I’ve been doing some educating myself as to what it takes to start and have a mountain bike company or a company that supplies the parts that go into what makes a mountain bike or the companies that supply stuff it takes to ride and maintain a mountain bike. This video is a great example of why mountain bikes are so expensive. Mountain bike companies, apart from a very few, are small companies. This video shows how much equipment, space, employees and how many steps are needed to put out a quality mountain bike. It’s endless. This video doesn’t show all the other expenses involved, like financed debt, R&D, going to shows, having ride days so people can try your bike, insurance, the high cost of having employees, dealing with and buying from vendors, warranty repairs or issues, legal matters. Again, it’s endless. And then there’s the stress and hard work from the owners and employees. It’s not an 9 to 5 job. It’s a 24/7 job.
Then, you have the single most stupid comment in the bike industry, “I can buy a motorcycle cheaper than a bicycle”. Good, go ahead and buy a motorcycle! It’s less people on the trails. There’s a concept called Economies of Scale, Google it. Motorcycle companies are big companies, most are owned by the 5% largest companies in the world. They make and sell so many units that if they only profit a few dollars per unit, they are doing pretty good. In 2024 Honda only profited just over $1.00 per motorcycle sold. Here’s an example of that in a different industry. For a big airline carrier, we’ll use Delta as an example: If, and that’s a big if, if the flight goes perfectly and if the plane is full, they only profit about $300 per flight. That’s less than the average price of a single passenger ticket. But, that’s ok, because they do it almost 6,000 times per day, every day. If you had a small charter company with only a few planes, you’d be bankrupt on day one. That wouldn’t even cover the insurance. Same with a motorcycle company. When they sell a motorcycle, they sell hundreds of thousands and sometimes over a million units. They don’t have to make very much per unit to make a good profit. A small mountain bike company, on the other hand, would be hard pressed to put out 5,000 units of a particular bicycle. Which means they need to profit many times more per unit, just to keep the doors open.
Owners of small mountain bike companies, hell even the big ones, aren’t running away with loads of cash, like most people believe. Most of them could probably make more money and have much less stress with a 9 to 5 job. They do it because they love it. And I applaud and support what they do for us, so we can enjoy what we do. The bikes and equipment are so good these days. It’s a great time to be a mountain bike rider.
There are other videos about why mountain bikes are so expensive. That’s not what this video is about. But, in this video, you see it. And, this is a bare bones operation.
Then, you have the single most stupid comment in the bike industry, “I can buy a motorcycle cheaper than a bicycle”. Good, go ahead and buy a motorcycle! It’s less people on the trails. There’s a concept called Economies of Scale, Google it. Motorcycle companies are big companies, most are owned by the 5% largest companies in the world. They make and sell so many units that if they only profit a few dollars per unit, they are doing pretty good. In 2024 Honda only profited just over $1.00 per motorcycle sold. Here’s an example of that in a different industry. For a big airline carrier, we’ll use Delta as an example: If, and that’s a big if, if the flight goes perfectly and if the plane is full, they only profit about $300 per flight. That’s less than the average price of a single passenger ticket. But, that’s ok, because they do it almost 6,000 times per day, every day. If you had a small charter company with only a few planes, you’d be bankrupt on day one. That wouldn’t even cover the insurance. Same with a motorcycle company. When they sell a motorcycle, they sell hundreds of thousands and sometimes over a million units. They don’t have to make very much per unit to make a good profit. A small mountain bike company, on the other hand, would be hard pressed to put out 5,000 units of a particular bicycle. Which means they need to profit many times more per unit, just to keep the doors open.
Owners of small mountain bike companies, hell even the big ones, aren’t running away with loads of cash, like most people believe. Most of them could probably make more money and have much less stress with a 9 to 5 job. They do it because they love it. And I applaud and support what they do for us, so we can enjoy what we do. The bikes and equipment are so good these days. It’s a great time to be a mountain bike rider.
There are other videos about why mountain bikes are so expensive. That’s not what this video is about. But, in this video, you see it. And, this is a bare bones operation.
