Cycle Retail In Meltdown.

[rjb]

Would you risk buying from a retailer who has financial issues. If they go under your user rights are worthless. No guarantees. A recent thread highlighted the Moore Large collapse and subsequent auction. One unlucky punter bought an e bike at a discount only to discover it was faulty with no regress to the seller. The cost of repairing it was far greater than the original saving.
Caveat Emptor.

[Cowsham]

I would expect that CRC own all of their stock outright if not 99% of it...

They don't. There are credible reports from within the industry that one retailer has about £2m exposure to them and plenty more with up to £1m.
The bigger the company (CRC etc), the more leverage

https://bikebiz.com/wiggle-crc-to-enter ... ports/amp/

Leverage costs money

[Squirrel chaser]

I would expect that CRC own all of their stock outright if not 99% of it...

They don't. There are credible reports from within the industry that one retailer has about £2m exposure to them and plenty more with up to £1m.
The bigger the company (CRC etc), the more leverage

https://bikebiz.com/wiggle-crc-to-enter ... ports/amp/

Leverage costs money

The leverage that customers have cost very little in effect.
As customers we can control the market and should really be looking at this moving forward.
After all the customer is always right.....

[853]

Who bought all the auctioned Moore Large stock?

No idea but by the time it was sold, adding on the VAT and the auction tax didn't make it a great bargain anyway, most of what I saw was selling at very near original RRP.

I bought two lots, after it was mentioned on this forum. Yes, you pay a 25 percent 'auctioneer's fee' and then 20 percent VAT on top of this (so a total added fee of 50 percent).

I got both lots for the same price, which was 28.6 percent of the RRP - and that's inclusive of the 50 percent fees

For anyone interested John Pye Auctions are still selling the Moore Large stock at a current South Wales auction

https://www.johnpyeauctions.co.uk/Brows ... rOptions=7

[cycleruk]

I don't know if using a "credit card" or PayPal would give some sort of protection ?

[irc]

I don't know if using a "credit card" or PayPal would give some sort of protection ?

Credit card if over £100.

I read elsewhere but can't confirm that it only applies per item. So 2 x seperate £50
items not covered.

Also note credit card protection does not apply if using it via Paypal.

https://www.moneysavingexpert.com/credi ... Section75/

Unless there is a huge saving I'm in the why risk it camp.

[Cowsham]

One of the many problems the retail industry faces is business property rates -- ( not business rates ) this is a tax you have to pay there's no way to circumvent it. Also it's about 12 times domestic property rates. ( I think that's replaced by council tax in England we still have domestic rates ). Your LBS has to find that money before any other money is made.

For a small shop here it's about £14,000 a year roughly £40 a day! How do they survive when the government is milking them dry. Yes they make maybe 50% to 100% on small items but on a bicycle I'd be surprised if they make 5 to 10 %. You need to sell a lot of brake pads to get the governments £40 each day. -- there will be days not a sinner walks through the door.

Speaking from experience in the retail trade. ( family business )

Then there's VAT. What's that all about ? ( already discussed somewhere and had to prove to posters ( on here ) that VAT registered retail business are always on the losing side of that tax.

[Cowsham]

They don't. There are credible reports from within the industry that one retailer has about £2m exposure to them and plenty more with up to £1m.
The bigger the company (CRC etc), the more leverage

https://bikebiz.com/wiggle-crc-to-enter ... ports/amp/

Leverage costs money

The leverage that customers have cost very little in effect.
As customers we can control the market and should really be looking at this moving forward.
After all the customer is always right.....

Market forces will always find their own level no matter how government or the public attempt to interfere with it. Mr market will always win that argument -- found this out the hard way.

[TrevA]

Well then does anyone know if the fall of such companies as wiggle etc will help the LBS industry?
After all we all need cycling so why not stop shopping online and go to the bike shop like we always used to......

I fear it’s already too late. Most of my go-to LBS’s have already closed down. If Wiggle/CRC cease trading, then people will just buy from Merlin, Tredz, etc instead.

[Psamathe]

Provided the small independents have got some spare cash it's a potential opportunity to acquire stock at good prices.

It doesn't work that way - CRC/Wiggle are huge buyers within the industry and they work with multiple dealers and distributors.

Everything on the CRC website that isn't an in-house brand has been bought from those manufacturers or their distributors. If that stock hasn’t been paid for (which is very common, you essentially pay the manufacturer back as and when you sell the stock) that’s going to cause cash flow problems across the industry.
...

In the days when I was in business ownership of goods only transferred once payment had been made. So if suppliers shipped goods on the basis of paying when sold-on, I'd have expected the supplier to be able to recover their goods (if same practices are still used).

Maybe suppliers provided credit in which case ownership may easily have transferred to Wiggle/CRC. I'd have expected suppliers to have insured or passed credit risk on. We used to use factoring to underwrite credit (factoring company setting credit limits) - on the basis our business was provision of hardware and services not financial services.

Ian

[Manc33]

A lot of times people don't need to upgrade a bike part (or the entire bike) because the current one already works. In the past I'd try to put all the best stuff on my bike but it was never actually necessary, it's just that it was reasonably affordable back then so I did it wherever I could. These days the prices are so high there's no point even looking at upgrades.

[rareposter]

A lot of times people don't need to upgrade a bike part (or the entire bike) because the current one already works. In the past I'd try to put all the best stuff on my bike but it was never actually necessary, it's just that it was reasonably affordable back then so I did it wherever I could. These days the prices are so high there's no point even looking at upgrades.

There's an element of truth in that but I think it's a whole range of factors.
Covid created a huge demand for bikes and bike parts as people who never (or rarely) rode discovered it was one of the few things they could actually do during lockdowns / restrictions. At the same time, the massive factories in the Far East were all shut down so there was a sudden massive demand spike and supply slump.

Once back up and running, everyone stepped up production to meet the demand which placed cost pressures on raw materials and therefore finished product; meanwhile most people who wanted a bike had bought one, there was limited further demand and many people who had bought bikes had lost interest and were flooding the S/H market with barely ridden impulse purchases (this also happened in about 2013/14, it was the post-Olympics boom ending and everyone selling their barely used Pinarellos bought off the back of Bradley Wiggins' wins!).
The bikes that have been kept are still fairly new so limited need for upgrades.

Much like how kennels and rescue centres were suddenly overwhelmed with dogs from all the people who'd bought puppies during lockdown...

And following on from Covid, the UK now has a combination of Brexit, inflation, cost-of-living etc to deal with as well, the market has an oversupply of bikes and parts which it can't shift which equals mountains of kit (and therefore money) tied up in warehouses with limited prospect of ever selling it, at least not at RRP.

[jimster99]

-deleted due to duplicate-

[jimster99]

Credit card if over £100.

Also many banks operate some kind of fraud protection scheme for under £100, and also debit card purchases also often have protection. HSBC offer this on their Visa debit cards, for instance, even if under £100.

I fear it’s already too late. Most of my go-to LBS’s have already closed down. If Wiggle/CRC cease trading, then people will just buy from Merlin, Tredz, etc instead.

And fewer market participants mean higher prices and less choice for all.

[Cowsham]

Provided the small independents have got some spare cash it's a potential opportunity to acquire stock at good prices.

It doesn't work that way - CRC/Wiggle are huge buyers within the industry and they work with multiple dealers and distributors.

Everything on the CRC website that isn't an in-house brand has been bought from those manufacturers or their distributors. If that stock hasn’t been paid for (which is very common, you essentially pay the manufacturer back as and when you sell the stock) that’s going to cause cash flow problems across the industry.
...

In the days when I was in business ownership of goods only transferred once payment had been made. So if suppliers shipped goods on the basis of paying when sold-on, I'd have expected the supplier to be able to recover their goods (if same practices are still used).

Ian

Hasn't been like this in all my time in the retail sector. You'll get one or maybe two months credit if available from that wholesaler then it's 6 monthly or a yearly repayment plan which can be better than bank rates but never a good way to do business.

Many times we've had to sell stuff well below cost price to get money in to pay one wholesaler who's stuff just isn't selling due to one thing or another ie out of season or trend changes you didn't foresee or you just overestimated demand.

The most horrible thing to hear is a customer saying ( even now 24 years later when I hear someone say it about another retailer ) " Look at how cheap I bought that thing at -- just shows that they must be making a fortune off the usual price."

Little did they know the full price had a 5% margin and now making a 50% loss on the wholesale price they paid cos another wholesaler needs paid.

Retail is a very hard game these days. Nearly impossible for the small shop in the street.