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Old 10-11-11, 10:58 PM   #1
mikepwagner
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Bike Shop Markup vs. Tuning/Inspecting a BikesDirect bike?

Is there any rough standard for the an average LBS markup? I think that I have read hear before that it's very hard to say, but it's likely on the order of 10%.

If thats that's the case, and I want to spend $2200 on a bike, then should it make any difference to an LBS if I buy a bike they are selling for $2200, or buy a $2000 bike from BikesDirect and pay the LBS $200 to assemble the bike, true the wheels, and adjust everything?
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Old 10-11-11, 11:08 PM   #2
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On a bike in that price range, a bike shop would typically mark it up 35%-38%. And their operating overhead expenses are typically about 35%. So their main way of making any actual net profit is to sell you accessories to go with your new accessory magnet... errr... bike.

I've worked on some BikesDirect.com bikes. They cut corners. Maybe it matters to you, maybe it doesn't. They won't be there for you with warranty coverage. Maybe it matters to you, maybe it doesn't. At the end of the day, I'm paid by the hour and will gladly assemble and tune your BD.com bike to be all that it can be, so it's your call. We'd probably charge you $70 labor, our standard tune-up charge. And ironically, we probably make as much net profit from that $70 tune-up as we would by selling you a $2000 bike. Weird how that works.
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Old 10-11-11, 11:18 PM   #3
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For a newbie, I would recommend a local shop.
For fit and warranty issues.
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Old 10-11-11, 11:23 PM   #4
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You will come out ahead if you can work on your own bike ...
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Old 10-12-11, 12:01 AM   #5
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Problem with people with a job, even just at a bike shop?


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Old 10-12-11, 05:07 AM   #6
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Markup and margin are two words for what a shop makes on a product, but work differently.
Markup is the percentage added to the shop's cost, margin is the percentage of the sale price that is gross profit.
A 100% markup translates as a 50% margin. The industry usually speaks the margin language.
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Old 10-12-11, 07:19 AM   #7
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At that price level and with little to no bike mechanical knowledge, no question you should buy directly from a well regarded bike shop.

It isn't just a matter of out-of-pocket cost. The bike shop will assemble your bike correctly, fix or replace any defective items, let you do some "customization" (stem length, etc.) within reason and give you a "tune up" to refine the shifting and brake performance after you've ridden the bike for a while and things have bedded in. They will also support any warranty claims you may have in the future. Bikes Direct will do none of the above.

Bikes Direct is for experienced mechanics who can do all of their own adjustments and can recognize and fix defects, and there are likely to be some. For the novice owner/mechanic they can be a huge headache.
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Old 10-12-11, 07:35 AM   #8
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At that price level and with little to no bike mechanical knowledge, no question you should buy directly from a well regarded bike shop.

It isn't just a matter of out-of-pocket cost. The bike shop will assemble your bike correctly, fix or replace any defective items, let you do some "customization" (stem length, etc.) within reason and give you a "tune up" to refine the shifting and brake performance after you've ridden the bike for a while and things have bedded in. They will also support any warranty claims you may have in the future. Bikes Direct will do none of the above.

Bikes Direct is for experienced mechanics who can do all of their own adjustments and can recognize and fix defects, and there are likely to be some. For the novice owner/mechanic they can be a huge headache.
100% correct
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Old 10-12-11, 08:02 AM   #9
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I've worked on some BikesDirect.com bikes. They cut corners. Maybe it matters to you, maybe it doesn't.
Just for my education, how are they cutting corners on the following bike?

http://bikesdirect.com/products/moto...io_inferno.htm

That really is a question, and not an argument.

When I look at most of their cheaper bikes, it seems like they advertise one component group, but the actual stuff on the bike is a hodgepodge from different component groups. But it appears (to someone who doesn't know bikes) that all the components on this bike are "SRAM Red".

Where is the cheap stuff on this bike?

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We'd probably charge you $70 labor, our standard tune-up charge. And ironically, we probably make as much net profit from that $70 tune-up as we would by selling you a $2000 bike. Weird how that works.
I wondered if that as truly the way it works.

It would seem that if I buy a $2000 bike from BD, and then pay a local LBS to go through it with a fine tooth comb, true the wheels, fit it, etc., the LBS may make net higher profit than if I buy a $2200 from them. In addition, they aren't risking any capital, or keeping the bike on display, or a myriad of other hidden costs.

It looks to me like an economic win/win - they make as much net profit from setting up the bike for me as they would selling me a $2200 bike, and I get a bike that they could not afford to sell me for $2200.

That means that the only real economic question for me is the trade-off between a lower price and warranty work, correct?

This is mostly a thought exercise for me, but what would an equivalent (steel lugged frame, SRAM Red components, Mavic Ksyrium wheels, etc. bike cost at an LBS?

If we have equalized all of the other issues (by paying $200 for assembly, fitting, and tuning), then the only remaining issue is the warranty.

Is there something wrong with this chain of reasoning?
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Old 10-12-11, 08:12 AM   #10
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The bike shop will assemble your bike correctly, fix or replace any defective items, let you do some "customization" (stem length, etc.) within reason and give you a "tune up" to refine the shifting and brake performance after you've ridden the bike for a while and things have bedded in.
Won't the local bike shop do all of that for $200? Someone else posted that their shop would do a tune-up for $70. So if I pay $130 for initial assembly, and $70 for a tuneup 3 months later, aren't I getting everything except the warranty?

Many responders seem to be answering the question, "Whats the difference between buying from BD with no support from a local LBS and buying from an LBS?"

I may not have expressed the idea clearly in the OP, but I was asking about buying the bike fro BD, and paying the LBS to do initial assembly, fitting, etc.
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Old 10-12-11, 08:13 AM   #11
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You will come out ahead if you can work on your own bike ...
Do you understand that's not the question I was asking?
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Old 10-12-11, 08:28 AM   #12
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Bikes Direct is for experienced mechanics who can do all of their own adjustments and can recognize and fix defects, and there are likely to be some.
I guess these folks are at home working on their own bikes for the most part, which would make sense since we rarely see them at the bike shop. We get a lot of BD bikes in our shop to assemble, check out, etc., and the customers are almost always first-time bike buyers and the bikes are very, very inexpensive models. The customers often have literally no idea what to expect from their new bike or from us. They seem to have a kind of haphazard strategy of buying a bike, to be honest. These are the BD customers we typically see for service; which again, makes sense because experienced do-it-yourselfers wouldn't need us to service their bikes.

FWIW, the only bargain online bike I've seen in person that I was impressed with was a Neuvation I saw recently, which was equipped with a full SRAM Force group. We weighed the bike, and it was sub-16.5 lbs, ready to ride. When the customer told us the price he paid for it, I have to admit our jaws dropped a bit. It was in for what we call a "drivetrain tuneup," where we simply adjust the drivetrain, nothing else. The customer had fiddled with it and couldn't get it to shift right. I worked on it myself, and found that the derailleur hanger was misaligned badly. After that fix, it worked great and the customer was happy.

One thing's for sure, online bike sales are here to stay; as a shop you gotta just roll with it and do your best for the customer.
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Old 10-12-11, 08:30 AM   #13
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Won't the local bike shop do all of that for $200? Someone else posted that their shop would do a tune-up for $70. So if I pay $130 for initial assembly, and $70 for a tuneup 3 months later, aren't I getting everything except the warranty?

Many responders seem to be answering the question, "Whats the difference between buying from BD with no support from a local LBS and buying from an LBS?"

I may not have expressed the idea clearly in the OP, but I was asking about buying the bike fro BD, and paying the LBS to do initial assembly, fitting, etc.
You were clear enough. What the bike shop won't do on a BD bike is replace defective items or let you customize the fit. They will make sure everything on the BD bike is adjusted properly but they will only work with what is provided. If something is wrong, you will be on the hook for its replacement.

What I don't understand is why you want to deal with BD if the costs are equal.
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Old 10-12-11, 08:33 AM   #14
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Won't the local bike shop do all of that for $200? Someone else posted that their shop would do a tune-up for $70. So if I pay $130 for initial assembly, and $70 for a tuneup 3 months later, aren't I getting everything except the warranty?

Many responders seem to be answering the question, "Whats the difference between buying from BD with no support from a local LBS and buying from an LBS?"

I may not have expressed the idea clearly in the OP, but I was asking about buying the bike fro BD, and paying the LBS to do initial assembly, fitting, etc.
At that range, the savings are probably great enough that you'll come out ahead buying from BD and getting the LBS to build it up for you IF you get a bike that fits you right and you don't care about the name on the frame. You'd get better components than you'd get on a LBS bike in that range and they'll probably make a higher margin off you. They might not see it that way, but it seems like a win-win to me. Heck if you price it right you might be able to get a professional fit so you know exactly the right size before you buy, and then you could pay them to set the bike up that way. Probably would kill any price difference, but maybe not. At a lower price, the margins aren't big enough to make it worth your time, but at that level they might be.

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Old 10-12-11, 08:38 AM   #15
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I will buy from the bike shop when I can. I recently bought spokes, a hub and a rim to build up a wheel. I paid more than internet prices, but I like having a bike shop to go to. (Our city lost two shops in the last year.) I had a general idea how to put the wheel together, but the LBS owner pointed me to specific resources to consult and talked about different wheelbuilding methods.

The wheel is done, but I don't have the removal tool to take the cog off my old wheel to put in on the new wheel. So on the way home from work tonight I'll bring the wheel by the shop. I expect they will pop the freewheel cog off the old wheel for free, probably put the new wheel in the truing stand and check it out for me, and if they have a fixed cog and lock ring in stock I'll buy those and they'll probably put those on for free, too. They know I'll be back for more stuff when I need it, and that at some point in the future my kids will be out of college and I'll have enough disposable income to actually buy a nice bike from them. In the meantime, they nickel and dime me and I pick their brains and use their tools once in a while. Seems like a fair exchange to me.
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Old 10-12-11, 09:24 AM   #16
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You were clear enough. What the bike shop won't do on a BD bike is replace defective items or let you customize the fit. They will make sure everything on the BD bike is adjusted properly but they will only work with what is provided. If something is wrong, you will be on the hook for its replacement.

What I don't understand is why you want to deal with BD if the costs are equal.
From a long email trail in another forum, it appears that BD is will replace also defective parts.

There are two things that sparked this train of thought:
  1. A number of bikes that I am interested are not available locally. The local shops can't even order them. Most of the the local shops feature one brand - at least in the < $2500 range. There's the Giant bikes shop, the Specialized bike shop, the Trek bike shop, etc. Those aren't the names of the shops, but that's mostly what they are. The LBS with a wide variety of bikes in a wide variety of sizes is largely a mythical beast, at least around here.

    For example, if I wanted a steel lugged bike, or a belt drive bike, no LBS has them in stock.
  2. Talking with the owner of an an LBS about a bike that I will probably buy from him, I realized that he faces a heck of an inventory dilemma. I am interested in a 2012 Civia Bryant Belt Alfine 11. Since that's an unusual taste around here, he has to make a quess as to inventory - does he buy 2 or 3?

    If he guesses wrong, then he is could be stuck with those bike for years until he finally has to sell them at a loss. It seems like a big gamble to me. I wondered if there were a way to reduce his risk.

The simple answer to your final question is that even though the costs are equal - and the LBS is making an equal net profit on both purchases, I am getting a nicer bike than a local LBS can afford to sell me for $2200.
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Old 10-12-11, 09:26 AM   #17
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The price is really going to depend on the bike shop, location, and time of year. For instance, if you're going to have the LBS assemble a BD bike, this is probably a good time to do it. December? Don't hold your breath. And you can forget about getting it done the first nice week in spring (about April here), as their mechanics will have their hands full assembling new bikes, tuning them to new bike customers, and doing spring tune-ups on the regulars' bikes.

Though you didn't ask, that might be another reason to buy from the LBS. Busy bike shops take care of their own first, and walk-ins second. (I'm an exception. I've had enough weird stuff happen, and fixed at my LBS, that the mechanics get a gleam in their eyes whenever they see me walk in. Even if it's just for a new tube!)
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Old 10-12-11, 09:35 AM   #18
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Just for my education, how are they cutting corners on the following bike?

http://bikesdirect.com/products/moto...io_inferno.htm
HeadsetFSA 1" W/SEALED Bearings
Handlebar
6061 Butted Road, BAR BORE: 31.8mm, (52cm:400L,54~56cm:420L,58~61cm:440L)
Stem
Motobecane Superlight Road Aluminum, 1" (1.125+shim) Removable Clamp
(52cm:90L , 54~56cm:100L,58~61cm:110L)
Tape/Grip
Motobecane custom cork wrap Black
Saddle
Motobecane Velo "Comfort Cut-out"
Seat Post
Superlite Micro Adjust alloy, 250mm X 27.2mm

This is not stuff that normally comes on a $2000 bike... or at least you should expect better.

Last edited by LarDasse74; 10-12-11 at 09:41 AM.
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Old 10-12-11, 09:36 AM   #19
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A lot of the folks here work at shops, so they'll tell you to buy from a shop. That makes sense.

For me, I have owned a couple BD bikes, and I don't work in a bike shop. Honestly, they are fine bikes and you will get a lot more for your money buying from them. If you take it in to the LBS for setup, they'll profit nearly as much as if you bought a bike from them--everybody's happy. Some shops will be snobby about a BD bike, others won't--you'll have to shop around.

Keep in mind you will spend some cash upgrading a couple things. The pedals (although most expensive bikes don't come with pedals), the stem, maybe. The bars are fine if you like them, you may or may not. But that's the case with any bike.

That bike looks like a lot of bike for $2k. You won't get that much bike for that price anywhere else.
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Old 10-12-11, 09:39 AM   #20
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Originally Posted by mikepwagner View Post
From a long email trail in another forum, it appears that BD is will replace also defective parts.

There are two things that sparked this train of thought:
  1. A number of bikes that I am interested are not available locally. The local shops can't even order them. Most of the the local shops feature one brand - at least in the < $2500 range. There's the Giant bikes shop, the Specialized bike shop, the Trek bike shop, etc. Those aren't the names of the shops, but that's mostly what they are. The LBS with a wide variety of bikes in a wide variety of sizes is largely a mythical beast, at least around here.

    For example, if I wanted a steel lugged bike, or a belt drive bike, no LBS has them in stock.
  2. Talking with the owner of an an LBS about a bike that I will probably buy from him, I realized that he faces a heck of an inventory dilemma. I am interested in a 2012 Civia Bryant Belt Alfine 11. Since that's an unusual taste around here, he has to make a quess as to inventory - does he buy 2 or 3?

    If he guesses wrong, then he is could be stuck with those bike for years until he finally has to sell them at a loss. It seems like a big gamble to me. I wondered if there were a way to reduce his risk.

The simple answer to your final question is that even though the costs are equal - and the LBS is making an equal net profit on both purchases, I am getting a nicer bike than a local LBS can afford to sell me for $2200.
Well, if you're fairly confident you're going to buy it and are willing to put money down, it's not like he's risking anything to order it for you as he won't be carrying it in inventory. He'll just build it up and you'll go off on it. Restock fees if you don't want it are going to be a problem unless you agree in advance that he passes those on to you if you don't like it.
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Old 10-12-11, 09:43 AM   #21
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Also, I don't think BD sells too many belt drive (or IGH) bikes, so that might mean you can't go through them to get what you want.
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Old 10-12-11, 09:46 AM   #22
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Originally Posted by mikepwagner View Post
Just for my education, how are they cutting corners on the following bike?

http://bikesdirect.com/products/moto...io_inferno.htm

That really is a question, and not an argument.
Handlebar, stem, saddle, seat post are the obvious ones. Not that they would be deal killers but they are cutting a few corners to help keep costs down. Personally, I've looked at buying BD bikes a couple of times and got far better deals buying at Performance Bike Shop. It took a little patience but I scored some nice bikes. I would not hesitate buying from BD if that is where I got the best deal and I would do the assembly myself (I've done assembly on 3 "bikes in boxes" - 2 NIB vintage MTBs and a Nashbar single speed for my son).

I will say that Gran Premio is a sweet looking bike. I'd be very happy to have that in my stable.
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Old 10-12-11, 09:57 AM   #23
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Quote:
Originally Posted by LarDasse74 View Post
HeadsetFSA 1" W/SEALED Bearings
Handlebar
6061 Butted Road, BAR BORE: 31.8mm, (52cm:400L,54~56cm:420L,58~61cm:440L)
Stem
Motobecane Superlight Road Aluminum, 1" (1.125+shim) Removable Clamp
(52cm:90L , 54~56cm:100L,58~61cm:110L)
Tape/Grip
Motobecane custom cork wrap Black
Saddle
Motobecane Velo "Comfort Cut-out"
Seat Post
Superlite Micro Adjust alloy, 250mm X 27.2mm

This is not stuff that normally comes on a $2000 bike... or at least you should expect better.
I'd really question the choice of a 1" steerer tube on a $2000 bike when literally everything these days is 1 1/8". Granted if you bought all those components separately it probably works out that they are paying you to take the the frame. It's a steal then
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Old 10-12-11, 10:00 AM   #24
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Some shops will be snobby about a BD bike, others won't--you'll have to shop around.
This is true. Find a shop that doesn't have an attitude about your BD bike, if you get one.

One other factor that occasionally comes into play is shipping damage, or even pre-shipping damage. This is another small gamble you take when you buy off the Internet. If you buy from the LBS, it's their problem, not yours. If you decide to buy from BD, and the box shows up with any signs of crushing or damage, then 1) take photos as you unpack, and 2) save all packing materials in case you need to make a claim with the shipper.

Someone should design a bike box that lets off a 110-decibel siren when laid on its side, that's what I say
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Old 10-12-11, 10:03 AM   #25
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Originally Posted by joejack951 View Post
I'd really question the choice of a 1" steerer tube on a $2000 bike when literally everything these days is 1 1/8". Granted if you bought all those components separately it probably works out that they are paying you to take the the frame. It's a steal then
I think it's a nod towards the "vintage" styling of the lugged steel frame. Personally I would prefer a 1" with this kind of bike.
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