question about shops in the GTA... too much$?- Mtbr.com
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  1. #1

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    question about shops in the GTA... too much$?

    Ok so ive been thinking about the state of prices for bikes in the GTA, i live in mississauga and im talking about the 5 major shops here in particular, i wont name them out because its possible they might harrass me (ok highly unlikely), plus its not like i hate them or anything so anyway...

    The price of my bike is regularly 1099.99, plus tax you get $1250 bucks, in the states however the bike costs 749.99 almost everywhere you go, thats if your buying one already at retail price, most places charge less!! even adding in the cost of 8% duty paid at the border, and a regional tax, my bike hit 800 dollars CAD... why the 450 dollar difference?

    I`ll put out another example a basic trek fuel 70 is 799.99 in the states just over the border, while 1 hour away across the border in mississauga, and in fact almost everywhere in the GTA (i called 20+ places), its retailing for 1199.99 plus tax!!! Thats again close to 450bucks in difference just playing with canadian money.. Remember shops dont get bikes at retail cost or something like that as well....

    WHY?

  2. #2
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    I agree, it's ridiculous. It reflects the exchange rate of five years ago.

    There are a couple of Ontario bike store owners on the forum... maybe they can chip in.

    They are losing a lot of business IMO, especially on $1000+ bikes.

    On the other hand when you figure in shipping from the States it evens out a bit.

    However, if you live close enough to drive, it's a no brainer.

  3. #3
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    same thing for cars. For some models, a 46,000 CAD car is only 31,000 USD.

    I just ordered 1200 USD in bike parts from the states online. I got dinged for duty, taxes. The price I would've paid here would have been roughly double.

  4. #4
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    Some things are a lot more I've noticed, but at the same time I don't mind paying a little bit more if it's resonable for good service.

    So I end up buying some stuff in store for convenience/service and a lot of stuff online just for price.

    I don't think it's the LBS' fault. It's more that we only have like 2 distributors of everything and they fix the price as I understand it.

  5. #5

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    even with exchange rate and duty, it just doesnt make sense to me... I mean 50-100% more then just over the border taking that into account and still? common theres something wrong there.

    im glad that people notice this too

  6. #6
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    Your LBS doesn't have anything to do with the price they sell a bike... When you're getting a Trek bike, it comes from the US... Only Trek sells it more expensive then it does in the states. Price is set for the Canadian dealer show (which just shut down today in Montreal) according to the exchange rate. You might be biching now... But 3-4 years ago, i use to have customers coming from NY and VT who would simply make the drive here to get a good deal on a bike because the exchange was around 1.4... I guess then no one in small Canada complained about their LBS being too cheap!

    Why is everyone looking at their LBS as a ripoff when bike shop owners are never millionaires? If i were you, i'd shop around and try to find a "deal" on milk and bread that you buy EVERY WEEK! In the long run, you would save more!
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    umm, according to what exchange rate? 1300 dollars does not convert to 800 no matter how you slice that discount bread you reffer to.

  8. #8
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    It's more then just the exchange rate that makes the difference in Can / US pricing .
    As mentioned , the same stink was brought up a while ago on the news about car pricing .

    The manufacturers had all the answers about why they could justify it .
    I just don't remember the particulars as the report caught my ears as I was working on
    my bike with the tv across the room to my back .

  9. #9
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    Duty and tariffs

    Depending on where the bike is made it will get hit with import duties from the Canadian government that the US shops don't get hit with.

    You can sometimes pick something up in the states and when you come back you get hit with paying the duty yourself. Customs will charge it on the retail so you can get hit harder than if you bought it from a canadian store as they only get charged the duty on the wholesale price. Of course sometimes you get away without paying it which it a lucky break. Any bike that isn't made in the U.S. or Mexico is subject to duty charges, the percentage is dependant on the country. China and Taiwan, where most bikes are made are hit with over 10%.

    Kinda sucks but that's what we have to deal with up here.

  10. #10

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    Just be happy you dont live in Great Britain or Australia, they get truly hosed on prices.
    Many things are cheaper in the states, even after the exchange rate. Thats just the way it is.
    If you are that unhappy, take a friend and drive over the border, buy a bike and ride it back

  11. #11
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    I second that....LBS does not set price

    Quote Originally Posted by BigJay
    Your LBS doesn't have anything to do with the price they sell a bike... When you're getting a Trek bike, it comes from the US... Only Trek sells it more expensive then it does in the states. Price is set for the Canadian dealer show (which just shut down today in Montreal) according to the exchange rate. You might be biching now... But 3-4 years ago, i use to have customers coming from NY and VT who would simply make the drive here to get a good deal on a bike because the exchange was around 1.4... I guess then no one in small Canada complained about their LBS being too cheap!

    Why is everyone looking at their LBS as a ripoff when bike shop owners are never millionaires? If i were you, i'd shop around and try to find a "deal" on milk and bread that you buy EVERY WEEK! In the long run, you would save more!

    The retailers do not set the price, so don't whine to them. Most of the LBS owners are living their passion for bikes, not the money.
    If you want to ***** to someone, target the manufacturers, and include the distributors. Canada is too small a market to have much competition with these guys, so prices tend to float higher. Many distributors get exclusive monopoly rights to selling product as well. However, it is true that our prices are better than overseas!

  12. #12
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    ok, but here is the really sad part of this story:

    i'm canadian, live in the US, buy bike parts and bikes in the US...

    last year when i went home to visit the parental units in TO i dropped by an awesome bike shop whose name i can't remember...missisauga, on lakeshore...awesome people! but yes, the prices of bikes and bike parts were terrible in comparison to what i'm used to seeing and spending here in the US. so i'm thinking: 'ok...i get it...they have to ship them over...more parties involved...more middle men...higher prices...' i dig it.

    BUT why the hell are the CANADIAN bikes so expensive. the prices of rocky mountain frames is outrageous! and they're a canadian company!

    so the conclusion: there is a huge mark-up in canada. chalk it up to the cost of living thing. it's high. but hey...take it from someone who has experienced both...your healthcare IS really better...

    and more importantly, your mountain bikers are A LOT more friendly! in fact, i'm glad i started riding in canada, because if i started riding out here...i would have given up on the sport a long time ago!
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  13. #13

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    thing is your all still talking about small differences in price.

    8% duty across the border thats what the company has to pay, 10% on the exchange rate.

    The price of the bike for a shop owner here or in the states is gonna have a 18% difference max, so a 1000dollar bike over there should be 1180 here yet its not.

    Now i can understand the prices are fixed somehow, but what is punishment for a shop not selling at the price set out? Is it nothing? is it removal of the line from the store? If so i understand, in that case shops should be pushing to lower their set prices,, but why would they do that? they make more money and then know it....

    these are just things flying through my head, sorry if it offends anyone but i think its true...

  14. #14
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    Canadian-made bikes have a LOT of foreign-made parts, is one of the reasons. Typically only the frame is actually made here, and in many cases that will be made offshore, so they are really *assembled* here.

    It is the same deal with cameras, which I buy a lot of. It is generally cheaper to bring something in from B&H in NYC than to buy locally.

  15. #15
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    Quote Originally Posted by pinkheadedbug
    Canadian-made bikes have a LOT of foreign-made parts, is one of the reasons. Typically only the frame is actually made here, and in many cases that will be made offshore, so they are really *assembled* here.
    yeah...but even a frame, made in canada...no other components...is still ridiculously pricey!
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  16. #16
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    I too noticed that canadian made goods are sold cheaper in the states than in Canada. You would think paying duties crossing boarders to be sold in the USA market would be more than the same part sold in the Canadian market. Not the case. Think of race face products and louis garneau stuff.

    I had a chat with a LBS's mechanic one day as he was looking in astonishment at my busted fork. Had a bit of a chat, was asking him some questions on some high end parts he did not stock. He said he would have to order them from Norco.

    I paused and asked... NORCO? don't they make bikes? He said nope. Norco's main business is distribution of parts. They are the largest distributor of bicycle parts in Canada. For which they hold many of the exclusive distributor rights for parts in Canada. They handle 75% of all manufacturer's warranty work, such as warranty work for DT swiss. The LBS he told me orders close to 80% of all their parts they sell to customers from Norco. Norco for which forbids them to undercut others, advertise prices online.

    He also told me in the states they have Quality bike Products (QBP) then some of the bigger places deal with the manufacturer's directly. Even if you order from QBP their MSRP is 30% of what Norco is after you factor in exchange rate. For which QBP has volume discounts as well.

    The hurdles are against our LBS. I told him (the mechanic) that I could buy parts from Jenson USA or Universal Cycles with their coupons/discounted shipping. Pay 50% of what your MSRP is with taxes and duties, and then in turn sell them online myself and still undercut your best price. He said yup. Sometimes we (mechanic) order from USA and resell.

  17. #17
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    BigBore - think "big fish, little fish" and a little bit of "i'll add this much", while you're at it.

    Where do these bikes come from - good ol' U.S. of A. So, you have whatever bike for let's say $800 U.S. Okay, gotta get that bike "up here", right? Well, in order to do that you need a Canadian distributor. Enter OGC (Outdoor Gear Canada) and Norco (yes, the same Norco as the one's that "make" bikes). So, OGC and Norco need to accept, ship and store these bikes. Not a cheap task and neither company are small, either, so they mark-up the price to reflect this.

    Ahhhhhh, now it's making sense. Hey, they have to not only pay for the service, but they also have to make money, too.

    So, now we have that $800 bike, converted to Canadian dollars (at 1.15, just to be nice) and we're at $920. That's not including the additional mark-ups, but figure you're at at least $1000.

    Well depending on the LBS there might be another warehouse involved, a "local warehouse", if you will. They either say "it's coming from the local warehouse and we'll have it in a few days" (at least the good one's do, not the cheap-a$$'s that only order once a week) OR they'll tell you "it'll take a week 'cuz it's coming from Vancouver". That local warehouse ain't free, either. Guess what? Yup, more mark-up. Now that $1000 becomes ..... $1100.

    Okay, now we're "at the LBS". Do you really think he's doing all this for free? He's got his building/rent, employees (?), tools, taxes ..... blahblahblah and a whole bunch of other ****, and he's gonna put a price tag on that bike for ..... $1300.

    So, yes, if you do THEIR math then $800 U.S. = $1300 Canadian.

    Now, in reality my prices above will be "a little out" - this is due to the fact that the $800 dollar bike in question ISN'T costing the U.S. shops $800, nor is it costing the bike manufacturer $800 to have the frame produced overseas, shipped here, assembled wherever along the way, etc etc. Point is that there are numerous mark-ups involved that "you don't see" and that's what you're paying for. You can thank OGC and Norco primarily for this. More or less your LBS's hand's are tied.

    Look no further than parts like Avid's brakes, specifically the BBDB. Remember when they came out new, how much they were? What, $200 U.S. per set? NOW they sell for how much???????? That's right, $70 ****ing dollars (yes, it's a new currency). ALL that time people were paying almost 3 times what they are worth. You think the U.S. shops are loosing money when they sell them at $70 now? NOPE! Those brakes probably cost Avid about $15-20 per set. Yes, REALLY! When you deal with such large volumes then prices plumet (and i'm not even taking into acount that the mold(s) Avid has these made from were payed off a looooong time ago). And here we are NOW, in the GTA, paying what, anywhere from $130 ("new" take-offs) to $200 (NIB) for these things. Oh, when you're buying the "new" take-offs, you just helped your LBS make more cash by buying something that someone else's bike used to have on it, but the LBS swapped it out with a set of less expensive v-brakes. They were charged accordingly, with mark-up, then you bought the brakes for whatever price and payed a little more iinto their pocket. Not so much mark-up here, but a little bit of "presto-magico, into my pocketo".

    Let's not get into tires, okay. Same tire has a $25 difference in price depending on which shop you are in.


    Oh, almost forgot ..... for the expensive Canadian-made comment - some are touted as being handmade here in Canada. That's not a cheap feat. Take a look at some of the U.S.A. handmade manufacturers and they're the same thing - EXPENSIVE! RM's (Canada), Elly's (U.S.A.) and such aren't made in Taiwan, so they aren't priced like Taiwaneese-manufactured frames. Labour is more expensive here in North America - period. People in the RM plant are making $20+/hour Canadian. People in Taiwan ..... $5/hour (???). Also, you have to factor that there's less production when making (welding) frames by hand - this means less parts to make profit from, so a greater price is needed to reflect this. Think "less is more", but differently than the normal way.


    Okay, now where are my Italian brakes being shipped from Larry in the U.S.?!?!
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  18. #18

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    nuts! very informative, thanks btw guys. Its something thats been on my mind for a while

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    Yup, basically smaller market, less competition = higher expenses and higher prices.
    Given time though, things may change.

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    see now i go and ask a friend who works at a distributer, he tells me that my bike costs shops 480bucks, it retails for 1099 plus tax...

    interesting.

    I went to a shop in etobickoe, the guy who owns the shop is a friend who ive known for many years in fact hes gotten bikes for my friends at drastically reduced prices and i asked him to confirm how much he would get the bike in question for.

    he told me straight up 500bucks for a 1300dollar bike is his cost.

    So again, im not trying to be an ass but i really dont believe that shops are doing what they can to keep prices low, they think that people will pay whatever, MSRP is just MSRP there are no rules, its just suggested.

  21. #21
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    Quote Originally Posted by BigJay
    Why is everyone looking at their LBS as a ripoff when bike shop owners are never millionaires? If i were you, i'd shop around and try to find a "deal" on milk and bread that you buy EVERY WEEK! In the long run, you would save more!
    I always scoff at this anology because as a regular customer at a small store I do get discounts on milk and bread. My bill always gets rounded DOWN so it's even. Can people in the industry or other random people please stop saying, "go speak to so and so vendor and see if they give you a deal on X like you expect from a bike shop." Thank you.

  22. #22
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    Long winded response from former insider.

    Having been on the inside of both the LBS and distributor, I should explain a few things. Most shops prefer to buy from Canadian distributors because it removes the problems with duties, tarriffs, and international shipping. Less headaches for the LBS.

    Your LBS has certain margins they need to meet to stay profitable, and most important to you, stay in business. Prices are set based on the price they pay for the product.

    Therefore, your LBS is not directly responsible for pricing. Distributors really set pricing. Remember that most bicycle business is really done at this time of year. Most bookings and estimates of volume sales are done during the BTAC show. Therefore, distributors set their pricing with an exchange rate that buffers them against the changes of the Canadian dollar against the US dollar. Because our dollar traded around the $0.80 US mark last fall, prices were set to allow them to comfortably sell the product for the next year with out having to worry about a huge backlash if the dollar dropped 5 or 10 cents. They could eat the loss and not have too much to worry. It also means they don't have to incure the costs of price appendicies for all of their printed literature. So, you pay a higher price for the comfort of buying at the same price all year from your LBS.

    But, you do have the power to influence your LBS. If you continually reference US pricing against your LBS's pricing, they will in turn complain to distributors that they are loosing sales to US retailers. There will then be competative pressures to lower the prices.

    Finally, if you do choose to buy from the US, don't expect your LBS to warranty any issues you have with the product. Also expect to pay services for anything you previously may have gotten free, or charged minimally.
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  23. #23
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    Some of the better LBS in Toronto do bring their gear in directly from the States. It makes quite a difference on the price... eg $50 instead of $60 for a component. But they don't shout about it for obvious reasons.

  24. #24
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    Quote Originally Posted by bigbore
    see now i go and ask a friend who works at a distributer, he tells me that my bike costs shops 480bucks, it retails for 1099 plus tax...

    interesting.

    I went to a shop in etobickoe, the guy who owns the shop is a friend who ive known for many years in fact hes gotten bikes for my friends at drastically reduced prices and i asked him to confirm how much he would get the bike in question for.

    he told me straight up 500bucks for a 1300dollar bike is his cost.

    So again, im not trying to be an ass but i really dont believe that shops are doing what they can to keep prices low, they think that people will pay whatever, MSRP is just MSRP there are no rules, its just suggested.
    I don't think you're being an ass. I just think that you've had your eye's opened, you're seeing wtf is going on it the (real) world.

    NOW you have an understanding and appreciation (subjective) for what is involved in the process. NOW you are an educated consumer. This, my fellow poster, is information that you can use to your advantage. You can be motivated to find better deals. When not found you can have a better idea of what might be an acceptable price to pay and offer it.

    Wether anything comes of this is a TOTALLY different story dependant on many other factors, of course.

    If you wanna play with the LBS better start kissing ass now.



    Stay tuned for bigbore's next thread, titled: How do I get a bike shipped up from the US for cheap?


    One last thing, bigbore, just in case - IF you decide you wanna go the U.S. route, please PLEASE search here in MTBR first, especially in the Deals section. This topic has been covered many times and will provide you with more great information.
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  25. #25
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    Profit margin for a bike in a US Store = X
    Profit margin for a bike in a Canadian Store = X

    It doesn't matter who sells it... Who produces it and who dsitribute it to the store makes a difference... Try and buy a Cannondale in Europe... You'll pay the price of an Intense or Titus...

    Margin on bikes is around 30%... But even the "beautiful" Specialized, Giant and/or Kona you pay 4000$ for, the frame still cost about 50$ to produce... Same thing as every market out there... Everyone needs to make money. But your LBS owner probably doesn't make the amount of money you make at your desk job... but he lives on passion... you live on "trying to get the best deal"...
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  26. #26
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    Don't be so quick to rule that a bike store owner's profits are less than a desk job. I'd be very surprised if he wasn't beating me out big time...

    As per if the bike store owner owner opened his store for passion or for pure dollars is up to anyone's debate. Anyone can open a business, and you usually open one up in the area of your interest and expertise. Could be a computer store, could be a bike shop, could be a local garage. who knows.

    The fact that you have opened up a store for business means you are subject to the economics. Supply/Demand/Competition... whatever they may be. You as a consumer have choice. Remember the old business moto that no one ever remembers anymore? "THE CUSTOMER IS ALWAYS RIGHT!" It's unfornate in this day in age that is not true anymore. I can't count the number of times I was dissapointed, argued with, or be-littled with poor customer service. Anyone from Rogers/Bell, Subaru, GM, Dell, and yes the local bike store.

    When I goto a LBS I see a person, that person better offer me some customer service or else why would I pay a premium for his/her parts. I don't need you "store owner/employee" talking back at me on why I chose this and why I'm crazy for expecting X price. Hence I use online bike stores. I click some buttons, part arrives faster than what my LBS can do for ordering them in from their distributor and I get it cheaper. I don't need to kiss anyone's ass to get a 10% discount, or explain to them this the part I want, and not the one sitting there full of dust on your shelf.

    Sometimes if i'm just browsing I'll test the LBS around my area. See if they are worth my $$$. If I want a part it means I've been researching it for a week or more. Which means I know the size of the thread of the bolts, the length of the bolts. What colors it comes in, what variations, what the differences are between the 05 and 06 model. Whether or not the part i'm questioning the store will fit X application. Which I already know. If they say I don't know, that's an honest answer, I'm glad because I found an honest place. If the guy/gal tells me no no... you can't get that part in that variation, or it wont' fit, or that part is no good, try this one. Then you have just failed my test. Oh and the #1 thing that makes me walk out the door is when someone tells me Aluminum is 10X stronger than steel.

    YOU DO NOT TELL A PROFESSIONAL ENGINEER that aluminum is 10X stronger than steel and expect to get any business.

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    Quote Originally Posted by Cheers!

    YOU DO NOT TELL A PROFESSIONAL ENGINEER
    That's right.. you cannot tell a professional engineer anything. Didn't you know, that once you get your ring, your poop doesn't smell anymore, and you are now consider the most elevated of all humans?

    NEVER discount a shop employee's comments. Some are wrong, but despite all of your research, sometimes their first hand experience is a lot more valid that the garbage you can research on the internet.
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  28. #28
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    Actually those pinky rings come with a 1/2 labotomy!

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    No good

    Oh boy, here we go with the Engineer bashing.

    That's right.. you cannot tell a professional engineer anything. Didn't you know, that once you get your ring, your poop doesn't smell anymore, and you are now consider the most elevated of all humans?
    Not all Engineers have that attitude; some do, but you could take any career and find some people that are cocky or full-of-themselves.

    Hey Teebor, why don't you enlighten us as to what makes you so superior that you feel you have the right insult all engineers?

    Why is it so difficult for some people to swallow that engineers go through a rather rigorous education, work in technical jobs, and just might have expertise in a certain area over and above the average person?

    I don't agree with the way it was stated by Cheers!, but I would definitely trust the opinion of a mechanical engineer over a LBS clerk any day, when it comes to material properties.

  30. #30

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    Quote Originally Posted by AndrewTO

    If you wanna play with the LBS better start kissing ass now.



    Stay tuned for bigbore's next thread, titled: How do I get a bike shipped up from the US for cheap?


    One last thing, bigbore, just in case - IF you decide you wanna go the U.S. route, please PLEASE search here in MTBR first, especially in the Deals section. This topic has been covered many times and will provide you with more great information.
    lol ya i`ll check it out, im looking for a decent DJ rig, ive got the hardtail for multi-use but obviously not every bike is made for everything out there.

  31. #31
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    Quote Originally Posted by bigwheelboy_490
    That's right.. you cannot tell a professional engineer anything. Didn't you know, that once you get your ring, your poop doesn't smell anymore, and you are now consider the most elevated of all humans?

    NEVER discount a shop employee's comments. Some are wrong, but despite all of your research, sometimes their first hand experience is a lot more valid that the garbage you can research on the internet.


    Hang on ..... (runs to get popcorn) ..... okay. I'm ready.




    I've got my own fact about this, but i'm curious to see what, if anything, transpires from this.

    Garbage on the internet. Yyyyyyyyyyyyup. The internet is a great invention, but you gotta use it properly.
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  32. #32
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    I've worked in bike stores for more than 10 years now and I can attest to the fact that if you want to make a million dollars ina bike shop you should start with 2 million.
    for all of you that buy product over the internet, just remember that the price in your LBS ususally includes aftersales service. The internet cant tune your bike, warranty your part, or give you set up advice. (ok, miss-information from forums not included). If every one bought their stuff from the states, to save money, then the bike shops will close down and where will we be then. think globally, but buy locally. The economic destruction that can happen from only shopping based on price is for more important than the deal you might get now.
    In a couple of years, when you cant find a job because no-one buys canadian anymore and all of the shops are closing down dont come back complaining to us.

  33. #33
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    I will continue to support Canadian. I buy LG over Fox clothing. I buy raceface products. I've owned a rocky mountain bike. I plan on buying a cervelo road bike. But when I go and buy a raceface crank and it's 499 cdn + tax at the LBS. And it's only 275 USD with 30% off, then I'm going to buy canadian made goods from the USA.

    If gasoline across the street was 10 cents cheaper than the 1st gasoline station you saw and you had to double back off a side road to get to the cheaper gasoline station would you?

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