An Experiment in Importing Bicycles

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JHyre
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An Experiment in Importing Bicycles

Post by JHyre » Tue Jan 17, 2017 11:04 am

A friend who annually sends a few export containers to Chile from the US has room in one that is shipping out in a week or so. I just picked up 9 brand new mountain bikes at auction, still in boxes with plastic sealing straps unbroken. I got a very good price on them and a good price on the shipping. A relative who is into bikes will sell them for a % of the profit. It's something of an experiment. I can afford to lose the bikes and the money invested in them.....doubt that'll happen and it's not part of the plan, but certainly a possibility. The idea is to dip my toe in the water as to "can I trust both the competence and intent of the relative for bigger things" (I obviously think so, else I'd not give it a shot) and "I wonder how something like this sells in Chile". I had originally intended on selling them here in the US and could easily sell them for double my investment, perhaps 2.5x with a little effort. But the sudden availability of cheap container space and a relative who is into biking struck me as an opportunity for a little fun & experimentation.

Any insights into bike culture in Chile? Is this brand "known" at all there? They normally retail for around $600 USD in the States, and can often be found for closer to $500. Any idea what something like that sells for in Chile? We'll probably put them on Craigslist and in biking publications. Any relevant or generic insight, etc. is welcome.

Here are a few useful links in re Upland X90 26 inch Hardtail Mountain Bikes:

http://mountainbikespro.com/upland-x90- ... -reviewed/

http://www.consumercharts.com/cheap-mou ... beginners/

John Hyre

Gloria
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Re: An Experiment in Importing Bicycles

Post by Gloria » Tue Jan 17, 2017 11:38 am

JHyre wrote:A friend who annually sends a few export containers to Chile from the US has room in one that is shipping out in a week or so. I just picked up 9 brand new mountain bikes at auction, still in boxes with plastic sealing straps unbroken. I got a very good price on them and a good price on the shipping. A relative who is into bikes will sell them for a % of the profit. It's something of an experiment. I can afford to lose the bikes and the money invested in them.....doubt that'll happen and it's not part of the plan, but certainly a possibility. The idea is to dip my toe in the water as to "can I trust both the competence and intent of the relative for bigger things" (I obviously think so, else I'd not give it a shot) and "I wonder how something like this sells in Chile". I had originally intended on selling them here in the US and could easily sell them for double my investment, perhaps 2.5x with a little effort. But the sudden availability of cheap container space and a relative who is into biking struck me as an opportunity for a little fun & experimentation.

Any insights into bike culture in Chile? Is this brand "known" at all there? They normally retail for around $600 USD in the States, and can often be found for closer to $500. Any idea what something like that sells for in Chile? We'll probably put them on Craigslist and in biking publications. Any relevant or generic insight, etc. is welcome.

Here are a few useful links in re Upland X90 26 inch Hardtail Mountain Bikes:

http://mountainbikespro.com/upland-x90- ... -reviewed/

http://www.consumercharts.com/cheap-mou ... beginners/

John Hyre



https://www.facebook.com/bicicletaupland/

http://deportes.mercadolibre.cl/bicicle ... upland-x90
I'm from the generation of common sense, wisdom and unfiltered answers. I sayeth as I seeth.

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JHyre
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Re: An Experiment in Importing Bicycles

Post by JHyre » Tue Jan 17, 2017 11:45 am


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Re: An Experiment in Importing Bicycles

Post by David_Bro » Tue Jan 17, 2017 11:52 pm

JH-----Semi-Pro cyclist back in the day here and bike shop manager for about 12 years in my youth---raced in Chile back in the 80's with a USCF international license in which I have nothing to show for sadly----The critical issue for selling your bikes is that you cannot get the frame, components or design in Chile at the present time----so the idea would be that anyone showing up with your bike would have something special, state of the art and really, again, just something you can't find in Chile and its one of a kind of sorts----if you can get it in Chile already plan on selling it at 2/3 the market price for Chile and they will move but if you are looking to sell at the same price for the same thing, the cousins will be just waiting around for a buyer just like the bike shops do.

###

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JHyre
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Re: An Experiment in Importing Bicycles

Post by JHyre » Wed Jan 18, 2017 11:14 am

DBro,

I'd planned on selling them at 1/2 of retail and would make a nice profit if I did - selling them at 2/3 of retail would be quite nice. Retail in the US = anywhere from $500 to $600. I could easily sell them for $300 here, little effort required. In the US I'd probably use a Philippine VA to post ads, and pay a teenage kid to deliver them locally, so it'd take little of my time or money to move them.

I suspect retail is higher in Chile, I need to confirm that. Even if Chilean retail is higher, I'd probably be better off selling them in the US - easier, no need to share the profit, etc. But I got them at a good enough price that I am willing to experiment some - see how shipping works, customs & duties (on the coat-tails of my already-experienced shipper), and most of all test my local contacts to see how serious they are about doing more of this. If it works out, I may get a bit more serious about import/export. If not....well, then I learned something and likely lost little or nothing.

My local guy opined that if the brand & make exist in Chile and are known among the biking crowd, they'd be easier to sell. Makes sense. Gloria's links were helpful in that regard, still getting a feel for price.

Thanks for the feedback.

John Hyre

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Re: An Experiment in Importing Bicycles

Post by Rhodolite » Wed Jan 18, 2017 12:12 pm

I would like to tack on a question for those knowledgable about bicycles in Chile. I have a Trek Soho, purchased 2008 and not used and a Trek Navigator 400 in excellent condition to sell. Where do I advertise and what is a fair price?

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Re: An Experiment in Importing Bicycles

Post by Gloria » Wed Jan 18, 2017 12:17 pm

JHyre wrote: I suspect retail is higher in Chile, I need to confirm that.
My 2 cents in the matter. Most all imports in Chile retails for double or triple the price. I would like to suggest 2.5 of "gains" ( double and 1/2) leaving some room for bargaining. Keep in mind that most Chileans want a "payment plan" type. So you need to come up with a selling price that may entice them to buy ASAP.You can make a nice profit with the right sells person.
I'm from the generation of common sense, wisdom and unfiltered answers. I sayeth as I seeth.

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Re: An Experiment in Importing Bicycles

Post by JHyre » Wed Jan 18, 2017 12:46 pm

My 2 cents in the matter. Most all imports in Chile retails for double or triple the price. I would like to suggest 2.5 of "gains" ( double and 1/2) leaving some room for bargaining. Keep in mind that most Chileans want a "payment plan" type. So you need to come up with a selling price that may entice them to buy ASAP.You can make a nice profit with the right sells person.
Thanks for the feedback. My experience with import prices in Chile, while considerably less than yours, mirrors your numbers. My guess on the bikes (sans any real research) is that double US retail = Chilean retail. I have not yet made the time to really research it. From what I saw in the links you supplied, prices were all over the board. Part of what I want my local person(s) to do is get that feel. Just talked to them, they are getting numbers for retail via a bike shop owner they know. I'll keep you all posted. Part of the experiment is to see whether Chilean mark-up (and my ability to buy well below it) outweighs the hassles of importing and selling via others, even trusted others. Thankfully, one my family members helps cut through the cultural aspects (delay, ambiguous terms of the deal, etc.) due to her OCD nature. She's really a German at heart, very well disguised as a Chilean.

If Chilean retail = 2x US retail, I can make a very nice profit selling at 50% of Chilean retail, better than what I would have made here, including profit split for Chilean end. If I sell at 40% of Chilean retail, I make what I would have made here on quick & easy sale, taking into account the need to share profit with Chilean side. Family is involved so I am probably being overly generous on profit split at 1/2, seeing as how I found the deal, funded it, and shipped it. That split would likely need to change in a downward direction on larger volume deals should this little test flourish.

We find our fun wherever we can.

John Hyre

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Re: An Experiment in Importing Bicycles

Post by Rhodolite » Wed Jan 18, 2017 1:36 pm

JHyre, Instead of a downward change in profit sharing I suggest that you decide now the rate for your larger volume deals and offer that rate. Then you can give a "thank you" bonus or "everything is more difficult the first time" bonus or "small order but same work as large order" bonus. You know your family best, but I've never met anyone who was happy to have their commission reduced no matter how sensible the reason.

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Re: An Experiment in Importing Bicycles

Post by JHyre » Wed Jan 18, 2017 1:49 pm

JHyre, Instead of a downward change in profit sharing I suggest that you decide now the rate for your larger volume deals and offer that rate. Then you can give a "thank you" bonus or "everything is more difficult the first time" bonus or "small order but same work as large order" bonus. You know your family best, but I've never met anyone who was happy to have their commission reduced no matter how sensible the reason.
I hear you. <sigh>. Me and my big mouth. What I will likely do on any future deals is add work on their end (deal some with customs, shipping, etc.) and ask that they bear some of the funding. In other words, if one wants partner-level comp, let's get some partner-level participation. That'll keep it at 50%. A raw commission would be a different number, I need to think about that. I initially figured on being generous without thinking about "and that also sets long-term expectations". Dumb on my part. I do not mind paying well at all - as long as I'm getting value for it. Indeed, I prefer to see a good employee, partner or vendor make good money. Doing well and doing good. But I also need to get paid well, and that doesn't happen if I overpay. The balance, the balance, where is it at?

Granted, I am in a good position. Should this little deal work (we'll see), I can simply walk if the overall arrangement does not work for me. This is purely a side venture for fun, learning, and perhaps some profit.

I do have some friends up here with contacts down there. They run a nice side business exporting to Chile, it's their container I'm riding on. They generally export on a "cost-plus" model - they are told what the Chileans want, usually large items or good sized lots instead of nit-noid retail. The items are mostly used & in good condition or new and bought at auction in bulk. They then estimate a cost, find what's desired and ship it. Chileans pay cost plus a negotiated mark-up, they are responsible for the goods once they show up at the port. There is a lot of trust, and the arrangement is informal. So far everyone seems happy, and there has not been any BS or screwing around. Everyone does well - the Chilean mark-ups are so high and the US bargains so prevalent here that there's plenty of juice to make everyone happy. So far no one has gotten greedy or stupid. Interesting model, not sure I've the contacts & context to duplicate it.

John Hyre

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Re: An Experiment in Importing Bicycles

Post by nwdiver » Thu Jan 19, 2017 1:58 am

Don't forget country of origin documents, or they will live in the customs warehouse for awhile.......... Unless your contact has a contact that breezes over the details.....
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Re: An Experiment in Importing Bicycles

Post by JHyre » Sat Mar 11, 2017 12:41 pm

I will experiment later with something else. Reason: I am very busy, law practice is doing well, and delays all around. Shipping date moved from January to April. OK, can't look that gift horse in the mouth, but I also dislike sitting on inventory. Especially if come April there is another delay. Also, Chileans in Chile who were to help sell it seemed....busy. Again, nothing new, no surprises there. The higher possible margins in Chile are presently not worth the hassle, especially given constraints on my time. We'll try again later with something else.

Sold all of the bicycles here within days of letting my informal network know they were available. Made 100% on my investment after sitting on them for about 4 months, not bad. They sold mostly to Latin restaurant workers who were happy to pay $250 for brand-new, high-quality bicycles that retail for $600 - $650 here. They use them to get from job to home and the like. I was a little surprised at how in-demand they were, and how quickly they sold once word got out.

One of the workers is a very, very hungry Chilean from the poblaciones. Busts his ass. Married a guy in the US to get legal (I am fairly sure he does not swing that way) - which was brilliant. Betcha it is a huge loophole. Who would dare challenge such a politically correct arrangement? He has bought properties here on land contract already. Dumps that he will fix and rent to his co-workers. He also earns a commission on selling things like the bikes, AC units, etc. Dude is hungry and works like a dog. I think he'll be just fine here. A disproportionate number of immigrants are hungry and have guts. Makes sense, such a move is not for the faint of heart - unless they are moving for the freebies, welfare, etc. He certainly did not move for those reasons, gotta respect his moxy & drive.

John Hyre

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