Sy Reene

Lineups were also more extensive. A look on BicycleBlueBook of eg. Tarmacs in 2014, shows 4 models available with CF frames that fell in a price range of $2100 to $2950. (the progression is from Tiagra/105, to 105, to Rival to Ultegra). Today, the 4th model up from the lowest, costs $4,000 more ($3k vs $7k).

Koyote

I doubt that info is correct, as my 2008 Tarmac Expert (Ultegra) was $3000. By 2014, an Ultegra Tarmac would've likely been a bit more, in nominal terms.

I gave some actual info about Tarmacs (then and now) a ways up in this thread, and -- in real terms, i.e. adjusted for inflation) the price of one equipped with Ultegra is virtually the same as in 2008 -- but today's version has many improvements. In other words, you're getting more for your money right now, at least at that price point in that product line.

WhyFi

What's the difference in the price from the competition at these two build levels?

Sy Reene

Cannondale; $700 diff. Again, the consumer benefiting whatsoever from the big bike maker's purchasing strength isn't apparent.

105: https://www.cannondale.com/en-us/bik...ku=c12350m1048
Ultegra: https://www.cannondale.com/en-us/bik...ku=c12300m1048

rubiksoval

Can't you apply this same idea to pretty much anything? I'm sure I could source the parts and materials I need to build a car or a house or a computer or whatever cheaper...

downhillmaster

You are missing everything.
Supply and demand.
Period.

downhillmaster

Your lack of understanding regarding the current economy is what doesn’t add up

Sy Reene

I'm not sure. Of course labor is required building a car or a house. Buying a complete bike with either groupset would have required pretty much identical labor from the bike maker.

More apt might be how a contractor prices things put into a new house build? Eg. bathroom fixture. Is his price differential on the entire house, less, more or same than you'd find if you priced out the 2 choices of bathroom fixture yourself at home depot? I honestly don't know how house industry works and if there's cost itemization of parts etc. that are verifiable.

WhyFi

How so?

AcesHigh007

I'm afraid it's time for Economics 201 to begin.

Ever heard of the concept of Price Elasticity / Elastic and Inelastic goods? Elastic goods are those things that the general population NEEDS. I.e. Toilet paper, soap, basic food, etc. Inelastic goods are those things people WANT. I.e. Mercedes and $12000 road bikes.

Elastic goods - Along the supply demand curve there is an equilibrium price that the market will find that maximizes profit. The higher the price, the fewer items will be sold. The lower the price, more items will be sold. The market will find the optimum price.
Inelastic goods - Are typically priced higher and lowering the price can often lower the demand.

Most the high rollers here are all too willing to pay insane prices because you think you are Peter Sagan (you are not).

I stand by my original statement. The pricing of road bikes is highly contrived. This excessive pricing started long before Covid, so it's stupid that so many of you are associating bulk of the excessive pricing to the pandemic. What has changed is that the stores are not lower prices. The retail prices had been raised long ago. What is your next excuse?

Yes I can afford a $10k road bike. If I wanted, I could buy a $300k road bike. And the reason I can is because I AM CAREFUL WITH MY MONEY.

People keep referring to hydraulic brakes and Di2 as a driver for rising prices. This is largely a lie as well. How much is a complete Di2 + disk setup? $2200. Let's do the math: $2200 minus $1000 (for Ultegra Mechanical). So a 'modern' bike with Ultegra Di2 + disc should cost around $1200 more than mechanical old school (at the max). Yet prices have increased many thousands of dollars and the frames are basically the same. In 2014, a Cervelo S3 frameset was $2300. Now the S Series frameset is $4k. Yes the S Series may be a couple percentage points stiffer, but high end road frames are at diminishing returns.

Face it. You're paying excessively higher sums of money for minute returns because you think you're Peter Sagan.

And no I don't have any interest in paying $6500 for a bike that is basically the same as my old $3500 bike with a $1200 group.

WhyFi

It's good to see that you've moved goalposts since it was shown that you were wrong on your prior "point."

tomato coupe

You suspect and figure wrong.

tomato coupe

You just flunked Economics 201.

Koyote

I stopped reading right there. I can tell you, as a person with a PhD in economics and 35 years of experience in the profession – which includes a tenured full professorship – that statement is completely wrong.

Edited to add: I read a bit more because I’m on my trainer and bored. If one of my students ever referred to a “supply demand curve,“ I would ask him to make up his mind: there’s a supply curve, and there’s a demand curve, but there is no “supply demand“ curve.

Economics 201, indeed.

AcesHigh007

The statement is absolutely correct. You are obligated to support your claim.

People who tout their useless PhD's are usually democrats.

Koyote

If you want support, open any introductory Econ textbook. Literally any of them.

I get paid to teach the subject to people. Since you’re not paying me, you can learn it on your own.

My PhD must be useful for something, as I am easily able to afford any of the bikes that you are whining about.

tomato coupe

Introducing politics is a sure-fire way to get a thread locked.

Maelochs

Fist off .... when you say stuff about degrees and political parties you are proving that however smart you might be in other aspects, in that one respect your idiotic bias makes you one of the stupidest life forms to ooze across the face of the planet. I don't care it it is democrat, socialist, GOP, green, whatever .... "Partyism" is just as prejudicial as racism, and just as stupid and offensive.

Just saying .....

Also saying, the "appeal to authority" argument ... yeah, it was a scientist who "invented" the idea of human races which has since been rejected by the scientific community .... Kepler vs Copernicus? A lot of scientists have been entirely wrong, or simply mistaken.

As for the "elastic" and "inelastic" stuff .... I don't know the terms but some of what you says is described accurately ... there is indeed a different pricing method for necessities and luxury goods, which I perhaps mistakenly described a "discretionary income purchases." There is an even different pricing system for "Conspicuous Consumption" items, where often the items sell better with higher prices because people want the exclusivity and the bragging rights.

But as I think most of us realize, people pricing bikes aren't doing it based on cost, but on ... . "what the market will bear." People who want to own the Latest and Greatest, simply because someone told them it is the latest and greatest.

Here is another bit of data --- real-world data.

I sometimes buy houses ... not as quick as bikes, but I don't need a Fahgedaboutit lock when I leave it either. And I have gone into a development when it is just starting to build out, and priced houses, then returned a few times, deciding whether to buy or not ... and the prices go up as the development fills out.

To clarify: When there is nothing but a sign, some pvc pipes sticking up and some wooden stakes with ribbons marking where the utilities will be, the base prices are low. When a few houses are built, the base prices go up a few thousand dollars. Every month or two, depending on how fast the units sell (including unbuilt lots) the prices go up another couple thousand. Six months in, the homes you could have bought for a $195,000 now cost $210,000 or $225,000.

Same houses, same lots, same build quality .... and it isn't "supply and demand" because there are still a lot of lots left, and in one or more cases, the same builder has a whole new neighborhood planned for right next door. It is what people will pay when they see a fledgling neighborhood instead of a barren field with stakes and pipes. it is the lack of imagination which forces sellers to start low, and the appeal of pretty landscapes let them raise the prices for the exact same products later.

And if there are real estate forums .... I don't imagine anyone is posting "So Unfair!! Outrageous price increases! The manufacturers are robbing us!"

Bike buyers, however ......

Atlas Shrugged

Want to get my comment in before the thread is locked.

What is this strange obsession with Peter Sagan? Every one has their own personal value metric and having the freedom to choose within that metric is what makes our way of life fantastic. I ride expensive bikes and accessories yet live a very basic and frugal life in other ways. Who am I or anyone else to judge people and their motivations. If someone in a developing country looked at the ridiculous positions made regarding what is good value and not you would be embarrassed to have to support your positions.

AcesHigh007

This thread should be locked. I've learned enough about what to expect from this forum.

Maelochs

We're going to miss you .... the same way we miss DuraAce600.

Koyote

That’s probably directed at me, and I agree with you. I hate doing that. But explaining all the ways in which AcesHigh007 is wrong about price elasticity would take quite some time… It’s a full 50 minute lecture in my introductory microeconomics course. So I did play the “appeal to authority“ card. But I encourage him, and anyone else who is interested, to go read up on the topic - like I wrote, any introductory Econ text will have a full explanation. It’s generally a whole chapter. Hell, there’s probably even a Wikipedia page, but god only knows if it would be accurate. If you think I’m wrong, come back and tell me so – but I doubt that, after 35 years of teaching the stuff.

For now, suffice it to say that he has everything ass backwards: the demand for toilet paper is highly inelastic, the demand for expensive luxury goods like high-end bikes is generally elastic.
Then his following paragraph contains a whole bunch of additional wrongness.

​​​If AcesHigh007 is going to use a bunch of fancy disciplinary concepts to talk down to people, he should probably get it right.

Maelochs

yeah, I know nothing about formal economics studies, but it did seem odd to me that a necessity would be "elastic:" when the need obviously was constant ... and luxury items, obviously, have changing demand because of changes in the economy and where rich people chose to invest.

I didn't want to get into it, because starting from "ignorant" there weren't a lot of better places I might get to.

The idea that inelastic items are priced differently (whichever term is correct--I certainly trust you on this one) is common snese ... anyone who has bought anything can see that.

While scientists get it wrong ... i know they get it right too. And I expect you know the terminology in the field in which you specialize.

Still, though ... if you economists are so smart, why have we been doing "Boom and Bust" and bubbles for the past 250 years?

You know what I will let trickle down on those "supply-side" economists ....

TY for the reasonable reply.

Koyote

Hey, man, I’m a microeconomist. You’ll have to hang that one on the macroeconomists. 😂

Maelochs

Those macroeconomists mess everything up. Why can't the only do good, like you microeconomists?