The fall of Kona Bikes :(

[benb]

Seven or IF likely have to deal with health insurance and benefits.

That's a huge PITA to a US manufacturer in that size range. The overseas competitors are in countries with nationalized health care that have done a much better job of controlling costs AND wages are much lower.

A one man shop likely doesn't deal with any of that but still has to figure out where to buy insurance for the proprietor.

[EB]

Originally Posted by benb

Seven or IF likely have to deal with health insurance and benefits.

That's a huge PITA to a US manufacturer in that size range. The overseas competitors are in countries with nationalized health care that have done a much better job of controlling costs AND wages are much lower.

A one man shop likely doesn't deal with any of that but still has to figure out where to buy insurance for the proprietor.

Small point, but mainland China notably has no nationalized, universal health insurance or health care scheme. They have a patchwork of private and public subsidized care that arguably is even harder to understand than the US system, and it usually involves the individual and/or employer paying.

Chinese “communism” in practice just means whatever is convenient for the leadership.

[benb]

Ok, but I bet for a lot of the factory workers that equates to zero health insurance or extremely low costs for the company compared to US costs.

Our costs are not exactly competitive.

[fried bake]

The road/gravel segment of the industry is in a weird space it seems. Frames and full builds seem to be more expensive and (due to aero focused integration) that increases maintenance and replacement parts cost as well. Yet, if one wants a cheap set of nice, reliable modern carbon wheels, there are numerous options. Not to mention, rim brake used bikes are true bargains.

So, it’s really the future proofing that is driving costs. As an example, I chose to pay $500 premium to purchase a disc frame over its rim brake equivalent. While I always justify a purchase as the lifetime bike, the reality is that I may end up selling it and that drove the purchase consideration, (not wider tires, or better braking).

So, the manufacturers have upsold us and that cost increase trickles down as many of us consider relative pricing when making purchases. That $8k premium model is out of reach, but ok, there’s a comparable model that “only costs $5k”, and I’ll upgrade the wheels later.

For me the one of the biggest changes in price creep was SRAM’s AXS drop. Now, if you want the lovely clean looks of modern bikes, you can’t buy a cheap group-set and you are locked into their eco system with hubs and expensive cassettes and consumables. It was a truly brilliant move, particularly as the product delivered in terms of looks, ease of integration with aero cockpits and the modern clean aesthetics (look ma, no cables!), but man is it expensive for the end user.


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[EB]

Originally Posted by fried bake

For me the one of the biggest changes in price creep was SRAM’s AXS drop. Now, if you want the lovely clean looks of modern bikes, you can’t buy a cheap group-set and you are locked into their eco system with hubs and expensive cassettes and consumables. It was a truly brilliant move, particularly as the product delivered in terms of looks, ease of integration with aero cockpits and the modern clean aesthetics (look ma, no cables!), but man is it expensive for the end user.

Don't forget how SRAM deprecates each generation so quickly (*side-eyes at my two obsolete Eagle AXS derailleurs*)

[fried bake]

Originally Posted by EB

Don't forget how SRAM deprecates each generation so quickly (*side-eyes at my two obsolete Eagle AXS derailleurs*)

Yup, I’m cognizant of the fact that SRAM could easily render my 11sp Etap/12speed force AXS groupset a relic. It’s not quite a sword of Damocles but it remains a concern as I try to cling on to my 11speed drivetrains.


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[KonaSS]

Originally Posted by EB

Don't forget how SRAM deprecates each generation so quickly (*side-eyes at my two obsolete Eagle AXS derailleurs*)

Tangent - how or why are your Eagle AXS derailleurs obsolete?

I have a couple, they don't feel obsolete.

[litcrazy]

Inflation follow up.
Maybe this should become its own thread, but I thought I'd follow up using a big brand bike (even though I've been disconnected from the sector). I note that the road category has its quirks as noted, but this was interesting to compare.

In 2014 the MSRP for a Specialized Tarmac SL4 with mechanical disc was $2024 from what I could find on the Specialized sight.
The MSRP for 2024 Tarmac SL7 with mechanical 105 is $3800.

Running an inflation calculator, the that 2014 $2024 in 2024 dollar would be $2670.

This takes out the questions of US built boutique bikes.

I understand a 2024 Tarmac is better than a 2014 Tarmac, but it does make it real how much more expensive that 2024 105 Tarmac is. That's an 88% increase.

I'd be curious who's doing better in the bike industry in light of that increase? Did unit sales go down?
It doesn't seem like shop mechanics' pay went up 88%. It doesn't seem like shop owners are making 88% more. Is that all going to Shimano and Specialized? To their manufacturers?

As a point of comparison, 2014 base model Prius seems to have had an MSRP $23,215. A 2025 base model Prius starts at $27.950. That would only be a price increase of 25%. I imagine Toyota would say the 2024 also has seen improvements.

Am I crazy, or have recreational bikes drifted more and more expensive relative to inflation and thus become more and more of a luxury item (even before the arrival of e-bikes). I imagine I could also look at one magazines awards edition and we'd see a similar rise in prices, not just at the top but in their budget and mid-tier awards.

[EB]

Originally Posted by litcrazy

Inflation follow up.
Maybe this should become its own thread, but I thought I'd follow up using a big brand bike (even though I've been disconnected from the sector). I note that the road category has its quirks as noted, but this was interesting to compare.

In 2014 the MSRP for a Specialized Tarmac SL4 with mechanical disc was $2024 from what I could find on the Specialized sight.
The MSRP for 2024 Tarmac SL7 with mechanical 105 is $3800.

Running an inflation calculator, the that 2014 $2024 in 2024 dollar would be $2670.

This takes out the questions of US built boutique bikes.

I understand a 2024 Tarmac is better than a 2014 Tarmac, but it does make it real how much more expensive that 2024 105 Tarmac is. That's an 88% increase.

I'd be curious who's doing better in the bike industry in light of that increase? Did unit sales go down?
It doesn't seem like shop mechanics' pay went up 88%. It doesn't seem like shop owners are making 88% more. Is that all going to Shimano and Specialized? To their manufacturers?

As a point of comparison, 2014 base model Prius seems to have had an MSRP $23,215. A 2025 base model Prius starts at $27.950. That would only be a price increase of 25%. I imagine Toyota would say the 2024 also has seen improvements.

Am I crazy, or have recreational bikes drifted more and more expensive relative to inflation and thus become more and more of a luxury item (even before the arrival of e-bikes). I imagine I could also look at one magazines awards edition and we'd see a similar rise in prices, not just at the top but in their budget and mid-tier awards.

CPI (and other inflation measures) are averages over a large number of categories, with category-specific weighting based upon analysis of what the "average" consumer needs, wants, and buys.

These are useful tools, but they are not apples-to-apples for a specific category, which may have faced much larger increases than other categories (or even categories that are seeing decreases).

So it is possible that bicycles faced category-specific pressures through the pandemic period specifically that led to outside price pressure, even relative to the average represented by CPI or other inflation measures.

[prototoast]

I've posted this elsewhere, but seems applicable to repost here:

As a general matter, adjusting for changes in quality of goods over time is a real challenge for people whose job it is to measure price changes over time. The BLS--the official price calculators for the united states--apply a method called hedonic quality adjustment, essentially trying to estimate the price of an item based on its characteristics and using those characteristics to calculate how the price would have changed for a comparable item. You can read an FAQ on their methodology here: https://www.bls.gov/cpi/quality-adjustment/

Unfortunately, they don't actually adjust bicycles for quality in their official measure of inflation, as a result, the official measure of bicycle inflation is probably overstated. https://www.bls.gov/cpi/quality-adjustment/

But what can we still say about bicycles and inflation. The first thing, which I think is unambiguously true, is that people are spending more inflation-adjusted dollars on bicycles than they were 10+ years ago.

The second question, which is less clear is are people paying more because the relative price of bicycles has increased more than inflation, or are they paying more because they are getting higher quality bicycles than before. I think it's overwhelmingly the latter, but in some cases it depends on subjective things like whether you think 12 speed 105 Di2 is better than 10 speed Dura Ace. Where comparisons are more obvious, I will point out examples like right now a CAAD Optimo aluminum rim brake bike has an MSRP of $1625 with 11 speed 105. A decade ago, a CAAD 10 with 10 speed 105 had an MSRP of $1680, which would be about $2,200 adjusted for inflation.

So overall, I think in most cases, the extra money people are spending on bicycles reflects an increased willingness to pay for higher quality more than a general increase in the price level of bicycles, but I admit that there is so room for disagreement on assessments of quality.

[Likes2ridefar]

Originally Posted by KonaSS

Tangent - how or why are your Eagle AXS derailleurs obsolete?

I have a couple, they don't feel obsolete.

Same mine are ticking along just fine and one was recently added to work with the current control pods.

[SpeedyChix]

Originally Posted by jcs7282

I know someone directly impacted by the changes there, so, can confirm.

This is not good news. They so some nice work.

[mhespenheide]

Originally Posted by prototoast

So overall, I think in most cases, the extra money people are spending on bicycles reflects an increased willingness to pay for higher quality more than a general increase in the price level of bicycles, but I admit that there is so room for disagreement on assessments of quality.

I take your whole point and I don't want to argue with you, but I might amend that to say "fancier" rather than higher quality. I don't know that ultra-aero bikes with integrated cabling and "lovely clean lines" are necessarily higher quality.

I do wholeheartedly agree that there is a quality increase over time in the sense that R7000 "105" is solidly better than 7400 Dura Ace. The quality of each specific group has increased.

[prototoast]

Originally Posted by mhespenheide

I take your whole point and I don't want to argue with you, but I might amend that to say "fancier" rather than higher quality. I don't know that ultra-aero bikes with integrated cabling and "lovely clean lines" are necessarily higher quality.

I do wholeheartedly agree that there is a quality increase over time in the sense that R7000 "105" is solidly better than 7400 Dura Ace. The quality of each specific group has increased.

For sure, individual preferences may differ, and not everybody values things like aerodynamic performance. Here "quality" is basically a catch-all for things that people, on average, are willing to pay more for. I think it is uncontroversial that there is a segment of the market willing to pay more for aerodynamic tube shapes.

[buddybikes]

Originally Posted by benb

Seven or IF likely have to deal with health insurance and benefits.

That's a huge PITA to a US manufacturer in that size range. The overseas competitors are in countries with nationalized health care that have done a much better job of controlling costs AND wages are much lower.

A one man shop likely doesn't deal with any of that but still has to figure out where to buy insurance for the proprietor.

this is when you get yourself a good spouse that is a teacher or in a large corporation on good govt healthplan