to having about 8-10staff during the good times, and who can't adapt to a global retail market.

The importers are the slowest of the dinosaurs, dragging everyone down into the abiss with them.

There is a better way, but it will take the whole industry to agree to a better format.
Sadly, after spending a few decades watching how they bicker and argue over silly little things, then I think Woolworths or Bunnings should overun the entire system.

Just think, Harley Road King on special for this week only, free 5kgbag of potato's included.

[Trade_nancy]

The distributor sets the recommended retail price.

They would not look favourably on their dealers/retailers starting pricing wars.

Sounds like the m/cycle industry is due for a reality check and introduction to 21st century competiveness. Stipulated RRP prices are often very significantly inflated and bear no relationship to fair and reasonable profit margins. Distributors apply a big WHACK - to provide enough cuttable fat for the retailers to haggle better deals. The dealer who chooses to sell at the bloated RRP does so of their own choosing. In the PC industry we started with an RRP in the order of about 35-50% when I first became involved with the sales side back in 1992. Today - more like 10-15% on PC equipment..which has become a commodity product. Price wars did rage - and companies who engaged - such as PC General, PC-Direct,..ultimately went down. On a sale - I aim for 20% as my "good" markup. What would a Motorcycle retialer go for?
Also - to argue that a markup on a part is "fair" because it is only $15 is unreasonable. It is the margin that indicates the fairness. To be sure - there is a minimum cut you want to make from a sale - else it is not worthy of your time. So often businesses increase lower price items by a $$ amount rather than applying a percentage margin. Hence a 10 cent washer may be sold for $10..and I have no problem with that..as you get service, time and a solution in that price and it aint worth it for the 10 cent + 20% markup way. I needed 4 snap-on metal circlips that hold on HONDA emblems - on CB750 side covers...and traced them to a nuts/bolts distributor.....he said minimum sale price is $10 and gave me about 50 of them in a snaplock bag. No problems.
I bought a set of Triumph "Garrett" gloves from a certain Harley/Triumph shop - "Fire Sale" last week - had 50% off - so got them marked down from $129 ticket price to $64. Googled later and found them for sale in USA for US75RRP -marked down to US$50. So I guess the original markup was more than 100%.

[Woodman]

Maybe the importers/distributors need to just sell direct in NZ. Couple of warehouses in the main centres as their retail outlets and an online option as well. No bikes for sale, no workshop, just parts and accessories. Open 7 days.

This would be for aftermarket parts and accessories only, leaving the genuine parts to the dealers that sell and fix the bikes.

Its how the auto industry has been doing it for donkeys years.

[BoristheBiter]

Sounds like the m/cycle industry is due for a reality check and introduction to 21st century competiveness. Stipulated RRP prices are often very significantly inflated and bear no relationship to fair and reasonable profit margins. Distributors apply a big WHACK - to provide enough cuttable fat for the retailers to haggle better deals. The dealer who chooses to sell at the bloated RRP does so of their own choosing. In the PC industry we started with an RRP in the order of about 35-50% when I first became involved with the sales side back in 1992. Today - more like 10-15% on PC equipment..which has become a commodity product. Price wars did rage - and companies who engaged - such as PC General, PC-Direct,..ultimately went down. On a sale - I aim for 20% as my "good" markup. What would a Motorcycle retialer go for?
Also - to argue that a markup on a part is "fair" because it is only $15 is unreasonable. It is the margin that indicates the fairness. To be sure - there is a minimum cut you want to make from a sale - else it is not worthy of your time. So often businesses increase lower price items by a $$ amount rather than applying a percentage margin. Hence a 10 cent washer may be sold for $10..and I have no problem with that..as you get service, time and a solution in that price and it aint worth it for the 10 cent + 20% markup way. I needed 4 snap-on metal circlips that hold on HONDA emblems - on CB750 side covers...and traced them to a nuts/bolts distributor.....he said minimum sale price is $10 and gave me about 50 of them in a snaplock bag. No problems.
I bought a set of Triumph "Garrett" gloves from a certain Harley/Triumph shop - "Fire Sale" last week - had 50% off - so got them marked down from $129 ticket price to $64. Googled later and found them for sale in USA for US75RRP -marked down to US$50. So I guess the original markup was more than 100%.

So what you are after is no bike shops, we do it all on line or have just one big shop that sells everything, therefore no competition.

I hear what you are saying as our suppliers are now doing kits for everything.
But all i still hear is people wanting a top service and don't want to pay for it.
It has been like this for years and now these threads have become like waving threads.

I go to 3 different shops, not because they are cheapest but i get the best service, great advise and can stop in and just chew that fat any time, and the best one if I have a problem i can just take it back.

So you had never go into a shop ever again as someone might have put a mark up on it.

[Katman]

In the PC industry

Yes, in an industry that sells to 95% of the population your turn-over would certainly allow smaller margins.

When you're selling to only 2% of the population you don't have the same luxury.