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  1. #26
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    Quote Originally Posted by customfab View Post
    If this is the way you think don't ever walk through the door.

    No it's not your responsibility to keep somebody in business. But that doesn't mean you should work them over on price or abuse there knowledge and service. If you want to buy stuff dirt cheap on line that's fine but ask the black hole that is the internet your questions and don't even think about walking into your LBS when your looking for a warranty.
    Buddy, I buy some stuff online, some stuff in stores and some stuff used. Not just with bikes with everything. But if you don't want my business, PM me with the name of your company, and I will be sure to never darken your doorstep.

  2. #27
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    Quote Originally Posted by marpilli View Post
    How do you know you're being treated fairly unless you have some idea of the dealer cost? Without that, you have no reference point to compare against. Kinda goes against the "don't disclose the dealer cost" argument.
    I think he was referring to service not price. But even if he was talking price. MSRP is fair in my book.

  3. #28
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    Ah, I totally agree with the service aspect. The closest LBS to me doesn't get much business because of this. Every time I go in there and ask a question they act like I'm wasting their time. Because of this, I drive to a shop 20 minutes away that is welcoming and always takes time to listen to what I'm trying to find.

    As others have said, I buy on-line and used also...
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  4. #29
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    Quote Originally Posted by customfab View Post
    MSRP is fair in my book.
    Knowing a little bit about how bikes and accessories are priced out, I would agree, especially in the case of full bicycles. I don't even try to negotiate the price there because unlike car dealers, most bike shops are straightforward and fair about pricing.

    And taking the lowest online price you can find, then calculating the difference between it and MSRP to determine markup is making one BIG assumption - that the lowest online price you're seeing is the dealer cost. I have seen many cases of parts being offered online at LESS than dealer cost.

  5. #30
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    Quote Originally Posted by morphosity View Post
    Exactly, I don't think I've ever paid full retail for the bikes I've got through an LBS, usually about 25% less as I pay cash...
    Man..I have always paid cash for bikes I buy at the LBS and it's always been full price. Except for my hooligan which was a 'last year model', thus 20% off sticker, sales tax brought a chunk of that savings back tho. The deals I have gotten have been on bikes I purchase on via the web.

  6. #31
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    The posting of dealer-only info hurts your LBS and is not cool.

    Mtbr's policy does not allow these posts and it has been removed.

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  7. #32
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    Quote Originally Posted by Fix the Spade View Post
    Well...

    The rrp on my local shop's bikes is roughly 100% across the board (I asked the owner).

    But that's the rrp, bikes hardly ever sell for full price these days. Even latest models seem to need something off the recommended price to shift.

    People like buying on finance and credit cards now too, so quite often a bike sold at 'full price' has great chunks taken out of the mark up right from the moment of sale. Bikes sold on interest free finance deals, percentage gets taken by the finance company and then the shop might not see most of the money for a month (or 3, 6... year).

    People who walk in with cash in hand tend to get discounts too. They might get as much as 10-15% off a brand new bike, but it's cash in the till and product out the door. Quite often a cash sale with a hefty discount works out more profitable than someone paying full price but on 24months finance (and you can forget about discounts when mentioning the F word).

    Once the dust settles, the actual mark up he gets varies from close to 100% on the little kids bikes, to 60-40% on proper bikes with the narrower end of that centred on the most expensive models.

    God it's complicated selling stuff to people.
    Remember that a 100% markup = a 50% margin, and the margin from dealer invoice cost to selling price is way less. Then the cost of shipping, assembly and followup service must come out of the margin. In the long run the LBS does just a bit better than break even on bikes.

    Even most parts and accessories are less than 50% margin at MSRP and obtained from the main distributors.
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  8. #33
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    Quote Originally Posted by Pritchett View Post
    retail is typically based on a 100% markup. That $80 dollar tire cost the shop $40.
    I have no experience in the cycling business but I was a parts manager at a motorcycle dealership for 4 years. Sold Yamaha, Ducati, Polaris, Honda, Suzuki, Aprilia, BMW, and KTM. Most parts factory or after market have about a 50% markup. Unless its Oakleys or Costa Del Mars, they have 100%. We typically were shooting for a 33% margin of profit at the end of the month. I doubt bike parts are much different.

  9. #34
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    Quote Originally Posted by gregg View Post
    The posting of dealer-only info hurts your LBS and is not cool.

    Mtbr's policy does not allow these posts and it has been removed.

    -g
    I agree with your action but not your reasoning... If someone went into a shop knowing dealer cost looking for a deal the dealer has the oppurtunity to say no but at least they walked in the door instead of buying online. Knowing dealer cost wont actually deter someone from buying the product... It actually might help the smaller guys (bike companies) to compete with the bigger brands creating more competition... This wouldn't effect your LBS but would be good for the consumer and the sport as a whole.
    Killing it with close inspection.

  10. #35
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    While it's a competitive market out there it's good to know the other side of the coin as well. LBS do not buy direct from all manufacture they have their middle man. Then the overhead, rent, utility, labor. Avg business run about 30% labor retail may be different but you get the idea. Plus they have to stock the products, not everything they sell are special orders. That's a chunk of cash sitting on the showroom floor loosing value.

    LBS do not buy the same thing online place do either, some online do bulk of their business with OEM parts, and take offs with no box and sometime no warranty.

    I think that it's good that good shops make money, they don't burry the profit in the back yard they put it back in the business, expanding and offer more sales.

    My friend celebrated a sweet deal he scored at an LBS after hecklling them to death by going to a Sushi restaurant ordered amoung other things a $7 California roll that cost about 65 cents to make

    There's no need for transparency, consumer do not need to know how much it cost, just the going price. If an LBS sell an XYZ product for $100 and make $75 profit, another LBS that sell it for $75 would gain the customer by earning less profit, and so on. I don't see one shop making all the money and every shop follow that's not how business work, everyone gets competitive.

  11. #36
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    Quote Originally Posted by Pritchett View Post
    Because anyone who isn't an idiot realizes that many other factors contribute to the actual profit made from any sale. Manufacturers invest in overhead, R&D, Engineering, infrastructure, etc. Retailers invest in various operating costs, including rent, utilities, marketing, etc.
    Did you see the "High cost of saddles" thread? It always bugs me to hear people complain about paying so much money for "a few cents worth of metal and plastic."

    I am a machinist and my entire living is made turning metal and plastic into useful items. I do not do this for free. It does not get shipped for free. The engineer did not design it for free. Even the time spent sourcing the material is not free. And material prices are not as cheap as some may like to imagine.

    Anyway, support your local bike shop. If you do, they will likely give you discounts and great service. They love loyal customers.

  12. #37
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    I have seen the prices that my shop buys at. Like someone said above the average is around 30% on bikes, Some shops will haggle on price but some wont. Between insurance, work mans comp, all other operating expense. credit card processing around 1.8 to 2.5% and it widdles down fast And if it is American Express it is more. I run a couple retail shop not bike but i sit down every month and track those expenses and it a whole lot of expense. I give the lbs a lot of credit, tough market and not a lot of return. And a whole lot of competition.

  13. #38
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    I don't ask my shop to match the price for me I just asked if they would work with the price, they say yes and I take it. Turned out a few times it's cheaper than online. Not many shop keep their price up to date most of the time they have not adjust the price and I get discounted on a lower price tag.

    I don't think that the shop is making all kinds of money because if it's that profitable there would be a bike shop on every corner. Most of us who buy and sell used stuffs online or classified would know what kind of idiots that we have to deal with and the kind of profit we made.

  14. #39
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    Quote Originally Posted by icantdrive65 View Post
    Did you see the "High cost of saddles" thread? It always bugs me to hear people complain about paying so much money for "a few cents worth of metal and plastic."
    I'm the guy who began that thread. It wasn't so much a complaint as a "wonderment". One looks at something sometimes and wonders why it costs what it does. "Why?" is a fair question to ask. Either there is a good answer, or there is room to jump in and compete at a lower price. Henry Ford probably asked himself one day why cars were so darned expensive. The he put together an assembly-line and changed the industry.

    OTOH, used to be I would wonder about the price of restaurant food. Then one day I realized I was not paying for the food at all. What I was *really* paying for was for the food be there, where I wanted it, when I wanted it. That changed my whole line of thinking, and I no longer complain about food prices when I eat out.

  15. #40
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    if you find a good shop and are good to them. they will be good to you in return.

    that's my experience.

  16. #41
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    I did not start this thread to bash local shops, I was just wondering. I realize that they have to keep the lights on - and I have no problem paying a couple extra bucks to keep it local. If they have it, I'll buy it from them. If not they will happily order it. That said I have bought over the internet as well, mostly impulse buys on deals that are too good to pass up. For the most part I like to keep it local. As for loyalty, I've used the same shop for over 30 years - God only knows how much I have spent in that shop. They treat me well and I drop off an Iced Mocha or Pizza every once in a while as a thank you. I could not count the times he as told me 'I'll just get you next time' when it comes to paying for a quick service. That is why I plan to use that same shop for the next 30 years.

  17. #42
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    I prefer to buy from the LBS rather than online. Winters are long around here, so when something on my bike breaks, I need a replacement right away, not in two weeks. It's worth the extra cash for that reason alone, plus with a bit of haggling or buying sale parts, and the lack of shipping costs, pricing isn't much different anyways.

    Service costs are a huge ripoff though, except for **** like headset installs, where the cost of the tools required is over double that of the labor.

  18. #43
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    Quote Originally Posted by Metalized View Post

    Service costs are a huge ripoff though, except for **** like headset installs, where the cost of the tools required is over double that of the labor.
    Srsly? shop rates here range from $50 to $75 an hour. Compare that to hourly rates in other industries and I think it's in line with the amount of experience and tooling that bicycles require. If the service dept. at your LBS is staffed by seasonal help I complete understand your point. But I really think the average shop rate is pretty fair.

  19. #44
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    Quote Originally Posted by customfab View Post
    Srsly? shop rates here range from $50 to $75 an hour. Compare that to hourly rates in other industries and I think it's in line with the amount of experience and tooling that bicycles require. If the service dept. at your LBS is staffed by seasonal help I complete understand your point. But I really think the average shop rate is pretty fair.
    To add to this... I know when I get stuff done at the LBS they charge me actual work time and not some inflated estimated time ... Its not like getting work done on your car. One shop that I have been to charged me roughly $5 for every tool that they had to use to get the job done... so, $5 for installing a crown race, $5 for cutting a steerer tube and $5 for installing a star nut... It made it worth my time to go to them.
    Killing it with close inspection.

  20. #45
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    Quote Originally Posted by Pritchett View Post

    This being said, don't think shop owners are getting rich. They operate in a seasonal atmosphere with a lot of overhead costs. Especially with competition from online retailers, we should feel lucky that brick and mortar bike shops still exist! It's a rough industry and many do it for the love, not the money.

    As said above, any haggling would best be left to discounted accessories at time of bicycle purchase.

    Support your LBS when you can please!
    I agree, I just ordered 2 bikes from my LBS. The people at my LBS are awesome and to help them stay in business I will pay more. The help, tips, details and directions are more then worth the premium I pay to my LBS.

  21. #46
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    Thanks for pulling the dealer pricing, it really hurts LBS to have this exposed.
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  22. #47
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    Quote Originally Posted by Metalized View Post
    Service costs are a huge ripoff though, except for **** like headset installs, where the cost of the tools required is over double that of the labor.
    I disagree w/this comment. Sometimes I feel shops should charge even more than they do.

    One aspect of service that is often overlooked is the assumption of risk. Do a repair yourself, and you bear the risk. Take the repair to the shop, and part of what you pay for is to transfer the risk of failure to the shop. Plus, there's all the usual overhead and labor costs that get discussed ad-nauseam. Labor rates -- at least in the shops I patronize -- are something I won't even consider complaining about.

  23. #48
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    Bikes have a ~30% mark-up, less on the very high end. Parts, clothing, and accessories are "keystoned" or 100% mark. That is why shops always want you to buy lots of things with your bike - they make more money on those items (that is why they are in business). I always thought the mark-ups were pretty standard for a retail business; the bikes weren't marked up as much as I would have thought. I worked at a shop in the mid-90s. To guy that says that giving this info makes me an @sshole, this is all fairly common retail knowledge. I just don't get why people don't understand that to make money you need to buy low and sell high, I don't get too concerned about it when I purchase any goods or services, whether online or in a brick/mortar store. Why is a bike shop such a different experience that say Best Buy, Walmart, etc.? Those places really stick in your rear and people smile about it all day long.
    Last edited by TiGeo; 08-07-2011 at 11:08 AM.
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  24. #49
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    I try to do what I feel is middle ground with my purchasing. I buy my bikes, helmets, shoes, consumables (water bottle, chains, lube, etc), and some special order parts ie specialized parts from the LBS. I feel this is giving them my business, but on the other hand, I am not well off so I need to buy other things online that are way cheaper, like pedals and most other parts. I am very grateful that my lbs is there and I use them for most big purchases, but as I said I do not have a ton of extra money so I need to make it go further.

  25. #50
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    labor rates in shops generally need to go up. Sure $9 for a tire/tube change is expensive, but when it's a bolt on bmx wheel with pegs, it takes some time. it's also super easy to do yourself. I think my shop charges $20 for a headset install. but if you bought the headset from us, and the bike from us, we'd probably do it for free or $10 especially if we didn't discount the part a ton. if you come in with a headset you got elsewhere, it's $20. that covers the proper tools and the know how to do the job correctly.
    we try to price things on how expensive the tools are and how complicated it is to do/the knowledge required. too many people discount the knowledge required to do a job and troubleshoot things if it isn't a super smooth by the book fix/job.
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