genejockey 

As in, "Nice bike shop you got here. Be a shame if sumpin' was to happen to it"?

Koyote

I’d really like to know what terrymorse is referring to.

terrymorse 

For lack of a better word, the "special tax" on the bike industry can be called "competition".

Competition kills profits.

Maelochs

Anyone who thinks specialty luxury items shouldn’t cost more than bare-bones, basic, lo-quality or mass-demand items has never run a business.

The OP also claims she is pro-free-market …. another phrase she apparently doesn’t understand.

OP also does not, apparently, understand the concept of “tax;” a tax is necessarily and exclusively applied by the government. If the government isn’t collecting the increase …. It is called “profit,” which is supposed to be Good, right? Make a profit, expand, create jobs, all that? Y’know that “ free market “ stuff?

The consumer has the option to buy from other suppliers or to buy different products.

You want luxury you pay luxury prices. Not a tough concept.

And before everyone asks, yes, cycling for pleasure, competition, even personal fitness are luxuries. You have no Need to do them, they are done for personal enrichment.

I commuted for several years on found bikes, rebuilds, and a couple yard-sale finds ( one of which I still ride.)

If you ride due to DUIs then the cost is part of the penalty— and you can still do it for next to nothing.

Anyone complaining about operating costs while driving to a triathlon in a Corvette (or in an Esplanade because the Vette is the second car) ….

Koyote

That’s even worse than what I expected you to write.

Taxes and competition are two entirely different things. Taxes raise prices, competition reduces them.

I’m just astounded. You recently complained about so-called price gouging – – prices being too high. Now you’re railing against competition, which brings prices down. You seem to be extremely confused.

wolfchild

Here in Canada we have a 13% sales tax ( HST ) on everything including bikes. That's why everything is so damn expensive here..

terrymorse 

Competition does not always reduce prices. Sometimes it increases prices. It always kills profits.

Consider an LBS who must pay the prevailing rate for retail space. If the other businesses competing for retail space (say an Apple Store) can afford to pay more, the LBS will be forced to pay more for the space and raise prices to cover the increased overhead.

With few exceptions (rhymes with "blemano"), nobody in the bike industry is rolling in the dough.

Chuck M 

I think those are called "insurance policies".

tomato coupe

That's not economic competition.

Koyote

That’s competition for resources. Not competition within a market. And that is something that literally – LITERALLY— every business faces. And hence, you still have not explained this special “tax“ on bike shops.

By the way, you again seem to be very concerned that bike shops are not making enough profit… But earlier in the thread, you were complaining about “price gouging,” which raises profits. (or at least, that would be the effect if it were a real thing.) So what is the actual problem - too little profit, or too much profit?

Well, it is a type of competition, but not a type that would especially disadvantage bike shops – or any other particular type of business. So I think l Terry is still striking out.

terrymorse 

I am not an economist, but economists apparently do use “competition” for both buyers and sellers.

"[C]ompetition takes place in markets—meeting grounds of intending suppliers and buyers. Typically, a few sellers compete to attract favorable offers from prospective buyers. Similarly, intending buyers compete to obtain good offers from suppliers. When a contract is concluded, the buyer and seller exchange property rights in a good, service, or asset. Everyone interacts voluntarily, motivated by self-interest.

In the process of such interactions, much information is signaled through prices (see austrian school of economics). Keen sellers cut prices to attract buyers, and buyers reveal their preferences by raising their offers to outcompete other buyers."

— Wolfgang Kasper, emeritus professor of economics, University of New South Wales, Australia.

shelbyfv

Guys, guys.... the troll is cackling now.

Koyote

Please explain the special tax on bike shops. Please. That was your claim. Are bike shops the only businesses that compete for scarce resources – – real estate, equipment, labor?

By the way, you may not be an economist, but I am — at least according to all these diplomas I’ve got in a drawer somewhere. And I have never - never in almost 40 years - heard any actual economist claim that competition raises prices. And your Google quote doesn’t claim that, either.

tomato coupe

You're just throwing spaghetti at the wall. None of this can be interpreted as a "special tax" on bike shops and bike manufacturers.

terrymorse 

It was a loosely thrown term, admittedly.

My point is that profits in the bike business are already pretty darn low, so there is little ability to reduce consumer costs. The premise of this thread, that if only sellers would be happy with less profit, that customers wouldn’t have to pay so much, is not realistic.

Koyote

That was not the OP’s premise, and it does not relate to the claims that you were making. In other words, you’ve tossed another handful of spaghetti at the wall.

You’ve also now introduced a new claim (“profits in the bike business are already pretty darn low”) without providing any evidence.

You’re a waste of time. ‘bye.

tomato coupe

Maybe you should have just stated that, instead of this nonsense about "special taxes" and competition driving up prices.

rsbob 

Time to ignore them and just let this ridiculous “I’m right, your wrong” thing end. Don’t feed them.

seypat

I thought the special tax were those sharp, pointy things that Big Bike/CO2 scattered across the roads so bikes would get more flats. Thus, driving up the costs of CO2 inflators and mini pumps sold at Walmart.

livedarklions

Give you a few more posts and you'll discover the law of supply and demand.
For LBS, they are not just competing with other LBS, they are competing with online retailers and big box stores. I've long since given up buying tires (for example) locally because it's much easier to obtain what I want at an affordable price online. This is not a unique issue for bicycle retailers, it's rampant throughout consumer retail.

I can't follow your arguments here at all, they just don't make any sense. I don't think you understand what a tax actually is.

livedarklions

Right, the tax tacks. I think the government should impose a special sales tax on tax tacks, and we can call it the tax tacks tax.

VegasJen

I do shop Amazon, although I prefer not to. But I don't live in a metropolitan area so my retail options are pretty limited.
Thanks. And you're not kidding about bike tires! I was on Jenson's site earlier this week, shopping tires. I saw some high end options that were literally more per tire than for my daily driver.
My nearest dedicated bike shop is over 50 miles away.
No, I have very specifically avoided turning this thread political.

terrymorse 

I was refuting the claim made above that retailers competing to buy scarce resources is not “economic competition”.

A easy way to refute that was by citing some Econ 101.

Allow me to state this observation:

There is a common notion that if consumer prices are high, it must be because suppliers are raking in huge profits. While there is some evidence of that in some categories, I don’t see a lot of profit being made in bikes. Especially not at retail, which has never been a way to big profits, and is only worse now.

It was always fun to stand silently while a customer berated me about how our prices were ridiculous, how we were ripping people off, how we had no shame, etc., while I was wondering if I was going to have enough money at the end of the month to pay the landlord.

elcruxio

Do people not understand that there's quality tiers to tires? I can get a schwalbe marathon for 14 € per tire but conti GP5000 S TRs are 55€ a pop, minimum. One is a hard wearing allround tire that'll not win any races but might take you around the world safely. The other is a top end racing tire that's essentially built for pure speed.

If I were to put highest grade of professional racing track tires on our toyota I'd be paying out the nose and they wouldn't last very long.

If you want fast bicycle tires they're going to be expensive. You can buy slower tires for cheaper. But of course it's more satisfying to complain on the internet that the luxury product you want costs too much.

genejockey 

Secretary of War : How about taking up the tax?

Rufus T. Firefly : How 'bout taking up the carpet?

Secretary of War : I still insist we must take up the tax!

Rufus T. Firefly : He's right, you've gotta take up the tacks before you can take up the carpet.