An Open Letter To Chain Reaction Cycles

I was somewhat surprised to see an LBS with a pretty good business model (Dream Cycle) post this up on Facebook and call CRC 'The Devil', but anyway here's some quality bitching and moaning:

http://zengarage.com.au/2012/11/an-open-letter-to-chain-reaction-cycles/

Boo hoo etc…. All the UK shops that I know of are doing pretty well and they are much closer to CRC than Australia, or SpokeySpokeSpoke, Freehubwheel, or Mel and Kims Bikes in Vancouver.

What an asshat.

I'm thinking this store is related to any of the ones Matt Holmes has any stake in.

What an asshat.

I'm thinking this store is related to any of the ones Matt Holmes has any stake in.

yeah, whiney baby was my first thought.

and i love david thorne! omg he makes me laugh

they run a business. why do some people want to turn this into an ethical debate?

i never even really looked into them before, now with this free advertising I'll have a look…

^^^
What I thought after the first paragraph was, this is free advertising for CRC

After reading a bit more it seemed like ignorance.

Bold statement for sure, but that guy needs an editor. Unfortunately I can't offer my services outside the Canadian distribution network…

Reposting a comment I made on the dream cycle post here:

http://www.facebook.com/permalink.php?story_fbid=250116451780923[HTML_REMOVED]id=312387246806

The fact is nobody has the stock that these big guys do. KS lev 150 seat post in 30.9 which is high in demand? Had to get it from arts cyclery. Might as well pick up some brake pads for 20 bucks cheaper at the same time and free shipping.

Another example is the hope stem i picked up from crc, 50mm with 25deg rise. Nobody local is going to stock such an odd ball stem.

A lot of the time if I do want to get it local, I have to call 5+ shops only to find out they have to order it in. Nobody in Vancouver seems to run an online store that shows current stock with the exception of dunbar. In the case of dunbar I've saw that they had something in stock and went there to get it.

I do all the work on my own bikes. LBS's do well with people that aren't as knowledgeable and don't work on their bikes. Most of the people who buy online know exactly what they need and how to install it.

Edit: They deleted the comment. Nice.

I thought his comment regarding CRCs "… avoidance of Australian Goods and Services Taxes, import duties …" interesting. It seems our taxation model almost promotes consumers purchasing online, if for nothing else, to get a 12% savings by not paying HST.

funny, i read that screed and agreed with everything he said. though i think he overstates the severity of crc's impact on the retail bike industry, big box stores, whether they use the internet or not, have a distinct advantage over smaller retailers on many fronts - the prices they offer, the stock they carry, flexibility to use advantageous tax regimes, a size that allows them to take advantage of or in some cases demand favourable business policies, low overhead, not having to use loss-leaders to generate business, subsidized shipping costs through public carriers, no need to invest in the local community, etc. - that allows or causes (depending on how you look at it) them to drive out small scale competitors. these smaller scale businesses usually beat their bigger aggressors on many fronts - service, local job creation, community investment, etc - that factor into their higher prices, but "value minded," short sighted consumers who take the bottom line above all are happy to externalize those and precipitate the decline of businesses that are part of the fabric of their local economy and build resiliency, using all of the excuses listed above and more. go to (m)any small community in north america and you're likely to see them at the end of or on the same track: few(er) local businesses, more and more chains popping up to take their place. there's often talk about a changing retail landscape and what bikes shops need to do to retain customers and remain relevant (service damnit!) but the environment for these businesses is getting harsher and less stable - a nice economic analog to how global warming is going to effect us all - and big box and online retailers, and the increasing number of customers who blithely support them (some of whom do not need the expertise and service of the shops but come on how many idiots post up in the gear section with obviously no clue how to install or trouble shoot something they bought on line and are inevitably directed to "go to your lbs") are at the end of the day responsible for that, and the outcomes of this trend, whether they accept them or not. /rant

There is something wrong with the price of goods - especially bike parts - in Canada (or BC from my experience). I go out of my way to try and give my money to local bike shops, but when I can order something online, from the US or UK, have it shipped to my door in a couple days for routinely half the price of what my local shops have it for, why wouldn't I? I spoke with the owner of a recently defunct local shop and he said the online price from the US is regularly what his wholesale cost was. What's going on? The Canadian Dollar has been at par, or more, to the US for years so you can't tell me its the dollar difference and time-frame from when orders are being made. Are we really imposing taxes on items to double their retail value?

I thought his comment regarding CRCs "… avoidance of Australian Goods and Services Taxes, import duties …" interesting. It seems our taxation model almost promotes consumers purchasing online, if for nothing else, to get a 12% savings by not paying HST.

its not just that tim - many of these large chains or online retailers can have the majority of their business operations in one place yet designate another as their "headquarters" thereby enjoying the most favourable business tax rates as well. american chains operating in europe are very keen on this tactic - and european countries are starting to crack down on them: http://www.bbc.co.uk/news/business-20288077

illegal? no. unethical/inequitable? i'd say so

I thought his comment regarding CRCs "… avoidance of Australian Goods and Services Taxes, import duties …" interesting. It seems our taxation model almost promotes consumers purchasing online, if for nothing else, to get a 12% savings by not paying HST.

You have to pay this when you bring your product across the border. However, there are times where this is waived at the border agents discretion.

Any LBS that feels threatened by online retaillers is, quite simply, doing it wrong. Find your niche. Cultivate and educate your clientele. Provide value-added services that can't be offered online. Make your shop a destination shop!