Geo restriction Country Blocking

Geo Blocking Sales for bikes and parts

Traditional geographical boundaries meant that was always a regional focus to the sale of bikes and gear. Of course the key brands were available, though always through local agents such as the distributer / wholesaler / importer or a national branch of the bike brand. 

Mail order made it possible for enthusiasts in remote continents (i.e. Africa, Asia and Australia) to have some access to speciality gear, there was usually a long wait and premiums for currency exchange.

With the ride of online shopping, sales initially were regional and for successful shops who adapted, they become international. But there were two effects:

Firstly, the products were no longer just ‘niche’ and hard-to-get products, rather they were everyday parts and accessories which were already available ‘locally’.  Customers were buying because it was cheaper… not because they couldn’t get it from their local bike shop.

Secondly, brands were now selling to the same buyer, but not via their local importer and bike shop and for many brands it raised questions of warranty and supporting the traditional retail channels.

 

However, the customer was usually a winner.
The customer has the same item for a lower price and are comfortable buying online so it is also convenient. Of course there are risks such as warranty issues and customer service challenges when dealing with the overseas shop. The end effect is that the bike rider has the same item… and the brand still sold their product.

 

Geo-Restriction and GeoBlocking for bikes and gear

Mavic was a very early adopter and for years they have been blocking Wiggle and Chain Reaction Cycles from selling their wheelsets to selected countries overseas. Other brands such as Continental have remained readily available.

Of course for customer who really wanted the Mavic wheels there were a few ways around restrictions such as using a 3rd party service to mask the country of origin and in cases it allowed delivery to an overseas address. Sometimes a bit of juggling the cart (selecting £ and UK delivery, adding the item and then changing currency and location) or simply ignoring on-site notes of restricted delivery… and letting the wheels simply turn up a few weeks later.

For ‘direct to customer’ brands such as the German brand of Canyon bikes and brands which are simply unavailable and unsupported in some countries, mail-forwarding can be used and is a service which is becoming increasing popular in the U.S. for example. A last resort is an international flight to Europe when the cost of flight and expenses is lower than the cost of purchasing locally.

 

How do retailers GeoBlock?

Wiggle detect a visitors location and when the product isn’t available they suggest that the product is no longer available, rather than not available. A challenge being that the products can be easily found on the wiggle site and only when selecting an unsupported delivery destination are the products suddenly out of stock.

Product No Longer Available

Search Engine Optimisation dictates this approach, it is better to include a product in the inventory and then try and guide a customer to alternative products, rather than to lose them completely. Of course customers who also notice this and over time simply may not visit.

Error 404 Page Not Found

Chain Reaction Cycles likewise have the product available in their directories for SEO purposes, however appear to favour an approach of sending visitors with an incompatible destination to the homepage. This can usually lead to the customer wonder ‘what just happened’ and trying a few times. Within their search database the term “Mavic Ksyrium” with a UK destination and GBP selected shows 25 results while with Australia as a destination and AUD there are only 8 results.

Among the Australia results are a few Mavic wheelsets which are apparently not blocked. Perhaps clearance or hard to sell wheelsets.

Mavic Ksyrium UK

Mavic Ksyrium Australia

 

Evans Cycles takes a different approach. In the past they haven’t appeared to block brands for sale, though more recently have changed tact. During testing there was also blocking on some Shimano parts which is unusual as Shimano and SRAM virtually never have geo-restrictions, sometimes the big online retailers sell before local bike shops overseas can even get stock.

Customers from ‘incompatible’ delivery destinations will see the complete range and receive no information or notice of restricted availability (with their overseas location and currency selected). First when the customer tries to check-out and pay are they informed that they can’t purchase. How annoying!

Evans Cycles Unavailable

 

While Evans do allows their own system to be circumvented, this process will not be documented. And there are also many other retailer to chose from. From the big ones, with our example of Mavic, Ribble have a single wheelset in their database, without any restrictions for people outside of the UK. Likewise ProBikeKit have no apparent restrictions however are focussed on UK customers and seem to neglect customers outside of the UK when it comes to customer satisfaction.

Hargroves Cycles is also in our database however doesn’t sell outside of the UK….

Actually they do, but unlike their competitors Hargroves don’t allow the destination to be selected by (potential) customers while browsing. Country selection is hidden inside the checkout process and their overseas delivery charges are hefty in comparison. In favour of Hargroves is their extensive range of our example brand ‘Mavic’.

 

Where does this leave the customer?

Some brands block some online shops from selling to customers in some countries. It depends how determined the customer is, where there is a will, there is a way. The inconsistency by many brands who try to block will leave loopholes. When online retailers in England wont sell, what about Northern Ireland… or a German retailer?

For brands there are also consequences. Some customers who experience these road blocks may return to local bike shops or local online bike store. Some brands require their products to be sold in-store, even if you are in South Africa for example, South African online retailers are not allowed to sell.

But some customers will simply walk away and turn to other brands, brands which are comparable but which they can purchase through a channel which they prefer, and for price they feel competitive.

 

IBD Annoyed bike shops importers

How to annoy bike shops and importers

Some bike shops get annoyed the minute a customer walks through the door, but that’s a different story. Good bike shops welcome customers with open arms and but there is a sure-fire way to get the staff to quickly turn against you. 

Local bike shops, independent bike dealers and bicycle retail chains face stiff competition from online retailer. A few dabble, succeed or even embrace online retail (and concentrate on bike servicing which online retailers can’t provide), but many can also compete against online retailers. This is not usually on price, but by providing the service and local engagement which Wiggle, Chain Reaction Cycles and co. simply can’t provide.

The easiest way to annoy staff at the bike shop is to ask them to price match an online price. Price matching an (overseas) online retailer will often knock out the complete margins and in many cases the bike shop may be paying a higher wholesale price than the online price.

But there is another way to frustrate your bike shop beyond tears, if you have purchased something online that has broken, take it to your bike shop (rather than to where you purchased) and attempt to get them to resolve the warranty claim. You, as the ‘bad customer’, are the idiot in this case. But this still happens. People try their luck returning their online purchases to the bike shop.

This scenario is made worse when it takes time to determine that the faulty equiptment was not purchased locally. People mnay attempt to contact the importer directly and waste their time before the importer determines that your wheelset was purchased overseas. (There are some good news stories where the shop or the import still look after the customer regardless, they really need be be commended for this).

Of course it can be costly, time consuming and frustrating if you purchase online, the equipment fails and you have to convince the online retailer that it is a warranty replacement. In many cases, this is where your local bike shop simply win through better customer service.

Outside of the bike world, big brands such as Apple offer worldwide service, but as a brand they also have much strong control over their retail outlets. Giant Bicycles is in a similar position with their Giant Bicycle stores and limited online availability.

Consumer protection laws change between countries and even states, the rule of thumb is to return items under warranty to the place where you purchased. And if in doubt, you can enquire with the brand.

 

photo © Bruce Turner

How sales tax works when you buy bikes and gear online

The big online stores for bikes, parts and accessories who serve customers across the globe are concentrated in the European Union and America, but irrespective of location, if they sell overseas the sales tax is removed.

In the UK the rate is 20% and when shopping online, when you select a delivery destination outside of the United Kingdom, this will be removed from the final price. In the United States, sales tax rates differ from state to state and likewise are (should be) removed for overseas purchases.

 

However

If you are in the European Union and order from an online retailer in another EU member nation, provided that they will deliver to you, they will also add and collect the sales tax applicable in your country. This means there is no additional local taxation.

If you are in the United States and order from a different state, tax may or may not be collected by the retailer, depending on the laws. If sales tax is not charged, many states will require you, by law, to include details of online purchases where no tax was collected in your tax return.

For customers who are ‘overseas’ generally your government will apply taxes and/or duty on your imports.

 

Tax Exemptions

When the tax is calculated and collected automatically, it makes it easy. There are a number of factors which can affect tax, in brief this includes:

• Trade Agreements between countries – certain products may be exempt
• Type of Product – likewise, certain items may be excluded or have a reduced tax rate
• Usage – exemptions on items for certain activities
• Taxation Threshold – Some countries impose tax and duties on items over a specific value

And more… each country is different so it is worth researching. When importing it may be required to pay the complete taxes and apply for exemptions for a refund.

Saving Tax or VAT when buying online

Upfront, if you are eligible to pay tax, there is no magic way  to escape it. You may however be exempt from Tax…

The world’s biggest online bike stores are in the UK, the good news is that they have very competitive pricing and may (or may not) have the cheapest prices.

When you visit a bike online bike shop, the chances are, they will detect your location (and default currency) and provide you with the correct price. If they don’t, usually at the top right there is an option to change delivery destination and price.

In the UK their tax on products and services is VAT (Value Added Tax) and calculated at 20%. If you are in the UK, this is included in the display price and you pay it automatically. If you are in the European Union, the big shops such as Wiggle and Chain Reaction Cycles will automatically calculate the applicable (local) taxes – so you get your product and there is no additional taxes and there is no addition customs duty. If purchasing from a smaller online shop, you need to ensure that they have removed VAT, if the applicable taxes are not added in the sale price, you may be required to pay the local tax and customs duty when the package is delivered.

For non-EU countries, the display price on the big online stores, in your local currency and to your country will have the 20% VAT removed. When ‘importing’ however, you may be liable for local tax and customs duty. The values will vary from country to country, while some may have a threshold which allow imports without tax and or customs duty for products under a certain value. You need to check your local customs details.

Take note of returns, if you do return a product you may then require an exemption to return any payment made.