I know most will not agree but the $10,000 bike should cost $2000. I bet most cost $500 to make. I would like to see a stress test, actual weight, flex test, aero test etc comparing bike from China, Bikesdirect, trek. cannondale, specialized . We know tires effect the ride quailty more than most frames, I would really like to know the difference between $500 frame and $5000 frame. Not opinion but data. I bet there is a difference I want to know how much.
What bikes specifically would you like to compare?
Buy them and pay for the wind tunnel time. Then you can figure out if the company that stole another’s research and development efforts did a good job of copying the design or not.
surprisingly not a terrible bike if you are small. pretty uncomfortable if you are >= 6’
got it, I don’t think a versa goes for 8k either but I could be wrong
the notion that a rebel is equal to vlx or a Harley isn’t argued because its dumb. A 500$ bike may be safe and functional but a 3000$ bike will be an upgrade in many areas. Same with cars, a base model versa vs an Altima? I mean its easy to argue top end not being much of value but base to mid point? I think mid point in tri bikes being 3kish? That’s what I see at most races.
A guy t-boned into a stopped pickup in front of me in a race several years ago. He was riding a “carbon” bike from an online retailer who sells their bikes for the cost of the grouppo. That thing snapped in half clean at the top tube and down tube. They were nice clean snaps with sharp edges, not fibery like you would think. Sure that’s anecdotal evidence, but I think it shows a difference.
if were going to have a car in there, lets use a car people actually want to own… i’d be willing to bet that no one wants to own a versa, if they even own it. Lease it specifically because its cheap and all they can afford, or buy it because they haven’t tried any other cars and it was the cheapest on the lot.
lets continue this analogy. At any bike shop there are bikes ranging from $200 all the way to >$5000. At a Nissan dealer, there are cars ranging from 10000 (versa, couldn’t find one for 8000) all the way to 120000 (gtr w/ options). VERY FEW, if any people end up getting the 200, or even $500 bike, usually because theyre crap. I would know, i have a Fuji Newest 3.0 from Performance, $450. Same way VERY FEW, if any people end up getting the basic car at a dealer, even if they went in going for that. most people getting a nissan car at least get a sentra( 15000+)
clif notes: no one wants super basic. more money gets you more performance, safety, and reliability
I want and own a super basic car. It means more money can be spent on things like bikes. A car is just a thing I sit in to take me to work and get groceries. A bike is a means to enjoyment.
I’m not necessarily siding with the OP, but it would be interesting to know the life cycle cost of a bike.
The P2 for example has been around for a while. R&D and the molds are the upfront costs. Manufacturing is a constant. Each P2 that comes off the line is cheaper to produce than the previous. It would be interesting to know what this cost is. Probably is cheaper than $500.
*I totally realize I’m simplifying a complex process. Nearly my entire understanding comes from “econ 200” freshman year of college…and I think I got a B
I’m not necessarily siding with the OP, but it would be interesting to know to life cycle cost of a bike.
The P2 for example has been around for a while. R&D and the molds are the upfront costs. Manufacturing is a constant. Each P2 that comes off the line is cheaper to produce than the previous. It would be interesting to know what this cost is. Probably is cheaper than $500.
He is not talking about a P2, he is talking about a $10K “superbike”.
In your above scenario, you are dealing only with a frameset, not a complete bike.
What a product costs to produce can be vastly different than what it actually costs a manufacturer. R&D, testing, marketing, sales, and about a zillion other things all add to the final cost of a product. So while it may only cost $XX to pop a frame out of a mold, it actually costs a supplier $XX+YY to get the product to market.
Higher margin products are often used to subsidize lower margin products. So assuming that the P2 is a high-margin frame (based on the idea that the tooling has been amortized and paid for, etc), Cervelo may well be using it to keep costs lower across the other frames, but still creating a balanced product portfolio.
People often forget that the bike business is built on a multistep distribution model, and each step along the way requires that a company make some profit. Factory produces the frame at a price higher than its cost, Supplier then sells it do the dealer at a price higher than its cost (the price it paid to the factory) and the dealer then sell it to the consumer at a price than its cost (the price it paid to the supplier).
To use even, simple numbers let’s assume that each step along the way, each company in the process has a 50% margin. So if it costs the factory $250 to produce a frame,it sells it to the supplier for $500. Supplier then sells it the dealer for $1000, retailer then sells it for $2000. And that is just a frame, not a bike. Now, margins in the bike biz are not 50%, but the example helps illustrate why bikes cost what they do at retail.
I know many of the $500 frame companies (well, they are not companies coz they are just a couple of guys with a screen name) are actually making more money than many proper western bike manufacturers that invest in R&D, who may well be struggling. But the fake pinarello guys are making even more, in a way why porn industry is making a lot.
It’s very very very tempting for the consumer who doesn’t know much about the manufacturing process and R&D to think manufacturers are ripping them off. R&D generally involves going back and forth on the design, modifying moulds, or making new moulds, doing many tests that destroy perfect good carbon frames one after another, hiring educated and trained staff. Just burning money, really. Plus they also have to pay for IP protection, corporate management and marketing, QC, etc. Truth is, bicycles, frames, or bike parts have much lower profit margin than many products we use in life. A $8000 car is equivalent of $300 bike.
I run a bicycle company now and the profits we make, even at a level that we consider a success, is laughable at best compared to my previous jobs.
I’m not trying to pick an argument about why bikes cost so much at retail, or really any argument at all. In fact I think we agree. I was referring to your “XX cost” being below $500.
I had forgotten about the smaller margins on the super bikes compared to the “budget models.”
I think its interesting to see how the pie gets sliced up. Cervelo gets x amount of the total p2 pie, but to break it down further, x1 amount of the pie goes to funding the p5.
and in the end the price of a thing has no direct relationship to how much it costs to make it.
A thing may cost a million dollars to make, and even at a buck of five nobody wants it.
Conversely if you can make a thing for a dollar that everybody must have, and nobody else can figure out how to make it, you can charge a brazillion dollars.
and in the end the price of a thing has no direct relationship to how much it costs to make it.
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Exactly. A company that determines its price based solely on the cost of the product has pretty poor management, or fights based on price alone.
I have never seen an industry like the bike biz where people worry as much as they do about the cost of bikes, or think they should be able to know what the costs are.
I dunno I see it all the time.
Econ 101 should be taught in grade school.
I have never seen an industry like the bike biz where people worry as much as they do about the cost of bikes, or think they should be able to know what the costs are.
