0 Markup Bike

[In Libman]

Improb just wishing here but after leaving the dealership the other day i was thinking that there might be a website out there that gathers prices and estimates the average price paid by dealers for new bikes. or that the info of an estimated average *might* be provided by the dealer under the freedom of information act but i would hate to wonder what kinda red tape they would put you through just to get that. but anyway what im getting at is does anyone out there know of any resources like this out there? also i want to be clear im not out to really try to screw a dealer over but i just think it would be nice to have a better idea when it comes time to negotiate.

Average Dealer Mark Up is.....What ever the traffic will bear, thus when times are good, the dealer makes good money and when the times are bad the dealer suffers...support your dealer as he must find a way to average all this out...I am not a dealer, but he took the risk to be an independent business person.

Depends on how they buy bikes (one at a time or entire truck loads), how many bikes they sell in a year, distance to the warehouse amoung other things. There are many other numbers that come into the equation too.

What he said is true. Different sales volume, different prices. I know of a Suzuki dealer that used to sell so many RMs in a year that he even got a couple for free and the others he paid a few hundreds under what most dealers would pay.

^^ hmmm, it must be a lot different than the auto industry, cause by law all dealers are allowed to recieve the same dealer incentives on every unit...The exception to this is if say a Chevy dealer hit a sales quota of say 100 trucks, then GM would give the dealer a incentive check, but they still paid the same for each and every truck

Biking makes me happy and I look happy on a bike. I selected from the last 12 months a few pictures of me (taken mostly by my co-biker, former colleague and friend Daniel) that I like in particular.

When I worked in the trade (about 15 years ago), the best profit margins were around 35% on bikes and 40% on accessories and parts.

We closed half the bike shop down and turned it into a coffee shop as the mark up on food was about 90%.

Most big suppliers required you to take a number of units per year at various price levels, this meant taking a risk and holding a fair amount of stock. You have any of it left in September and the next years models arrive and it is viewed as old stock. Once you consider all the associated costs bike shops make very little profit.

Evans/Wiggle/Halfords/Crc have a slightly different model with their in-house/self distributed brands (Norco,Bmc,Pinnacle,Dhb,Nukeproof,Ragley etc) as they remove a layer of cost.Sometimes 2 in the case of brands they own and sell directly (why crc can sell their own brands at 40%+ discount and still make money)

Double the price and add VAT is standard for retail. But it is obvious from clearance that the margin on new bikes from small shops is less than this. Our previous sponsor would give us 40% discount and above this was struggling to not lose money. That on some expensive bikes.

When you buy a car, you can get a factory invoice and know how much

bargaining room you have between that and the msrp. What about for bikes?

For instance, how would you know what the factory cost of a Cannondale

T700 is to the dealer? Are there fairly standard percentages, or does it

vary totally by the model?Peter Hernes

Remember that when a bike arrives at the shop, it is unassembled in a box.

The shop has to do quite a bit of prep work before the sale. And, better

manufacturers, like Cannondale, are somewhat selective about dealers to

make sure you get good quality work. My advise is to pay the dealer

for this service. Dealers may throw in a free 3 month tune up or discounts

on some accessories, but don't expect large differences in pricing

between dealers (until the year end closeout sales).--

Ken Lee, ken...@rahul.net,

Wholesale is around 60% of list price on higher-end models, according

to the dealers I've talked to.However, keep in mind that this includes assembly, tune-ups, and other

services (I know of a few dealers that re-tension wheels and repack

bearings before the bike hits the floor). Lower-end bikes often have lower mark-up, especially in competitive

markets.--

Eric Bryant Electrical Engineering undergraduate

ewbr...@mtu.edu Michigan Technological Universityfinger ewbr...@kirchhoff1.ee.mtu.edu for various info

Actually, the markup on high end manufacturer bikes (Trek, Specialized,

etc.)is really closer to 30%, not 40%. It can be as low as 28% for small

builders frames. The markups for the cheaper bikes are actually greater,

usually 38-43%. The part that most consumers don't consider (because how are they really

supposed to know?) is that the cost of running a bike shop is about

34-35%. Maybe, if your a really good buisness person (no offense but

most shop owners aren't, they're into bikes) you might be able to squeak

out another point or two. So selling high end stuff doesn't seem so

appealing from a buisness standpoint. They really don't have room to

bargain. Mail-order, on the other hand, tries to survive on higher volume sales

at a lower margin. They do this by lowering their overhead. Warehouse

space is much cheaper than retail space.Now I'm not saying that people shouldn't try to get a better deal from

bike shops, but it's always better to know both sides of the story. It's

amazing to me how many people think bike shop owners are laughing all

the way to the bank.Hope this helps!

By the way, I've worked in shops for 9 years now, as a buyer, manager,

and mechanic and currently working as a bike messenger in Chicago having

to pay retail. Yuk.

David Wilson

d...@interaccess.com

>> When you buy a car, you can get a factory invoice and know how much

>> bargaining room you have between that and the msrp. What about for bikes?

>> For instance, how would you know what the factory cost of a Cannondale

>> T700 is to the dealer? Are there fairly standard percentages, or does it

>> vary totally by the model?

This is true, for the most part. The amount of "factory"

assembly varies among mfg, but a GOOD shop will largely

dis-assemble a pre-assembled bike before building it

*correctly*. This is very time-consuming, and therefore,

expensive.

Don't bet on a stringent "selectivity" by manufacturers when

it comes to opening dealerships. Big sales figures talk loudly,

but long-term relationships are not valued nearly as much as

they once were.

....but make sure that you actually get what you pay for.

My advice is to patronize your local bike shop-- but ONLY

if they continue to EARN your loyalty. Don't try to nickel

and dime them, and you'll probably find that you will be

treated quite fairly.

From my experiences in buying bikes and from my experiences on the net.

I have learned that the Bike Industry has a 45 to 75 percent markup on

everything. And it is not hard to become a Cannondale Dealer. Even

though they have a Policy Letter saying no-sales on the net.. You can

find dealers who will deal to make the sale. As for prices I have seen prices range as much $800 bucks difference

from dealer to dealer (this was an extreme case on a Litespeed Tellico)

but on average you can find about $400 difference from dealer to dealer

on the same bike. And with such high markups on bikes, dealers can

negotiate. Cannondales and others come what is called almost-complete

assembly. Pretty much you can put the bike together if you have any

experience with bikes. The whole idea behind Cannondale having

"selective dealers" is PRICE FIXING, plain and simple. Fewer dealers,

no-net sales all result in a higher price they can demand for their

bikes. It has nothing to do with proper assembly. How hard can it be to

bolt the stem onto the fork and mount the wheels, and put the seatpost

on.. Its all a money game.. The sad part of it is all the bike companies

do it, the higher the bike sales for the more bikes dealers will buy to

get them at a reduced price, the more money everyone makes.. Its not

just Cannondale, its Trek, GT, Diamondback, Specialized etc..You dont think a $1500 buck bike actually cost them $1000 bucks do you..

Think about it, I am Cannondale, I goto Shimano and buy oh.. 1 Million

XT derailers how much do you think I am getting them for? Pennies on the

dollar! ALOT cheaper than the mail-order houses, OK? Now how much money

is tied up in an aluminum frame.. OK.. It has proprietary tubing that

only "Bike X" has.. So what.. I can goto Easton and say I want to buy 50

miles of tubing but I want it to have a special mix of aluminum - zinc

(for example).. And they will crank it out.. Hince I have my "Special

Tubing" I can claim as my own, and charge bookoo for it, and still get

it as cheap as the traditional tubing.. And another thing, the bike

companies will take a bike, then make it have thinner walls, slap a

warentee on it that is less than thicker walls and put a "Team or a Pro"

sticker on it and charge 30 percent more.. Use the net, play the game.. Its your money.. Make it buy the best bike

your money can buy. Dont be in such a hurry to jump on the first bike

you see. Any dealer who wants to make a sale will deal.. Those who dont,

oh well.. For every 1 that will not deal, there is 3 that will. Their

loss your gain.. Service is a nice thing, granted. A good dealer for a first timer

should throw in those things that you will need.. IE:Helmet, maybe

gloves, maybe a small pump.. Tune-Ups are a gimmi.. A new bike will need adjusting to tune out the

cable stretch, the pad shiftment, retruement of wheels. Minor things

that must be done on a new bike. Things beyond that, such as you biffed

the wheel and it wont clear the brakes, or you snapped a brake cable

cause you smacked the tree with the lever. That is beyond the dealers

responsibility to take care of.. But may choose to do it free, maybe

charge a minor fee.Extras such as shoes, maybe SPD's can be negotiated at a reduced price

during the sale. Try to work a package deal to get everything you will

need to be on the road (or trail). Repeat or Experienced riders/customer deals on bikes usualy areupgrades

to better forks, better peddles, better tires.. Maybe a longer service

agreement. .

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