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Inflation or price gouging?

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Inflation or price gouging?

Old 06-24-21, 10:48 AM
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johbren
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Inflation or price gouging?

Ordered a new trek verve 2 in Jan. wont get it till Aug. if Im lucky. Price stared out at $649.00 then two months later it went up to $699.00 now its $729.00 one more price jump ill just have my specialized crossroads fixed up!
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Old 06-24-21, 12:26 PM
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We are getting gouged by the bike industry and there is a zero justification for it Covid or no Covid. The mountain bike I purchased last year for $5200 is now $6700.
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Old 06-24-21, 04:13 PM
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Neither

Everything is worth what someone is willing to pay.

No such thing as price gouging.
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Old 06-26-21, 09:32 AM
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it's called free enterprise (free market system)
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Old 06-26-21, 10:30 AM
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Because there's never been a direct relationship between the MSRP of a bike and the cost of goods sold, I think it's difficult to correctly characterize this as "price gouging". Bikes retail for what they do because that's what people will pay for them, regardless of what it costs to build the bike.

In fact, if you wanted to get down to the fundamentals, bikes probably aren't priced high enough right now. If bikes were priced to ensure a healthy balance between supply and demand, bike shops wouldn't be out of bikes. There are, of course, a lot of factors behind the shortage (logistics, manufacturing, transportation, etc.), but the fundamentals of supply and demand (and price) will always apply in a free market economy and the fact is demand has outstripped supply for quite a while now. What always happens in that situation, whether the market is bicycles, poultry, natural gas, or real estate? The price goes up.
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Old 06-26-21, 12:56 PM
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I'm surprised that prices didn't go up more. Expenses have definitely gone up
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Old 06-26-21, 02:47 PM
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Originally Posted by johbren View Post
Ordered a new trek verve 2 in Jan. wont get it till Aug. if Im lucky. Price stared out at $649.00 then two months later it went up to $699.00 now its $729.00 one more price jump ill just have my specialized crossroads fixed up!
Did you prepay the order?
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Old 06-26-21, 04:11 PM
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Beside the increase in the $$$ amount, look at the level of components which now are stock! I remember when the lowest level of component on the less costly models was Alivio. Now we're seeing bikes, which aren't cheap, coming with Acera, some with Tourney. Seriously?!
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Old 06-26-21, 04:37 PM
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So if you sell a bike you own right now you would not be asking a higher price during this current bike shortage period of time? I already know the answer.
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Old 06-26-21, 08:19 PM
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no
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Old 06-27-21, 09:03 AM
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Old 06-27-21, 09:03 AM
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Old 06-27-21, 09:04 AM
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https://fred.stlouisfed.org/series/M2SL
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Old 06-28-21, 08:49 AM
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BTW, I don’t disagree with the OPs frustration.

Increasing money supply is a type of theft (dishonest scales and measures).

I just wouldn’t blame the bike manufacturers or suppliers.
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Old 06-28-21, 09:58 AM
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Originally Posted by johbren View Post
no
Prepay should have locked in a price if they would have taken it. Bikes have been in short supply for months so I'm not surprised at price increases. And yes raw material prices are going up. Are you still going to take delivery?
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Old 06-28-21, 12:13 PM
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Originally Posted by SkinGriz View Post
No such thing as price gouging.
The hell their isn't. Price gouging refers in when manufacturers of a product and others take advantage of spikes in demand by charging exorbitant prices for the product they manufacture. That is exactly what is happening in the bike industry right now.
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Old 06-28-21, 05:02 PM
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Originally Posted by prj71 View Post
The hell their isn't. Price gouging refers in when manufacturers of a product and others take advantage of spikes in demand by charging exorbitant prices for the product they manufacture. That is exactly what is happening in the bike industry right now.
See post #12.
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Old 06-29-21, 05:37 AM
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Originally Posted by prj71 View Post
The hell their isn't. Price gouging refers in when manufacturers of a product and others take advantage of spikes in demand by charging exorbitant prices for the product they manufacture. That is exactly what is happening in the bike industry right now.
Prices are high because the economic value of bicycles is higher today. Producers don't set prices in a vacuum. In a free market, both producers and consumers together set pricing. If bike X is priced at $3,200, it's because consumers of bike X are valuing it at $3,200 and are paying $3,200 for the product. If bike X is really worth only $2,500 to consumers (but priced at $3,200), then the producers of bike X would have a glut of supply of that model, and bike shops would be overflowing with bike Xs with $3,200 price tags.

As stated earlier, despite the high prices of bikes today, there still is not a healthy relationship between supply and demand. Demand is still outstripping supply (or supply cannot keep up with demand...however you prefer to look at it). If bike X continues to sell out at $3,200 and they can't make them fast enough, then that price is probably too low. It doesn't matter what the price was yesterday, last month, or last year. Producers and consumers set pricing based on today's variables. And today, bikes are more valuable than they were last year. Maybe that'll change a year from now. It probably will. Once the demand is satiated and bike shops are full of bikes again, they won't have $3,200 on bike X any longer. In fact, I wouldn't be surprised if there's a correction in the other direction. You may very well be able to buy some very nice bikes a year from now for much less than you can buy them today.

There won't be any accusations from consumers about price gouging then...
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Old 06-29-21, 11:08 AM
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Originally Posted by SkinGriz View Post

Increasing money supply is a type of theft (dishonest scales and measures).
Not anxious to drive off topic, but, as someone who's worked in the finance sector for 30 years, I can't understand your statement here. Are you saying the creation of credit is theft?
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Old 06-29-21, 05:10 PM
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Originally Posted by blacknbluebikes View Post
Not anxious to drive off topic, but, as someone who's worked in the finance sector for 30 years, I can't understand your statement here. Are you saying the creation of credit is theft?
“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” Upton Sinclair

If it leads to ever higher M2 and ever higher asset prices then eventually higher goods prices that outstrip wages? Then yes = theft.

Chapwood Index - The Real Cost of Living Increase Index Vs Consumer Price Index - Founded by Ed Butowsky

It could also be equated to a type of partial slavery. The Fed wants inflation to lower unemployment? So are they admitting they want all the underclass to be hamsters on wheels?

And probably everyone reading this post will have some unfounded partisan view “My side will correct it if only....” yea, about that.
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Old 06-30-21, 10:06 AM
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good luck out there.
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Old 07-01-21, 09:27 AM
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Originally Posted by blacknbluebikes View Post
good luck out there.
Luck is what happens when preparation meets opportunity.
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Old 07-01-21, 12:27 PM
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It's definitely price gouging. I feel sorry for those that think the increased prices are justified.

Of course the only way to stop the outrageous price gouging is to stop buying bikes, period. The industry is capitalizing on the pandemic and behaving disgracefully. Consumers are being gouged, plain and simple.
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Old 07-03-21, 09:40 AM
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Yes, at this time, it does make sense to fix up our bikes, and for some, maybe sell them as well. Low supply has created a sellers' market, and it applies to us bicycle owners and sellers as well as manufacturers and the millions of middlemen/women. Many retailers, like bike shops, and the legions of service-providers, are also trying/having to recover lost revenues more than covering expenses.

But the bicycle industry, specifically, peaked decades ago and has been truly hurting for years. Bicycle sales have been hurting for years and the industry has tried to survive by selling more of the most expensive lines and building/creating evermore of the latter. I'm about to test-ride a new 400cc motorcycle that has an MSRP that is less than a bunch of current, recent, and less-recent Trek, etc. offerings. Imagine the differential engineering, manufacturing, shipping and other costs of these categories of two-wheelers -my life-long passion. Consider that bicycle costs have very little to do with prices, though prices probably have everything to do with even surviving.

The pandemic compounded the problems. Check out this pre-covid article on one large retailer: note the reference to other weak bike businesses, and pre-covid tarrifs that predictably/purposely raised costs and prices, and also predictably, helped sink a bunch of weak ships:
https://www.bicycling.com/news/a2630...cycle-closing/

Finally, yes, there is a TV program called American Greed on the major business channel in said country.
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Old 07-03-21, 07:13 PM
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Originally Posted by prj71 View Post
The hell their isn't. Price gouging refers in when manufacturers of a product and others take advantage of spikes in demand by charging exorbitant prices for the product they manufacture. That is exactly what is happening in the bike industry right now.
You obviously flunked Introductory Economics.
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