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Thursday
Oct312013

Why do bikes cost so much?

I was sent the link to the above video. It drags on for 37 minutes, and it could have said the same thing in a third of that time. However, it does raise some interesting points. The main one being, why do the top end bikes cost so much?

It is pointed out that a Trek carbon fiber bike can cost $13,500 and a Kawasaki motorcycle $4,000. Maybe there are more motorcycles sold worldwide than carbon fiber bikes, but when you take into account the number of parts in a motorcycle compared to a bicycle, and what the labor costs must be to just to assemble a motorcycle, how and why should the bicycle cost almost three times as much?

The video also compares the $13,500 Trek to a $650 Motobecane. We all know the Trek has a better frame, better wheels, better group of components, but is it 20 times better? Is it really worth almost $13,000 more?

I’m not sure how much flexibility a bike dealer will give a customer, but the video points out that when a cyclist reaches the level that he wants a high end bike, he wants certain gear ratios, crank length, handlebars, saddle, etc. etc.

Back in the 1980s when I had my business, I built frames only. I sold them to bike dealers and they built them into bikes. The customer got to choose every part that went on the bike.

There were Motobecanes back the then, along with Nishikis, Centurians, and other production bikes. When a customer test rode one of these bikes and compared it to a Fuso that I had built, there was no comparison in the way it performed and handled. One was a production bike, the other had a hand built frame.

But pricewise the Fuso was not 20 times more than the production bike. In fact if the dealer put lower price components on the Fuso, like Sugino, and Sun Tour, the Fuso would come out at about the same price as the Nishiki or Centurian. However, the Fuso would outperform the production bike even with cheap components.

There is a culture within the cycling community now that almost wants to pay these high prices. I guess that is okay, it is up to any individual how they spend money. And there are plenty of lower priced bikes for those who can’t or don’t want to pay these prices.

You can go to the National Hand Built Bike Show and there are hundreds of craftsmen framebuilders who will build you something really nice for probably less than the $13,500 Trek.

A lot of the money companies like Trek make go into marketing and sponsoring professional teams that ride in the Tour de France and other events, which in turn creates the demand for more $13,500 bicycles. I am just grateful I am no longer part of this crazy business.

 

Footnote: For some reason the video starts 15 minutes in. If you have that problem drag the red bar back to the start.

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Reader Comments (17)

Buying a road bike was so different back then. You chose your frame from the dozens hanging from the ceiling (if not getting a custom build), then selected parts from the display under the glass top counter. You would either then build it yourself at home, or if feeling particularly generous, get the shop to build it for you.

Nowadays, the shop only sell complete bikes, at prices to suit every pocket.

I guess what I'm saying is that previously the customer was in charge and now the bike manufacturers are.

October 31, 2013 | Unregistered CommenterYoav

The irony is that some of us who, as teenagers, couldn't afford Campag in the 70/80s and had to "make do" with Suntour are now scouring the web to pay a fortune for Superbe Pro components for their latest project bike! I've just put a Superbe Pro rear mech on my (6-speed) bike and the gear change is unbelievable - short, fast and precise. The Campy record will be going on eBay and I'll be looking for a front mech to match.

Agreed on the frame though - by the best you can and then spend all the rest of your money on a good set of wheels. Now I'm off to find some Suntour hubs!

October 31, 2013 | Unregistered CommenterAndy Mac

Nicely put. I built my dream bike (at least, the bike of my current dreams) last winter, and it was nowhere near those astronomical figures. The frame is lugged steel with custom geometry, so that wasn't cheap, but it wasn't that expensive. The components ended up costing a lot, partly due to vanity (I didn't really need that White Industries rear hub, and a Shimano dynohub would have been nearly as good as the SON--not to mention the René Herse crank), but also because I was mixing and matching components and thus couldn't get an OEM-style deal on the whole shebang. On the other hand, it looks great, rides like a dream on everything from smooth pavement to washed-out fire roads, and most importantly, should last me the rest of my cycling life.

Sure, my bike weighs 10 lbs. more than a high-end Trek racing bike (though a lot of that is due to fenders, a front rack, and bags), but for the kind of riding I do, that doesn't make a lick of difference. What's important is that it still feels comfortable after 10 hours in the saddle.

October 31, 2013 | Unregistered CommenterBrian Ogilvie

And if I get a custom built frame it will actually fit me, not the mold that it came out of.
The funny thing is that I just finished building a full Shimano 105 group (from 1980) on a nice old steel frame and it only weighs 1.5# more than the the top end crazy stuff.

November 1, 2013 | Unregistered CommenterEdStainless

There's a handbuilt Dave Moulton Fuso with full campy on eBay right now which can be had for 1/10 the price of that Trek. That's a re-listing, no bids the first time, so I bet the first $1300 to wander by will get it. Paint's a little rough, but I'm sure that doesn't affect the ride...

November 1, 2013 | Unregistered CommenterRubeRad

I remember buying Shimano Dura-Ace in the early 70’s because it was much cheaper than Campag. How times have changed.

November 1, 2013 | Unregistered CommenterYoav

I've a modern steel custom-built frame, from the nice chaps at Paulus Quiros. It cost me far less than a carbon frame would have, fits me perfectly, and is only a little bit heavier than the carbon. I can only assume that us older guys 'know' - but then, we're not the ones being advertised to.

November 1, 2013 | Unregistered Commenterjon

Hi Dave, Since you didn't mention which components, wheels etc.... is one getting on the 13K Trek it's hard to say why it cost's so much. I ,like the others, ride older steel bikes with older quality components. I do however ride an aluminum Redline cyclocross bike with a carbon fork and Dura Ace 9spd components. This bike I built for about 3k. But as a recent former mechanic for a
Los Angeles based "Hi End" bike shop I'll say that I built a Scott Team pro with Sram Red components, Zipp 808 carbon tubular wheelset, carbon stem, seatpost and handlebars. This bike was a 54cm frameset and weighed 14 pounds ready to ride. Yes, I am not lying that figure is correct. This was for a pro rider and could have probably dropped another pound with silly light parts.
I also sold a Blue Angion all Sram Red with less expensive stuff to a guy for 5K that weighed 15 1/2 pounds. And one of the stores regular customers had me build up a Cervelo R5 California frame set with Ultegra DI2, DT wheels and other high end stuff that was also 14 lbs. My point being that some people have deep pockets and want to build a bike with light trick stuff. All the bikes I mentioned are not ridden just on the weekend for a coffee run. These customers ride over
300 miles a week and are dead serious ! Dura Ace DI2 cost's 4K alone. These bikes are expensive, but I haven't seen a steel bike with top stuff anywhere
close to the 14 / 15 pound weights I mentioned. Also, I would ride any of these bikes and I'm 6' 1" amd weigh 185 lbs. So, some like to spend their money on the latest trick Trek or ????? or some will ride a 19lbs. steel bike with cool older stuff ( I like these myself too !!!) I have to admit that a 14 / 15 pound bike makes the 19 pound bike feel like an anchor at times. Yes these carbon cookie cutter bikes are not the artisan beautiful bikes that builders like you Dave, and many others create, but they do perform and people like the latest technology too. Great post Dave !! Thank you !
Brian

November 2, 2013 | Unregistered CommenterBrian

@Brian - my steelie weights 16lb, and I could easily knock a couple of pounds off that with more expensive bits.!

November 2, 2013 | Unregistered Commenterjon

I think the situation has gotten out of hand- but at least partially because so many people are willing to pay those ridiculous prices. As an amateur racer, I prefer steel bikes because I can't afford to be replacing carbon stuff on a regular basis. Given that a hand made steel bike often costs less than a carbon Trek, and that steel bikes can be built pretty darn light if necessary... I'm surprised that so few people are racing steel bikes anymore. Carbon is fine for pros because they are going to get new bikes on a regular basis. If you want or need your bike to last 10 years (like it should) then steel is the way to go.

November 2, 2013 | Unregistered CommenterConrad

A couple of things here: the high-end uber-expensive TREK is made in the US. Supposedly we in the US make really, really good 'stuff', but it will cost more. I got a custom-built Ti frame from a very reputable builder in 2010. It came in lower than the equivalent US-made TREK at the time (a Madone 6 or 7). Sure, I now have a metal bike, when everyone around me rides carbon. One might call me a retro-grouch; WHATEVER!
Yes, I paid dearly for my custom bike. More than I ever thought I would. I had a budget, and blew it (by a little). But I know who built my bike! I know the workmanship that went into it.
It was NOT a machine in Taiwan (or China), producing 'knock-offs' with huge price tags. For Christ's sake, the top-of-the-line Specialized bikes go for the same price as the TREK in the example in the video.
Bottom line here, is (I think), the manufacturers look at the bottom line. Period. The consumers keep feeding this madness by buying the products. Stop buying, and the prices will come down. It happens every time the price of oil goes up and the population decides they can actually walk (oh, the horror!). The same should apply to bikes.

November 3, 2013 | Unregistered CommenterPVasiliou

Conrad,
A steel frame will last a lot longer that 10 years, as long as 50 years. Also it will not fail suddenly but will develop a crack first. The frame will start to feel more flexible or maybe start making creaking sounds, giving plenty of warning that something is wrong.
Dave

November 3, 2013 | Registered CommenterDave Moulton

Well thanks for the reminder Dave. Sure a steel bike will last 50 years.

I have one, made by Jack Taylor in 1953. He was probably already legend when you started frame building. I guess it would have been pricey then...not all that pricey tho. Sometimes I ride it.

Now I mostly ride a Cervélo, which was pricey in 2011, but not all that pricey. The sort of price that a guy who really likes riding can stretch to, much the same as the Taylor was 60 years ago.

The guys that are buying a $13.5 Trek are the same guys as are buying Tesla automobiles, and for the same reason...because they can.

November 3, 2013 | Unregistered CommenterMartin Hayman

A really good post. You were absolutely right that the video could have been shorter (at I least I learned how to play YouTube videos at 2x speed), but he makes some good points. For racing bikes, I think there is probably a "sweet spot" of best bike for the money for serious recreational riders, maybe somewhere around $1500-3000.

November 4, 2013 | Unregistered CommenterTimJ

Dave,
Agreed. Four out of five of my bikes are more than 10 years old and going strong. My Serotta Colorado II has been raced on for 20 years and crashed really hard a couple of times, and the fork re-aligned by a local frame builder. But still no cracks or signs of imminent failure. I don't worry about 40mph descents. On a carbon bike that had been crashed hard- I would worry!

November 4, 2013 | Unregistered CommenterConrad

they sell this bike at this price because they can, expensive watches sell for similar reasons. this is a psychology topic as to why people buy not a technology topic. If they have that bicycle in their range there is a trickle down effect of kudos.

November 7, 2013 | Unregistered Commenterpeter

I have a couple of Australian factory bikes from the '80s. Tange 900 d/butted tubing. I've swapped stuff onto them, and they're both low kilometres, and nice enough to ride. But nothing compares to the hand-built Pegasus, made by a guy in Canberra in the '80s, Keith Davis. The ride is in a different league, and has caused me to watch for similar such bikes. Though I've spent more on replacing components than on the original frame, I'm hooked... and on the lookout.
BTW, it was constructed in 531 Professional.
And, agree with the 'psychological' factors comment. "Look at me!"

December 9, 2013 | Unregistered CommenterPaul (Australia)

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