Anyone know what the markup is on a bike like the Dual? If it retails for $1599 what does the dealer pay?
J
Don’t know but here is some information. I wanted a Dual but they didn’t have my size at the factory, so my LBS guy ordered a P2k for me and sells it for $1,800.00. List is about $2,199. I assume he made something, say $200, so that is a $600.00 mark-up. You can do the percentages. They might not carry down to lower priced products, but there is an idea, anyway.
that is information that you shouldn’t be able to find out here. In fact, if a dealer divulged that info. it would likely be the end of there being a dealer for that brand.
In the end the dealer pays about 94-96% of that price.
-SD
94-96% of the retail price? Or where you responding to the other post about the P2 sold at $1800? I am very curious what the markup in the bike market is…
J
**I am very curious what the markup in the bike market is… **
Why?
No offense, but I don’t understand why so many people seem so curious about that. The implication always seems to be that the LBS is ripping us off or something. They’re not. How many rich bike dealers do you know?
I have to wonder what the point is as well.
If the dealer makes $60 on a $2100 bike or $600 on a $2100 bike. The question still boils down to whether or not the bike si worth $2100 to you. If another dealer gives you a better price, great, but it still has nothing to do with the markup either adds.
No the exact opposite is true… I wonder what the markup is because I wonder HOW the LBS makes it. Normally in this economy of the Web there is often a significant discount on line. Not true, at least from what I have found, with tri bikes like Cervelo. Nothing wrong with wanting to find out what the margin is.
The bike shop I used to work at averaged 25%-28% mark-up on bikes.
Components: 25%-35%
Tires Tubes: 75%-100%
Accessories: 75%-100%
Clothing: 75%-100%
Whats the big deal in knowing this. I can find out the invoice price for a new or used car before I purchase one. Bottom line is they are in business to make a living and they have to mark-up items. Trust me when I tell you this because I know from experience, that most bike shops are lucky to break even at the end of the year. After rent, utilities, labor, insurance (ect.) there is not much left for the owner. I really think they do it for the love of the sport. Did you know that department stores get as high as 1000% profit on some clothing items.
I’ll be happy to give you full disclosure on all wholesale prices. Just send me your last five years tax returns and your W-2’s will full disclosure of your retirement accounts. Then I’ll post them along with your name and address and social security number on this forum.
Well, put it this way. If I depended on the bike industry to make a living- I couldn’t.
Yes, the LBS has to stay in business. Yes, they are entitled to a mark-up, and as much as they can get. But to say that consumers should just remain in the dark, is, I think a little too far the other way.
I got the deal on my P2K because Cervelo could not deliver a Dual. My LBS guy set the $1800 price. I didn’t negotiate it down to that, or try to take food out of his mouth. I need him. My LBS guy even offered that if I could get a Dual on the Internet, he would assemble it for free.
Yes, successful shops get about 6% profit, not so successful ones can survive around 4%, shops below that number don’t last long, or do and incredibly high dollar volume and see gross dollars (thanks Cannondale) as their opportunity.
Owning a bike shop isn’t fun, running one can be until you become responsible for the bottom line.
getitcheaphere.com is a one way that the internet has delivered an unending line of consumers wanting to pay as little as possible for a product exactly what they want.
-SD
Doesn’t really matter does it? If you want to pay a lower price, offer the lower price. He can either take your offer or leave it. What he makes shouldn’t matter either way.
When consumers were able find out what a new car invoice prices they became bogus. Now there is “dealer holdback” or “incentives” not listed on the invoice price. That is why they offer to show you the invoice, because it’s meaningless.
I live in Livermore, Ca. Our local bike shop Livermore Cyclery supports almost every local race or athletic event in this area. I have perchanced 3 bikes (2 kids, 1 mtb) from them in the past 2 years and feel like I got a fair price. When you take into consideration everything they have given to the local community than I feel like I am getting a great deal. Add to that the advice and adjustments and I know that the true value of what I received was better than any deal I could have found on the internet.
Price does not equal value.
Dave
A person can find out what dealer holdback is and what hidden incentives are out there, with little problem.
Although I do agree with you in the rest of your statement.
When I was shopping for my bike, I shopped around, looked and rode various models and found out the price on all of the bikes, then I went with the place that offered a combination of the most help, best fit/feel, price. One shouldn’t only take price into consideration with a purchase such as a bike. Heck my ass is going to be on it for hours and I want that to be the best experience I can have. 
Well said, thank you.
-SD
I might be a shop’s best customer because of this but I never haggle: I ask for a price, if it works with my budget I go for it, if it doesn’t I pass, I never EVER ask for a ‘deal’ or ‘discount’ or whatever.
This is also one of the main reasons why I bought a toyota rather than a subaru a few years ago: toyota here has firm no-haggle prices (set by toyota, not by the dealership) which works perfectly with me.
Knowing what a dealer’s margin is is of no consequence: they could be having an 80% markup or a 10% markup for all I care, if they offer a product I want, at a price I am willing to pay, and with the level of service I expect, I’ll buy it, if not I’ll go somewhere else.
On a related note, a book that should be required reading for anybody trying to buy anything is this:
The Power of Persuasion: How We are Bought and Sold.
by Robert V. Levine
(and for anybody that believes that you can actually find out exactly what a particular car costed to a particular dealership I have a bridge I’d like to sell…)
jwkidd3,
When I bought my first bike, a Bianchi, my LBS had to order the bike because they did not have my frame size in stock. When the bike finally arrived and they called me to pick it up, I asked them if they had any bike boxes that I might have to use to ship it if I encountered the need to do so. I was directed out back to their dumpster.
I was very surprised to find the box for my bike on top with the C.O.D. UPS shipping invoice still attached to the carton. Needless to say I couldn’t resist looking at it. It showed the cost as 1/2 the suggested retail price I was asked to pay for the bike. The dealer had been generous and allowed me a $20.00 discount off the list price. After discovering this information, I did not feel too bad for him for selling me the bike at his “cost”. I had paid over $1,000.00 for the bike. This was without any extra accessories, i.e. bike computer, etc. It was also with the stock saddle. Although I later changed the handlebar to a 44 cm because of my wide shoulders, the dealer felt that the 38 cm bar that came with the bike would be just fine for me. He was a F.I.S.T. certified fitter so I was sure he was right. I was also buying my first real road bike so I probably wouldn’t know the difference. Hey, maybe I wouldn’t even stick with the sport or so the dealer may have felt. Would any of his choices have influenced the outcome?
Outside of Schwinn/Pacific inexpensive IBD bikes, there is no manufacturer that can offer a 50% margin on their products. Bianchi certainly never has. Perhaps the COD tag was not the total for the bike, but the outstanding cost for delivery. I have seen many COD tags that do not reflect the value of the product sold inside the box. If you saw a published MSRP and the invoice read HALF of that value, something is amiss.
It really is 4-6% all told, perhaps less on time consuming road bike sales with high dollar prices.
-SD