Where is the bike industry going with pricing

[ChrisF]

aah, i forgot to add. make your profit its a business afterall, but be realistic for the less fortunate okes.

also the price demand always plays out in favour of high prices, if the demand drops then you will hear the price is high because we dont ship a lot as we used to.

 

appart from components my peevf hate is that a bicycle tyre cost more than my family car sedan replacement yokies

 

Few decades back it was Nishiki.

 

A few others since then.

 

Currently TITAN is the quality bike for the masses.

 

 

Today's TITAN may be "mid-range" in terms of engineering when compared to the current expensive bikes (cheaper frame, decent components .. model dependant).  Fact is, these so called "mid-range" bikes are now sporting components that were top-of-the-range a few years back, at affordable costs.

 

 

 

Truth be told, we are very spoilt for choice  .... from a decent HT for under R20k for those on a budget, to R200k+ for those that are in the position to afford it.  Not too dissimilar to cars .... some of us will drive second hand, some entry level new, very few will drive high end new cars .... and many will go for the over-priced-under-specced-brand name models, in both cars and bikes and most other consumer items ....

 

 

The trick is in the marketing .... VERY easy to spend a significant chunk of money on a bike that is way more marketing than proper engineering .... I was looking for an ebike in February, a KNOWN brand seems to be the market leader in this segment and I looked at their range.  The 2019 spec was a DECENT bike !!  The 2020 spec costs MORE, and was downgraded to NX ... heaven alone knows what else they downgraded, while upping the price.  So in my humble opinion, get YOUR budget sorted, then start hunting for the best specced bike in your price bracket .... though some deliberately buys a better frame knowing that they will be spending money on upgrading the components .... either way, KNOW what you are buying and what your cost of ownership is going to be.

[Hairy]

I built a good number of bikes, so just for fun I hacked the Epic S-Works components RRPs into my built spreadsheet.

I doesn't look good. Assuming the S-works frame with brain shock costs the same or more than my Element 999 you won't be able to build this bike for R190k. 

Unless of course you start shopping around and get stuff for solid discounts.

The $/R is really going hard on us here....

I did the same last night, but the thing is this.

 

We are showing RRP on our spreadsheets of what the components cost us to buy locally.

 

The manufacturers should be getting these components at hugely reduced prices, yet they end up with a price similar to what it would cost "us" to build the same spec up at. You would think it should be much cheaper to buy a fully built bike vs buying all the spare parts and slapping it on the frame (And granted that Spaz Evo with the wild paint job is drool worthy).

 

Somewhere, something is weird.

[Duane_Bosch]

I don't know much about motorcross so I'd ask what other parallels there are between the two industries. Assuming there are legitimate reasons for pricing disparity. The 1st of which comes to mind is. Have things changed in the motorcross industry in lets say the last 5 years? Does a 5 year old motorcross bike seem as redundant today as a 5 year old mountain bike?

Mmm. Interesting question. I do think you have a solid point there. A motocross bike from 2010 looks contemporary and can still tear your arms out of their sockets whereas a 10 year old MTB really does look ancient.

[Jewbacca]

I see it more like football. 

 

The economy is created by the demand, whether it makes sense to parallel industries or not.

 

How can 1 man with no tertiary education earn 250 000 euro a week to kick a ball and entertain the working class?

 

The economy is driven by the need of the middle class to watch and manically support sports. The bike industry and it's 'stand alone' inflated economy is driven by people 'needing' the newest and greatest.

 

It doesn't make sense when taken out of the bike industry. We should stop trying

[Kranswurm]

surely they're not that similiar?

 

You can buy a specialized bike for R4k, yet you're showing the top of the range CEO richwanker SWorks version that is R190k. I'm sure the top of the range BMW GS goes for silly like ~R500k, which would be a more apples with apples comparison.

Nope

[CAAD4]

Up.. the end.

[LazyTrailRider]

I see it more like football. 

 

The economy is created by the demand, whether it makes sense to parallel industries or not.

 

How can 1 man with no tertiary education earn 250 000 euro a week to kick a ball and entertain the working class?

 

The economy is driven by the need of the middle class to watch and manically support sports. The bike industry and it's 'stand alone' inflated economy is driven by people 'needing' the newest and greatest.

 

It doesn't make sense when taken out of the bike industry. We should stop trying

 

In my experience, most things which seem like economic absurdities are simply an effect of - contrary to how we perceive it - how incredible complex the world actually is. To limit information overload, most people think of individual wealth (which is what drives luxury goods purchases) in easily understandable brackets.

 

You're working class, middle class, upper middle class, high net worth, ultra high net worth, etc.

 

The reality is that there are *hundreds of millions* of tiny levels of relative wealth just within the blanket definition of "middle class". Each of these levels of wealth has a set of operational parameters which make sense only to the individual whose wealth it is.

 

The thing is, as social creatures we like to compare notes and find some of common ground on which we can relate to others and compare ourselves to them, so we come up with simplified thinking along the lines of "surely the average middle class 35 year old South African cyclist can't afford to spend R190k on a mountain bike?" This is where we make the mistake...

 

I make this same mistake regularly: During any given day, I'll see more than one person driving around in a new-ish R900k BMW X5 and I absentmindedly think "how can there be so many people earning R300-R350k a month?" because proportionally related to my own income and spending ability, that's the level I would need to reach before I would consider a R900k X5. But you see, I'm wrong. There are thousands of possible ways for someone to end up in a R900k vehicle.

 

It's the same with bikes. This "how can it be?" thread (although there are many others) represents both a drop in the ocean in terms of the total market of individuals for bikes, and an insignificant representation of the financial diversity out there.

Edited June 25, 2020 by LazyEnduroRider

[Captain Fastbastard Mayhem]

Well said, MH.

[MTBeer]

We live in a 3rd world sheet hole so the price we pay for 1st world luxury products is inversely proportional to the competence of our government.

[bertusras]

I did the same last night, but the thing is this.

 

We are showing RRP on our spreadsheets of what the components cost us to buy locally.

 

The manufacturers should be getting these components at hugely reduced prices, yet they end up with a price similar to what it would cost "us" to build the same spec up at. You would think it should be much cheaper to buy a fully built bike vs buying all the spare parts and slapping it on the frame (And granted that Spaz Evo with the wild paint job is drool worthy).

 

Somewhere, something is weird.

 

I don't think that something, somewhere is weird to be honest. In 2011 Specialized had a rumoured annual revenue of $500 million.

 

"Bikes are booming today--industry sales in 2011 are up 37%. (Fitness products do well during bad economic times.) Driving the trend are two American companies, Trek Bicycle of Waterloo, Wis. and Sinyard's Specialized Bicycle Components."

 

Source

 

Edit: After some further digging I found a more up to date estimate:

 

"Sinyard, in an interview from his home in Capitola, California, a beach community near Santa Cruz, said he's seen nothing like the COVID-19 pandemic in his 46 years in the industry. But Specialized, a billion-dollar company (more or less) is taking a financial hit like all businesses, he acknowledged, but especially in its overseas operations with so many nations under lockdown."

 

Source

 

With a sponsored teams and riders list that's really not shy:

 

"Many riders in recent years have used Specialized bicycles in the North American and European professional cycling circuits. In 2019, the professional road teams sponsored by Specialized are Deceuninck–Quick-Step, Bora–Hansgrohe, Boels–Dolmans and Axeon–Hagens Berman.

 

Mountain bike riders sponsored by Specialized include the downhill world champion Loïc Bruni, who rides for the Specialized Gravity Team, Finn Iles, Jaroslav Kulhavy, Christoph Sauser, Lea Davison, Martin Soderstrom, Simon Andreassen, Sam Gaze, Hannah Barnes, Annika Langvad, Mitch Ropelato, Curtis Keene, 2:1 Racing, Nicholi Rogatkin, Dylan Dunkerton, Curtis Robinson, Matt Hunter and Howard Grotts.

 

Sponsored triathletes include Brent McMahon, Jenson Button, Rubén Ruzafa, Non Stanford, Conrad Stoltz, Melissa Hauschildt, Tim Don, Lisa Norden, Chris McCormack, Francisco Javier Gómez Noya, Gwen Jorgensen, Lucy Charles and Benjamin Hoffman."

 

Added to that massive marketing and R&D departments, it's no surprise that their products sell for as much as they do, and get sold for as much as they do.

[arendoog]

First rule of business. A product is worth exactly what your customer is willing to pay for it. If this number is higher than the cost price you're running a business. If its lower then you're running a charity. 2nd rule of business bundle items to hide the individual costs and increase profits due to economies of scale. Select high perceived value items and bundle with low cost low perceived value items. Price according to high perceived value items. Figure out what your client is looking at and make that amazing; make everything they're not paying attention to ****.

 

And this is why I buy my parts individually and build my own bikes.

I build my own bikes ,by patiently buying the parts i want over a few months .I get what i want at the price i am willing to pay .I have yet to walk into a shop and buy a bike of the floor

[Hairy]

My poor prediction for 2021 

 

Awesome low and medium priced bikes is where it "will be at" .... Deore + Revelation/Yari or the like suspension on capable alum framed duallies or hard tails with "house brand" components will be selling like hot cakes.....or at least overseas they will be.

 

SA's MTB'ers may still be a bit status sensitive and up to a higher spec bike, but newer riders may take up on the predicted great value offerings.

[Eddy Gordo]

I have managed to build my last two bikes up for way less than what they would cost as a whole unit. However this was buying parts on sale and doing alot of the assembly myself etc. 

[T-Bob]

My poor prediction for 2021 

 

Awesome low and medium priced bikes is where it "will be at" .... Deore + Revelation/Yari or the like suspension on capable alum framed duallies or hard tails with "house brand" components will be selling like hot cakes.....or at least overseas they will be.

 

SA's MTB'ers may still be a bit status sensitive and up to a higher spec bike, but newer riders may take up on the predicted great value offerings.

 

If I were building up a N+1 bike that new Deb' Rev' with 35mm legs and the SLX / Deore kit is such a no brainer. I was so impressed with the last 'cheap' bike I rode. Only things that were letting it down were the wheels, saddle and grips. 

[SCD]

My poor prediction for 2021 

 

Awesome low and medium priced bikes is where it "will be at" .... Deore + Revelation/Yari or the like suspension on capable alum framed duallies or hard tails with "house brand" components will be selling like hot cakes.....or at least overseas they will be.

 

SA's MTB'ers may still be a bit status sensitive and up to a higher spec bike, but newer riders may take up on the predicted great value offerings.

 

I bet on a slight variance for the majority of buyers, to be like: "I'd planned to buy a new bike and saved the cash for it but on second thoughts my current steed is actually still just fine....and I might need the money to buy food...."

End of story.

[stefmeister]

It's not just the local currency taking a beating that caused prices to soar.

Comparing specs from a few years ago to now in the equivalent USD price bracket, you're getting a lot less "value" for your money.

Looking at the $5k bikes, instead of getting XO with carbon cranks and a Pike/SID, you're now getting at best GX and a Revelation/Reba. And we're not even talking about the shitty brakes that made their way into the new builds. 

Where the bike builds below this had GX, they now have NX/SX boat anchors, and OEM/RS Gold type forks that replaced the Revelation/Reba.

 

And don't tell me; YeAh, bUt 12 SpEad eAgLe, and today's entry level suspension is better than yesteryear's. That's called technological advancement, that should trickle down into lower end products, and not just keep on upping the prices every time they make a goddamn hub 6 mm wider.