Bicycles (mid to high end) tend to carry price tags that rival actual motorbikes… in many cases highly engineered, technologically advanced motorbikes that are able to reach speeds in excess of 300km/h, with handling to match.
Please explain. There has to be a reason which I am clearly missing.
Bicycles (mid to high end) tend to carry price tags that rival actual motorbikes… in many cases highly engineered, technologically advanced motorbikes that are able to reach speeds in excess of 300km/h, with handling to match.
Please explain. There has to be a reason which I am clearly missing.
Yeah it’s insane. It simply comes down to what people are willing to pay. If people are willing to part with $15k for a bike, then that’s what a bike company will set its pricing at. In Australia the base model P2 (105) jumped from $2900 to $4700 and no-one blinked an eye. Cervelo price their P5 frameset at AU $8k. I reckon there’s about $400s worth of carbon-fibre in a frame. There’s other costs like R&D, but with minimal changes with some models over the years, it can’t amount to much. And look at disc wheels, some companies asking up to AU $5k and smaller companies have similar products for $1k. There isn’t $4k difference between an ENVE and a Prime/Ron etc
Bicycles (mid to high end) tend to carry price tags that rival actual motorbikes… in many cases highly engineered, technologically advanced motorbikes that are able to reach speeds in excess of 300km/h, with handling to match.
Please explain. There has to be a reason which I am clearly missing.
Yeah it’s insane. It simply comes down to what people are willing to pay. If people are willing to part with $15k for a bike, then that’s what a bike company will set its pricing at. In Australia the base model P2 (105) jumped from $2900 to $4700 and no-one blinked an eye. Cervelo price their P5 frameset at AU $8k. I reckon there’s about $400s worth of carbon-fibre in a frame. There’s other costs like R&D, but with minimal changes with some models over the years, it can’t amount to much. And look at disc wheels, some companies asking up to AU $5k and smaller companies have similar products for $1k. There isn’t $4k difference between an ENVE and a Prime/Ron etc
Yea, I guess if people keep paying those prices (which they clearly are) then bikes will keep pace with that. Despite these crazy prices people are spending the money. Supply-demand I guess.
I was talking to my cycling buddies about this a few weeks ago as well…
When I started in the sport, about 5 years ago, an entry level bike would be 1500-2000 Euros new (let’s say aluminum frame, carbon fork, 105 group). A mid-level bike (full carbon, Ultegra (mechanical), ok-ish wheels) was 3000-3500 Euros, one with Ultegra Di2 4500-5000 and a high-level bike (full carbon, Dura Ace Di2, good wheels,…) was 7000-8000 Euros.
Nowadays that mid-level bike with mechanical shifting is already at 5000 Euros with the only difference being you might get an integrated bar/stem combo and you possibly have all the wires/cables routed internally what might not have been the case 5 years ago… A bike with Dura Ace Di2 and good wheels is going to cost 10-14k…
My Cannondale Systemsix with mechanical Ultegra was 4000 Euros new 2 years ago and now it’s 5600 Euros, only difference being it had Fulcrum DB400 wheels in it while now it has Vision Trimax 55 wheels, mine has the Vision Metron 4D stem/bars and now it has the KNOT stem/bars… I don’t see how that’s a 1600 Euro upgrade…
There are examples of fairly priced bikes, for example Giant TCR Advanced Disc; $3100 with Ultegra and carbon wheels, $2300 with 105 and alloy rims
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I blame it partly on road cycling. Huge surge in popularity over last ten years or so. More people take up the sport, including a lot of high earning mamils who don’t blink twice at paying top end prices. That then puts the manufacturers into a competitive spiral to meet the consumer ideology that expensive equals better. Prices of every model below also get pushed up accordingly. It’s even proliferated into lycra and the current price of top end bib shorts. I don’t blame the brands, they’re a business and function on profit and shareholders etc. Essentially fashion came into cycling and the landscape has been irrevocably changed.
Mountain bikes prices are just as crazy (maybe even crazier). I bought the top of the line S Works Epic World Cup used in 2003 for $2500. New at that time was $4700. Can pay over $15,000 for one now. Googling why so expensive: “Every part of a S-Works bike is delicate and it must be efficiently aligned with the other parts. Its frames, wheels and other parts must be in tune in order for it to be a great bike! That is why it is so expensive; any mistake in servicing it may bring down its value and usefulness.”
The carbon bits aren’t the biggest problem. Integration comes at a high price - all the little rubber and plastic bits to fill in gaps and make the bike look smooth have high mould costs. Unit cost of a plastic part is low but that doesn’t carry through all that well when you’re only talking a couple of thousand units over the product lifetime to amortise the mould cost.
A P3C had some cable stops and a seatpost as proprietary parts.
A P5D has that, plus fork, the entire cockpit, bento box, cover in front of bento, aero bottle, internal Di2 bracket
Now the expectation has become that bikes are designed as systems - which means a heap of those proprietary bits and a lot higher cost for pretty limited benefit.
Right now you also see supply constraints, will not help either. But there are more budget friendly options such as giant and canyon (canyon has however bumped prices up a lot when they went disc wheels).
But i guess if there was this HUGE market for cheaper bikes someone would come in and try to capture it?
I guess that is what e.g. premier tactical is trying to do.
A high end Motorcycle is cost much more than $15K
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A high end Motorcycle is cost much more than $15K
In their defense, they didn’t actually say High End Motorcycles, they said “highly engineered, technologically advanced.”
The Yamaha YZF-R1 with a top speed of 300kph is $18,099, while the YZF-R3 with a top speed of 180kph is $5299. But you are correct, the top end Yamaha motorcycles are around $26,000.
“Every part of a S-Works bike is delicate and it must be efficiently aligned with the other parts. Its frames, wheels and other parts must be in tune in order for it to be a great bike! That is why it is so expensive; any mistake in servicing it may bring down its value and usefulness.”
What a load of shit. You think the alignment of the parts is what makes the bike expensive?
“Every part of a S-Works bike is delicate and it must be efficiently aligned with the other parts. Its frames, wheels and other parts must be in tune in order for it to be a great bike! That is why it is so expensive; any mistake in servicing it may bring down its value and usefulness.”
What a load of shit. You think the alignment of the parts is what makes the bike expensive?
It seems like they are quoting an article about S-Works bikes and why they are expensive. If you search for that exact phrase you will find it lots of places, so maybe it’s in the S-Works PR info.
I’ll be honest, reading through one of those articles, I can’t quite tell if it’s satire or not.
Mountain bikes prices are just as crazy (maybe even crazier). I bought the top of the line S Works Epic World Cup used in 2003 for $2500. New at that time was $4700. Can pay over $15,000 for one now. Googling why so expensive: “Every part of a S-Works bike is delicate and it must be efficiently aligned with the other parts. Its frames, wheels and other parts must be in tune in order for it to be a great bike! That is why it is so expensive; any mistake in servicing it may bring down its value and usefulness.”
Whoever wrote that S-Works price justification is mostly full of $#!t. It’s not that there’s no truth in that assertion, but that it’s also true for every other bike and every other complex mechanism to a greater or lesser extent. Bikes are not very high on the complexity ladder. They have relatively few parts, that are relatively simple in form and function. Servicing which is mentioned here as though it were a huge concern, is hardly rocket science. Yes, when you try to optimise a bike, like many mechanisms, you make everything more critical. Tolerances come down, and required expertise goes up, but I don’t accept that typical mid level bikes are at a level to justify the costs currently associated with them. I think it’s a victory of marketing over reality. The commercial purpose of Halo bikes is not primarily to drive innovation, or to to sell lots of high end bikes. It’s to provide a high priced option in contrast to which the mid range pricing seems more reasonable. This isn’t specific to the cycling industry. It’s standard practice, and it works. We don’t place a value on things objectively. Value is based on comparison to other things.
Part of it is that we are framing our experiences perhaps in the wrong product range. I think in the past the delta of “functional name brand tri bike” and “pro race team bike” was closer in price to the point we deluded ourselves a bit.
I think just now it’s getting as far apart as the world of auto racing always has been where the true racing machines are pretty unreachable for most hobbyists, and you have to go the “DIY” route to go racing. Even the DIY route gets expensive.
I say that to equate to the bike world that if you want to do the same, it’s the equivalent nowadays of building up your own open mold Chinese tri frame and going from there…if it matters that much to you and you can’t afford it otherwise.
Now, otherwise, I feel like there may be a “come to Jesus” moment for the big brands pushing the base 105 model mechanical stuff to what used to be superbike prices when folks finally go “aww hell no”
This is already really driving the open mold wheel and frameset market harder than long ago.
IMO, from my keyboard view.
Yes I know it is a load of shit. I said “when I googled…”
Agreed. The amount of abuse and punishment a MTB takes (and can take) is amazing. There is nothing ‘delicate’ about a modern MTB, including repair and maintenance (save for the carbon).
Bikes are stupid-expensive, but then again so are some pickup trucks at $80,000.
I think that consumers shopping new WANT a higher priced bike. The marketing on these bikes does a good job of convincing us that we need all the latest features and frames. The kestrel talon is an “affordable” entry level tri bike. How many of those do we see at tri races?
Another reason could be the used bike market. For people who are shopping for a deal, a 3 year old bike could be 1/2 the price of a new one, with virtually all the same features. Manufacturers can’t compete on price with that, so I think they lean towards marketing to explain why the premium on a new bike is worth the increase in price.
It’s sort of like sedans in the US car market. Manufacturers don’t make much money on a sedan, so they need a huge volume to make up for it. But most consumers want the bigger, better vehicle. The volume isn’t there to make money on the low end, so manufacturers stop making it. No more Ford Focus. No more Chevy Cruze. No more Chrysler 200. And no more entry tri bikes that are priced at an entry level. The low end is squeezed out of the market.
I would expect the profit margins to be quite high on the high end bikes and that helps cross subsidize the much lower margins in the high volume categories. Most of the bike companies are private so hard to know how much profit they make. Giant is one of the few public companies. The Giant parent company, which I assume is the bicycle company, had an operating profit margin of 4% in 2019. Giant and it subsidiaries had a margin of 7.5%. Are Trek and Specialized margins higher? I doubt it.
I would expect the profit margins to be quite high on the high end bikes and that helps cross subsidize the much lower margins in the high volume categories.
You would be very wrong. The margin on the high end stuff is the same or lower. Lower? Yes, often the high end bikes take longer to sell, require more high touch service and often require significant discounts off MSRP over entry-level bikes. High demand, low supply, top end race bikes is a historical anomaly. Especially in TT/Tri bikes.