pedpower

Hi Vegan,

Thanks for your reply, I appreciate your insight and advice. First I'm not a seller, I'm a buyer. I was just trying to get info on how dealerships price their bikes. I guess there is no standard, nobody seems to know if there is a secret KBB on tap.

I hope you didn't take it personal when I mentioned the word "crooks". It wasn't directed at you, it was directed at the industry of not paying fair market value on a trade in, but then flipping it more than a reasonable profit. The right thing would be for the dealer to be looking after the customer and offering "fair" market value while retaining his/her business for the long haul/term. That was my beef, but I guess with your capitalistic beliefs "your" just in it for you. As long as you can take advantage of someone else's lack of the market and it's values "your" satisfied.

*"your" is not directed at "you" directly.

dedhed

No industries taking in used/trade product will pay "fair market value". That's kind of the point of a business, to pay wholesale and sell retail. That's how you hope to make a profit, rather than lose money.

Do they know that customer will be a regular every X many years buying? Or a one & done? Do the know if the shop will even be around for the "long haul"? Profits on used bikes are measured in tens or hundreds, not thousands.

Koyote

OK, you asked for it. Inferior goods, like all goods, do have negative price elasticity of demand… But they also have negative income elasticity of demand - and that is the defining characteristic of an inferior good. It means that income and demand (which influences price) are inversely related, as you described.

Still, assuming you did not just finish your introductory microeconomics course last week, I’d say your recall and understanding are pretty damned good. Kudos.

WizardOfBoz

Exactly the better and more informed description that was hoped for. BF members are now better informed by more accurate info. Thanks!

Yes, well... Last week? My macro and micro econ courses were finished not even in this millenium. Sigh. But thanks!

Koyote

Terminology is for professionals and pedants...But you had the concepts correct, which is all that really matters.

Oneder

They probably price them so they will move asap. I doubt they make money off the used bikes. probably just selling off trade-ins more as a service than anything else and so they can sell new ones. I never seem to see used bikes twice at local shops but they can probably get more in a store that you could selling them yourself since people can see them and trust they have been tuned properly.

njkayaker

Say the book price is $500. This is the estimated price to the consumer (the retail price).

A shop would have to buy the bike for less than $500 (a "wholesale" price).

LesterOfPuppets

Unfortunately Autotrader bought KBB a few years ago. Since then prices are rigged a little on the high side.

njkayaker

It seems like you are looking at this from the side of the purchaser.

If you were selling something that was a thing that generally was selling "really well right now", it wouldn't be surprising if you chose to raise the price of that thing. If it doesn't sell at the higher price, you can always reduce the price.

Probably, not very accurate.

Is Kelly Blue Book Accurate? - Your Car Angel - Your Car Angel

solman

Just sold my Bianchi Alfana a few days ago, listed on Blue book for $75.00 trade in value. The private party value is listed at $127-$131. I got $300 for it and people were in line when I posted it on Craigslist. I don't think Blue book reflects the current situation at all. Also I think they undervalued the bike as Bianchi is a desirable brand.
My LBS didn't really want it as they are not in the business of selling used bikes. He told me to sell it on my own is the best way to go. He said he sometimes takes in used bikes to facilitate a sale but would rather not take a trade at all. He has to lay out money and then sit on them until they sell.

downhillmaster

Hi.
What’s this thread about?

downhillmaster

Good stuff.
I always appreciate naïveté
Just a heads up though that if you don’t like the way dealers price bicycles you are always more than welcome to buy and sell them on your own.
That also goes for cars and boats and jewelry and airplanes and lawn mowers and pets and furniture and...

RiceAWay

Bikes are not cars and there is so little change from year to year that you charge whatever the market will bear. What do you think is better, a new Trek aluminum bike with lower end Shimano parts on it or a 5 year old Trek Madone with Ultegra group? Hell that Madone is all hell and gone better and it you think 60% of new value is too high go buy a motorcycle.

MadKaw

Could be... I've been out of the business for 20 some years. And even then we used Black Book more than Blue Book.

MadKaw

I don't agree that there is little change in bikes. I'd put up the new 105 groupset against a 5 year old Ultegra. Technology is advancing no matter what field you're in.

veganbikes

You are a-ok no hard feelings. Bikes are worth what they are worth. Shops gotta keep employees and lights on as well as a whole host of other things that cost a ton of money. If a shop pays high prices, the margins are even lower and keep going down and then it is a losing deal. If I buy a something for $1 and have to spend another $1 to repair it and try to resell it and only charge $2 I make nothing if I sell for $3 I make a tiny profit but probably not enough to make it worth my time and effort. I get you sure we would all love to be able to give everyone a fair shake but this system doesn't allow for that.

I am most certainly not a capitalist but I am a realist and understand the industry I work in so I can live and survive in this system that someone else created. If it were up to me, we would be doing something different and not sucking our souls for the great green god of money (or if you happen to be from non-'merica than whatever color your money is).

Oneder

Used is used. Wear and need for maintenance matter a lot. People are ridiculous when they think their 5 yo bike is worth half what it cost them plus many times think all the money they put in after should also go into the price. Bikes costs money to maintain and need new parts over time to keep the same performance and those parts are even more expensive for a more expensive bike making putting in the money for them even more senseless otherwise no one would ever be selling anything.

viffer

Just an FYI, a bone stock 2008 Trek Madone 5.2 popped up on craigslist a couple days ago for $1000 and was sold in less than 24 hours which would lead me to believe it was a little undervalued at that price.