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I am in the process of building up a road bike and have been working with a LBS on the project. I purchased the frame from the LBS and have just began pricing out the components. I am finding the prices quoted by the LBS for some of the components to be excessively high. For example, I have decided on Chorus brake/shifters and was quoted a price of $410. I can find the same shifters online for $250. I understand that local shops cannot compete with online pricing but this seems to be gouging to me. Am I wrong in my assumption? I would really love to support the local store so if anyone can help me determine what a reasonable mark-up is I would appreciate it.
 

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They typically work on 30-35% margin from my experience. Just buy the shifters online. You are paying a premium for service, and if there is a warranty issue down the line. Even the big online guys are pretty good at handling warranty issues now-a-days though. I've probably opened a whole can of worms now with the LBS vs. online issue, but I feel that as far as value goes, you cannot compete with some of the stuff I've found online. I mean, I've found a guy who has '03 Duke SLs for $225 shipped, while my LBS has a 2003 Duke SL marked at close-out for $299+tax. When it comes to my money, I'd rather save a couple bux and get it online. However, if you get a set of shifters from your LBS, and there is a screw or cable missing, just go back there, and they will get it to you that day. If you buy something online (like when I bought Camelback from Nashbar, and the tube was kinked) you have to wait another week for them to get you the replacement. Sure, at first you may feel guilty about not using your LBS, but when it comes to your hard earned cash, you won't feel as bad saving a couple hundred dollars here and there. I would like to hear what other people have to say about the whole LBS vs. Online thing, because I would like to own my own shop someday (As I'm sure about half of you want to as well!)
 

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The market up is pretty excessive. The QBP/BTI price that is also crazy. For example, an XT derailer may cost $45 from QBP, meaning that the cheapest a bike shop can get it for is $45, and they have to pay for shipping as well, so the realistic price might be around $50, then mark it up 50-80% (normal, even 100% is not uncommon) and it costs $80 easy...

The same derailer at Jenson or Cambria might cost $43.

I find 100% markups to be pretty crazy, not reflected in a whole lot of other industries and areas, but they are very common in the bike world, when talking about components of course.


Bikes on the other hand are not marked up nearly as high....
 

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sonyisdope said:
Sure, at first you may feel guilty about not using your LBS, but when it comes to your hard earned cash, you won't feel as bad saving a couple hundred dollars here and there. I would like to hear what other people have to say about the whole LBS vs. Online thing, because I would like to own my own shop someday (As I'm sure about half of you want to as well!)
LMAO !!! You basically advise folks to buy online, and then profess to wanna open your own shop someday.....good f'in' luck, pal - I'm sure we'll be the first to hear your whining about "people buying parts online instead of from me and my cool shop..." because, brick and mortar retailers cannot realistically compete (pricewise) with online retailers. Good luck.....you'll need it
 

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Are you kidding me?

sonyisdope said:
They typically work on 30-35% margin from my experience. Just buy the shifters online. You are paying a premium for service, and if there is a warranty issue down the line. Even the big online guys are pretty good at handling warranty issues now-a-days though. I've probably opened a whole can of worms now with the LBS vs. online issue, but I feel that as far as value goes, you cannot compete with some of the stuff I've found online. I mean, I've found a guy who has '03 Duke SLs for $225 shipped, while my LBS has a 2003 Duke SL marked at close-out for $299+tax. When it comes to my money, I'd rather save a couple bux and get it online. However, if you get a set of shifters from your LBS, and there is a screw or cable missing, just go back there, and they will get it to you that day. If you buy something online (like when I bought Camelback from Nashbar, and the tube was kinked) you have to wait another week for them to get you the replacement. Sure, at first you may feel guilty about not using your LBS, but when it comes to your hard earned cash, you won't feel as bad saving a couple hundred dollars here and there. I would like to hear what other people have to say about the whole LBS vs. Online thing, because I would like to own my own shop someday (As I'm sure about half of you want to as well!)
You spew the advantages of online purchaxes, and then say you want to own your own shop someday? Please get real.
 

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Jm. said:
The market up is pretty excessive. The QBP/BTI price that is also crazy. For example, an XT derailer may cost $45 from QBP, meaning that the cheapest a bike shop can get it for is $45, and they have to pay for shipping as well, so the realistic price might be around $50, then mark it up 50-80% (normal, even 100% is not uncommon) and it costs $80 easy...

The same derailer at Jenson or Cambria might cost $43.

I find 100% markups to be pretty crazy, not reflected in a whole lot of other industries and areas, but they are very common in the bike world, when talking about components of course.

Bikes on the other hand are not marked up nearly as high....
First of all you show your ignorance of the entire retail/wholesale question by saying 100% mark ups are pretty crazy. The clothing you buy (non-bike stuff) is marked up well in excess of 100%, which is actually called a 50% margin, so that when you get them "on sale" the company still makes money. Most of the online parts houses buy in such quantity they get much better price breaks or that XT deraileur could be an OEM take off which is not quite the same as an aftermarket one. Or htey work in quantity over margin. Meaning they are happy with a 10% margin because they sell thousands of parts. Those sunglasses you got on sale for $40 that retail for $125, cost about 5 dollars to the company that produces them.....
 

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kellyinNY said:
I am trying to dertermine what typical mark-up should be at the local retailer.
Every part is different and unless you have their wholesale price list you will never know what their mark-up is. SO buy from your LBS or buy online but remember that the service is part of what you are paying for when you buy from your LBS
 

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damion said:
You spew the advantages of online purchaxes, and then say you want to own your own shop someday? Please get real.
Service, and a knowledgable staff are two strong aspects of a shop. The fact that you can try on shoes and helmets before you buy them is another. I realize that if you want to compete on price alone, you will get burned almost everytime. The only advantage of online purchases is price. That is it. When it comes to my broke-a$$, I will choose to save money over service. If I had money, I would probably choose other-wise. There are also many shops that have actual store fronts in addittion to an online store.
 

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kellyinNY said:
I am in the process of building up a road bike and have been working with a LBS on the project. I purchased the frame from the LBS and have just began pricing out the components. I am finding the prices quoted by the LBS for some of the components to be excessively high. For example, I have decided on Chorus brake/shifters and was quoted a price of $410. I can find the same shifters online for $250. I understand that local shops cannot compete with online pricing but this seems to be gouging to me. Am I wrong in my assumption? I would really love to support the local store so if anyone can help me determine what a reasonable mark-up is I would appreciate it.
60-100% markup depending on the item. Remember than ALL of the costs of doing business (shipping, rent, utilities, taxes, insurance, advertising, wages, etc.) must be covered from that before there any profit.
 

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VaNRS2 said:
First of all you show your ignorance of the entire retail/wholesale question by saying 100% mark ups are pretty crazy. The clothing you buy (non-bike stuff) is marked up well in excess of 100%, which is actually called a 50% margin, so that when you get them "on sale" the company still makes money. Most of the online parts houses buy in such quantity they get much better price breaks or that XT deraileur could be an OEM take off which is not quite the same as an aftermarket one. Or htey work in quantity over margin. Meaning they are happy with a 10% margin because they sell thousands of parts. Those sunglasses you got on sale for $40 that retail for $125, cost about 5 dollars to the company that produces them.....
they are marked up 100% from their first line supplier? I think not. Vendors do not pass those proffits on to retail, the vendors maximize their own proffits. The amount of proffit is inversely proportional to where the product is as far as from factory, to first wholesaler, to maybe a 2nd wholesaler, to the retailer...
 

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Knowledge always the key

VaNRS2 said:
First of all you show your ignorance of the entire retail/wholesale question by saying 100% mark ups are pretty crazy. The clothing you buy (non-bike stuff) is marked up well in excess of 100%, which is actually called a 50% margin, so that when you get them "on sale" the company still makes money. Most of the online parts houses buy in such quantity they get much better price breaks or that XT deraileur could be an OEM take off which is not quite the same as an aftermarket one. Or htey work in quantity over margin. Meaning they are happy with a 10% margin because they sell thousands of parts. Those sunglasses you got on sale for $40 that retail for $125, cost about 5 dollars to the company that produces them.....
Shimano stuff is normally the same OEM or aftermarket. Other companies do spec things differently for OEM. Specialized has changed specifications on forks in the past, and on hubs too.

I don't mind buying OEM stuff, as long as I know what I'm getting before I buy.

JmZ
 

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Jm. said:
they are marked up 100% from their first line supplier? I think not. Vendors do not pass those proffits on to retail, the vendors maximize their own proffits. The amount of proffit is inversely proportional to where the product is as far as from factory, to first wholesaler, to maybe a 2nd wholesaler, to the retailer...
most products are in fact marked up significantly from the vendor to the distributor to the retailer. Now obviously the more distributors there are i na chain then your margins go down but generally when you deal directly with a company, that company is marking up their product with a 40-50% margin then that gives you the wholesale price. The retailer then goes by either the MSRP or sets their own price. Everyone is out ot make al iving and that is the bottom line but I think most people would be surpised if they actually knew what the cost was to manufacture a particular product.
 

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100%

I was just shopping for a repair stand. My LBS didn't have the model I wanted so they whipped out their catalog that they order from. I guess they didn't think I could read upside down, because as they were quoting me the prices on the various stands, I could see the salesman was just doubling the price quoted in the catalog.

I wonder if bike shops located in high-rent areas (like parts of California) have a higer mark up. This is supposed to explain why gas prices are higher here...
 

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GuruAtma said:
I was just shopping for a repair stand. My LBS didn't have the model I wanted so they whipped out their catalog that they order from. I guess they didn't think I could read upside down, because as they were quoting me the prices on the various stands, I could see the salesman was just doubling the price quoted in the catalog.

I wonder if bike shops located in high-rent areas (like parts of California) have a higer mark up. This is supposed to explain why gas prices are higher here...
The point I am trying to make is just because something is marked up "100%" don't think that they are ripping you off. A bike stand is a good example to because if you buy a bike stand that costs say 150 the wholesale is probably about 75 then factor in 10 bucks to ship it plus the paperwork of having to pay the bill and yadda yadd all of the sudden that 100% margin turns into about 50%.

Who cares....just go and ride:)
 

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VaNRS2 said:
The point I am trying to make is just because something is marked up "100%" don't think that they are ripping you off. A bike stand is a good example to because if you buy a bike stand that costs say 150 the wholesale is probably about 75 then factor in 10 bucks to ship it plus the paperwork of having to pay the bill and yadda yadd all of the sudden that 100% margin turns into about 50%.

Who cares....just go and ride:)
You are correct except a 100% markup is a 50% margin. Markup is the % added to the wholesale price. Margin is the % of the retail price is above wholesale.

A 100% markup is the retail norm - known as "keystone".
 

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Similar experience...

I buy a lot of stuff at my LBS, get work done there from time to time and generally try to support the local shop(s). I haven't bought a bike from them, but I've steered business their way and spent plenty of money on accessories there.

Then the pedal on my fixie commute-bike blew apart on me last week. Things are real tight around here since purchasing a home some months ago, so I was looking for a decent pedal at a cheap price and didn't want to wait for shipping. I was looking for a bargain and found it at an online retailer who just happens to have a nearby showroom (Not Supergo, though I have shopped there too.).

On my way down there I stopped in at my LBS figuring I'd check their price, since sometimes I'm pleasantly surprised by how close they can come to mail-order on certain items. However, they wanted $140 for the pedals (eggbeaters, if it matters) I was going to drive 30 or so miles to get for $80 (Actually I ended up going with the even cheaper $65 chromoly ones.). FWIW, I didn't pull the "but I can get it online for X amount." routine, 'cause they probably hear that sh*t all the time. I just browsed around a bit more and left.

I was prepared to spend an extra $10 or $15 to support the local guy and not have to drive 30 miles to go get my pedals, but $60? Sorry, but that's not a trivial amount of money for me.

I don't particularly look forward to rolling in there with the new pedals I bought elsewhere next time I have to stop by and get a part or a couple tubes or something, but whaddya gonna do?

-Trevor
 

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sorry to be off thread here....but why do we feel guilty about buying things online or at another shop....do feel guilty about buying shoes, a car or anything else for that matter...most of us look for the best price...how the LBS's have created this guilt...i think they see the writing on the wall...most bike repair is easy if you have the right tools...most warranty stuff can be handled on your own these days....so what are we getting for our hard earned money at these shops exactly?

again sorry to be off thread but the guy who said he felt guilty about his pedals was catalyst for this post.
 

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Alllright... hopefully this info will help your determination of "reasonable markup" This price info is directly out of one of the 3 major catalogs that bike shops use, QBP, J&B. BTI. The prices are fairly uniform between the 3 catalogs. For a DuraAce 7800 2x sti front shifter or the DuraAce 7800 10 spd. sti rear shifter in silver, the lbs would have to pay $134.95 for each. Consumer price probably around $269.99 each. So you're looking at about $539.89 retail value for those two shifters and the dealer's cost would be $269.99 for both shifters. Just a little info for those hungry eyes out there....

maggywag

kellyinNY said:
I am in the process of building up a road bike and have been working with a LBS on the project. I purchased the frame from the LBS and have just began pricing out the components. I am finding the prices quoted by the LBS for some of the components to be excessively high. For example, I have decided on Chorus brake/shifters and was quoted a price of $410. I can find the same shifters online for $250. I understand that local shops cannot compete with online pricing but this seems to be gouging to me. Am I wrong in my assumption? I would really love to support the local store so if anyone can help me determine what a reasonable mark-up is I would appreciate it.
 
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