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How do LBS come up with the values/price of used bikes?

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How do LBS come up with the values/price of used bikes?

Old 05-19-20, 12:03 AM
  #26  
pedpower
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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.
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Old 05-19-20, 05:21 AM
  #27  
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Originally Posted by pedpower View Post
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.
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.
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Old 05-19-20, 06:02 AM
  #28  
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Originally Posted by WizardOfBoz View Post
Right now the low end market may be being influenced by what I seem to recalled is the negative price elasticity of inferior goods*. When the average wage drops so that folks no longer buy a car (or a really top end bike) but they need transport, this increases the price of low-end models.

*Any economists can correct my terminology or skewer my explanation, as you wish.
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, Id say your recall and understanding are pretty damned good. Kudos.
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Old 05-19-20, 07:54 AM
  #29  
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Originally Posted by Koyote View Post
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.
Exactly the better and more informed description that was hoped for. BF members are now better informed by more accurate info. Thanks!

Originally Posted by Koyote View Post
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.
Yes, well... Last week? My macro and micro econ courses were finished not even in this millenium. Sigh. But thanks!
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Old 05-19-20, 08:05 AM
  #30  
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Originally Posted by WizardOfBoz View Post
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!
Terminology is for professionals and pedants...But you had the concepts correct, which is all that really matters.
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Old 05-19-20, 08:08 AM
  #31  
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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.
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Old 05-19-20, 09:12 AM
  #32  
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Originally Posted by pedpower View Post
Example, if I wanted to trade in a 2008 Trek Madone 5.2, how does the dealership come up with a value for my trade in? Do they look at bicyclebluebook.com and give the client the current rate or do they look at other factors/sites for that info ect?
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).
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Old 05-19-20, 09:16 AM
  #33  
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Originally Posted by MadKaw View Post
Lets compare it to the automotive Blue Book, which is pretty accurate and see what the differences are.
Why is the automotive Blue Book more accurate than the bicycle Blue Book? I think there are two reasons.
  1. Statistics. There are lots of cars sold every week, averages out to around 800,000 per week.
  2. Those sales consist of relatively few models. I'm guessing that the vast majority of sales cover fewer than 500 models.
  3. The price of sale is relatively accurate, centrally recorded, and publicly available through DMV records.
So without getting needlessly mathematical, I assert that the average price of sale is statistically significant for most models.

Bikes have fewer sales, there are lots of manufacturers and models, and there is no central source of data for the sales price. So it is a lot harder to come up with numbers. You can cross your eyes and compare it to buying a 1922 Ford pickup. Certainly it has a value, but there are so few sales that it just boils down to what an individual buyer is willing to pay.
Unfortunately Autotrader bought KBB a few years ago. Since then prices are rigged a little on the high side.
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Old 05-19-20, 09:22 AM
  #34  
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Originally Posted by pedpower View Post
​​​​​​.

With ALL due respect, not every make and model is "currently in demand". That's a very loose term/staement. Just because bicycles are selling really well right now, doesn't mean "everything" should go up. We need further data to tell us what is selling (the kind of bikes/brands/models) at what price point, before we just put a "demand" on the bicycle industry as a whole. Just saying.
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.

Originally Posted by pedpower View Post
How accurate is bikebluebook.com?
Probably, not very accurate.

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

Last edited by njkayaker; 05-19-20 at 09:26 AM.
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Old 05-19-20, 04:23 PM
  #35  
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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.
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Old 05-19-20, 08:06 PM
  #36  
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Hi.
Whats this thread about?
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Old 05-19-20, 08:13 PM
  #37  
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Originally Posted by pedpower View Post
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.
Good stuff.
I always appreciate navet
Just a heads up though that if you dont 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...
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Old 05-19-20, 09:44 PM
  #38  
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Originally Posted by pedpower View Post
Good late morning all (PCT),

As my title of this thread states, where/how do LBS come up with the price and value they put on their used bikes? How accurate is bikebluebook.com? It seems like almost everything I look at is over valued/over priced. How do I educate myself on the current estimated values on the bikes I'm interested in? I have no problem paying the current market value, but like anybody who wants to over pay for something that's over valued?

I know the market is set by the purchaser, but where does that value come from? Is there an industry standard? How do LBS come up with a trade in value? Do LBS's have a system that they use? Or do they just throw out a number and hope someone comes around and pays their price?

Any help "you" could provide me would be greatly appreciated! Thank you in advance.

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.
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Old 05-20-20, 04:55 PM
  #39  
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Originally Posted by LesterOfPuppets View Post
Unfortunately Autotrader bought KBB a few years ago. Since then prices are rigged a little on the high side.
Could be... I've been out of the business for 20 some years. And even then we used Black Book more than Blue Book.
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Old 05-20-20, 04:57 PM
  #40  
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Originally Posted by RiceAWay View Post
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.
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.
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Old 05-20-20, 08:10 PM
  #41  
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Originally Posted by pedpower View Post
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.
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).
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Old 05-20-20, 08:19 PM
  #42  
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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.
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Old 05-24-20, 06:04 PM
  #43  
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Originally Posted by pedpower View Post
Example, if I wanted to trade in a 2008 Trek Madone 5.2, how does the dealership come up with a value for my trade in? Do they look at bicyclebluebook.com and give the client the current rate or do they look at other factors/sites for that info ect? You can't tell me they just pull out a number out of thin air? This bike has a trade in value ($317-327), Private Party value @ ($513-529). How can they list it at $1399? That can't be ALL supply and demand if it just sits there. Is this another episode of pure greed at its best? That's a huge mark up people! Assuming they use this system of bicyclebluebook.com.
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.
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