Quoted post said:Bikes and components are way overpriced. I have always wondered about this myself and one reason I have come up with is that we are willing to pay so the manufacturers soak us. Maybe someone in the industry would like to share some light on this FACT.
Hopefully my work in the financial world will pay off...
Anyway, the same reason why everything else is overpriced...Why do you think a can of coke costs a dollar now a days, maybe $4 if you're at a stadium? There's probably 1 cent worth of sugar and carbonated water in each can, and maybe the can itself is worth 2 cents. There is a global duopoly on that brown-colored soda and when a firm has a great amount of market share they're able to push the price through something called artificial scarcity. Things like patents, can further drive up prices through legally granted monopolies.
Patents can be ridiculous, for instance when Canyon sued Cervelo for violating a patent:
http://www.cyclingnews.com/news/cervelo-downplay-significance-of-european-patent-dispute
Um hey everyone, we're going to patent oval tubes that are shaped like this and if you want to use it you better pay us!
Really now? Hey did you know T-mobile trademarked its own shade of magenta, so that no other company can use it? If another company uses T-mobile's magenta they will get sued or have to pay royalties...
Likewise, Facebook wants the rights to any word that has the form ****book... so what, if I say "yearbook" are you going to sue me?
Anyway, you are right davereo, we have high demand for bikes manufactured by ProTour sponsors because we see their advertising, and we want to ride what the pros ride. Remember when Fuji didn't sponsor a pro tour team? Their bikes were probably less than half of that of a comparable Trek when Lance was dominating, but they were just as good.
The market for carbon is also being stretched. Other industries are realizing how awesome carbon fiber is, and they want to use it for everything...cars, airplanes, buildings, etc. The demand is making the cost of carbon fiber skyrocket.
Barriers to entry also prevent potential bicycle manufacturers from entering the market. It might cost many millions of dollars to set up a factory which is why manufacturers are offshoring production to Asia. Still, the barrier to entry is high so that keeps the market operating as tight-knit oligopoly. You also need to hire talented engineers and use sophisticated software, and access to a wind tunnel.
Don't worry though, a smart Chinese businessman/woman will realize how much money they could make by turning an offshored factory into an independent bicycle manufacturer...they already have the tools and instructions given to them by the mainstream companies...all they need to do is make copies once the patents expire. But who wants a crummy bike made in China? Oh wait! We're already riding them anyway...and the quality is quite good.