# Dealer Cost vs Retail Price



## centershot (Nov 21, 2008)

How much mark up is there on a typical upper end bike? Curious, I know the dealers need to keep the lights on but I'm just wondering how much they really make on a bike deal. My guess is 30% am I close?


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## JAGI410 (Apr 19, 2008)

You don't want to know. 

(I don't know)


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## Dangeruss (Jan 24, 2006)

Margins are pretty low on bikes. 20% is pretty much the average on high-end bikes. The margin is much, much higher at the low-end. A bike shop might make as much from the sale of an entry-level mtb as from a high-end road bike. The difference is that the guy who buys the roadie will also buy the $150 helmet, the $300 pedals, the $90 jersey, $150 shorts, and will be in the shop again in five months for a pair of $80 tires -- all of which carry mich higher margins than the actual bike.

the best way to negotiate when buying a bike is not to get a cut on the price of the bike, but to haggle over the prices of all the other little things...


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## Pritchett (May 18, 2005)

With the exception of complete bicycles, retail is typically based on a 100% markup. That $80 dollar tire cost the shop $40.

Most products in a shop come from distrubters (QBS, BTI, etc.), which sell at a markup from what they pay to the manufacturer. I have no idea what this margin is, but A wild guess is 20%. (more volume requires lower profit per unit...)

When I worked at Bike shops (1998-2004) we were able to "Employee Purchase" directly from many manufacturers at a substantial discount below wholesale. This meant parts would cost us about 30% of retail. Sometimes less. Those were the days!

This being said, don't think shop owners are getting rich. They operate in a seasonal atmosphere with a lot of overhead costs. Especially with competition from online retailers, we should feel lucky that brick and mortar bike shops still exist! It's a rough industry and many do it for the love, not the money.

As said above, any haggling would best be left to discounted accessories at time of bicycle purchase.

Support your LBS when you can please!


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## Shalom (Nov 7, 2008)

Pritchett said:


> As said above, any haggling would best be left to discounted accessories at time of bicycle purchase.


Definitely agree with this. Most of the guys I have seen and worked with in bike stores are there for the love of cycling and the lifestyle. Certainly not to get rich!



Pritchett said:


> Support your LBS when you can please!


Look after them and they will look after you. Especially when it comes to emergencies or labour.


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## Sean831 (May 22, 2011)

i talked to my lbs guy that said he was in about $975 for a bike that retails for $1600. He would have had it marked closer to $1400 though


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## Pritchett (May 18, 2005)

Sean831 said:


> i talked to my lbs guy that said he was in about $975 for a bike that retails for $1600. He would have had it marked closer to $1400 though


That's a 64% markup. Most OEM's give price breaks to shops that move more product. A shop that sells thousands of X brands bike's will pay slightly less for them than a smaller shop that moves less than a hundred of X brands bikes per year. I can't remember if this is based on number of bikes, or total $$$ sales volume.

Either way, the largest margin I've seen available for complete bikes was 40%. Times may have changed, or I may be remembering incorrectly.

Even at 64% markup, after overhead costs are taken into account, that's very little money.

Our small shop required around $1300 in sales a day to break even. That doesn't sound like much, but it is.

Where shops make the most money is in service and repair. The guy behind the counter probably makes less than $10/Hr... but he can change a tube in 3 minutes and charge you $5 to $13. (yes... people will pay $13 dollars for you to swap a tube...)

That's how shops survive. Thank god for the lazy/incompetent.


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## Pritchett (May 18, 2005)

Sean831 said:


> ...He would have had it marked closer to $1400 though


Also, I remember that some OEM's will not allow a shop to display a price lower than the MSRP on current model year bikes. This is done to keep things fair for smaller shops.


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## Shalom (Nov 7, 2008)

Pritchett said:


> Where shops make the most money is in service and repair. The guy behind the counter probably makes less than $10/Hr... but he can change a tube in 3 minutes and charge you $5 to $13. (yes... people will pay $13 dollars for you to swap a tube...)
> 
> That's how shops survive. Thank god for the lazy/incompetent.


I was always amazed at the sheer number of lazy people out there! Or too afraid to get their hands dirty. Either way, we made quite a bit of money that way!


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## Fix the Spade (Aug 4, 2008)

Well...

The rrp on my local shop's bikes is roughly 100% across the board (I asked the owner).

But that's the rrp, bikes hardly ever sell for full price these days. Even latest models seem to need _something_ off the recommended price to shift.

People like buying on finance and credit cards now too, so quite often a bike sold at 'full price' has great chunks taken out of the mark up right from the moment of sale. Bikes sold on interest free finance deals, percentage gets taken by the finance company and then the shop might not see most of the money for a month (or 3, 6... year).

People who walk in with cash in hand tend to get discounts too. They might get as much as 10-15% off a brand new bike, but it's cash in the till and product out the door. Quite often a cash sale with a hefty discount works out more profitable than someone paying full price but on 24months finance (and you can forget about discounts when mentioning the F word).

Once the dust settles, the actual mark up he gets varies from close to 100% on the little kids bikes, to 60-40% on proper bikes with the narrower end of that centred on the most expensive models.

God it's complicated selling stuff to people.


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## morphosity (Mar 3, 2011)

Fix the Spade said:


> Well...
> 
> The rrp on my local shop's bikes is roughly 100% across the board (I asked the owner).
> 
> ...


Exactly, I don't think I've ever paid full retail for the bikes I've got through an LBS, usually about 25% less as I pay cash...


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## leoferus (Jul 22, 2011)

Support your LBS. Please. In my area, these are the guys sponsoring races, supporting advocacy groups, providing assistance with MTB 101 classes, they organize group rides, etc. The prices they have are sometimes in the park with online prices and other times they are higher but I pay them. Why? Because they are a small shop with big passion. Actually, in my area it is true that all of the bike shops give back and help the passion grow. I support them because they support us.

All the fluffy stuff aside, the mark up here varies depending on demand. On parts and accessories, however, it seems to be almost always 100%. Like mentioned by someone else. It is in the parts and accessories categories that the LBS is truly making money. On some mid-level to higher end bikes I've noticed that the cost of the components was much more than the retail price of the whole bike.


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## screaminz2002 (Aug 5, 2011)

Do most lbs haggle on prices? The two I have been to seemed like they were set on price and I didn't even think about offering a lower price.


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## Mr. Blonde (May 18, 2008)

Anyone who has this knowledge and shares it openly on an online forum is an @$$hole. Shame on you people. Independent bike shops have a hard enough time keeping the doors open with all the online retailers these days. Don't make their job harder.


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## leoferus (Jul 22, 2011)

Mr. Blonde said:


> Anyone who has this knowledge and shares it openly on an online forum is an @$$hole. Shame on you people. Independent bike shops have a hard enough time keeping the doors open with all the online retailers these days. Don't make their job harder.


I can do simple math. Please don't turn this into some sort of a personal issue with me but I contend that what you want to remain concealed is obvious to most. It doesn't take a genius to know that the wheels I was charged $260 were marked up 62.5% since I found the same online for about $160. Did I care? No. Why? The service rocks! And, as I stated before, they fuel the local passion.

But I agree that our shops have a hard time making sales... well, that's why my favorite shop is moving to Main Street... We have a large MTB community. We have a large trail system in our area and are surrounded by other great trail systems. The boutique like shops that don't open up to the community and are simply trying to sell high dollar bikes without real service are the ones being hit hard by the online retailers. Why? Because we can do without the high and mighty attitude and can bypass the snob that says you must have a Fox fork because a Reba is just a wanna be...

Anyways, I understand what you are saying and I respect my local shops. That is why I have not posted their names. I have gotten the same review of the local shops from most of the people I talk to. I make it a point for my friends, family, and coworkers to visit all the shops and find out where they want to spend their money and why. I try to educate them when they return to me and say, "I saw this online cheaper." I have not had one person buy a bike online. I have had almost all of my friends and riding buddies support their LBS even though we are all able to repair our own bikes. I posted what I posted earlier in an attempt to help people make the connection between the price they pay for goods and the service they receive in addition to fueling the local economy and biking community.

Of course, being that common sense isn't common, it is clear that some will simply take the fact that they are paying more for certain things at their LBS and spend their money online. So be it. Have you noticed how the advertisements on this very forum are usually listing prices that our LBSs cannot even come close to in order to make money? If I were to have purchased everything I did over the last year from the online shops listed on MTBr.com and not from my LBS I would be about $300-400 richer right now. But I am not. Again, because I appreciate what a LBS does for the community, what they provide me with, and the local economy.

Sincerely,

Ricardo

P.S. I appreciate the fervor with which you responded and I share in your intensity when it comes to defending my local bike shops. I make it a point to make an argument any time I hear someone recommend that they go online and purchase this or that.


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## 2Slo4U (Jan 12, 2004)

Mr. Blonde said:


> Anyone who has this knowledge and shares it openly on an online forum is an @$$hole. Shame on you people. Independent bike shops have a hard enough time keeping the doors open with all the online retailers these days. Don't make their job harder.


One word comes to mind....hypocrite. I'm sure when you bought your last car, camera, ipod, computer, etc. that you didn't even consider doing research on the 'net.' Just because one knows what the actual costs to products are does not mean that you can find a store to sell it at the price you want.

I'm not in the retail industry but I know a LOT about it and how it works. I still support my LBS however I can. Very rarely do I buy something online if my LBS has it. I do purchase clothing online because my shop does not stock some brands I prefer. I've referred many, many people to them. Last month that resulted in over 7K in sales that they would not have seen.


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## rebel1916 (Sep 16, 2006)

Mr. Blonde said:


> Anyone who has this knowledge and shares it openly on an online forum is an @$$hole. Shame on you people. Independent bike shops have a hard enough time keeping the doors open with all the online retailers these days. Don't make their job harder.


Why is it my responsibility to keep anyone's doors open?


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## Guest (Aug 5, 2011)

Dangeruss said:


> Margins are pretty low on bikes. 20% is pretty much the average on high-end bikes. The margin is much, much higher at the low-end. A bike shop might make as much from the sale of an entry-level mtb as from a high-end road bike. The difference is that the guy who buys the roadie will also buy the $150 helmet, the $300 pedals, the $90 jersey, $150 shorts, and will be in the shop again in five months for a pair of $80 tires -- all of which carry mich higher margins than the actual bike.
> 
> the best way to negotiate when buying a bike is not to get a cut on the price of the bike, but to haggle over the prices of all the other little things...


good god in heaven, i've been out of the loop that long? three hundred dollar pedals? are the bearings titanium too?


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## Mr. Blonde (May 18, 2008)

2Slo4U said:


> One word comes to mind....hypocrite. I'm sure when you bought your last car, camera, ipod, computer, etc. that you didn't even consider doing research on the 'net.' Just because one knows what the actual costs to products are does not mean that you can find a store to sell it at the price you want.
> 
> I know a LOT about the retail industry and I still support my LBS however I can. Very rarely do I buy something online if my LBS has it. I do purchase clothing online because my shop does not stock some brands I prefer. I've referred many, many people to them. Last month that resulted in over 7K in sales that they would not have seen.


What? What does doing research before a purchase have to do with openly publishing dealer costs on an open forum? The two are in no way analogous. You clearly have no idea what people do with this information. I have watched groups of roadies with large influence in the local scene come in, knowing cost, and literally strong arm small shops into giving them huge deals. People knowing cost is one of the biggest bs issues bike shops deal with on a regular basis. Also: the little assumption about online prices representing cost is WAYYYYY off base. Online dealers often get distributor pricing, part out completes, and buy in massive quanitities. To top it off they often lose money on some of their deep sales. It's all about economics of scale. The online price might be half of what the ibd pays. I live a city with a VERY strong local buying ethic. I eat at local restaurants and buy local food for 95% of my meals these days. I want bike parts I go into my favorite shop (Carolina Fatz), tell them what I want, wait patiently, make their job as easy as possible, and plop down the plastic without even discussing the exact total. Maybe even bring some good beers. Know what happens? I get treated VERY fairly. If you don't then your shop sucks.


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## Guest (Aug 5, 2011)

"I have watched groups of roadies with large influence in the local scene come in, knowing cost, and literally strong arm small shops into giving them huge deals."

these are the real a$$holes.


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## Guest (Aug 5, 2011)

"I have watched groups of roadies with large influence in the local scene come in, knowing cost, and literally strong arm small shops into giving them huge deals."

these are the real a$$holes.


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## Guest (Aug 5, 2011)

"I have watched groups of roadies with large influence in the local scene come in, knowing cost, and literally strong arm small shops into giving them huge deals."

these are the real a$$holes.


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## customfab (Jun 8, 2008)

rebel1916 said:


> Why is it my responsibility to keep anyone's doors open?


If this is the way you think don't ever walk through the door.

No it's not your responsibility to keep somebody in business. But that doesn't mean you should work them over on price or abuse there knowledge and service. If you want to buy stuff dirt cheap on line that's fine but ask the black hole that is the internet your questions and don't even think about walking into your LBS when your looking for a warranty.


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## Pritchett (May 18, 2005)

Mr. Blonde said:


> Anyone who has this knowledge and shares it openly on an online forum is an @$$hole.


why?

Plenty of other industries operate successfully with this type of transparency. Sales of automobiles, gasoline, many other commodities and the entire lending industry for example. In fact, any publicly traded corporation is required to operate on this principle.

Are the blogs who tear apart a new Apple computer, then estimate the cost of the components to post online a$$holes? Do you think Steve jobs loses any sleep over these activities? No. Because anyone who isn't an idiot realizes that many other factors contribute to the actual profit made from any sale. Manufacturers invest in overhead, R&D, Engineering, infrastructure, etc. Retailers invest in various operating costs, including rent, utilities, marketing, etc.


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## marpilli (Feb 8, 2011)

Mr. Blonde said:


> Know what happens? I get treated VERY fairly. If you don't then your shop sucks.


How do you know you're being treated fairly unless you have some idea of the dealer cost? Without that, you have no reference point to compare against. Kinda goes against the "don't disclose the dealer cost" argument.


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## rebel1916 (Sep 16, 2006)

customfab said:


> If this is the way you think don't ever walk through the door.
> 
> No it's not your responsibility to keep somebody in business. But that doesn't mean you should work them over on price or abuse there knowledge and service. If you want to buy stuff dirt cheap on line that's fine but ask the black hole that is the internet your questions and don't even think about walking into your LBS when your looking for a warranty.


Buddy, I buy some stuff online, some stuff in stores and some stuff used. Not just with bikes with everything. But if you don't want my business, PM me with the name of your company, and I will be sure to never darken your doorstep.


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## customfab (Jun 8, 2008)

marpilli said:


> How do you know you're being treated fairly unless you have some idea of the dealer cost? Without that, you have no reference point to compare against. Kinda goes against the "don't disclose the dealer cost" argument.


I think he was referring to service not price. But even if he was talking price. MSRP is fair in my book.


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## marpilli (Feb 8, 2011)

Ah, I totally agree with the service aspect. The closest LBS to me doesn't get much business because of this. Every time I go in there and ask a question they act like I'm wasting their time. Because of this, I drive to a shop 20 minutes away that is welcoming and always takes time to listen to what I'm trying to find.

As others have said, I buy on-line and used also...


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## Harold (Dec 23, 2003)

customfab said:


> MSRP is fair in my book.


Knowing a little bit about how bikes and accessories are priced out, I would agree, especially in the case of full bicycles. I don't even try to negotiate the price there because unlike car dealers, most bike shops are straightforward and fair about pricing.

And taking the lowest online price you can find, then calculating the difference between it and MSRP to determine markup is making one BIG assumption - that the lowest online price you're seeing is the dealer cost. I have seen many cases of parts being offered online at LESS than dealer cost.


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## Moozh (Jan 20, 2010)

morphosity said:


> Exactly, I don't think I've ever paid full retail for the bikes I've got through an LBS, usually about 25% less as I pay cash...


Man..I have always paid cash for bikes I buy at the LBS and it's always been full price. Except for my hooligan which was a 'last year model', thus 20% off sticker, sales tax brought a chunk of that savings back tho. The deals I have gotten have been on bikes I purchase on via the web.


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## gregg (Sep 30, 2000)

The posting of dealer-only info hurts your LBS and is not cool.

Mtbr's policy does not allow these posts and it has been removed.

-g


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## shiggy (Dec 19, 1998)

Fix the Spade said:


> Well...
> 
> The rrp on my local shop's bikes is roughly 100% across the board (I asked the owner).
> 
> ...


Remember that a 100% markup = a 50% margin, and the margin from dealer invoice cost to selling price is way less. Then the cost of shipping, assembly and followup service must come out of the margin. In the long run the LBS does just a bit better than break even on bikes.

Even most parts and accessories are less than 50% margin at MSRP and obtained from the main distributors.


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## roadracerX (Apr 21, 2011)

Pritchett said:


> retail is typically based on a 100% markup. That $80 dollar tire cost the shop $40.


I have no experience in the cycling business but I was a parts manager at a motorcycle dealership for 4 years. Sold Yamaha, Ducati, Polaris, Honda, Suzuki, Aprilia, BMW, and KTM. Most parts factory or after market have about a 50% markup. Unless its Oakleys or Costa Del Mars, they have 100%. We typically were shooting for a 33% margin of profit at the end of the month. I doubt bike parts are much different.


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## FireLikeIYA (Mar 15, 2009)

gregg said:


> The posting of dealer-only info hurts your LBS and is not cool.
> 
> Mtbr's policy does not allow these posts and it has been removed.
> 
> -g


I agree with your action but not your reasoning... If someone went into a shop knowing dealer cost looking for a deal the dealer has the oppurtunity to say no but at least they walked in the door instead of buying online. Knowing dealer cost wont actually deter someone from buying the product... It actually might help the smaller guys (bike companies) to compete with the bigger brands creating more competition... This wouldn't effect your LBS but would be good for the consumer and the sport as a whole.


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## mimi1885 (Aug 12, 2006)

While it's a competitive market out there it's good to know the other side of the coin as well. LBS do not buy direct from all manufacture they have their middle man. Then the overhead, rent, utility, labor. Avg business run about 30% labor retail may be different but you get the idea. Plus they have to stock the products, not everything they sell are special orders. That's a chunk of cash sitting on the showroom floor loosing value.

LBS do not buy the same thing online place do either, some online do bulk of their business with OEM parts, and take offs with no box and sometime no warranty.

I think that it's good that good shops make money, they don't burry the profit in the back yard they put it back in the business, expanding and offer more sales.

My friend celebrated a sweet deal he scored at an LBS after hecklling them to death by going to a Sushi restaurant ordered amoung other things a $7 California roll that cost about 65 cents to make:madman:

There's no need for transparency, consumer do not need to know how much it cost, just the going price. If an LBS sell an XYZ product for $100 and make $75 profit, another LBS that sell it for $75 would gain the customer by earning less profit, and so on. I don't see one shop making all the money and every shop follow that's not how business work, everyone gets competitive.


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## TheMachinist (Feb 24, 2007)

Pritchett said:


> Because anyone who isn't an idiot realizes that many other factors contribute to the actual profit made from any sale. Manufacturers invest in overhead, R&D, Engineering, infrastructure, etc. Retailers invest in various operating costs, including rent, utilities, marketing, etc.


Did you see the "High cost of saddles" thread? It always bugs me to hear people complain about paying so much money for "a few cents worth of metal and plastic."

I am a machinist and my entire living is made turning metal and plastic into useful items. I do not do this for free. It does not get shipped for free. The engineer did not design it for free. Even the time spent sourcing the material is not free. And material prices are not as cheap as some may like to imagine.

Anyway, support your local bike shop. If you do, they will likely give you discounts and great service. They love loyal customers.


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## tpc1 (Jun 29, 2010)

I have seen the prices that my shop buys at. Like someone said above the average is around 30% on bikes, Some shops will haggle on price but some wont. Between insurance, work mans comp, all other operating expense. credit card processing around 1.8 to 2.5% and it widdles down fast And if it is American Express it is more. I run a couple retail shop not bike but i sit down every month and track those expenses and it a whole lot of expense. I give the lbs a lot of credit, tough market and not a lot of return. And a whole lot of competition.


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## mimi1885 (Aug 12, 2006)

I don't ask my shop to match the price for me I just asked if they would work with the price, they say yes and I take it. Turned out a few times it's cheaper than online. Not many shop keep their price up to date most of the time they have not adjust the price and I get discounted on a lower price tag.

I don't think that the shop is making all kinds of money because if it's that profitable there would be a bike shop on every corner. Most of us who buy and sell used stuffs online or classified would know what kind of idiots that we have to deal with and the kind of profit we made.


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## JonathanGennick (Sep 15, 2006)

icantdrive65 said:


> Did you see the "High cost of saddles" thread? It always bugs me to hear people complain about paying so much money for "a few cents worth of metal and plastic."


I'm the guy who began that thread. It wasn't so much a complaint as a "wonderment". One looks at something sometimes and wonders why it costs what it does. "Why?" is a fair question to ask. Either there is a good answer, or there is room to jump in and compete at a lower price. Henry Ford probably asked himself one day why cars were so darned expensive. The he put together an assembly-line and changed the industry.

OTOH, used to be I would wonder about the price of restaurant food. Then one day I realized I was not paying for the food at all. What I was *really* paying for was for the food be there, where I wanted it, when I wanted it. That changed my whole line of thinking, and I no longer complain about food prices when I eat out.


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## Guest (Aug 6, 2011)

if you find a good shop and are good to them. they will be good to you in return.

that's my experience.


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## centershot (Nov 21, 2008)

I did not start this thread to bash local shops, I was just wondering. I realize that they have to keep the lights on - and I have no problem paying a couple extra bucks to keep it local. If they have it, I'll buy it from them. If not they will happily order it. That said I have bought over the internet as well, mostly impulse buys on deals that are too good to pass up. For the most part I like to keep it local. As for loyalty, I've used the same shop for over 30 years - God only knows how much I have spent in that shop. They treat me well and I drop off an Iced Mocha or Pizza every once in a while as a thank you. I could not count the times he as told me 'I'll just get you next time' when it comes to paying for a quick service. That is why I plan to use that same shop for the next 30 years.


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## Metalized (Apr 1, 2009)

I prefer to buy from the LBS rather than online. Winters are long around here, so when something on my bike breaks, I need a replacement right away, not in two weeks. It's worth the extra cash for that reason alone, plus with a bit of haggling or buying sale parts, and the lack of shipping costs, pricing isn't much different anyways. 

Service costs are a huge ripoff though, except for **** like headset installs, where the cost of the tools required is over double that of the labor.


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## customfab (Jun 8, 2008)

Metalized said:


> Service costs are a huge ripoff though, except for **** like headset installs, where the cost of the tools required is over double that of the labor.


Srsly? shop rates here range from $50 to $75 an hour. Compare that to hourly rates in other industries and I think it's in line with the amount of experience and tooling that bicycles require. If the service dept. at your LBS is staffed by seasonal help I complete understand your point. But I really think the average shop rate is pretty fair.


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## FireLikeIYA (Mar 15, 2009)

customfab said:


> Srsly? shop rates here range from $50 to $75 an hour. Compare that to hourly rates in other industries and I think it's in line with the amount of experience and tooling that bicycles require. If the service dept. at your LBS is staffed by seasonal help I complete understand your point. But I really think the average shop rate is pretty fair.


To add to this... I know when I get stuff done at the LBS they charge me actual work time and not some inflated estimated time ... Its not like getting work done on your car. One shop that I have been to charged me roughly $5 for every tool that they had to use to get the job done... so, $5 for installing a crown race, $5 for cutting a steerer tube and $5 for installing a star nut... It made it worth my time to go to them.


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## pawa_k2001 (Jul 21, 2011)

Pritchett said:


> This being said, don't think shop owners are getting rich. They operate in a seasonal atmosphere with a lot of overhead costs. Especially with competition from online retailers, we should feel lucky that brick and mortar bike shops still exist! It's a rough industry and many do it for the love, not the money.
> 
> As said above, any haggling would best be left to discounted accessories at time of bicycle purchase.
> 
> Support your LBS when you can please!


I agree, I just ordered 2 bikes from my LBS. The people at my LBS are awesome and to help them stay in business I will pay more. The help, tips, details and directions are more then worth the premium I pay to my LBS.


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## Sunn Xchox (May 25, 2008)

Thanks for pulling the dealer pricing, it really hurts LBS to have this exposed.


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## JonathanGennick (Sep 15, 2006)

Metalized said:


> Service costs are a huge ripoff though, except for **** like headset installs, where the cost of the tools required is over double that of the labor.


I disagree w/this comment. Sometimes I feel shops should charge even more than they do.

One aspect of service that is often overlooked is the assumption of risk. Do a repair yourself, and you bear the risk. Take the repair to the shop, and part of what you pay for is to transfer the risk of failure to the shop. Plus, there's all the usual overhead and labor costs that get discussed ad-nauseam. Labor rates -- at least in the shops I patronize -- are something I won't even consider complaining about.


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## TiGeo (Jul 31, 2008)

Bikes have a ~30% mark-up, less on the very high end. Parts, clothing, and accessories are "keystoned" or 100% mark. That is why shops always want you to buy lots of things with your bike - they make more money on those items (that is why they are in business). I always thought the mark-ups were pretty standard for a retail business; the bikes weren't marked up as much as I would have thought. I worked at a shop in the mid-90s. To guy that says that giving this info makes me an @sshole, this is all fairly common retail knowledge. I just don't get why people don't understand that to make money you need to buy low and sell high, I don't get too concerned about it when I purchase any goods or services, whether online or in a brick/mortar store. Why is a bike shop such a different experience that say Best Buy, Walmart, etc.? Those places really stick in your rear and people smile about it all day long.


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## lamb (Sep 18, 2008)

I try to do what I feel is middle ground with my purchasing. I buy my bikes, helmets, shoes, consumables (water bottle, chains, lube, etc), and some special order parts ie specialized parts from the LBS. I feel this is giving them my business, but on the other hand, I am not well off so I need to buy other things online that are way cheaper, like pedals and most other parts. I am very grateful that my lbs is there and I use them for most big purchases, but as I said I do not have a ton of extra money so I need to make it go further.


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## markf (Jan 17, 2007)

labor rates in shops generally need to go up. Sure $9 for a tire/tube change is expensive, but when it's a bolt on bmx wheel with pegs, it takes some time. it's also super easy to do yourself. I think my shop charges $20 for a headset install. but if you bought the headset from us, and the bike from us, we'd probably do it for free or $10 especially if we didn't discount the part a ton. if you come in with a headset you got elsewhere, it's $20. that covers the proper tools and the know how to do the job correctly. 
we try to price things on how expensive the tools are and how complicated it is to do/the knowledge required. too many people discount the knowledge required to do a job and troubleshoot things if it isn't a super smooth by the book fix/job.


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## FireLikeIYA (Mar 15, 2009)

lamb said:


> I try to do what I feel is middle ground with my purchasing. I buy my bikes, helmets, shoes, consumables (water bottle, chains, lube, etc), and some special order parts ie specialized parts from the LBS. I feel this is giving them my business, but on the other hand, I am not well off so I need to buy other things online that are way cheaper, like pedals and most other parts. I am very grateful that my lbs is there and I use them for most big purchases, but as I said I do not have a ton of extra money so I need to make it go further.


I wouldn't sweat not making your purchases from an LBS. Most the stuff they sell is made in China anyway. As a blue collared worker I look at it in a very generalized way... If they are not giving me their business why should I give them mine? Might as well benefit from the whole arbitrage thingy yourself. :thumbsup:


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## Reice05 (Jul 8, 2011)

I was at a LBS in my area a few weeks ago looking at the Trek 3900. The 2011 Trek 3900 was around 539$ i believe and when she was on the computer looking on the Dealers Website about ordering one or seeing if they was gonna get anymore in stock i saw the pricing of the 2011 that they get it for which was if i remember correct was around 280$ and they sell them for 539$. When i saw the 280$ she quickly changed screens lol, i was paying attention at first but as soon as i looked at the screen that 280$ stood out so much it was hard not to notice even for the few seconds that screen was up


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## tl1 (Dec 21, 2003)

*Define your terms*

What is always silly about these bike cost discussions is that everyone thinks they know what they're talking but and that everyone knows what these terms mean but I don't think that's the case. Also how are manufacturer incentives factored in, interest rates etc?


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## tsefreeflow (May 21, 2011)

customfab said:


> MSRP is fair in my book.


I agree, but I do try to put things into perspective. Like I can buy an S-Works 29er for $10,000 or a new motorcycle LOL! Hell you can buy a new car for $10,000 that has A/C and heat, cup holders, windshield wipers, and a gas pedal. Its just amazing how something we have to make move with our bodies can be so damn expensive haha. Just perspective!


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## old'skool (Jul 2, 2011)

> if i remember correct was around 280$ and they sell them for 539$.


If some here don't understand markup, they need to take business 101. Or, go open a shop, and they'll figure it out real quick.

Even flipping stuff on craigslist, I find I have to just about double my price to get 20% net profit. Fee pay and pay pal take theirs, as does Fed-X, USPS and UPS. There is also gas, my time, etc. And I don't even have to pay rent for a shop, or have a payroll.

I did a business plan once for a bike shop. In order to make 60K a year for myself, I'd have to gross 1/4 million a year. Think about it, that's over a thousand bucks a day. Even if I charge 75/hr for labor, that's 14 hours, every day. If I'm just selling bikes at a 40% margin, that's a $3000 dollar bike every single day.


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## cautery (Aug 1, 2006)

I ALWAYS try to support my LBSs (as many as are willing to deliver good customer support). It takes time to develop a relationship at your LBS... MOST people go in and use it as a catalog... They look at the LBS and buy somewhere else... I DON'T do this...

I am just now getting back to riding, but I am visiting at least 3 shops in the area about once a week... I'm developing a relationship at each... I am honest with all of them that I HAVE my MTB bike and will be doing a few upgrades... until I'm ready to buy a new one. I let them all know that I WILL be buying a tri-bike within the next 12 months and what my budget is...

When the time comes, I will spec the bike to each shop and the best shop gets the sale...

Running a bike shop as a PROFITABLE business is likely one of the hardest local business deals around... Huge overhead, lots of labor, lots of fixed costs... lots of money tied up in inventory that begins to lose its value the second it hits the shelves...

Only for love...


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## PretendGentleman (May 24, 2011)

Mr. Blonde said:


> I get treated VERY fairly. If you don't then your shop sucks.


The bike shop business model is problematic. It's not the consumer's fault.

My primary complaint/disillusionment with shops is with regards to how fairly they compensate their employees. I've worked at a dozen shops and they all pay shlt, and offer no job security unless you're the manager. We're all living in a competitive economy, so by those rules, its fair to shop online and ask questions at the shop and it's fair to pay employees low wages if they'll work for 'em.

We have 4 bike shops in my medium-small town. All the owners appear to be living the American dream, nice cars, homeownership, wives that stay at home. They do work hard and put varying amounts of their lives into it(For some it's clearly become just a source of income, no longer a passion). And it's all fine and fair by me.

The business model needs some tweaking. If I start my own shop some day, the markup on parts will be small, but the customer will pay for labor and the primary relationship will be between the customer and the mechanic, not the customer and the markup on parts somebody far away made.


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## cwakefld (May 13, 2014)

I am a manager at a local, family owned outdoor store, we do not carry MTB. The way any retail business works is to purchase an item, in this case a bike, from a manufacturer and then sell that item to the consumer at a higher price in order to make a profit. These businesses have to pay employees, pay a mortgage or lease, pay bills etc... You will almost always be able to purchase that same item on the internet for a lower price. The consequences of making those purchases online, is that the next time you want to purchase a new bike, you may not have an lbs available to test ride one, or you may have to drive hours to do so. If the markup on bikes does not permit someone to own an lbs, and make a comfortable living doing so, no one will want to own an lbs. If you think that the owners of your lbs are getting rich selling you a bike for $539 that they paid $280 for, You are sadly mistaken. And to pay employees more, would mean charging even higher prices for goods and services. A 50% margin is fairly common in the retail world. And it is important to understand that profit margin and markup are not the same thing


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## Harold (Dec 23, 2003)

haha, suckered in by a resurrected thread dredged up by a spammer


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## PretendGentleman (May 24, 2011)

cwakefld said:


> I am a manager at a local, family owned outdoor store, we do not carry MTB. The way any retail business works is to purchase an item, in this case a bike, from a manufacturer and then sell that item to the consumer at a higher price in order to make a profit. These businesses have to pay employees, pay a mortgage or lease, pay bills etc... You will almost always be able to purchase that same item on the internet for a lower price. The consequences of making those purchases online, is that the next time you want to purchase a new bike, you may not have an lbs available to test ride one, or you may have to drive hours to do so. If the markup on bikes does not permit someone to own an lbs, and make a comfortable living doing so, no one will want to own an lbs. If you think that the owners of your lbs are getting rich selling you a bike for $539 that they paid $280 for, You are sadly mistaken. And to pay employees more, would mean charging even higher prices for goods and services. A 50% margin is fairly common in the retail world. And it is important to understand that profit margin and markup are not the same thing


If a business model depends on people paying more than they would if they went somewhere else, that business can get in trouble fast. Basic economic principles predict that low-cost firms do the best. Mail order bike repair companies don't do well but mail order bike retail clearly does well. Compete where you have low costs.

Bike shops clearly are not homogeneous. I've worked at a lot of family oriented bike shops with few high end bikes on the floor. More recently I've worked at high end road/tri bike shops, so that influences my views. I think there are people out there who are willing to pay over $100/hr for a mechanic who can fix any problem on their bike, but they won't pay that much for their bike to be worked on by one of several mechanics with wildly varying competence.

I would like to open a shop where customers hire the mechanic, who works more like a contractor. The mechanic sets his own prices based on demand and the mechanic works to attract her own clients. An anesthesiologist who is riding a $10k bike is likely to have no problem with an arrangement where she can walk into the shop and say, "hey my thingie is clicking", and the mechanic has a deal with her where she pays him $150/hr to have problems fixed that same day, regardless. Another customer might have been there first, but they only pay $60/hr and know they might have to wait a few days or longer depending on how busy it is. Another idea is to have a maintenance subscription. Pay $200/mo during the season and receive unlimited tune-ups, for example. With all of these ideas, the parts would be marked up maybe 20%, while the labor is more expensive. markup on part is higher if they are in stock and lower if they are special ordered. It always blows my mind that markup on special order parts is essentially always identical to parts on the floor. I can imagine reasons, but it doesn't seem efficient.

I think there are some alternative business models that can preserve the bike shop without requiring the big showroom packed full of expensive, high mark-up, depreciating bikes.


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## cwakefld (May 13, 2014)

You totally miss my point. I will clarify later, on my way to work now. Short version is, it's not about local business charging more for a service or item. It's about people with no overhead that sell on amazon out of their garage charging much less.


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## juan_speeder (May 11, 2008)

A very well run bike shop will make a 35% average margin. That is, $65 out of every $100 pays to restock shelves. Then one takes that remaining $35 and pays rent, payroll, insurance, utilities etc. 

What's left over is sweet sweet profit.


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## PretendGentleman (May 24, 2011)

cwakefld said:


> You totally miss my point. I will clarify later, on my way to work now. Short version is, it's not about local business charging more for a service or item. It's about people with no overhead that sell on amazon out of their garage charging much less.


I think I got much of your point: Bike shops are a high cost business when it comes to selling goods that can be easily shipped.

Not sure if you got my point: online retailers have very high costs for shipping labor. Does Performance even offer a mail order tune-up?

And the point an economist would make: high cost businesses exit the industry and low cost businesses remain. I repeat, does Performance offer a mail order tune-up?

I don't think there's much hope for the traditional retail business model for most bike shops, especially for entry-level to mid-level bikes, where people know enough to feel confident buying online but they care enough about cost that they are deterred by the price differences they see between online and brick and mortar.


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## velo99 (Apr 18, 2014)

A lot of online retailers drop ship their products. They never touch the actual product. They are glorified order takers. However in the manufacturers eyes a buck is a buck and if Online Harry can sell 100k a year he gets a better price. 
I frequent the LBS for the camaraderie and the ability to actually touch a product before I ship it. Case in point, I have been looking at Gopro`s. Looked on line on eBay Amazon and the like. Last weekend I borrowed one from a friend of mine. Having never seen one up close I didn't realize how small they actually were. All of the pics I have seen are zoomed in. Now that I have actually operated a unit I will probably buy one eventually. 
Back to the LBS. When I call and ask a question I either get an answer or they ask me to bring it in and "we" can look at it. There is usually a discussion about the problem and possible solutions. They have taken it in the back and tweaked it a few times for no charge because I have been in several times looking. I never actually bought anything until last weekend. They know now that I will purchase from them and likely a bike sale or three on the horizon. They DONT hammer me about my bike not being worthy of an upgrade even though it is a few years old. 
They are after those guys who drop off their bikes for service, who don't blink twice about dropping 3k on a bike, then bring that bike in for routing service. These are the guys that have a stable in their garage rather than a bike on a hook.
However they also know guys like me who buy parts develop an attachment to their machinery. We talk about local trails and events, new stuff coming out etc. We are also the guys who will help a customer get a bike in the door when the phones are ringing off of the hook and the showroom is full. I have played with kids while the counterman is closing a deal on a bike. I have loaded and unloaded bikes for people while I am out in the parking lot loading or unloading my bike. But you know what, I like doing that for people because they are bike people and the LBS is our oasis. I have seen people on the trail and at the bike shop. Conversation starter right there. That same rider would be the one who stopped and helped me on the trail or vice versa. Might give a hint on technique or need a hint while out riding. 
Its about making my world a little smaller.


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## Frydguy (Aug 24, 2014)

I live in a smaller community and there is no way in hell that I'd buy anywhere else except at our local bike store.. It's the only one around... And we need them in town.. For anyone that has a bike...I don't have time to wrench on all of our bikes..


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## andytiedye (Jul 26, 2014)

I buy locally if I can, but each bike purchase has required more searching than the last.
Most recent bike purchase was from a brick-and-mortar store run by the bike manufacturer, not sure if that counts as an LBS or not. It's close enough to qualify as local and they do service. They had a much better selection of bikes for small riders than any of the LBS's I visited.

Used to have a great LBS, bought two bikes and all accessories there for years. The owner died and it got sold. Not so good anymore. Looking for a new LBS.

I do not doubt that running an LBS is a difficult business, more likely to be a labor of love than a road to riches. Presuming that this is the case, transparency is a good thing. We already know the online prices either before we enter the store or we look them up on our smartphone while we are there, even if we have no intention of buying online.


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## Clbryant1981 (Aug 6, 2014)

I can't resist commenting on this old thread. The mentality of buying cheaper verses supporting small local business is one of the reasons Americas economy is struggling. It's no longer about helping and supporting each other, it's about me, me, me. I will support my local shop always. I recently bought three bikes from them and now I get 20% off all accessories for life. We look out for each other.


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## HitmenOnlyInc (Jul 20, 2012)

This horse is dead!


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## mjydrafter (Aug 20, 2014)

I live in a fairly large city, and we have a good number of LBS's. 

My wife and I stopped in at one I hadn't been in for a long while the other night.

The guy was working on a bike. We showed up about 10 minutes before close.

We looked about and waited for a greeting... nothing. We kind of looked at each other and walked out without the guy saying a word. I understand it was close to closing and he was with another customer, but not even a hello? :skep:

Next day I was on my way to appointment, stopped a new LBS. The person helping me was the owners wife. They had a fairly large selection of a very obscure product I have been looking for. I told her I was browsing a bit on my way to appointment. We talked about the product she had and she answered a bunch of my questions. Their prices were completely competitive, and I could see that she was a user as well as being a seller. 

To be perfectly honest their prices were just a touch higher than the best prices I have found on-line, but close enough that when I do buy I will get it at the LBS, and happily pay a very small premium.:thumbsup:

Care to guess which one is my new favorite LBS, probably of all time? It's sad too, because the first shop is a dealer for my addictions product of choice (he had 1 of the bike I am interested in...)...


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## cjsb (Mar 4, 2009)

PretendGentleman said:


> If a business model depends on people paying more than they would if they went somewhere else, that business can get in trouble fast. Basic economic principles predict that low-cost firms do the best. Mail order bike repair companies don't do well but mail order bike retail clearly does well. Compete where you have low costs.
> 
> Bike shops clearly are not homogeneous. I've worked at a lot of family oriented bike shops with few high end bikes on the floor. More recently I've worked at high end road/tri bike shops, so that influences my views. I think there are people out there who are willing to pay over $100/hr for a mechanic who can fix any problem on their bike, but they won't pay that much for their bike to be worked on by one of several mechanics with wildly varying competence.
> 
> ...


You may be right about there being alternative models that can preserve the shop, but unless you try them we won't know....

The service subscription idea is interesting, but it is going to be tough. You have to find customers and they have to find you -- and be willing to pay in advance or pay for Availability. When I see a lbs in my area have a 3 week wait time for service--and they do-- then this has some merit, but who knows at what price?

On the service side the model would be competing with Youtube and with shops that don't require a subscription. In cities with horrific traffic and high retail rent there could be a niche market, e.g., SoCal.

Good luck with your ideas and getting a business started, hopefully you will get constructive feedback here.


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## Ailuropoda (Dec 15, 2010)

PretendGentleman said:


> ..I would like to open a shop where customers hire the mechanic, who works more like a contractor. The mechanic sets his own prices based on demand and the mechanic works to attract her own clients. An anesthesiologist who is riding a $10k bike is likely to have no problem with an arrangement where she can walk into the shop and say, "hey my thingie is clicking", and the mechanic has a deal with her where she pays him $150/hr to have problems fixed that same day, regardless...


I'm a physician. I support my local bike store and don't mind paying extra for the privilege of good service. But I'm not going to pay somebody $150/hr to fix a clicking thingy on my bike. It is true that some people have more money then sense and this includes some doctors but for the most part people with money are pretty smart about both making and keeping it and are not going to pay ten times the going rate for repair work to their bike.

With that being said I don't think people value their LBS as much as they should.


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## eb1888 (Jan 27, 2012)

Your shop idea relies on backward logic.
The person with the capability to develop the skill in one area is least likely to use a high priced bike mechanic. The one without the patience to have become an anesthesiologist will need to use a mechanic and be most likely to have a payment problem at the $150/hr level. Pricing based on ability to pay with a sliding scale isn't currently setup anywhere, although with the way technology is going it seems possible.


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## PretendGentleman (May 24, 2011)

Ailuropoda said:


> I'm a physician. I support my local bike store and don't mind paying extra for the privilege of good service. But I'm not going to pay somebody $150/hr to fix a clicking thingy on my bike. It is true that some people have more money then sense and this includes some doctors but for the most part people with money are pretty smart about both making and keeping it and are not going to pay ten times the going rate for repair work to their bike.
> 
> With that being said I don't think people value their LBS as much as they should.





eb1888 said:


> Your shop idea relies on backward logic.
> The person with the capability to develop the skill in one area is least likely to use a high priced bike mechanic. The one without the patience to have become an anesthesiologist will need to use a mechanic and be most likely to have a payment problem at the $150/hr level. Pricing based on ability to pay with a sliding scale isn't currently setup anywhere, although with the way technology is going it seems possible.


eb1888, you're describing an oulier here. Most anesthesiologists hire bike and car mechanics, for example. They even go to other medical specialists when they need those services. Opportunity cost is the name of the game here. Why give up 1000/hr when you can pay 150/hr to have a more experienced person do the work?

I don't know if it would really work, but there are plenty of people who will pay a lot of money to have work well done. People regularly pay my old boss 250 for 2-3 hours of fitting time. I don't know what hourly rate will equilibrate supply and demand for a very experienced mechanic's service. I do know that I've seen a lot of customers come into a shop and ask for a specific mechanic to do the work. Typically, somebody else does the work because the guy who they asked for is just too busy. If a higher rate were an option to get the work done by somebody who knows what they're doing, then that's an option that can make everybody in this story better off.


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## mack_turtle (Jan 6, 2009)

FireLikeIYA said:


> I wouldn't sweat not making your purchases from an LBS. Most the stuff they sell is made in China anyway.


I know this post is nearly a month old, but I am confused. If buying stuff from Chinese manufacturers is problematic for you, you need to quit cycling at all ASAP. a vast majority of bicycle products are made in China or Taiwan. in fact, stop purchasing everything altogether, unless you can afford to pay 10 times more for everything to buy American.


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## mimi1885 (Aug 12, 2006)

mack_turtle said:


> I know this post is nearly a month old, but I am confused. If buying stuff from Chinese manufacturers is problematic for you, you need to quit cycling at all ASAP. a vast majority of bicycle products are made in China or Taiwan. in fact, stop purchasing everything altogether, unless you can afford to pay 10 times more for everything to buy American.


It won't be 10 times more but pretty close. . The thing is most American don't really care but the others really do, especially Asian. They want the made in USA stamp on the products.

I support American companies, if it made in the US, good if not still ok more money for them, I hope. I don't balm Berger kings for moving their HQ to Canada, hey more money in the bank.


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## grantini (Sep 14, 2014)

*My attempt to pile on....*

We all face the conundrum of wanting to get the best deal but not being pennywise and pound foolish. I just bought my first new mountain bike since 2003. I bought it from the same guy I bought my last bike from. He now owns his own shop, and they are the epitome of what a bike shop should be. The service area is essentially in the middle of the sales area, and the sales are handled by the mechanics. I recently took my 2003 bike with a blown shifter and though they are on a ten day out repair schedule, the head mechanic, who has worked on my bikes since the late eighties, suggested that I leave it and he would see what he could do. An hour later, he called and I went and picked it up. I'm not a big racer or even much of a rider any more, but I've been loyal to the guys that work there, since they started in the business, and they reward that loyalty. When I got my new bike, I didn't negotiate on the bike, I DID get what seemed to be a great deal, and they gave me a big discount on all the extra crap I bought. If I could have saved $300 by buying a bike online, and I ride this bike for the next ten years, that savings averages out to $30 a year. I know a lot of you buy bikes more often than I do, but you can do the math. Even if the savings amortizes to $100 a year, what is that worth to you in "special treatment" versus bringing your internet bike to your favorite shop and waiting two weeks got get it back. Anyway, I'm a fan of my LBS and I think my loyalty has been rewarded countless times.... In fact I think on an ROI basis, the premium I've paid for my bikes over the last thirty year has been excellent.


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## grantini (Sep 14, 2014)

Another great example: A couple years ago I had my MB on the roof rack... coming back from a long ride I was tired and not paying attention. I did what I have managed to never do in thirty years of riding, I drove into the garage fast with the bike on the roof. Once I stopped cussing I loaded the bike and took it to my local LBS. It was quickly determined that replacement parts for my 2003 rock shocks were no longer available. It looked like I would have to buy a new bike.... I didn't want to, I really liked that bike and it still had plenty of miles left in it. My favorite mechanic mulled over it and said "leave it here, I'll see what I can do." Sure enough a couple days later, he called, and told me to come get it. Turns out he had a bunch of old parts at home, and was able to rebuild the forks with what he had. For $100 I was able to avoid buying a new bike for more than two years and the guys at the shop got to have a fair bit of fun at my expense... another great example of return on LBS investment....


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## BikeWizard33 (9 mo ago)

I wonder if in 2022, these margins have increased? My gut tells me it's still same margins for low or high end bikes at around 30%? Bikes may cost more, but that comes with inflation?

Also, have you folks seen any decline in demand?


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## OldMike (Apr 30, 2020)

BikeWizard33 said:


> I wonder if in 2022, these margins have increased? My gut tells me it's still same margins for low or high end bikes at around 30%? Bikes may cost more, but that comes with inflation?
> 
> Also, have you folks seen any decline in demand?


My thought (from Canada at least) s that margins would have to be up to compensate for the fewer sales (due to supply).
The cost of shipping is also a huge contributor (to price increase). 

The LBS i talked to said we're stiill a few yrs away from returning to per-pandemic stock levels.


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## BikeWizard33 (9 mo ago)

OldMike said:


> My thought (from Canada at least) s that margins would have to be up to compensate for the fewer sales (due to supply).
> The cost of shipping is also a huge contributor (to price increase).
> 
> The LBS i talked to said we're stiill a few yrs away from returning to per-pandemic stock levels.


From what I can tell, consumer spending is up amidst increasing interest rates. Low stock levels are probably helping balance with what I would assume would be lower demand this season. With restrictions being lifted, I see spend on other items such as vacations vs. "stay at home" activities.


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## Stewiewin (Dec 17, 2020)

centershot said:


> How much mark up is there on a typical upper end bike? Curious, I know the dealers need to keep the lights on but I'm just wondering how much they really make on a bike deal. My guess is 30% am I close?


ik from my business, manufactures mark up in 1000s%. the s-work frame sells for 4K it costs them 200 to make.


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## OldMike (Apr 30, 2020)

BikeWizard33 said:


> From what I can tell, consumer spending is up amidst increasing interest rates. Low stock levels are probably helping balance with what I would assume would be lower demand this season. With restrictions being lifted, I see spend on other items such as vacations vs. "stay at home" activities.


Ya, You'd think that would be the way, but my LBS's have very little stock and the only thkngs arrvnig are those items which were ordered last yr.


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## BikeWizard33 (9 mo ago)

Stewiewin said:


> ik from my business, manufactures mark up in 1000s%. the s-work frame sells for 4K it costs them 200 to make.


Totally agree, it's mind bending. Vietnam and alike is as cheap as they come in terms of labour. Dont want to debate this... but it makes you wonder if those alibaba carbon copys are just as good. I mean, it's the same labour and machinery. Just minus some QA?


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## J.B. Weld (Aug 13, 2012)

Margins are mostly down.


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## Roge (May 5, 2017)

BikeWizard33 said:


> I wonder if in 2022, these margins have increased? My gut tells me it's still same margins for low or high end bikes at around 30%? Bikes may cost more, but that comes with inflation?


Bike costs have gone up significantly and costs are being passed on to the LBS. Plus the cost of shipping has doubled for bikes that aren’t shipped freight paid.


Stewiewin said:


> ik from my business, manufactures mark up in 1000s%. the s-work frame sells for 4K it costs them 200 to make.


Youre shooting from the hip. What’s your biz, tho that’s irrelevant. Plenty of industries have big margins. Selling produce, jewelry, even the meal you buy at a restaurant have big markups. If you’re selling commodities, your margins are razor thin.

Got any facts to back up that s-work frame that costs 200? Did you include the amortization of costs for the wind tunnel time to develop the frame? The engineer salaries, the patent, legal, liability and marketing costs? The costs to partially assemble, package and ship the bikes to the LBS? I’m sure I’ve omitted a few things.


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## dysfunction (Aug 15, 2009)

You forgot the costs for the molds. Those ain't cheap


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## driver bob (Oct 12, 2005)

OldMike said:


> My thought (from Canada at least) s that margins would have to be up to compensate for the fewer sales (due to supply).
> The cost of shipping is also a huge contributor (to price increase).
> 
> The LBS i talked to said we're stiill a few yrs away from returning to per-pandemic stock levels.


As a Canadian retailer I can say that margins are not up.

I saw my first 2025 lead times early this week.


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## driver bob (Oct 12, 2005)

Also, for my shop: when customers put down deposits on bikes in 2020 and 2021 that locked the msrp for them.
Suppliers have increased their cost to us but we think it's a d!ck move to tell customers... "oh, by the way, not your fault but the bike's now going to cost you an additional $xxx"
So we guarantee the price for them and absorb the additional cost (because we're billed when they ship), it comes from our margin.
Not all shops do this but thats how WE roll...


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## dysfunction (Aug 15, 2009)

driver bob said:


> As a Canadian retailer I can say that margins are not up.
> 
> I saw my first 2025 lead times early this week.


I'm not even in this industry, and that does not surprise me. At all.


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## Roge (May 5, 2017)

dysfunction said:


> You forgot the costs for the molds. Those ain't cheap


Yep. Different molds for each size. And if you want to make more than twelve frames a day, you need more molds.


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