Dealer "markups" for Cannondale
Peter Hernes
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
Ken Lee
In article <Pine.OSF.3.95.97020...@saul2.u.washington.edu>,
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, http://www.rahul.net/kenton/index.shtml
Eric W. Bryant
Peter Hernes (pjhe...@saul.u.washington.edu) wrote:
:*
:* 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
:*
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 University
finger ewbr...@kirchhoff1.ee.mtu.edu for various info
David Wilson
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
Bruce Jackson
DW=David Wilson <d...@interaccess.com>
EWB=Eric W. Bryant <ewbr...@mtu.edu>
EWB> Wholesale is around 60% of list price on higher-end models,
EWB> according to the dealers I've talked to.
This is about right.
EWB> However, keep in mind that this includes assembly, tune-ups, and
EWB> other services (I know of a few dealers that re-tension wheels
EWB> and repack bearings before the bike hits the floor).
Better shops do go over the bikes pretty well but I never saw
a shop repack bearings. I know of a few shops that claimed to
repack bearings but I saw the mechanics assemble bikes and they
did not do this.
EWB> Lower-end bikes often have lower mark-up, especially in
EWB> competitive markets.
As Mr. Bryant said, higher=end bikes usually have the lower margin.
The shops I worked at priced low-end BMX, freestyle, and mountain
bikes as high as 40% margin. Mid-priced sport and triathlon bikes
between 30-35% margin. I remember selling $3,000.00 bikes where less
than $500 was gross profit. Net profit was rather pathetic since
building up pro bikes from frame and parts often took the better part
of a day.
DW> Actually, the markup on high end manufacturer bikes (Trek,
DW> Specialized, etc.)is really closer to 30%, not 40%. It can be as
DW> low as 28% for small builders frames. The markups for the cheaper
DW> bikes are actually greater, usually 38-43%.
You confuse markup and margin. Markup is the amount added to the
wholesale price to make retail; margin is the portion of the retail
price that is markup. 30% margin is actually 43% markup, 33% margin
is 50% markup, and 40% margin is 67% markup. Any shop that prices
bikes at less than 30% margin risks loosing their dealership,
distributors will yank dealerships of shops that lowball other shops
by too much. Of course the margins are gross not net. After figuring
in shipping, assembly, service, and commission there isn't much profit
for the shop. Things were worse in the past. I found some old
Schwinn and Raleigh pricing slide rules at one shop I worked at that
indicated that 23% was the typical margin.
DW> By the way, I've worked in shops for 9 years now, as a buyer,
DW> manager, and mechanic and currently working as a bike messenger in
DW> Chicago having to pay retail. Yuk.
I've been pretty lucky there. Several bike shop proprietors are
people who worked with or for me in the past and still insist on
selling me stuff just above cost.
--
Bruce Jackson b.a.j...@ieee.org
http://replicant.csci.unt.edu/~jackson/
Jeff B
The profit margin on bike items, as with many things, is inversely
proportional to price. That is to say, the cheaper the item is, the
more profit margin there is percentage wise. And the more expensive an
item, the lower the margin. A patch kit which sells for $2.50 in a shop
is purchased at wholesale for around $0.50, thats a 500% markup! A
bike, especially a higher end one costing around $2000, would have a
wholesale cost of around $1600. That's only a profit margin of 25%.
The lower end bikes in the sub-$400 price range, have the highest markup
of around 60%. But the prices on those bikes go down considerably
throughout the sales year and by the end of the year - now - the bike
which is marked "Was $400, Now $200" is probably being sold AT COST!!
And by the time you figure in all the other costs involoved in
shipping, storing, building and prepping a bike, many are sold at A LOSS
TO THE SHOP.
BIKE SHOPS DO NOT MAKE MONEY ON BICYCLE SALES.
Shops make their money on future service to return customers and through
accessories. They may only sell two bikes on a given day, but a hundred
tubes and patch kits. Those are the high margin items.
Please be considerate when shopping for bikes and related merchandise.
Those who work in bike shops do it because they want to be there, not
because they are getting rich off of commissions. Most shops DO NOT PAY
SALESPEOPLE COMMISSIONS, these are not car dealerships. If the bike
says $500, don't ask what the price is. That is the price. Period.
And if a shop DOES bargain down the price, what does that tell you
about the price to begin with-- it was too darn high. And if the bikes
are marked up enough to be "bargained down", imagine what other
exorbitant markups are being paid if you buy your other items at that
shop as well. The patch kit that normally should have that 500% markup
to $2.50 might have a 1000% markup to $5.00! That may seem trivial, but
as you look at things like jackets and helmets the difference is
important. That Pearl Izumi vest you paid $80 for cost the shop about
$15!
Jeff B
c m lozier
>
>In article
<Pine.OSF.3.95.97020...@saul2.u.washington.edu>,
>Peter Hernes <pjhe...@saul.u.washington.edu> writes:
>|> 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?
>
>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, http://www.rahul.net/kenton/index.shtml
Why is it when people ask this question here, they always get the same
BS which doesn't answer the question!!! The mark-up ranges from 20-35%
depending on the brand and cost of the bike. If you want to negotiate
a better deal, try it you have nothing to lose.
John A. Lee
ken...@rahul.net+ (Ken Lee) writes:
>Peter Hernes <pjhe...@saul.u.washington.edu> writes:
>> 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?
>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.
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.
>And, better manufacturers, like Cannondale, are somewhat selective
>about dealers to make sure you get good quality work.
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.
>My advise is to pay the dealer for this service.
....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.
Steven Hartsell
Ken Lee wrote:
>
> In article <Pine.OSF.3.95.97020...@saul2.u.washington.edu>,
> Peter Hernes <pjhe...@saul.u.washington.edu> writes:
> |> 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?
>
> Remember that when a bike arrives at the shop, it is unassembled in a box.
> manufacturers, like Cannondale, are somewhat selective about dealers to
> 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, http://www.rahul.net/kenton/index.shtml
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. .
Vincent Cheng
Jeff B (jeff...@bouldernews.infi.net) wrote:
: The profit margin on bike items, as with many things, is inversely
: more profit margin there is percentage wise. And the more expensive an
: item, the lower the margin. A patch kit which sells for $2.50 in a shop
: is purchased at wholesale for around $0.50, thats a 500% markup! A
: bike, especially a higher end one costing around $2000, would have a
: wholesale cost of around $1600. That's only a profit margin of 25%.
: The lower end bikes in the sub-$400 price range, have the highest markup
: of around 60%. But the prices on those bikes go down considerably
: throughout the sales year and by the end of the year - now - the bike
: which is marked "Was $400, Now $200" is probably being sold AT COST!!
: And by the time you figure in all the other costs involoved in
: shipping, storing, building and prepping a bike, many are sold at A LOSS
: TO THE SHOP.
: BIKE SHOPS DO NOT MAKE MONEY ON BICYCLE SALES.
Usually, when a bike is put on discount for 25-30% off, it means that they
are selling it pretty much at rock bottom. usually, the markup on mid
range bikes are around 50-60%, and the minimum a shop will sell the bike
for is 25% because they have to cover for labour and other overhead
charges.
: Shops make their money on future service to return customers and through
: accessories. They may only sell two bikes on a given day, but a hundred
: tubes and patch kits. Those are the high margin items.
: Please be considerate when shopping for bikes and related merchandise.
: Those who work in bike shops do it because they want to be there, not
: because they are getting rich off of commissions. Most shops DO NOT PAY
: SALESPEOPLE COMMISSIONS, these are not car dealerships. If the bike
: says $500, don't ask what the price is. That is the price. Period.
I worked in a shop that gave commission this year. The deal was that if
we sold a kick stand with the bike, we get a dollar. But that was about
it. I must have sold 40000 worth of bike that month and I got about 50
dollars of commission. I remember that a guy said I was "set" for the
week because I sold a Marin Pine Mountain and he thought I would get a
cool couple hundred bucks. I looked at him and almost laughed, if it
wasn't for the fact that he was buying the bike. Oh yeah, if a guy
bargain to get that .1% off, I don't get any commission. Yep, we sure are
making big bucks!
: And if a shop DOES bargain down the price, what does that tell you
: about the price to begin with-- it was too darn high. And if the bikes
: are marked up enough to be "bargained down", imagine what other
: exorbitant markups are being paid if you buy your other items at that
: shop as well. The patch kit that normally should have that 500% markup
: to $2.50 might have a 1000% markup to $5.00! That may seem trivial, but
: as you look at things like jackets and helmets the difference is
: important. That Pearl Izumi vest you paid $80 for cost the shop about
: $15!
Well, the LOuis Garneau t-shirts that I wear everyday sells for around 18
bucks here and they are 8 bucks at cost. For parts, the usual mark up is
100% and for shocks, it's 50%. But don't count on your shop giving you
anything more than 25% off if you are lucky.
Vince
--
--
***************************************************************************
Vincent Cheng**2nd Year Mechanical Engineering Co-op**University of Alberta
vcc...@gpu.srv.ualberta.ca http://gpu.srv.ualberta.ca/~vccheng/
vcc...@bikerider.com vcc...@blackstar.net
Creative Web Catchers HTML Designer*http://www.cwc.cban.com
Maintainer for Mountain Biking FAQ*http://www.ualberta.ca/~vccheng/faq.html
Edmonton Bicycle Commuters Society*http://freenet.edmonton.ab.ca/ebc/
Columnist-Gearhead MTB e-zine*http://www.gearhead.com/
Columnist-Edmonton Oilers Hockey*http://www.ualberta.ca/~mkozak/oilers.htm
***************************************************************************
Eric Lin
ja...@po.CWRU.Edu (John A. Lee) wrote:
>>> 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?
>
>>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.
>
> 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.
It's especially true with 'dales. They come from the factory much more
diassembled than other big name brands. None of the cable housing or
cables are installed or even cut to the proper length. Plus, there's
usually a manufacturing defect that takes a few whacks of a rubber
mallet to "fix" before the bike can be finished.
=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Eric Lin
squ...@interaccess.com
http://homepage.interaccess.com/~squint
"I am Clin-Ton. As overlord, all will kneel trembling before me
and obey my brutal commands! End communication."
Thomas H. Kunich
In article <q8sp3a1...@replicant.csci.unt.edu>,
Bruce Jackson <jac...@replicant.csci.unt.edu> wrote:
>Better shops do go over the bikes pretty well but I never saw
>a shop repack bearings. I know of a few shops that claimed to
>repack bearings but I saw the mechanics assemble bikes and they
>did not do this.
Witt's in Hayward repacks the bottom bracket and checks the wheel
bearings on _every_ bike that goes out the door unless he has a good
run of bikes (when he finds the bottom brackets properly packed
in most of the shipment he will sometimes let one slide if he's
pushed.) I have sat there talking to him while he's assembled many
bikes and watched this procedure. Moreover, every mechanic he hires
he trains to do it just that way. And we're talking mostly low-end
stuff too.
>As Mr. Bryant said, higher=end bikes usually have the lower margin.
>The shops I worked at priced low-end BMX, freestyle, and mountain
>bikes as high as 40% margin. Mid-priced sport and triathlon bikes
>between 30-35% margin. I remember selling $3,000.00 bikes where less
>than $500 was gross profit. Net profit was rather pathetic since
>building up pro bikes from frame and parts often took the better part
>of a day.
In Hayward they _average_ 25% MARKUP. If you change it a percent or
two it immediately shows up in the sales.
It's a hard business and you have to love it to stay in it.
John & Cathleen Halliburton
>
> Witt's in Hayward repacks the bottom bracket and checks the wheel
> bearings on _every_ bike that goes out the door unless he has a good
> run of bikes (when he finds the bottom brackets properly packed
> in most of the shipment he will sometimes let one slide if he's
> pushed.) I have sat there talking to him while he's assembled many
> bikes and watched this procedure. Moreover, every mechanic he hires
> he trains to do it just that way. And we're talking mostly low-end
> stuff too.
BB's
>
> >As Mr. Bryant said, higher=end bikes usually have the lower margin.
> >The shops I worked at priced low-end BMX, freestyle, and mountain
> >bikes as high as 40% margin. Mid-priced sport and triathlon bikes
> >between 30-35% margin. I remember selling $3,000.00 bikes where less
> >than $500 was gross profit. Net profit was rather pathetic since
> >building up pro bikes from frame and parts often took the better part
> >of a day.
better profits are made.
>
> In Hayward they _average_ 25% MARKUP. If you change it a percent or
> two it immediately shows up in the sales.
Down here in the burbs of big city land, we have to run at 35-40% on
bikes, the rent is higher.
JH
Jeffrey Potoff
Steven Hartsell wrote:
>
> 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..
Well, that depends, do you want brakes that don't squeal when you
use them ? How about ones that stop well ? Would you like your
wheels to stay true, or would you prefer that the mechanics just
slap them in the frame and ship it out.
The fact is, no matter how much of the bike is 'pre-assembled', you
have to set up the derailleurs, brakes and true the wheels. That
takes some expertise and time. If you think it's easy, good for
you, but you wouldn't believe the number of bikes we used to get
from seemingly intelligent people who has tried to 'fix' them before
they gave up and brought them to us.
>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!
I suppose you never spent anytime working in a bike shop, otherwise
you wouldn't make a statement like that. A $1,500 bike usually
costs the shop around $900.00.
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..
You forget, it's not about the actual materials involved. Most of
the cost of a bike is tied up in labor.
Jeff
Flailer
Steven Hartsell Sez:
>...my experiences ... my experiences ...> I have ... You can........
>...I have seen ...... you can find ....... dealer to dealer
> ....you can ...... if you have any experience ........
>.....they can .... their > You dont think ..... do you..
>.. do you .... I am .. .... I want ... I have ...I can .... my own,
>...as you .... or you ...you ... you will
Hi Steven --
No one can truly argue against your points, they are all true.
BUT look at what you said (above). Look at all the "experiences" and
"I"s
and "You"s and hunting, "looking" and "finding". There is a lot of
value
and work and time in there.
And not just on your part....Think of all the time, effort and thousands
of
dollars the dealers and manufactures have spent on these products,
training,
shipping.... The continuing overhead. The after the fact service
costs.
Some dealers do well, some don't. --Service is what separates them,
typically.
And service costs the dealer time _effort_ and money.
Your time looking at bikes is FREE -- Theirs is not, nor should it
be.
>..A good dealer > should throw in those things ......you will need..
> IE:Helmet, maybe gloves, maybe a small pump..
> Tune-Ups are a gimmi..
>...Say I am Cannondale, .I goto .....and buy oh.. 1 Million
>...I can goto Easton and say I want....
If you had the contacts, the time, and the knowledge, would you REALLY
tie-up your millions of dollars on something that you could lose money
on ??
Remember, all it takes for failure is one detail to screw-up the whole
thing.
Or would you place that money in a mortgage company and make 10%
compounded daily ??
You should also consider the fact that Cannondale maybe running at full
capacity,
producing all the frames they can without jumping up to a whole new
corp. level.
Cannondale happens to make a fine riding bike. They handle very well.
BTW, I don't ride a Cannondale....
Like you were implying; _the bang-for-the-buck IS to low_.
Flailer
Robert Turnbull
Jeff B <jeff...@bouldernews.infi.net> writes:
(text deleted)
>And by the time you figure in all the other costs involoved in
>shipping, storing, building and prepping a bike, many are sold at A LOSS
>TO THE SHOP.
>BIKE SHOPS DO NOT MAKE MONEY ON BICYCLE SALES.
I would propose that all readers of this newsgroup support their
local bike shops by buying all their bikes by mail order. If you
really need to ride a bike before purchasing it go to another city
and put their shops out of business by buying bikes there.
Bob
mtn...@cp.duluth.mn.us
Jeff B <jeff...@bouldernews.infi.net> wrote:
>The profit margin on bike items, as with many things, is inversely
>proportional to price. That is to say, the cheaper the item is, the
>more profit margin there is percentage wise. And the more expensive an
>item, the lower the margin. A patch kit which sells for $2.50 in a shop
>is purchased at wholesale for around $0.50, thats a 500% markup! A
>bike, especially a higher end one costing around $2000, would have a
>wholesale cost of around $1600. That's only a profit margin of 25%.
>The lower end bikes in the sub-$400 price range, have the highest markup
>of around 60%. But the prices on those bikes go down considerably
>throughout the sales year and by the end of the year - now - the bike
>which is marked "Was $400, Now $200" is probably being sold AT COST!!
>And by the time you figure in all the other costs involoved in
>shipping, storing, building and prepping a bike, many are sold at A LOSS
>TO THE SHOP.
>BIKE SHOPS DO NOT MAKE MONEY ON BICYCLE SALES.
>Shops make their money on future service to return customers and through
>accessories. They may only sell two bikes on a given day, but a hundred
>tubes and patch kits. Those are the high margin items.
>Please be considerate when shopping for bikes and related merchandise.
>Those who work in bike shops do it because they want to be there, not
>because they are getting rich off of commissions. Most shops DO NOT PAY
>SALESPEOPLE COMMISSIONS, these are not car dealerships. If the bike
>says $500, don't ask what the price is. That is the price. Period.
>And if a shop DOES bargain down the price, what does that tell you
>about the price to begin with-- it was too darn high. And if the bikes
>are marked up enough to be "bargained down", imagine what other
>exorbitant markups are being paid if you buy your other items at that
>shop as well. The patch kit that normally should have that 500% markup
>to $2.50 might have a 1000% markup to $5.00! That may seem trivial, but
>as you look at things like jackets and helmets the difference is
>important. That Pearl Izumi vest you paid $80 for cost the shop about
>$15!
Most stuff at a bike shop isn't marked up like you say. That $80PI
vest cost $35 +. Most stuff is marked up double or a little less.
Bikes vary too much to make a good guess.
Bill Randleman
In <5dfdv1$7...@vixen.cso.uiuc.edu> turn...@coewl.cen.uiuc.edu (Robert
Turnbull) writes:
many are sold at A LOSS TO THE SHOP.
>>BIKE SHOPS DO NOT MAKE MONEY ON BICYCLE SALES.
>
>local bike shops by buying all their bikes by mail order. If you
>really need to ride a bike before purchasing it go to another city
>and put their shops out of business by buying bikes there.
>
>Bob
>
bike mail order or out of town but having your local bike shop maintain
it and sell you accessories then go right ahead! As long as the local
shop doesn't have the bike in stock killing their open to buy.
Bikes serve only as traffic builders and lost leaders. They are a
marketing tool only. They should not really be considered merchandise
by a bike shop.
Bill
Bicycle Service Center
30 East 13th Avenue
Eugene, OR 97401
(800) 360-5320
bik...@ixnetcom.com
www.bicyclecenter.com
Nell Adkins
Jeff B (jeff...@bouldernews.infi.net) wrote:
: The profit margin on bike items, as with many things, is inversely
: proportional to price. That is to say, the cheaper the item is, the
: more profit margin there is percentage wise. And the more expensive an
: item, the lower the margin.
: Shops make their money on future service to return customers and through
: tubes and patch kits. Those are the high margin items.
Well, this seems inconsistent w/ the behavior of the folks
at the local bike shop here. Whenever I bring my bike in
for service, they IMMEDIATELY start trying to sell me a new
one. I have to ask very pointed questions to get them the
slightest bit interested in doing the work I came in the
shop for. I have bought numerous accessories there - from
gloves and shorts and tools to tires and so forth. Basically,
they act like they couldn't care less for my business -
whether it's servicing my bike or selling me accessories.
They are very interested, however, in selling me a new bike.
And this is a shop w/ a good reputation, supposedly.
I give up. You think I'm gonna buy a new bike from them
this year? I don't think so.
Nell
Jim Tonak
I follow these posts from time to time and always come to the same
conclusion. Readers of this NG will never understand how bike shops
work. I've worked in shops that mark up bikes 66% and offer free
service for a year. I've worked in bike shops that sell them at a 25%
mark up and charge you for every little tweak the bike may need after
it goes out the door. Most shops are in the middle of these two
extremes, marking their bikes up between 35% - 45%.
When you consider all the variables...shipping, the amount of time the
boxed bike spent in storage either at the shop or in a warehouse, the
amount of work that goes into a quality build (and price of bike does
not matter here because the cheap ones typically require more work),
the time the bike sits on the showroom floor, and so on...45% mark up
is not a lot of money.
In many instances, what consumers consider to be a low priced, marked
down, left over stock sale may actually be something else. Typically
when the new model year bikes begin shipping from the manufacturer,
the manufaturer sells the previous model year left over bikes at a
large savings to their customers. Many shops who did well with the
particular models during the last year will purchase these and mark
them down significantly from their original asking price. While it
may seem that the shop is selling leftover bikes at cost, they are
actually making a profit because they bought them much cheaper.
Most shops count on the purchases made in addition or after the bike
sale to make their money. Many shops I've worked at price parts and
accessories on a tiered mark up system. Very inexpensive parts may be
marked up 100% while parts in the $30 to $70 wholesale price range are
marked up 80% , and parts over $70 wholesale are marked up 65%. But
pricing really does vary quite alot. Typically when you see an XT
rear derailleur for $49.95 in a mail order magazine, a bike shop pays
$39.00 wholesale for the same part. This is due to the mail order
companies huge volume discounts and the fact that they buy most of
their parts direct from the part manufacturer. Shops buy a majority
of their parts through wholsale suppliers.
I think it's important to realize that although there are always
business owners out there who will take advantage of a consumer, the
overwhelming majority of bike shops out there are just trying to make
a buck and pay their bills like you and I. When huge mailorder
companies out price bike shops with their mega sales ads in the
magazines, they are really taking advantage of bike shops, and you can
hardly fault shop owners for being pissed at them. After all, it's
the bike shops that take the stuff to the neighborhoods, it's the bike
shops where you can go lay your hands on the product to see what it
really looks and feels like, and it's the bike shop where you can go
get professional advice, face to face.
Just my two and a half cents.
Jim Tonak
ig...@gate.net
[email addres altered to foil spammers]
Thomas H. Kunich
In article <32fd9f04...@news.gate.net>, Jim Tonak <ig...@gate.net> wrote:
>I follow these posts from time to time and always come to the same
>conclusion. Readers of this NG will never understand how bike shops
>work. I've worked in shops that mark up bikes 66% and offer free
>service for a year. I've worked in bike shops that sell them at a 25%
>mark up and charge you for every little tweak the bike may need after
>it goes out the door. Most shops are in the middle of these two
>extremes, marking their bikes up between 35% - 45%.
Yeh, and they don't take the time to think about it either. If you mark
up a bike 45% and it already cost you $110, that thing is sitting on
your floor taking up space. It requires you to spend an hour putting it
together. It requires you to move it around and clean up under it and
in the end you make less than $50 on it. Hell, why not put your money
into a mutual fund and make 20% on it and not have to even lift a finger?
Not add to this the horses asses who come in the shop at least once a
day to tell you how you're screwing them for taking a 45% markup on
a $200 bike!
Not me boss. I wouldn't work in the bike business for anything.
AA
When I lived in Baton Rouge Louisiana I bought just about everything from
mail order houses. The bike service in Baton Rouge was not very good (at
that time). In Corvallis Oregon we have healthy competition with five major
bike shopes in a town of 50,000. I buy 90% from the local shops and helping
them stay in business helps me. They have excellent service and on most
items, service is worth a lot. Service building a bike is obviously
important, but service giving me an honest evaluation of which pump to buy
is also very important. At least 4 of the five stores compete on service
and are completely honest about the strengths and weaknesses and what you
really need. My advice is to buy what you can locally and insure they stay
in buiness by allowing them to make a living.
BTW, the service cost in Corvallis is 3 to 4 times as high per hour as it
was in Baton Rouge. The difference is Corvallis Mechanics typically have
10-20 years of experience.
I apologize, if I offend anybody in Baton Rouge. I didn't try all shops or
mechanics there.
Alan Acock
hop...@proaxis.com
David Wilson <d...@interaccess.com> wrote in article
<32F938...@interaccess.com>...
> Eric W. Bryant wrote:
> >
> > Peter Hernes (pjhe...@saul.u.washington.edu) wrote:
> > :*
> > :* 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
> > :*
> >
> > 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 University
> >
> > finger 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
>
>
>
and...@nospam.inforamp.net
> Typically when you see an XT
>rear derailleur for $49.95 in a mail order magazine, a bike shop pays
>$39.00 wholesale for the same part. This is due to the mail order
>companies huge volume discounts and the fact that they buy most of
>their parts direct from the part manufacturer. Shops buy a majority
>of their parts through wholsale suppliers.
>
>
>Jim Tonak
>
>ig...@gate.net
>[email addres altered to foil spammers]
Just a quick addition to Jims absolutely correct posting.
Much mail order product is purchased as factory overruns, end of lines
and specifically OEM product. They get OEM product from bike
manufacturors (sp) who double up their purchase of things like cranks
pedals, shocks etc. just to sell them at a markup to mail order
houses. OEM discounts vary from 20%-60% off wholesale. This is also
why bike shops have been starting to sell private label bikes.
header altered to reduce spam
Andrew Marshall
and...@inforamp.net
peach
In fact, you got it exactly right. A 1500 dollar bike does cost a shop
1000 to 1200 depending on their mark-up. But of course you already knew
this because you have so much industry experience. (buying a bike on the
net)
Once again the problem is simply a load of complainers that aren't
willing to accept the fact that bikes are really expensive.
Excuse me now while I go roll around in the big pile of money in my
living room that I made working at the bike shop.
Dennis O'Connor
peach <pe...@u.washington.edu> wrote in article <32FC17...@u.washington.edu>...
: In fact, you got it exactly right. A 1500 dollar bike does cost a shop
: 1000 to 1200 depending on their mark-up. But of course you already knew
: this because you have so much industry experience. (buying a bike on the
: net)
:
: Once again the problem is simply a load of complainers that aren't
: willing to accept the fact that bikes are really expensive.
They are just unhappy because the demand for C'dales is high
enough that they command a price premium, which puts C'dales
out of their reach. And they, not understanding how supply
and demand work together to set price, are confused.
They probably also do not comprehend "overhead".
it's a free market. Don't like a C'dale's prices ?
Try to haggle. Still to high ? Too bad. Buy a Huffy.
It's all you really NEED in a bike, anyway. Think of
how proud you will be when you can do things on a
Huffy that the POSERS need a C'dale to do ! :-)
--
Dennis O'Connor dm...@primenet.com
"Speak for ? Speak for ?
I don't speak for anyone: I'm just having fun."
c m lozier
Hey if you got a problem with the money you make at the shop get
another job (or business)!!
In <32FC17...@u.washington.edu> peach <pe...@u.washington.edu>
writes:
>
>In fact, you got it exactly right. A 1500 dollar bike does cost a shop
>1000 to 1200 depending on their mark-up. But of course you already
knew
>this because you have so much industry experience. (buying a bike on
the
>net)
>
>Once again the problem is simply a load of complainers that aren't
>willing to accept the fact that bikes are really expensive.
>
Steve Hartsell
Dennis O'Connor wrote:
>
> peach <pe...@u.washington.edu> wrote in article <32FC17...@u.washington.edu>...
> : 1000 to 1200 depending on their mark-up. But of course you already knew
> : this because you have so much industry experience. (buying a bike on the
> : net)
> :
> : Once again the problem is simply a load of complainers that aren't
> : willing to accept the fact that bikes are really expensive.
>
> enough that they command a price premium, which puts C'dales
> out of their reach. And they, not understanding how supply
> and demand work together to set price, are confused.
>
> They probably also do not comprehend "overhead".
>
> it's a free market. Don't like a C'dale's prices ?
> Try to haggle. Still to high ? Too bad. Buy a Huffy.
> It's all you really NEED in a bike, anyway. Think of
> how proud you will be when you can do things on a
> Huffy that the POSERS need a C'dale to do ! :-)
>
> --
> Dennis O'Connor dm...@primenet.com
> "Speak for ? Speak for ?
> I don't speak for anyone: I'm just having fun."
Well. Actually Huffy did make the Olympic Bikes one year..
Mike and Dawn Groff
Steven Hartsell wrote:
>
> Ken Lee wrote:
> >
> > In article <Pine.OSF.3.95.97020...@saul2.u.washington.edu>,
> > Peter Hernes <pjhe...@saul.u.washington.edu> writes:
> >
> > 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, http://www.rahul.net/kenton/index.shtml
>
> 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.
>
> 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
> 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
> 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..
>
> 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
> gloves, maybe a small pump..
>
> 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. .
What in God's name are you smoking? You have to be out of your mind,
or have never been in a business before to make such ridiculous
statements. Let's say you are a carpenter. If someone is building an
addition on their house for the first time, should you just throw in the
windows and doors in hope of them becoming a repeat customer? That
would blow your profit margin away, just as your statements would
destroy the profit margin of a bike shop owner. A bike shop owner
usually only grosses 40 percent on average for a bike. This does not
include the overhead costs of paying the employee that built it, the
supplies that go into putting the bike together (grease, lube, polish,
etc.), or even the tools sometimes required to put the special ones
together (like taps to rethread the poor quality holes made at the
factory).
Bike companies are making the money ("the money" being a greater
portion of profit than the dealer). So, why don't you go start a bike
business? This industry is one of the most risky. When money falls
short, the luxuries and entertainment expenditures (bikes) will be of
the first to come to an end. I know because I was in the bike industry
when the "so-called" recession was on its way in. Bike sales slumped,
and the president of the company I was working for was shaking in his
boots. The dealers were scared and were not buying.
To summarize this dissertation, get the hell off of the bike companies
and dealers asses, for they are doing what they do best and trying to
make a living at it.
Vincent Cheng
Steven Hartsell (hart...@ykt0.attnet.or.jp) wrote:
: 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.
This is very funny. You hae no experience owning a shop nor working in
one, and you are making these stupid claims. Yes, there are dealers who
will deal on the net, but the other claims you have made are really wrong.
: 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..
hmmm...you msut have been buying your Cannondales from Costco. At any
good bike shop, and I don't mean Kmart or whereever you buy your bikes, we
go through everything on the bike, bearings, true the wheels, all the nuts
and bolts and adjust the cantis to work like V brakes. It takes about an
hour to do everything properly, sometimes even more on the better bikes.
: You dont think a $1500 buck bike actually cost them $1000 bucks do you..
As a matter of fact, I do. I was talking companies in town, at Interbikes
and stuff, and also, I have a crap load of ordering sheets for dealers
sitting at home, and yes, these bikes actually cost that much money. Get
some facts before you open your mouth.
: 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
and the manufacturers of bicycles will sell the bikes you to at their
cost, right? Hey, wake up! Manufacturers make the most money and they
jack the price up a lot to make their profit. for example, you can buy a
good set of Easton tubing for maybe 50 bucks, but they sell the frames to
us for around 250-300(for cheap frames), now think about that.
meanwhile, your local shop is selling them to you for arond 450, who is
making the money now? The manufacturers can buy their parts at the lowest
prices, but it's what they sell if for that dictates what consumers can
buy it for.
Do you realize that most shops are small and they buy maybe 5 derailleurs
at a time, not a million. When small LBS's buy their supplies, they don't
often get the volume discount that mail order houses get. Maybe it's
really different at wherever you are writing from, but it doesn't work
like this here in the real world.
: 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..
and that will be a dealer's fault because? This is what the consumers
want and this is what they do to meet the response.
: 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..
Ok, this is true.
: 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..
yeah, they can do that, and jack up the prices accordingly. What do you
think? They get all their accessories for free? This is where the shops
make money, on accessories. They can give you a deal on the stuff, but
throwing it in for free is just plain stupid.
: 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.
Well, a lot of shops offer free tune up after 30 days of riding to cure
cable stretch and other break-in things. Maybe you should find a
friendlier shop. And yes, the shop that I work for this summer(among
others that I have worked or associated with) give discounts to people who
bought bikes there andneed parts.
Answer this, you are disputing all of us, who have either owned, owning,
worked or working in real bike shops before, and say that your bike
buying experiences are true facts? Get real.
Eric Lin
mtn...@cp.duluth.mn.us wrote:
>Most stuff at a bike shop isn't marked up like you say. That $80PI
>vest cost $35 +. Most stuff is marked up double or a little less.
>Bikes vary too much to make a good guess.
Pearl stuff and Oakleys usually retail for exactly double. That
doesn't include shipping to get the goods to the shop. I've seen Pearl
socks below MSRP at SportMart though. I've found that high end stuff
(Litespeed frames for instance) have a bigger markup than cheap stuff
like Trek 800s and Specialized Hardrocks.
Blair Weeks
>>
>> >As Mr. Bryant said, higher=end bikes usually have the lower margin.
>> >The shops I worked at priced low-end BMX, freestyle, and mountain
>> >bikes as high as 40% margin. Mid-priced sport and triathlon bikes
>> >between 30-35% margin. I remember selling $3,000.00 bikes where less
>> >than $500 was gross profit. Net profit was rather pathetic since
>> >building up pro bikes from frame and parts often took the better part
>> >of a day.
>This is typical. As well is the margin on accessories. This is where
>better profits are made.
>>
>> In Hayward they _average_ 25% MARKUP. If you change it a percent or
>> two it immediately shows up in the sales.
>
>Down here in the burbs of big city land, we have to run at 35-40% on
>bikes, the rent is higher.
>
>JH
>>
>> It's a hard business and you have to love it to stay in it.
I recently purchased a 97 C'dale F700 from my local bike shop. The
suggested retail price which the shop was quoting was $1458.00 Canadian
which is worth 65-70 cents realtive to the US dollar. The shop sold it
to me for $1150.00. I figure the shop made a $280.00 profit based on a
wholesale cost of 60% of suggested retail price ($874.00). With this I
get three years free maintenance. As I perceive this tis to be a good
deal, I make sure I patronize the store and buy a lot of accessories.
I figure I received a good deal? What do people think?
Blair
Ch'town PEI
Sweattman
I say you did good.....Nice bike with a good service agreement.....I think
most people just need to learn to ask for discounts and other
spiffs....they might be surprised what the qualified bike shop can give
them...
A kick in the ass is a step forward!
Curtis L. Russell
I'm with you, but that's just a start of the list. The $ 800 differential
might be real enough -- one store decided to write off the bike that didn't
move before the other store did. Another regular risk, along with holding
costs, renting store space, advertising... The 'regular' mark-up has to
cover overhead and the bikes that never get sold at 'regular' mark-up.
As for assembly -- I kinda have to wonder when someone implies that
assembly is pretty much the same, no matter where, and that you don't get
what you pay for. Never mind the times at Sports Authority that I had to
get the wrench wretch to turn the part around to face the right direction
(hey, I was shopping for a cheap sports bag), there's enough problems with
the Yuppie chains (two months training in sales and two days on bike
assembly) and the mower shop now bike shop to write a book about. Even the
good shops make mistakes, but at least they can make good on them (assuming
that you managed to miss the car when the brake blocks popped out). As you
mentioned, even the minor adjustments can be difficult for a newbie.
Scratch that -- I popped Campi brake-cable bolts off and on for years, so
some minor maintenance can try anyone's patience. Someone asking the
original post doesn't strike me as someone already doing maintenance. And
a fair number of bike racers and experienced day riders are happy to leave
that minor maintenance to the lbs. (OTOH, I haven't really seen that many
'experienced customers' getting extended service agreements. Doesn't strike
me as a big selling point.)
I'm no fan of Shimano, and there's a lot of bikes I feel are overpriced.
But anyone that feels its so easy should be driving a van around peddling
bikes (I'd try a pun, but everyone would think I couldn't spell) and making
a fortune on the $ 800, or $ 400, difference. But I don't see a dearth of
competition at the local level, and the ones that survive seem to provide
added value -- like good advice as opposed to all the bad stuff floating
around...
By the way, the auto 'factory invoice' does not generally list the factory
give backs, special floor financing and hidden rebates that make the 'money
losing' car a profit for the auto dealership. '$ 50 over factory invoice'
is NOT $ 50 over true net costs. But HE knew that...
Mike and Dawn Groff <grof...@ix.netcom.com> wrote in article
<32FE10...@ix.netcom.com>...
> Steven Hartsell wrote:
...
> > 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.
...
> > 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. ...
>>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.. ...
> > 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..
> > Repeat or Experienced riders/customer deals on bikes usualy
areupgrades
> > to better forks, better peddles, better tires.. Maybe a longer service
> > agreement. .
>
> What in God's name are you smoking? You have to be out of your mind,
> or have never been in a business before to make such ridiculous
> statements
Michael Frank
Blair Weeks wrote:
>
> I recently purchased a 97 C'dale F700 from my local bike shop. The
> suggested retail price which the shop was quoting was $1458.00 Canadian
> which is worth 65-70 cents realtive to the US dollar. The shop sold it
> to me for $1150.00. I figure the shop made a $280.00 profit based on a
> wholesale cost of 60% of suggested retail price ($874.00). With this I
> get three years free maintenance. As I perceive this tis to be a good
> deal, I make sure I patronize the store and buy a lot of accessories.
>
> I figure I received a good deal? What do people think?
>
> Blair
> Ch'town PEI
I had a similar scenario. I bought an R900 Cannondale from my local
shop. The list was $1800 and they would only knock off $100. So I asked
if they would give me an extra year's service, and they agreed. I do a
lot of my own stuff, so what it really boiled down to was access to the
techs on the phone and in the shop when I got in over my head. I know
the cost to the shop was around $1300 and they didn't even have it in
stock -- I had to wait a few weeks. It really irked me, but I couldn't
find it much cheaper anywhere else, I couldn't assemble it (actually, I
don't know but it was probably better for a professional to do it
anyway) and the service *is* worth something. I'm a businessman too, and
I want them to make some money on it -- otherwise, how will they pay the
tech. So all in all, I'm not unhappy. Besides, whenever the shop treats
me poorly, I just order from the catalogs!
Mike
Atlanta, GA
Jason T. Nunemaker
(original post missing... responding to a response...)
> Steven Hartsell wrote:
> > 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.
Pardon me, but have you ever ASSEMBLED one of these "almost-complete
assembly" Cannondales? As a former shop mechanic, I've assembled Schwinn,
Raleigh, GT, Mongoose, Nishiki, Marin, Gary Fisher, Specialized, Greg
Lemond, and Cannondale. Of those ten, Cannondale is hands-down the
furthest from "almost-complete" assembly, mainly because they package
things differently. To say that anyone with "any experience with bikes"
can put one together is just ludicrous.
I'm no longer a shop mechanic. And yes, it does frustrate me slightly
that I have to pay a shop to do something that I can easily do myself.
But guess what... even if I could find a shop that would give me the bike
in a box (with a wink and a nod), if anything ever went WRONG with it and
I tried to get it warrantied, any company with any brains would just
laugh. No matter how well I can build a bike, they don't KNOW me. For
all they know, I put it together with a hammer and an adjustable wrench.
If the dealer is AUTHORIZED, there's the assumption that the mechanics
will assemble with a certain level of skill as expected by the company.
The company KNOWS that the bike was assembled "properly" by their
standards. Therefore, the warranty stands.
And besides, the money I pay for that assembly might help some poor kid
who's wrenching his way through college like I did. Sort of like passing
the torch...
Jason
arc...@iav.com
Actuall, bike shops DO make money on new bikes. Usually, about 30-35
points. (not quite equal to percentage.) So if you buy a nice $500
bike, usually the dealer is making $150 to $175. From that, he has to
subtract the time it takes to build a bike, approx 45 minutes for most
($5), the salesperson's time (not just you, but also with the 10
prospective customers before you who didn't buy the bike ($20) and the
future adjustsments ($10-$20 depending, most bikeshops allow unlimited
adjustments from 6 months to a year)
Service however has a HIGH markup. Since most of it is based on labor
rates and the mechanics expertise, a $40 tune up which takes an
average mechanic about 2 hours and parts which also have high markup
makes for an especially attractive business.
However, GOOD mechanics are very hard to find. It's not just being
able to work on the new bikes, but the old bikes too. Huffys included.
Shop mechanics also have HUGE databases on parts in their heads. If
you hand one of them an older Shimano Biopace crank, odds are most
will be able to tell you right off the top of their heads, 122.5mm
bottom bracket.
Sooooooooo... it brings us to the point. Service is more profitable,
but SALESPEOPLE are reletively EASY to come by. They don't need to be
anywhere as knowledgeable, their wages are lower, and many people have
already sold themselves on a particular class of bike so they don't
necessarily need to be skillful.
So I guess it depends on the philosophy of that particular shop that
you're dealing with.
JF
E. Paul Stanley
There has been A LOT of discussion on this newsgroup, both pro and con
about bicycle markup. Heated reply from bike shops (and their
supporters) claim they make no money on new bike sales. I'm all for
competition and charging the highest price the market can bear (a/k/a
capitalism). On the other hand, if the manufacturer is forcing the MSRP
on dealers, then that is illegal. Want to convice us that the MSRP is
fair? Simple? State the actual price paid wholesale for the bike (that
is the invoice price less the end-of-month kickback). As long as you
won't do that, the consumer has to assume that you are making a huge
profit. I can buy a new car for $300 over dealer cost (2% markup), but
I'll bet that I can't buy a new bicycle that close to wholesale. Why
not?
--
Paul
Scott McClellan
I have just one question...
Would you be willing to operate a business, especially a business with
relatively high capital outlays, for 2% net profit *before* paying
operating costs (eg labor, rent, interest, utilities, etc)?
If so, get used to being *very* poor.
Bruce Jackson
> There has been A LOT of discussion on this newsgroup, both pro and con
> about bicycle markup. Heated reply from bike shops (and their
> supporters) claim they make no money on new bike sales. I'm all for
> competition and charging the highest price the market can bear (a/k/a
> capitalism). On the other hand, if the manufacturer is forcing the MSRP
> on dealers, then that is illegal.
I don't pretend to know the legality of it but I do know that when I
sold bikes selling them below 30% margin would put you in danger of
loosing your dealership.
> Want to convice us that the MSRP is fair? Simple? State the actual
> price paid wholesale for the bike (that is the invoice price less
> the end-of-month kickback). As long as you won't do that, the
> consumer has to assume that you are making a huge profit. I can buy
> a new car for $300 over dealer cost (2% markup), but I'll bet that I
> can't buy a new bicycle that close to wholesale. Why not?
Car dealers do have a few tricks to pad their profits like double
charging for things done in prep, getting rebates from the
manufacturers, etc. If a shop was going to charge 2% markup they
would have to tack on dealer prep like auto dealers do. Assuming two
hours of labor for assembly, checkup, and waranty service would add
about $70 to the price. If you look at the bike itself like an
investment remember that one can get a 6% return on safe investments
without too much trouble. If a shop covered its other expences and
only made 2% on a bike they would have to turn over their inventory
three times a year just to equal the return they could get with no
risk at all. I like to get a deal as much as the next guy but my
experience working in and managing bike shops taught me that bike
shops are already selling bikes about as low as they can.
--
Bruce Jackson b.a.j...@ieee.org
http://replicant.csci.unt.edu/~jackson/
E. Paul Stanley
Scott McClellan wrote:
>
> I have just one question...
>
> Would you be willing to operate a business, especially a business with
> relatively high capital outlays, for 2% net profit *before* paying
> operating costs (eg labor, rent, interest, utilities, etc)?
>
> If so, get used to being *very* poor.
See. Once again, an assertion without quantative data. I know that car
dealers represent one of the largest percentage of destitute people in
our economy. If they can live on 2% why can't bike stores?
--
Paul
E. Paul Stanley
Bruce Jackson wrote:
>
> I don't pretend to know the legality of it but I do know that when I
> sold bikes selling them below 30% margin would put you in danger of
> loosing your dealership.
I had a sneaking suspicion that there was some price fixing going on.
FYI, if a manufacturer tells you that you can't sell a bike below a
certain price then it could constitute illegal price fixing.
> Car dealers do have a few tricks to pad their profits like double
> charging for things done in prep, getting rebates from the
> manufacturers, etc. If a shop was going to charge 2% markup they
> would have to tack on dealer prep like auto dealers do.
Souds like a great idea!! I don't mind paying for legit services and
products. Charge me 2% over cost plus dealer prep and I'll buy a new
bike every year.
> Assuming two
> hours of labor for assembly, checkup, and waranty service would add
> about $70 to the price. If you look at the bike itself like an
> investment remember that one can get a 6% return on safe investments
> without too much trouble. If a shop covered its other expences and
> only made 2% on a bike they would have to turn over their inventory
> three times a year just to equal the return they could get with no
> risk at all. I like to get a deal as much as the next guy but my
> experience working in and managing bike shops taught me that bike
> shops are already selling bikes about as low as they can.
If that were quantatively true then all bike shops would be out of
business. Since we know that not all bike shops go bankrupt, then they
must be making money. If they could make more money elsewhere, then the
opportunity cost would be too high and they would take the safe
investment. Also, if they sold the bikes that cheaply, then turning
over that kind of inventory would be no problem.
As to general bike shop overhead, I wonder how many hours the average
bike shop owner works per week (all I know are closed on Sunday and most
of Saturday, don't open until 10 on weekdays and close at 6 PM), the
average taxable income, the average business writeoff (makes the
business look like it makes no money at all), and how much bike
equipment they purchase for their own personal use (and add to overhead
instead of salary). Stories and assertions are intersting, but data is
for real. If you won't share the numbers, then don't make the claim.
Thanks to Bruce for his candid observation.
--
Paul
Jim Tonak
If you want your bikes at cost, go open yourself a bike shop and quit
your whining. Then you can sell bikes at a 2% markup to all of your
whining buddies. Or I suppose, you could get a job as a mechanic and
make $7 an hour. That way you could get an employee purchase on a
bike (15% below wholesale). But hey, you saved yourself a bunch on
that bike, didn't you?
Jim Tonak
ig...@gate.net
[email address altered to foil spammers]
Tullio
E. Paul Stanley wrote:
> See. Once again, an assertion without quantative data. I know that car
> dealers represent one of the largest percentage of destitute people in
> our economy. If they can live on 2% why can't bike stores?
> --
> Paul
I'll give you some approx. figures from our first year (actually 9 mos.)
of business. We started very small and things get better with greater
volume, but you'll get the idea. All of the figures are expressed as a
percentage of total sales.
Sales 100%
Cost of Goods Sold 60%
Gross Margin 40%
General Expenses 13% (supplies, depreciation, insurance, etc.)
Labor 10% (this does not include any pay for me)
Payroll Taxes 2%
Rent 7%
Advertising 11%
Utilities/Phone 3%
Interest Paid 4%
Total Expenses 50%
Net Loss 10%
In our second year, we sold around 240 bikes and achieved a profit of
several thousand dollars. Again, that did not include any pay for me,
and all of the profit was invested in the business. Hopefully, in a
year or two, the shop will be large enough that I can draw some salary.
Unfortunately, because of our growth, we will need a larger facility
next year. So, rent will go up substantially.
In any case, a gross margin of 2% is unrealistic for any business. Car
dealers earn far more than 2% on new car sales. The "2% over invoice"
sales are nothing more than advertising trickery. Besides, car dealers
cannot survive on new car sales. They require the much greater margin
of service and used car sales to cover their expenses.
Todd
Tullio's Big Dog Cyclery
LaSalle, IL
e-mail: tul...@TheRamp.net
Kristan Roberge
jac...@replicant.csci.unt.edu (Bruce Jackson) wrote:
>
> In article <33078C...@usa.net>, E. Paul Stanley <psta...@usa.net> wrote:
> > On the other hand, if the manufacturer is forcing the MSRP
> > on dealers, then that is illegal.
>
> sold bikes selling them below 30% margin would put you in danger of
> loosing your dealership.
A manufacturer has the right to set a minimum price for its products,
PERIOD. Car companies don't bother to do this because they know that
even at 2% over invoice the dealers make a killing because 2% over
10,000 is $200. Sell 20 cars a week at that price (and if you ever
watch a car lot you'll see that happening) and you've cleared $20,000
BEFORE the other fees that dealers always charge. Meanwhile 2% over invoice
on a $1000 bike is only $20. Boy that's a wonderful profit margin. How
about on a $100 huffy. Your going to have to sell 10 of them just to
make the profit of charging a 20% margin on one of them.
> > Want to convice us that the MSRP is fair? Simple? State the actual
> > price paid wholesale for the bike (that is the invoice price less
> > the end-of-month kickback).
> Car dealers do have a few tricks to pad their profits like double
> charging for things done in prep, getting rebates from the
> manufacturers, etc. If a shop was going to charge 2% markup they
> would have to tack on dealer prep like auto dealers do.
Hey, I'm all for charging dealer prep (though they call it P.D.I.
in Canada - Post Dealer Inspection - and they also charge for freight).
Looking at the car sale adverts in today's paper and we find a PDI
of $675 on EVERY new car (even the $200 over invoice models... amazing
huh?).
> Assuming two
> hours of labor for assembly, checkup, and waranty service would add
> about $70 to the price. If you look at the bike itself like an
> investment remember that one can get a 6% return on safe investments
> without too much trouble. If a shop covered its other expences and
> only made 2% on a bike they would have to turn over their inventory
> three times a year just to equal the return they could get with no
> risk at all.
3 times several hundred units in the case of most shops. Auto dealers
have it easy because the manufacturer reimburses them for labour costs
on warranty items. Bike manufacturers aren't quite so generous.
Kristan Roberge
> >
> > I don't pretend to know the legality of it but I do know that when I
> > sold bikes selling them below 30% margin would put you in danger of
> > loosing your dealership.
>
> FYI, if a manufacturer tells you that you can't sell a bike below a
> certain price then it could constitute illegal price fixing.
That law varies with the state/province and country you know. As I recall,
recent supreme court (USA) decisions have given the manufacturers back
the right to set minimum prices for their products if they so choose
and restricting sales to dealers who honors their contracts with the
manufacturers.
If your want to be a cannondale dealer, part of the requirement is
honoring the terms and conditions set by the manufacturer who is
GRACIOUSLY allowing you to deal their products. That includes a minimum
price. Charging less would be unfair to other cannondale dealers
who are FOLLOWING the terms of the dealership agreement. A manufacturer
setting a minimum price for its goods (ESPECIALLY when its NOT the
only manufacturer offering similar goods, when a manufacturer represents
the ENTIRE marketplace - or a large percentage - and only sells at
one price, then THAT is price fixing, but one company out of a hundred
is NOT price-fixing) is as perfectly legal as refusing to sell to anyone
except other manufacturers and dealers. Try ordering a Cannondale
from the factory sometime.
> Souds like a great idea!! I don't mind paying for legit services and
> products. Charge me 2% over cost plus dealer prep and I'll buy a new
> bike every year.
They already charge you for the prep you moron. Its simply buried in
the pricetag.
> If that were quantatively true then all bike shops would be out of
> business.
Alot are. A friend of mine who owns a local retail shop (I'm almost
strictly mail-order) has a LIST of ALL the local bike shops that have
closed in the last 10 years. Its reached the high 20s as I recall. Just
the stores that have failed in this region over the last 5 years...
FIC, 3 Cyclepath locations (two of them have failed twice under different
owners), Bikeway, Bicycle Revival, one Bikestop location, National
Sports exchange, Boots & boards. Now that's just off the top of my head.
Hell, '96 alone we lost at least 5 shops. MAYBE in your fantasy world
bike stores never fail, but around here the failure rate runs about 20-30%
a year.
> Since we know that not all bike shops go bankrupt, then they
> must be making money.
Fortunetly here in Ottawa, all the SMART shops sell skis in the winter.
The rest shutdown to one or two employees (usually the owners) and that's
IT.
> If they could make more money elsewhere, then the
> opportunity cost would be too high and they would take the safe
> investment. Also, if they sold the bikes that cheaply, then turning
> over that kind of inventory would be no problem.
If you dump a product on the market, eventually your going to run out
of buyers.
> As to general bike shop overhead, I wonder how many hours the average
> bike shop owner works per week (all I know are closed on Sunday and most
> of Saturday, don't open until 10 on weekdays and close at 6 PM),
Local hours taper off in the winter for the BIKE only stores but the
combined Bike/Ski stores hold 9-6 Mon/Tue, 9-9 Wed-Fri, 9-6 Sat, 9-5
Sunday. Though this does vary from store to store.
> average taxable income, the average business writeoff (makes the
> business look like it makes no money at all), and how much bike
> equipment they purchase for their own personal use (and add to overhead
> instead of salary). Stories and assertions are intersting, but data is
> for real. If you won't share the numbers, then don't make the claim.
> Thanks to Bruce for his candid observation.
I've yet to see your proof, oh sure you can repeat a car ad, but where
are the numbers on what a car dealer REALLY profits.
Matthew Bailey Seigel
I buy a $3000 computer. Several years later it has lost most of its
value both in resale and in use. And I loose my health.
I buy a $800 bike. It still has value to me years later. And I gain
health.
Who cares about markup.
-Matthew
John A. Lee
In a previous article, hart...@ykt0.attnet.or.jp (Steven Hartsell) says:
>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.
From MY experiences in the Bike Industry (20 yrs in retail),
Hartsell's statement is an overflowing crock of bullshit.
Amado Ulloa
- If a low profit margin is indicative of failure, then why do I see vastly different prices for the same bike at shops 5 miles from each other? And I don't mean a $25 difference, I'm talking $150-$200 difference. It's called greed, and besides I get better service at the cheaper shop.
John A. Lee
In a previous article, arc...@iav.com () says:
>Service however has a HIGH markup. Since most of it is based on labor
>rates and the mechanics expertise, a $40 tune up which takes an
>average mechanic about 2 hours and parts which also have high markup
>makes for an especially attractive business.
The Bike Industry recently did a financial survey of dealers,
asking them to submit GAAP documents for statistical analysis.
The identities of the dealers were kept confidential, which was
probably a gesture of mercy since it became quite clear to the
accountants doing the study that most shop owners are woefully
unsophisticated businesspeople. Suffice it to say that it is
rather difficult to stay in business for very long if one's
gross profit margin is 36%, but the overall cost of doing
business is 38%.
If an average mechanic takes 2 hours to do a tune-up (not
unusual) for which a shop would charge $40 (also not too
unusual), then following the industry average wage scale
would put the average mechanic's wage at less than $8/hr
(sad to say, also not that unusual).
Does anyone really expect highly-skilled, experienced,
responsible, "professional" mechanics to STAY in the bike
industry for these kinds of wages? Why do you think that
there are so many students turning wrenches at your local
bike shop?
As for those "high markup" parts from which your local repair
shop garner huge profits, what makes anyone think that
customers are more forgiving of the 'outrageous' prices for
parts on a repair vs. over the counter sales? Last time I
checked, Nashbar was selling EXA-Drive cassettes for $2 BELOW
dealer cost, but at least the Sachs chain *did* cost a dollar
or two above 'wholesale.'
>However, GOOD mechanics are very hard to find. It's not just being
>able to work on the new bikes, but the old bikes too. Huffys included.
Good mechanics are indeed hard to find; and even harder to
keep (in the industry). The situation will remain so until
cyclists stop thinking of their bikes as mere 'toys.'
As for Huffys and the like, there are plenty of GOOD mechanics
who wouldn't bother touching anything that they know won't
hold its adjustments.
Jeffrey Potoff
E. Paul Stanley wrote:
>
> Scott McClellan wrote:
> >
> > I have just one question...
> >
> > Would you be willing to operate a business, especially a business with
> > relatively high capital outlays, for 2% net profit *before* paying
> > operating costs (eg labor, rent, interest, utilities, etc)?
> >
> > If so, get used to being *very* poor.
>
> dealers represent one of the largest percentage of destitute people in
> our economy. If they can live on 2% why can't bike stores?
Because they get a kickback from the GM, Ford, etc for every
car they sell. They also make up for poor margins on new
car sales through used car sales (where the margins are substantial)
and service.
Jeff
Bruce Jackson
EPS="E. Paul Stanley" <psta...@usa.net>
BJ=jac...@replicant.csci.unt.edu (Bruce Jackson)
BJ> Car dealers do have a few tricks to pad their profits like double
BJ> charging for things done in prep, getting rebates from the
BJ> manufacturers, etc. If a shop was going to charge 2% markup they
BJ> would have to tack on dealer prep like auto dealers do.
EPS> Souds like a great idea!! I don't mind paying for legit services
EPS> and products. Charge me 2% over cost plus dealer prep and I'll
EPS> buy a new bike every year.
I don't believe it. I've tried low-ball pricing and it doesn't work
that well. One time we managed to get a really good deal on some bikes
that was contingent on our buying them by the container. At first we
tried selling them well below what the wholesale normally was. We
made a few extra sales but not that many. Some customers simply
didn't trust us when we told them that the bikes were a really good
deal, some thought that there must be something wrong with the bikes
at that price, a lot of customers seemed to think that the low price
meant we were going out of business and didn't want to buy a bike from
us. We thought that the bikes would sell so well at the discounted
price that we would soon buy another container but we never even
managed to sell off the first container that season.
BJ> Assuming two hours of labor for assembly, checkup, and warranty
BJ> service would add about $70 to the price. If you look at the
BJ> bike itself like an investment remember that one can get a 6%
BJ> return on safe investments without too much trouble. If a shop
BJ> covered its other expenses and only made 2% on a bike they would
BJ> have to turn over their inventory three times a year just to
BJ> equal the return they could get with no risk at all. I like to
BJ> get a deal as much as the next guy but my experience working in
BJ> and managing bike shops taught me that bike shops are already
BJ> selling bikes about as low as they can.
EPS> If that were quantatively true then all bike shops would be out
EPS> of business. Since we know that not all bike shops go bankrupt,
EPS> then they must be making money. If they could make more money
EPS> elsewhere, then the opportunity cost would be too high and they
EPS> would take the safe investment.
The vast majority of bike shops do go out of business. Every
shop I ever worked at has since gone out of business. Granted
that some of the shops deserved to go out of business but others
were good shops that did everything they could to help their
customers and promote cycling but couldn't scrape by.
EPS> Also, if they sold the bikes that cheaply, then turning over
EPS> that kind of inventory would be no problem.
To be blunt, bull shit.
EPS> As to general bike shop overhead, I wonder how many hours the
EPS> average bike shop owner works per week (all I know are closed on
EPS> Sunday and most of Saturday, don't open until 10 on weekdays and
EPS> close at 6 PM),
Here is the week I worked when I managed a bike shop. At least two
days a week I drove to a warehouse to pick up merchandise which
required me to start out 7:00AM. The rest of the week I did have the
luxury of not having to be at work until 10:00AM. We closed the shop
at 6:00PM but typically I would deliver bikes for an hour or two then
go back to the shop and do a few more hours of repairs. Since
Saturdays were the day when we sold the most bikes if we didn't have
enough bikes on the floor we would either work late on Friday night or
come in early Saturday to assemble bikes. Some weeks I worked until
2:00AM on Friday night or come in at 5:00AM on Saturday morning.
On a slow week I'd work 50 hours but when things were busy it was
more like 70. It was the hardest I ever worked and I only pulled
down about $20K/year.
EPS> the average taxable income, the average business writeoff (makes
EPS> the business look like it makes no money at all),
LOL! running a bike shop for the tax write-off? Now I've heard
everything.
EPS> and how much bike equipment they purchase for their own personal
EPS> use (and add to overhead instead of salary).
I had some nice equipment but a lot of the stuff I used was also stuff
that just wouldn't sell. You can't eat stuff that won't sell so you
end up using it. One bike I rode around for years was built
almost entirely out of parts that other mechanics threw away and I
rescued from the dumpster. Getting parts at cost and writing off
personal equipment is not a huge benefit.
EPS> Stories and assertions are intersting, but data is for real. If
EPS> you won't share the numbers, then don't make the claim. Thanks
EPS> to Bruce for his candid observation.
Your base assumption is that people only open bike shops because they
see it as a good business opportunity. Believe it or not the reason I
worked in and ran bike shop was because I thought bicycles were about
the greatest thing mankind has ever come up with. They are such a
simple machine yet are among the most efficient. Cycling is at the
same time the most exciting sport, the best way to stay in shape, the
cheapest way to get from point A to B, and since a lot of nice people
ride bikes the best way to socialize. A lot of people bitch about the
price of bicycles but I can't think of many sports or hobbies that are
cheaper. My other hobbies are photography and computers and I have a
lot more money tied up in them than cycling. Some of the rewards to
running a bike shop are more sublime.
Bill holderness
>There has been A LOT of discussion on this newsgroup, both pro and con
>about bicycle markup. Heated reply from bike shops (and their
>supporters) claim they make no money on new bike sales. I'm all for
>competition and charging the highest price the market can bear (a/k/a
>capitalism). On the other hand, if the manufacturer is forcing the MSRP
>on dealers, then that is illegal. Want to convice us that the MSRP is
>fair? Simple? State the actual price paid wholesale for the bike (that
>is the invoice price less the end-of-month kickback). As long as you
>won't do that, the consumer has to assume that you are making a huge
>profit. I can buy a new car for $300 over dealer cost (2% markup), but
>I'll bet that I can't buy a new bicycle that close to wholesale. Why
>not?
>--
>Paul
Paul, why do you assume you can get a car for $300 over dealer cost?
Think about it, all dealers floor their inventory, that costs about $150
to $250 per car, per month. (if the manufacturer. Pre-pays the flooring
for x months then you are paying for it in a backhanded method ) Next add
in the salesman's wage & commission (he doesn't work for free). Factor the
transportation and prep costs for the car(this usually avg. $500-$750
/car). Next add the $10,000 to $25,000/Mo. rent that the avg.(more for a
large). dealer pays divided by the number of cars he sells a month. Then
add overhead (heat, lights, phone, advertising, misc. personal), oh and
some profit and wages for the dealership owner.
Who did you think was paying for all of those costs?
Thinking that you can purchase a $25,000 automobile for $300 over cost is naive.
Bill Holderness
IMPACT
bhol...@zola.trend1.com
Amanda Ferguson
look above
Amanda Ferguson
Other profitable parts of a dealership are:
- Used car sales. Were it possible to sell used bikes (it's really not
due to depreciation, too many sizes, not titled, no market standards)
there would be good money in it. Used cars are readily avail. to the
dealer. Many people feel more comfortable buying from a dealer than from
a private as well as the ease of financing there.
- Financing. Why do you think GMAC finances? Think of the size of the
revenues here. Also, dealers/salespeople get bonuses for writing
favorable contracts for payment.
- Service department. The 30K service for a Honda Civic is $450. For a
car that is half-microchips and never breaks anyway. Dealers are
reimbursed for full labor rates on warranties @ $45-60 an hr. All
service done during warranty/free service periods are reimbursed @ full
rate.
John A. Lee
In a previous article, sally...@linkonline.net (Amado Ulloa) says:
> If a low profit margin is indicative of failure, then why do I see
>vastly different prices for the same bike at shops 5 miles from each
>other? And I don't mean a $25 difference, I'm talking $150-$200
>difference. It's called greed...
It's called desperation, and cutting one's losses. Some dealers
will stubbornly hold their price (at what they consider to be
"fair," of course) even after the next year's models start rolling
in. Others may start dropping their prices to dump old merchandise,
in order to free-up capital to buy new merchandise. Still others
may simply have no clue as to what their break-even gross profit
margin is, so their prices may not be consistent with good business
practices. There are real differences in overhead expenses from
one dealer to the next, and it is the business owner's responsibilty
to make the proper calculations.
>...and besides I get better service at the cheaper shop.
Keep shopping there!
Supergo
Care to share with us what you pay for bikes then. If its so bullshit.
People on the net could careless about anything but the price. So come
on share with us the price what you pay then what you sale them for.
Money Talks.. Bullshit walks.. (Put up or shut up)..
AA
Our local bike shops charge about $30/hour for
service. Bike prices are a bit less than list in
Bicyling, etc. None of the bike shops are getting
rich, but we have professional mechanics who have
been in the business for a long time. A $30/hour
mechanic gets a lot more done in an hours than a
$15/hour mechanic, though not twice as much. The real
difference is the $30/hour mechanic gets it done
right! If the mechanics get half the charge, their
$15.00/hour would be about $30k a year. I think they
should raise their rates! It is important to me that
they make enough to stay in business!
The last bike I bought, the mechanic spend about 3
hours building and adjusting it--I know, I waited.
The bike has 2,000 miles without an adjustment
(except new tires). There was nothing wrong after the
free one month checkup. I might have got the bike
$100 cheaper from a shop that threw them out, but I
would have made up the difference getting it rebuilt.
Alan Acock
Hop...@proaxis.com
--
3106 NW Harrison
Corvallis OR 97330
Jeffrey Potoff <jpo...@latoso.cheme.cornell.edu>
wrote in article
<330A6A30...@latoso.cheme.cornell.edu>...
David Wiesenhahn
Bill holderness wrote:
> Paul, why do you assume you can get a car for $300 over dealer cost?
> Think about it, all dealers floor their inventory, that costs about $150
> to $250 per car, per month. (if the manufacturer. Pre-pays the flooring
> for x months then you are paying for it in a backhanded method ) Next add
> in the salesman's wage & commission (he doesn't work for free). Factor the
> transportation and prep costs for the car(this usually avg. $500-$750
> /car). Next add the $10,000 to $25,000/Mo. rent that the avg.(more for a
> large). dealer pays divided by the number of cars he sells a month. Then
> add overhead (heat, lights, phone, advertising, misc. personal), oh and
> some profit and wages for the dealership owner.
> Who did you think was paying for all of those costs?
> Thinking that you can purchase a $25,000 automobile for $300 over cost is
naive.
Don't forget the service department that is co-located at the dealership.
These typically have a fairly high profit margin. They also make money off
of financing and add-ons like extended warranties and undercoating.
Also, it's not unusual to have a model or two (e.g., Corolla) that they'll
let go for a small profit margin just to move them, while at the same time,
they make a much bigger profit off the higher-end cars (e.g., 4Runner) that
are in high demand.
> Bill Holderness
-------------------------------------------------
Dave Wiesenhahn IDA
dwies...@ida.org Alexandria, VA
John A. Lee
In a previous article, sa...@supergo.com (Supergo) says:
>People on the net could careless about anything but the price.
Yes, this seems to be true for a significant proportion of
this audience. Mis-information is also quite rampant on
the net, as well.
Show me your 1040 tax returns, and I'll happily show you
my wholesale price lists. The point is, the margin on
consumer goods is not relevant-- if you feel the product
is WORTH the selling price, you may buy it. If not, then
you may not buy it. Value is defined by each purchaser.
Jeff
My LBS is Super cool they are more then happy to show me there dealer
cost.
My LBS is MT 60 Bikes is Chino Ca.
The thing is if your only get the bike how do you think your going to
get that great of a deal. The shop need to make there money some place.
So if you buy ALOT you will get a good deal. But you Must be Nice to
the Guys at the bike shop.
I get Super great deals on parts and bike from them but like I told
you they are there to make money Not to give things away.
In the last Five months I have got tons of stuff from the shop like
a Ton of parts,shirts,helmets,and a Cannondale SVA3000 and a F1000
and a F700.
I'm in there getting some about 1 to 2 times per week.
Ride Fast.
Phil Rose
I get very frustrated whenever I see buyers disparaging prices at
small dealers in any field. I've never run a bike shop, but had a
one-person computer sales and consulting business in a rural area for
several years. It failed. One of the main reasons was that people
repeatedly balked at having to pay more markup than they would at
WalMart 20 miles away. I'm not complaining (well, not too much), but
they often got presale advice from me, then bought at WalMart or by
mail. I didn't like that, but figured at least that I would get
service business from them when the think broke and WalMart couldn't
help. Sometimes I did. But saying a store owner should be happy to
make basically $0 on new equipment sales in hopes of creating
long-term future customer relationships seems more than a bit
illogical, and not a good long-term business strategy unless you have
the cash reserves of a Sony or Canon. Oh, and customers also balked
when I tried to make service fees high enough to cover my costs if I
wasn't making anything on the sales.
I'm not saying I've never bought mail-order or at superstores. I even
do it myself with computer equipment, but that's because I know how to
handle problems with computers myself. But when I know that I know
little about something and that there's a reasonable chance I will
need pre-sale advice, and long-term service and support on something,
I suck up and ignore the lower prices elsewhere and buy from a
reasonably-priced knowledgeable local store. I've done this a number
of times, and did it with my own bicycles. If the satisfaction of
supporting a self-run small business in your local economy isn't
enough --- and I'm not saying it should be, especially if money is
precious to you --- then just look at it as a practical decision to
make your life easier in the long run.
---phil
peach
I am planning to buy a Marin Team Issue. This bike retails for about
2300.
As an employee I can get it for 1500. Yeah, that's a substantial
savings.
So f______ what. So dealers pay less for the bikes than you do. Do you
flip out at the grocery store about the mark-up on a can of soup?
What about other recreational sports? Have you ever bought skis?
Not only can you easily sink 750-1000 into the equipment, but then you
go and spend 40 every time you go skiing. Lots of people do this and I'm
sure that a lot of them whine about it too. But hey, they DON'T HAVE
TOO.
Any golfers out there? What do you think the mark-up is on a Titanium
club that goes for 400 retail? I have no idea, but if I golfed and I
wanted a set of them, I would have to evaluate whether or not they were
something I wanted to pay for. Nobody has ever forced me to golf.
Bottom line... Invariably the market price is supported by the
demographic. Financially secure people ski and golf, therefore the
equipment will tend to be expensive. Same with bikes. The good news is
you don't have to buy bikes!
But if this doen't satisfy your urge to complain, you do have a few more
options:
1. work in or own a bike shop/ski company/grocery store to get reduced
prices
2. actually ride the bike you own so much that you become fast enough
to deserve the free parts you're always asking for anyway
3. Realize that you enjoy riding and pay full boat. Nobody says you
can't shop around, but don't give everyone the "life isn't fair to me"
routine.
Thanks, and sorry about ranting. It seemed like a good idea at the time.
Peach
David Pottage
Steven M. Scharf wrote:
> I'm not sure what country you are posting from, but in the U.S. it
> is illegal for a manufacturer to set a minimum price. Ditto for
> the U.K. This is where the ubiquitous MSRP came from. They can
> suggest a retail price, but they can't set a minimum.
It still happens though. I recently tried to buy a Hope hub. Everyone I
called, even mail order companies who often sell shimano bits for 20%
under normal retail price, quoted the same (offical) price. Yet at the
same time, they quoted wheels built with hope hubs for less than the
retail cost of materals. (Wheels with shimano hubs had realistic profit
margins.) They told me that Hope refuse to re-supply anyone who sells
below offical MRSP.
As Hope stuff is good, I am happy to pay full price for it, But it is
clear to me that the prices are fixed.
--
David Pottage
1st Year Chemistry Postgraduate Student, University of Southampton,
Southampton SO17 1BJ, U.K. email: d.e.p...@soton.ac.uk
c m lozier
Peach - take a chill pill. If you are soooo unhappy in the industry...
get out!
In <33115A...@u.washington.edu> peach <pe...@u.washington.edu>
writes:
peach
I am very happy in the bike industry. I am very unhappy with people who
expect things for free.
Peach
Hamish Eisler
On 17 Feb 1997 21:22:15 GMT, Kristan Roberge <Krob...@magi.com>
wrote:
>A manufacturer has the right to set a minimum price for its products,
>PERIOD. Car companies don't bother to do this because they know that
>even at 2% over invoice the dealers make a killing because 2% over
>10,000 is $200. Sell 20 cars a week at that price (and if you ever
>watch a car lot you'll see that happening) and you've cleared $20,000
20 x 200 = 20,000?
Hmm...
SunCycTour
I shopped for my Cannondale for several months and contacted at least 10
bike shops. I had test ridden a specific model at a bike shop and loved
it so I gave them the first shot at a sale. I ended up purchasing the
bike at another shop that sold it to me for about $100.00 less.
It has taken me months to get the bike set up properly due to poor
assembly by the "cheaper" shop. What's more, while the shop I first rode
the bike has a great rep for service, every adjustment made by the shop
where I purchased the bike was a battle.
I tell this story to everyone who admires my bike, naming both the shop
where I test rode the bike and the shop where I bought the bike. I
believe it has brought business to the former and cost the later. Price
is important but I'm sure had I spent that extra $100 bucks I would have
been much happier.
Mike and Debbie Thompson
God you're stupid. A good friend of mine has a dealership and sold only
30 cars last month and 20 times 200 is $4000. I don't know what his
overhead is for a month but I'm guessing that a measley $4000 probably
is less than his own salary for a two week period. Stupid.
I'm stupid too but gah!
me!!!
--
Mike Thompson
Mud Sweat & Gears
http://www.bikeusa.com
5340 NW Cache Rd.
Lawton, OK 73505
405-355-1808
800-933-1808
Mike and Debbie Thompson
Didn't realize who I was slamming. Maybe stupid on this one deal. I
use much of his tech advice because it works.
Mike
PBR
>> Hamish Eisler wrote:
>> >
>> > On 17 Feb 1997 21:22:15 GMT, Kristan Roberge <Krob...@magi.com>
>> > wrote:
>> >
>> > >A manufacturer has the right to set a minimum price for its products,
>> > >PERIOD. Car companies don't bother to do this because they know that
>> > >even at 2% over invoice the dealers make a killing because 2% over
>> > >10,000 is $200.
No, car companies don't do this because it's illegal. It's called
price-fixing and it's illegal in this country for cars, bikes,
anything. And, car companies sell their cars at 2% over invoice
because 9 out of 10 people will finance the car through the dealership
and they end up paying 75% over invoice by the time it's over. I
realize that you wouldn't understand such a concept since most bike
shop employees/owners/managers tend to be rather on the dim side when
it comes to business.
---snip----
Sell 20 cars a week at that price (and if you ever
>> > >watch a car lot you'll see that happening) and you've cleared $20,000
>> >
Yeah, your math is on par with your legal and business skills. 20
times 200 is 4000, not 20,000.
--------------------
Paul Brinkley-Rogers
"Just my $.02"
p...@sirius.com
--------------------
chen...@imap1.asu.edu
Why don't you send me your address and I'll send you your $0.02 back to you.
I used to wrench and I really don't appreciate the generalization that all
employees of bike shops are "dim". First of all, I think it's probably
pretty safe to assume that anyone that's working in a bike shop is NOT there
to get rich...there are far easier and faster ways. We're in it because of
the LOVE of the sport. I'm not saying that maybe Mr. Eisler is right, but
let's at least be nice about it.
Dave
PBR
On Wed, 5 Mar 1997 12:03:22 -0700, chen...@imap1.asu.edu gave us this
little nugget:
>Why don't you send me your address and I'll send you your $0.02 back to you.
Fine. 5160 Claremont Avenue Oakland CA 94618.
>I used to wrench and I really don't appreciate the generalization that all
>employees of bike shops are "dim".
I used to manage and head-wrench at one that did a million $'s a year
in business. I KNOW that MOST bike shop employees, managers, and
owners are dim when it comes to BUSINESS. Of course, it would have
been too hard to actually reply to the facts of my post when it's so
easy to paraphrase and skew it.
First of all, I think it's probably
>pretty safe to assume that anyone that's working in a bike shop is NOT there
>to get rich...there are far easier and faster ways.
True; I recommend computers. They fit nicely into the lifestyle of
most techno-nerd anal bike types. You can tinker with adult toys
(kinda like bikes) but actually make money (not like bikes).
We're in it because of
>the LOVE of the sport.
That's wonderful. I'm sure you are sincere in your commitment.
I'm not saying that maybe Mr. Eisler is right, but
>let's at least be nice about it.
Good point, but let's be truthful and realistic as well. The fact of
the matter is that most people working in bike shops (mind you, not
throughout the industry, as the people in it for the money aspect as
well have moved onto things that are PROFITABLE such as inside sales
or wholesaleing or perhaps completely out of the business ) have no
business being in business.
But you are right, bike shop folk are in it for the love of bikes and
that's fine and dandy.
Paul
Hamish Eisler
On Fri, 07 Mar 1997 01:52:30 GMT, someone wrote:
>> I'm not saying that maybe Mr. Eisler is right, but
>>let's at least be nice about it.
>>>
>>> >> Hamish Eisler wrote:
>>> >> >
>>> >> > On 17 Feb 1997 21:22:15 GMT, Kristan Roberge <Krob...@magi.com>
>>> >> > wrote:
>>> >> >
>>> >> > >A manufacturer has the right to set a minimum price for its products,
>>> >> > >PERIOD. Car companies don't bother to do this because they know that
>>> >> > >even at 2% over invoice the dealers make a killing because 2% over
>>> >> > >10,000 is $200.
>>>
>>> No, car companies don't do this because it's illegal. It's called
>>> price-fixing and it's illegal in this country for cars, bikes,
>>> anything. And, car companies sell their cars at 2% over invoice
>>> because 9 out of 10 people will finance the car through the dealership
>>> and they end up paying 75% over invoice by the time it's over. I
>>> realize that you wouldn't understand such a concept since most bike
>>> shop employees/owners/managers tend to be rather on the dim side when
>>> it comes to business.
I think someone is misquoting me here. All I pointed out was that 20
time $200 isn't exactly $20,000.
Just trying to avoid any flames here...
-hamish
R.Sean Baldwin
Supergo <sa...@supergo.com> wrote in article <330A5A...@supergo.com>...
Well, I've worked in the bicycle industry since the early '80's and I've
never a seen markup over 35-40% and often much less than that. Just to get
you people in off the streets and on a bike I often sell year-ends at an
average of $25-$50 over cost. And that is no 'walking' bullshit. I WILL
tell you where we (the industry) 'screw' you tight asses. That's in labor
and until you either learn how to ride properly or repair your own pieces
of junks, we will continue to drain your wallets on repairs long after you
so reluctantly forked out the cash for the initial purchase.
Oh, and just to put salt in the wound, employees often get 10-20% below
wholesale from the distributer. And that's how guys like me can afford an
$1,100.00 bike, because we only paid $700.00-$800.00 for it AND we work on
it ourselves.
Liz and Scott Philbrook
Sure is nice to hear from someone in the bike industry who doesn't have
a attitude. You must work at my local bike shop, the one that stripped
out my allenhead bolts on my brakes so when I went to work on them it
was impossible. And then they tell me I stripped them so they can't
help me, and no, they don't stock the parts. Luckily CAnnondale is
sending new bolts for free. The talented mechanic never did my force-40
brakes working right. It took a novice like myself to get it right.
Yes, its nice to have such considerate bike shop folks around. it sure
makes me wonder why anyone would want to work on bikes themselves or
mail order stuff when you can get such friendly help from bike shops.
Scott
Yes, I rebuild my own bikes.
--
Bob Ross
> Sure is nice to hear from someone in the bike industry who doesn't have
> a attitude. You must work at my local bike shop, the one that stripped
> out my allenhead bolts on my brakes so when I went to work on them it
> was impossible. And then they tell me I stripped them so they can't
> help me, and no, they don't stock the parts. Luckily CAnnondale is
> sending new bolts for free. The talented mechanic never did my force-40
> brakes working right. It took a novice like myself to get it right.
>
> Yes, its nice to have such considerate bike shop folks around. it sure
> makes me wonder why anyone would want to work on bikes themselves or
> mail order stuff when you can get such friendly help from bike shops.
>
mechanics are very helpful and courteous. Last Friday I broke a shifter
cable. They replaced it immediately and only charged me for the cable.
...Hills are just flats at an angle.
R.J.(Bob) Ross
Calgary, Alberta, CANADA
Internet: bob...@cadvision.com
FidoNet: 1:134/75 (mail only)
Meade
> The talented mechanic never did my force-40
> brakes working right.
Scott,
It doesn't take a good mechanic to get Farce-40 brakes working
correctly....it takes a miracle of biblical proportions and the patience of
Job. ;-)
Larry Meade
Matt O'Toole
R.Sean Baldwin <irs...@pcinternet.com> wrote in article
<01bc4264$0e6823c0$0d1202cf@irsean>...
> Well, I've worked in the bicycle industry since the early '80's and I've
> never a seen markup over 35-40% and often much less than that.
Who cares what the markup is, as long as the consumer is getting some kind
of value for his dollar. Too often, he's not. There's no reason to
patronize a retail store when one can get a better selection and price, and
faster and more cheerful service through mail order. It does rub me the
wrong way when a shop is trying to charge $6 for an inner tube, $30 for a
$15 chain, or $80 for faded, shop worn jerseys. I'll give 'em a hard time
about it too, in front of other customers if possible. Free markets and
free speech, etc.
> Just to get
> you people in off the streets and on a bike I often sell year-ends at an
> average of $25-$50 over cost. And that is no 'walking' bullshit.
I can hear the violins playing. Welcome to the land of the living. I'm
sorry if the competition makes you work harder.
> I WILL
> tell you where we (the industry) 'screw' you tight asses. That's in labor
> and until you either learn how to ride properly or repair your own pieces
> of junks,
The only reason we're riding "pieces of junks" is that's what we're being
sold in the first place. The only problems I've ever had with a bicycle
were things like poorly made and unevenly tensioned wheels, sloppy cable
installations, incorrectly trimmed steerer tubes, misadjusted hubs and
bottom brackets, etc. All these things are the fault of the bonehead who
assembled the bike. Too often this is a 19 year old loser with an attitude
problem, who's either too stupid or too stoned to handle a simple
instrument like a wrench.
After having problems like these, I'd have absolutely no confidence in your
service department. Otherwise, I might have you fix my bike occasionally,
so I can spend more time doing other things I'd rather do.
> we will continue to drain your wallets on repairs long after you
> so reluctantly forked out the cash for the initial purchase.
The reasons we are so reluctant are mentioned above.
> Oh, and just to put salt in the wound, employees often get 10-20% below
> wholesale from the distributer. And that's how guys like me can afford an
> $1,100.00 bike, because we only paid $700.00-$800.00 for it AND we work
on
> it ourselves.
It's a good thing, too, because that's the only way guys like you will ever
afford a new bike. Have some salt for yourself, genius.
Matt O.
Jeffrey Potoff
John A. Lee wrote:
>
> In a previous article, irs...@pcinternet.com (R.Sean Baldwin) says:
>
> >Well, I've worked in the bicycle industry since the early '80's
>
>
> >I WILL
> >tell you where we (the industry) 'screw' you tight asses. That's in labor
> >and until you either learn how to ride properly or repair your own pieces
> >of junks
>
>
> >Oh, and just to put salt in the wound, employees often get 10-20% below
> >wholesale from the distributer.
>
> were substantially less than the lowest mail-order price-- but
> it isn't.
Oh really ? I didn't know that Specialized, Cannondale, Trek, Moongoose,
etc were sold mail order.
> Bike shops often try to use 'employee discounts' as an important
> perk to get people to work for (relatively) low wages.
Not really. I used to work in a shop because I liked bikes.
> Of course,
> for many folks, it doesn't really take that long to accumulate
> enough stuff to render this incentive ineffective.
True. Although I was usually too busy fixing customer's bikes to
ever think about needing the latest trick part.
> I'm fortunate
> to be able to work on state-of-the-art bikes almost exclusively,
> but I have no burning desire to OWN the latest, greatest, etc.
Me neither. I used to be so busy fixing other people's bikes by the
time I was done, I really had no motivation to do anything with mine
besides ride it.
Jeff
John A. Lee
In a previous article, irs...@pcinternet.com (R.Sean Baldwin) says:
>Well, I've worked in the bicycle industry since the early '80's
...[blah, blah, blah]...
>I WILL
>tell you where we (the industry) 'screw' you tight asses. That's in labor
>and until you either learn how to ride properly or repair your own pieces
>of junks
...[blah, blah, blah]...
>Oh, and just to put salt in the wound, employees often get 10-20% below
>wholesale from the distributer.
10-20% below "dealer price" might actually be a big deal, if it
were substantially less than the lowest mail-order price-- but
it isn't.
Bike shops often try to use 'employee discounts' as an important
perk to get people to work for (relatively) low wages. Of course,
for many folks, it doesn't really take that long to accumulate
enough stuff to render this incentive ineffective. I'm fortunate
to be able to work on state-of-the-art bikes almost exclusively,
but I have no burning desire to OWN the latest, greatest, etc.
I'm glad that I didn't waste my money over the years by 'upgrading'
to {6,7,8-speed} hubs, Bio-Pace chainrings, d/t indexed shifters,
aero-seatposts, magnesium frames, hard-anodized rims, carbon-fibre
spokes, Bullseye pulleys, and the Pacer 2000 cyclecomputer ($299!).
John A. Lee
In a previous article, jpo...@latoso.cheme.cornell.edu (Jeffrey Potoff) says:
>John A. Lee wrote:
>> Bike shops often try to use 'employee discounts' as an important
>> perk to get people to work for (relatively) low wages.
>Not really. I used to work in a shop because I liked bikes.
Me too-- but this is not universally true for everyone in the shop.
Let me re-phrase: some of the employees liked *riding* bikes, but
not necessarily selling, or repairing them. Retail is all about
catering to your customer, not your own interests. It's nice if
you can do both simultaneously, but I know quite a few good shop
employees who are only casual cyclists. I noticed that you USED
TO work in a shop, but I assume you didn't stay in the business.
>> Of course,
>> for many folks, it doesn't really take that long to accumulate
>> enough stuff to render this incentive ineffective.
>True. Although I was usually too busy fixing customer's bikes to
>ever think about needing the latest trick part.
That was basically my point. For people to STAY in the bike
industry, they need to make a decent living. Otherwise, they
will leave for some other field, or if they do stay, they *may*
just become cynical, loudmouthed, Entitled Experts who give
lousy customer service. ;->
>> I'm fortunate
>> to be able to work on state-of-the-art bikes almost exclusively,
>> but I have no burning desire to OWN the latest, greatest, etc.
>Me neither. I used to be so busy fixing other people's bikes by the
>time I was done, I really had no motivation to do anything with mine
>besides ride it.
Couldn't agree with you more! That's why all of my commuting
bikes are fixed-gear-- less to clean, less to go wrong. I may
'upgrade' to clinchers, someday, but I've never found the time
to get around to working on my own wheels.
Mark Hornblower
well, i'll come right out and say it. i work in a shop and ther mark-up
on bikes is close to non-existant. the mark-up on accessories and parts
and clothing, though, is (in our shop, anyway) between 140 and 200%
--
--
___
{(ojo)}
| \O/ |
\ /-\ / Speed Kills! Use Windows ... Save Lives
| |
/ /
\ \ wom...@hookup.net
/__\ http://www.hookup.net/~wombat
Brian J. Elsts
I didn't spell really well in the last post. I apologize to all of you
English majors!
It should be Know, not NO, and I probably spelled some other things
incorrectly too.
Brian J. Elsts
Liz and Scott Philbrook wrote:
> Sure is nice to hear from someone in the bike industry who doesn't have
> a attitude. You must work at my local bike shop, the one that stripped
> out my allenhead bolts on my brakes so when I went to work on them it
> was impossible. And then they tell me I stripped them so they can't
> help me, and no, they don't stock the parts. Luckily CAnnondale is
> sending new bolts for free. The talented mechanic never did my force-40
> brakes working right. It took a novice like myself to get it right.
>
> Yes, its nice to have such considerate bike shop folks around. it sure
> makes me wonder why anyone would want to work on bikes themselves or
> mail order stuff when you can get such friendly help from bike shops.
>
> Scott
>
> Yes, I rebuild my own bikes.
> --
I went to the bike shop the other day, and have been in several bike
shops in the DC area. Either they just don't have a clue, or they are
trying to be ignorant. I went in and asked if they had any track
parts. They responded with "Yes, we have BMX parts". I said "No, track
bike parts, like for the velodrome type bikes. You know, fixed gears!"
The guy still didn't know what I was talking about. He asked another
guy, and he pointed me towards the road bikes. Then I asked another guy
(the mechanic), "do you have someone here that can install a fixed
gear?" He said that because a road bike doesn't have a horizontal
dropout, that maybe he could. He then said that maybe I would prefer to
have a single free gear. Because then if I wanted to, I could stop
peddling if I felt like it. I then told him that if he could install a
single free gear, then why couldn't he install a fixed gear? He didn't
know.
This didn't just happen in this single store either. Ignorant bike
mechanics/salespeople are abound!
Bill Randleman
>I went to the bike shop the other day, and have been in several bike
>shops in the DC area. Either they just don't have a clue, or they are
>trying to be ignorant. I went in and asked if they had any track
>parts. They responded with "Yes, we have BMX parts". I said "No,
track
>bike parts, like for the velodrome type bikes. You know, fixed
gears!"
>The guy still didn't know what I was talking about. He asked another
>guy, and he pointed me towards the road bikes. Then I asked another
guy
>(the mechanic), "do you have someone here that can install a fixed
>gear?" He said that because a road bike doesn't have a horizontal
>dropout, that maybe he could. He then said that maybe I would prefer
to
>have a single free gear. Because then if I wanted to, I could stop
>peddling if I felt like it. I then told him that if he could install
a
>single free gear, then why couldn't he install a fixed gear? He
didn't
>know.
>
>This didn't just happen in this single store either. Ignorant bike
>mechanics/salespeople are abound!
I am sure it's hard to get good help for $6.00 to $8.00 per hour in a
major metro area where McDonald's pays more without the seasonal
layoffs.
Bill
Bicycle Service Center
30 East 13th Avenue
Eugene, OR 97401
(800) 360-5320
bik...@ixnetcom.com
www.bicyclecenter.com
open 10-6 Pacific Monday-Saturday
Tim McNamara
In article <334A3D...@federal.unisys.com>, "Brian J. Elsts"
<els...@federal.unisys.com> wrote:
> This didn't just happen in this single store either. Ignorant bike
> mechanics/salespeople are abound!
So do ignorant customers.
Tim
--
What do you want me to do, to do for you while you're sleeping?
Then please don't be surprised when you find me dreaming too.
-Robert Hunter
STEVE AGOCS- ON TWO WHEELS
In article <5idvmb$n...@dfw-ixnews12.ix.netcom.com>, bik...@ix.netcom.com(Bill Randleman) writes:
>>I went to the bike shop the other day, and have been in several bike
>>shops in the DC area. Either they just don't have a clue, or they are
>>trying to be ignorant. I went in and asked if they had any track
>>parts. They responded with "Yes, we have BMX parts". I said "No,
> track
>>bike parts, like for the velodrome type bikes. You know, fixed
> gears!"
>>The guy still didn't know what I was talking about. He asked another
>>guy, and he pointed me towards the road bikes. Then I asked another
> guy
>>(the mechanic), "do you have someone here that can install a fixed
>>gear?" He said that because a road bike doesn't have a horizontal
>>dropout, that maybe he could. He then said that maybe I would prefer
> to
>>have a single free gear. Because then if I wanted to, I could stop
>>peddling if I felt like it. I then told him that if he could install
> a
>>single free gear, then why couldn't he install a fixed gear? He
> didn't
>>know.
>>
>>mechanics/salespeople are abound!
>
> major metro area where McDonald's pays more without the seasonal
> layoffs.
>
> Bill
> Bicycle Service Center
> 30 East 13th Avenue
> Eugene, OR 97401
> (800) 360-5320
> bik...@ixnetcom.com
> www.bicyclecenter.com
> open 10-6 Pacific Monday-Saturday
EVERYTHING about every type of bike. If a someone asked me to install a fixed
gear I wouldn't be able to do it simply because I've never had the opportunity
to mess around with that type of bike and drivetrain. In most cases, however,
one of two things happens: 1) I would research the topic and figure out how
to do it so I would know in the future or 2) someone else at the shop would
know how to do it. Some shops hire people who they think will sell a lot of
merchandise, rather than going with cycling enthusiasts. Look at the shop you
frequent. If 90% of the bikes on the racks are mountain bikes, don't hold your
breath that they will be able to work on a track bike or carry track parts ( a
relatively small aspect of the overall bicycling sport). At the same time,
son't expect to walk into my shop (in Davenport, IA) and find a hardcore, three
-feet-of-rear-travel downhill racer! Special equipment and procedures require
special tools, knowledge, and talent. Unfortunately, most shop employees are
too threatened to say "Sorry, we don't know how to do that" or "I've never done
that before so it might take a week or so" or even "try the shop down the
street"! Until then, you'll have to do the hunting yourself...Steve
Jon Isaacs
Two points to the original poster:
1. There are not a lot of bikes out there with fixed gear or that can use
fixed gear. Shops generally don't carry the stuff. I have two track
bikes and there are shops around that carry the stuff but you have to know
where to get it. It is not a selling item but rather a service that shops
carry the stuff. Plus if you are going to use fixed gear, you better know
how to put it on yourself, because unless you have a true track hub with a
lock ring, it may come off at any time.
2. Bikes with vertical drops outs cannot properly use fixed gear because
the chain cannot be adjusted. These bikes could use a single speed with
freewheel because then a deraillieur(???) can be used to tension the
chain. While it may take a special and difficult to find older
deraillieur whcih can handle a wider chain, this is one reason why a
freewheel type could be used where a fixed gear couldn't.
Sheldon Brown
This is a multi-part message in MIME format.
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Jon Isaacs observed:
> Bikes with vertical drops outs cannot properly use fixed gear because
> the chain cannot be adjusted...
Actually, there are ways around this problem (though shops which don't
specialize in this sort of thing wouldn't be likely to know it.)
I own a Cannondale road frame and a Bianchi MTB frame, both of which I
have converted to fixed gear, despite their dropoutual verticalitude.
I discuss this issue in my Fixed-Gear for the Road article at:
http://www.sheldonbrown.com/biz/hub/fixeda.html#vertical
Sheldon "The Fix Is In!" Brown
+-----------------------------------------------------------+
| Always listen to the experts. |
| They'll tell you what can't be done, and why. |
| Then do it. |
| --Robert A. Heinlein |
+-----------------------------------------------------------+
http://www.sheldonbrown.com/biz/hub/
Harris Cyclery, West Newton, Massachusetts
(617) 244-1040 FAX 244-1041
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<TD>
<A HREF="http://www.sheldonbrown.com/biz/hub/eagle.html"><IMG align=center alt="Sheldon Brown photo" SRC="http://www.sheldonbrown.com/biz/hub/images/scb_eagle_contact.jpeg" height=108 width=72></A>
<TD valign=bottom><H3><A HREF="http://www.sheldonbrown.com/biz/hub/">Harris Cyclery<BR>West Newton,<BR>
Massachusetts</A></H3>
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--------------395679072F88--
Bill Randleman
Actually, The consumer in the bicycle marketplace just has to be aware
that in order to fufill the expectation of having PROFESSIONAL service
people (who do have training in almost any technical aspect and are
bicycle mechanics as a PROFESSION instead of a college summer job),
they are going to have to pay $45 to $60 per hour labor rates like they
do to any other service shop.
Eleanor MacMaster
Just wondering .... do people who know something spell "know"
as "no"?
Jobst Brandt
I get the impression that you not know no nothing either.
Jobst Brandt <jbr...@hpl.hp.com>
Mark Hickey
jbr...@hpl.hp.com writes...
Not to pick nits, but it's "you not know no nothing Neither".
Mark Hickey
Habanero Cycles
http://www.cynetfl.com/habanero/
Home of the $675 ti frame
Brian J. Elsts
Mark Hickey wrote:
>
> jbr...@hpl.hp.com writes...
> >
> >I get the impression that you not know no nothing either.
> >
> >Jobst Brandt <jbr...@hpl.hp.com>
>
> Not to pick nits, but it's "you not know no nothing Neither".
>
> Mark Hickey
> Habanero Cycles
that I spelled Know with a no in the subject. And to Jobst Brandt, if
you are going to flame someone on their spelling, please use proper
English. It just doesn't get the point across if you too look ignorant.
Grason
Not to pick nits, but it's "you not know no nothing Neither".
Actually, if we were to diagram this sentence, (and please, everyone,
before parsing anything make sure your helmet is properly adjusted, or you
could be seriously injured or worse), we would find that the proper
construction is "you not know no nothing neither, knucklehead." Please
refer questions to E.B. White.
Jason T. Nunemaker
In article <01bc468d$dcfe07e0$b915...@aggie.netins.net>, "Grason"
<ag...@netins.net> wrote:
I buckled up my helmet, set to diagramming just like my eighth-grade
English teacher taught me, and damn near fractured my dangling
participle. I hate this kind of thread, but I've wasted too much of my
life studying the English language to let it go. Can I propose this?
"I get the impression that you also know nothing."
Quick, clean, to the point. The beauty of the sentence.
Jason "Now, Could We Get Back to Bikes?" Nunemaker
Donald S. Finan
In article <nunemaker.2-11...@ts10-7.homenet.ohio-state.edu>,
Does no one here have a sense of humor? How about irony?
--
==>====>====>====>====>====>====>====>====>====>====>====>====>====>====>==
Don Finan "A really hoopy frood who knows
dfi...@ucs.indiana.edu where his towel is."
==<====<====<====<====<====<====<====<====<====<====<====<====<====<====<==
hau...@mbi.org
In article <334E33...@no.spam.com> "Brian J. Elsts" <els...@federal.unisys.com> writes:
>From: "Brian J. Elsts" <els...@federal.unisys.com>
>Subject: Re: dealers that KNOW nothing
>Date: Fri, 11 Apr 1997 12:50:53 GMT
>>
>> Not to pick nits, but it's "you not know no nothing Neither".
>>
>I did put two posts out there. At least I think that I did? I know
>that I spelled Know with a no in the subject.
Well, sure you do NOW!
And to Jobst Brandt, if
>you are going to flame someone on their spelling, please use proper
>English. It just doesn't get the point across if you too look ignorant.
Uh, that was a JOKE, nimrod. You certainly have proven Jobst's point on this
one.
Rich
KMsSavage
Can we stop with the "Bike-onics" now???