Expensive bikes - how do they justify the price?

[Berlinbybike]

can anyone shed some light on how the prices of top end kit are justified? I know little about composites but have always suspected the price of top-end frames (Halo bikes[?]) has little to do with the cost of production. This is not some polemic to upset those of you who may have bought such equipment, just a plea for a little objective information to inform my next bike purchase. I have a Trek OCLV from about 10 years ago and the current price of their equivalent offering is rather more than twice what that cost. I cannot see the reason. Can you?

 

[Alembicbassman]

There's a number of reasons. Research and development into new materials, manufacturing techniques, design, factory tooling up costs for a new range is high.

Volume sales, the manufacturers know they will sell a large number of entry-mid level bikes so the above costs are spread.

Technology eventually trickles down to the entry level bikes, but by then the R&D has been covered by sales of the top end stuff.

 

[Nebulous]

Advertising plus the cost of sponsoring teams all have to be factored in, but like many luxury goods the price relates more to what the market will bear than production costs. I'm a fairly recent convert to cycling, but still haven't come to terms with the pricing. Most things can be picked up as occasional bargains, but shifters seem to be particularly difficult to get at anything I regard as reasonable.

 

[gavintc]

And I suggest that supply and demand determines prices. When demand is high, prices are classically raised until the demand meets the output from the suppliers.

Cycling is now more popular, ergo, prices can be raised.

 

[smokeysmoo]

All the above, but the major factor of bike price is the components.
One of my bikes can be had for under £1000, but the top spec version is £2600 yet apart from the colourway the framesets are identical, but the £1000 bike has Shimano 105 and the top spec bike has Shimano Dura-Ace. If you actually worked out the cost of a bike based on the cost of it's components they usually work out cheaper to buy as a full bike. I've always figured this to be due to the discounts the manufactures get from the component suppliers for buying in bulk.

 

[cyberknight]

Advertising plus the cost of sponsoring teams all have to be factored in, but like many luxury goods the price relates more to what the market will bear than production costs. I'm a fairly recent convert to cycling, but still haven't come to terms with the pricing. Most things can be picked up as occasional bargains, but shifters seem to be particularly difficult to get at anything I regard as reasonable.

+1 i wanted a RH shifter for my sram apex which is their lowest groupset (?) and i was looking at £200 fitted , you can buy the whole lot for £400 if you shop around.

 

[GrumpyGregry]

The prices are determined by marketing not by cost to make the bike(s). Therefore MAMILs drive the prices up because the price is whatever someone is prepared to pay.

 

[Garz]

There are some brands that are just dearer as they are purchased by people who want either quality/looks regardless of the price. If people stopped buying them then the company would drop the prices or go bust.

The average joe will tend to prioritise decisions chiefly on price/performance.

 

[fossyant]

You can but a top of the range Canyon with Super Record for just over £4k (you can't buy it in bits for that), but certain other 'marques' with the same components and you are looking at £7k - e.g. the Dogma 2 frameset is £4k on it's own.

Like anything, you pay for a name, but also R&D. Companies like Canyon do the prices they can by buying in huge bulk, and shipping direct.

 

[dan_bo]

What's a MAMIL?

 

[vickster]

Middle aged men in Lycra apparently

http://www.urbandictionary.com/define.php?term=Mamil

 

[GrumpyGregry]

What's a MAMIL?

It is more a state of mind really.

 

[Nantmor]

Have they started using OMIL as a term of abuse yet?

 

[Berlinbybike]

So -not entirely unsurprisingly- if you stick a prestige name on something quite ordinary you can charge an extraordinary price. I think it cynical -and short-sighted- to charge what the market can bear, rather than adopt a cost-plus model, but no doubt such a view is antiquated and naive in the world of me-first.

 

[Cubist]

So -not entirely unsurprisingly- if you stick a prestige name on something quite ordinary you can charge an extraordinary price. I think it cynical -and short-sighted- to charge what the market can bear, rather than adopt a cost-plus model, but no doubt such a view is antiquated and naive in the world of me-first.

It isn't just cycling though is it?

Beer, cameras, jeans, T shirts, underwear..... the list is endless. To some consumers the more expensive the pricetag the more the reason to buy it in order to consume conspicuously.