How much do Bike stores mark up their Bikes?

bolingbroke

How much discount can you expect to get at a bike store when buying outright?

I work in retail and I know for a fact when we tell customers there's barely any room for discount, nine times out of ten, I'm bullshiting. Usually there is room for a bit of discount but only the people who are persistent or charming enough get it.

So does anyone here who works in a Bike shop know how much markup is on a product on average? I would imagine with a low turnover of stock that that kind of store would have, together with the large variation in prices online, it's quite big.

And to everyone else, whats the best amount of money have you managed to get knocked off a bike in store?

turnerjohn

its around 40 to 50%.....as with most consummer goods, the thing is bike shops aren't cheap to run and staff and then theres profit on top ....the shop owner doesn't make a killing so don't expect much more then around 10%...end of the day they have to make a living or their go bust with everyone taking the piss trying stuff on in the shop then buying on line :twisted:

The Rookie

Most retail is at a mark up of about 33% (so 25% of the final price) however don't forget a bike shop has to do a build/PDI as well so unless they have time on their hands that carries a cost as well.

slindborg

Price fixing certainly isn't helpful either.

supersonic

Not seen any evidence of price fixing though.

Kowalski675

The Beginner wrote:

Most retail is at a mark up of about 33% (so 25% of the final price)

I've never worked in the bicycle trade, but I know that retail markups on average are way bigger than that. If the bicycle trade's anything like the motorcycle trade then the markup on clothing and accessories will be huge.

supersonic

Not on bikes. On clothing and accessories it is larger, but bikes themselves are being squeezed ever more.

But it depends on the store/chain/brand/,odel.

Kowalski675

supersonic wrote:

Not on bikes. On clothing and accessories it is larger, but bikes themselves are being squeezed ever more.

But it depends on the store/chain/brand/,odel.

Same situation in the motorcycle trade - profit margin on used bikes is often more than on a new one, but markup on clothing and accessories is huge, so haggle as hard as you can on the bike price, then ask for a sizeable discounr on clothing or accessories to go with it (or some freebies) - they'd rather give away £100 of clothing than discount a bike sale by £100, since discounting the bike costs them the full £100, but giving away £100 of clothing costs them less than half that.

I'd be interested to know what the actual percentage markup on bikes is though, given the heavy doscounts you see on discontinued models. My local shop has (for example) a 2012 Giant Anthem X4 for sale at £929 (36% discount on rrp) and I'd be very surprised if they're selling it at a loss, even as a discontinued model.

97th choice

They are possibly getting price support from giant. My LBS hinted that much when they price matched match with another shop.

Plus, everyone knows that models still in stock get heavily discounted from around September to shift them in advance of the new model year.

njee20

As said, it varies, it's not as straightforward as having a markup of x. Bigger brands will have a structure based on how much business you do too - Specialized have at least 6 tiers. The margins are also smaller on more expensive bikes.

Kowalski's right about asking for stuff rather than a straight discount, but the margins still aren't that good. Very few things have a mark up exceeding 100%, a lot of clothing is on par with the bikes frankly!

slindborg

supersonic wrote:

Not seen any evidence of price fixing though.

So all bikes being sold within tens of pounds of each other from shops/online for fear of losing the sales contract etc (just like with apple, samsung, other areas of the retails sector) isn't price fixing then... Hmmm

97th choice

I've seen little evidence if this, apart from with fox where people, apart from chain reaction, seem very reluctant to discount them.

There's a big different between pricing a bike at RRP and price fixing

slindborg

I guess I'm far too cynical then. Until products like these get aggressively priced by differing vendors then as far as I'm concerned, they are price fixed. Rightly or wrongly I don't care.

cooldad

You obviously have no idea what price fixing actually is. Try Google then try again. And read 97ths post again.

slindborg

Like I say, I don't care if others are happy with the way its run or allegedly defined.... http://en.wikipedia.org/wiki/Price_fixing that seems to cover the way things are done in most markets in the UK by not moving from rrp. One would hazard its a grey area and th usual waffle of protecting small business.

Of course some things are well discounted, we got £150 off rrp of a dishwasher from one seller but all others were sticking to rrp.

The Rookie

supersonic wrote:

Not seen any evidence of price fixing though.

My LBS openly admit they can give a bigger discount in store on a 'certain brand' than they can online, said brand monitor online prices and get awkward if they discount them too much, in store they can get away with it as 'the brand' doesn't know about it. The threat is to withold supplies completely.
Sounds like evidence of price fixing to me!

97th choice

No it isn't, that's fairly common. If you are marketing and designing a product as premium how would you feel about it being discounted in line with items that you wish to differentiate from?

If SRAM and shimano got together to agree on prices then that would be price fixing. If your LBS worked with their nearest competitor to agree some prices that would also be seen as price fixing.

If your LBS had a written agreement on minimum prices with the manufacturer, that could be seen as retail price maintenance.

herb71

njee20 wrote:

The margins are also smaller on more expensive bikes

I was told by a bike shop owner the opposite applies. On entry level bikes they make very little margin, even expressed as a percentage. They hope to make a bit selling a new rider crash helmet, pump, lights etc, but there is very little on the bike itself.

The margins on expensive bikes give them much more haggle room.

supersonic

slindborg wrote:

Like I say, I don't care if others are happy with the way its run or allegedly defined.... http://en.wikipedia.org/wiki/Price_fixing that seems to cover the way things are done in most markets in the UK by not moving from rrp. One would hazard its a grey area and th usual waffle of protecting small business.

Of course some things are well discounted, we got £150 off rrp of a dishwasher from one seller but all others were sticking to rrp.

Allegedly defined? Price fixing is different to the practices you suggest are happening, hence why people are raising issue.

stubs

I went to buy a new washing machine/tumble dryer recently. Went into the Southport branch of a well known electrical retailer. I dont want to name and shame so lets call them Burrys. They didnt have the model I wanted in the warehouse so I said I will take the display model if you do a discount for cash. It was £500 I say knock 20% off, the salesbody said I will speak to the manager. The body came back and said we cant give you 20% discount but we can offer you a £100 discount :roll:

Chunkers1980

Surely that just shows how stupid some people are and we should be thankful of our education system.

chez_m356

stubs wrote:

I went to buy a new washing machine/tumble dryer recently. Went into the Southport branch of a well known electrical retailer. I dont want to name and shame so lets call them Burrys.

classic

The Rookie

97th choice wrote:

No it isn't, that's fairly common. If you are marketing and designing a product as premium how would you feel about it being discounted in line with items that you wish to differentiate from?

Bang on the definition of price fixing for me....and contrary to EU law, the law is clear, retailers should be free to sell a product at any price they like (except for loss leading) once they have bought it themselves, forcing retailers to maintain sales at RRP is price fixing.

97th choice

No it isn't, the shop is entirely free to sell the bike in stock at whatever price they want. And the manufacturer or wholesaler is entirely entitled to not sell them further bikes. Unless you are saying that the shop has a contract stipulating what price he can sell at.

The Rookie

It is price fixing, and if the manufacturere withdrew supplies purey for that reason it would be illegal, they do of course make up another excuse for it.....

Stu Coops

The Beginner wrote:

supersonic wrote:

Not seen any evidence of price fixing though.

My LBS openly admit they can give a bigger discount in store on a 'certain brand' than they can online, said brand monitor online prices and get awkward if they discount them too much, in store they can get away with it as 'the brand' doesn't know about it. The threat is to withold supplies completely.
Sounds like evidence of price fixing to me!

This is fact and common place too it's not only a few that do this. From very good source I know this

supersonic

It is not price fixing though - is resale price management at best (which is being clamped down anyway).