Bicycle Prices, MSRP, Dealer Invoice, Markup, Street Price, etc.

What is a good price to pay for a bicycle relative to the published MSRP? How much do dealers
actually pay for the bicycles in comparison to the MSRP?

I am currently looking at a complete bike for which the MSRP is just over $3000.00 and I am trying
to get a handle what the dealer paid for this bike. I have no idea what the pricing structure is in
the bicycle industry, particularly at this level.

I have previously purchase a bike with an MSRP of $925 for $725, although it was available at
several shops for $825. In that case, the bike was widely available for about 10% below MSRP and
I got it for about 20% off MSRP. The shop would not give this price out over the phone either,
seems that there is pressure from the distributors to hold the prices at some level and not
discount the price.

Anyone have some working knowledge of this subject that could share some insode with me? -- Thanks!

HKEK scrawled in bright red lipstick:
> What is a good price to pay for a bicycle relative to the published MSRP? How much do dealers
> actually pay for the bicycles in comparison to the MSRP?
>
> I am currently looking at a complete bike for which the MSRP is just over $3000.00 and I am trying
> to get a handle what the dealer paid for this bike. I have no idea what the pricing structure is
> in the bicycle industry, particularly at this level.
>
> I have previously purchase a bike with an MSRP of $925 for $725, although it was available at
> several shops for $825. In that case, the bike was widely available for about 10% below MSRP and
> I got it for about 20% off MSRP. The shop would not give this price out over the phone either,
> seems that there is pressure from the distributors to hold the prices at some level and not
> discount the price.
>
> Anyone have some working knowledge of this subject that could share some insode with me?
> -- Thanks!

My working knowldege indicates that the dealer should be allowed a profit for all the reasons that
hopefully allow them to make a living being a good LBS

(Nelson, call on line one....)

Penny S

In article <16063ad.0309141855.6d74d8cd@posting.google.com>, coolmale@hotmail.com (HKEK) wrote:

> What is a good price to pay for a bicycle relative to the published MSRP? How much do dealers
> actually pay for the bicycles in comparison to the MSRP?
>
> I am currently looking at a complete bike for which the MSRP is just over $3000.00 and I am trying
> to get a handle what the dealer paid for this bike. I have no idea what the pricing structure is
> in the bicycle industry, particularly at this level.

Right, that's because you're not buying a car and that information isn't a readily available as is
the case in the automotive retail business. You seem to suspect that the dealer paid, like, $99.95
for this bike and has $2900 in profit. The reverse is closer to the truth, or at least it was years
ago when I worked in bike shops.

My question to you is: is the price fair? If you're not convinced that this is $3,000 worth of bike,
don't buy it.

Well you got some lame replies.

I'll add mine

I got 30% off MSRP of my bike at a PERFORMANCE BIKE shop. This was last Nov. on a new '03 model not
an '02 end of year clearance. I see all the time bikes that list for $1500 going for $1000 9-10
months later. Thats like 33%. Ive seen at a lbs bikes list at $2100 for sale at $1300. A Giant Warp
ds-1 that was like $1000 or $1100 they were selling for $599 Though at another shop (about the
smallest in the area) the guy wont budge a bit on prices. Went to buy 3 bikes at one time(me my wife
& son). I asked for 10% off the total he wouldnt do it so I left.

I dont know how biking is where you are but at $3000 it doesnt seem like it will fly off the shelf.
I say wait him out keep going in asking for like 20% off. The shop will most likely still make
money. If not on you then the next chump that goes in and pays full price. What ever you do dont
pay the full price. This goes for not only bikes but autos, furniture, audio, video, appliances,
house,jewelery, hobby type radio-control vehicles so on.

On 14 Sep 2003 19:55:28 -0700, coolmale@hotmail.com (HKEK) wrote:

>What is a good price to pay for a bicycle relative to the published MSRP? How much do dealers
>actually pay for the bicycles in comparison to the MSRP?

Depends on the bike model and brand, the build kit (if included or not), shipping method and
speed, etc...

Also keep in mind that an LBS does not "make" everything above the purchase cost of a bike. This
goes double for custom setups.

Also keep in mind other services, building, extended fitting sessions, fit parts swaps, etc... These
all cost money to provide. Custom bikes take far more time to build than a $300 hybrid, due to
varying degrees of a factory build.

Don't forget after the sale service, more service costs more money to provide.

Look at the overall value of your purchase. The cheapest price may not be the best deal.

Barry

"Penny S" <pennysinvalid@cetinvalid.com> a écrit dans le message news:
vmaavhcu17h9d0@corp.supernews.com...
> HKEK scrawled in bright red lipstick:
insode with me? -- Thanks!
>
> My working knowldege indicates that the dealer should be allowed a profit for all the reasons that
> hopefully allow them to make a living being a
good
> LBS
>
> (Nelson, call on line one....)
>
> Penny S

Nothing wrong with trying to get the best price you can. If the dealer doesn't think he's being
"allowed a profit" at a certain price, no one is forcing him to sell the bike. All things being
equal, go for the low price. That said, the buyer should keep in mind that you're buying more from
the LBS than a piece of metal. There's service, warranty issues, accessories, upgrades, your next
bike purchase... The 10% you might save on a bike can pale besides these factors and peace of
mind/aggravation you might experience dealing with an outfit that makes it's living on volume and
small margins. Thinking back on items I've bought that I've had for long time and used a lot, saving
10% at the time of purchase is quickly forgotten compared to other factors.

"It's the stingy man who ends of paying the most"

On Mon, 15 Sep 2003 01:17:39 -0500 (CDT), QUAKEnSHAKE@webtv.net (QUAKEnSHAKE) wrote:

> I dont know how biking is where you are but at $3000 it doesnt seem like it will fly off the
> shelf. I say wait him out keep going in asking for like 20% off.

At some shops, you'll wait until they publish your obituary. <G>

Barry

Quake'n'Shake says:

>What ever you do dont pay the full price.

If the time is right, the bike is right, and the money available, why not? If he has $3000 to blow
on a bike, and he wants it, and he can't find it cheaper, what's the problem?

Steve

"HKEK" <coolmale@hotmail.com> wrote in message
news:16063ad.0309141855.6d74d8cd@posting.google.com...
> What is a good price to pay for a bicycle relative to the published MSRP? How much do dealers
> actually pay for the bicycles in comparison to the MSRP?

<snippity>

> Anyone have some working knowledge of this subject that could share some insode with me?
> -- Thanks!

Yes. Small shops rarely discount, due to many factors. Big "chain" shops often discount. The bigger
the chain, the bigger the discount is likely to be. If you want lots of personalized service, pay
the money and buy from a small shop. If you just want a great price, buy from a big discount chain.
You really can't have both, and if you beat-up a small store trying to get a big discount, you
create ill will. Not good when establishing a relationship that you need more than they do. You're
just a customer, but they are your bike shop. Handle with care.

-=B=-

"HKEK" <coolmale@hotmail.com> wrote in message
news:16063ad.0309141855.6d74d8cd@posting.google.com...
> What is a good price to pay for a bicycle relative to the published MSRP? How much do dealers
> actually pay for the bicycles in comparison to the MSRP?
>

Without having any concrete numbers, I can tell you shops don't make a lot of profit on complete new
bike sales. When you consider the post-sale service, pre-sale info, and during-sale
fit/perzonalization consulting, they almost break even. Good shops know that when you come back for
upgrades, accessories, and t-shirts is when they will make the scratch.

> I am currently looking at a complete bike for which the MSRP is just over $3000.00 and I am trying
> to get a handle what the dealer paid for this bike. I have no idea what the pricing structure is
> in the bicycle industry, particularly at this level.
>

That's a bad way to think. Not every shop pays the same for every bike - you think Performance gets
the same deal as the family owned shop on the corner? Don't be afriad to pay a bit more for a bike
that you honestly feel will carry a better ownership experience with it: again, this goes back to
quality of post-sale service and pre- and during-sale consultation.

> I have previously purchase a bike with an MSRP of $925 for $725, although it was available at
> several shops for $825. In that case, the bike was widely available for about 10% below MSRP and
> I got it for about 20% off MSRP. The shop would not give this price out over the phone either,
> seems that there is pressure from the distributors to hold the prices at some level and not
> discount the price.
>

Most major dealers - in most industries, not just cycling - set a minimum advertised price. This is
why places like Jenson USA list "call for price" on so many parts. Either the item they're selling
is somehow legitamtely available below the MAP, or it's some grey-market variant (usually meaning
OEM, not intended for resale) part.

> Anyone have some working knowledge of this subject that could share some insode with me?
> -- Thanks!

In summary - don't always think of buying a bike as you would buying a car. MSRP doesn't always mean
much, dealers don't always pay the same prices, and just as you'd want to purchase a car from a
reputable, friendly dealer in case there were problems, you want to buy the bike from the shop you
feel the best about. Also, getting to know the folks at your Friendly Neighborhood Bike Shop is a
priceless thing. Walking in there with a Nashbar frame (worst case scenario, but I hope you see
where I'm going) won't be the way to make new buddies.

Having a badass bike that gives you a hard-on (assuming your male here) is totally worth the extra
$50-100 you might drop at the right shop...says me at least. Don't sweat the small stuff. Ride hard,
smile big. Go over the bars a few dozen times. If everything goes well, you won't miss the extra
couple of bucks after one, two, or ten seasons on just the right bike from just the right place.

Chris

Re: Bicycle Prices, MSRP, Dealer Invoice, Markup, Street Price,

Group: alt.mountain-bike Date: Mon, Sep 15, 2003, 12:25pm (CDT+5) From: saildesign@aol.comnospam
(Stephen=A0Baker) [quote]If the time is right, the bike is right, and the money available, why not?
If he has $3000 to blow on a bike, and he wants it, and he can't find it cheaper, what's the
problem? Steve [quote]

The person didnt write about all the things you mentioned; the time is right, if money
available,cant find it cheaper. So dont know the persons situation.

From what I gathered the person wants to be a knowledgeable consumer
and make a fair offer on a general product that is widely negotiated on.

My "guess" is that the more expensive bikes have a 200% markup! So the $3000 probably cost the
LBS $1500.

--
- Zilla Cary, NC (Remove XSPAM)

"HKEK" <coolmale@hotmail.com> wrote in message
news:16063ad.0309141855.6d74d8cd@posting.google.com...
> What is a good price to pay for a bicycle relative to the published MSRP? How much do dealers
> actually pay for the bicycles in comparison to the MSRP?
>
> I am currently looking at a complete bike for which the MSRP is just over $3000.00 and I am trying
> to get a handle what the dealer paid for this bike. I have no idea what the pricing structure is
> in the bicycle industry, particularly at this level.
>
> I have previously purchase a bike with an MSRP of $925 for $725, although it was available at
> several shops for $825. In that case, the bike was widely available for about 10% below MSRP and
> I got it for about 20% off MSRP. The shop would not give this price out over the phone either,
> seems that there is pressure from the distributors to hold the prices at some level and not
> discount the price.
>
> Anyone have some working knowledge of this subject that could share some insode with me?
> -- Thanks!

In article <%Ns9b.11539$vi3.9045@bignews4.bellsouth.net>, Zilla <zilla62XSPAM@bellsouth.net> wrote:
>My "guess" is that the more expensive bikes have a 200% markup! So the $3000 probably cost the
>LBS $1500.

You "guess" way high. If you could make 50% margins in a bike shop people would open shops to
make money!

You stupid moron you first can't add subtract, multiply or divide. Second you don't know the
definition of mark-up. Lastly, you haven't a clue as to what you are talking about as your nospam in
the middle of your name would indicate--you are just a pot-stirred with absolutely no knowledge.

Aside from your needed to be euthanized, why is the original poster shopping price? Why would you
do that with a car either. As other posters have said, you are buying a long-term service
relationship. Cheap is cheap and large shops do not sell quality bikes. Never ever buy a mass
produced bike--they all are pretty much deficient and have shorter lives, are coated with too much
paint and unfinely finished. Fit is everything and you will never get properly fit at a large shop.
It is your choice, if you want a mediocre and unrefined package shop price--God how all businesses
who offer quality service hate people like that!!! Use everyone to find the biggest whore. Oh and
by the way person who thinks the bucks are made of secondary sales, well not exactly. The only way
most shops actually make money is to have a robust service business stream. Generally, the higher
the price the better technicians and engineers one gets access to and the better the work they do,
down to the little details.

The choice is yours just remember cheap is cheap--I've been screwed by operating that way more than
once int he past!

Dan "Zilla" <zilla62XSPAM@bellsouth.net> wrote in message
news:%Ns9b.11539$vi3.9045@bignews4.bellsouth.net...
> My "guess" is that the more expensive bikes have a 200% markup! So the $3000 probably cost the
> LBS $1500.
>
> --
> - Zilla Cary, NC (Remove XSPAM)
>
>
> "HKEK" <coolmale@hotmail.com> wrote in message
> news:16063ad.0309141855.6d74d8cd@posting.google.com...
> > What is a good price to pay for a bicycle relative to the published MSRP? How much do dealers
> > actually pay for the bicycles in comparison to the MSRP?
> >
> > I am currently looking at a complete bike for which the MSRP is just over $3000.00 and I am
> > trying to get a handle what the dealer paid for this bike. I have no idea what the pricing
> > structure is in the bicycle industry, particularly at this level.
> >
> > I have previously purchase a bike with an MSRP of $925 for $725, although it was available at
> > several shops for $825. In that case, the bike was widely available for about 10% below MSRP and
> > I got it for about 20% off MSRP. The shop would not give this price out over the phone either,
> > seems that there is pressure from the distributors to hold the prices at some level and not
> > discount the price.
> >
> > Anyone have some working knowledge of this subject that could share some insode with me? --
> > Thanks!

"Paul Southworth" <cnhyf-1063598400@usenet.etext.org> wrote in message
news:XWs9b.37688$A%3.485029@ord-read.news.verio.net...
> In article <%Ns9b.11539$vi3.9045@bignews4.bellsouth.net>, Zilla
> <zilla62XSPAM@bellsouth.net> wrote:
> >My "guess" is that the more expensive bikes have a 200% markup! So the $3000 probably cost the
> >LBS $1500.
>
> You "guess" way high. If you could make 50% margins in a bike shop people would open shops to
> make money!

Ahhh, that's only for their "higher end" models, which stock around 40-50%. I "guessed" this because
the people who work there claim to get 40% of retail for their purchases. Also I see $1500 go on
sale for $800-$1000, and the LBS STILL makes a profit, that is, it won't sell the bikes at a loss.

Again, it's still a "guess."

--
- Zilla Cary, NC (Remove XSPAM)