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Where we are in 2020 and the cost of road bikes

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Where we are in 2020 and the cost of road bikes

Old 12-19-20, 06:50 PM
  #126  
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Originally Posted by rubiksoval
Bulk purchasing power.

It's the same reason why Walmart is cheaper on everything than your local mom and pop grocery store.
I dont think this accurately answers the question of 'why are framesets only $1000 less than full builds'.

in the past, I've seen a frameset listed for something like $2500 and an Ultegra build for $3500, so this question has popped into my head too.

If the bike brand has incredible purchasing power to buy components in bulk for cheap prices, then why aren't they able to buy framesets in bulk for cheap prices? They have the same purchasing power for framesets as components.

In reality, framesets are bought in volume and many boutique/smaller brands sell their framesets for gobs of money because they can and not because they have to.
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Old 12-19-20, 07:04 PM
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Originally Posted by Maelochs
yeah, I know nothing about formal economics studies, but it did seem odd to me that a necessity would be "elastic:" when the need obviously was constant ... and luxury items, obviously, have changing demand because of changes in the economy and where rich people chose to invest.

I didn't want to get into it, because starting from "ignorant" there weren't a lot of better places I might get to.

The idea that inelastic items are priced differently (whichever term is correct--I certainly trust you on this one) is common snese ... anyone who has bought anything can see that.

While scientists get it wrong ... i know they get it right too. And I expect you know the terminology in the field in which you specialize.

Still, though ... if you economists are so smart, why have we been doing "Boom and Bust" and bubbles for the past 250 years?

You know what I will let trickle down on those "supply-side" economists ....

TY for the reasonable reply.
Originally Posted by Koyote
Hey, man, I’m a microeconomist. You’ll have to hang that one on the macroeconomists. 😂
As a professional political scientist (international relations Ph.D.), I hate to ever defend an economist, but economics and political science are both often beset by a few problems in studying social science. 1) We are often studying outcomes, explaining why they occur, and identifying patterns. It is rarely deterministic, and committed policy makers are happy to ignore even high levels of consensus (there is ongoing data on IR academics' views on a range of issues though the TRIPS project - the wisdom of the crowd of scholars has often been prescient, if ignored). 2) By studying social interactions we can sometimes change them and now our explanations of how things work no longer work because we're making all sorts of new mistakes. This is way too much of an oversimplification and only scratches the surface of the complexity of studying social science.

As for bikes - my Pinarello with Di2 and disks is almost exactly $1000 more than the same bike with mechanical, and that Pinarello is about $1000 more than the Orbea with Ultegra I bought in 2007, not accounting for inflation. I got it because I wanted it; I don't buy many luxury goods, and relative to a more expensive car or a motorcycle (my old passion), it didn't seem that insane. To a non-bike buyer, sure it's insane. I know lots of people with much more expensive bikes; many of them are incredibly fast and race. A small number don't ride much. And one of the strongest dudes I know is on Claris. It works for him for now - he's looking to upgrade as he can afford to. Point of this paragraph? No idea. People will have many different motivations for buying what they buy.
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Old 12-19-20, 07:29 PM
  #128  
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Originally Posted by ericcox
As a professional political scientist (international relations Ph.D.), I hate to ever defend an economist, but economics and political science are both often beset by a few problems in studying social science. 1) We are often studying outcomes, explaining why they occur, and identifying patterns. It is rarely deterministic, and committed policy makers are happy to ignore even high levels of consensus (there is ongoing data on IR academics' views on a range of issues though the TRIPS project - the wisdom of the crowd of scholars has often been prescient, if ignored). 2) By studying social interactions we can sometimes change them and now our explanations of how things work no longer work because we're making all sorts of new mistakes. This is way too much of an oversimplification and only scratches the surface of the complexity of studying social science.

As for bikes - my Pinarello with Di2 and disks is almost exactly $1000 more than the same bike with mechanical, and that Pinarello is about $1000 more than the Orbea with Ultegra I bought in 2007, not accounting for inflation. I got it because I wanted it; I don't buy many luxury goods, and relative to a more expensive car or a motorcycle (my old passion), it didn't seem that insane. To a non-bike buyer, sure it's insane. I know lots of people with much more expensive bikes; many of them are incredibly fast and race. A small number don't ride much. And one of the strongest dudes I know is on Claris. It works for him for now - he's looking to upgrade as he can afford to. Point of this paragraph? No idea. People will have many different motivations for buying what they buy.
My wife is in your tribe, right down to the IR field, so I understand where you're coming from.

Regarding macroeconomic policy: we have the same problem. For example, there is much consensus on certain issues -- some expressed through a survey of leading economists. But getting policymakers to listen is a different matter.
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Old 12-19-20, 07:38 PM
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Originally Posted by mstateglfr
I dont think this accurately answers the question of 'why are framesets only $1000 less than full builds'.

in the past, I've seen a frameset listed for something like $2500 and an Ultegra build for $3500, so this question has popped into my head too.

If the bike brand has incredible purchasing power to buy components in bulk for cheap prices, then why aren't they able to buy framesets in bulk for cheap prices? They have the same purchasing power for framesets as components.

In reality, framesets are bought in volume and many boutique/smaller brands sell their framesets for gobs of money because they can and not because they have to.
I think the answer to your question lies not in purchasing, but in production: every bike manufacturer sells many different frames, and they change (at least the paint) every single year - which means that any particular frame is produced in relatively small quantities and hence economies of scale are low. Groupsets, on the other hand, are produced in much higher volumes, and the designs tend to change only every several years -- so those manufacturers have much larger economies of scale which drive down costs.
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Old 12-19-20, 07:48 PM
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Originally Posted by Koyote
I can tell you, as a person with a PhD ...
Originally Posted by ericcox
As a ... Ph.D ...
Overheard at a graduation ceremony: "Why do so many people get degrees in philosophy?"
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Old 12-20-20, 12:19 AM
  #131  
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Originally Posted by Koyote
I think the answer to your question lies not in purchasing, but in production: every bike manufacturer sells many different frames, and they change (at least the paint) every single year - which means that any particular frame is produced in relatively small quantities and hence economies of scale are low. Groupsets, on the other hand, are produced in much higher volumes, and the designs tend to change only every several years -- so those manufacturers have much larger economies of scale which drive down costs.
Totally agree- production of frames is smaller than groupsets for sure. 1000 ultegra drivetrains can be purchased, but only 200 of 5 different frames for those 1000 drivetrains. So each frame's overall volume is lower.

I was (confusingly) commenting that when a frame is priced incredibly high and only $1000 under a very nice bike, it isnt priced that high because the fameset costs a lot due to low production. That individual frameset costs the company the same amount as a frameset that is fully built.
If BrandX contracts with a bike manufacturer to make 10000 frames, then BrandX can just hold back 400 for sale as framesets. The cost is the same for those even though they are sold individually.

I didnt express that well before.
The margin on high level carbon framesets has to be significant.
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Old 12-20-20, 11:20 AM
  #132  
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Originally Posted by rubiksoval
Frankly, a high-end 10-15k bicycle really pales in comparison to a $150,000 watch, in my opinion. At least there's some utility.
Man, I would get a LOT of utility out of this - if I ever decide to sell my business, this is my retirement gift to myself:
,

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Old 12-20-20, 11:57 AM
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Please .... all you philosophy PhDs ...... don't bring up definitions of "utility .....
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Old 12-20-20, 12:12 PM
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Maybe the price of high-end frames from companies like Trek, in addition to being determined by the factors already mentioned, is meant to suggest that their bikes' frames are of the highest quality while also hinting that they don't really want to be in the business of selling frames.
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Old 12-20-20, 12:45 PM
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Originally Posted by Maelochs
Please .... all you philosophy PhDs ...... don't bring up definitions of "utility .....
I haven't seen anyone in this thread claiming to have a PhD in Philosophy.
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Old 12-20-20, 12:56 PM
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I was sort of hoping to see a vigorous debate over the various meanings of "utility" and figured someone with a PhD would pick up on that ....

I guess I won't be getting a PhD in Communications .....
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Old 12-21-20, 09:05 PM
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Price gouging is a practice when the demand curve is less elastic (demand is not as sensitive to price). Trump put in tariffs right when demand for bicycles exploded due to the lockdown and distancing orders. There are part shortages and bike shortages.
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Old 12-21-20, 09:06 PM
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What keeps time better my $20 Casio or an $80,000 Piaget?
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Old 12-21-20, 09:32 PM
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Originally Posted by helmet4000
What keeps time better my $20 Casio or an $80,000 Piaget?
I think the added utility is that you can trade the Piaget for a meal and a ride home after a really outrageous night.
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Old 12-21-20, 10:16 PM
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Originally Posted by Maelochs
I think the added utility is that you can trade the Piaget for a meal and a ride home after a really outrageous night.
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Old 12-22-20, 09:49 AM
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This may have been posted in this thread, but I don't have time to read all the posts. But, this is the reason prices are sky high.

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Old 12-22-20, 10:14 AM
  #142  
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Originally Posted by Sojodave
This may have been posted in this thread, but I don't have time to read all the posts. But, this is the reason prices are sky high.
for those that dont want to watch a 13min video documenting a lack of available bikes, dave is saying prices are high because inventory is limited.
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Old 12-22-20, 03:58 PM
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Originally Posted by AcesHigh007
I'm afraid it's time for Economics 201 to begin.

Ever heard of the concept of Price Elasticity / Elastic and Inelastic goods? Elastic goods are those things that the general population NEEDS. I.e. Toilet paper, soap, basic food, etc. Inelastic goods are those things people WANT. I.e. Mercedes and $12000 road bikes.

Elastic goods - Along the supply demand curve there is an equilibrium price that the market will find that maximizes profit. The higher the price, the fewer items will be sold. The lower the price, more items will be sold. The market will find the optimum price.
Inelastic goods - Are typically priced higher and lowering the price can often lower the demand.

Most the high rollers here are all too willing to pay insane prices because you think you are Peter Sagan (you are not).

I stand by my original statement. The pricing of road bikes is highly contrived. This excessive pricing started long before Covid, so it's stupid that so many of you are associating bulk of the excessive pricing to the pandemic. What has changed is that the stores are not lower prices. The retail prices had been raised long ago. What is your next excuse?

Yes I can afford a $10k road bike. If I wanted, I could buy a $300k road bike. And the reason I can is because I AM CAREFUL WITH MY MONEY.

People keep referring to hydraulic brakes and Di2 as a driver for rising prices. This is largely a lie as well. How much is a complete Di2 + disk setup? $2200. Let's do the math: $2200 minus $1000 (for Ultegra Mechanical). So a 'modern' bike with Ultegra Di2 + disc should cost around $1200 more than mechanical old school (at the max). Yet prices have increased many thousands of dollars and the frames are basically the same. In 2014, a Cervelo S3 frameset was $2300. Now the S Series frameset is $4k. Yes the S Series may be a couple percentage points stiffer, but high end road frames are at diminishing returns.

Face it. You're paying excessively higher sums of money for minute returns because you think you're Peter Sagan.

And no I don't have any interest in paying $6500 for a bike that is basically the same as my old $3500 bike with a $1200 group.
Every cheap person on the planet describes themselves as ‘careful with their money’
Own it.
Plus we all know that you have a Peter Sagan jersey and poster
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Old 12-22-20, 05:08 PM
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Originally Posted by downhillmaster
Every cheap person on the planet describes themselves as ‘careful with their money’
Own it.
Plus we all know that you have a Peter Sagan jersey and poster


In my experience, some of the biggest spendthrifts like to describe themselves this way.


I especially love this line, because it is sooo meaningless. I mean, I could afford a $300k bike too, I suppose, if I just pulled the money out of my retirement savings. Oh, and if such a bike existed. After all, in 2020, having $300k is no big deal.

Originally Posted by AcesHigh007
Yes I can afford a $10k road bike. If I wanted, I could buy a $300k road bike. And the reason I can is because I AM CAREFUL WITH MY MONEY.
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Old 12-22-20, 06:59 PM
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Originally Posted by Koyote
I especially love this line, because it is sooo meaningless. I mean, I could afford a $300k bike too, I suppose, if I just pulled the money out of my retirement savings. Oh, and if such a bike existed. After all, in 2020, having $300k is no big deal.
Yeah, that's nothin'. If I wanted, I could buy $3,000,000 cycling socks. And the reason I can is because I AM CAREFUL WITH MY MONEY.
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Old 12-22-20, 09:49 PM
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If I wanted to buy new high end bike and wanted to economize, I would look for factory pre-built bike models without any options offered on them and find what I want in the lineup. Once you are given options to choose what you want on the bike, it is always quite a bit more expensive simply for having a choice. Anybody who ever sold something to public knows well that options can kill your business profit fast unless you charge a lot for them (and even then you better be high volume production and work it into your selling strategy like the big brand name bike sellers do).

Here the OP is shopping on one such site and is wondering why is it so much more expensive than when he bought his bike years ago. I bet that old bike didn't come with options to choose.
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Old 12-27-20, 07:17 PM
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Originally Posted by AcesHigh007
I purchased a Cervelo S3 in 2014 and had a very pleasant experience. The retail price was $4k, I received a good discount and I felt good about my purchase. Now I am looking for something between road/gravel bike and am astonished at the prices for what companies are selling. To continue with Cervelo, their Caledona base with Di2 is $4500. For $4500, the base model comes with alloy stem and bars, doesn't have integrated cockpit, crap wheels, and has an alloy seatpost. It is the $6500 Caledona 5 Di2 that has these features and even still, the wheels/hubs leave a lot to be desired.


So $6500 to feel like I am purchasing a bike in the food chain where I was in 2014?


Total out of the door in 2014 was $3600. The Caledona 5 Di2 would be $7100. I'm seeing this across the board. Trek selling $6500 road bikes that have alloy bars/stems, low grade saddles and questionable wheelsets.


This seems the equivalent of walking onto a BMW lot and seeing a base 3 Series is suddenly $75000. Am I missing something here?
I had a BMC SLC01 Promachine 01 with Dura-Ace in 2009 for $4800
I bought a BMC Roadmachine 01 with Ultegra in 2016 for $4500
had I stayed in the same food chain like you say and went with Di2, would have been an other story.

Old Dura-Ace quality became the new Ultegra.
they created a new quality with the Di2 which comes with a premium.
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Old 12-27-20, 07:57 PM
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There is a difference between being a skinflint and being poor. I always try and go for value. There was a bike which came up (frame just slightly undersized, !@#$% it), a Rocky Mountain Sherpa 30 with the 853 tubing. This sample is a 2011 model. That's the bike I've been looking for for a long time. These bikes were around c$1500 new but the going rate for them on the used market is about $4-450, depending on year and condition. To me that is a great value in a good mass production bike which I'd be very happy for decades with I think. There are so many bikes out there to choose from. I don't think I would ever buy new. Same thing with many clothes. Most of the ones I have are used. I bought a timeless in style 100% cashmere Zegna sport blazer which needed minor alterations to fit for far shy of the $2200 original price. Yep, $3. I've bought lots of things like that. If you are patient and can live with going without for a while... sometimes a long while, then things do show up.
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Old 12-31-20, 01:40 PM
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Originally Posted by AcesHigh007
But I thought everyone was broke and needed government subsidies to pay the rent and buy bread? Meanwhile $7-$15k carbon road bikes are flying off the shelves so quickly that manufacturers can charge higher prices on the premium models. Something doesn't add up.

Hear me out: there is this concept called income inequality. Google it sometime.
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