Competition: Is Someone Else Making Your Choices for You

Print
User Rating: / 6
PoorBest 
Written by Steve Graham   
Thursday, 07 April 2005

Competition: Is Someone Else Making Your Choices for You?

This is a tough subject, and one that I am somewhat reluctant to pen this article about. But it is one that needs to be brought to the forefront if we as consumers are going to continue to have the control we rightfully deserve to have over our own marketplace.  The circumstance I write about here is becoming more prevalent lately and I have grown weary of hearing about it.

This nation (the US) has very aggressive "fair competition" legislation in place, and that legislation has lead to the creation of the worlds greatest marketplace for consumers of all kinds. Those of you who have friends out side the US know how difficult it can be for them to get the parts they want for their bikes at reasonable prices.

These laws are designed to create a reasonably level playing field among vendors and manufacturers of all products and have worked quite well.

But there will always be a few who will try to skirt the intent of these laws to gain advantage over their competition. By leveraging their purchasing power with the manufacturers, they try to force smaller, and often very popular competitors out of the marketplace.

This is, unfortunately, relatively common in every market in existence. It is a fact of life that tends to remove choices from the consumer, and place it in the hands of those who have the most clout or muscle to effect the outcome.  If a vendor disappears due to their own inability to compete based on service or pricing, they are a fair casualty, if they are forced out to protect another's competitive position they are not.

We have enjoyed cottage Industry status in the Road Star Community for quite a while now, and have been reasonably isolated from this type of competitive pressure. We have a large field of small players who have entered our industry and prospered by providing services and products that the big players were just not interested in. Many of us have done business with these smaller dealers and vendors and have been quite pleased with what we have received.

But things are changing. We are maturing as a market force and are under full steam. Every plausible manufacturer now wants a piece of the Road Star Market, and those who are not already participating are making plans to do so. We have broken the conventions and hierarchy of the cruiser industry and are now a force to be reckoned with.

This is attracting the larger players in distribution, and they are trying to increase their status with this community. They are ramping up their machines to come into our arena and compete for our business. This is an awesome change, and one that will benefit us all by bringing competitive pressure to bear and providing us with even more choices than we have now. I am personally very excited about their entrance, as it means that someday I will be able to buy Road Star parts for prices comparable to what our "American Made" friends pay for theirs.

Our new friends are very business savvy, and know the value of an alliance. They have purchasing/marketing power that is going to blow the lid off of what we have grown so accustomed to (high pricing - low availability). Their power and ability to move merchandise gets the attention of manufacturers, who need that type of commitment to increase investment in Road Star related products and development.

This is all good, in fact it is great, but some troubling things are starting to develop in our new utopia. We are starting to see support for our oldest friends (smaller dealers and vendors) being limited or withdrawn. This is quite troubling, as they are the ones who brought us the support and parts we needed when the larger players weren't even interested. They have been our friends and allies since nearly the beginning. A manufacturer HAS to follow the money train. We understand that, and know that if they did not they would be out of business. But we also know that limiting support available to smaller vendors also limits income, So we have to ask ourselves what motivation would effectively cause a manufacturer to limit support for smaller dealers, in favor of the larger ones.

We think we know the answer, and in the majority of cases we think this is being caused by anti-competitive pressure coming from the larger (think millions of dollars in sales per year) vendors who do not want to have competition on popular products. They negotiate steeper discounts in exchange for larger purchase commitments and exposure, and pressure these manufacturers to limit their support for the smaller dealers. Its not a dark conspiracy, its business. Why spend millions of dollars a year with a particular manufacturer when you will then be forced to compete with all the smaller vendors for your slice of the pie?

Once again, not a bad situation for the larger vendors or manufacturers, but a bad one for us as consumers. In many cases we feel tremendous loyalty to these smaller dealers and vendors, and appreciate the opportunity to do business with them. Now we are being forced to do business with the vendors who can bring the most influence to the table, and not necessarily the ones who we would prefer to do business with. Its hard to find fault here, as we think that manufacturers and the larger vendors are merely following the process that will allow them grow and that makes good business sense, but we as consumers ultimately hold the highest hand.

We choose who we do business with, and do so based on our own experience and desires. We have the ability to ensure that our market remains a free and open one that allows all an opportunity to play and participate. Remember that the mere presence of these smaller dealers and vendors keeps the big guys honest and fair. Without them we end up with monopolies that control our experience and make our decisions for us (Ever tried to negotiate something on your cable bill?).

We will most likely follow up on this story as we see more of this type of thing, but we ask that you do the same in order to protect your own freedom of choice and best options.

If you see a particular manufacturer receding from the smaller dealers, perhaps less are carrying the parts or they seem to be limited in what they can provide for that manufacturer, take a moment and think about this article. If the manufacturer is withdrawing from small dealers, they are making our choices for us, and forcing us to do business with their choice dealers instead of those who we would prefer.

If there is an alternative part that might do the job available from another manufacturer, consider it. If there is not, and you would normally have purchased that part from a smaller vendor, purchase only that part from the "choice" dealer and return to your normal vendor for the other parts you may need. The big resellers know that you are going to try and purchase as many parts as you can from singular dealers (for convenience sake) and are counting on their more exclusive relationships to get business they have not fairly earned.

Deny them this opportunity if in your mind, you see evidence of this type of influence peddling and manipulation. Every dollar we spend under this type of arrangement ends up supporting what we all fear most by limiting our options and eliminating smaller players who have fairly earned our business and respect.

I am aware of at least one circumstance that supports this and brings it to the forefront. Last year a business relationship was formed between a manufacturer in this community and one of the Internets largest cycle parts dealers (names will not be revealed). The parts dealer wanted extraordinary discounts in exchange for their business, and priority over smaller dealers in exchange for their orders. They had the clout and muscle to force their way in and literally take over this manufacturer's order processing. To this manufacturer's credit (I am a huge fan of this guy) he stood up to the dealer pressuring him and refused to be manipulated. He stood his ground on all fronts and refused to enslave his company to this large vendor. Interesting thing is that the large dealer resells his parts anyway (how could he not?? People want to buy them) and yet these parts are still available to be purchased from nearly every other vendor in the marketplace. This manufacturer was loyal to both his resellers and to this community of riders.

I am aware of others who are not. While I will not drag them into a public battle about their internal policies and decisions, I would ask that you exercise prudence in your purchasing with particular sensitivity toward this type of situation. These small dealers and vendors helped us to create this marketplace and are now in danger of going extinct. They are entitled to all the business they can legitimately earn, just as the big guys are.

Manufacturers who DO NOT support this type of exclusive policy with their resellers and distributors are invited to contact me via any of the "Contact Us" options on this website and express your support.  I will include you in a list to be referenced in this article so that this industries consumers will know you support an open and fair playing field for all.

Opinions expressed in this article are those of the author alone, and do not necessarily represent those of the Road Star Clinic's staff, its affiliates or any other entity who we may be associated with.

Permission to reprint this article is granted to ALL for any purpose, as long as it is reprinted in its entirety and properly credited. Lets spread the word. Please be sure to credit it correctly for author and original print location (for the full article) in any reprints.  This reprint permission must also be included. 

Original article posted at http://roadstarclinic.com/index.php?option=com_content&task=view&id=145&Itemid=2

Error, missing simpleboard config file!
 
...................................................................... ...................................................................... ...................................................................... ...................................................................... ...................................................................... ...................................................................... ...................................................................... ...................................................................... ...................................................................... -->



The Road Star Clinic is a collaborative community of riders who archive and publish user contributed technical data about Yamaha Road Star motorcycles.

We also sponsor the creation and support of other community websites similar to our own. Inquiries about availability of a website for your community can be submitted to us via any "Contact Us" option on the Clinic.

Copyright 2003-2007 Road Star Clinic and its respective authors. Road Star Clinic is sponsored by the folks at MLSHomeQuest.com.