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do all bike dealers sell for retail when it oomes to low end bikes?

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do all bike dealers sell for retail when it oomes to low end bikes?

Old 04-26-07, 01:24 AM
  #1  
slowrider24
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do all bike dealers sell for retail when it oomes to low end bikes?

i was kind of surprised when looking around for my bike. all the nearest dealers were charging msrp. i thought about driving out farther to see if i could do better but decided not to with the way gas is and i do value my time. im sure the high end bikes are somewhat flexible as far as price since there has to be lots of profit margin, but it was kind of weird to see a bike shop owner not budge much on their bottom line bikes. In the end I got a free frame pump and bottle cage with water bottle but I still paid msrp. and this was for an 07 model...im talking about current model bikes. i don't know if this has to do with the time of year (warm here in the south) and/or my location.
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Old 04-26-07, 02:13 AM
  #2  
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any product or service provider will tell you that the money is with the higher-ticket items. profit margins on low end goods are lower. additionally there is a certain amount of administrative overhead that goes into selling any bike; this is a flat opportunity cost which eats into margins even more on cheaper items (employee time, retail space, accounting, orders, people who walk in wanting free adjustments on a bike they bought a year ago).

another reason high end prices are flexible is because of your typical customer:

if someone walks in saying "i want to spend $3000 on a bike" chances are good that you can sell them on a bike and $600 worth of accessories.

someone comes in saying "i've got $200 and some change in my pocket" they are probably going to waste your time. even if a shop owner can sell them on a cheap (low-margin) bike, there will be no left over money for high-profit accessories.

additionally, bike shops assume a certain amount of risk by selling bikes. namely, the risk that their customers might be jackasses, mess up their bikes and bring them back in demanding either free service or just wasting a lot of time. and time is money, especially in the warm season.

it's basic economics.

Last edited by Zinn-X; 04-26-07 at 02:20 AM.
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Old 04-26-07, 07:13 AM
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Not sure how low-end you mean, but all my bikes were discounted by store credit.

Example:

Low End - Trek 1000 - $200 Store credit
Higher End - Madone 5.2 Project One - $700 Store credit

Bicycles Etc, Jax, FL
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Old 04-26-07, 08:44 AM
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I bought my 07 Trek 1000 Discovery Channel Edition at my LBS for a MSRP Price ($710) out the door. Thats including Tax and Special Order.
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Old 04-26-07, 08:56 AM
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When I bought my first roadie, all three LBS that I checked with would not budge off the MSRP on a low-end model (OCR3, Trek 1000, Felt somethingoranother). But when I was looking to spend $1500-2000 they were a lot more willing to deal. Not sure if the margins are better or if they're counting on a higher-end bike needing higher-end accessories rather than going to Wal-Mart.
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Old 04-26-07, 09:16 AM
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the markup on bikes is quite low. shops don't win on bikes; instead they profit from clothing, accessories, & the service area.
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Old 04-26-07, 09:25 AM
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actually, it makes sense from an economic point of view using just straight dollars and cents.

I don't know the actuals, and am just making up numbers, but, if you assume that there is a 5% markup on all new bikes, then the $700 bike only equals $35 in profit that they can allow you to eat into. Now, assume that same 5% on a $2000 bike - $100 profit, or $65 more flexibility in the pricing.

of course, we all know what assuming does...
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Old 04-26-07, 09:35 AM
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I was in a local LBS this week and Saw multiple 06 models that were marked way down. Good thing the wife was with me or I would have had a new Giant OCR C3 for 1300 bucks MSRP was 1799 thats $500 off or 30%. Where I live there are 6 Large shops all competing for bisuness and if you look around its not hard to find a deal. I bought a bike that listed for 419.00 msrp for 350.00 because of a small ding. Otherwise I could have got a mint one for 379.00. So I belive their is deffinalty room for movement on any bike. Of course the more you pay the more movement. All the 06s left were atleast 150 off even on 6-700 bikes that I saw last weekend.

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Old 04-26-07, 11:32 AM
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Originally Posted by 3MTA3
the markup on bikes is quite low. shops don't win on bikes; instead they profit from clothing, accessories, & the service area.
Really?

I've been told that the markup on bikes is upwards of 40% in some cases. This is on higher-end bikes.
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Old 04-26-07, 11:42 AM
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Originally Posted by grebletie
I've been told that the markup on bikes is upwards of 40% in some cases. This is on higher-end bikes.
depends on a number of things. some companies have higher margins than others, all stores have higher margins if they buy from a company in bulk, sometimes companies will have wholesale specials on certain bikes making the margins higher, etc. maybe there's competition from another shop & in order to unload some bikes (thus have people buy accessories as add-ons) they mark the bikes lower than usual. the margin doesn't really matter if the bike is "high end" or "low end." i'd say the average margin is 30%. i've seen some high end bikes come in to a shop i worked at where our margin was 20%. sometimes managers/owners will get sick of a certain frame or bike in the shop & sell it at cost just to get rid of it. clothing & accessories are usually 50%; while bottle cages & tubes... well, those margins are sky-high (even if the cost to the consumer is relatively low).
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Old 04-26-07, 12:21 PM
  #11  
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We don't usually discount the bikes at our shop because with the warranty tune-up package we offer, we don' t really make that much on the bike. It's the accessories that save us at the end of the day, so if someone wants to barter, we usually do them a favor on the lock, the helmet, the lights, etc.

Keep in mind that my shop mostly sells bikes in the 400-1000 category, with fewer sales in the upper limits. If someone wants a 2500 MTB, then we might work the numbers more.
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Old 04-26-07, 02:08 PM
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OP - you're getting some pretty frank, useful input from bike shop owners in this thread - consider yourself lucky. You might want to consider too that you're looking for a bike at the absolute peak bike-buying season. Your business is valuable to any bike shop - but - when there are plenty of customers looking, it doesn't make sense for the LBS to do a lot of discounting. It's just good 'ole supply and demand.
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Old 04-26-07, 03:58 PM
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Most of the shops here will cut you 40 or 50 bucks off MSRP in low end bikes. Some will not give you any break at all..

T
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Old 04-26-07, 04:55 PM
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thanks for the input. i wasn't complaining about the price. i just was wondering if that was the case pretty much everywhere. i do want to keep my lbs open for biz so i have a local place that i can have my bike serviced.
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Old 04-26-07, 05:11 PM
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The markup where I work is about 40%
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Old 04-26-07, 05:56 PM
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My LBS doesn't budge from MSRP at any range, whether it be a $700 bike or a $6000 bike. They do however give you free tune-ups for the life of the bike and %10 off anything in the store as long as you own it.

I called the other day to schedule a r700 crank to be installed (I bought it through them) and they said they could take me in about a week. They then asked me if I bought the bike from them and when I replied yes, they said bring it in anytime. I could of saved $50 getting that crank from PBK but I decided to support my local LBS since they take care of me. Sorry to get off topic there...LOL

Last edited by G_Sup; 04-26-07 at 06:02 PM.
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Old 04-26-07, 06:32 PM
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At my LBS, I just ordered a Felt Z70, got some money off MSRP (not much - $50), they are installing some FSA wings for cost, and throwing in a bike computer if I don't pay with a credit card. (I would be using a debit card anyhow, so it all comes from the same account.) Oh, and "faster tires".

...and let me add that so far, they spent 4+ hours over 2 days fitting me for a new bike (I currently have a Trek 1000, and wanted to upgrade). Service is key.

I already get 10% off accessories at any LBS as I'm a club member.

Michelle in Rockford, IL area
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Old 04-26-07, 07:51 PM
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my lbs is quite lenient with pricing, but only if you talk to the owner, the manager wont budge off msrp. haha.
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Old 04-26-07, 08:25 PM
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Markup % is usually the same across all bikes. Since the lower end bikes cost less, there is less profit. So there is less room to negotiate.
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Old 04-26-07, 08:58 PM
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unless you either a midget or a giant, spring is a bad time to buy

you are more likely to find a hot deal early on in the fall
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