A Question about Bike Shops, markups, and profit

Discussion in 'The Bike Cafe' started by lucien2, Aug 14, 2004.

  1. lucien2

    lucien2 New Member

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    So I have a bike on order from my LBS. An expensive one- Seven Axiom Steel. I am now working with my LBS to make equipment decisions. They've given me pricing on Ultegra ($1050) and Centaur($1350) kits. There's about a $300 difference between the two. Now here's the thing: I've found 2004 Centaur kits elsewhere for as little as $700. The prices that the LBS quoted include seat, seat post, handlebars, cabling, etc., so it isn't fair to make a direct comparison, but I wonder if I couldn't come up with a better kit for the same money using eBay and whatnot.

    Is it cheesy to bring my own kit to the table, purchased elsewhere for so much less? Could I offer to pay the LBS a margin% on the kit to lessen the cheesiness and still help my budget significantly? Any advice appreciated.
     
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  2. Cedez le Passge

    Cedez le Passge New Member

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    Lucien, I also bought a Seven through my LBS. They were less than forthcoming about the pricing until very late in the game, and negotiations almost broke down over the margin they were asking for. (As I recall, it was something in the neighborhood of $1,000 initially).

    In the end, I bought the frame and fork from them at retail (less a minor bike-club discount) and sourced everything else myself. They pressed the headset and I built up the rest of the bike, mostly using advice from these forums and Parktools.com.

    I would have been more than happy to pay them a reasonable markup and to have them build the bike, size the stem and seatpost, etc. But we couldn't get there, and it wasn't for lack of effort on my part. I do believe in supporting LBSs, but I also think there's a lot to be said for building the bike yourself (you learn how to fix it when it breaks and how to maintain it so it doesn't). This solution was something of a compromise that way.
     
  3. JohnO

    JohnO New Member

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    That seems a bit pricey for Centaur - cbike.com sells Chorus groups for < $1k, but that's minus the seatpost. I ended up getting my frame from ebay (Trek Y-Foil), group (chorus) from cbike, seatpost (Record) from branford bike, bars from ebay (Cinelli), wheels (Rolf) from ebay and new wheels (Zonda) from cbike, plus a Shimano-Campy converted cassette from aebike.com. Also got a removable link for the campy 10 chain from branford bike.

    Ebay is a good reference, but always check the online retailers for price - people can get silly on ebay from time to time, and for brand new components or groups, you can often buy from an online retailer for the same price as ebay or less, plus you don't run near the risk of getting stiffed. Last year, I bought my Zondas for $350. Saw an identical set on ebay going for $400 at about the same time.
     
  4. TechJD

    TechJD New Member

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    I think it might be just the LBS and what kind of person is runing them
    I bought a crankset online and goin to get the bb and a incert from my LBS at the same prices I see online
    and hes goin to install them and make sure all is alined right for $15 to $20
    I dont think that is bad pricing
     
  5. graf zeppelin

    graf zeppelin New Member

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    Over the course of about a year and a half I collected, part by part, everything I needed to build my new bike. Ended up that the only thing I purchased from my LBS was the seat post. Everything else (I had chosen specific make/model for each item) I was able to find much cheaper online. My LBS had given me their pricing for everything. I told them I was going to try to find the best prices I could, but go to them for anything that was close. They did not mind at all. I had a good relationship with them. They fit me for the frame, built the bike, did all the servicing. I also got all my whim purchases from them.

    I've found most shops to be happy that you at least check with them on pricing before going somewhere else. Some will try to price match too. They understand you having to go where its best priced for you. I've yet to find a shop that can come close to online prices for parts, and that's not even using eBay.

    The Seven frame I'd probably stay with the LBS for, as you dont see them better priced online too often in exactly the size etc you'd want. Everything else, though, I'd be careful to do a little research to be sure you're getting pricing that's good for you and the part selections you desire. If the LBS is fairly close, I always go with them. If its way off though, maybe see if they can come closer. They wont mind you're getting some parts from elsewhere, especially as its their frame sell.
     
  6. ThrillBilly

    ThrillBilly New Member

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    well, that is certainly the rub. both sides have a story.

    if i need a part that cost $100 at the LBS and dont need it TODAY, and it is readily available by mail/net for $50, im buying elsewhere, and i think the LBS understands. what i WONT do is bitch about the cost of a tube at the LBS, save a buck online, and then show my face at the shop asking to borrow the pump.

    if you ask the LBS to quote a group, and at least give them a chance to compete, i would have NO problem in paying their normal charge for build-up if they cant compete on the parts pricing. i would then expect to also pay for any tune-ups that i couldnt do, which would probably be free if i had purchased a turn-key package from them.

    THE OTHER SIDE- i have developed a very good relationship with a local (auto) tire shop near my home. i purchased a set of tires from them this spring which i COULD have saved a few bucks on by purchasing the tires from tirerack.com and having them do the install. but i bought everything from them for the service factor. ONE-STOP shopping. last week, i noticed while unloading the bike, a BIG screw in my left rear tire on my other vehicle. NOT the tires i bought from them. i went to the tire shop, my car was on the rack within 5 minutes of arriving even though they were very busy. my tire was plugged and patched as well as rebalanced within 20 minutes. i was pulling out my credit card to pay, when the mgr just waved his hand and said, "NO CHARGE". this was for a tire i didnt even buy from them! im sure the normal charge would have been at least $20. needless to say, i was very happy, and will be a repeat customer when i need to buy tires again.

    so i try to support the LBS whenever possible. its good for both parties involved. when/if all the LBS vanish, going to walmart to fondle nice high dollar bike parts wont be an option. a sad day indeed.
     
  7. chuy

    chuy New Member

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    i've noticed the shops that cater more to the 'recreational' biker/cyclist tend to charge up the prices like mofos whereas the shop catering to roadies have decent prices with no or little markups
     
  8. lucien2

    lucien2 New Member

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    I have no intention of screwing my LBS, that's sure. I am not a fan of the WalMartization of this country anyway. Thanks for the input, everyone. 20 more days till my frame and fork arrive!
     
  9. domaindomain

    domaindomain New Member

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    I think that you could talk with them about it.

    Show them the ads and let them know that their prices are out of line on some things. It gives them the chance to compete at the very least and competition is what keeps businesses improving.

    But, as you already realise, having a good relationship with your LBS is a good thing and to stay in business, they need to make a living.

    If they can't match the price, they can come as close as they are able to and, if its handled properly, everyone should be happy.

    Just one thing, if you are comparing with prices off ebay, be sure it is a business that you are looking at - if I bought an item and then decided to sell it as I didn't want it, my price would be way lower than retail and its unfari to expect a shop to match that...


    Enjoy the new bike!
     
  10. Insight Driver

    Insight Driver New Member

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    I think the best shops post the prices for the work they do on a bike, pressing the headset, installing crankssets, etc. The prices are reasonable if you look at the time it takes. Many of the bike shops I frequent run pretty thin margins because competition is brutal. Where I live there are about 20 bike shops within a fifteen mile radius of me. I have chosen my LBS shop after careful consideration. I have a good relationship with my LBS. I know they sell bikes and service, they are not in the business of selling parts, per se. They do not have the volumes that allow low pricing that you find from distributors online. I pay the retail prices because I know it supports my local bike shop. I know as I support my LBS he returns the favor to me.

    I stop in regularlly and will have a conversation. In passing I will mention I have this ache in my knee or whatever and immediately my LBS will put my bike on a trainer and observe me spinning and will make tweaks to improve my fit. You don't get that kind of service without doing something in return like buying from them.

    It all comes down to what your outlook is. I can fix most things on a bike and don't need a bike shop to do it for me. That said, I am not good at fitting myself properly to a bike and for that I rely on my LBS. My LBS won't survive without the support of the customers that see the value in having a relationship with them.

    At least for me, my bike shop is not like a typical retail store.
     
  11. mattyg

    mattyg New Member

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    as a mechanic in a bike shop (and a road racer) i see it all the time. people bringing in parts from elsewhere to have them installed from us. now, like a previous poster said, it depends on whos running the show there. in my case (no names will be mentioned) but my boss is a stickler and would give you the evil eye. most bike shops will install the stuff for you, but charge you and installation fee. get to know all your local bike shops, and see whos got the best mechanics and the best owners. im my case, we have the nest mechanics (im not the only one) but our boss is a stickler...so.............but my advice is to try and avoid ebay. remember bike shops are there to make money, and if they quote you centaur at 1300$ then they probably got it for $1000, mark ups arent that high.

    heres a helpful hint to remember: for every dollar that comes into a bike shop, roughly 3 to 5 cents ends up being profit.

    draw your own conclusions, but remember, bike shops cant please everybody, and we cant always give deals. crap i soulnd like my boss.
     
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