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  1. #1
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    What is the Mark-Up on bikes and how much can you negotiate?????????

    I am looking into a Santa Cruz Superlight at this time. None of the 3 shops that carry SC in my area have one in stock. If I order one should I negotiate price? Should I just ask for free accesories? Am I stuck paying retail for everything? Any suggestions or opinions would be helpful. I know they have to make money and I am not trying to say they shouldn't, I just do not know what the mark-up is and weather or not the prices are what they are or not and if they are negotiable, how much?
    Thanks

  2. #2
    sarcasm meter: jerk mode santiago's Avatar
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    Quote Originally Posted by Marvin
    I am looking into a Santa Cruz Superlight at this time. None of the 3 shops that carry SC in my area have one in stock. If I order one should I negotiate price? Should I just ask for free accesories? Am I stuck paying retail for everything? Any suggestions or opinions would be helpful. I know they have to make money and I am not trying to say they shouldn't, I just do not know what the mark-up is and weather or not the prices are what they are or not and if they are negotiable, how much?
    Thanks
    When I bought my bike at the beginning of this season my LBS told me that he has a low and a high selling price that he's allowed to sell the bike at. He told me that he is not allowed to set the price for lower than the low selling price and his distributor can come and check invoices. However, he was able to give me free stuff and better prices on other stuff.

    I don't know how universal my experience was or how much of it was BS but I walked away feeling I got a fair deal and I always get a good price when I walk back in even for a $20 knick-knack.
    Last edited by santiago; 07-13-05 at 12:05 PM.
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  3. #3
    I Am Online Now! G-Unit's Avatar
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    Haggling on a special order is not cool.
    I rock peas on my head but donít call me a pea head.
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    I agree with G-Unit...your best bet on haggling would be for a bike that is already on the floor.
    I would suggest this: Tell them that their asking price is on the high end of your pay range. Ask (politely) if there is any way they could come down on the price "so you can afford to buy some accessories from them." I'm guessing one of two things will happen: 1) they drop the price by $1 or $200, or 2) you'll get some freebies.
    Good Luck.

  5. #5
    Throw the stick!!!! LowCel's Avatar
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    There is not nearly as much of a mark up as you probably think. By the time the shop pays shipping and pays an employee to build the bike the profit margin drops even more. The best thing to try to get from the shop is free tune ups for a year or two. That way it will save you money in the long run and it won't cost the shop a whole lot either.
    I may be fat but I'm slow enough to make up for it.

  6. #6
    Weekend Warrior TrumbullCT's Avatar
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    Quote Originally Posted by G-Unit
    Haggling on a special order is not cool.
    I completely agree. Go nuts trying to low ball 'em for bike that has been sitting in their shop. But don't expect a break for one that they're going to order for you. In the end, it's all about how much you're willing to spend and how much you like their services. I find that my shop is on the higher end of the price scale but I like them and know they do good work. I might have found my bike at another SC dealer in the area for less but the comfort level wouldn't have been there.

  7. #7
    Senior Member skiahh's Avatar
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    Hmmm.... a bike on their showroom floor is paid for or financed and costing the dealer money. A special order takes a little time and, presumably, you're going to pre-pay for it before the order. So, they tap a few keystrokes or make a phone call to order the bike, assemble it when it comes in (and the dealer is out no money since you pre-paid) and you come get it.

    There's something like a 40% markup (or 25% off retail) margin on a new bike. However, that's the shop's profit, build costs, overhead, etc. There's more margin in accessories.

    Negotiating isn't cool? BS! Negotiate the best deal you can get on everything you can. Don't be an ass about it, of course, and realize the shop's not going to sell you something if they can't make a little money. Some shops will have less overhead and thus more room to deal. Others will prefer to hold on the bike price and give you parts/accessories discounts. And if you get into a negotiation and the shop is holding their position, don't think they're being jerks... it's just business. If they can sell you something at a discount and make a little money, they will; if they can't they won't and won't feel bad about it.

    Figure out your budget; what you're willing to/able to pay. If it's close to the asking price, negotiate away. If it's stupidly far from the asking price, you should look at another bike.

    All these guys who say you're a jerk for negotiating don't really get the real world. It's just business on both sides. You have a budget and they have a cost. If you can make them meet you get a sale, if not, you don't. It's really not that complex regardless of what kind of whining you're going to see around here about haggling. If you pay more than their bottom line, you're just putting your money into their pockets. And if they sell to you at less than costs plus a fair profit, they're giving you money. That's not cool on either side. The goal is to get the most you can for the least cost to you. Their goal is to extract the most amount of your cash they can in selling you a bike. That maximum amount might just be what it takes to move a bike that's been sitting there for a while in order to cover their costs on it. It might be full retail on a hot new bike. It's just business and if they didn't try to do that every time, they wouldn't stay in business very long.

    Now, as pointed about above, there are some intangibles involved in the process. And, realistically, those are your call. If you get a good feel from a shop, they have a good reputation, you've worked with them before, whatever, it might be worth it TO YOU to pay a premium over another shop. The generic argument of support your LBS is a crock; just because it's an LBS doesn't give it mythical status deserving of protection. If it's not a good shop - if they give you attitude for negotiating, for example, in our capitalistic ecomony - it might be worth going elsewhere. If it is a good shop, they may not negotiate (but will understand the process and not cop an attitude about it) and it might still be worth it to do business with them because of their service, selection, distance, reputation... whatever; that's your call and yours alone. And those intangibles will have a different value for every person on here. I've used mail order and LBS'. I've shopped different LBS' and avoided ones that just didn't feel right, even if the price was lower.

    As an example, I just replaced my XT shifter pods. I could have mail ordered them for probably 20% or more less than I paid, but I wanted them right now. I installed them and adjusted them, so service wasn't really a factor, but timliness was. So I was completely comfortable with paying more for them this time. Another time (had I had better planning!), I'd have ordered them in advance and had them in my stash of parts.

    I expect to get some good flames about this, too... from the same people who think you should just pay whatever the price tag says. Have at it....
    Last edited by skiahh; 07-13-05 at 02:55 PM.
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  8. #8
    TrekDualSuspension Freak!
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    Quote Originally Posted by skiahh
    Hmmm.... a bike on their showroom floor is paid for or financed and costing the dealer money. A special order takes a little time and, presumably, you're going to pre-pay for it before the order. So, they tap a few keystrokes or make a phone call to order the bike, assemble it when it comes in (and the dealer is out no money since you pre-paid) and you come get it.

    There's something like a 40% markup (or 25% off retail) margin on a new bike. However, that's the shop's profit, build costs, overhead, etc. There's more margin in accessories.

    Negotiating isn't cool? BS! Negotiate the best deal you can get on everything you can. Don't be an ass about it, of course, and realize the shop's not going to sell you something if they can't make a little money. Some shops will have less overhead and thus more room to deal. Others will prefer to hold on the bike price and give you parts/accessories discounts. And if you get into a negotiation and the shop is holding their position, don't think they're being jerks... it's just business. If they can sell you something at a discount and make a little money, they will; if they can't they won't and won't feel bad about it.

    All these guys who say you're a jerk for negotiating don't really get the real world. It's just business on both sides. You have a budget and they have a cost. If you can make them meet you get a sale, if not, you don't. It's really not that complex regardless of what kind of whining you're going to see around here about haggling.

    I expect to get some good flames about this, too... from the same people who think you should just pay whatever the price tag says. Have at it....
    I totally agree with this, i mean come on, you guys really think the store looses money? Haggle as much as you can on everything! Its not personal, there is always a markup. You really think the lbs says the price hes getting the bike for on order? Why do employees get a super deal on there bikes? Always haggle! The worst that can happen is him saying i cant lower the price any more, if you dont like there are plently of shops around.
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  9. #9
    Throw the stick!!!! LowCel's Avatar
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    Quote Originally Posted by adelii
    I totally agree with this, i mean come on, you guys really think the store looses money? Haggle as much as you can on everything! Its not personal, there is always a markup. You really think the lbs says the price hes getting the bike for on order? Why do employees get a super deal on there bikes? Always haggle! The worst that can happen is him saying i cant lower the price any more, if you dont like there are plently of shops around.
    The reason employee's get such a great price is because they buy directly from the company not the shop. The company generally gives shop employees a really nice price because if the shop employees are riding their bikes then most likely they will try to steer customers to the same manufacturer.

    As far as haggling there is no harm in trying, but do it in small amounts. Don't think that a shop can drop the price by hundreds of dollars on a bike. On an 1800 bike I wouldn't expect to save much over $50 - $100.
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  10. #10
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    If you read my initial statement, I said I know they have to make money and I am not saying they shouldn't. Anyway, some of you must own shops to get that defensive. For what it is worth, I run a business, and a Special Order is easier to discount because it never hits your inventory dollars. It is paid for before you receive it so you can afford to sell it for less. It increases your turns on your inventory which results in a higher GMROI (Gross Margin Return On Investment). Anyway, I was just curious as to what the mark-up was and how to approach the situation.
    Thanks

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    Quote Originally Posted by adelii
    I totally agree with this, i mean come on, you guys really think the store looses money? Haggle as much as you can on everything! Its not personal, there is always a markup. You really think the lbs says the price hes getting the bike for on order? Why do employees get a super deal on there bikes? Always haggle! The worst that can happen is him saying i cant lower the price any more, if you dont like there are plently of shops around.
    our store doesnt really do the whole haggling thing. there is a certain level that trek tells us to sell their bikes at, and thats what we sell them as. I've talked to guys who have worked at other shops, and generally shops that allow haggling will add another 100-200 bucks to the price of the bike so that a customer can get the satisfaction of a hard-fought victory/deal.

    the only time when we are allowed to knock down prices is on last year's models, and even then its like 10% per year, not a whole lot.

  12. #12
    Dismember harov3's Avatar
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    I got my current bike for 20% off list price. The store owner wanted to sell as many Haro's as possible just then. In my case the distributor was rationalizing retail outlets and my lbs was determined that they were going to be a surviving outlet. Point is you dont know whats going on at the shop so you may as well ask.

  13. #13
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    I do notice some shops have bikes already discounted and others have MSRP on all bikes, therefore, some negotiation should be acceptable for stores that show MSRP. I will pay MSRP and go for some free accesories, I think that is my best bet.
    Thanks

  14. #14
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    In my shop we can do a little haggling.... that being said if you walk in and start talking price and discount right away you are screwed.. I am gonna charge you for EVERYTHING... BUT if you are more interested in a bike and then talk price a little later we will most likely cut you a little slack and put you on our mental favored costomers list... those people are generally charged less and are good friends... but the foreigner people that come in and are really asses about prices etc. never get our friendship and are almost never cut any slack...

    bottom line realize that they are making money and that they have some areas of negotiability... but dont push it... talk price after you have made friends and shown that you are serious about a bike or product
    -Jacob

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    Good advice, I have already been their twice and plan on going a couple more times to find out what else I will need and to solidify my decision.
    Thanks

  16. #16
    I drink your MILKSHAKE Raiyn's Avatar
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    Quote Originally Posted by LowCel
    The reason employee's get such a great price is because they buy directly from the company not the shop. The company generally gives shop employees a really nice price because if the shop employees are riding their bikes then most likely they will try to steer customers to the same manufacturer.

    As far as haggling there is no harm in trying, but do it in small amounts. Don't think that a shop can drop the price by hundreds of dollars on a bike. On an 1800 bike I wouldn't expect to save much over $50 - $100.
    Exactly. After the shop pays the utilities, mortgage, credit card fees, and my salary there isn't a whole lot of "profit" on a bicycle. Where we actually get money is on accessories and repairs, so we'll consider throwing a sizable discount on accessories long before we'll drop the price on a bike. On a special order bike you pay the price we quote you or we don't order it. Usually if it's one we don't have in stock it's because we don't expect selling it and would rather concentrate on getting models that will sell.

  17. #17
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    Quote Originally Posted by G-Unit
    Haggling on a special order is not cool.
    I never really got this. If I'm going to special order a bike, the shop 1) gets paid before they order; 2) knows when the purchase the bike taht i'm going to buy it.

    No risk for them--just pure profit. if it takes them 1 hour to order and assemble and they make $200 profit that's not bad--and it doesn't matter how much the bike actually costs, the profit is the same.

    PersonallY I always expect a LOWER percentage markup on SO items, as there are fewer costs to recoup. And if they're going to order it anyway, they're not providing a service that I can't get anywhere else. I'm much more likely to ask for an internet proce match on a SO than on an in stock item.

    Just my 0.02. And haggling is always 'cool', so long as you're polite about it. never hurts to ask; the store would certainly prefer that you ask for price reductions than walk out without buying if they could have had the sale with $20 less profit.

  18. #18
    TrekDualSuspension Freak!
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    Thats what makes me laugh, lbs puts 200 bucks on the price so you can haggle and feel good, then somebody goes in a doesnt haggle and the store gets 200 bucks extra. What has worked for me always is test ride a few bikes even if you know which one you like, show a lot of interest on the one you like, then haggle, when he drops down the price tell heim to help you out some more because you are going to buy helmet, bags and other things. It always works and nobody gets offended.
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  19. #19
    pacifist-vegetarian biker
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    IMO you should proably be able to get 5-10% off on a SO. instead of asking for free services, you can do all the assembly/adjustments yourself if you are mechanicly minded. and save the shop a little bit of work. Some shops are proably more willing to haggle depending on how much business they do. The mark up on bikes is around 40%, but after paying your rent, shop staff and the cost of bikes that don't sell, the margins aren't that great.

    I know from looking at dealer catalogs, there are minum selling prices from some bikes and some parts. I know that shimano XTR stuff has a fairly high minium price, but in that case, the shop can always throw in cables, brake pads, etc.

    Anyways, you can ask for a little bit off a SO, or ask for discounts off accesories, but don't go overboard.
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  20. #20
    one less horse cryptid01's Avatar
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    I got a deal on my last two new bikes, both of which were special order.

    Having said that, I was on the informal "preferred customer list" and had a good relationship with the owner. Furthermore, I told him I wanted the bike first, then asked what he could do to help me out, so there was no haggling involved per se.

    Now I work for a shop, so I will be able to EP my next bike. Muahahahaha!

  21. #21
    Senior Member robo's Avatar
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    I haven't worked in a bike shop, but the idea of haggling over a special order makes some sense. With a SO, the shop is nothing more than a middleman between you and the wholesaler.

    From the comments i've read here and on other bike boards (and the comments here are very tame compared to some of the near psychotic rants i've heard from self described bike shop owners/employees), many bike shops are not really run from a 'business' perspective.

    If a stranger walks into a shop, looks at a bike, and offers to pay less than sticker price, why would you flatly turn him down, but give the same price to someone who chats with your employees? Either the price works for your business, or it doesn't. Even if that guy walks out with the bike and never buys anything else, you made a profit, and even a slimmer profit is better than letting merchandaise get dusty on the shop floor, right?

    Not saying that a shop should let stuff go for a loss (unless it's been sitting in the store forever), but should it matter if the customer is 'friendly' or a total stranger?

  22. #22
    Senior Member skiahh's Avatar
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    Quote Originally Posted by LowCel
    As far as haggling there is no harm in trying, but do it in small amounts. Don't think that a shop can drop the price by hundreds of dollars on a bike. On an 1800 bike I wouldn't expect to save much over $50 - $100.
    Do it in the most amount you can get. The shop will sell at a point that is profitable to them and no less. On my last couple of bikes, I paid $2100 for a $2500 bike and then - at another shop and only because I had moved halfway across the country- got $200 off a $1900 frameset. I got a new fork, too and a good price. The bike and frameset were special order, the fork was out of stock.

    I did do research and worked with the managers of both stores (actually, the first one was part of my riding group, though I was pretty new to the group) and after talking about the bikes, we arrived at a mutually agreeable price. I never asked for discounts on service or accessories, though both places gave me the standard 10% off accessories for purchasing a bike from them. I had the second shop do the build up of my bike, and they gave me a decent rate - as part of the deal - for that, too.

    I went in with my own budget and and idea of what I felt was their best price, based on my research. I was also ready to not get the bike if my research wasn't good or the shop wasn't inclined to deal. During the haggling, I was also ready to change what my idea of the best/fair price was based on how the process went which might have meant paying a little more than I thought I could get as a "best deal" at first. Like I said before, it's just business.

    Maybe because I was an educated customer, they felt my good recommendations/referrals would be worth a little "advertising" cost in the form of a discount; I don't know, but I did recommend them to numerous people, some of whom bought bikes and other stuff. And by the same token, I've shared bad shop experiences with people as well who then, presumaby went elsewhere for a bike.

    Oh, and one thing (from my perspective, at least), if you're going to negotiate, do so in good faith. It's OK to make tenative probes, without planning on buying, but when you no kidding start the haggling process, you have to be willing to if the shop agrees to your offer. You can't then say something like... OK, I want to go check XYZ shop first. If you open a negotiation, you must be ready to conclude it if you get to an agreement!
    Last edited by skiahh; 07-14-05 at 01:39 PM.
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