[Closed] mark up on new bikes ?

I assume you mean the difference between trade and rrp? The sales, the floor rental, the staffing costs, the warranty support and building it 😉

You'd need to start off at least 100% I reckon.

£1000 delivered into shop
£2000 selling price

VAT already takes £333 of the £1000.

Mark up or margin?

Also depends on how many units the shop commits to over the year, and whatever other terms have been negotiated. Then, of course, there's the margin taken by Halfords/Cyclescheme etc for the C2W sales.

b r is nowhere near.

Just curious really !

LOL 😆

What do you do for a living? Fancy telling us how much profit you do or don't make?

To be honest, on some bikes it's embarrassing, not because of how much it is, but how little... You don't work in the bike trade to get rich! Big shops that buy in bulk get bigger discount obviously, but even they will often have to sell last years models at, or below cost, just to get shot of them...

Can we leave it at "it's not as bad as electronic goods retail, but it's a lot less margin than most industries" please and move on?

You'd need to start off at least 100% I reckon.

£1000 delivered into shop
£2000 selling price

Hahahahahahahahahahahahahahahahahahahahahahahaha!

You'd need to start off at least 100% I reckon.

£1000 delivered into shop
£2000 selling price

VAT already takes £333 of the £1000.

With margins like that, I'd be able to retire next month! 😉

Let's just face it, when the new Aston Martin comes out we know it's all the bike industry lining up to buy them...

You'd need to start off at least 100% I reckon.

£1000 delivered into shop
£2000 selling price

VAT already takes £333 of the £1000.

You don't know then.

[i]With margins like that, I'd be able to retire next month! [/i]

If you're making less, how do you stay in business?

When I worked in the trade (about 15 years ago), the best profit margins were around 35% on bikes and 40% on accessories and parts.
We closed half the bike shop down and turned it into a coffee shop as the mark up on food was about 90%.

Most big suppliers required you to take a number of units per year at various price levels, this meant taking a risk and holding a fair amount of stock. You have any of it left in September and the next years models arrive and it is viewed as old stock. Once you consider all the associated costs bike shops make very little profit.

@br 😆
Depends on the brands and the commitment you make.Some brands (Trek) tie in the the margin across all their products (clothes,shoes,accessories) and offer a further rebate at the end of the year if you meet their targets for both sales and growth.
If you are a large stockist it can be up to 40% for the bigger brands but for most its closer to 30-35%.If you are a smaller shop and can't meet the buy in requirements (a number of bikes from each category) it can be as low as 20%.
By the time you've knocked off the customary 10% for someone walking into the shop and then thrown in the obligatory 'freebies' that does'nt leave too much for rent/rates/wages/bills etc.

[quote=mboy ]Can we leave it at "it's not as bad as electronic goods retail, but it's a lot less margin than most industries" please and move on?

I'm not sure why the need to be so coy - I think most of us are aware the margins aren't huge on complete bikes, and those who aren't could probably do with being educated. It's hardly a trade secret which is going to kick the bottom out of the market.

I read once the price doubles at each stage. So a frame that costs £250 to make costs the distributer £500. They sell it to the shop for £1000 who then sell it for £2000.
Not sure how true it is though. Certainly doesn't sound right.

People are perhaps coy because a proportion of stw see margin as profit and will use figures like that at an example of how the lbs is ripping the world off.

They sell it to the shop for £1000 who then sell it for £2000.
Not sure how true it is though.

Yep double it up..It's fact actually

Having seen my LBS' online ordering system when I bought a bike a few years ago, I know that a £2,800 Trek cost the shop £1500. So not quite 100%, but close. However, the shop has a lot of overheads to pay for out of that markup, which takes huge chunks out of profit margin. I would guess that Evans – with their huge buying power – might get better prices than an independent retailer. So they'd have more scope for discount.

Yep double it up..It's fact actually

No it's not you ignoramus.

I don't work in retail, so asking as really have no idea. Some interesting replies. I know that local bike clubs can get discounts of up to 20% off the RRP on current model bikes, so was wondering whether the shop still makes a bit of profit in these cases.

40 to 20% max really for bikes at RRP of current year stock, so f'all really once any discount is given and other running costs taken into account.

Having seen my LBS' online ordering system when I bought a bike a few years ago, I know that a £2,800 Trek cost the shop £1500.

Plus the VAT.

Yep double it up..It's fact actually

No, it really isn't

Having seen my LBS' online ordering system when I bought a bike a few years ago, I know that a £2,800 Trek cost the shop £1500. So not quite 100%, but close. However, the shop has a lot of overheads to pay for out of that markup, which takes huge chunks out of profit margin. I would guess that Evans – with their huge buying power – might get better prices than an independent retailer. So they'd have more scope for discount.

Nope. Wrong again. Unless it was an extra special deal, where Trek had bought too many bikes and were selling them to their dealers at a deal. I would't expect that your dealer would have paid any less than 1700 quid for that bike.

mikewsmith - Member
People are perhaps coy because a proportion of stw see margin as profit and will use figures like that at an example of how the lbs is ripping the world off

No one thinks LBS's are really stitching people up, do they?
They are squeezed between customers who use them as a sizing service and competition from the big boys.
It cannot be easy at all.

Overall, I know one shop doing excellent business, a couple ticking along nicely but most seem to be struggling, even the really good ones.

If it was such a goldmine, we'd all be at it.
What with all our expert knowledge.

We'll miss them when they're gone.

Evans/Wiggle/Halfords/Crc have a slightly different model with their in-house/self distributed brands (Norco,Bmc,Pinnacle,Dhb,Nukeproof,Ragley etc) as they remove a layer of cost.Sometimes 2 in the case of brands they own and sell directly (why crc can sell their own brands at 40%+ discount and still make money)

Rusty Spanner - Member
No one thinks LBS's are really stitching people up, do they?

[quote=Rusty Spanner ]No one thinks LBS's are really stitching people up, do they?

Have you not seen the owners' Ferraris?

Evans/Wiggle/Halfords/Crc have a slightly different model with their in-house/self distributed brands (Norco,Bmc,Pinnacle,Dhb,Nukeproof,Ragley etc) as they remove a layer of cost.Sometimes 2 in the case of brands they own and sell directly (why crc can sell their own brands at 40%+ discount and still make money)

My limited awareness suggests they'd mark up by more than 100% on brands where they own the importer, possibly significantly more if they own the bike brand too.

As to bargains, it's amazing what you can find if you visit your lbs and ask them to poke around a bit in the back, as my friend Samantha told me.

Recent finds include the previously considered extinct 2015 dropped bar Tour de Fer, resplendent red.
They'd forgotten about them, apparently.
🙂

I know some of the landed costs the importers pay for products.Whilst not tiny it's significantly less than the retailers make and they rely on volume of sales.2015 has been such a hard year for the trade partly because the importers have been left with a glut of overstock from 2014 (forward orders are placed months beforehand and 2013 was a bumper year).

It is a fact (happy to be proven wrong.. things might have changed a lot.)
Half of you have the receipts in hand so simple to prove across a varied spectrum of bikes.

I'm not suggesting bike shops are gold mines at all. Doesn't mean people should lie about the numbers in case some think it is easy money.

Joe pipe down with the name calling. Thanks.

Double the price and add VAT is standard for retail. But it is obvious from clearance that the margin on new bikes from small shops is less than this. Our previous sponsor would give us 40% discount and above this was struggling to not lose money. That on some expensive bikes.

Personally, I have no problem with reasonable prices. Evans don't sell Giant btw. If you get 10% discount on a popular model (that will sell out in the standard sizes) be happy.

To be fair ,you're an idiot.
The half dozen people on here who have refuted your 'fact' are either long time bike trade employees or lbs owners.

I know some of the landed costs the importers pay for products.

Indeed... Owning my own shop has opened my eyes to things from the importer's side of things too... On some premium products, say high end FS frames, carbon wheels etc. the importers are lucky to make even 6-8% margin selling them onto the retailers sometimes! I know when I wanted a nice set of wheels for my own bike, asked a favour of the brand manager at the importer and he said "as you're selling a few of these to customers already, I'll do you a set at our cost price for yourself, so another 6% off your normal dealer rate"... 😯

Yep double it up..It's fact actually

In the rarified world of high st. clothing retail, maybe!

Seriously, if you can't post without name calling then you need to go elsewhere.
I haven't posted anything offensive.

It is a fact, happy (very happy) to be PROVEN wrong (Not bullied into submission)

Who are you arguing with?! 😯

So basically you reckon with no fact it's double someone calls you an idiot for making shit up and you get upset?

Only the VOICES under the tin foil HAT....... 😐

You can claim shops have 100% mark up if you want but its simply not true, I've worked in bike shops for years and I've never bought a current model for half the retail. If someone has some information that all the people who work in shops arent privy to then by all means share but otherwise it's all misinformed speculation.

There is no need to insult other forum members.

Are insults worse than just making stuff up Drac?

Drac...have you met Hora? 😕

I assumed Drac was telling off theocb for calling people liars

Having seen some grey import pricing a few years back there's definitely good money to be made. Unfortunately it's generally spread across 3-5 tiers by the time it gets to the customer.

The current model is slightly broken and it's why the direct sales brands have flourished..

It is a fact, happy (very happy) to be PROVEN wrong (Not bullied into submission)

Aside from a bunch of people from the industry (including myself) telling you this is incorrect how are you hoping to have it proven?

You'd need to start off at least 100% I reckon.

Dream on sunshine!
Actual figures:
£2000 rrp bike. Cost £1067. VAT £333. Therefore 'margin' is £600