Bicycle Retailer reports that Shimano has slashed wholesale and retail prices on many components above the SLX level, although price cuts aren’t uniform across the board. Changes in prices range from a 1 percent increase to a 40 percent decrease.
The changes have reportedly been made to allow local bike shops to compete more directly with online retailers, who can often buy components for significantly cheaper than wholesale (at OE pricing), and thus sell them for less.
Here’s an example of one pricing change:
With new retail pricing, a Deore XT front brake, for example, which had a suggested retail price of $159.99, now has a suggested retail of $118.99 — a 26 percent change. With the new price lists, margins were trimmed substantially on inventory bought at old wholesale pricing, and margins also slimmed on new wholesale prices.
Unfortunately for retailers, this has essentially devalued all of the current inventory that they already own, and Shimano isn’t buying any inventory back.
Other potential reasons for the price reduction include the depreciation of the Yen vs the US dollar, and the drop in the price of raw aluminum.
One potential factor that hasn’t been mentioned by other outlets but immediately springs to mind is increased competition in the market. With SRAM releasing quality drivetrains at affordable prices, such as GX and the NX1 drivetrain, just announced yesterday, riders have more affordable drivetrain options that offer true quality than ever before.
While this pricing change may or may not be good news for IBDs, there’s no way this isn’t good news for the average rider looking for a new drivetrain.