's Forum Archives - General

Archive Home >> General(1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 )

Why is buying a bike sometimes like buying a car?(14 posts)

Why is buying a bike sometimes like buying a car?gregario
Aug 6, 2002 6:11 AM
I was wondering something: Why is it that when someone buys a bike that they feel the shop should "throw in" extras, like a free bottle cage, etc.? Admittedly, I feel this way sometime. I dropped a LOT of coin on a new tandem last week. I asked the shop owner to put on a chainstay protector and he (literally) mumbled something about just throwing that in, but he never really finished what he was saying. He ended up charging another $6. Now, when I just dropped $4,500 for a tandem another $6 isn't going to break me, but I was annoyed. Why do I (and others) feel that shop owners should give freebies? You don't do that when you go to the clothing store, grocer, hardware, etc. Do you shop employees see that a lot? Why does that mentality exist? It's like buying a car and expecting free floor mats. I know from talking to an owner that these guys really don't become wealthy owning a shop.
peer pressureDougSloan
Aug 6, 2002 6:30 AM
Some shops just do that sort of thing. When some do it, we start expecting it, I suppose. What's the problem, though?

The shop owner just made at least $1500.bnlkid
Aug 6, 2002 6:48 AM
To use your own words....why shouldn't the shop owner throw in a $6 bottle cage that only cost him about $2. Shop owners don't get rich, especially if they nickle and dime their customers. Throwing in water bottles, 10% off accessories, etc. are what makes customers happy and coming back to the shop to spend money. If I threw down $4500 on a bike and the guy was unhappy about throwing in a bottle cage, I would have taken my business elsewhere. It's not about getting something free, it's about establishing a good relationship.
Not Exactly - The shop owner just made at least $1500.NJRoad
Aug 6, 2002 1:25 PM
According to NBDA (National Bike Dealers Association), the industry average markup is about 35-36% on a new bike. The average industry cost to open the doors in the morning is also about 35-36%. So on average if the dealer does nothing but sell bikes they break even.

Now that's average, they may very well get great pricing on a particular model the manufacturer is pushing and make a little more on it.

One of the posters below said it correctly, they make money on service and parts/accessories. Example...tuneup costs $20, 1 good mechanic does 2 an hour. Gross revenue = $40/hour. Mechanic makes $12/hour + employee taxes and shop costs, etc. the owner is paying $20/hour in costs, so $40 (gross revenue) - $20 (costs) = $20 profit, plus you bought a couple of tubes, a new tire and gloves while you were there.
Sounds like a great business plan but remember your counting on staff to do the work efficiently and you have to manage a large inventory of miscellaneous parts (that's why they never seem to stock anything).
Because, like a car (except Saturn) the price of a bikescottfree
Aug 6, 2002 7:02 AM
is 'negotiable.' If prices were absolutely fixed at MSRP, you wouldn't expect extras. But we haggle about prices, and eventually arrive at one. Extras are kind of what we expect when we suspect we never really negotiated down to the absolute bottom line price.
re:Because, like a car (except Saturn) the price of a bikegregario
Aug 6, 2002 7:23 AM
but why is it negotiable? What else do we buy that we do that? Why bikes? I'm not sure my question can be answered.
Well ...scottfree
Aug 6, 2002 8:47 AM
Usually, 'negotiable' pricing evolves when the element of trade-in is thrown into the mix. Since the trade-in allowance is subjective and negotiable, that makes the retail price of the new item fluid as well. (You know the feeling: What is the real trade-in they're giving you, and how much is based on an inflated 'asking' price so they can make you feel like you're getting a helluva deal on trade-in?)

So I'm not sure. Back years ago, were trade-ins common in bike purchases? It probably evolved that way.
Why do you tip you waiter but not your oil change guy...Scot_Gore
Aug 6, 2002 8:56 AM
...because it's expected practice in the industry and service in which they operate. WHY is it expected practice, I'don't know!!!

I expect to haggle around the price of cars, persian rugs, home improvements, and real estate AND not haggle about groceries, electronic equipment, and day care for my kids.

WHY??? Cultural expectations of the society I live in.

it wont matter if the oil-guy spits in your oil next time NMSpirito
Aug 6, 2002 12:04 PM
hobbies create tightwadsbigrider
Aug 6, 2002 7:44 AM
I believe there is an underlying guilt many of us have about expensive hobbies. I know many people that agonize over spending money on their equipment for hobbies whether that is musical, weightlifting, biking, fishing, hunting, reading, etc. I think we have to somehow justify the spending of the money on something we don't NEED so we just gotta get a bargain. A free bottle cage goes a long way in suppressing buyer's remorse. I would cry for a week after I spent 4500 on a bike although I would enjoy every second on the bike. doesn't make sense but it's the truth
Because you spent a lot of money!Juanmoretime
Aug 6, 2002 8:04 AM
When it comes to our obsessions and addictions, we all tend to stretch our budgets about as far as you can go. So, I guess you need a little more to try to justify the stretch. My last bike I went about $1,000 over what I originally had intended to spend. I could have bought a "built" bike but I wanted to hand pick every component. Was it worth it, it depends on who you ask, me, hell yes, my wife, hell no. But I came home and said to her, yes I spent $4,000 on a new bike but the dealer threw in these cages and some water bottles with the shops name in on the deal for free. It justified the extra $1,000 to me, not the significant other.
Hmm...interesting...I think you might be right. (nm)jtferraro
Aug 6, 2002 12:13 PM
Its good for repeat businessPODIUMBOUNDdotCA
Aug 6, 2002 8:13 AM
A bike is a lot bigger purchase than anything you mentioned. And since a bike tends to get a lot of upgrades/servicing to ensure repeat business it is often a smart idea to throw in some freebies. A bike shop doesn't make 30% on a 4,500 bike... correct me if I'm wrong but its under 10%. Where they make the money is servicing/upgrades.

And for the record most bike shop owners don't get wealthy doing what they do... but the ones with the right business sense do. However, more often than not these bike shops get a lot bigger and less personal as well.

they musta thought you had the $ to pay full priceColnagoFE
Aug 6, 2002 1:58 PM
unless you are getting a pro/bro deal (which seems like everyone but me is getting) you are gonna pay pretty close to full price at a LBS. if this isn't the case then the retail price is likely too high to begin with as in the case of jewelry and the rediculous markups they have in order to be able to say 75% off sale.