How much? For a frame?

greasedscotsman

So poped into everyone's favourite bike shop over the weekend, Epic Cycles and just talking to the guys in their about a number of things, asked them about the new Look 696. Only £4,500 for the frame! I've seen the Wilier Cento frameset somewhere for a similar price and with the Cervelo California coming in at $9,600, is this all getting a bit silly?

Have to say that I thought the nicest bike they had in Epic was the Genesis Croix de Fer! Maybe it's my age or something...

Anonymous

Not my favourite bike shop...

The thing is, some of these new 'mamils' will like the fact it is ridiculously expensive and buy it...

rolf_f

NapoleonD wrote:

Not my favourite bike shop...

The thing is, some of these new 'mamils' will like the fact it is ridiculously expensive and buy it...

No, Epic are not ridiculously expensive. Just because there are other places that are cheaper, does not mean that Epic are ridiculously expensive. It's a decent shop and if you want unpatronising advice (especially as a beginner) it isn't bad at all. To much negativity in the world........

Anonymous

Eh?

You missed my point. I wasn't saying Epic were expensive, I was saying that some people will only buy that particular Look frame because it is ridiculously expensive.

I have never used Epic but if I were in that neck of the woods they would be my first place to visit...

As for prices, I am a strong advocat of the LBS over slightly cheaper internet...

greasedscotsman

Oops, sorry, shouldn't have mentioned Epic at all there, wasn't really what I was getting at there. Maybe I should have just said "a bike shop", but then I was trying to show off a bit. Went to Condor bikes on Thursday as well.

Actually, come to think of it, it's interesting how bike shops have changed over the years. I remember bike shops back in the day used to be dark, dingy, even scary places. Rammed full of bikes and bit. The bike shop owner would be a grumpy old censored , probably dressed in a brown jacket, who'd see it as a major inconvenience that you'd come into his shop and actually wanted to buy something. And they had a particular smell to them as well (cont'd on page 85...)

rolf_f

NapoleonD wrote:

Eh?

You missed my point. I wasn't saying Epic were expensive, I was saying that some people will only buy that particular Look frame because it is ridiculously expensive.

Apologies - I did miss your point. And was surprised at your apparent opinion

So anyway, I quite agree! Must be a few more frames at that bonkers sort of price surely?

Frank the tank

When you consider how good frames are that cost considerably less than 4.5K those prices are riddiculous. No doubt they're excellent frames but the companies are just taking advantage of the rich and the gullable.

If you're wealthy enough fair play, if you're gullable no one will be able to convince you, you've been "had" so to speak.

jim453

How expensive before the buyer is gullible?

Frank the tank

jim453 wrote:

How expensive before the buyer is gullible?

Thanks for correcting my spelling, I'm never sure on the spelling of such words

Good question, I don't know.

EKIMIKE

NapoleonD wrote:

these new 'mamils'

Cough Cough...

Chip \'oyler

EKIMIKE wrote:

NapoleonD wrote:

these new 'mamils'

Cough Cough...

You beat me too it!

Chip \'oyler

Frank the tank wrote:

When you consider how good frames are that cost considerably less than 4.5K those prices are riddiculous. No doubt they're excellent frames but the companies are just taking advantage of the rich and the gullable.

If you're wealthy enough fair play, if you're gullable no one will be able to convince you, you've been "had" so to speak.

Why has someone been 'had' if they buy a companies frame at £4.5k? And why do you think a company is trying to take advantage if their frame costs that much?

Do you think Aston Martin are taking the piss with their customers? Or do you think their prices are justified because of the craftsmanship and materials that have gone into their cars?

And if you can buy a frame for £500, surely buying one for £1k you are being 'had'?

I'm probably not sticking my neck out here buy I reckon if you could afford that frame you'd buy one.

EKIMIKE

It clearly sells at 4.5k. I mean i'm sure they've spent a good few hours considering what price point to enter the product onto the market. Look have been selling bikes for a long, long time. If it is wrong then people won't buy it. They would reduce in such circumstances.

Every market has a premium/high end. That's because there are plenty of consumers with the money to buy premium/high end products. It doesn't mean these consumers are 'idiots' or having a mid-life crisis. It means they have alot of money and they want a product which corresponds.

ishmael

Many cyclists believe that the value of anything is directly linked to how cheap it is.

Modern road bike frames like Look, Cervelo et al are handmade to aerospace/F1 specs yet the old-schoolers and thrift-addicts still believe they should be sold at 1970s prices.

I've known riders drive 40 miles for 10% off a bike - seriously!

Mind you cyclists are not as bad as runners. They'd sell their children into slavery for 30% off a pair of new Asics.

Gazzaputt

ishmael wrote:

Mind you cyclists are not as bad as runners. They'd sell their children into slavery for 30% off a pair of new Asics.

Actually I'd add the wife to that for a Colnago C59.

greasedscotsman

jim453 wrote:

How expensive before the buyer is gullible?

Anyone with anything more expensive than my bike

Frank the tank

I've no doubt that Look produce "handmade" quality frames as do other companies.

What I meant by being had is although the frames are excellent they will charge more because it has the look name and the frame will not neccessarily perform any better than a frame a thousand pounds or more cheaper.

I'm just a sceptical grummpy old man.

As for me buying one if I could afford one, no I wouldn't, I don't like the look of looks.

ishmael

If I won the Euromillions I wouldn't buy a Bugatti Veron or even a Ferrari 558 (might get a VW Transporter though).

But I wouldn't hesitate to fly 1st class to the US to be fitted for a Titanium Seven. Or maybe Italy for a Pegoretti or even Condor - or maybe all three!

Oh and I'd get a garage/workshop for all my bikes.

Chip \'oyler

Frank the tank wrote:

I've no doubt that Look produce "handmade" quality frames as do other companies.

What I meant by being had is although the frames are excellent they will charge more because it has the look name and the frame will not neccessarily perform any better than a frame a thousand pounds or more cheaper.

I'm just a sceptical grummpy old man.

As for me buying one if I could afford one, no I wouldn't, I don't like the look of looks.

I bet it will.

Pretre

Chip \'oyler wrote:

Frank the tank wrote:

I've no doubt that Look produce "handmade" quality frames as do other companies.

What I meant by being had is although the frames are excellent they will charge more because it has the look name and the frame will not neccessarily perform any better than a frame a thousand pounds or more cheaper.

I'm just a sceptical grummpy old man.

As for me buying one if I could afford one, no I wouldn't, I don't like the look of looks.

I bet it will.

+1

BTW - Look 695 (696??) isn't 4.5k - it's 3.5k - http://www.fisheroutdoor.co.uk/find.asp ... and=&size=

*Edit:596 is 4.5k - but I think that's a TT frame, not a road frame, & they're always super expensive at the top end

schweiz

Anybody know how many of those frames they manufacture per year and of those how many they sell retail and how many they give away to sponsored teams either free or reduced prices? Whilst Tesco may sell milk as a loss leader to attract customers, a bike manufacturer will want to make profit on every product line.

Raw material cost, manufacturing cost, shipping costs etc. are recurring costs but they need to amortise the development cost and the cost of the frames that given away so it pushes the retail price up considerably if it is only a low number production run. The other thing that pushes the £ price up is the fixed percentage mark up at each stage. The Importer probably adds 50%, the shop another 60% on that and then VAT at 17.5% so a frame that costs 3500 is made up as follows:

Importer pays :1242
adds 50%
Dealer pays: 1861
adds 60%
RRP without VAT: 2978
adds 17.5%
RRP with VAT: 3500

and my importer and dealer mark ups are on the conservative side. I wouldn't at all be surprised if they were closer to 100%, especially the dealer.

Chip \'oyler

schweiz wrote:

Anybody know how many of those frames they manufacture per year and of those how many they sell retail and how many they give away to sponsored teams either free or reduced prices? Whilst Tesco may sell milk as a loss leader to attract customers, a bike manufacturer will want to make profit on every product line.

Raw material cost, manufacturing cost, shipping costs etc. are recurring costs but they need to amortise the development cost and the cost of the frames that given away so it pushes the retail price up considerably if it is only a low number production run. The other thing that pushes the £ price up is the fixed percentage mark up at each stage. The Importer probably adds 50%, the shop another 60% on that and then VAT at 17.5% so a frame that costs 3500 is made up as follows:

Importer pays :1242
adds 50%
Dealer pays: 1861
adds 60%
RRP without VAT: 2978
adds 17.5%
RRP with VAT: 3500

and my importer and dealer mark ups are on the conservative side. I wouldn't at all be surprised if they were closer to 100%, especially the dealer.

Interesting. So using that scale a carbon frame that costs £1k retail cost censored all to make, which is kind of scary when you're flying down a hill at 40+mph

I also suspect that you're dealer mark up is exaggerated. From what I hear dealer's don't make much money on bikes - which is why they try to add extras onto the sale, like helmets, pumps etc, which have more margins in them.

schweiz

Many moons ago, I used to work for Blacks as a Saturday job and most things (skis, tents, gore-tex jackets, walking boots, technical climbing gear) all had mark ups of 100% or more. i.e. pair of skis could cost 102 100% mark up to 204 plus VAT = 240.

I've never worked in the cycle industry but I'd heard, like you that mark ups weren't as high as people thought, that's why I knocked them down to 50% and 60%. The higher percentage for the shop as they have more risk as they are the ones actually responsible for the ordering. Orders for 2011 bikes probably went to the importers several months back. The importers risks are low because every bike they order from the manufacturer is already 'sold' to a shop. The only risk is when a shop goes bust between ordering and delivery.

anto164

Sorry, but there is no way in gods earth that bike retailers can just whack 100pc on top of the price that they get it from

An lbs averages about 30-40pc markup on the bikes that they sell, so for instance..

buy bike in for £600

RRP would then be £1k.

BUT, the VAT of £160 needs to be deducted too, so really, they're only getting..

£1k - (£600+160) = £240 profit.

That's it.

Then you have to factor in overheads, and variable costs, which doesnt leave much at the end of the day.

But sure, they'll sell add on sales for big money when they buy them for buttons. Such things as innertubes are pure profit nearly.

schweiz

I was basing my guesses at mark up off the prices that online retailers who sell OEM parts in plastic bags charge rather than the full retail price in nice boxes and also the kind of discounts that get offered at the end of season where I can't imagine the bikes/frames are sold at a loss compared to what it costs the shop to buy them (not what it costs to sell them when overhead is added).

I'm not disputing the overheads of shops (rent, wages, insurance, utilities, etc. etc.) make their actual profit tight, but the mark up is still there at each level in the chain from manufacturer to customer. That was the essence of my point. And unless you're buying generic frames like Ribble or Planet X do or selling in the quantities of Trek then amortisation of overhead is large part of the cost. Hence the seemingly exorbitant cost of some frames. On the MTB forums there is a thread about some space frames. Guys spending £10,000 on bikes with no suspension and cheap brakes. The frames are very expensive but only a few hundred have been made. In contrast,I would be very surprised if a RRP £700 Taiwanese cookie-cutter frame costs anything more than £100 to manufacture.

greasedscotsman

Pretre wrote:

BTW - Look 695 (696??) isn't 4.5k - it's 3.5k - http://www.fisheroutdoor.co.uk/find.asp ... and=&size=

*Edit:596 is 4.5k - but I think that's a TT frame, not a road frame, & they're always super expensive at the top end

Yup, I was told there was two versions, one costing 4,500 and the other costing 3,500. Seems the 695 is the road version, costing 3,500 and there maybe a new TT version of the 596, maybe the 696, costing 4,500?

And I would agree with what's already been said, if I won the lottery this weekend, I'd go out and buy something silly, but probably not the 695/6. I'm sure they will sell very well and it's no doubt a great bike. But I just can't justify spending that much on a bike any more. I've had some top end bikes in the past, I won a Cannondale R4000 in '97, which was a great bike, really fast! And since then I've had a Giant TCR Composite and then Tarmac SL. But I'd just rather have something a bit more interesting now. Thinking custom built steel

Slapshot

Mark up of 100% is not as unusual as you think, especially in niche market, which high end bikes and bits most certainly is. These massive mark up's are what allow bike shops to have their huge 30 or 40% off sales making you think you are getting a huge bargain.

The ice hockey equipment market is exactly the same. For a top end pair of pro skates you'll pay just under £500 from a shop where as the shop owner is buying them at half that price. I used to get my gear direct from an importer at his import prices not the dealer price, importer maybe makes 30% but if the dealers are smart then they can make a fortune, don't always be fooled by their "poor" rhetoric.

Chip \'oyler

greasedscotsman wrote:

Pretre wrote:

BTW - Look 695 (696??) isn't 4.5k - it's 3.5k - http://www.fisheroutdoor.co.uk/find.asp ... and=&size=

*Edit:596 is 4.5k - but I think that's a TT frame, not a road frame, & they're always super expensive at the top end

Yup, I was told there was two versions, one costing 4,500 and the other costing 3,500. Seems the 695 is the road version, costing 3,500 and there maybe a new TT version of the 596, maybe the 696, costing 4,500?

And I would agree with what's already been said, if I won the lottery this weekend, I'd go out and buy something silly, but probably not the 695/6. I'm sure they will sell very well and it's no doubt a great bike. But I just can't justify spending that much on a bike any more. I've had some top end bikes in the past, I won a Cannondale R4000 in '97, which was a great bike, really fast! And since then I've had a Giant TCR Composite and then Tarmac SL. But I'd just rather have something a bit more interesting now. Thinking custom built steel

You could always get a custom built carbon frame from Viner

ishmael

Slapshot wrote:

Mark up of 100% is not as unusual as you think, especially in niche market, which high end bikes and bits most certainly is. These massive mark up's are what allow bike shops to have their huge 30 or 40% off sales making you think you are getting a huge bargain.

The ice hockey equipment market is exactly the same. For a top end pair of pro skates you'll pay just under £500 from a shop where as the shop owner is buying them at half that price. I used to get my gear direct from an importer at his import prices not the dealer price, importer maybe makes 30% but if the dealers are smart then they can make a fortune, don't always be fooled by their "poor" rhetoric.

Maybe that's true for bulk buying retailers like Evans, Halfords, Wiggle or CRC but for the average LBS the average margin is 37% - fact. Even for high end bikes and frames the margin will not be greater. That's why there is so little profit in selling new bikes for the independent retailer - they simply can't demand the same volume discounts as the big boys.

End of season bikes are often sold at a loss in real terms - absolutely. If the bike has been in stock for a while then it is dead money and must be realised sooner rather than later, that's why the poor LBS is so keen to offer discounts to churn their stock - it's called cashflow.