Having finally received permission from my SO to buy a new bike (road alas) I have been searching high and low for what I want and was planning on going down the self build route, plan was for titanium or fancy aluminium frame, ultegra disk groupset and some hunt 4 season wheels albeit budget dependent it may go to an SRAM 1X and cheaper wheels. And I have sat poring over costs working out what’s cheapest where, moaning at the dirth of groupset bundles, checking countless sites and was about to push the button and order the frame on Friday but got distracted at work.

And then on Saturday I was perusing CRC and see the latest Vitus road bikes and the price difference is insane. Latest Ultegra R8000 hydraulic disks on a bike that is just over 1400 once you have used British cycling. Now having worked out what this groupset would cost me to buy on its own the rest of the bike must be lower spec, but no, DT Swiss wheelset, all carbon front fork, heck even the saddle is Fizik.

Now I know that it has budget stem and handlebars, an own brand seatpost but the cost difference is insane and I can’t make my build without the frame equal what CRC can sell the whole bike at.

I can’t belive that shops and retailers are making such a big margin on components so how do they do it? What am I missing.

Most of it.

My guess: when you like to build your dream bike from new parts you need big pockets. Advantage: bits and pieces are exactly what you want.

I can’t belive that shops and retailers are making such a big margin on components

these shops don’t get the 80 % … 90 % rebates Shimano gives bike manufacturers…
Means these shops don’t make the money you think.
But OEMs are money making machines for Shimano, SRAM, Fox, Formula, DT Swiss and similar.
Indirectly these companies Shimano, SRAM, Fox, Formula, DT Swiss have to “pay for that”.
The “frame” from the bike manufacturer is only a fraction of the cost. For a hardtail mtb less than 100 bucks (Asia, aluminium).
The bike manufacturer earns his money on the shiny Shimano, SRAM, Fox, Formula, DT Swiss parts…- but which he gets for little money.

Strange business. But not unique for bike industry.
Similar: servo hydraulics and avionics for airplanes. The suppliers sell these UNDER manufacturing costs to Boing and Airbus.
But over the lifetime of the airplane these are gold mines for these suppliers…
Boing and Airbus know about the power they have.

Same with bike manufacturers.
Once you order “300 sets” forks you are the party in power.
And then you don’t have to pay 1 k for a Fox fork. You pay less than 50% …

Yep, self build is never going to be as cheap as an off the shelf bike, the buying power the manufacturers have is huge, even a small company like Vitus will be buying thousands of groupsets from sram/shimano per year.

Then look at a much bigger company like Cube, or Trek etc. The numbers must be huge.

I know Cube aren’t to everyone’s liking but just as a comparison: one of their 2018 bikes has a Fox 36 factory (£1100), Fox DPX2 factory (£500), Newmen wheels (£600), GX eagle groupset (£350), Fox factory Transfer dropper (£300), code R brakes (£200) – that’s £3050 before you take into account frame cost (carbon front triangle, alloy rear) or the finishing components. The bikes costs £3499. £3150 with the 10% BC discount from CRC. And they’re not even a direct selling brand…

Forget the idea of matching a full bike price if you’re building one, the purpose of a self build is to ensure you get exactly the parts you want, but if you can buy a bike that’s 95% there and change a few bits then you’ll be better off doing that.

I know Cube aren’t to everyone’s liking but just as a comparison: one of their 2018 bikes has a Fox 36 factory (£1100), Fox DPX2 factory (£500), Newmen wheels (£600), GX eagle groupset (£350), Fox factory Transfer dropper (£300), code R brakes (£200) – that’s £3050 before you take into account frame cost (carbon front triangle, alloy rear) or the finishing components. The bikes costs £3499. £3150 with the 10% BC discount from CRC. And they’re not even a direct selling brand…

neat calculation.
Yes – they even still have the middleman…
And I suspect Cube assembles the bikes in Europe?
Plus warranty and stuff…

the purpose of a self build is to ensure you get exactly the parts you want

😉

At the bottom and mid point of the market, no way can you beat the cost savings of buying a complete bike when building from parts, and these days, when mid range bikes are REALLY good from the factory, i’m not sure why you’d want too!

But, if you get up to the high end, have the cash, and want some unique parts, then a self build, whilst probably not actually saving you any money, can be at the worst, cost equivalent.

I built my Mondy Dune up from a frame, and spent £20 MORE than the list price of the complete factory bike, but ended up with a significantly higher spec, and a spec that is unique to my bike.

Having said that, thanks to the weak £, and worries about europe, i suspect the days of bargain bike parts from the big EU distributors may be over, handing back the advantage to the fully build bikes again, even at the high end?

these shops don’t get the 80 % … 90 % rebates Shimano gives bike manufacturers…

80-90% of OE spend of a larger brand refunded?

Only time i’ve found self build to be worthwhile is if any/many of the parts simply aren’t available on off the shelf bikes or if you are going extremely high end, where the discounts to the manufacturer aren’t as big.

So your mid range carbon with ultegra at £1500, no chance.
Even at the beginning of the D-A and high end carbon market (£2500-3000) you’ll still be better off buying (this has changed in the last 10-15 years, this used to be the point that building was *usually* better, not necessarily hugely cheaper, but no mucking around with saddles, bars, gear ratios etc)

A boutique build 600 gram carbon frame with lightweight wheels and a D-A Di2 or Campag SR group but with clavicula cranks and EE brakes. Yeah, build it yourself. But you won’t get it on cycle to work 😉

Even if you just want a top end bike with different wheels/bars/saddle, you’ll probably still be better off buying the whole bike and swapping/selling.

FWIW the last time i worked for a manufacturer, they were buying complete group sets at about 25-30% of RRP. BUT, the groupset spec was completely fixed, no options, and the deal was done about a year before the first bike was even assembled. So you had to be pretty sure of selling those thousands of ultegra equipped bikes a year………. And AFAIK, we weren’t even on the best rate. Just the best rate we could get for the volume. And this was in the early 90s as well. I’m sure things have moved on since then.

I have built my last 5-6 bikes but mainly so I can carry over loads of bits to new frames. Even when I went 29er I was able to build a fairly high spec bike cheaply by reusing brakes, drive chain and finishing kit.
However when I bought a new road bike I went for a complete factory build because I don’t have loads of older road parts to soften the blow of buying new kit for a new frame

80-90% of OE spend of a larger brand refunded?

for mass produced parts:
bike manufacturers pay 10% … 20% of the recommended retail price. Means 80-90% rebate.

The shops where we buy our bike parts: companies like Shimano need these to make money. The rebates for the bike manufacturers are an “investment”. But the shops get normal, much smaller rebates. Means when we buy the parts stuff in the shops Shimano earns most. Not the shop.

Funny: from which parts count are we an bike manufacturer?
1 bike: no
But rebates kick in already from around 40 bikes…
They are good from around 100 bikes.
They are excellent from xxxx bikes…

vs self build

means: get 40 to 100 “self builders” together und you will be able to beat the bike factory price.

Or, in other words: when you like to start a bike business you need to invest in 100 bikes.
100 000 bucks minimum capital needed.
😯

At 100 bikes it’d probably cheaper to buy from one of the german webstores, or in a CRC sale……..

At 100 bikes it’d probably cheaper to buy from one of the german webstores, or in a CRC sale……..

o.k.. But from this approx number it starts getting interesting.
Rebates for mass produced parts: you are right

But rebates for high end Fox forks: these guys are happy to sell 100 equal forks…

Most of it

Harsh but fair 🙂

Big manufacturers het huge discounts from suppliers
Online sellers like CRC get much larger discounts than LBS (CRC for example sells to the customer at a price beow “trade” for an LBS on many items)

But rebates for high end Fox forks: these guys are happy to sell 100 equal forks…

Ah, yeah. On the MTB side with high value items like that, quite possibly. On the road stuff, not so much.

LBS

Yes – these folks have more or less the same “purchasing power” as we (means: nearly no).
Plus: they have the hassle.
😥

for mass produced parts:
bike manufacturers pay 10% … 20% of the recommended retail price. Means 80-90% rebate.

OK – I won’t debate the finer points of the % levels (I spec bikes in Asia in the day job) but just wanted to clarify ‘rebate’ vs ‘discount’ : )

Is part of the story here is that we use to be as able to buy OEM bits retail. Some one like Merlin bought a load of OEM stuff like forks and groupsets. Some they put on bikes some they sold. But this has been stamped out?

For a comparison pop down your local Fords part counter and try buying a Ford Fiesta as bits. I understand it’s pricey

About 3-6 times rrp to build a car from spare parts from what i can remember. (Excluding labour.)

Have heard that mark up on aerospace spares is the most truly eye watering thing you can experience (starts at about 800%, goes up from there).

OK – I won’t debate the finer points of the % levels (I spec bikes in Asia in the day job) but just wanted to clarify ‘rebate’ vs ‘discount’ : )

good. @jameso: Interesting Job you have!
What I would like to see more from the mtb bike manufacturers: TESTING !
System testing. Fatigue testing. Mud & crap testing. Shake and bake type stuff.
They are in the position to do so.

You are in the business – maybe you are able to push a bit for that…?
😉

mark up on aerospace spares

800%

haha. Yes aerospace is fun.
Had something to do with one of those companies (buffalo new york servo hydraulics business).
Only thing I know: once the plane is certified and has your parts on board…- the golden age will start for you…

@andreasrhoen – big topic.. we do relevant fatigue and ride testing here though. I’ve never specced a press-fit BB. Hope that covers the basics : )

@jameso
Haha. Great. Good to hear.

Cheers!
😉

On the built up from spares subject. One of the motorcycle mags did the sums a few years ago and priced a litre bike straight purchase price against built from spares price. At the time, they were about ~£8k to buy. The spares were about ~£38k (excluding labour).

Some of the Specialised S-works full builds were actually more expensive than me as a mere mortal buying all the parts (I was bored one day and did the sums, with betterer wheels too if I remember).