Originally Posted by
IRONHEAD1
maybe you are right and no i dont feel swindled, i just have a hard time understanding why these places feel they need to make 100% markup on everything. it would make sense to me to make deals here and there to move bikes and still make a reasonable profit. im just one person and I am sure they have made a couple grand off me already this year.
Most every place is actually the same. Due to my intense interest in the bike industry I have often wondered why the customers in this industry seem to price in-elastic and are always under the impression that they are simply handing all their money away if they buy anything. Most retail margins are in the 25%-40% range at places like big box stores and in the 30%-80% range at most mom and pops. Even then the average net is 3%-4%. Figure out what $ amount worth of bikes you'd have to sell to net out you current salary if you only netted 3%-4% from their sale. I've done the math....it's frightening. It's also why I still operate my bike related business in a sort of industry grey zone. The traditional model is crap for the buyer and the seller.
Consider the NBDA's figures for average gross margin on a bicycle sale 30%-40%. Now let's assume you want to offer the best prices in town and make up for it with volume.....so you discount from MSRP to 20%. Seeing as how many shops net 3-4% (and knowing that a lot of a shop's business is from service and sales of accessories with higher margins) you could have theoretically broke even on your bike sales....at best.
....but as the saying goes....you may have lost money, but that's OK. You'll make it up on volume.