One view of bike prices.

[peanutgallery]

Given the state of the industry, especially in the US, I would state the opposite. Prices for bikes, parts and accessories are probably too low

[Mark McM]

There are so many different bike brands on the market, and so many different outlets to buy them, it is hard to believe that bikes are overpriced. If there were a cheaper way to make a bike with a particular feature set (and at a particular production volume), surely someone would do it in order to take a larger portion of market volume.



Well, at least that should be the case for most bikes on the market. But the bikes that are being discussed here are really high-end specialty niche products. The law of supply and demand and its affect on pricings starts to break down in the specialty market. But this basic axiom still holds true: A product is worth as much as people are willing to pay for it. If people are buying these high-end niche products, then they must be priced right.

[oldpotatoe]

Originally Posted by Mark McM

There are so many different bike brands on the market, and so many different outlets to buy them, it is hard to believe that bikes are overpriced. If there were a cheaper way to make a bike with a particular feature set (and at a particular production volume), surely someone would do it in order to take a larger portion of market volume.



Well, at least that should be the case for most bikes on the market. But the bikes that are being discussed here are really high-end specialty niche products. The law of supply and demand and its affect on pricings starts to break down in the specialty market. But this basic axiom still holds true: A product is worth as much as people are willing to pay for it. If people are buying these high-end niche products, then they must be priced right.

Correct. I used to carry Ritchey folding tires..Made in the same factory in Thailand as a lot(like Vittoria)..REALLY good deal but almost 1/2 the retail $ of Vittoria..VERY cheap from Ritchey...COULDN'T sell em..so I added $10 to the price, sold them like mad...

[Black Dog]

There are overpriced bikes IMHO. I think that manufacturers need high end bikes and discounting them too much will kill their perceived quality. The halo bikes. In the minds of buyers there has now been established a price range for the best of the best. If a maker offers their best at 40% less than the others then people will think that it is not as good as the more expensive offerings. This is a buyers psychology issue not a supply demand issue. How do you sell the idea that you best bike is as good as the others in every way yet costs so much less? DO you come out and say that you have lowered your 1000% margin to 500%? Buyers have been long convinced that the tech in the high end bikes is so advanced that it has to cost that much. This is my speculation and not a claim of fact.

[Lanternrouge]

Originally Posted by RKW

100% untrue.

Secondary market, yes. Buying new, as the original allocation holder, no.

Isn't the whole thing with original allocations on special models that you've had to buy a bunch of other really expensive Porsches just to get there. Also, I think what you are referring as secondary market is just someone walking into a dealer and wanting to buy one. I think we may be talking about somewhat different levels of things in terms of walking into a Porsche dealer and getting a crazy car and walking into a bike shop and getting a halo bike.

To get more back on the topic, another thing with the bike industry is that it doesn't seem as economically efficient as autos. The percentage difference between what it costs to build a bike part (or even complete bike) at a factory versus what it sells for at a shop is a lot different than what it costs to make a car at the factory and what it sells for at a shop. I know there are variations in vehicles at different levels in terms of profit margins, but I'm talking on an overall basis.

Another thing with bikes is that since the overall dollar amount is lower than cars, it's mentally easier to just pay more for the "best" (DA over Ultegra) than it is with a car. Granted, you're still paying twice the price for something that works basically the same, but it's easier to do that when the dollar figure is lower and you're buying something that's a passion. The price difference between a base Camry and one with some nicer options covers a pretty nice bike.

Now I'll get back to the work that affords me the ability to have some nice bikes.

[wernerherzogsid]

These banal justifications and half-witted rationales from crass capitalists justifying their excessive luxury purchases reminds me of hyenas on the savannah. Gathered as the scavengers they are, tearing at the carcass of a dead antelope brought down by some nobler beast, eating that which they have not earned while laughing all the while.

[peanutgallery]

The economics and psychology of purchasing niche bike stuff is one thing to consider, the reality in the trenches is another

The originator of the bike product is doing ok and the buyer of the product is getting a fair deal. The guy selling it to you is getting squeezed, the value to the consumer comes out of their end. The halo and niche stuff margins are particularly bad. Interesting times

[peanutgallery]

Dura ace stomach on a 105 budget

Originally Posted by wernerherzogsid

These banal justifications and half-witted rationales from crass capitalists justifying their excessive luxury purchases reminds me of hyenas on the savannah. Gathered as the scavengers they are, tearing at the carcass of a dead antelope brought down by some nobler beast, eating that which they have not earned while laughing all the while.

[BobO]

Pivot doesn't sell direct to customer;

https://www.pivotcycles.com/en/dealers

What percentage of the sale price of a $10K bike is the bike itself?

[RKW]

Disclaimer: I played the Porsche and Ferrari flip game for a few years - eventually it got to be a pretty big headache, but below is a high-level overview of how it works.

Originally Posted by Lanternrouge

Isn't the whole thing with original allocations on special models that you've had to buy a bunch of other really expensive Porsches just to get there.

More than anything you just have to know how to play the game. I got into the allocation game by happenstance, but not exactly. You get onto the allocation list by starting small and establishing a good relationship with the dealer. Mine started before I was buying cars, when my dad bought a 993 GT2, and continually bought the new-fancy one as they offered him an allocation. He got older, and when the 997.2 GT3 allocation came, he was going to pass, and so I bought the allocation from him. I work with a different sales guy than he did, but the story works the same. Something special comes out, and I either take the allocation if I want the car, or I have the dealer go to the next name on the list.

Best way to stay on the list is to not take every allocation, which drives more business for the dealer.

To get into the allocation game, it just takes knowing people more than an established history. I got my roommate in college into the Porsche game after he graduated Law School. He started with a GT4 at MSRP, and went from there.

Originally Posted by Lanternrouge

Also, I think what you are referring as secondary market is just someone walking into a dealer and wanting to buy one.

Kinda. If you buy the car New (as in...the first name on the title history) and you pay more than MSRP, PMNA will be especially unamused. The secondary market is when you buy the car "New" (as in...not the first name on the title history), and you pay whatever the market dictates.

A Porsche dealer can lose their franchise for selling a new car for more than MSRP. Lots of people (myself included) have received an allocation for a new "halo" (read GT/Speedster etc), and never taken physical delivery. Just titled it and immediately sold it back to the dealer for our cash cost + some return. At this point it's "Pre-Owned," and can be sold for whatever the market dictates.

Ferrari works the same way. Go into a Ferrari dealer and try to buy a new one - most won't sell you one, because there's more margin in them selling to an existing customer to drive it for a year (and 1500 miles or so), and then sell it back to the dealer, who can turnaround and sell it for over sticker.

If you want a new Ferrari, you buy a used one, and then buy the next model (or the one after that, depending on your dealer) new.

If you're willing to take the "risk" you can sell on your own, but often, dealers will stop putting you at the top of their allocation list if you don't throw them a bone when you sell the car. That's why/how I got out of the Ferrari game, I simply wasn't invited back when I sold my Scud with delivery miles on it. (And yes, I regret not driving it, but I didn't buy it as a car, I bought it as a rolling bank account)

Originally Posted by Lanternrouge

I think we may be talking about somewhat different levels of things in terms of walking into a Porsche dealer and getting a crazy car and walking into a bike shop and getting a halo bike.

I'm not sure I entirely agree with that, in general, absolutely, specialist stuff, not so much. Go into your local Specialized dealer and try to get a new Shiv TT...they made 250 for the global non-team market for 2020. The only way you're getting one is if you have an existing relationship with the shop AND the rep.

[Mikej]

Originally Posted by AngryScientist

bikes and cars are both as expensive as you want them to be, or as cheap.

new bikes are fun and we all have our reasons for buying them, but we've all been on a group ride where someone riding a 500 dollar bike is killing it, and guys on 12k dollar bikes get dropped on the first big climb.

no big deal. i think the bottom line is that folks with disposable income will find ways to spend it. boats, cars, motorcycles, RV's, gambling, cocaine, high end escorts, stamp collections - what have you.

industries respond to that and cater to it.

if 10k dollar bikes are selling well, you can bet there will be 11k dollar bikes for sale next year and 12k the year after that until we find the breaking point.

OR, they get super cheap, like flat screen tv's - smiley face

[cash05458]

the whole sleight of hand thing via ten grand bikes vs the 100 thousand buck Ducatti thing is flat out silly...I mean, be serious... and I have no idea via the new mountain bike/gravel stuff and whatever that involves....but via road stuff...when tiagra loaded bikes go for 2 grand or so new, you know that there is a big problem with these things...

[Red Tornado]

Originally Posted by cash05458

the whole sleight of hand thing via ten grand bikes vs the 100 thousand buck Ducatti thing is flat out silly...I mean, be serious... and I have no idea via the new mountain bike/gravel stuff and whatever that involves....but via road stuff...when tiagra loaded bikes go for 2 grand or so new, you know that there is a big problem with these things...

Agreed

[sonicCows]

Riding bikes generally requires leisure time, and jobs that grant leisure time tend to be at the higher end of the pay scale. These high paying jobs have increased in pay in the past 10 years while most other lower-paying jobs remain stagnant. Bike companies are designing bikes for what their customers can afford. With increased revenues they can also now pay their staff more. Trickle down at work!

[Lanternrouge]

Originally Posted by RKW

Disclaimer: I played the Porsche and Ferrari flip game for a few years - eventually it got to be a pretty big headache, but below is a high-level overview of how it works.



More than anything you just have to know how to play the game. I got into the allocation game by happenstance, but not exactly. You get onto the allocation list by starting small and establishing a good relationship with the dealer. Mine started before I was buying cars, when my dad bought a 993 GT2, and continually bought the new-fancy one as they offered him an allocation. He got older, and when the 997.2 GT3 allocation came, he was going to pass, and so I bought the allocation from him. I work with a different sales guy than he did, but the story works the same. Something special comes out, and I either take the allocation if I want the car, or I have the dealer go to the next name on the list.

Best way to stay on the list is to not take every allocation, which drives more business for the dealer.

To get into the allocation game, it just takes knowing people more than an established history. I got my roommate in college into the Porsche game after he graduated Law School. He started with a GT4 at MSRP, and went from there.



Kinda. If you buy the car New (as in...the first name on the title history) and you pay more than MSRP, PMNA will be especially unamused. The secondary market is when you buy the car "New" (as in...not the first name on the title history), and you pay whatever the market dictates.

A Porsche dealer can lose their franchise for selling a new car for more than MSRP. Lots of people (myself included) have received an allocation for a new "halo" (read GT/Speedster etc), and never taken physical delivery. Just titled it and immediately sold it back to the dealer for our cash cost + some return. At this point it's "Pre-Owned," and can be sold for whatever the market dictates.

Ferrari works the same way. Go into a Ferrari dealer and try to buy a new one - most won't sell you one, because there's more margin in them selling to an existing customer to drive it for a year (and 1500 miles or so), and then sell it back to the dealer, who can turnaround and sell it for over sticker.

If you want a new Ferrari, you buy a used one, and then buy the next model (or the one after that, depending on your dealer) new.

If you're willing to take the "risk" you can sell on your own, but often, dealers will stop putting you at the top of their allocation list if you don't throw them a bone when you sell the car. That's why/how I got out of the Ferrari game, I simply wasn't invited back when I sold my Scud with delivery miles on it. (And yes, I regret not driving it, but I didn't buy it as a car, I bought it as a rolling bank account)



I'm not sure I entirely agree with that, in general, absolutely, specialist stuff, not so much. Go into your local Specialized dealer and try to get a new Shiv TT...they made 250 for the global non-team market for 2020. The only way you're getting one is if you have an existing relationship with the shop AND the rep.

The car game sounds too complicated and I may have just had the simplified version relayed to me by people who've played it. There were some cars that seemed new at the local dealer that had something like "market adjustment" to the price. This was in contrast to the cars upstairs that were sold as pre-owned, such as the GT2RS at 150% of what sticker was when it was new.

My concept of a halo bike when I wrote that was just the highest end stuff versus something super limited production from one of the big boys priced at a premium over the standard version of basically the same thing. There are always people willing to pay a premium for exclusivity of pretty much anything and sometimes they need help rationalizing.