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Oh and turnover is king. I’d rather make 20% on 2 million turnover than 40% on 1million.
You can't apply a total simplistic approach like that. You could turnover all the money in the world, but if you're not making anything, you arn't going to last.
Turnover, profit & cashflow are all important.
And me, I'd much rather make a healthy 40% (assuming good cost control) on £1m than do twice as much work to make the same amount of money. If the opportunity for growth is there, it can be managed far better with higher margins.
The company I work for would go bust if we only ever made 20% gross.
They're also a gateway drug. I mean no one woke up one morning amd thought "I've never done drugs before but I reckon I'd like to try a few gram of meth today" it's the same with bikes "oh, that hybrid thing looks like it could get me fit and save a few hundred quid in petrol" 18 months later "hmmmmm £380 for some jockey wheels, ooooohhhhh and they come in red. Screw holiday the kids"
You can’t apply a total simplistic approach like that. You could turnover all the money in the world, but if you’re not making anything, you arn’t going to last.
Turnover, profit & cashflow are all important
Yes, I thought it was fairly obvious that was a massive over simplification.
“Oh and turnover is king. I’d rather make 20% on 2 million turnover than 40% on 1million.”
I take it you don’t run your own business?
Lower profit and higher turnover is always higher risk and more stressful. You need more staff, bigger premises, more complex admin systems, and if market forces change your costs or selling price (exchange rates, commodities, competition) then you more easily swing from profit to loss.
They’re also a gateway drug. I mean no one woke up one morning amd thought “I’ve never done drugs before but I reckon I’d like to try a few gram of meth today” it’s the same with bikes “oh, that hybrid thing looks like it could get me fit and save a few hundred quid in petrol” 18 months later “hmmmmm £380 for some jockey wheels, ooooohhhhh and they come in red. Screw holiday the kids”
Only £380, you cheapskate!
https://www.pushcartel.co.uk/shop/ceramicspeed-3d-printed-titanium-oversized-pulley-wheels
Lower profit and higher turnover is always higher risk and more stressful
That very much depends on why your profit is low, a company investing and expanding will have a naturally lower profit vs one which isn't, a company selling too cheap could very easily have a higher % profit than one selling at a sensible price, even at the same level of turnover.
No I wouldn't take a 50% dip in profit for 100% increase in turnover year on year but I'd very happily spend into loss over a few years to see a 100% increase in turnover with an expected return to profitability at 80 or 90% of previous levels in the mid term.
As above, my statement is a massive over simplification but growth in revenue isn't just a vanity trip and higher profits aren't always the sane pursuit.
Only £380, you cheapskate
Well yes, but I can buy a significantly over priced mini bag of haribo and get free £380 jockey wheels. Those ones probably don't come with sweets.
There's some merit in favouring higher-turnover & lower-profit business models, as it might indicate a more mature and stable position in the market.
Depending on a high profit margin and low volume might leave you more vulnerable to competitors.
But that's making some assumptions, obvs.
Re. bike pricing, we're all knowledgable enough to understand that it's not just cost of parts and everything else is profit for bike companies, but - as mentioned - some brands' "aspirational" pricing of their halo models is just silly.
but – as mentioned – some brands’ “aspirational” pricing of their halo models is just silly.
It all seems pretty consistent, around £10k for the top end model with carbon wheels, top end group set, top end finishing kit etc.
It's much like the car market you can buy a 318 (or whatever the entry level BMW is now) or you can take out a mortgage and buy a 750.
There are people who will buy top end bikes and top end cars....
as mentioned – some brands’ “aspirational” pricing of their halo models is just silly
I think its as much that those halo products don't actually seem to be that outlandish beyond the price. Sure its factory suspension and xtr shifting etc but none of that is actually *that* spectacular.
If those halo models were equipped with a £1400 derailleur cage and trickstuff brakes etc we might look at the [crazy] high priced stuff and think "wow" about something other than the price, as it is the halo models look a bit too normal.
For want of a better analogy it's a bit like finding there are no bugattis or maybachs to drool over, but if you want top of the line for twice the price of your standard mondeo you can have aircon and heated seats.
I suspect those £10k "superbikes" only sell in very tiny numbers. And possibly none or very few at the official RRP.
What does it tell us that only certain brands do them? That's an open question BTW.
What does it tell us that only certain brands do them? That’s an open question BTW.
That it's cheaper column inches and better marketing than a few "1/4page" adverts.
I suspect those £10k “superbikes” only sell in very tiny numbers. And possibly none or very few at the official RRP.
If I had the choise of a £3 pint of beer or a £5 pint of beer, and I knew the £5 one to be superior; I'd not hesitate to pay the extra.
£60 shoes or £100 shoes, again, if I can justify why the dearer ones are better, for something I'll use nearly every day, no issue for me personally.
While I'm far from able to apply the same logic to bikes, there exists a large number of people that have the disposable income to do so.
If the top model of brand A is £6k and brand B is £10k, but with some kashima stanchions and carbon wheels and electric shifting which feels better on the demo day, or even just gives them a warm fuzzy feeling on the spec sheet; then this month's sales bonus will go to the more expensive one and they wont look back.
What does it tell us that only certain brands do them? That’s an open question BTW.
That they have good marketing departments......
regardless your chart is USD to EUR and USD to GBP.
Um, yeah. If you want to see the effect on the currency of being in a bun fight with another currency, probably better to use a neutral benchmark not involved in the bun fight. That chart shows pretty conclusively that the pound and euto both suffered from brexit and both recovered pretty well post referendum. Also that the pound recovered to the pre referendum level (as an aside, the pound was 5-15% over valued pre referendum, so that will be built into the drop too). Again, the larger point is that since the pound has risen sice the referendum, I shows that the uncertainty of the event is more damaging than the event itself.
A lot of stuff is priced in dollars, I don't know about bike stuff but it wouldn't surprise me. A lot of the inputs will be priced in dollars, so that's the currency to look at for the effect of currency on prices.
The top model's main raison d'etre is to make the next couple of models down the line look reasonable
I suspect those £10k “superbikes” only sell in very tiny numbers. And possibly none or very few at the official RRP.
Having been at Comrie today and seen at least 30% if the bikes out were Santa Cruz/Specialized eBikes if £5-7k, I'd beg to differ...
Having been at Comrie today and seen at least 30% if the bikes out were Santa Cruz/Specialized eBikes if £5-7k, I’d beg to differ…
They weren't the halo range superbikes for those manufacturers though.
I used to work in a mass production bike factory many years ago, low end stuff, deore LX was the highest ever spec, when you buy hundreds or thousands of groupsets the price difference is massive, lots of cranks tightly packed into a box all separated by a bit of cardboard, same with the hubs.
The raw steel frames from the far east all tightly packed with surface rust on, a lot of them needed their stays manipulated to get a wheel in pre powder coating, they cost next to nothing and those cheap generic 7005 hardtail frames in the mid 90's that got re branded by a dozen companies were shockingly cheap, I took a couple home for my mates.
Having been at Comrie today and seen at least 30% if the bikes out were Santa Cruz/Specialized eBikes if £5-7k, I’d beg to differ…
thats barely mid range for a full suspension ebike
what was the rough average value and brand of the manual bikes
thats barely mid range for a full suspension ebike
Yep, was in Rutland cycles local ebike shop the other day (killing time) and amazed at how many bikes over £5k they had, £5k seemed about mid price for their stock. Several over £10k at the top end, not much under £3k at the bottom end.
A lot of prices are what someone is willing to pay. Take that famous flip flop begins with H made in Brazil, in the shops in Brazil for £4.50, in the UK shops over £20.
In the mid Eighties I was talking to a dress maker in London who made dresses for a high street brand, out of his factory which was in London at the time, £8.50, in the store £85.
Or the very well known running shoe company, chinese factory price £2.50, shop price £84, this was 15 years ago.
There has always been a big disconect from factory to shop.
That has the label for a referendum in the wrong place, it was 23 Jun 2016, not October 2016.
Just by eyeballing the chart, for the 12 months leading into the referendum (the larger vertical drop) GBPUSD exchange averaged about 1.5, following 12 months the average is below 1.3. You can change the 12 months to 24 or 36 months and it's going to be a similar kind of answer in terms of >10% devaluation post-referendum.
It appears that the assertion that by mid-2017 the pound rose to higher than it was at the referendum is based on a misconception.
I kind of appreciate that I'm being picky, but I just really have a dislike for 2 + 2 = 5 statements.
Have you changed your mind then, having had another look at the stats?
I’ve never bought a full price new bike. Currently my newest frame is a bird 2019 which was second hand. Have been able to source parts quite reasonably and looking forward to build it when I have time. Bikes don’t have to be too expensive if you’re prepared to buy used and be a season or two behind.
appears that the assertion that by mid-2017 the pound rose to higher than it was at the referendum is based on a misconception.
We must be looking at different charts. It's pretty clear to me that by mid 2017 the graph is higher than it was at referendum. Also that the pound traded below 1.5 for all of 2016.
Again the takeaway is that despite the fact that brexit was still on, the pound rose. So did the Euro. Both will likely drop leading up to the no deal/deal/what's in the deal and then they will recover. The longer term is not favourable to the pound but it's not that favourable to the Euro either.
When I did my how much did retrobikes cost in the early 90s thread I am pretty sure 2k or more was mentioned for the high end models and that's an old now basic hardtail that was from a mainstream company.r and d on modern FS bikes and forks and shocks must be a lot and as mentioned some charge what they want. if they are slapping 600 on a bike over a yr I do not agree with that being fair though.
We must be looking at different charts. It’s pretty clear to me that by mid 2017 the graph is higher than it was at referendum. Also that the pound traded below 1.5 for all of 2016
I think you must be looking at different graphs yes, at least for post referendum peaks. To hopefully put it to bed in simple terms.
Prior to 2016 the GBP traded higher against the dollar. Over the 10 years 2006-15 ranging an annual average of 2.0 - 1.52. the biggest decline being brought about by the financial crash which wiped around 30c off the annual average.
During 2016 the pounds decline again starts to creep more sharply in as the traders priced in a possible no vote. Given it seemed unlikely they only partially did so.
Prior to the referendum in 2016 the pound trades an average 1.42-1.45 Jan to may.
Some the referendum monthly averages have only breached 1.40 once, not quite reaching pre referendum levels, and mostly have been high 1.20s low 1.30s.
The pound has been on a long te decline, which was accerelerated by the referendum and on average you could reasonably say the pounds dropped from 1.5 pre ref, to 1.3 post.
It's hard to say how fair some of these price rises are. And obviously it's business, fair doesn't really come into it. It's not hard to envision a scenario where all component costs are rising due to limited supply and increased demand. And as a result, you may be facing lower margins on a smaller number of sales. That to me means bigger price rises to maintain profits.
UK wage growth over the last decade has been way behind other countries. That 10k bike might seem ridiculously expensive but in countries where there have been wage increases it doesn't look as bad. It isn't only exchange rates that are the problem.
National stats would dissagree with that, in 10years wage growth mean UK 2%, France 0.4%, Germany 1%, USA 4%, EU 2%.
UK wage growth over the last decade has been way behind other countries.
You'd need to look at disposable income after health, food, housing costs etc to get any meaningful comparison, as the costs of living vary so much.
Rising costs are one of the reasons I 'retired' - I started MTB in the late 80's alongside BMX snowboarding and MX. I progressed and rode at a high level and had decent kit as budget stuff lacked the adjustment/quality.
What really finished me was a Cannondale Jekyll discounted from Paul's Cycles. I cracked it Stiniog after a few months and it was absolute shite - I hated it but was reluctant to be spending £4k+ for something else so I sold up.
Yep, was in Rutland cycles local ebike shop the other day (killing time) and amazed at how many bikes over £5k they had, £5k seemed about mid price for their stock. Several over £10k
I noticed the ebike bandwagon is the latest gold rush! Shame most of them end up bouncing back through the doors for warranty repairs in yet another MTB QC bit of a mess. Edit: I didn't type "bit of a mess"
Seems like a parallel world to me. I look at the stuff on here and other major sites and the frankly ludicrous RRP's for branded disposable tat.
Loads of complete bikes have had year on year price rises and spec reductions, usually cheaper nastier forks. Seen some go from gold Sektors to them shitty RS silver (always rust through) TK dampers with a price rise to boot.
and prices rising...
https://road.cc/content/news/specializedcanyon-and-giant-increase-bike-prices-278405
Is it simply a case of making hay while the sun shines?
S-Works Founders Edition £13,000 - No price change
Thank god for that!
Meanwhile I have just got a new knobbly 26inch tire for my commuter for 10 pounds posted.decent brand too.
S-Works Founders Edition £13,000 – No price change
Yep, made me smile!
Kind of reminds me of a return to the late 90's when a fairly decent full suspension bike could be had for £1500 and £5000 road bikes were only to be seen in the pro peleton.
With adjustments to inflation taken into account it feels like we are heading bak to those days again.
Kind of reminds me of a return to the late 90’s when a fairly decent full suspension bike could be had for £1500
Late noughties too.
Hold on a moment listening in on a recent conversation with my mates daughters and friends leads me to believe it’s only us saddos that want to own something that get offended by prices unless we have loads of cash burning a hole.
The yoofs are happy to stick it on a credit card and be in eternal debt from what I can gather , they realised the housing ladder is beyond them and so spending 700 quid a month on a pcp car and two hundred quid a month on a 7k bike is just part of the having nice things lifestyle. Someone pointed out I’m into bikes and they positively laughed me out of the conversation because my 2 grand remedy was what the poor people ride these days .... sheesh tough crowd
Bring back cash only.
Kind of reminds me of a return to the late 90’s when a fairly decent full suspension bike could be had for £1500
I'd take a new £750 halfords 29er hardtail over any £1500 90's full suss (even in time-machine-new-condition).
It would be better suited for any riding, competitive or recreational.
Any counter arguments welcome
Just read Specialized and Canyon have increased costs by 12% lol 500 quid on a road bike that some people haven’t even received yet paid the deposit on , oh dear.
I'm inclined to believe them that costs are going to be rising and availability is going to challenged. Not a good look unfortunately when you've started taking deposits at shops. But as the article says, shop has to honour the original price (and I'd hope that the shop gets that too).
Any sign that this is a global trend, or is it a change at UK level only?