BIKES the price of!!!!!!!

jonnyashworth

too many beers sorry

jonnyashworth

yyyooouuu knknooowww wwhhhhdddaaammm ttrrrrriiiing to zzzay

Anonymous

No, I really don't. If I did, I would have given you an appropriate answer.

jonnyashworth

My thinking started on this point when I bought a Giant anthem X frame last week with full warranty from a genuine dealer (okay it was an 09 model) for £350 when they are selling the 2011 ones for £1200 (I'm no saint I sold it immediately) but it got me to thinking..........

jonnyashworth

I fully expect adiscount on older models but thats not what I'm on about. I think if you could buy say an 2009 anthem x2 or a 2008 zesty 315 or 2009 fuel ex8 for arounf a grand today (new from a dealer) people would but that choice isnt available to them unless they can find really old stock. I'm on about a bike company continuing production of a bike for longer to make it more affordable. (hope this clears it up with less spittle sorry)

Anonymous

Like I said. If the 09 frame was still being sold as current, then it would still cost the same as it did brand spanking new, so you wouldn't have got it for £350.
The fact that a newer model was introduced at a similar price point, devalues the older frame.
So basically you're moaning about not being able to afford brand new, high end bikes. Well boohoo.

Same thing happens with cars, which is why the vast majority of people are driving pre-owned cars. Not many can afford to buy new.

jonnyashworth

I can afford high end new bikes! Hell I have four of the bloody things. I just remember what it was like to be skint and 19 (and I was no less passionate about my chosen hobby then) How can we realistically expect younger people to enjoy our sport fully if we dont offer some more better specced higher performing "budget" options to them?

Anonymous

but they DO have affordable options. Either older models, or second hand. If the older models were still current, they wouldn't get the bargain basement prices.
You seem to want everyone to be able to afford high end machines. Well, that's not how the world works.

bike-a-swan

schweiz wrote:

As an Engineer, a proper Engineer who makes sure aircraft are safe to fly, not an 'Engineer' that comes to replace a circuit board in your washing machine, my internal charge rate is over US$100/hour. That's just for my time which consists of salary, amortised cost of real estate and IT, training, paid leave etc. before tax and before profit. So the external cost of my time is closer to US$200/hour. Then add any materials have been bought and fabricated, jigs and tooling made, more salaries for design engineering, project management, production, sales and marketing, personnel department, accountants, contract lawyers, administration, warehousing staff, quality control. Then add insurance, tax, provision for warranties...I could go on!

If I got paid my charge rate....
If only.....

Anonymous

True that

schweiz

bike-a-swan wrote:

schweiz wrote:

As an Engineer, a proper Engineer who makes sure aircraft are safe to fly, not an 'Engineer' that comes to replace a circuit board in your washing machine, my internal charge rate is over US$100/hour. That's just for my time which consists of salary, amortised cost of real estate and IT, training, paid leave etc. before tax and before profit. So the external cost of my time is closer to US$200/hour. Then add any materials have been bought and fabricated, jigs and tooling made, more salaries for design engineering, project management, production, sales and marketing, personnel department, accountants, contract lawyers, administration, warehousing staff, quality control. Then add insurance, tax, provision for warranties...I could go on!

If I got paid my charge rate....
If only.....

+ 1

mac_man

yeehaamcgee wrote:

Like I said, R&D is not the end of the story.
If you want an older bike for very little money, just go out and buy one. There's plenty around.

Ditto this. I was looking in the classifieds here yesterday where somebody was trying to sell a brand new Rockhopper SL Pro at a £200 discount off list price (it was an insurance replacement).

Problem for him is.... 09 models with a better spec are still available at £100 less than he was asking!!!

It's good to see the likes of Canyon and other direct sellers bringing some bargaintastic pricing into the market. When you compare Mountain bikes with motorbikes for example... you can get an engine included for what some people pay for an MTB!!!! And many motorbikes are not built in massive numbers either.

Anonymous

There's still far more motorbikes built than mtbs, and they don't have to be built down to such a light weight. The fact that a mountain bike has to be reasonably light weight, but still strong enough to take a beating bumps the price up consuderably.
I think it was Gary fisher who said..
light, strong, cheap, pick any two.

t0pc4t

Keith Bontrager but I agree with your point.

supersonic

Almost everyone I have spoke to in the business of bikes reckon the prices have been kept artificially low for a number of years. Now they are rapidly catching up to what they would have been if we had had a steady increase in prices from the mid 2000s.

rhext

I reckon the only real way to judge is to look at the profitability of the major brands to see if they're on stupid margins. I doubt that raw material makes up much of the cost: it's clear that a lot of cash goes on sales and marketing, sponsorship etc, and the engineering challenges of making bikes and components lighter/stronger/better all the time presumably eat up a fair bit of R+D cash.

Funny thing is that I suspect a lot of their costs don't actually directly affect the quality of the bikes at all. Running a professional racing team, for example. But for some obscure reason, we don't aspire to own the brands which don't carry this overhead....... Maybe it's our own fault they cost so much.

Anyone know how profitable the major brands actually are?

Anonymous

rhext wrote:

I reckon the only real way to judge is to look at the profitability of the major brands to see if they're on stupid margins. I doubt that raw material makes up much of the cost: it's clear that a lot of cash goes on sales and marketing, sponsorship etc, and the engineering challenges of making bikes and components lighter/stronger/better all the time presumably eat up a fair bit of R+D cash.

Funny thing is that I suspect a lot of their costs don't actually directly affect the quality of the bikes at all. Running a professional racing team, for example. But for some obscure reason, we don't aspire to own the brands which don't carry this overhead....... Maybe it's our own fault they cost so much.

Anyone know how profitable the major brands actually are?

I bet the mark up on a decent MTB is about 100%. By with I mean a £2000 bike probably costs the retailer a little more than £1000.

supersonic

The markup on a top end MTB is often less than a bottom end one - usually 20-40%

steponahen

jonnyashworth wrote:

A huge proportion of the cost of bikes is in the R&D and changing the manufacturing process so surely if a company was to roll out a bike that had exactly the same frame for about 4-6 years instead of 12 months the price would plummet??? giant did it with the anthems in 09-10 and there bikes never suffered from the price hikes that many others did.

I'm not saying I dont want advances just that it would be nice if manufacturers offered a no frills (but still quality) line.

Im sure if the 08 fuel ex frame was still being made and available with half descent components for £750-£850 there would be alot of them about on the trails!

Isn't this essentially what already happens? I.e. Specialized Rockhoppers frames are now M4, a material which was used only on S Works Stumpys a few years ago. My 04 Stumpy FSR Elite is basically the same frame as last years XC FSR.

rhext

RichardSwt wrote:

rhext wrote:

I reckon the only real way to judge is to look at the profitability of the major brands to see if they're on stupid margins. I doubt that raw material makes up much of the cost: it's clear that a lot of cash goes on sales and marketing, sponsorship etc, and the engineering challenges of making bikes and components lighter/stronger/better all the time presumably eat up a fair bit of R+D cash.

Funny thing is that I suspect a lot of their costs don't actually directly affect the quality of the bikes at all. Running a professional racing team, for example. But for some obscure reason, we don't aspire to own the brands which don't carry this overhead....... Maybe it's our own fault they cost so much.

Anyone know how profitable the major brands actually are?

I bet the mark up on a decent MTB is about 100%. By with I mean a £2000 bike probably costs the retailer a little more than £1000.

That may be true, but the retailers have their own costs to consider. I think retail generally looks for operating margins of around about 30% (so if it cost you £70, you'd sell it for £100)....but then you've got to take out the fixed costs (like depreciation on stock, staffing, heat/light, premises etc). If the retailers were really milking it, then it wouldn't be long before someone else came in and took the business from them.

Thewaylander

supersonic wrote:

Almost everyone I have spoke to in the business of bikes reckon the prices have been kept artificially low for a number of years. Now they are rapidly catching up to what they would have been if we had had a steady increase in prices from the mid 2000s.

Now this is an interesting point...

As to the people on about having a frame design for a few years, Think of your boutique brands santa cruz, most of there models last a few years on a design and a few of the others tooo.

And think of orange the 5 hasn't had much R&D for years and it costs the same

I think the recent cost increase in transport and materials though is a huge contributing factor. But i'd be interested to see the mark up, I bet kona's is huge as they seem to always be rediculous awful specs for there money then next season there half price lol

supersonic

Yeah, the costs get passed down the line and multiplied as each sector takes it's cut.

Say manufacturer A in Taiwan sees his costs for a bike go from £500 to £600, and he wants 50% profit when selling to the distributor. Distributor now paying £900, not £750! So an extra £50 there. Now the distributor wants 50% profit. He charges the bike shop £1350, not £1125. Now the bike shop wants 50% profit. He charges just under £2000, not £1675 (or whatever). So that 100 quid extra materials cost means we end up paying 300 quid more.

rhext

steponahen wrote:

...I'm not saying I dont want advances just that it would be nice if manufacturers offered a no frills (but still quality) line....

Aren't there already manufacturers that do that? Not the brands that you may want to buy, of course.......

rhext

Thewaylander wrote:

supersonic wrote:

Almost everyone I have spoke to in the business of bikes reckon the prices have been kept artificially low for a number of years. Now they are rapidly catching up to what they would have been if we had had a steady increase in prices from the mid 2000s.

Now this is an interesting point...

As to the people on about having a frame design for a few years, Think of your boutique brands santa cruz, most of there models last a few years on a design and a few of the others tooo.

And think of orange the 5 hasn't had much R&D for years and it costs the same

I think the recent cost increase in transport and materials though is a huge contributing factor. But i'd be interested to see the mark up, I bet kona's is huge as they seem to always be rediculous awful specs for there money then next season there half price lol

But look at the prices of the Santa Cruz range:

1) Heckler and Superlight frame - the ones that have been going for years £900.

2) Blur LT Carbon frame - cutting edge flagship, continually updated £2,500

Yes, there's still a brand premium on the older models, but it's clear where the R+D premium falls most heavily.

supersonic

It's great to see SC offering stuff at lower price points frame only. It still works out better value buying a full bike in most cases, we were at the point a couple of years ago where you could pick up Giant Trances for 100 quid more than the frame only!

uk_mr_brownstone

cee wrote:

Ahaha...I saw that episode of casualty where the squash racket snapped, and stabbed the fella through through the neck...he died....just saying!

That was a grim scene I remember it well!

jonnyashworth

I seem to remember recently reading an article in one of the big mtb mags where the guys from hope were saying they thought the price of bikes was silly at the moment and they thought that it was possible to produce top end bikes in the UK for far less money. I forget the figures they banded about (maybe someone could help me out there) but I would say they have a pretty good idea of where money goes in our industry.

I'm suprised no one has cottoned on to the fact that many big brands will have humongous borrowing and therefore a large piece of the money will be siphoned off to the lovely cuddly banks in intrest.

cooldad

jonnyashworth wrote:

I seem to remember recently reading an article in one of the big mtb mags where the guys from hope were saying they thought the price of bikes was silly at the moment and they thought that it was possible to produce top end bikes in the UK for far less money. I forget the figures they banded about (maybe someone could help me out there) but I would say they have a pretty good idea of where money goes in our industry.

I'm suprised no one has cottoned on to the fact that many big brands will have humongous borrowing and therefore a large piece of the money will be siphoned off to the lovely cuddly banks in intrest.

Er quick lesson in business. Business raises money (either from banks or shareholders), puts money to work, repays loans with interest or shareholders with dividends and or capital growth, gets big, everybody is happy.
If you didn't get that - no finance, no big brands, no shiny new bikes for us to ride.
And unless you own a bike company, it's not 'our' industry, any more than the banks are 'our' industry just because we have monster cc debts and overdrafts. (Probably a bad example as in theory as taxpayers we do own them, albeit not out of choice).
We just buy the product.

jonnyashworth

Condascending MUCH?

Thanks for the lesson. What is it you do? Very succesful no doubt! Perhaps you could come and take a look over my buisnes's books and give me some pointers where I could save a bit on tax or overheads?

cooldad

You make a stupid statement, you get a stupid answer.
My first piece of advice would be use a spellcheck. So much more professional.