_tom_
You're sort-of missing the point. If you had £6k to spare on a bike, you would still have a few biking holidays every year (not camping.... staying in 5* accom).
£6k seems a lot of money if you don't have it in the first place.
flange - what spec will your bike be ?
So we are doing this thread again.
1, The "average" person in the street thinks ALL of us spend too much on bikes.
2, Some of us think the others spend too much on bikes
I think thats usually the summary.
Flange - but what about the extra development work on the engine to produce higher revs etc. I would imagine there is still a greater margin on the higher value product but its probably not as small as that when all is taken into account.
That's unit price. Without question there's a development cost involved but for production price there's £8k difference between the two.
Porsche buy the Cayenne from VW (who make it) as a complete package - even down to the documents/owners manual and regardless of spec its £22k per unit. So thats quite some margin and the development was spread across the two (three cars use the same platform - Toureg, Q7 and Cayenne). Whats the most expensive Cayenne you can buy? £130k? Thats not a bad margin....
flange - what spec will your bike be ?
There's a thread somewhere on here with pictures (I need to get some more) but a short list
Niner Air carbon F&F
Enve Wheels on king
Tune cranks
Clegg brakes
K-edge Di2 groupset
Enve finishing kit
I bought a Klein Attitude back in 92 and if memory serves it cost £3k back then and that replaced a Marin Team Titainium which frame alone cost £1.5k..
“those were the days my friend I thought they’d never end, lal la la"
Well I think these types of bikes are cheap at £6.5k.
I had a long hard look at a Santa Cruz Tallboy 29er Carbon t’other week and it was Art disguised as a bike, £5k mind…
Ooooh, sounds nice. Picture please, or a thread link.
You wont want to scratch that when it built up.
[url= http://singletrackworld.com/forum/topic/part-of-my-new-build-has-turned-up-im-a-bit-excited ]Niner Build thread[/url]
Yeah, I'm a bit worried about riding it to be honest. That'll wear off after the first crash...
I agree with tinsy on this one as I would have a KTM sixdays for example over a tallboy xtr for example.
Plus motorbikes don,t depreciate as much and are way more fun racing around on!
It s all subjective but would like to add that stw as a whole spend an accumalative fortune which in turn probably keeps a fair bit of the industry happy as larry. Santa cruz pro,s more like than bike staff members!
I agree with tinsy on this one as I would have a KTM sixdays for example over a tallboy xtr for example.
All relative though isn't it. I've got a motorbike worth more than my Niner build and I get far more enjoyment riding my pushbikes than I do scaring myself on the motorbike. To the point where i'm going to sell the motorbike - just doesn't do it for me anymore.
I bet if you went on a golfing forum, or a sailing forum or any other hobby type place you'd find similar or greater amounts being spent. On the PB forum there's a bloke who's bought two ex-GP bikes. I bet they weren't cheap
Binners I don't know for sure what the margins are exactly but I do know that some of the big ticket items you can buy don't carry the kind of margin you'd expect. The haven carbon wheels for instance only give around 40% gross margin.
The places where the bike shops make their biggest margins is on consumables and accessories like tubes, saddle bags, spares, clothing and shoes. Stuff that you just buy.
Also the price isn't just a reflection of what people will pay. It's a reflection of efficiency in the value chain. If you compare what Bant did with the On One brand initially with someone like Cotic then while the Soul is accepted as a higher quality product the fact it costs three times more than the equivalent On One is as much about the efficiency of Brants model as it is the quality of the soul.
That's unit price. Without question there's a development cost involved but for production price there's £8k difference between the two.Porsche buy the Cayenne from VW (who make it) as a complete package - even down to the documents/owners manual and regardless of spec its £22k per unit. So thats quite some margin and the development was spread across the two (three cars use the same platform - Toureg, Q7 and Cayenne). Whats the most expensive Cayenne you can buy? £130k? Thats not a bad margin....
Interesting on the cost per unit. Profit margin pre tax for the entire VW group for this financial year is c.4.2% but unfortunately they don't break it down per car, presumably as it would be too complicated and a massive list given the number of brands they own.
It was my riding buddy pointing out that an XTR rear mech was tagged at £199 in Alpine Bikes this week that caught my eye..., bloody hell, hope mine stays intact.
You're sort-of missing the point. If you had £6k to spare on a bike, you would still have a few biking holidays every year (not camping.... staying in 5* accom).
I have a £6500 MTB and a £4000 road bike. I drive a 10 year old Golf and haven't been on a holiday of any sorts since 2009. I'd not change that! Priorities innit.
The perception of margin is very, very wrong. Margin is the profit made after tax and on high end is generally 20-25% after tax.
with custom gear that gets reduced further.
I know of a £550 ax lightness stem where the profit after tax was 15p
That also excludes the phone call to order it which cost 30p!
The low end is where the big margins are.
cycle king and all the other stack em high sell em cheap stores will be making 50-60% on bikes sold.
My name's Tinman and I'm a bike snob.
Feels better now we've got that out of the way.
Why would anyone want to pay over £6k for a bike. Why not if that's what they choose to spend their money on.
My carbon fibre road bike is probably worth the best part of £5k and doesn't have suspension, disc brakes etc. In fact the wheels alone cost nearly the same as my Cove Stiffee did to build in 2006.
The fact is I'm still 'relatively' young, have a good job and no kids.
Yes I could buy something cheaper and yes the weak link in the whole thing is the useless chuffer that sits on the bike but I still love my bikes and to honest I'm not going to buy a cheaper bike just because I'm not that fast. On that basis very few people would be eligible to buy a Porsche.
I think this was well over £3K in 1990ish
Lotus Sport carbon frame
hydraulic rim brakes
not sure what forks it came with
[IMG] 
[/IMG]
What would be interesting to know is by how much mnaufacturers/distributors push up the price of roadbikes for the next model year to benefit from the inevitable Wiggo effect. Maybe they'll just let it slip by with nothing more than the odd special team GB edition.
I know of a £550 ax lightness stem where the profit after tax was 15p
Get one of those in Matty-boy!
Its a fair point about the cycle-king/CRC's of the world (and you'll be able to be more accurate on this than me Matt), but my understanding is that local shops can't buy some of the shimano stuff in at trade that CRC and the like can bang out at retail. But you pays your money - my other halfs Rock Lobster came with a set of OEM Reba's with the serial number filed off. The rear mechs you get from CRC come in a bag rather than a box and so on.
At the end of the day though, its all very well having bikes worth 5-10k but if you don't get to ride them, whats the point? I reckon I've ridden my Storck less than ten times since I bought it and the Niner will pretty much only be raced on and I'll keep my other bike for training. Its those with 10k bikes and can ride every day that I envy the most.
You've got to chuckle....people who ride £2,000 push bikes having a pop at people who ride £6,000 push bikes 🙂
It's only money. It's sole purpose is to exchange labour into something you want or need. If you want to exchange a few weeks/months salary for a bike, then why not?
Although, I would draw a line under someone who earns £15k a year and buys a £6k bike on credit, then rides it once a month at a trail centre, whilst crippled by the loan repayments. It's still their choice, it's hard to make an argument for justification.
My cove cost about £5k or £6k, but that was because I got a bit carried away. i didn't set out intending to spend that much.
Out of interest does anyone know if any bike companies are listed? Easy way to find out margin at the manufacturing end.
Giant (who make frames for lots of other manufacturers) are listed on the Taiwanese exchange - ISIN TW0009921007 and 9921 TT is their Bloomberg code. Don't know about researching margins from their public listing docs though.
Get one of those in Matty-boy!
I have a full range of sizes and colours in my top drawer, just in case i change frames.
i decided to stock up before they increased the prices!
I have a full range of sizes and colours in my top drawer, just in case i change frames.
Why have I never seen these?
Peterfile makes a good point - go and tell a non cycling fan member of your office / workplace that you spent £1000 on a push bike and see the look on their face.
Its all in the eye of the beholder, to me £2000 is quite cheap for a decent full sus but don't get people spending £50 on a t-shirt.
but that was because I got a bit carried away. i didn't set out intending to spend that much.
Can we have that etched in stone tablets somewhere? 😀
Yeah it would £6450 is list price.Though works bikes are full of trick bits (they like an upgrade even more than MTB'rs), your bog stock bike will run with them quite happily in the right hands.
6.5k will buy an off the shelf the machine but it wouldn't even scratch the surface when it comes to GP machines. 6.5k will pay for fork upgrades at a push and no GP rider would do much on a stock machine I assure you. They don't compare.
The margin on a £700 hardtail is probably a lot higher percentage-wise than that on a high end bike.
It really annoys me when people complain about what margin bike shops/distributors/manufacturers make without knowing the facts. Nobody works in the bike trade to get rich from it!
[b]Binners, I've just read this back and seen how it looks. This is not directed at you, I'm just beginning to get a bit fed up with people complaining how much things cost[/b]
If we're going to get into the subject of, take a look at some other industries.
For example, my partner worked for a few years at an optometrists who specialized in very exclusive brands: Cartier, Chanel, Gucci, Rayban and Versace, to name but a few- Seriously, Oakley costs buttons compared to that lot. Think of these as equivalent to the very high end mass production brands in the bike industry (SC, Yeti, Ibis, Turner etc...)
The shop would buy in a set of these top name specs for something like £120 (i forget the exact figure, but it's there or thereabouts) and sell them for between £400-£500. That's a margin of between 70 & 76% (bear in mind that that's average- some went a lot higher than that!)
Now compare that to your retailer who's selling a top end carbon bike at an average margin of around 30% (bearing in mind he'll probably have had to discount it because "i've seen it online for this...")
Admittedly, 30% of a top end bike is quite a lot of money, but these are sales which don't come along very often. And out of that 30% (maybe 1k on a top end bike, but probably less than that) he's got to pay his staff, heat and light his shop, buy in a good selection of stock (because nobody likes going into a threadbare shop) and take home a wage for himself (which from my experience, is generally never a good one!)
That 30% doesn't really go that far now, does it?
The same could be said for distributors, who buy and sell for probably the same margin. Admittedly, they don't have to go to the same lengths as the bike shop, but they (as I believe someone mentioned earlier) have to hold a [b]LOT[/b] of stock to keep your LBS well supplied, as and when they need it. The money for that has to come from somewhere!
Imagine then that the Manufacturer is working around a similar margin (I have no evidence for this, as I do not know what they sell at, but to go back to an earlier point- nobody makes millions in the bike trade!)
They produce their bikes as efficiently as they can, aiming to improve standards as much as possible without pushing their costs disproportionately. They then set an RRP taking into consideration the expected costs mentioned above, and ensuring that there's enough margin for all involved to make a living out of.
So overall, your bike probably cost around 90% more than it cost to make. Yes it seems a lot, but bear in mind that money're got to be split between so many people to allow the bike industry to keep going.
Now if we go back to the optometrists operating on a 70-75% margin, and presume that the same margins apply down the supply chain (manufacturer, distributer, retailer) your top name glasses cost somewhere in the region of 210-225% more than they cost to make. Now [b]there's[/b] a margin that's set purely because some people are willing to pay it.
You don't have to spend £500 on glasses, you could get a perfectly good pair for less then £100. The same way that you don't have to spend £6500 on a mountain bike when you could get a decent one for less than £1k. However if you want the best, that's what it costs. And you can rest assured knowing that no-one's gotten rich off your purchase with your hard earned dosh!
Aaaand breathe...
onceinalifetime - Member
I agree with tinsy on this one as I would have a KTM sixdays for example over a tallboy xtr for example.
No, No, No, dont agree with me, thats not what I meant!
I meant that it has quite a lot more cost involved in making it, it has lots and lots of tech involved and an engine for a start, titanium valves, exhaust system, radiatiors, injection moulded plastics, all that a high end MTB has plus,plus plus. To my mind it makes even a creme de la creme MTB expensive.
I don't think its an issue if someone would like to or does buy a top end bike as suggested if you can why not.
FWIW, I wouldn't be interested in the 6.5k crosser either*, I have this.
(* Though if anyone wants to know what to get me for my birthday).
[img] 
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If you're seriously considering buying a £6k bike, then changes are you have a £50k Audi sitting in the drive.
If I had it spare, I would love to spend £6k+ on a bike, but no way I would be happy spending £10k on a car. Each to their own, or not 😆
If you're seriously considering buying a £6k bike, then changes are you have a £50k Audi sitting in the drive.
Maybe. But I have plenty of riding buddies who will spend thousands on their bikes quite happily but haven't spent more than 50 quid on their house in 5 years or paid more than 500 quid for a car.
If spending vast sums of money on a push bikes is what you want to do then so be it. I couldn't care less whether you're a seasoned pro or a full on 'all the gear, no idea' sort. Who am I to point fingers?
Net margin, so after all costs, tax etc has been taken out, for Giant Bicycles as a whole is 7.9%. So for your £6,000 bike Giant will make £474*.
Incredibly broad brush approach as specific margin will vary markedly across the range and various bike frames they manufacture for others.
What I was trying to say was that it costs 8k more to build an all singing all dancing carbon braked 911 than it does to build a poverty spec Boxter
This is incorrect.
pinetree - Easy tiger! I was asking a genuine question. Not having a pop at anyone. I was just interested to know how the margins compared, bearing in mind volume of sales etc.
this is incorrect
I've heard this from a very good source too
This is incorrect.
No its not
I've just edited my post as I realised I cocked up and said it was directed at you!
Sod's law, the one bit I thought "i'll make sure i get this right" 🙄
Ah - only takes the one specific word eh? Thanks for the detailed answer though. 😉
This is incorrect.No its not
Nice to see the level of debate hitting the usual lofty standards 😀
No its not
Well then we disagree 🙂
I also meant to add another thing:
Bike retailers make more, precentage-wise, out of low-end bikes (hybrids, sub £1k mtbs) than they do out of high end bikes. Though [b]at best[/b], this is around 40% (and that's only if they sign up to a big commitment of bikes in advance.)
Even so, a 40% margin on a bike wich costs under £500 isn't all that big, and they make a living by selling volumes of these bikes.
It's all a bit mad, and I don't like talking about money that much, but it really gets to me when people complain about prices like they're being held to ransom, and implying that bike companies are out to make billions and bankrupt their customers in the process- This is the behaviour of the banks and the property industry, not the bike trade.
maybe the maufacturing costs of a Porsche are 8k different but then the nature of assembly is greater?
pinetree. What got me thinking about margins was seeing the thread on £500 hartails. I saw [url= http://www.decathlon.co.uk/81-2011-id_8168695.html ]this[/url] and thought 'how on earth can they shift that at that price per unit'
Look at the spec. They must be shifting one hell of a lot of them to make anything. The profit must be wafer thin on that
maybe the maufacturing costs of a Porsche are 8k different but then the nature of assembly is greater?
Say what?
maybe to actually manufacture the different parts of each car yields an £8000 difference but that may not actually take into consideration build costs?
Okay gotcha
Binners,
That frame probably cost buttons to make (most likely a malaysian catalogue special) so all the money goes into the parts on that.
Not much r&d needed for a generic cheap frame, eh?
But yeah, they'll shift a hell of a lot of em at that price. Almost worth buying that, along with a decent frame and use it as a donor bike!
