Economics of new bikes
Don’t US retailers pay a sales tax? Although IIRC a lot of prices are shown ‘pre tax’ in the USA. The other 20% is probably differences in importers etc, I’m guessing Santa Cruz etc in the USA can opperate more allong a Saracen model where the distributor/owner are the same people, thus one less cut, whereas a Santa cruz in the UK has a cut for SC USA and their UK importer?
My last full bike was/is a Pitch (which was my first for ~10years!), in future I’d do a custom build as there are a lot of things I like/want/need and I reckon I could have custom built for the same money.
Specialized Pitch – £1800,
Cotic rocket – £1400, Marz 55 RCS 1.5 steerer from USA £250, everything else on the pitch was replaced with personal bits from my parts bin out of preferance and a dropper post. So the rocket would actualy be arround the same cost! Obviously that example relies on a cheep fork that doesnt fit many frames, otherwise it’s a £800 fork and the sum doesnt work.Posted 5 years agomeehajaMember
weirdly mountain biking just isn’t as popular in the US as it is here. (think percentage of population wise) so economy of scale is part of it, also I think they are a bit “more roadie” in that they buy complete bikes and keep them, rather than constantly changing stuff because they can. Also they don’t do mud as much as us, so stuff lasts longer!Posted 5 years agoddaySubscriber
Interesting experience recently, having decided to purchase a new bike.
The bike in question is a Canadian brand, retails at around US$3.5k. The same spec in UK£3.5k. So if I purchased the bike stateside, I would have paid equivalent to around £2.2k. Ok, given the (perceived) hassle of bringing a bike in the country, I figured I could probably beat the UK price doing a self build, and ordered the frame, forks and wheelset locally, then started looking around for components.
Given my job takes me to the US frequently, I thought I would order the parts in the US, and simply pick them up. Well, I could not beat Chain Reaction cycles, or Wiggle prices. At minimum, online prices were 20% cheaper than US counterparts.
End of the day, I have have managed to get the bike plus parts at just under £3.2k. Ok, its a distance from the US$2.2k for the bike, but I did get the spec I wanted, including a few luxuries eg, uppy downy seatpost. Granted, I have to build the bike, but that’s sort of part of the pleasure.
Historically, I have been under the impression that a factory build would always be cheaper than a home build, given a stock spec. I managed to negotiate a small discount for the frame/fork/wheel combo, but the rest of the savings came from online discounts.
So whats the deal with US OEM bikes, that the build price is significantly cheaper, but purchasing components in the US seems to be really expensive? Is this a cultural thing, we are more likely to build / fix our own bikes than our US counterparts? Or economics, given that components largely come from China / Japan, bike manufacturers get big discounts on components, that don’t filter down to the customer.
For what its worth, if I took into consideration the extra expense for tools, and other bits required for a self-build, its unlikely I could beat a retailer for a complete bike. Which is a bit sad. It cancels an option for those who are willing to invest the time and effort (and pleasure) of a self build, while saving a few of those hard earned shekels.Posted 5 years agoStonerSubscriber
Has always annoyed me. Especially SC.
However, you need to allow c. +26% additional cost from US retail to UK retail to cover import duty of, IIRC, 4.5% on the US price INCL VAT @ 20% on that and all shipping costs.
So that would take your $3.5k to c.$4.5k and then to £2.8k at £0.629:$1
So £700 lighter.
And this where we’re told the importer and retailer have to take their cut, but it ignores the fact that the importer should be buying from the factory gate at around 50% of US retail, say, $2k and after allowing for duty, 2xsets of VAT and shipping leaves actually around £1,500 between the importer and retailer to work with for profit.Posted 5 years agotarquinMember
Having read this I had a quick browse.
Orange 5 Frame + Rear Shock. £1400
Full XTR setup from Evans, £830
Add Wheels £250
Front shock £750
Pretty much there for a full XTR build at £3k then, add a few things like bars and saddle, but what else am I missing, thats much cheaper than buying direct.Posted 5 years agothepodgeMember
I was once told by someone very successful in the business “double it or don’t bother” suggesting that if you aren’t making 100% profit then you’re doing it wrong.
The amount that bike brands make is often much higher than many expect as they have some strange notion that it’s all some kind of “mates rates plus a couple of quid” pricing scheme.Posted 5 years agolegalalienSubscriber
MTB spare parts prices are certainly an anomaly. I live in the USA (formerly a UK Northern Monkey) and often find CRC way cheaper than buying online from US retailers. And wait, that’s with free shipping too.
For many things you can literally swap the pound sign for a dollar sign, but bike bits and bobs ‘ain’t cheap. I have no explanation.
On the culture thing, I don’t know. In certain areas, you’d think MTB was the only sport that existed and in others you would see amazement and wonder if you rolled into town on a Five. And when I say ‘areas’ I mean states. When I say ‘states’, I mean places it would take me 5 hours to fly to whilst staying in the same country. This place is too large and diverse for generalizations. A lot of the states are literally like different countries.
Some of my MTB mates do their own spannering, but many don’t have a clue. Many of the bike shops are bloody awful too. The other week, the LBS mechanic was trying to sell me a square taper BB insisting it would be fine for my ISIS cranks (I know, I know, but I’m keeping it going on a budget-ish until I can do a major upgrade). I politely declined and got lucky with my old Stumpy BB that I had in the basement.
Culturally here, meehaja is close to the mark – as soon as it gets a bit cold or rainy, a lot of the big jessies cry off. To be fair, a lot of riding is managed trails and the volunteer organizations tend to request you don’t ride them when too muddy so they aren’t wrecked, but that’s partly just an excuse for not getting all sh1t up.Posted 5 years agoddaySubscriber
@Paceman, there are some risks, the weight difference might raise a flag on the system on your return, ideally you want to take a bag out with an old frame, dump it, and return with the new bike (I have done this with golf clubs in the past) Unfortunately, the logistics were against me, there were no bike dealers in the area I was heading too, and oddly, stock was even more limited than here in the UK.
I know many folks suggest it, but very few have done it.Posted 5 years ago
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