Koyote

OK, got it. And you’ve identified a common problem in these discussions: nominal prices are almost meaningless. But they are what people tend to focus on.

Kapusta

The key here is "on clearance"

There are no bikes on clearance during a shortage. But this is temporary.

Kapusta

Exactly!

Gresp15C

In my view another issue with bike pricing is what's referred to as "product differentiation."

It's fascinating to browse the old Schwinn catalogs, which can all be found online. One take-away is that there was actually relatively limited variety of bikes. Schwinn had kids bikes, cruisers, tourists (lightweight with upright bars), and racing bikes (lightweight with drop bars). Their definition of "lightweight" is open to debate of course. And a couple of specialized bikes. It was pretty easy to guess the purpose and target audiences of each bike. Likewise, the 1962 Raleigh catalog was 6 pages. Most adults were satisfied with a single or 3 speed bike. The "ten speed" fad came later. A person could go to the department store, or a Schwinn store, and buy a bike.

Today, there's a huge proliferation of bike types, and the offerings seem almost designed to be confusing to the layperson. Bikes that are pretty much general purpose, like hybrids, are dismissed by enthusiasts, and even hybrids offer a bewildering array of options.

Under stress, people spend. The whole marketing and sales process is designed to leave you with a little bit of doubt about whether you're buying the right bike, and to "upsell" you into a more expensive model.

Further complicating matters is that bike choice is partly a regional and local thing, since it depends on your riding conditions, but both marketing, and advice shared online, is nationwide. For instance, how many gears you need depends on where you live.

downhillmaster

So bicycles(or anything else for that matter)should not rise in cost because a segment of buyers chooses to do no research before buying?

unterhausen

I'm sure but even people that should know better seem to be stuck with the idea of perfect markets from econ 101 evidenced in the post I was responding to. The bike industry is small enough and customers are devoted enough to the brands they know that a relatively few people have the power to set prices, and competition isn't going to change anything.

Koyote

I think you're bringing together a couple of issues. I was responding to your earlier post about the time required to increase market supply -- expanding factory space and such. That's Intro to Econ material, and our understanding of the time dimension has been solid for about 130 years. As for the bike industry: I think it's fairly competitive (low entry barriers, much product differentiation, low info costs) with a few large players (e.g. Trek, Spesh) that have some power to move the market, sort of like oligopolists -- as you say. But consider the increasing role of internet sales (e.g., Canyon, and now other companies as a result of Covid) in enhancing competition - which will drive prices down closer to avg total cost.

Again, I think there is absolutely nothing here that contradicts (i.e., is not fully explained by) established mainstream econ models. The only problem is that most people don't understand much about economics, and tend to conflate their opinions with facts. When people see prices rising for anything -- bikes, gasoline, whatever -- some tend to believe in bogeymen...But the reality is often that unseen (by most people) factors are driving up costs.

As far as "perfect markets" go, well, mea culpa. That's a failing of the Intro to Econ courses. We teach that model for good reasons - to show why competition is good, is an ideal, something to strive for when possible -- but we do a lousy job of helping students to remember that such markets are virtually non-existent outside of the textbook.

Koyote

If you really pressed me, I'm not sure which of these I'd sooner do without.

unterhausen

I could stop drinking coffee if I had to, but I wouldn't like it. As far as TP, lots of people in the world use water.

50PlusCycling

The goal of marketing and advertising is to make us buy things we don't really need and can't really afford. In 1980, when I was a kid, I lusted after a Masi Gran Criterium bike at the LBS. It was fitted with a Campy Super Record kit, and, at $1800 was one of the most expensive bikes on the market at the time. $1800 in 1980 is about $5700 today. But in 2021 the bikes in the same niche as the old Masi Gran Criterium cost more than $10,000.

If I had my choice between a new, 1980, 12-speed Gran Criterium with a steel frame and friction shifters, or the latest 12 speed carbon fiber wonder with disc brakes and electronic shifting, I would take the Gran Criterium in a heartbeat.

mstateglfr 

That can be one goal of marketing and advertising, sure.
Another goal is to let current and potential customers know about improved features and/or services. Those features absolutely can be both needed and affordable.

Your extremely jaded view is also inaccurate.

Trakhak

In 1965, my local bike store sold the top-of-the-line all-Campy-Record Legnano, which was functionally fully equivalent to the 1980 Masi Gran Criterium, for $150. At more than 10 times the price only 15 years later, the Masi at $1800 was a far more outrageous ripoff than the modern bike versus the Masi.

Sure, the Masi would be fun to ride around on today, if you're not planning on racing. I loved my 1982 Campy Super Record-equipped Bianchi Super Corsa when I was racing back then. Nostalgia is a powerful emotion. But any $5,700 modern racing bike is light years beyond from the Masi in technology and performance. In fact, we can buy any number of modern bikes for less than half that price that offer most of the performance advantages of the $5,700 bike.

Kapusta

Comparisons of what the most expensive bikes are from different eras tells you basically zero about what the sport actually costs to participate in.

rydabent

Corporations have to keep increasing their prices because of gov tax greed and ever increasing cost of labor. Both my trike TeraTrike, and my bike Rans is not built by a huge corporation. There are many small bike and trike producers.

Koyote

This post makes no sense.

The small companies that built your trikes do not magically get lower wage rates and lower tax rates.

By the way, real wage rates in the US for all but the top 10% of earners have been flat or falling for over 40 years, and the US corporate tax rate is lower than all other leading industrialized economies other than the UK. And the US has the sixth-lowest rate of overall taxation among the 37 OECD countries.

You know, the same device that you use to post this stuff can be used to learn the truth.

indyfabz

And you know they are not incorporated how?

unterhausen

I recently looked at the difference in price between a Peugeot UO-8, which wasn't a bike I would want to ride, and a PX-10, which was a very nice bike. In the early '70s, the difference was not very much, even in today's dollars. Then the bike boom happened and a lot of inflation happened, and here we are.

I was thinking about this thread the other day and realized the bike shortage has made me consider making bikes again. The problem is I can't get parts either.

I think the main thing that the current shortages have made me wonder about is why the price hikes haven't been more striking. I don't think it would increase supply very much. Sure, that prices some people out of the market, but I'm not sure the industry worries about people like that.


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tomato coupe

indyfabz

It's his M.O.

Phil_gretz

I'm glad that marijuana, alcohol and heroin are plentiful, though. There's that...

AlanO

I’ve noticed you can still get bikes for the same price but the quality of components is lower than it used to be. Maybe it’s just an alternative to inflation, like shrinking the container of ice cream instead of raising the price.

altondavis2

I think you're right on with the recent price increases. Admittedly the content on a lot of bikes has increased.
Its hard for me to justify disc brakes on an entry level bikes. I am down to 3 bikes and my Specialized Diverge
has all 105 disc components. However for a lot of occasional riders, even the low end disc brakes don't add
a lot of value over a good set of rim brakes. Everyone doesn't ride on a rainy day. I think that the price of
bikes should be coming down. Value models should feature rim brakes and 7 spd drivetrains and any other
features that can be used to keep the price down.

rbent

IMHO, "entry level" depends on what you are going to use the bicycle for - recreational, touring, racing, off road/mountain/gravel ... I've got two recumbents, a tri-bike, and a mountain bike all of which I paid upwards of $1500 for. Recently I bought, for less than $500, an eight speed, 24 pound, foldable bike that is now my "everyday" bike. It easily fits in my car (a Subaru Outback) to take with me wherever I go to help explore new places. It's a Zizzo Urbano - a couple of YouTube reviews sold me on it.

afm199

Back in 2014 I bought a Bike Nashbar AL1, which really was a great deal. It had mostly Sora components, ok wheels and brakes. I still own the slightly pork frameset, which is probably a Cannondale, and have "upgraded" to Ultegra brakes, real derailleur, and a carbon seat post.

Last month the left Sora shifter bit the dust, and I was not happy. A new one is hard to find and expensive, and I don't trust the lower level below Sora, after this experience I don't trust Sora.

And lo and behold, 9 speed triple left brifters just aren't there. I ended up buying 105 10 speed left, which works fine and is much better than the Sora.

So I have a $400 bike with $800 worth of upgrades that weighs 21 pounds, lol. I forgot to mention the carbon wheels. Still and all, it's ridden either in the hills or the city, and I love it.

I always check Craigslist for used bikes. I bought my Trek Cronos there for a good price and it's a great bike. The stuff on the showroom floor today for $400-$500 is not worth it, the used bikes can be.

MRT2

Agree about V brakes, which are incredibly cheap and work really well. I am admittedly a late adopter, but if keeping V brakes will save the brands some money off the retail price, I think it makes sense. As for 7 speed, I actually think there is no reason why 8 speed shouldn't be the standard budget bike choice in 2021. My 1997 Bianchi had 7 speed, which, admittedly seemed like a huge jump in performance from the 5 speeds I grew up with.
Shimano introduced 8 speed mountain groups in the early 90s, and has had Altus level 8 speed shifters/derailleurs since the early to mid 2000s. These days, most people looking for higher performance are going for 1 x 10 or 1 x 11, so surely, 8 speed has gone far enough down the food chain that the bike brands could put it on entry level bikes, at least for the better brands.