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  1. #1
    Diphthong
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    GVH bikes - business model bashing

    There's a small thread in another area of this forum debating the way GVH bikes does business. One poster has suggested the following about GVH bikes:

    They're a 'garage dealer' selling 'gray market frames'
    They 'undercut every Colnago dealer in the country'
    None of their 'frames carry warranty'
    They are the kind of company that 'put small shops out of business who have over head and employess, health insurance and such'
    They are an 'internet discounter who helps in putting out the small shop, devalues brands and hurts margins in the industry'

    What say the masses? Is this information valid or is it just sour grapes? Does GVH bikes take food out of the mouths of LBS employees or are they just beating them at their own game?
    I expected the Rocky Mountains to be a little rockier than this.

    I was thinking the same thing. That John Denver's full of $hit, man.

  2. #2
    BS the DC
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    Almost every business that exists takes business away from other businesses. Almost every business that has business taken away from them by other businesses thinks it's unfair. The internet is a new market that's here to stay. LBSs will have to learn to compete. They have warantees, better service, free tune-ups, your money stays in the local economy.
    "The team wasn't just riders. It was the mechanics, masseurs, chefs, soigneurs, and doctors. But the most important man on the team may have been the chiropractor."

    - Lance Armstrong, Every Second Counts

  3. #3
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    buyers serve the overall good

    By shopping and spending their money on the best deals consumers support the best economy -- that is the heart of our system

    I think you will note that some internet sellers under price some bike shops
    Some Bike shops sell at way off list and bet some internet deals
    Some internet sellers provide factory warranties; some do not
    And some bike shops sell bikes without warranty and some sell without free service

    And I think you will find customers who shop wisely do better than those who do not

  4. #4
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    I checked them out - they had plenty of older stuff I wanted. My biggest gripe was how their shipping rises exponentially as they ship further east. I found a hub I wanted that cost $10. To ship it would have been $30....I'd rather they charge more for the parts and less for shipping, especially to the east coast time zone...

  5. #5
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    Thumbs up GVH Bikes Rocks!!!

    I recommend GVH to anyone. Tom is a stand up guy. He knows his stuff, will not dish "attitude," will answer your (sometimes dumb) questions and give you a price that will be hard to beat. On my bike, I spec'd a chorus build. Tom was out of stock on several components, so he just upgraded them to Record at no charge! What LBS does that?

    Philosophically, I feel we who appreciate the capitalist system, owe companies like GVH a bit of gratitude for doing their part to keep things competative. If you feel otherwise, vote with your dollars by paying more of them to someone else!

  6. #6
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    some of that is true, the rest I don't know about...but...

    I got a Merckx from him that was not carried by any local dealer, so I don't feel too badly about that. Otherwise, I do tend to shop my local dealers. I value that economic model.

    I think that we tend to not know what we have got till its gone--when all of the good ol' LBS are gone we will hear lots of griping about it and wondering what the heck happened. The idiots who think that the lowest price is the most important thing will probably be among those to gripe the loudest, if experience serves. A bunch of them will be unhappy about the lack of warranty service on their global-free-trade frame and components purchased in the exciting Globalized Marketplace.

    On the issue of grey market unwarranted frames, I would like to hear more. I got the idea that he did have warranty authority. I suppose someone could ask him.

    Quote Originally Posted by Bulldozer
    There's a small thread in another area of this forum debating the way GVH bikes does business. One poster has suggested the following about GVH bikes:
    They're a 'garage dealer' selling 'gray market frames'
    They 'undercut every Colnago dealer in the country'
    None of their 'frames carry warranty'
    They are the kind of company that 'put small shops out of business who have over head and employess, health insurance and such'
    They are an 'internet discounter who helps in putting out the small shop, devalues brands and hurts margins in the industry'
    What say the masses? Is this information valid or is it just sour grapes? Does GVH bikes take food out of the mouths of LBS employees or are they just beating them at their own game?

  7. #7
    Overweight, aging athlete
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    When Gary ran the business

    I purchased 2 frames from him. I subsequently broke both of them and had both replaced as warranty items.
    On the LBS issue...I tend to buy frames elsewhere, but purchase components from the LBS. Also, being the terrible wrench that I am, I have the LBS assemble the bikes for me. They tend to acquire a partial ownership and interest in the project and take excellent care of me and my machines down the road.

  8. #8
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    I've never understood the logic behind sales taxes and internet & mail order sales. Buy from somebody out-of-state and, in my town, you save around 7 1/2% over a local dealer. Why would local politicians want to favor out-of-state interests over local business whose taxes help pay for local government?

  9. #9
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    Quote Originally Posted by Spoke Wrench
    I've never understood the logic behind sales taxes and internet & mail order sales. Buy from somebody out-of-state and, in my town, you save around 7 1/2% over a local dealer. Why would local politicians want to favor out-of-state interests over local business whose taxes help pay for local government?
    hyper capitalism...

    ...some would say Marx was right.

  10. #10
    Home Brew User!
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    Quote Originally Posted by Bulldozer
    ...
    They're a 'garage dealer' selling 'gray market frames'
    They 'undercut every Colnago dealer in the country'
    None of their 'frames carry warranty'
    They are the kind of company that 'put small shops out of business who have over head and employess, health insurance and such'
    They are an 'internet discounter who helps in putting out the small shop, devalues brands and hurts margins in the industry'
    ...
    goes to show you that some people will B!tch about anything
    Joined the other team in the name of the economy

  11. #11
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    Groucho?

    Quote Originally Posted by shabbasuraj
    ...some would say Marx was right.
    Would that be when he said "This is so simple, a 6 year old could explain it. Somebody get me a 6 year old!" or was it "I refuse to join any club that would have me as a member!"

  12. #12
    You're Not the Boss of Me
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    I'm shocked in a way that folks would dis GVH so aggressively. At least when Gary was running the show, the place had an impeccable rep., and unlike most internet vendors, you could call up on the phone and talk to the owner... about paint, buildup, sizing, shipping. And I don't know anywhere else you can snag a Landshark here in my home state.

    The retro steel offerings rock and the service is personal. Zat's okay by me.

  13. #13
    eminence grease
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    Does GVH bikes take business away from LBSs? Sure, some.

    Should LBSs be protected from such practices - no way. If LBSs want to compete, they need to adjust their business model to do what they do best - sell bikes to people who would never dream of buying a bike on the internet and provide service that makes people want to use them.

    I bought a bike from Gary in 1999, a used Calfee Tetra Pro. Now, I wanted that particular bike, and there is no Calfee LBS dealer within 1000 miles of me. So, in order to support my LBS, should I have instead bought a Trek?

    Take a look at the riders in the next 2000+ person organized ride you do. Trek, Lemond, Specialized, Cannodale and Litespeed. I'll bet anyone that 99% of those bikes were bought in LBSs. Of the other brands, I'll bet 99% of them were also bought in LBSs. Most people would never consider buying a bike without a test ride and sight unseen. It's not internet integrators like GVH that are killing LBSs, LBSs are killing themselves.

  14. #14
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    Quote Originally Posted by Bulldozer
    There's a small thread in another area of this forum debating the way GVH bikes does business. One poster has suggested the following about GVH bikes:

    They're a 'garage dealer' selling 'gray market frames'
    They 'undercut every Colnago dealer in the country'
    None of their 'frames carry warranty'
    They are the kind of company that 'put small shops out of business who have over head and employess, health insurance and such'
    They are an 'internet discounter who helps in putting out the small shop, devalues brands and hurts margins in the industry'

    What say the masses? Is this information valid or is it just sour grapes? Does GVH bikes take food out of the mouths of LBS employees or are they just beating them at their own game?
    I think some guys once threw tea into Boston Harbor and then declared independence so we could buy from whoever we want to.

    I've dealt with Tom at GVH bikes and would highly recommend. Stand-up guy, good services, delivered on time and as promised. And perhaps most importantly, he had what couldn't be found at my LBS. If retro is your thing, you should bookmark his site and just visit it to drool occasionally.

    He also posts here occasionally, usually in the wrenching forum, and always offers good, friendly advice.

  15. #15
    cmg
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    I've bought 2 frames from GVH. Both of them were unavailable in my area. local shops built them up and made money from it. on another thread it was stated that larger markups occur on the cheaper items, manly the stuff i added to my frames. do i feel local LBS suffer from internt sales, no way. it encourages buyers to look at other options and creates interest in the activity. otherwise a buyer would make a few phone calls discover that the activity costs too much and decides to play with something else.

  16. #16
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    Quote Originally Posted by terry b
    It's not internet integrators like GVH that are killing LBSs, LBSs are killing themselves.
    Right on! You should have seen how the tube steak that owns a shop I was at today treated me. I'm done. Hopefully he will be soon.

  17. #17
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    Quote Originally Posted by Spoke Wrench
    I've never understood the logic behind sales taxes and internet & mail order sales. Buy from somebody out-of-state and, in my town, you save around 7 1/2% over a local dealer. Why would local politicians want to favor out-of-state interests over local business whose taxes help pay for local government?
    what they say below. brain fart yesterday.
    Last edited by Rushfan; 03-02-2006 at 08:24 AM.

  18. #18
    n00bsauce
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    Here's what GVH Bikes says about warrantees.

    GVH Bikes Guarantee

    GVH Bikes guarantees that you will be 100% satisfied. Upon receipt of your purchase, inspect it very carefully. If it isn't exactly as you visualized or everything you expected, just ship it back...no questions asked! I will promptly return your merchandise purchase price. If a problem occurs with any bicycle or component after it is used, contact me at once; each problem will be rectified on a case-by-case basis. Buyer satisfaction is my most important goal.
    Most of the frames we sell carry a manufacturer's warrantee. The period varies from 1 year to the lifetime of the frame, depending on the brand. These warrantees will usually cover cracks and failures near welds, but not crash damage or negligence. In the unlikely event that your frame fails, contact us and we will do everything we can to help you process the claim.

    Here's what I think. GVH is a different business model than LBS. LBS can compete with GVH if they want and on the same playing field. They just have to create an internet sales presence. GVH can compete with LBS if they want. They just have to create a storefront and service presense (maybe they already have one, I dunno). GVH has overhead. I don't know if there are employees other than the owner or health insurance. So what? That's the LBS owners decision and GVH's decision. We used to have a one man LBS in town. He decided he didn't need employees and was in business for many years. He sold the shop to another one man operation and he was in business for many years. He made some business decisions that were not favorable (sold the building he was in and leased it back, new owners later jacked up the rent. Moved the business to a bad location) and went out of business. I don't think it was because of GVH or others of the same ilk. It's a free market for bike and bike parts sales in the US. Competition tends to hurt market shares and margins. Brands that don't put out quality tend to devalue themselves. Availability has little to do with it. Giant is a good example of value, both in quality and price. Their brand is not devalued by greater availability and lower cost. It's all a bunch of sour grapes.
    "Those who can make you believe absurdities can make you commit atrocities." Voltaire

    There are your fog people & your sun people, he said. I said I wasn't sure which kind I was. He nodded. Fog'll do that to you, he said.

    "We are all ignorant about most things."
    Mel Erickson

  19. #19
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    good experience

    I visited all the shops in this area before buying. Service in most was dismissive, often uninformed, occasionally dishonest. They didn't really carry what I wanted. Prices were higher too. Gary and Tom aced the deal and bent over backwards to smooth a few details. Excellent. I'd do it again.

    I'd like to buy local... for repairs, speed, no shipping charges, community support, etc... But after repeatedly leaving their stores disappointed by no selection, high price and rude/ignorant staff, what should I do? Give them lots of money b/c they just can't help it? No. Let the market forces work and this won't be a problem, because the lamest shops will be gone and the smartest/replacements will be much better.

  20. #20
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    Quote Originally Posted by Lifelover
    goes to show you that some people will B!tch about anything
    exactly. GVH is as legitimate as can be.. they are a shop, they have a ph number, the guy on the other side of the line knows his sh!t and they carry frames which are hard, if not impossible to find elsewhere (any LBS carrying landsharks?).
    not only that but they provide a chance for all newbies to buy an affordable lugged italian frame, dress it w/ ultegra or centaur and ride into the sunset w/ the best(imho) quality ride on earth. again; which LBS is carrrying vinner, cinelli, basso lugged frames?
    all the *****ers should check their mouths..

  21. #21
    JP
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    Yeah, I agree with the everyone here. I hear nothing but good things about them. Also, they get good marks for having beautiful stuff that will last a lifetime. I mean how many places have steel Cinelli frames in stock?

  22. #22
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    out-of-state sales taxes

    Quote Originally Posted by Spoke Wrench
    I've never understood the logic behind sales taxes and internet & mail order sales. Buy from somebody out-of-state and, in my town, you save around 7 1/2% over a local dealer. Why would local politicians want to favor out-of-state interests over local business whose taxes help pay for local government?
    The logic is very simple - states simply have no authority to collect taxes for sales outside of their states. Most states do in fact require residents to pay sales tax directly to the government for their out-of-state purchases - but since this is very difficult to inforce, it is rarely ever paid. This is certainly the case in my home state of Massachusetts where line 33 of the Massachusetts Resident Income Tax Return is for out-of-state sales taxes (see the Massachusetts Income Tax Return Instructions for how to fill out line 33).

    Normally, when a retailer obtains a license from the state to operate a retail establishment, they have to agree to act as an agent of the state in the collection of state sales tax (Note: It is the buyer who pays the tax, not the seller). But when a buyer doesn't step foot in the state, the state (and its agent, the retailer) has no jurisdiction to collect a sales tax on that transaction. The sellers own state does have jurisdiction to collect a tax on that sale, but obvious it is very hard for the state to monitor all such transactions, so buyers largely "get away" with not paying sales tax on out-of-state purchases.

    Years ago, only a small percent of purchases were made from out-of-state vendors, so states lost little revenue from uncollected sales taxes. With the advent of internet, however, far more purchases are done interstate, plus with the information age it is easier to keep track of such purchases. States are now trying to get cooperation from other states for sales tax collection purposes, and there is even a call for some type of federal sales tax program.

  23. #23
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    Quote Originally Posted by Rushfan
    I think the original logic was that out of state retailers (mail order) did not rely on local services, so why should they be taxed to support them? No way GVH in Oregon benefits from paying tax to pay for a firehouse in my state.
    They're not paying taxes toward an Oregon firehouse either?

  24. #24
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    Who pays the sales tax

    Quote Originally Posted by Spoke Wrench
    They're not paying taxes toward an Oregon firehouse either?
    I think you missed the point about who is paying the tax and who is benefiting from them.

    Retailers do not pay sales taxes - customers do. The retailer merely acts as an agent of the state for the collection of sales tax. Neither GVH, nor the state of Oregon, have the authority to collect taxes from out-of-state buyers. If the customer is not in Oregon, they don't get any of the benefit of the Oregon firehouse, so why should they pay a tax toward it?

    Whether the customer is in-state or out-of-state, GVH themselves pays no more and no less tax from each sale to support the firehouse (because GVH doesn't pay the sales tax to begin with). On the other hand, Oregon does have the authority to assess income and property taxes on GVH bikes. And the more GVH expands their business through out-of-state sales, the greater their income (and probably the larger their inventory), and the more income and property tax they pay to support the local firehouse.

  25. #25
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    I haven't bought from GVH yet, but I wouldn't hesitate to in the future.

    I have purchashed two bikes from internet dealers. The first, a Litespeed mountain bike, saved me about $700 over what my local shop was selling the same bike for (with a lesser parts spec). So, I could give the LBS the extra $700 and get shitty service and attitude, or I could buy it over the net and get a great deal and excellent service. Hard choice.

    The second bike was a Pinarello frame. No local dealer stocked the frame, and to special order it would have cost me an extra $400 over what I paid. Another tough decision.

    I don't feel the need to treat my LBS as a charity.

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