[Possumpoint]

Wife was shopping so I was killing some time. Walked into a local bike shop and had the living "S" shocked out of me by the prices of some bikes. Mid to high 4 figures were common. Some of them were priced at what I paid for my first new car but that was a fair number of years ago.

Wow, sure hope they're worth it, I'll never know.

 

[Gandalfe]

There are so many nice bikes out there with little to no miles on them. Why buy new?

 

[Possumpoint]

Why buy new, good question. I bought new in August to replace a wore out 20 year old Murry. Paid $209 on sale for a new Schwinn. By no means a bike in the same class as what I saw today but a vast improvement over what I had. Now that I'm more involved in biking then at any other time of my life, I'm beginning to realize that biking has evolve way beyond anything I ever considered. Just looking at the tire treads available on the new bikes today showed the different purposes bikes are being used for.

 

[rola643]

All of it's expensive. I picked up a pair of Swiftwick - The Best Athletic Performance Socks, Guaranteed yesterday and put them down as fast...18 bux for a pair socks. To rich for my blood.

 

[Industry_Hack]

All of it's expensive. I picked up a pair of Swiftwick - The Best Athletic Performance Socks, Guaranteed yesterday and put them down as fast...18 bux for a pair socks. To rich for my blood.

They're not even the best. That would be Darn Tough.

At one time, my three most expensive two-wheeled toys were my Suzuki, which I paid $6,700 for, my Harley, which cost me $7,200, and my tandem, which cost $8k to build. It's all about priorities.

 

[froze]

Even though fitness (cardo) is a priority to me, buying or owning expensive bikes is not because I look at things as to how much is it worth down the road...weird, I know! But I don't race nor do I have a need to show off to people on the bike path or streets, so I don't need some fragile carbon fiber wonder bike. But I have been known to go nuts once in a great while.

 

[photosbymark]

Well I'm old and nearly every bike in the place is more than I paid for my first car. Ok the $450 68 Opel Kadet was probably not as fast as some of the bikes, but it was MINE!!! Now I often find bikes in bike stores that are more than my mom and dad paid for there house. It was a 3 bedroom frame that they spent a whole $7000 to build and had a house note of $52 a month.

Thing that makes it hard to compare is the value of the dollar. The more they print (ok to move into the modern world digitize) the less its worth. I still am not convinced that there is a way to know and be able to compare fairly how much that $8-10,000 bike would have cost had it be possible to build it in 1962. I remember seeing prices of the Schwinn Stingrays and IIRC they cost in the upper 30 to low 40 buck a piece range. Look at the house note though and you can see why I never got one.

 

[froze]

Well I'm old and nearly every bike in the place is more than I paid for my first car. Ok the $450 68 Opel Kadet was probably not as fast as some of the bikes, but it was MINE!!! Now I often find bikes in bike stores that are more than my mom and dad paid for there house. It was a 3 bedroom frame that they spent a whole $7000 to build and had a house note of $52 a month.

Thing that makes it hard to compare is the value of the dollar. The more they print (ok to move into the modern world digitize) the less its worth. I still am not convinced that there is a way to know and be able to compare fairly how much that $8-10,000 bike would have cost had it be possible to build it in 1962. I remember seeing prices of the Schwinn Stingrays and IIRC they cost in the upper 30 to low 40 buck a piece range. Look at the house note though and you can see why I never got one.

You never bought a house? Anyway's inflation has hit some products more then others. Housing far out paced the rate of inflation, as did cars. But appliances and electronics have not, in fact they under paced inflation. My dad woudn't even spend $30 or $40 for a stingray so he bought me a cheap $20 Mattel bike! Personally I would never spend over $4500 for a bicycle...I did go crazy once with a bike though, while in England in 07 I visited Derby and bought a custom made Mercian Vincitore spec'd to my wants and desires. The Mercian is a superb bike but kind of wish I hadn't bought it; but at the time I bought it I wanted a nice one of a kind custom built touring bike which is what I got. Then 4 years later I ran into a super deal and bought a 250 mile old 85 Schwinn Le Tour Luxe in mint original condition for $80; so now I decided to use it instead of the Mercian for touring.

 

[photosbymark]

Yeah I have a house, though now it isn't the investment it once was. My uncle growing up bought a different house moving up each time and selling the house he had at a profit each time. My experience was just the opposite. Real estate does not always go up and I got burned more than once. Still not complaining. Though not things go up the same, there is no question that the value of money has decreased. My dad wouldn't buy me the $30 to $40 Stingray because he couldn't afford it. He got what he could do with what he had to do with. I remember nights hearing them talk when they didn't know I could hear them, worrying about how they could make the house note. One month of a house note now would have paid for over a year of theirs. For many people renting isn't a bad move. Even then if you factored in the interest you paid vs the value of the equity, vs the cost of the loss of revenue from the money you didn't pay in interest, tax deductions, ect and compare that with the cost of renting, for many the comparison would be shocking. It all goes back to fact that the law of supply and demand can not be repealed by Congress. The more of something thats out there, the less its worth.

The other thing that is difficult is finding numbers that are truly fair and do not have a vested interest in their results. The official numbers are tied to many programs that involve official expense and if they raise the inflation number, they have to raise the amount of the checks they write. Makes one take their work with a grain of salt. Food is a key part of what we buy and its prices are rising rapidly, but they leave food out of the computation of the CPI now. Last time I checked, I still eat. The loaf of bread I sold for $.19 as a boy delivering groceries, I bought yesterday for nearly $2.

Still the point you make is valid. Not everyone needs the really expensive bike. You might want one, you may be able to afford it, and it maybe fun to own, but are you really going to ride that much better? Putting me on that bike wouldn't make me a better cyclist. I'd enjoy it, but Id still be a Fred. Fact is the best bike for you is the one you enjoy riding. If that's the 85 Schwinn you got for $80 or $4500 Mercian or any other custom top dollar bike, unless it adds something to the experience it doesn't matter. One day I might buy me one of those old cool Stingrays with the shifter. I am far less stupid now and having a kid now wouldn't be smart anyway. Read somewhere they were going for about $400 or so now or more. There just are not that many of them still around, and the money to buy them is worth less. Do I need a Schwinn Stingray? No but I might do it anyway.

 

[froze]

I saw one of those real cool Stingrays with the shifter sell for $2,800 on E-Bay some months back! And I didn't accidentally add any zeros.

Actually owning a home is an investment, and as with any investment it has it's risks...that's why it's called an investment. Having said that, owning a home even in a down market is always better then renting if you're going to be in the house longer then a few a years. With renting the payment continues for as long as you live there or until death do you part, PLUS, it will increase in cost every year. With a house the payment will stay the same except for minor increases in taxes and insurance, but at the end of the loan you no longer have a payment as long as you live there or until death do you part. Of course you still have taxes and insurance to pay for but so does the renter, it's built into the cost of the rent plus you still have to, or at least should, pay for renters insurance. So just because you and I (or at least I) didn't buy a house with the sole purpose to gain equity, we did gain the fact the once it's paid for we free up that income to do something else with it. I paid off my house a few years ago and used that money to buy rental property so now I'm getting an income that pays the mortgage, but once that is paid off then it's an income stream. Even though I bought the income property knowing it probably won't go up in value, I bought it with the intentions of keeping it forever so I could have an income from it. This rental property is part of my not keeping all my eggs in one basket philosophy I've adopted.

And while a loaf of bread has gone up so has our income from an average of $6,000 a year to $35,000, so it's almost a tit for tat situation. But I remember when I was kid a low cost small refrigerator for around $300...you can still buy a cheap new refrigerator for that price today. Heck even a real dinky frig in the late 1920's cost $200!! An IBM Selectric typewriter cost around $475 in 1962, you can buy a cheap computer and add a cheap printer for close to that today and be able to do a lot more with it. All in all, food, cars and houses (depending on where you live) have gone up 10 fold in 45 years but our income has not and that's why owning big ticket items today like cars and houses is more of a struggle for us then for our parents.

 

[photosbymark]

Technology is one place where prices have dropped. Yet it also is where the economy has gone global. That $200 frig that by today's standards was most likely made in the US, where the one you get today is likely not. I used to think those typewriters with the ball that had a correct button was so cool, but my high school typing class had the old style manual ones where you had to wait on the white out to dry. Back in the early 70s white out was cool. Now only blonds use it on their monitors. Yet both were made in the US and now I bet you would have a hard time finding someone that still produced a typewriter and white out I haven't looked for in years. The modern computer that replaced it most likely isn't made in the US. The economy is far more global now and I am not sure thats a good thing, but its the way it worked out. I wonder how many Schwinn's are still made in the US??

My grand dad, who raised his family in the middle of the depression, put it this way. In the early 70s he was unloading his car after a trip from the grocery store and found the receipt. He had filled a small trunk and looked at the receipt and it was almost $100. He looked at me and said, "Back when I was younger you would not have been able to put $100 worth of groceries in the back of a pick up. You would have had to make two loads, but nobody had a $100."

I have to admit my first trip back into a bike store after so many years though was eye opening as well and the OP need not feel alone in that respect.

 

[froze]

I have to admit my first trip back into a bike store after so many years though was eye opening as well and the OP need not feel alone in that respect.

I guess I've always been a little more on the rational side. I realize that over years prices will go up, and there's nothing that can be down about it. I've been in and out of bike stores for years so for me to see the gradual increase of prices is nothing unusual. I guess what I find more disturbing then the increasing price trends is that most of the bikes are now built in China. And you would thing that with the cost of labor and material being pennies on the dollar that bike prices would be a lot lower, but bike manufactures took that opportunity to make major profits. This profit taking perhaps was long overdue but they over doing it. I remember in the 80's bike manufacturing profits were bone slim and a lot of companies went out of business and so did a lot of bike stores. I remember when I bought my 84 Trek (frame and fork) 660 the dealer only made $1.50 off the sale! When I went back to the same shop in 88 to buy a new bike they changed from a Trek dealer to offer more models and I bought my 87 Miyata Team from them and they made a whopping $8 on the sale. Now the profit margins are much higher at close to 33% of the sale, which is good, but most of the profit goes to the manufacture and not to the LBS. I'm not complaining at all about LBS's making profit, they should, that's why their in business. But I know I will never buy a personal bike made in mainland China, a kids bike? ok, but not my own.

But keep in mind, this major profit making is something a lot of companies do, your $250 Nike shoes only cost $1.50 to make, and this sort of thing is rampant, not as extreme in some items but it's there. And yet corporations can't control their wasteful spending and thus companies are blowing money much the same way countries like the USA blow money. I guess it's the Harvard way.

 

[EvilGreg]

But I know I will never buy a personal bike made in mainland China, a kids bike? ok, but not my own.

But keep in mind, this major profit making is something a lot of companies do, your $250 Nike shoes only cost $1.50 to make, and this sort of thing is rampant, not as extreme in some items but it's there. And yet corporations can't control their wasteful spending and thus companies are blowing money much the same way countries like the USA blow money. I guess it's the Harvard way.

Don't be so naive. Yes the cost to manufacture products in China are much less than they are in the US but they are not that much less. On top of that the government, both US and China, place taxes on those products. You cannot bring anything into the US without import taxes being assessed. Then there are shipping costs and both the manufacturer and retailer have to make a profit. The only organization that is taking money that is not rightfully theirs is the government.

 

[froze]

Don't be so naive. Yes the cost to manufacture products in China are much less than they are in the US but they are not that much less. On top of that the government, both US and China, place taxes on those products. You cannot bring anything into the US without import taxes being assessed. Then there are shipping costs and both the manufacturer and retailer have to make a profit. The only organization that is taking money that is not rightfully theirs is the government.

I'm naive? You better do some research.

How much does it cost to make nike shoes
How much does a pair of nike shoes cost to make? | ChaCha
How much does it cost Nike to create a pair of their sneakers? - Yahoo! Answers

 

[Industry_Hack]

Raw materials and labor are only part of the cost. Factor in the millions they give to athletes to promote the crappy shoes too. That ain't free, and when you buy Nike, you're sharing that cost.

Read the first paragraph, if you want to consider the cost from another angle.

 

[froze]

That's the problem because the cost of athletes being sponsored by a company is suppose to come out of company profit not added to the cost of crap we buy! And shipping cost? It cost around $12 a ton to ship goods from China to America, how many shoes would it take to equal a ton?

 

[Industry_Hack]

It cost around $12 a ton to ship goods from China to America, how many shoes would it take to equal a ton?

Where are you getting that figure from?

 

[BeginnerCycling]

That's the problem because the cost of athletes being sponsored by a company is suppose to come out of company profit not added to the cost of crap we buy!

I don't disagree that many shoes are over priced, but athlete endorsements are just marketing expenses -- and one way or another expenses are generally passed on to the consumer.

Of course, if you chose to buy a shoe that is not endorsed by athletes, then theoretically that shoe should not have costs attributable to athlete endorsements (assuming no allocated share of endorsements for general brand marketing).

 

[froze]

More accurately since we're talking about shoes, it cost an average of $8,000 to ship a 40' trailer from Shanghai China to Long Beach Ca. If a 40' trailer can haul 12,384 pairs of shoes that would cost $1.55 (rounded up) per pair of shoes. How Much is Inside a Shipping Container? So now you have about $1.50 to $5.00 max to make a pair of tennis shoes, plus add in $1.55 for shipping to America. If a pair of tennis shoes weigh 1 pound that means a semi with a 53 foot trailer would only be able to carry 16,400 shoes or pounds of shoes. The going shipping rate for a semi is a $2 per mile, so lets say the truck goes from Los Angeles to Chicago is 2018 miles, thus it cost $4,036 or $4.06 per pair of shoes. Thus your total cost of shipping is $5.61 plus a max of $5.00 for a pair of shoes ends up costing $10.61 to the company for a shoe selling for $200. If the shoes are going to New York, it's cheaper to keep the shoes on the ship and sail them into New York which is what they usually do.

 

[froze]

I don't disagree that many shoes are over priced, but athlete endorsements are just marketing expenses -- and one way or another expenses are generally passed on to the consumer.

Of course, if you chose to buy a shoe that is not endorsed by athletes, then theoretically that shoe should not have costs attributable to athlete endorsements (assuming no allocated share of endorsements for general brand marketing).

Clothes in general have the highest markup of any product you can buy. I doubt seriously that a pair of Nike shoes costing $200 will cost Nike $100 in marketing expenses. Most of the profit on shoes goes to the retailer anyways, not to Nike! According to Business Week, you pay $180 for shoes, the retailer pays about $50, and Nike pays about $12. Here's another site with more detail break down but these costs were base on when Indonesia made Nike shoes in 1995, China has since then taken that and the labor and material cost are lower now, but shipping cost went up; see: How much profit does the shoe company Nike make off of a $100 pair of shoes? ? - Yahoo! Answers

Finding exact profit margins and cost breakdowns today from Nike or any other business is pretty difficult. But Nike's profit margin from last report in 3 of 2011 was $7.1 billion, this is profit after all expenses have been paid. See: Nike Profit Surges as Sales Rise - WSJ.com