New bikes, and the creeping cost of entry to our favorite sport
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OK, got it. And you’ve identified a common problem in these discussions: nominal prices are almost meaningless. But they are what people tend to focus on.
#102
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I got my first bike in 2012, a specialized allez 105. Full aluminium. Rim brakes
It was $600 on clearance.. With a 1 year warranty from the local shop around the corner from me
Theres nothing even remotely close to that nowadays. Even used bikes are insanely high priced. I feel lucky that I snagged a used roubaix ultegra for $1200 in Dec 2019!
It was $600 on clearance.. With a 1 year warranty from the local shop around the corner from me
Theres nothing even remotely close to that nowadays. Even used bikes are insanely high priced. I feel lucky that I snagged a used roubaix ultegra for $1200 in Dec 2019!
There are no bikes on clearance during a shortage. But this is temporary.
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In my view another issue with bike pricing is what's referred to as "product differentiation."
It's fascinating to browse the old Schwinn catalogs, which can all be found online. One take-away is that there was actually relatively limited variety of bikes. Schwinn had kids bikes, cruisers, tourists (lightweight with upright bars), and racing bikes (lightweight with drop bars). Their definition of "lightweight" is open to debate of course. And a couple of specialized bikes. It was pretty easy to guess the purpose and target audiences of each bike. Likewise, the 1962 Raleigh catalog was 6 pages. Most adults were satisfied with a single or 3 speed bike. The "ten speed" fad came later. A person could go to the department store, or a Schwinn store, and buy a bike.
Today, there's a huge proliferation of bike types, and the offerings seem almost designed to be confusing to the layperson. Bikes that are pretty much general purpose, like hybrids, are dismissed by enthusiasts, and even hybrids offer a bewildering array of options.
Under stress, people spend. The whole marketing and sales process is designed to leave you with a little bit of doubt about whether you're buying the right bike, and to "upsell" you into a more expensive model.
Further complicating matters is that bike choice is partly a regional and local thing, since it depends on your riding conditions, but both marketing, and advice shared online, is nationwide. For instance, how many gears you need depends on where you live.
It's fascinating to browse the old Schwinn catalogs, which can all be found online. One take-away is that there was actually relatively limited variety of bikes. Schwinn had kids bikes, cruisers, tourists (lightweight with upright bars), and racing bikes (lightweight with drop bars). Their definition of "lightweight" is open to debate of course. And a couple of specialized bikes. It was pretty easy to guess the purpose and target audiences of each bike. Likewise, the 1962 Raleigh catalog was 6 pages. Most adults were satisfied with a single or 3 speed bike. The "ten speed" fad came later. A person could go to the department store, or a Schwinn store, and buy a bike.
Today, there's a huge proliferation of bike types, and the offerings seem almost designed to be confusing to the layperson. Bikes that are pretty much general purpose, like hybrids, are dismissed by enthusiasts, and even hybrids offer a bewildering array of options.
Under stress, people spend. The whole marketing and sales process is designed to leave you with a little bit of doubt about whether you're buying the right bike, and to "upsell" you into a more expensive model.
Further complicating matters is that bike choice is partly a regional and local thing, since it depends on your riding conditions, but both marketing, and advice shared online, is nationwide. For instance, how many gears you need depends on where you live.
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I'm sure but even people that should know better seem to be stuck with the idea of perfect markets from econ 101 evidenced in the post I was responding to. The bike industry is small enough and customers are devoted enough to the brands they know that a relatively few people have the power to set prices, and competition isn't going to change anything.
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I think you perfectly demonstrate in this comment how economic theory fails to properly model reality. I imagine if even a very large bike retailer tried some to pressure a bike company, the person at the company would laugh and hang up.
You can't build or expand a factory overnight, and to the extent that manufacturers are trying to increase production, they are having supply problems of their own. It's a bit surprising to me that the extremely high demand means that bike shops are under stress and a significant number of them will fail due to a lack of merchandise to sell. Dealers have very little leverage and the bike companies don't have all that much leverage with their manufacturers. And the manufacturers may not have that much leverage with material suppliers. And transportation is a real problem right now as well.
At least we haven't had the kind of increases seen in the wood industry, where it everything doubled. At least not yet.
You can't build or expand a factory overnight, and to the extent that manufacturers are trying to increase production, they are having supply problems of their own. It's a bit surprising to me that the extremely high demand means that bike shops are under stress and a significant number of them will fail due to a lack of merchandise to sell. Dealers have very little leverage and the bike companies don't have all that much leverage with their manufacturers. And the manufacturers may not have that much leverage with material suppliers. And transportation is a real problem right now as well.
At least we haven't had the kind of increases seen in the wood industry, where it everything doubled. At least not yet.
I assure you that economic theory has properly modeled this reality (exactly the phenomena you outlined) since at least 1890, when Alfred Marshall published Principles of Economics, which is the first real econ text.
Pretty much every economics text written since then has included this content… It’s standard fare in any introductory microeconomics course.
Pretty much every economics text written since then has included this content… It’s standard fare in any introductory microeconomics course.
I'm sure but even people that should know better seem to be stuck with the idea of perfect markets from econ 101 evidenced in the post I was responding to. The bike industry is small enough and customers are devoted enough to the brands they know that a relatively few people have the power to set prices, and competition isn't going to change anything.
Again, I think there is absolutely nothing here that contradicts (i.e., is not fully explained by) established mainstream econ models. The only problem is that most people don't understand much about economics, and tend to conflate their opinions with facts. When people see prices rising for anything -- bikes, gasoline, whatever -- some tend to believe in bogeymen...But the reality is often that unseen (by most people) factors are driving up costs.
As far as "perfect markets" go, well, mea culpa. That's a failing of the Intro to Econ courses. We teach that model for good reasons - to show why competition is good, is an ideal, something to strive for when possible -- but we do a lousy job of helping students to remember that such markets are virtually non-existent outside of the textbook.
Last edited by Koyote; 04-02-21 at 08:44 PM.
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I could stop drinking coffee if I had to, but I wouldn't like it. As far as TP, lots of people in the world use water.
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#110
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The goal of marketing and advertising is to make us buy things we don't really need and can't really afford. In 1980, when I was a kid, I lusted after a Masi Gran Criterium bike at the LBS. It was fitted with a Campy Super Record kit, and, at $1800 was one of the most expensive bikes on the market at the time. $1800 in 1980 is about $5700 today. But in 2021 the bikes in the same niche as the old Masi Gran Criterium cost more than $10,000.
If I had my choice between a new, 1980, 12-speed Gran Criterium with a steel frame and friction shifters, or the latest 12 speed carbon fiber wonder with disc brakes and electronic shifting, I would take the Gran Criterium in a heartbeat.
If I had my choice between a new, 1980, 12-speed Gran Criterium with a steel frame and friction shifters, or the latest 12 speed carbon fiber wonder with disc brakes and electronic shifting, I would take the Gran Criterium in a heartbeat.
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Another goal is to let current and potential customers know about improved features and/or services. Those features absolutely can be both needed and affordable.
Your extremely jaded view is also inaccurate.
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The goal of marketing and advertising is to make us buy things we don't really need and can't really afford. In 1980, when I was a kid, I lusted after a Masi Gran Criterium bike at the LBS. It was fitted with a Campy Super Record kit, and, at $1800 was one of the most expensive bikes on the market at the time. $1800 in 1980 is about $5700 today. But in 2021 the bikes in the same niche as the old Masi Gran Criterium cost more than $10,000.
If I had my choice between a new, 1980, 12-speed Gran Criterium with a steel frame and friction shifters, or the latest 12 speed carbon fiber wonder with disc brakes and electronic shifting, I would take the Gran Criterium in a heartbeat.
If I had my choice between a new, 1980, 12-speed Gran Criterium with a steel frame and friction shifters, or the latest 12 speed carbon fiber wonder with disc brakes and electronic shifting, I would take the Gran Criterium in a heartbeat.
Sure, the Masi would be fun to ride around on today, if you're not planning on racing. I loved my 1982 Campy Super Record-equipped Bianchi Super Corsa when I was racing back then. Nostalgia is a powerful emotion. But any $5,700 modern racing bike is light years beyond from the Masi in technology and performance. In fact, we can buy any number of modern bikes for less than half that price that offer most of the performance advantages of the $5,700 bike.
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Comparisons of what the most expensive bikes are from different eras tells you basically zero about what the sport actually costs to participate in.
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Corporations have to keep increasing their prices because of gov tax greed and ever increasing cost of labor. Both my trike TeraTrike, and my bike Rans is not built by a huge corporation. There are many small bike and trike producers.
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The small companies that built your trikes do not magically get lower wage rates and lower tax rates.
By the way, real wage rates in the US for all but the top 10% of earners have been flat or falling for over 40 years, and the US corporate tax rate is lower than all other leading industrialized economies other than the UK. And the US has the sixth-lowest rate of overall taxation among the 37 OECD countries.
You know, the same device that you use to post this stuff can be used to learn the truth.
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I recently looked at the difference in price between a Peugeot UO-8, which wasn't a bike I would want to ride, and a PX-10, which was a very nice bike. In the early '70s, the difference was not very much, even in today's dollars. Then the bike boom happened and a lot of inflation happened, and here we are.
I was thinking about this thread the other day and realized the bike shortage has made me consider making bikes again. The problem is I can't get parts either.
I think the main thing that the current shortages have made me wonder about is why the price hikes haven't been more striking. I don't think it would increase supply very much. Sure, that prices some people out of the market, but I'm not sure the industry worries about people like that.
.
I was thinking about this thread the other day and realized the bike shortage has made me consider making bikes again. The problem is I can't get parts either.
I think the main thing that the current shortages have made me wonder about is why the price hikes haven't been more striking. I don't think it would increase supply very much. Sure, that prices some people out of the market, but I'm not sure the industry worries about people like that.
.
Last edited by unterhausen; 04-05-21 at 10:26 AM.
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I'm glad that marijuana, alcohol and heroin are plentiful, though. There's that...
#121
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I’ve noticed you can still get bikes for the same price but the quality of components is lower than it used to be. Maybe it’s just an alternative to inflation, like shrinking the container of ice cream instead of raising the price.
#122
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I think you're right on with the recent price increases. Admittedly the content on a lot of bikes has increased.
Its hard for me to justify disc brakes on an entry level bikes. I am down to 3 bikes and my Specialized Diverge
has all 105 disc components. However for a lot of occasional riders, even the low end disc brakes don't add
a lot of value over a good set of rim brakes. Everyone doesn't ride on a rainy day. I think that the price of
bikes should be coming down. Value models should feature rim brakes and 7 spd drivetrains and any other
features that can be used to keep the price down.
Its hard for me to justify disc brakes on an entry level bikes. I am down to 3 bikes and my Specialized Diverge
has all 105 disc components. However for a lot of occasional riders, even the low end disc brakes don't add
a lot of value over a good set of rim brakes. Everyone doesn't ride on a rainy day. I think that the price of
bikes should be coming down. Value models should feature rim brakes and 7 spd drivetrains and any other
features that can be used to keep the price down.
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#123
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IMHO, "entry level" depends on what you are going to use the bicycle for - recreational, touring, racing, off road/mountain/gravel ... I've got two recumbents, a tri-bike, and a mountain bike all of which I paid upwards of $1500 for. Recently I bought, for less than $500, an eight speed, 24 pound, foldable bike that is now my "everyday" bike. It easily fits in my car (a Subaru Outback) to take with me wherever I go to help explore new places. It's a Zizzo Urbano - a couple of YouTube reviews sold me on it.
#124
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Back in 2014 I bought a Bike Nashbar AL1, which really was a great deal. It had mostly Sora components, ok wheels and brakes. I still own the slightly pork frameset, which is probably a Cannondale, and have "upgraded" to Ultegra brakes, real derailleur, and a carbon seat post.
Last month the left Sora shifter bit the dust, and I was not happy. A new one is hard to find and expensive, and I don't trust the lower level below Sora, after this experience I don't trust Sora.
And lo and behold, 9 speed triple left brifters just aren't there. I ended up buying 105 10 speed left, which works fine and is much better than the Sora.
So I have a $400 bike with $800 worth of upgrades that weighs 21 pounds, lol. I forgot to mention the carbon wheels. Still and all, it's ridden either in the hills or the city, and I love it.
I always check Craigslist for used bikes. I bought my Trek Cronos there for a good price and it's a great bike. The stuff on the showroom floor today for $400-$500 is not worth it, the used bikes can be.
Last month the left Sora shifter bit the dust, and I was not happy. A new one is hard to find and expensive, and I don't trust the lower level below Sora, after this experience I don't trust Sora.
And lo and behold, 9 speed triple left brifters just aren't there. I ended up buying 105 10 speed left, which works fine and is much better than the Sora.
So I have a $400 bike with $800 worth of upgrades that weighs 21 pounds, lol. I forgot to mention the carbon wheels. Still and all, it's ridden either in the hills or the city, and I love it.
I always check Craigslist for used bikes. I bought my Trek Cronos there for a good price and it's a great bike. The stuff on the showroom floor today for $400-$500 is not worth it, the used bikes can be.
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#125
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I think you're right on with the recent price increases. Admittedly the content on a lot of bikes has increased.
Its hard for me to justify disc brakes on an entry level bikes. I am down to 3 bikes and my Specialized Diverge
has all 105 disc components. However for a lot of occasional riders, even the low end disc brakes don't add
a lot of value over a good set of rim brakes. Everyone doesn't ride on a rainy day. I think that the price of
bikes should be coming down. Value models should feature rim brakes and 7 spd drivetrains and any other
features that can be used to keep the price down.
Its hard for me to justify disc brakes on an entry level bikes. I am down to 3 bikes and my Specialized Diverge
has all 105 disc components. However for a lot of occasional riders, even the low end disc brakes don't add
a lot of value over a good set of rim brakes. Everyone doesn't ride on a rainy day. I think that the price of
bikes should be coming down. Value models should feature rim brakes and 7 spd drivetrains and any other
features that can be used to keep the price down.
Shimano introduced 8 speed mountain groups in the early 90s, and has had Altus level 8 speed shifters/derailleurs since the early to mid 2000s. These days, most people looking for higher performance are going for 1 x 10 or 1 x 11, so surely, 8 speed has gone far enough down the food chain that the bike brands could put it on entry level bikes, at least for the better brands.