Raleigh are increasing prices by 10% as from August 1.

[KTM Bike Industries UK]

The point is none of the above has anything to do with bicycles.

You could be trading anything.

Bike people in your business are a waste of time, what you want is glorified Del Boys.

I'm not criticising you for running the business that way, it's partially a result of the global manufacturing economy.

But you have chosen to operate in a fast-moving and volatile area - currency speculation.

Inevitably, unless you are very, very, sharp, you will get your fingers burnt now and again.

Blaming Brexit all the time merely demonstrates that among currency speculators you are a boy amongst men.

I'm not a currency speculator... I'm not claiming to be, or even want to be. I employ the services of a company for our foreign currency purchases for exactly that reason, and they email me each and every morning with their forecasts and advice. I then pay invoices and look at our margins on my spread sheet at all times. I know if it gets below x, we need to look at things because we'll be making nothing. Or we need to cut marketing budget or something else on our costs to ensure we don't have to raise prices.

 

[Wisper Bikes]

We all have to keep an eye on currencies and even in the good times it's pretty volatile. The post Brexit crash is something completely different, wiping over 10% off margins in a few minutes.

None of want to be currency speculators but if you are in business you ignore such massive changes in trading conditions at your peril.

Fords have just announced Brexit will cost them £750M. Cars will be shooting up in price as will everything else we buy. As I said in an earlier post, the massive crash in the value of the GB£ has effectively made everyone in the UK that relies on a wage or a pension 10% poorer.

 

[Kudoscycles]

The cycling nation bikes are from 1000 € to 9000 € because their market, Europe, is bigger. Where are the Chinese made "UK" bikes at my LBS? I think your bikes are too similar. You are all fighting for the same market segment with unoriginal products and aiming for the same price point. And limiting your market and ambitions to your tiny little island and not Europe which you are supposed to belong to still...

Anotherkiwi...e-bikes are starting to be sold by your lbs and by the bike chains,2 years ago they wouldnt have had any interest in e-bikes but normal bike sales are struggling,especially post Brexit and they are looking for revenue from any source.
You can hardly argue that Kudos bikes are all the same as everyone else...we have the K16....city bike,the Stealth/Alamo....sports e-bike,the Milano/Verona...retro 30's bike,the Sprint....low step compact,the Miami....beach cruiser.
Plus all the mountain style bike range to suit all tastes and sizes.
All those bikes are pretty unique,many were very brave(some may say stupid)to move away from the standard diamond frame e-bike but you cannot say unoriginal.
The reason we dont try to sell into Europe is money...to succeed in say Germany or Holland you would have to have a local distributor who sells out to retailers,thats 3 people dipping in the profits in a very competitive market place...how could we compete with a German importer buying direct from China. Also dont forget it costs £60 to ship an e-bike from the UK to Germany,with all the battery transport problems,it only costs £20 to ship from China to the UK or China to Germany.
Also there are warranty considerations,a guy who has a problem in say Munich with his bike is much more difficult to sort out than similar in the UK.
I am trying not to be rude but looking from the outside is all very well but when you are 'in the game' you realise so much more.
KudosDave

 

[Kudoscycles]

We all have to keep an eye on currencies and even in the good times it's pretty volatile. The post Brexit crash is smoothing completely different, wiping over 10% off margins in a few minutes.

None of want to be currency speculators but if you are in business you ignore such massive changes in trading conditions at your peril.

Fords have just announced Brexit will cost them £750M. Cars will be shooting up in price as will everything else we buy. As I said in an earlier post,the massive crash in the value of the GB£ has effectively made everyone in the UK that relies on a wage or a pension 10% poorer.

You and Colin need to go back to school,I think you mean 'something completely different' its hardly 'smoothing' at the moment,hehe
KudosDave

 

[Wisper Bikes]

OOOOPs!!!! I really shouldn't rush these posts!!!

 

[Crockers]

OOOOPs!!!! I really shouldn't rush these posts!!!

Then where's the fun in that...?

 

[trex]

David, 'wiping over 10% off margins' - it could be understood that you still keep 90% of your margin and profit.

 

[flecc]

OOOOPs!!!! I really shouldn't rush these posts!!!

Just blame predictive text David, it plays havoc with so many posts in here, as do US spell checkers.
.

 

[KTM Bike Industries UK]

David, 'wiping over 10% off margins' - it could be understood that you still keep 90% of your margin and profit.

Yes, that's clearly an incorrect interpretation.

An increase of 10% on cost price, can wipe off the whole margin on some products if you're operating on the margins many in the bike industry operate on.

 

[Wisper Bikes]

David, 'wiping over 10% off margins' - it could be understood that you still keep 90% of your margin and profit.

You are absolutely right, Trex. There are some bikes we made less than 10% on pre Brexit. If we hadn't acted immediately we would now be making a loss on every one of those bikes we sell. 10% was over 100% of our profit.

 

[Kudoscycles]

So much for your a-star in Maths and English,hehe
Dave

 

[Wisper Bikes]

So much for your a-star in Maths and English,hehe
Dave

10% is more than 100% of 9% Or am I wrong?

 

[KTM Bike Industries UK]

Just had to buy a load more Euro's to get stock from one of the other brands we work with (not KTM) and got them at:

Rate:
GBP /EUR 1.08573518

on that brand we only make a profit if we buy at 1.20 and over. We've sat on it long enough in the hope it would get better, its not getting better and every time the government open their mouths it gets worse.

how depressing.

Don't expect many of your purchases to be staying the same price for much longer, more prices rises are on the way from brands that aren't able to forward buy enough currency or stock to see them few these troubling times.

 

[Kudoscycles]

The problem is these exchange rates are politically driven...the Leave vote instantly knocked the £ v US dollar from 1.48 to 1.30,the BOE reduced interest rates and started QE which knocked it further,May's speech at the conference suggesting that she prioritised immigration control rather than staying in the single market knocked it further and now the markets don't trust post Brexit and knocked it further.
One wonders whether a cheap £ is intentional government policy.
KudosDave

 

[Tomtomato]

As I said in an earlier post, the massive crash in the value of the GB£ has effectively made everyone in the UK that relies on a wage or a pension 10% poorer.

You will need to explain that one.

Unless inflation reaches 10% (imported inflation), or people spend a lot of time abroad, I don't see how the crash of the GBP has made people relying on a wage or pension poorer...

Even if inflation was reaching 10%, it wouldn't make everyone of those people poorer either, as their own specific inflation would be different (depending on goods they buy).

 

[Wisper Bikes]

Can I amend that to nearer 15% or 20%?

Nearly everything sold in the U.K. including fuel, which governs air road and sea transport will increase by at least 15%, if it's not completely made in the U.K. We are going to see 15 to 20% increases on nearly everything in the shops by the Spring. Cars, white goods, wine, phones, computers all electrical products. Etc etc.

We have managed to vote the value of the £ down to 80 to 85p. Oops! The sad thing is that many millions of those who voted Brexit will not be in a position to take what is effectively a huge decrease in income. At least we have our boarders back!

 

[Wisper Bikes]

The problem is these exchange rates are politically driven...the Leave vote instantly knocked the £ v US dollar from 1.48 to 1.30,the BOE reduced interest rates and started QE which knocked it further,May's speech at the conference suggesting that she prioritised immigration control rather than staying in the single market knocked it further and now the markets don't trust post Brexit and knocked it further.
One wonders whether a cheap £ is intentional government policy.
KudosDave

I agree Dave! Just imagine the huge advantage to the treasury, duty and VAT receipts on fuel and all imported goods are poised to increase by 15 to 20%. No stealth tax could of achieved that!

 

[signwave]

At least we have our boarders back!

Well that should provide some extra income.




(boarders or borders?)

 

[Kudoscycles]

Well that should provide some extra income.




(boarders or borders?)

David (Miall).....wishing for your old public school days,hehe...
KudosDave

 

[Crockers]

Playing devil's advocate.

Could we not say that pre referendum the £ was over valued against the €? Could it not then be argued that going forward that inflation will go upwards entailing interest rates rising.....house prices levelling or even reducing.
- and is this bad?

I think it may be argued the $ is over valued and this will cause the USA major hardships with labour costs needing to be reduced.

Some may even say that the Brexit vote is just the 1st horse of the Apocalypse and the other 3 are lining up to ride in.

So what does the panel think is the correct exchange rate for £-€ and £-$? My personal view us about £1 to €1.25 and £1 to ,$1.45 therefore I think rates will bounce around those levels once the fear if uncertainty diminishes.