so i went to my bike shop today and i was talking to one of my firends who works there. He said that tubes cost them .10 cents each if you do the math when you buy the whole bundle. thats cheap. cause i hate buying tubes that are like $7-$14. whats the amount a bike shop pays for the bikes in the shop and how much do they make from it.
bike shops factory price
- Thread starter nycurse
- Start date
eleventy billion dollars. tool.
bike shops make close to zilch on frame sales. accessory/component sales are what keep them in business.
bike shops make close to zilch on frame sales. accessory/component sales are what keep them in business.
Take three deep breaths.
Now:
Learn and take the time to write.
Now:
Learn and take the time to write.
DHS said:
yup. poor ettiqeutte.
edit: i did give a legitimate answer to the question without revealing industry practices/secrets/voodoo magic.
DHS said:
Some of us DO. This is not secret info and I dont recall taking an oath of secrecy when I took my job. Anyone can get this info if they look for it.
Holy Crap these type of threads come up alot here huh.???...for cripes sake if you go out to eat are you getting ripped off when it is $19.50 for a $5.00 steak.????...this is a free country if you do not want to spend $12.00 to $15.00 for a part don't...it is pretty simple.....nycurse said:
If you want cheaper prices, buy all of your own tools, all of your own small parts and learn to do all of your own wrenching, then shop online.nycurse said:
If you want the convenience of someone being able to help you when you've got a broken part, or not having to own a bunch of expensive tools, or not having to spend the time to troubleshoot when you've got a problem, then you have to live with the fact that an LBS has a big overhead and needs to adjust their profit margins accordingly.
Is your LBS owner driving a Ferrari and living in a mansion? I doubt it. I think you'd be shocked at the profit margins of a lot of things you buy every day.
No way tubes are that cheap. They're pretty cheap, but you use the higher mark-up on stuff like that to fund the measly profit margin (less when you factor in labor to build the bikes, sell the bikes) they make on bikes.
No one ever opened a bike shop to get rich, it's a labor of love for most...
James
No one ever opened a bike shop to get rich, it's a labor of love for most...
James
I make lots of it. My car for some reason doesn't run on it though...vamkie said:
nothing's more insulting than dealing with a homeowner who's making a descision on accepting your bid or not.
and they ask you what your material costs are.
especially when it's been made clear to them that i charge them no more than what i pay+interest on the account.
what they're really doing is fishing for your labor rate.
which ultimately means they're begrudging you making a profit so you may pay your bills and enjoy a meager standard of living.
so when you're fishing for the dealer cost, you're doing the same thing.
try asking your local power co. what their cost per killowatt hour is.
and if they don't laugh in your face.
tell them you're only going to pay so much over that amount.
or ask your local gas station.....
and they ask you what your material costs are.
especially when it's been made clear to them that i charge them no more than what i pay+interest on the account.
what they're really doing is fishing for your labor rate.
which ultimately means they're begrudging you making a profit so you may pay your bills and enjoy a meager standard of living.
so when you're fishing for the dealer cost, you're doing the same thing.
try asking your local power co. what their cost per killowatt hour is.
and if they don't laugh in your face.
tell them you're only going to pay so much over that amount.
or ask your local gas station.....
try cost to the shop more like $3 and retail at 5-7. Who ever told you that price is dumb and has no concept of how a retail store works. When you factor in the cost of overhead - rent, utilities, payroll, storage, etc- the shop is probablt only making $.10 per tube.
Just James said:
actually, yea. they are (shop i worked at got 'em for about 90 cents each). when you buy several hundred of them at a time. if you think about it, say, trek for instance (well bontrager, same thing). They make tubes. A LOT of tubes, sold nationwide to every single shop that carries trek. Lets say that number is 500 shops (but in reality its probably way more). And on average, between flat repairs and selling spare tubes, each shop uses a 20 tubes per day (a reasonable number - when I wrenched this is about what we'd go through daily). Now lets see basic math... 10,000 inner tubes a day, 3,650,000 tubes per year. In terms of logistics and production... yea it probably costs way less than 90 cents to make a tube when you're producing several million of them.
a$$ or grass... nobody rides for free.
If bike shop mark up pisses you off so much, you don't even want to know how much groceries, clothing, home supplies, building materials and pretty much every other industry marks stuff up. Some of these things are marked to upwards of 300% above cost. Doesn't make your bike shop seem to bad now does it.
Being in the automotive industry I find these threads amuzing.
Especially the folks that are saying... Oh let them make their profit, you shouldn't have to know what their x-cost is or their y-cost.
Just because you KNOW the cost or want to know the cost doesn't mean you are complaining about price. It just makes you an educated consumer.
Especially the folks that are saying... Oh let them make their profit, you shouldn't have to know what their x-cost is or their y-cost.
Just because you KNOW the cost or want to know the cost doesn't mean you are complaining about price. It just makes you an educated consumer.
MTB_Rob_NC said:
agreed. i think that the purpose of this post was just that. being an educated buyer and getting a good deal not trying to low-ball his bike dealer on tubes. its funny how the last 13 posts have "been buck up princess" it's too bad that everybody just takes a post the worst way possible and make a huge deal about instead of giving appropriate information. i mean that power mac thread and this one are just accusations now when im sure no malice was intended. could we all just think happy thoughts now:love:
I agree 100% but I mark materials up 30% and never budge from that. Ordering/picking up costs me money/time and I pass that along. The way I look at it, you're losing money on materials.dhbuilder said:
I also bid by the job to avoid having to justify every minute of my crews time.
If the customer wants store pricing they can pick it up but I will charge them our hourly labor rate for each guy if they make a mistake that results in production delays. I also don't warranty materials I don't supply. That said, 99% of my customers have me take care of materials.
In regards to the thread at hand, retail cost is the only thing that should matter to a consumer. If the price is worth the service/product then you can approve by purchasing or call BS by walking out.
By definition what the customer pays IS "retail"dan-o said:
dan-o said:
Being educated puts you in a better position to make that call.
Wether you are buying a car, house or tube.
This site could be "A little knowledge is dangerous". LBS markup is highly contested, but it is the way shops stay in business, by making a profit.
Frankly, I would like to hear some mail order employees discuss their markups, and then I could speculate about being ripped off.
Frankly, I would like to hear some mail order employees discuss their markups, and then I could speculate about being ripped off.
When you think about any retail store......last I checked a bicycle shop is retail.....there are things they make nothing on and things that they make $$$ on...
It doesn't take a genius (or atleast I thought) to figure out what they make coin on. Complete bike sales they make the min. on because that's how that market is set up. It's probably been like that for so many years it's not funny...
Get a custom bike built.....with all parts you buy through the shop...and any decent one would give you some $$$ off for spending so much with them.......even some of the labor maybe (if you're a good customer) as they'll make TONS of profit off a full build and can offer you a small discount. They know it makes you happy thinking you're getting a discount.......and it makes them happy knowing that they'll give you $100 back (could be less/more) but they are making their profit margins off parts.
This doesn't just happen in the Bike world.......all kinds of different sectors do this. It's just how business works.
I imagine shops make a good killing on Tubes for example. Have you tried to buy 5 tubes vs. 1, or 10 vs. 1. Most shops will cut you a deal if you wanted to buy 10 tubes (same with some online places). More is better in that sense. But 99 out of 100 people just need that 1 tube......so they make their $$$. That is fine. That is their job.
But seriously......as a shop (or any store) the bottom line is the bottom line. If they can do it they probably would to earn your business and get a new customer......but with the way prices are online it pretty much makes MSRP out of date. I know many people who had to adjust their rates for things they sell because if you can't compete with the internet......staying open is hard.
I don't consider anything at a LBS a rip-off. It might seem a rip-off to me considering I check the net for the best prices but to the average John Doe who goes into a store it's probably fine. You gotta remember if they sold everything to you at cost there would be no LBS.
It doesn't take a genius (or atleast I thought) to figure out what they make coin on. Complete bike sales they make the min. on because that's how that market is set up. It's probably been like that for so many years it's not funny...
Get a custom bike built.....with all parts you buy through the shop...and any decent one would give you some $$$ off for spending so much with them.......even some of the labor maybe (if you're a good customer) as they'll make TONS of profit off a full build and can offer you a small discount. They know it makes you happy thinking you're getting a discount.......and it makes them happy knowing that they'll give you $100 back (could be less/more) but they are making their profit margins off parts.
This doesn't just happen in the Bike world.......all kinds of different sectors do this. It's just how business works.
I imagine shops make a good killing on Tubes for example. Have you tried to buy 5 tubes vs. 1, or 10 vs. 1. Most shops will cut you a deal if you wanted to buy 10 tubes (same with some online places). More is better in that sense. But 99 out of 100 people just need that 1 tube......so they make their $$$. That is fine. That is their job.
But seriously......as a shop (or any store) the bottom line is the bottom line. If they can do it they probably would to earn your business and get a new customer......but with the way prices are online it pretty much makes MSRP out of date. I know many people who had to adjust their rates for things they sell because if you can't compete with the internet......staying open is hard.
I don't consider anything at a LBS a rip-off. It might seem a rip-off to me considering I check the net for the best prices but to the average John Doe who goes into a store it's probably fine. You gotta remember if they sold everything to you at cost there would be no LBS.
Not a mail order employee.........but as where a LBS banks on the high mark up items mail order thrives on volume. You figure your local bike shop depending on location could sell a high end DH frame.......every month........2 months maybe? So we're talking 4-6 a year if you're lucky? I imagine a place like go-ride.com (also a store too) sells plenty per month.sanjuro said:
A better example I guess would be forks. Mail order sells high end forks for less than the LBS does.....but where the LBS sells 1 a month at full markup........the mail order sells 50 of them at their discounted price. It's easier for pricepoint.com to buy 500 888's and then discount them heavily than the LBS to buy 1 or 2. Not much room for a discount of any kind there.
Oh, I know how much they cost, I've been in the industry for 14 years or so, on both the retail and wholesale sides. I was saying that tubes weren't 10 cents cost.jonKranked said:
The tubes that Trek, Specialized, Giant, QBP, J&B, even Bell back in the day, sell are mostly made by the same people. So when you have Cheng Shen or someone huge in China with a giant factory making nothing buy butyl tubes, their cost is gonna be pretty low, and even factoring in the box, graphics, the little rubber band, and cost of shipping them on a boat 12,000+ miles, they still cost those guys very little. They sell them to shops at a price where they aren't making a ton, but since most shops go through an incredible number of tubes per year, it's a big battle zone, who gets to supply a shop with rubber.
JJames
Spunger said:
Being a "retail analyst" of sorts I can give you a brief bit of advice that industries pay BIG BIG money to hear.
You aren't competing with the "internet." You are competing with another retailer. What does that retailer offer that you arent offering? What can YOU offer that they aren't? Why dont you have some kind of presence on the "internet?" The internet is just another media to drive customers to your products.
i was in the LBS yesterday looking at disc rotors. they didnt have any that fit me in stock, so he was letting me look through his catalog. After a bit i asked him what he was going to charge, and he said, "see these prices, theyre what i pay, you pay double that."
first, he probably shouldnt have let me browse his catalog, but second he shouldnt have told me i was paying double.
first, he probably shouldnt have let me browse his catalog, but second he shouldnt have told me i was paying double.
It could have been something more "rip-off" able like a high dollar part.....not a tubesanjuro said:
I'll agree to that one.Also (not to sanjuro) but in general shops aren't alive because of the DH/FR/XC crowd that's in that speciality section.....it's the guy who's getting a bigger bike for his 7 year old.......or the student who needs something to go to school........or the soccer mom who needs some accessories for her kids bikes. It's things like tubes/tires/locks/lights/helmets and all that sorta stuff that keeps them going......not the sale of a fork or frame (though it's a nice chuck of change) they didn't intend to make that their "bread and butter" of sales.
You always have to look at things in a way that makes you like every other person out in the world. It's like say auto shops stay in business doing pistion ring replacements.....or installing cam shafts......LOL Noooooo.....it's the fluid change/tire rotation/balace/brakes/leaks that keep them going....and once in a while they'll get that big job that brings in some good $$$ but also takes time. Look at Jiffy Lube.......same deal mail order vs LBS.....Jiffy lube has what, 2-3 bays for oil changes and can probably do 2-4 changes per hour on each bay..(so figure 6-12 oil changes) an hour when the mom & pop auto garage has 1 lift and can do 2-3 an hour?
You get the point
The last special order I did the dork was all protective of the BTI book.......so I had to sit and give him part #'s (which should have said I know what I want) and probably knew the price (or close to it) so I gave him 1 part # at a time and got a price for it. I was surprised though that his prices were close to what I would have paid online anyways with shipping so I was totally happy......but it made me think of how closely guarded he had that book!boostindoubles said:
The "you pay double that" atleast lets you know what all the parts cost in the shop (for the most part).
I think the key with LBS's is the friendliness which should part of any good store.Spunger said:
You don't go into Walmart and start discussing markup. A bike shop is typically run and staffed by enthusiasts who want to make their customers happy and make a little money doing it.
Compare it to motorcycle shops. Most are exactly like car dealerships, and whatever the computer spits out for a price is what you pay, no discussion.
Most bike stores are mom-pop shops, and not every price is stored in the computer, and you certainly can discuss price.
I will give you an example of small business vs. big. I lost a dvd from a small video store around the block from me. I had thought about switching to Netflix anyway, but the owner, recognizing that I am a regular and good customer, did not charge me for the lost dvd.
Obviously I remain a loyal customer, and I suffer when all the copies of "Underworld Evolution" are checked out.
You have to factor in the shipping, which is usually at least $10 on something like a rotor, and if there is anything more, probably more like $20 or so, unless they hit the free-shipping price which most distributors have. It's easy to think that the shop is going to take that 100% markup (keystone) and put it all in their pocket, but that's not true.Spunger said:
Sanjuro is 100% correct that it's the customer service and expertise that you get at a shop that keeps you coming back, not the prices. Now we here on RM are more educated than the average consumer, most of us can install our own parts, which means that if you're looking for price, it's mail order. But they don't have (for the most part) a storefront to pay for, just a warehouse and a couple of phones.
For the average cyclist, the shop is where they go to have their questions answered, for advice, for service. I will be the first to admit that some shops haven't quite figured out that they have to up their level of customer service, but most are staffed by people making 20-100% less than they could in another job/industry, they're doing it becuase they love bikes. That's true for just about everyone in the industry. Sure, you can make quite a bit more doing something else, my buddy makes about twice what I make managing an office for a courier company, but he hates his job. Me, I decided a while back that I loved working with bikes, and have made that my career. I do well enough, and the perks are nice, but I'm not in it for the money.
I remember my old boss @ the shop once calculated that if he were paid hourly for the time he worked and the money he took home, he was making about $2/hr.
10+ years later, he's still at it. Making a bit more since he's improved the store, but he's still happy.
Sorry for the rant...
JJames
All materials from nails to wood are marked up 30%, from retail price before my discounts, which vary from 10-25%. I don't vary it by cost and I charge the customer whether I needed to buy new materials or used surplus from a past job. Core items for me (like tubes/cables/housing for a shop) are bought in bulk with the costs estimated per job. I charge a flat rate for various supplies related to completing the job (the IBD equivalent of shop rags, solvent, repair tags)that equates to about a 40% markup.sanjuro said: