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Typical discount structure for a Specialized dealer?

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Typical discount structure for a Specialized dealer?

Old 09-27-13, 11:31 AM
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Long Tom
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Typical discount structure for a Specialized dealer?

I'm well-versed in the world of hobby-store retail in general, which is what a cycle shop is pretty much, but I'm not real up on discount structures and practices within the industry.

I'm ordering a new Roubaix this fall and will be a fairly annoying negotiator. While I don't begrudge the other guy a profit, by the same token, having worked in a business very similar to bikes, I do want a discount that reflects the fact that MY SALE requires an employee to pick up the phone and make a call.... IE, the retailer doesn't have to put their money out there, sit on an inventory item, with all the risks associated with that (shop wear, getting stuck with it at the end of the season, stale inventory, etc), show the item to multiple prospective buyers, etc. just pick the phone and make (1) call.

The bike I want lists for $3800. Not knowing if the shop is on an A,B, or C mark (50%, 60%, 70% wholesale cost) or if Spesh price-fixes their bikes is an impediment to making what I feel to be a fair offer for the bike order.

Can anyone help me out with some info? Again, not going in there guns loaded to be a dick and demand the world; just want to have an idea of the shop's position WRT wholesale cost and manufacturer-mandated minimums.
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Old 09-27-13, 11:55 AM
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No idea about Specialized but I've read that the gross margin on bikes is ~40-50%. That said, I wouldn't expect to get any special discount just because you know what you want. Your best bet is to shop around for the best price. IME, 10% off is very easy to get and 20% isn't unheard of depending on the time of year. If you're in LA/OC I can PM you the place I got my Roubaix last year for around 18% off with no sales tax.
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Old 09-27-13, 12:02 PM
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Originally Posted by Dunbar View Post
No idea about Specialized but I've read that the gross margin on bikes is ~40-50%. That said, I wouldn't expect to get any special discount just because you know what you want. Your best bet is to shop around for the best price. IME, 10% off is very easy to get and 20% isn't unheard of depending on the time of year. If you're in LA/OC I can PM you the place I got my Roubaix last year for around 18% off with no sales tax.
Dunbar,

I am in OC and I will be looking for a new Roubaix come January for my 65th birthday. I would very much appreciate it you would PM me that shop name. The best I have seen is 10%, not counting special sales and EOY clearance.

Thanks!
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Old 09-27-13, 12:14 PM
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Originally Posted by Long Tom View Post
I'm well-versed in the world of hobby-store retail in general, which is what a cycle shop is pretty much, but I'm not real up on discount structures and practices within the industry.

I'm ordering a new Roubaix this fall and will be a fairly annoying negotiator. While I don't begrudge the other guy a profit, by the same token, having worked in a business very similar to bikes, I do want a discount that reflects the fact that MY SALE requires an employee to pick up the phone and make a call.... IE, the retailer doesn't have to put their money out there, sit on an inventory item, with all the risks associated with that (shop wear, getting stuck with it at the end of the season, stale inventory, etc), show the item to multiple prospective buyers, etc. just pick the phone and make (1) call.

The bike I want lists for $3800. Not knowing if the shop is on an A,B, or C mark (50%, 60%, 70% wholesale cost) or if Spesh price-fixes their bikes is an impediment to making what I feel to be a fair offer for the bike order.

Can anyone help me out with some info? Again, not going in there guns loaded to be a dick and demand the world; just want to have an idea of the shop's position WRT wholesale cost and manufacturer-mandated minimums.
In that case you just need to pick up the phone and call Specialized and buy a bike from them. Just sell off the other 100-500 bikes that they'll make you buy and you'll be all set.

Oh, wait, you need to have someone assemble it? Will you supply the tools to do so? The space? Warranty it? Deal with any recalls or service issues?

It's not just about the cost of the bike. The average profit margin for a successful shop is in the 5-15% range. Since this includes everything from high margin items (service, tubes) to low margin (bikes over, say, $2000), your $3800 bike will be on the low end. Figure the shop, if it's a current bike and a mid-sized shop, is clearing 3-5% on that bike, all told, without dealing with stale inventory or any other extra headaches.

You can go to the NBDA site to get more info on bike shop business. It's pretty informative if you haven't been on the other side of the counter.
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Old 09-27-13, 12:20 PM
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Typical markup on a bike is HUGE. If you pay more than $380, you're getting ripped off.

I'm giving you a hard time, carpediem is saying the same thing but in a much more diplomatic way.
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Old 09-27-13, 12:44 PM
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this is the same thought process used with motorcycling. You have to support local businesses. In a brief time I've worked up a great relationship with my local lbs, I also asked when I ordered my bike if I could get a discount, with bike and everything I got around 10%. Could I have pushed for more, sure, but I don't think at the end of the day it helps in establishing a relationship with the shop, and say I got another 10% off so maybe $300 more, just not a deal breaker. With the purchase they spent an hour with me fitting the bike setting it up, etc. Prior to purchase I had lunch with the owner who spent loads of time with me finding out what I wanted out of cycling. He set up a demo bike for me. The owner gave me his cell number and said to call/text any time I have problems or questions etc. They've been great to work with across the board, and it's worth whatever additional discount I could've gotten out of them if I pushed it.

I know lots of people get an ego boost when they feel like they've really gotten one over on a dealer. I absolutely don't begrudge them profit, and if it's healthy, more power to em, but they have to maintain the shop, pay mechanics and staff etc. It's worth the $$$
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Old 09-27-13, 01:39 PM
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I have been on the other side of the counter. And I'm self-employed. I don't begrudge a profit, nor am I ashamed to make one.

But someone special-ordering something and pre-paying it has extra leverage. I'd like to have a clearer picture of what that leverage might amount to.

Hey, takes two to tango! Two willing parties. They can always just refuse to do a deal under my proposed terms. If they DON'T refuse, then by definition, we have achieved a consensus as to what's reasonable.
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Old 09-27-13, 01:47 PM
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Originally Posted by zvez View Post
this is the same thought process used with motorcycling. You have to support local businesses. In a brief time I've worked up a great relationship with my local lbs, I also asked when I ordered my bike if I could get a discount, with bike and everything I got around 10%. Could I have pushed for more, sure, but I don't think at the end of the day it helps in establishing a relationship with the shop, and say I got another 10% off so maybe $300 more, just not a deal breaker. With the purchase they spent an hour with me fitting the bike setting it up, etc. Prior to purchase I had lunch with the owner who spent loads of time with me finding out what I wanted out of cycling. He set up a demo bike for me. The owner gave me his cell number and said to call/text any time I have problems or questions etc. They've been great to work with across the board, and it's worth whatever additional discount I could've gotten out of them if I pushed it.

I know lots of people get an ego boost when they feel like they've really gotten one over on a dealer. I absolutely don't begrudge them profit, and if it's healthy, more power to em, but they have to maintain the shop, pay mechanics and staff etc. It's worth the $$$
That's great and all, but I've not leaned on them like that, nor do I expect it from them. The bolder part is situational and not some general truism.

Again, my friends on the 41, I have BTDT on the other side of the counter in a very similar industry. I did countless special-orders in the same price range as a Roubaix for customers. I didn't just fall off some kind of socialist turnip truck here. And I'm not in any way denigrating what LBS's do.

I just want to keep as much of my moolah in my wallet as I can. They want to get as much of it as THEY can. Somewhere in the middle, there's a deal to be struck.
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Old 09-27-13, 01:54 PM
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What's interesting is that Specialized dealers can only afford to discount say 20% max. Performance routinely runs 50% markdowns on their bikes and not just at the end of season. I'm not trying to make any quality or performance comparisons between the two. I just find it interesting. Who is losing or keeping the differential? Is this the effect of removing maybe one middle man.
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Old 09-27-13, 02:02 PM
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Originally Posted by rpenmanparker View Post
What's interesting is that Specialized dealers can only afford to discount say 20% max. Performance routinely runs 50% markdowns on their bikes and not just at the end of season. I'm not trying to make any quality or performance comparisons between the two. I just find it interesting. Who is losing or keeping the differential? Is this the effect of removing maybe one middle man.
Performance doesn't sell Specialized.
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Old 09-27-13, 02:21 PM
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There is this invention used to communicate with people without leaving your house, and its called the telephone. Since shops that sell Specialized are as common as bars that sell beer, why not call several and ask them directly? Since you need no follow up service, there is this other service where people put things in boxes and transport them to far, far away places, using exotic looking trucks. You could call any shop you want, find the best price, and have it shipped to you.
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Old 09-27-13, 02:29 PM
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Originally Posted by koolerb View Post
Performance doesn't sell Specialized.
Are you sure?

Duh! That's why I made the comment about not trying to compare the quality of the bikes. Just pointing out that the retail business situations aren't universally the same.
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Old 09-27-13, 02:30 PM
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Originally Posted by RollCNY View Post
There is this invention used to communicate with people without leaving your house, and its called the telephone. Since shops that sell Specialized are as common as bars that sell beer, why not call several and ask them directly? Since you need no follow up service, there is this other service where people put things in boxes and transport them to far, far away places, using exotic looking trucks. You could call any shop you want, find the best price, and have it shipped to you.
That is a very "brown" idea.
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Old 09-27-13, 02:41 PM
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Originally Posted by RollCNY View Post
There is this invention used to communicate with people without leaving your house, and its called the telephone. Since shops that sell Specialized are as common as bars that sell beer, why not call several and ask them directly? Since you need no follow up service, there is this other service where people put things in boxes and transport them to far, far away places, using exotic looking trucks. You could call any shop you want, find the best price, and have it shipped to you.
There is this invention, called the Internet, that the astute can use to gain information in order to understand a situation or dynamic prior to taking the next steps.

..... besides, you don't find your best deal on the phone. That's crazy talk. A guy calling on the phone saying (Homer Simpson voice) "what's your best deal on a XXX" is laughed at by the guys behind the counter. I have also BTDT (done the laughing). And then there's shipping.

And besides THAT, I'm very in tune with supporting my LBS's. but that doesn't mean paying them more than necessary on a special-ordered $3800 bike.
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Old 09-27-13, 02:41 PM
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If you can wait...you may be able to get a huge discount if you ask your LBS what deals Specialized is offering. I bought a 105 Tarmac, which for 2012, retailed for $2750 (give or take, that's what they were going for +\-$50 everywhere I called). I checked in dec of '12 and was able to get one for $2050...take in mind this was a price given to me by two local dealerships on a new in box, from Specialized bike...no floor demo. The discount was on Specialized's end...not the LBS.
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Old 09-27-13, 02:54 PM
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Originally Posted by Long Tom View Post
There is this invention, called the Internet, that the astute can use to gain information in order to understand a situation or dynamic prior to taking the next steps.
So what has your astute research revealed? BF search function would show this question being asked monthly, and the answer given ranging from 0% to 50% markup, then some will throw in margin, then others will not understand the difference.

I am not saying any of this to be a tool. I am only saying that the only one who knows with certainty how low your LBS can go is your LBS. I am pretty comfortable that I could walk into my LBS, which handles Specialized, and get a decent discount. I also know that I have personally spent $25k at my LBS, and sent them another $8-10k. So how does you knowing what discount I could get help you price yours?
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Old 09-27-13, 02:57 PM
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Originally Posted by Long Tom View Post
Again, my friends on the 41, I have BTDT on the other side of the counter in a very similar industry. I did countless special-orders in the same price range as a Roubaix for customers. I didn't just fall off some kind of socialist turnip truck here.
Did you assemble products for your customers, fit them to them, and provide post-sale support?
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Old 09-27-13, 03:01 PM
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Originally Posted by Seattle Forrest View Post
Did you assemble products for your customers, fit them to them, and provide post-sale support?
Yeah, lots of pre- and post-sale handholding and product setup. It was a high-end guitar shop.... guitar geeks are at LEAST as OCD as bike geeks, plus they are often stoned.
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Old 09-27-13, 03:09 PM
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Originally Posted by RollCNY View Post
So what has your astute research revealed? BF search function would show this question being asked monthly, and the answer given ranging from 0% to 50% markup, then some will throw in margin, then others will not understand the difference.

I am not saying any of this to be a tool. I am only saying that the only one who knows with certainty how low your LBS can go is your LBS. I am pretty comfortable that I could walk into my LBS, which handles Specialized, and get a decent discount. I also know that I have personally spent $25k at my LBS, and sent them another $8-10k. So how does you knowing what discount I could get help you price yours?
No worries; we're just talkin'...

Well, what I'm hoping to find out is if, for instance, Spesh has MAP pricing or other official (or unofficial) screws they put to the dealers on minimum prices. And I'd love to know if they are A, B, or C mark. If "C", meaning wholesale is 70% of retail, which would be $2660 wholesale, and the dealer almost certainly pays shipping, and does setup, then I'll be much less inclined to push hard. That's a thin margin. If the are A-Mark, meaning wholesale on my bike is $1900, then I'm going to be much more assertive. That's FAT. I'm not paying a $1900 profit on a $3800 special order.

Those would be two things I'd love to know prior to showing up at the dealer with phat stax.
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Old 09-27-13, 03:15 PM
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Specialized has a "minimum" set on the B2B site. So that is what dealers will go by on their 2014 stuff. Spesh will also offer further discounts to dealers on older models and on items that have large amounts of stock they have left. So if you pick a bike with those further discounts...the dealer may pass that onto you.

Last year Spesh had a huge blowout on their 2012 S-Works road shoes...we ordered a bunch and passed those saving onto our customers.
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Old 09-27-13, 03:17 PM
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the most informed answer would have to come from a Specialized dealer...which means someone would most likely be breaking part of a contract by telling you the pricing structure. even if its a former employee, its going to be public knowledge on a forum, that will undoubtedly lead to a certain amount of dbags annoying bike shop employees about ridiculous discounts. while i understand that you want a great deal, being a good cyclist also means being part of the cycling community. this doesnt mean you need to spend all your money with an lbs, but it does mean being conscious of lbs.

the overwhelming majority of bike shop employees are in the industry because they have a passion for bikes. it is not a highly profitable occupation.
i would recommend treating bike shops like restaurants: try different ones, find something that you like, and find out what pricing suits your budget. there will be offerings at discounts, but remember that there is a lot of work that goes on behind the presentation (and not much profit for the lbs).

if a near wholesale price is the goal, you can always buy used or wait really long. if you dont want to eat at a restaurant, you can always cook something at home or get almost-expired food from the grocery store. dont be afraid to build your own bike and learn as you go.

IMO, price haggling/negotiating often brings out the super-d-bag in people. just be careful. i dont mind spending my hard earned money on something that supports the cycling community.

fwiw, your post seems like a self-entitled and arrogant. im not saying you are. but stuff like:

"Again, not going in there guns loaded to be a dick and demand the world; just want to have an idea of the shop's position WRT wholesale cost and manufacturer-mandated minimums"

you may not be demanding the world, but you are essentially asking for information only available to bike shops and manufacturers. if you want everyone to profit, why not seek the shops operating cost and socioeconomic status of the employees? you could still get a discount and help out others.
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Old 09-27-13, 03:50 PM
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If Specialized has A, B, and C dealers - does anyone have any idea how many bikes they have to sell (or dollar amount) to get the best prices? I find this thread very timely because I'm getting ready to buy and S-works and asked the local shop if they ever have a sale? Answer: Yes, 10% minimum off every bike in stock or special ordered including S-works. I asked store if I could buy right now at 10% for S-works that they don't have in stock? Answer: No.

I'm all for supporting LBS, but when it comes to big ticket items, I would feel much better getting some sort of deal. Anyone reading this in the know if an S-works at 10% off is a decent deal for both parties?

Thanks in advance.
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Old 09-27-13, 04:03 PM
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Originally Posted by rpenmanparker View Post
Are you sure?

Duh! That's why I made the comment about not trying to compare the quality of the bikes. Just pointing out that the retail business situations aren't universally the same.
I'm slow sometimes.
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Old 09-27-13, 04:06 PM
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I was with my dealer and went to the specialized dealers website, I'd planned to buy a roubaix, but they had almost no 13s left in inventory. I'm actually happy it worked out that way as the 14 is more bang for the buck.


Originally Posted by Smokehouse View Post
If you can wait...you may be able to get a huge discount if you ask your LBS what deals Specialized is offering. I bought a 105 Tarmac, which for 2012, retailed for $2750 (give or take, that's what they were going for +\-$50 everywhere I called). I checked in dec of '12 and was able to get one for $2050...take in mind this was a price given to me by two local dealerships on a new in box, from Specialized bike...no floor demo. The discount was on Specialized's end...not the LBS.
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Old 09-27-13, 04:10 PM
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ding ding ding! This is worth bolding. Over the years I've bought many motorcycles from many different dealers. And on good terms with a couple of them, they tell me some of the behavior people exhibit when "shopping for a deal". They're shocked when one of the dealers I know hangs up on em or just tells them if they show up in person they can't help em.

Originally Posted by abstractform20 View Post

IMO, price haggling/negotiating often brings out the super-d-bag in people. just be careful. i dont mind spending my hard earned money on something that supports the cycling community.
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