Bicycle makers offer some clues about inflation

[ripvanrando]

Originally Posted by Dead Man

is this possible? i hear people make statements like this, and i always wonder.... doesnt bankruptcy **** your credit up? who would issue a line o credit on someone with a history of discharging debt?

I know someone who declared bankruptcy and three years later had a mortgage and credit cards.

[ntb1001]

Originally Posted by ripvanrando

I know someone who declared bankruptcy and three years later had a mortgage and credit cards.

I’ve seen it too.

Different rules apply depend on on where you are, but I’ve seen bankrupt people get credit, cards, mortgages, car loans as little as 12 months after bankruptcy, meanwhile people who try to pay and have consumer proposals take years.


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[dustyrider]

Originally Posted by prototoast

The high end of bikes will probably keep creeping higher, but at the low end, prices have held pretty steady and are really good.

10 years ago, a CAAD 10 with 10 speed 105 had an MSRP of $1500 (a little over $1800 adjusted for inflation). Today, a CAAD Optimo with 11 speed 105 has an MSRP of $1500.

Same nominal price, lower real price, 1 more cog and internal routing. Seems pretty good to me.

I sort of expected this line of reasoning before I even posted. In my thinking I should be able to buy that caad 10 with 10sp 105 for $6-700 brand new today, but they’ve already convinced a lot of people that that extra gear is a value proposition, when it’s really not. I’m not saying stop innovation, I’m saying innovate to lower consumer price. I don’t want to pay the same. I want to pay less!

We don’t all have to agree, I’m never going to think $1500 for anything bike related is a good deal. I know the Paceline doesn’t think that just see above about enve being affordable!

[dustyrider]

Originally Posted by fa63

Bankruptcy is not something that people just toy with. That is mostly for corporations with good lawyers.

I am a "fiscal conservative" too for what it is worth, though that means different things to different people.

I had an economic class in high school that got me a math elective credit. Some where in there we created a business and then filed for whatever chapter allowed us to wipe away our debt, while we retained enough assets to walk away with money…good lawyers or corporation’s influence on law?

[joevers]

Originally Posted by dustyrider

We don’t all have to agree, I’m never going to think $1500 for anything bike related is a good deal. I know the Paceline doesn’t think that just see above about enve being affordable!

Originally Posted by dustyrider

do prices ever decrease? Just once I’d like to read a press release on a new bike that talks about how they lowered the consumer price point with some innovation…just once.

I didn't say it was affordable, I answered your question. With several examples.

[dustyrider]

Originally Posted by joevers

Zipp and Enve have wheels at $1500 now, and you can get really nice off brand ones for under a grand.

Not affordable, just cheaper. Got it! Finally I’ve been proved wrong.

[peanutgallery]

With the cost of shipping, you won't see a whole lot of sub $1k bikes of quality for a while...if ever again

Pre covid, sub $600 neighborhood bikes were king. Those are gone

[FriarQuade]

Originally Posted by dustyrider

In this world of marginal gains and incremental improvements, do prices ever decrease? Just once I’d like to read a press release on a new bike that talks about how they lowered the consumer price point with some innovation…just once.

We've dropped prices on a couple things over the years. Started with a higher price since we were a little unsure how much we could refine the process behind making them. When we realized it was way better, we dropped the price a few bucks. But we never sent out a press release. Maybe if we employed a marketing person they would have done that.

As a domestic manufacture, we've seen raw materials (all US milled) sky rocket as well. Seems it's getting made in enough quantity, just costs more to move it around the country. The ocean freight problems just make me sit back and laugh though.

[fa63]

Business bankruptcy is different than personal bankruptcy.

Originally Posted by dustyrider

I had an economic class in high school that got me a math elective credit. Some where in there we created a business and then filed for whatever chapter allowed us to wipe away our debt, while we retained enough assets to walk away with money…good lawyers or corporation’s influence on law?

[dustyrider]

Originally Posted by fa63

Business bankruptcy is different than personal bankruptcy.

Oh my vague recollections of that distant memory taught me enough to know that. I’ve got a few people in my circle that have declared bankruptcy, some would say they’re doing better than me right now. Never mind the college acquaintances I’ve kept that are carrying so much subsided debt right now just so they could go on spring break, buy a new bike, boat, car, or etc. It seems like the laws seem to promote excess spending since consequences for over spending seem to be slight. Take a look at how much money your neighbors have tied up in their driveway because the garage is so full of stuff they don’t park in it!

[mhespenheide]

Originally Posted by lavi

A person should not attempt to spend more than what they have...and not more! It should be a law!

However, our society is pretty much the exact opposite. Spend as much as possible. Then, go bankrupt and do it all over again asap.

Going back to 2019, so that the numbers aren't affected by the pandemic and its economic fallout, there were just under 775,000 personal bankruptcies in the United States out of a population of 328,300,000. So the bankruptcy rate was a little under one-quarter of one percent.

That hardly seems like a widespread issue corrupting all society.

[lavi]

Originally Posted by mhespenheide

Going back to 2019, so that the numbers aren't affected by the pandemic and its economic fallout, there were just under 775,000 personal bankruptcies in the United States out of a population of 328,300,000. So the bankruptcy rate was a little under one-quarter of one percent.

That hardly seems like a widespread issue corrupting all society.

This is a good stat. Mine was more of a seat of the pants reference regarding personal finance apathy/ignorance/don't give a **** in this country.

I have over 20 years working in personal finance. The things I've seen....

Ok. A more salient point on folks spending well beyond their means. Cell phones. Ever notice how many many folks seem to always have the latest gizmo phone? Think they can actually afford it? Nope. If the only choice was to pay 100% upfront, the unit sales would be drastically lower. It's smart of Apple (and others) to offer 0% financing to hawk these things. Again, just a point of people mindlessly and endlessly spending when perhaps they shouldn't. Pretty sure if we looked at 401k, IRA, 529, bla bla bla balances that we'd see a grim picture. Thank goodness they all have those phones, or huge boats, or huge trucks, or $14k halo bikes.

[ripvanrando]

Enve wheelsets are now $3000. Just sayin.....

[oldpotatoe]

Originally Posted by Clean39T

Supply < demand for elastic goods /= inflation.

Manufacturers/sellers are raising prices on the expectation that demand will be there at the higher price. If it isn’t, prices will fall (and no one will call that deflation).

Bicycles are not an inelastic bauble for most. Prices rise, demand falls or substitution happens. Prices then fall, or stock sits on shelves. The market is simply testing the willingness of people to spend above their means.

Yup, this continuing pandemic has really gooned up both the demand and supply side of things. Nothing inherently wrong, as in not basic systematic problems with the economy but a YUGE burp, with unprecedented, disrupted issues with supply and then unpredictable spiking demand.

Manufacturers/producers see light at the end of the tunnel, raise production...another variant, demand drops...product on shelves..Same for oil. Demand early 2020 pretty much ceased. Oil prices went to negative numbers..oil production cut..demand spiked early 2021...prices went up with low supply..Oil producers don't want to see negative prices again so are slow to raise production. Pandemic-supply-demand..fix pandemic...and eventually fix supply issues.....

[Kirk007]

Originally Posted by lavi

Pretty sure if we looked at 401k, IRA, 529, bla bla bla balances that we'd see a grim picture. Thank goodness they all have those phones, or huge boats, or huge trucks, or $14k halo bikes.

What?!? Wait, you mean my bicycle collection doesn't count as appreciable assets in my retirement portfolio?