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  1. #1
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    Bike shop employee discount???

    How much is a bike shop employee discount? 20 - 30% off regular price or even more? I am talking about bike components, not complete bikes. If it is 20-30% it should be pretty close to best deals on internet shops, right? For example, how much is Crossmax Sl disc wheelset, Thomson seatpost, XT 760 crankset, Avid juicy 7 or FOX 100mmRLC fork for shop employees? Maybe it's a secret...I do not know.... but I kinda need to know... thanks

  2. #2
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    First, it really isnt very professional to discuss employee purchase prices, and also the discount that each shop gives its employees is different for each shop. Some more generous shops might allow their employees to buy things at cost, and others might charge a markup from cost or a discount from retail price...

  3. #3
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    why do you kind of need to know?

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    Quote Originally Posted by the Inbred
    why do you kind of need to know?
    Probably because a shop employee is offering him a backdoor "discount".

    Like Lancerracer said not professional to discuss such things in public. Besides it is highly variable.

  5. #5
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    Unprofessional? From whose perspective? Someone in the industry?

    In whitewater paddling, which is probably like cycling (with the exception of full bikes, which they say are only 30% above cost) retail prices were usually 40-50% above cost. Pro-deals were usually wholesale (cost) prices, and some were even nicer to employees, like no tax, and even 10-20% below normal cost.

    You'll find people talking about this in many circles. It's not really secrecy, unless you're embarrassed about how bad LBS's ream the public.

  6. #6
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    30%

    I think 30% off retail is a pretty educated guess. Purchases are supposed to be for personal or immediate family only. I think a lot of shops pro-deal bikes once a year and that at about 50% off retail. However if the manufacturer has excess bikes they may offer steeper discounts that could reach 70%. Ebay is full of complete bikes that the owners are selling because they have another pro-deal coming up. They can usually sell their bike for what they paid for it with a years use on it and get another completely new bike. The rest of us are riding five year old bikes.

  7. #7
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    You have your answer

    Quote Originally Posted by jasong
    Unprofessional? From whose perspective? Someone in the industry?

    In whitewater paddling, which is probably like cycling (with the exception of full bikes, which they say are only 30% above cost) retail prices were usually 40-50% above cost. Pro-deals were usually wholesale (cost) prices, and some were even nicer to employees, like no tax, and even 10-20% below normal cost.

    You'll find people talking about this in many circles. It's not really secrecy, unless you're embarrassed about how bad LBS's ream the public.
    My understanding is that the bike industry is very similar to what you have described here. Not every shop will have the same policy regarding employee discounts.

    FWIW, while your question isn't out of line, it's tacky. And no, I don't work in the bike industry, nor do I have to in order to determine if a question is in good taste or not.

    Bottom line, you pretty much have your answer.

    Bob
    'If Wal-Mart sold parachutes, who would jump?' Frank Havnoonian (quoting his father) Drexel Hill Cyclery

  8. #8
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    It all depends on volume and stock level. The more you turnover, the deeper your discount. Most wholesalers in many industries (I'll use auto parts as an example) start you off at around 20% off retail which is commonly called Jobber. Depending on how much you sell, some will base discounts on Jobber whereas some will base it off retail. Unless your volume is crazy high, most max out around 40-45% off retail. Usually the larger your order (some are units, some are dollars), the more likely you'll get free inbound freight, which is an excellent thing and will reduce your costs dramatically. Some manufacturers and distributors even offer "shop discounts" if the part is for an employee. Typically it can be an extra 5-15% off the shop's current discount rate. I'd be really surprised if this wasn't available to LBS employees since a large part of the business is "What do you recommend?" but every company is different.

    * If there are any LBS employees or owners who can confirm any similarities, please PM me as I'm curious as to how the markets differ.

  9. #9
    Hi!!!
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    Quote Originally Posted by jasong
    Unprofessional? From whose perspective? Someone in the industry?
    Yeah...someone tell me why it's considered "unprofessional"? I have been working parttime at REI since the fall of 1997 and not once have I ever heard anything like that.

    In whitewater paddling, which is probably like cycling (with the exception of full bikes, which they say are only 30% above cost) retail prices were usually 40-50% above cost. Pro-deals were usually wholesale (cost) prices, and some were even nicer to employees, like no tax, and even 10-20% below normal cost.

    You'll find people talking about this in many circles. It's not really secrecy, unless you're embarrassed about how bad LBS's ream the public.
    Yup...that's pretty much it across most of the lines of products (including bikes and bike related stuff) we carry with some exceptions.

  10. #10
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    shops "ream" the public just like every other retail outlet.

  11. #11
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    Bullshi+

    Shops sell at markups consistent with normal mark ups, but that is hardley "reaming". I don't work in a shop anymore, but let me assure you it takes money and expertise to run a solid LBS with good people and reliable service. Mark up pays for things like electricity, liability insurance, toilet paper, credit card readers, and , lest we forget, the money it takes to keep good employees (who are not getting rich). Sure, retail is more then wholesale, but tis just plain foolish to expect it to be less. Oh, and no offense to the good folks at REI, but its not an LBS, and their multimillion dollar buying power helps them score product lower. Do I like to pay retail (remebering the good ol days of EP pricing)? No, but its the price to pay for good local service and selection. Oh, and its unprofessional to tell consumers the discount pricing (in every industry) because it devalues the item and puts pressure on shops, employees and reps to either sell for less or push more sales. That doesn't help anyone, including consumers.

  12. #12
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    In some cases, deep employee discounts (even below cost) may be one way of retaining good employees who are enthusiastic cyclists (and thus good for encouraging future business). Sort of like a restaurant offering its best cook the odd free meal.

  13. #13
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    Go work at Q and get access to the mythical "scratch and dent" table......

  14. #14
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    Quote Originally Posted by Mr.E

    Shops sell at markups consistent with normal mark ups, but that is hardley "reaming".
    I don't know but I feel reamed (so to speak) every time I go to an LBS. For example, I was looking to buy a set of park double sided cone wrenches from my LBS and they were charging 11.99 for each. I found them on ebay for 3.5 each (7 shipped)!!! Bought a set of 4 for $18 (only 5 shipping for the whole set!!), which is more than 50% discount vs. LBS. If the set was 25 or something like that at the store I would have bought from them.

    To be honest I only go to the LBS when I need to buy parts or tools that I need very urgently. I would go there more often if their markups were a little more reasonable. I understand they need to keep a business running, but that also could be done by selling more volume at lower margins. They are losing that volume to ebay and online retailers because their margins are so excesive.
    Last edited by morenowalh01; 09-14-2006 at 02:19 PM.

  15. #15
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    Employee pricing bikes are a secret of the industry. But after being around it for a while you start to hear things. Some shops even get free stuff for their employees (sunglasses, helmets, etc...). But the key thing to remember here is that when a shop employee gets a discount on something it is considered advertising. If that shop guy likes it he will talk it up to EVERYONE who comes into the shop looking for a similar product. Bike companies don't generate the same kind of advertising if they give you the discount because you only talk it up to your buddies or some internet strangers.

    Same thing with sponsorship. I get a pro-deal on a team frame, kit and accesories from various companies. But in exchange I have to only ride that bike, talk it up constantly, be in full kit at all times on the bike and represent myself in a way that a company wants to see it's products represented.

    Funny story: when I was a Junior I was on a team with a major sponsorship with a local brewery, I was the only junior @ 15 y.o.. I imagine it was quite a sight back then when someone would comment on my kit or I would be promoting at races and a 15 y.o. kid was talking up the local brewery, but it was an expectation.

  16. #16
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    I work in a shop, and we make diddly squat for the amount of education we are expected to have on the industry. One of our rewards is employee pricing, which barely makes up for the pay cut most of us take to do what we do. There aren't too many bike shop owners rolling in money. Most of them like to be rewarded by getting to try all the cutting edge stuff because they enjoy cycling. I'm not saying we're saints, I'm saying that it all works out about the same financially unless you like being in the thick of the industry. In other words, I could be making double outside a shop and still be riding the same bike I bought on employee purchase.

  17. #17
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    I know nothing about the biking industry from a business standpoind, but I can tell you the IT industry likes to ream its customers. I will use compusa for example, I used to work there a long time ago, the actuall completed product had a profit margin of maybe 2 or 3% on laptops and desktops, printers, there was a loss on those. All of the money is made selling replacement parts and accessories, ink replacement has about a 500% markup, peripherals, insane markup between 100 to 300% markup (I know because the employee discount used to be cost, thats changed now, no clue what it is these days). I use a rounded IDE cable for example, cost on it was around $4, retail was $29.99.

    Another example is the auto industry, you go price the individual components of a car, it will cost about 50 times the price of the car that those components make.

    I imagine the bike industry is the same way, however, there are some places, in all industries that go to excess, and 40 to 50% markup on lower priced items, with a 10 to 30% on larger higher priced items seems reasonable. but 100 to 500% and sometimes more, that kind of markup is rediculous, its bend over the barral and take it up the ass, without even a kiss good night.

  18. #18
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    Howabout none of your f@#&%ing business!

    now excuse me while I go rip people off with rediculously high margins and make a profit off of all of the free stuff that I get for working in the bike industry

  19. #19
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    If they reamed...

    Quote Originally Posted by the Inbred
    shops "ream" the public just like every other retail outlet.
    ... the public, then why aren't shop owners and employees lighting their cigars with $100 bills and driving around Benz SL500s?

    I'll tell you why. Because the markup barely covers expenses of a staff, rent, utilities, etc.

    There is a saying. How do you get $1 million in the bike industry? Start with $2m.

    Online bike shops can discount stuff because they have very little staff and overhead... they also have very little service.

  20. #20
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    The shop I worked for in college gave employees shop cost + 10%. This usually came out to 30-90+% off retail. A good example of 90%+ off were Camelbak bladders. We sold them for $15, shop cost was $1.

    Best deals were on complete bike or frames. Pro-form was usually 10-30% below shop cost. I recall paying $800ish for a full XTR Schwinn Homegrown (back when they were made by Yeti). Retail was well over $2k.

  21. #21
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    One of the problems with the LBS is that they enslave themselves to the big mfctrs in the industry, and speak the same rhetoric as the big companies do (ie Trek). Perhaps 20% of people buying roadbikes out there need something high performance, but the LBS sells the 80% stuff way too expensive. They don't offer anything less expensive, even though the quality is there. Look at shorts, jerseys, or any expense. THey won't find the lesser expensive items, which in turns screws them because it creates distrust when we can find those items for 30% of what they sell them for online. For example, the 16/24 speed $300 road bikes you can find onloine (bikesdirect). That is plenty for the average person - why doesn't the LBS sell them? They really aren't good marketers nor do I think they are promoting cycling for the reasons many of us like it (inexpensive green mode of transportation).

    My personal feeling is that people need to be much more mechanically inclined and do their own work, or have clubs foment that effort by possessing the high priced tools, and loan or teach these things to its members. Yet clubs now are "sleeping with the enemy" because the stores sponsor rides or give bigger discounts to certain peoplke in the club.

  22. #22
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    Minor reaming-

    I just got "poked" by a local shop myself. They wanted $0.45 for alloy nipples, the same nipples I paid $0.59 from oddsandendos.com that happened to include a free Wheelsmith DB14 with each..... When the pocket change I had didn't add up (I expected the normal $.30 each), the dude gave em to me rather then take a CC. It would have been a cool transaction, had he not tried to lecture me on the manual labor involved in adonizing nipples and how I owed him a dollar (no, really, you owe me a dollar...) the next time I go in. I did try to pay him after all.

    Oh well, some shops are better then others......

  23. #23
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    Quote Originally Posted by pimpbot
    ... the public, then why aren't shop owners and employees lighting their cigars with $100 bills and driving around Benz SL500s?

    I'll tell you why. Because the markup barely covers expenses of a staff, rent, utilities, etc.

    There is a saying. How do you get $1 million in the bike industry? Start with $2m.

    Online bike shops can discount stuff because they have very little staff and overhead... they also have very little service.
    the common LBS won't be cashing in much, but if the right path is taken, and the right people are in place, i have no problem believing shop owners can make a good deal of money. they won't be on the Forbes 400 list, but they won't be begging for spare change, either.

  24. #24
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    Ive been working the bike industry for over 10 years. I know these arguments in and out.

    The short of it is that we stay in business by providing service for people. I know many of my customers by first name, and I know their bikes intimately. When they bring it in, I know what I fixed last, I know when the last time I installed a chain or cables on it, and I know how to fix it and get them out on the trail in only a day or so. The vast majority of riders out there enjoy this level of service and have absolutely no problem paying for it. Yes, it is expensive, but it is also convenient.

    THEN, there are about 10% of our customers who are like you guys, always dickin around about price, trying to compete us against mail-order, install crap you bought mail-order, etc. Customers like this are not appreciated, and thankfully are not the norm. So your arguments are really moot, because you guys are the minority as far as LBS customers go, and for the most part, many LBS would rather that you just went away anyway.

    Ive done my share of assembling bikes from BikesDirect, Performance, and the like. And the people always complain about the fee charged. Well if you mail-order, you should know what you are doing, or be willing to pay the price. Mail-order is only for those that really know how to work on their own crap. If you dont entirely, honestly know what you are doing, then take it to a bike shop and understand that if people put in time on your bike, then they need to pay their bills, rent, and food too, and will need to charge you for their time accordingly.

  25. #25
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    Quote Originally Posted by velotimbe
    Ive been working the bike industry for over 10 years. I know these arguments in and out.

    The short of it is that we stay in business by providing service for people. I know many of my customers by first name, and I know their bikes intimately. When they bring it in, I know what I fixed last, I know when the last time I installed a chain or cables on it, and I know how to fix it and get them out on the trail in only a day or so. The vast majority of riders out there enjoy this level of service and have absolutely no problem paying for it. Yes, it is expensive, but it is also convenient.

    THEN, there are about 10% of our customers who are like you guys, always dickin around about price, trying to compete us against mail-order, install crap you bought mail-order, etc. Customers like this are not appreciated, and thankfully are not the norm. So your arguments are really moot, because you guys are the minority as far as LBS customers go, and for the most part, many LBS would rather that you just went away anyway.

    Ive done my share of assembling bikes from BikesDirect, Performance, and the like. And the people always complain about the fee charged. Well if you mail-order, you should know what you are doing, or be willing to pay the price. Mail-order is only for those that really know how to work on their own crap. If you dont entirely, honestly know what you are doing, then take it to a bike shop and understand that if people put in time on your bike, then they need to pay their bills, rent, and food too, and will need to charge you for their time accordingly.
    I am in the industry as well but I have to disagree w/ you. Its the folks on these boards that help keep the industry alive. Its natural for everyone to want to pay less. There are too many shops charging msrp as well as $50 for a tune-up that takes an hour to do. To price-match someone and only make $5 on the sale is better than not getting the sale at all. If you do this for customers, they will certainly refer you to others and you will be surprised what word of mouth does.

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