hey bike dealer lets talk about price now ;-)

[Dane Jackson]

Claire Petersky <[email protected]> wrote:
> "Dane Jackson" <[email protected]> wrote in message
> news:[email protected]...
>> Mike Jacoubowsky <[email protected]> wrote:
>>> They'll help you come up with ways to
>>> rationalize to your significant other why it's a good thing you spend so
>>> much time on your bike (the most-common one being, hey, isn't it better
>>> to
>>> be having that mid-life crisis/affair with a bike instead of another
>>> person?).
>>
>> Oooh! I haven't tried that one yet. I'm a little young for a mid-life
>> crisis, but maybe I can save that one up for a few years...
>
> When it comes to a new bike purchase, you are allowed multiple mid-life
> crises between the ages of 25 and 60.

Excellent. Now to persuade the wife of that. She recently pointed out
the inequity regarding the number of bicycles we each have. She's at
1.5 (Single + Tandem), and I'm at 4.5 (3 diamond frames, 1 folder, and
the Tandem). I think before I get another bike, I might have to buy
one for her.

--
Dane Jackson - z u v e m b i @ u n i x b i g o t s . o r g
"Religions change, but beer and wine remain."

 

[C.J.Patten]

"Dane Jackson" <[email protected]> wrote in message
news:[email protected]...

> Excellent. Now to persuade the wife of that. She recently pointed out
> the inequity regarding the number of bicycles we each have. She's at
> 1.5 (Single + Tandem), and I'm at 4.5 (3 diamond frames, 1 folder, and
> the Tandem). I think before I get another bike, I might have to buy
> one for her.

Well, technically, using your numbers, if you buy her a bike, you can get
away with 3 more of your own...

 

[bikeguy11968]

Except a trek 820 doesn't have a 200% markup... No bike does.. On a
really really really good day MAYBE you score 50%... smarten up.

 

[bikeguy11968]

Except a trek 820 doesn't have a 200% markup... No bike does.. On a
really really really good day MAYBE you score 50%... smarten up.

 

[Theodore Morton]

On Wed, 13 Jul 2005 13:16:08 -0700, Dane Jackson <[email protected]>
wrote:

>Claire Petersky <[email protected]> wrote:
>> "Dane Jackson" <[email protected]> wrote in message
>> news:[email protected]...
>>> Mike Jacoubowsky <[email protected]> wrote:
>>>> They'll help you come up with ways to
>>>> rationalize to your significant other why it's a good thing you spend so
>>>> much time on your bike (the most-common one being, hey, isn't it better
>>>> to
>>>> be having that mid-life crisis/affair with a bike instead of another
>>>> person?).
>>>
>>> Oooh! I haven't tried that one yet. I'm a little young for a mid-life
>>> crisis, but maybe I can save that one up for a few years...
>>
>> When it comes to a new bike purchase, you are allowed multiple mid-life
>> crises between the ages of 25 and 60.
>
>Excellent. Now to persuade the wife of that. She recently pointed out
>the inequity regarding the number of bicycles we each have. She's at
>1.5 (Single + Tandem), and I'm at 4.5 (3 diamond frames, 1 folder, and
>the Tandem). I think before I get another bike, I might have to buy
>one for her.

Tell her to get a second job so she can buy it for you for Christmas,
if she really loves you.

(This has actually been known to work, but not by me.)

Ted M.

 

[JJ]

"Ken M" <[email protected]> wrote in message
news:[email protected]...
> Well I would have to say that that trek 820 probably sells for about
> $240 to $320 just assuming the 200 to 300% markup, maybe a bit less
> from an internet seller.
>
> Ken

What do you mean, "assuming?" You're the one who claimed said 200-300%
markup. So, you believe that Trek can sell, delivered, an 820 to their
dealers for around $80?

 

[Dane Jackson]

C.J.Patten <[email protected]> wrote:
> "Dane Jackson" <[email protected]> wrote in message
> news:[email protected]...
>
>> Excellent. Now to persuade the wife of that. She recently pointed out
>> the inequity regarding the number of bicycles we each have. She's at
>> 1.5 (Single + Tandem), and I'm at 4.5 (3 diamond frames, 1 folder, and
>> the Tandem). I think before I get another bike, I might have to buy
>> one for her.
>
> Well, technically, using your numbers, if you buy her a bike, you can get
> away with 3 more of your own...

Your ideas are intriguing and I wish to subscribe to your newsletter.

That would allow me another road bike (this one with STI), just for
fiddling abooht. Possibly another bike with an xtracycle for use as
a shopper that's easy to take one of my daughters along. Then it
looks like I might have to invest in a welder so I make a frankenbike
from spare parts...

--
Dane Jackson - z u v e m b i @ u n i x b i g o t s . o r g
"She's been on more laps than a napkin." - Walter Winchell

 

[Dane Jackson]

Theodore Morton <[email protected]> wrote:
> On Wed, 13 Jul 2005 13:16:08 -0700, Dane Jackson <[email protected]>
>>
>>Excellent. Now to persuade the wife of that. She recently pointed out
>>the inequity regarding the number of bicycles we each have. She's at
>>1.5 (Single + Tandem), and I'm at 4.5 (3 diamond frames, 1 folder, and
>>the Tandem). I think before I get another bike, I might have to buy
>>one for her.
>
> Tell her to get a second job so she can buy it for you for Christmas,
> if she really loves you.

Hmmm, I'm not really good at the guilt trip. My mother was Catholic, my
father was sort of indeterminant Protestant, and my sister is Jewish, so
somewhere in there you would think I would have picked up these vital
coping skills. Instead I'm more of a passive-agressive sort of fellow.
Thanks for the idea though.

And first she'd have to get a first (salaried) job. Currently her job
is chasing our wee tots around and trying to keep them from destroying
the known universe. That's more than enough really.

> (This has actually been known to work, but not by me.)

Ah, another urban legend to send to snopes.com.

;-)

--
Dane Jackson - z u v e m b i @ u n i x b i g o t s . o r g
The church is near but the road is icy;
the bar is far away but I will walk carefully.
-- Russian Proverb

 

[Ken M]

Prove to me that it doesn't, and I will believe you.

Ken

 

[Ken M]

Probably somewhere in that range. Maybe upto $120.

Ken

 

[The Wogster]

Ken M wrote:
> Probably somewhere in that range. Maybe upto $120.
>

A Trek 820 in the US goes for about $240.00


Considering that Treks are made in the US, not in Taiwan or China, this
would probably be a fair breakdown:


Materials $50.00 (includes sub-compoonents)
Labour $50.00
Plant Costs $25.00
Trek Markup $65.00
Dealer Costs $40.00
----------- -------
Total $230.00
Dealer Markup $9.99
----------- --------
Retail Price $239.99
============ =======

That would leave the dealer just under $10.00

Seems about right. Don't know if a dealer could confirm this or not....

W

 

[Ken M]

Well I doubt any dealer is going to give up that info.

I will say that you are probably pretty close on materials. I think the
labour is really high, Probably more like $20.00 Plant cost is probably
pretty high too closer to $10.00 Trek mark up probably Closer to
$15.00. Which adds up to about $95.00 which is a little more than the
$80 that my economics would dictate. So the rest of the $240 would be
gross profit for the dealer. But like I said getting a dealer to reveal
this is probably not going to happen.

Ken

 

[The Wogster]

Ken M wrote:
> Well I doubt any dealer is going to give up that info.
>
> I will say that you are probably pretty close on materials. I think the
> labour is really high, Probably more like $20.00 Plant cost is probably
> pretty high too closer to $10.00 Trek mark up probably Closer to
> $15.00. Which adds up to about $95.00 which is a little more than the
> $80 that my economics would dictate. So the rest of the $240 would be
> gross profit for the dealer. But like I said getting a dealer to reveal
> this is probably not going to happen.
>

Typically with manufactured products, not all products, but most
products, the manufacturer takes the cost of production, so materials,
parts and labour, then marks that up 100% to cover everything else, the
dealer then marks that up 100%, and covers all of his/her costs out of
that. So if an assembled bicycle costs $80 to produce, the manufacturer
would charge the dealer $160, and the MSRP would be $320. So a $240
bicycle probably costs the dealer around $120, and the manufacturer
about $60.

Say a dealers operating costs for a month is $4800, rent ($1,500),
utilities ($500), salaries and benefits for employees $2,500, taxes
$250, tools and sundries $50. The dealer gets $120 for a bicycle, he
needs to sell 40 bikes a month, to break even. Now if he wants $500 a
week for himself -- not unreasonable, then he needs to take in ~$2170 a
month, in profit, so add that to his costs, gives a total of $6970, now
he needs to sell 59 bikes a month, or just over 13 per week, every week,
all year 'round, to make his target. If he misses his target, he loses out.

Yes, the gross profit on a $3000 bike is going to be higher, but so are
the carrying costs if it doesn't sell.

W

 

[Mike Jacoubowsky]

>> Probably somewhere in that range. Maybe upto $120.
>>
>
> A Trek 820 in the US goes for about $240.00
>
>
> Considering that Treks are made in the US, not in Taiwan or China, this
> would probably be a fair breakdown:
>
>
> Materials $50.00 (includes sub-compoonents)
> Labour $50.00
> Plant Costs $25.00
> Trek Markup $65.00
> Dealer Costs $40.00
> ----------- -------
> Total $230.00
> Dealer Markup $9.99
> ----------- --------
> Retail Price $239.99
> ============ =======
>
> That would leave the dealer just under $10.00
>
> Seems about right. Don't know if a dealer could confirm this or not....
>

Unfortunately, it's not practical to make low-end bikes in the US anymore.
In fact, most Treks under $1000 will be imported; just no way to compete on
commodity-type bikes with what they can do in China. Once you get to the
higher-end product, where technology can make a significant difference in
how a bike performs, domestic manufacturing becomes very relevant because
you can deliver things that aren't (yet) available from China. But that's a
constantly-moving target.

For what it's worth, a dealer that puts a lot of care into assembly, helping
the customer choose the right bike, and taking care of things down the road,
will generally lose money on every bike below about $400. There are simply
too many costs (including time) involved in such bikes to make them
profitable. But, those bikes lead to sales of other, more-expensive bikes,
and if we (the dealer) don't supply the less-expensive models, we're
essentially training people to shop at WalMart for them... and they'll
possibly never be exposed to all that cycling has to offer.

--Mike-- Chain Reaction Bicycles
www.ChainReactionBicycles.com

 

[Ken M]

Well you are right about overhead cost and how that eats up overall
profit of sales. If the lbs wants to stay in business they must pay
rent, power, telephone etc.

But on the other hand, it is sometimes 'worth' it to give away, sell at
cost, a bike or other item if it will earn a repeat customer.

Ken

The whole point of this thread was how much wiggle room the OP has in
buying a new bike for his son. I say there is a lot more than some
people know. Now like I said I don't have any first hand knowledge of
the bicycle business, but with most consumer good you can do better
than the advertised price.

 

[SMS]

Ken M wrote:

> But on the other hand, it is sometimes 'worth' it to give away, sell at
> cost, a bike or other item if it will earn a repeat customer.

A customer that demands products at costis probably not the type of
customer that a dealer really wants as a repeat customer.

> The whole point of this thread was how much wiggle room the OP has in
> buying a new bike for his son. I say there is a lot more than some
> people know.

Bicycle dealer are much more reluctant than car dealers to cut their
margins. You might save $50-100 by shopping around and trying to
bargain, but what's your time worth?

There are ways to cut the cost pretty significantly though. For example,
many bicycle clubs have arrangements with some shops for a member
discount. It's usually 15-20% on parts, accessories and clothing, and
10% discount on complete, non-sale, bicycles. 10% might not seem like
much, but given the relatively low margins on complete bicycles, it's a
lot for the shop to give up. At REI you get a dividend on non-sale
merchandise, usually around 10%, and at Performance you can join their
club and get a kickback. And of course you can always wait for sales,
and manufacturer promotions.

 

[SMS]

Ken M wrote:
> Oh but I DO know about the car business. What I am saying is that
> "invoice" maybe advertised a lot, but that is NOT what the dealer
> "pays" for the car!! "Holdback" is what I think you are calling the
> real price that the dealer pays. And incentives are a joke!

Holdback is but one of may items between dealer cost and invoice. I.e.,
in the case of Toyota, there is the 2% holdback, 1% for something called
"Wholesale Financial Reserve," and 2% TDA, which goes to pay for
advertising (Toyota dealer associations charge their members for
cooperative advertising, and the TDA defrays, or sometimes exceeds, the
cost per vehicle). Then of course there are the factory to dealer
incentives, which vary by region. I've paid $1500 under invoice, yet I
have no doubt that the dealer was still selling above what they paid the
manufacturer for the product.

A car dealer is hoping for additional profit from stuff like extend
warranties, financing, and WAOs such as fabric guard, pin-striping,
undercoating, paint guard, etc. A bicycle does not offer the same
opportunity for extremely high-margin add-ons. Maybe some shops should
try this sort of thing!