Author Topic: Are we getting overcharged for New bikes  (Read 7662 times)

Re: Are we getting overcharged for New bikes
« Reply #25 on: 28 March, 2017, 07:03:26 pm »
Fancy lug work and a poncy paint job may show many manhours of craftsmanship, but it's hiding 1930's technology and doesn't translate to a better riding experience.

 

ElyDave

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Re: Are we getting overcharged for New bikes
« Reply #26 on: 28 March, 2017, 09:03:44 pm »
yebbut, the debate was on price not performance - are we being overcharged, not does price reflect performance?
“Procrastination is the thief of time, collar him.” –Charles Dickens

LittleWheelsandBig

  • Whimsy Rider
Re: Are we getting overcharged for New bikes
« Reply #27 on: 28 March, 2017, 09:23:42 pm »
Traditionally, the bike industry has generally run on the smell of an oily rag. With the possible exception of Rapha, et al, it doesn't look to have changed much. Unless somebody is making huge profits somewhere in the supply chain, we aren't being overcharged.
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ElyDave

  • Royal and Ancient Polar Bear Society member 263583
Re: Are we getting overcharged for New bikes
« Reply #28 on: 28 March, 2017, 10:19:27 pm »
so you really think it costs Dura Ace/Tiagra multiple to shave those few grammes from the Dura Ace components?
“Procrastination is the thief of time, collar him.” –Charles Dickens

handcyclist

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Re: Are we getting overcharged for New bikes
« Reply #29 on: 28 March, 2017, 10:29:46 pm »
No we aren't being overcharged.

Simple market economics in a high volume wide choice market such as cycling won't let overpricing last long. Free market mechanisms, whether you love them or hate them, eliminate excess profit in the long term.
Doubt is is not a pleasant condition, but certainty is absurd.

LittleWheelsandBig

  • Whimsy Rider
Re: Are we getting overcharged for New bikes
« Reply #30 on: 28 March, 2017, 10:39:46 pm »
No, Dura-Ace (pronounced Do you race?) has a significantly higher profit margin than Tiagra. Suntour died because it priced all of its product at cost + fixed mark up, regardless of price point. Shimano made enough money out of their high end products to increase R&D enough to eventually make what their main customers wanted (more than Suntour could) and crushed their competitors. Shimano is the 800 pound gorilla of cycling but I think they make more money from their fishing division. That was started only because Mr Shimano wanted a better fishing reel and gave his bicycle engineers the problem of making it.
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Re: Are we getting overcharged for New bikes
« Reply #31 on: 28 March, 2017, 10:42:13 pm »
I can vouch for Shimano fishing reels.  Mine is over 30 years old (way before I took up cycling), completely neglected and still going strong.
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Samuel D

Re: Are we getting overcharged for New bikes
« Reply #32 on: 28 March, 2017, 11:33:12 pm »
I read the Shimano-versus-Suntour history a little differently, but in any case fishing is small beer for today’s Shimano (PDF).

Not many people are making their fortunes in bicycles, and in that sense we are not being overcharged. But many bicycles are needlessly expensive on account of pointless or harmful novelty.

The comparison with small motorcycles is revealing because those machines (or their underlying systems) are designed to lead long, hard, working lives in developing countries like Brazil and Pakistan. They are by their functional and durable nature the polar opposite of disposable playthings. So there’s no room for fripperies, and economics drives every aspect of their design and (mass) manufacture.

LittleWheelsandBig

  • Whimsy Rider
Re: Are we getting overcharged for New bikes
« Reply #33 on: 28 March, 2017, 11:45:54 pm »
You are right. It has been a lot of years since I checked Shimano's numbers. Fishing is only 1/5th of their business.
Wheel meet again, don't know where, don't know when...

Samuel D

Re: Are we getting overcharged for New bikes
« Reply #34 on: 28 March, 2017, 11:55:32 pm »
A fifth of sales but barely a tenth of their net income. The money’s all in the bicycles now. However, Shimano is one of a kind in the industry. No-one else is making that kind of money.

Cudzoziemiec

  • Ride adventurously and stop for a brew.
Re: Are we getting overcharged for New bikes
« Reply #35 on: 29 March, 2017, 10:21:55 am »
I read the Shimano-versus-Suntour history a little differently, but in any case fishing is small beer for today’s Shimano (PDF).

Not many people are making their fortunes in bicycles, and in that sense we are not being overcharged. But many bicycles are needlessly expensive on account of pointless or harmful novelty.

The comparison with small motorcycles is revealing because those machines (or their underlying systems) are designed to lead long, hard, working lives in developing countries like Brazil and Pakistan. They are by their functional and durable nature the polar opposite of disposable playthings. So there’s no room for fripperies, and economics drives every aspect of their design and (mass) manufacture.
Yes and no. Small motorbikes designed in the 70s or 80s in Japan are still being produced in their millions in places like India but many of them are now cosmetically redesigned to appeal to fashion and "performance". They've usually had a series of minor engineering upgrades too, such as 12V electrics, electric starters, disc brakes, electronic ignition and so on. Just like their Western equivalents really...
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Mr Larrington

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Re: Are we getting overcharged for New bikes
« Reply #36 on: 29 March, 2017, 11:02:38 am »
As a rule of thumb when buying components the range immediately below the top-end stuff is notably better VFM.  I was once bored enough to put all the data into a spreadsheet, and then bought a SRAM rear derailleur instead.
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Cudzoziemiec

  • Ride adventurously and stop for a brew.
Re: Are we getting overcharged for New bikes
« Reply #37 on: 29 March, 2017, 11:22:18 am »
I've heard that restaurants usually charge the largest mark up on the second-cheapest item in the menu. They reckon people who don't want to spend much tend to go for that cos they feel the very cheapest makes them look stingy. As bikes and their components are not usually chosen in front of a group of people who you feel might be judging you, a different psychology probably applies.
Riding a concrete path through the nebulous and chaotic future.

citoyen

  • Occasionally rides a bike
Re: Are we getting overcharged for New bikes
« Reply #38 on: 29 March, 2017, 11:36:17 am »
I've heard that restaurants usually charge the largest mark up on the second-cheapest item in the menu. They reckon people who don't want to spend much tend to go for that cos they feel the very cheapest makes them look stingy.

I think that's probably a myth.
"The future's all yours, you lousy bicycles."

Cudzoziemiec

  • Ride adventurously and stop for a brew.
Re: Are we getting overcharged for New bikes
« Reply #39 on: 29 March, 2017, 11:56:51 am »
Spread by restauranteurs to persuade us to go for the more expensive options?  :D In any case I think it's a different pricing pattern than bikes.
Riding a concrete path through the nebulous and chaotic future.

Re: Are we getting overcharged for New bikes
« Reply #40 on: 29 March, 2017, 12:25:14 pm »
I've had good value from just about every bit of cycling kit I've bought, from bikes to gloves, in general the more I've spent the better that value.  If I was going to make a comparison it'd be with whatever else I'd have spent the money on - everyday bike Vs public transport, sports bike Vs some other sports equipment...

citoyen

  • Occasionally rides a bike
Re: Are we getting overcharged for New bikes
« Reply #41 on: 29 March, 2017, 12:31:47 pm »
Spread by restauranteurs to persuade us to go for the more expensive options?  :D

Cheaper dishes generally have the highest mark-up. Soup will have the biggest mark-up of all because it's so cheap to make - pennies per portion. Things like fillet steak or turbot don't make a lot of money for restaurants because the ingredients are so expensive.

I think it's more a case of cutting the margins on the less popular dishes in order to tempt customers to choose them, rather than marking up the more popular dishes to make more profit.

Anyway, you're right - this doesn't have much bearing on the price of bikes.
"The future's all yours, you lousy bicycles."

caerau

  • SR x 3 - PBP fail but 1090 km - hey - not too bad
Re: Are we getting overcharged for New bikes
« Reply #42 on: 29 March, 2017, 12:41:11 pm »
Spread by restauranteurs to persuade us to go for the more expensive options?  :D

Cheaper dishes generally have the highest mark-up. Soup will have the biggest mark-up of all because it's so cheap to make - pennies per portion. Things like fillet steak or turbot don't make a lot of money for restaurants because the ingredients are so expensive.

I think it's more a case of cutting the margins on the less popular dishes in order to tempt customers to choose them, rather than marking up the more popular dishes to make more profit.

Anyway, you're right - this doesn't have much bearing on the price of bikes.


This thread might be worth a read for cafe owners who host audax controls however... :-D

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Re: Are we getting overcharged for New bikes
« Reply #43 on: 29 March, 2017, 12:51:28 pm »
Spread by restauranteurs to persuade us to go for the more expensive options?  :D

Cheaper dishes generally have the highest mark-up. Soup will have the biggest mark-up of all because it's so cheap to make - pennies per portion. Things like fillet steak or turbot don't make a lot of money for restaurants because the ingredients are so expensive.

I think it's more a case of cutting the margins on the less popular dishes in order to tempt customers to choose them, rather than marking up the more popular dishes to make more profit.
My experience in catering was further down the chain than the sort of restaurant that served turbot, as in a burger van, even so the price of the ingredients was a small proportion of the overall cost.  Highest mark up was on mugs of tea, biggest cost of which was people not returning the mugs.  We'd have been happy to have kept tea sales as the profit for the day with everything else covering costs.

LittleWheelsandBig

  • Whimsy Rider
Re: Are we getting overcharged for New bikes
« Reply #44 on: 29 March, 2017, 12:53:33 pm »
Much the same in bike shops. Biggest profit margin percentages come from spare tubes (and repairs).
Wheel meet again, don't know where, don't know when...

Cudzoziemiec

  • Ride adventurously and stop for a brew.
Re: Are we getting overcharged for New bikes
« Reply #45 on: 29 March, 2017, 12:57:11 pm »
Spread by restauranteurs to persuade us to go for the more expensive options?  :D

Cheaper dishes generally have the highest mark-up. Soup will have the biggest mark-up of all because it's so cheap to make - pennies per portion. Things like fillet steak or turbot don't make a lot of money for restaurants because the ingredients are so expensive.

I think it's more a case of cutting the margins on the less popular dishes in order to tempt customers to choose them, rather than marking up the more popular dishes to make more profit.

Anyway, you're right - this doesn't have much bearing on the price of bikes.


This thread might be worth a read for cafe owners who host audax controls however... :-D
;D
Riding a concrete path through the nebulous and chaotic future.

Re: Are we getting overcharged for New bikes
« Reply #46 on: 29 March, 2017, 01:37:38 pm »
Much the same in bike shops. Biggest profit margin percentages come from spare tubes (and repairs).

My LBS are very upfront about repairs/maintaining is their greatest source of income/profit.  Even better when they do the simpler tasks and use the biggest profit margin spares.

rogerzilla

  • When n+1 gets out of hand
Re: Are we getting overcharged for New bikes
« Reply #47 on: 02 May, 2017, 09:49:09 pm »
I'm sure Brompton are overcharging but they occupy a particular market niche, which no-one's been able to break into for 30 years.  And Bike4Work/Cyclescheme has pretty much set a £1000 price tag for a commuting bike, because it's not real money, and they're exploiting that fact.  An M3L was £550 only 8 years ago and now it's nudging a grand.

When branding and an associated ecosystem are taken into account, market forces no longer work.  Look at the markup on an iPhone.
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vorsprung

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Re: Are we getting overcharged for New bikes
« Reply #48 on: 03 May, 2017, 09:13:09 pm »
Having just spent 3k on a new one 🤔I'm begin to think when you look at what you get compared to a motorcycle we are paying through the nose

wait... have you tried pedalling a motorcycle?  They weigh loads.  Even a low end racing bike is lighter.
so bikes are actually amazing value compared to porky over weight motorcycles

Re: Are we getting overcharged for New bikes
« Reply #49 on: 04 May, 2017, 07:52:04 am »
Having just spent 3k on a new one 🤔I'm begin to think when you look at what you get compared to a motorcycle we are paying through the nose

wait... have you tried pedalling a motorcycle?  They weigh loads.  Even a low end racing bike is lighter.
so bikes are actually amazing value compared to porky over weight motorcycles
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