I know this sounds hard to believe but there's not a huge profit margin even from a 1K bike. I remember back in high school a $119.00 dollar bicycle had a profit margin of about $1.30!!! I suspect it's less than that today but people think a local bike shop makes more but it's probably less.

Last week a customer walked into the LBS I frequnt and said he wanted to buy a full size hybrid. You're not going to believe this but he told the owner he would buy the hybrid only if he received a BMX for FREE as part of the purchase!