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Is This A Form Of Price Fixing In A Free Market Economy?(11 posts)

Is This A Form Of Price Fixing In A Free Market Economy?Akirasho
Jan 5, 2004 5:09 PM
... or is Shimano merely attempting to protect the consumer from shoddy merchandise from shadey vendors?

I know this is old news to many of you, but was reminded of it while visiting a few web vendors displaying the logo shown below.

This is from Branford Bike's website...

Shimano bids Branford Bike Adieu
Shimano America is implementing a new distribution program that authorizes select retailers to sell Shimano products via the web and mail order. In a recent letter to Branford Bike Shimano America stated that the purpose of their new sales policy was to "ensure that consumers are provided with the highest levels of service, receive proper product and warranty information, and that Shimano's products are promoted in a manner that furthers Shimano's reputation for quality products."

We called Shimano America and asked George Eubanks, the policy creator, for a clarification. George Eubanks stated that he was not familar with Branford Bike and then added that we were not on Shimano's list of six "authorized web retailers". However if we agreed to stop selling all Shimano products over the web we would still be allowed to purchase them for resale through a brick and mortar store. We explained to him that we only sold Shimano products via our online catalog and previously with a paper catalog. We added that Branford Bike has sold Shimano products for over 28 years and currently serviced riders on every continent including Antartica. George Eubanks explained that this was their policy. However in a year or so there may be an opening and we could apply for "authorized web retailer" then. He added that soon they would be sending a list of banned retailers to Shimano distributors. He assured us that we would be included on that list if we continued to sell Shimano products via our online catalog.

As a result we have decided to discontinue all Shimano products from our Online catalog. Many are on sale already and they will be removed from our catalog once our stocks are sold out. We regret that we can no longer offer Shimano's fine products to our customers around the world. If you would like to speak with Shimano America or George Eubanks you may call them at 800-423-2420 or fax them at 800-206-0010. You may also call them at (949)951-5003


Of course, there are probably points to be argued between... what's your take?

Be the bike.
I can only hope...rwbadley
Jan 5, 2004 5:22 PM
they po'd Branford enough they will hold a fifty percent off sale ;-)

Actually this is a load of crap. I see this happen in other industry and the reason is the same.... to protect and serve etc...hogwash. It all boils down to a form of price fixing, the 'authorized guys' do not have discounted prices until Shimano says so. I can see the valid reason to protect the solidity of the pricing structure, but as a consumer, we're all lookin' for the best deal...right? I guess this puts a thorn in the side of enough folks in management they need to schnoozle the money out of the would-be Shimano buyers.

oh well, there are other choices in the market...

RW
It's completely legalChainstay
Jan 5, 2004 6:01 PM
The US has tough anticombines laws and manufacturers are not allowed to attempt to influence the resale prices of their dealers and retailers. What they are allowed to do however, is pick who they sell through. Shimano appear to be going to a more exclusive distribution for the internet business. This will tend to decrease price competition, support a higher internet price point and protect the brick and mortar guys. If one of their authorized internet resellers becomes too price aggressive I expect that they will toast them and sign up others.

It's hardball but when you have the market power it's only good business to use it to support your number one brand position. Letting a bunch of discounters loose with your product will undermine the loyalty of all your other dealers and market channels. Get your Shimano parts now before they get their strategy in place. Start looking around for international retailers with better prices.
Or you could just come clean and go with Campy ...Elefantino
Jan 5, 2004 7:33 PM
... sorry, couldn't resist!

It's not about the components.

FWIW,
Mike
.....and Shimo is wondering why OEM depand is up 400%divve
Jan 6, 2004 5:21 AM
.....expect discount flood once they deliver:)
er: This is A Form Of Price Fixing In A "Free Market Economy"RemmingtonShowdown
Jan 5, 2004 7:31 PM
The tax free, truly consumer driven internet economy as powered by e-Bay, or the grey market as it has been dubbed presents a dilema to both various govenments and to the companies whos product finds its' way there.

Eliminate the grey market?

Heard an interesting piece on just this on Odyssey from Chicago Public Radio. The December 24th show at this link; http://www.chicagopublicradio.org/audio_library/od_radec03.asp
I am glad to seeirregardless
Jan 5, 2004 7:42 PM
that Shimano has added a number of others to its original short list of authorized web dealers, including several low price vendors:

http://www.jensonusa.com/store/product.aspx?i=CR706B02

http://txcyclesport.com/Merchant2/merchant.mvc?Screen=CTGY&Store_Code=M&Category_Code=da-7800

Notice the Shimano authorized web retailer logo on those pages. I'm sure there are others. Consequently, I'm not as concerned about this distribution scheme as I was originally.
I've purchased from Jenson several timesB2
Jan 6, 2004 7:23 AM
because of their good pricing and service. However since this Shimano authorized internet dealer came into existence, there's nothing much that really catches my eye on their site. It sure seems to me that there used to be LOTS of good deals there (although mostly MTB oriented). I now throw them in with Colorado Cyclist and Excel. That's to say that all three of these guys are reliable with good inventory and service; have good deals now and then, but generally hold retail price line. The end result is that Jenson is getting less of my business and Shimano has given me perhaps the strongest reason yet to eventually convert all of my bikes to Campy.

Bryan
No, it's a matter of business and priorities!Ironbutt
Jan 6, 2004 5:13 AM
Branford hasn't carried Shimano in their on line catalog for several months. When they did, they were extremely slow in filling orders for Shimano equipment (for me, anyway) and over the phone would suggest that I switch to Campy. Sometimes my parts came in factory packages with all the literature, sometimes they didn't. They have been "a proud corporate sponsor of Campyonly.com" for some time, and this may explain Shimano's position in this particular instance.
Brakesdave woof
Jan 6, 2004 10:08 AM
314 grams (pair) Please note, brakes are sold seperately. Order 1 each of front and rear if you need enough for one bike.

Jensen lists Shimano brakes as sold separately - i.e. not in pairs.. wtf? What next - pedals and handlebar tape sold for each side?

D
Mountain bike brakes -TJeanloz
Jan 6, 2004 10:24 AM
I'd say this is the result of a Mountain-bike culture. MTB brakes are usually sold seperately as front or rear.