Road Cycling - Msrp?

I am new to this forum and road bikes also. I have a quick question about MSRP. Do most shops charge MSRP for the bikes they sell? I e-mailed the only shop close to where I'll be moving to in a few weeks asking them how their prices compared to MSRP. They replied saying they charge MSRP. Like I said, I am new to road bikes and just getting back into riding period (it's been about 5 years since I have used my bike for anything other than a commuter), but...I have never heard of stores actually selling stuff for MSRP (regardless of what equipment we're talking about). Is this normal? I'm afraid that this store is the only shop for a few hundred miles. I guess if this is the only store, I'm stuck with them anyway. Thanks a lot for the help.

Most LBS will be at MSRP or even slightly above if their local market will support higher pricing. However, now is a good time to be looking at 2002 models as the 2003s are hitting the market. If you can find the bike that you want instock in a 2002 model, then you should be able to get a good deal. I just bought a 2002 Trek 1000 for $60 below the regular LBS/MSRP pricing. Just be sure to get a bike that fits you and that you like. When setting your budget, don't forget all the "accessories" you will need.

And welcome to the forum!! :beer:

MSRP can be a variable price. The LBS receives a discount depending on how much product is bought. Some manufacturer's discount is as little as 10%, but can be as much as 40% if the LBS guarantees a certain volume of buying. But the MSRP will be determined by whichever discount is received. (The 10% "Profit" is often used up by the shipping charges to get it to the LBS. Companies don't ship for free unless the LBS orders $500. to a $1000. worth of merchandise.; --that also varies from company to company.)
Many manufacturers insist that the LBS must sell at the MSRP or they will no longer sell to the LBS.

Sometimes even the mailorder companies have to abide by these rules if they want to keep a product in their catalog. But not always.

Originally posted by ljbike
MSRP can be a variable price. The LBS receives a discount depending on how much product is bought. Some manufacturer's discount is as little as 10%, but can be as much as 40% if the LBS guarantees a certain volume of buying

I don't know what experience you have with that...but don't you think a store would have an incredibly difficult time operating if its profit margin on its main products, bicycles, was less than 10%?

At the store where I work, we usually sell at MSRP or sometimes lower depending on the time of the season and the customer demand for a certain model. On some of our 2002 Litespeed frames...we've taken off almost $1000 off the msrp (but we still make tons of money on it :) ). The fact is, we rarely see a reason to "haggle" and "negotiate" prices with customers. You pay for good service when you come to our store...so if you don't like the price or if you can find a bar for x dollars cheaper at x website then you can get it from there.

Our margin for a lot of the bikes is around 45%-60%. I'm not sure if this is the same for other bike stores but I do know we sell a LOT of bikes durnig the busy periods and perhaps we get special treatment *shrug*

Many manufacturers insist that the LBS must sell at the MSRP or they will no longer sell to the LBS.

Well, that's illegal. The manufacture can't tell a store what price to sell something for. It can't even be written in a contract or anything like that. The manufacture can tell the shop they can't advertise a price lower than $xxx.xx, but the shop can sell it for whatever price they want.

The biggest reason you will find a bike shop that sells at or close to MSRP is because they have to in order to stay in business. Last year more bike shops closed than opened, it's a rough business to be in.

On the "extra-profit" on a sticker, I wouldn't pay it over MSRP. It's certainly not there to make up for shipping charges which will only cost around $20-30 per bike if even that much (and is considered a "cost of doing business" and should be absorbed in the markup over wholesale). If the shop needs to charge an extra 10% over MSRP in order to "make it", they aren't going to be around very much longer anyways because there will be another shop around town that doesn't charge it.


MSRP can be a variable price. The LBS receives a discount depending on how much product is bought. Some manufacturer's discount is as little as 10%, but can be as much as 40% if the LBS guarantees a certain volume of buying

I think you are confusing MSRP and wholesale cost. MSRP will be the same number in all of the US, but may be a little different in Canada and different again in some other country. It has nothing to do with how much the store sells or anything like that. The part that is variable is wholesale price, or the cost that the LBS buys the bike/part for, then they mark it up so that they can sell it to you. I'm actually suprised at Ken's numbers, I would figure mark-up would be even higher on bikes, closer to the 80-100% mark (ie that $1500 road bike cost the LBS $750).

Andrew

Thanks to all those that have replied. It makes me feel a little better to know I'm not getting completely ripped off (I hope). Thanks again.

Many manufacturers insist that the LBS must sell at the MSRP or they will no longer sell to the LBS.


Well, that's illegal. The manufacture can't tell a store what price to sell something for. It can't even be written in a contract or anything like that. The manufacture can tell the shop they can't advertise a price lower than $xxx.xx, but the shop can sell it for whatever price they want.


You're only half right. The manufacturer certainly cannot force the retailer to charge a certain minimum price, however they most certainly CAN refuse to sell product to whomever they choose for whatever reason (outside of a monopoly situation like microsoft.)

Which means you'll never find, e.g., a moots frame on sale at any retailer who wishes to remain a moots dealer.

Originally posted by rrweather
Thanks to all those that have replied. It makes me feel a little better to know I'm not getting completely ripped off (I hope). Thanks again.
If I were you, I would go to a near by urban area where there are lots and lots of LBSs (lots of competition) and get the bike there. I'm sure you'll find a much better deal than MSRP.

For ex. I got a $700 hybrid for $450 and a $1,300 road bike for $1,000 (final price, no tax).

But the only problem I see with that is when you need service/adjustments, you'll have to travel far to get it.

Originally posted by Cadd

If I were you, I would go to a near by urban area where there are lots and lots of LBSs (lots of competition) and get the bike there. I'm sure you'll find a much better deal than MSRP.

For ex. I got a $700 hybrid for $450 and a $1,300 road bike for $1,000 (final price, no tax).

But the only problem I see with that is when you need service/adjustments, you'll have to travel far to get it.

There may be other, albeit less obvious, problems with this approach. Your LBS may have a few less dollars available to hire and pay employees in your town. It is possible that your LBS will have a bit of trouble sponsoring that softball or soccer team. Maybe your LBS will not be able to furnish a prize for the charity auction. Could be your local government will lose the benefit of the sales tax revenue. You might find that you will miss that close and continuous relationship with the cycling community in your neighborhood. Could even be that your decision will bring about the owner's decision to close up shop.

None of this has anything to do with cycling though. Does it?