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I've just bought a new helmet for £45 when the RRP is £90. What are the bike shops getting them for to still make some profit at half RRP?
could be a number of reasons
the shop, could be just making a loss to move old stock,
they bought a load in and got a deal from the manufacturer/importer
they are grey imports
the importer has decided to clear this years lines and is selling cheap.
you are one hell of a negotiator and could sell ice to eskimos 😉
few options, but on helmets the margin is typically 30-40% I guess
I've just bought a new helmet for £45 when the RRP is £90. What are the bike shops getting them for to still make some profit at half RRP?
Do you think they made a profit on the sale?
It sounds like you got a clearance item which was priced to go rather than something that you would make money on, could even have been at a loss. If it's there, taking up space, already paid for (most things will be) and there are bills to pay most retailers will see it gone for something rather than sit there for nothing.
It's a current year model [i]according to the website[/i] but that is what I really wondered about. Guess if there are plenty of other reasons it should be fine.
Current year doesn't mean a thing. 2014 RockShox are out next month!
If you look inside the lid it should have a date of manufacture mark in it. Also 2013 is over for the bike trade, 2014 stuff is being launched and will be there in August so it's now last years stock as 2013 was around from mid 2012, if that makes sense.
As Sancho says there are also deals from suppliers etc. I have some nice Teva links from that sort of deal 🙂
Is it a Giro? Madison are ditching them. Which could mean stock being shifted cheaply.
No, a Bell.
mikes smith I guess that makes sense.
Deals on most giro bell helmets at the moment
giro and bell is the same co...theyre will be very little profit on that i guess
Madison are about to dump a lot of Giro stock after the fallout, Easton Bell own Giro. Shops generally wouldn't make that kind of margin on P&A. Obviously there are exceptions to that in some instances
[url= http://www.bikebiz.com/news/read/madison-and-planet-x-settle-bell-dispute/014151 ]http://www.bikebiz.com/news/read/madison-and-planet-x-settle-bell-dispute/014151[/url]
some background
Didn't realise they were the same company. I guess a decent helmet for £45 is the main thing!
Thanks mrmo. Not likely to be any issues for the end customer though, are there?
Its still made of polystyrene and plastic whatever price you paid for it 🙂
Yeah 🙂 just reading the stuff about grey imports without CE marks, although I'm sure they wouldn't make a separate somewhat shitter version for outside the EU!
I seem to remember from when I had a Saturday job at an lbs helmets used to be one of the biggest margins to make sometimes up to about 65%. Bikes less so. Between 30 and 45%
only issue i can think of is what about the crash replacement, but for the money you paid why worry. It is a helmet, it'll offer a little bit of protection which is what it is meant to do. If it fits and you like it you got a bargain, so be happy and enjoy.
mrmo - Member
Is it a Giro? Madison are ditching them.
Not quite the truth, not sure if the announcement about Giro distribution has been made yet
Don't be surprised if they do....
Although its more to do with protecting their distribution network (quite rightly)
Not quite the truth, not sure if the announcement about Giro distribution has been made yet
It has, a while ago. Giro, Bell & Easton sales are about to take a tumble in the UK. I'm not sure the 'actual' truth will come out though.
Yes indeed mrmo.
Wondering rather than worrying (it's a slow day here today now that I've fixed the washing machine).
From the article mrmo linked:
Dominic Langan, chief executive of Madison, the exclusive UK distributor of Giro Helmets in the UK, said: "The unauthroised importation of Giro helmets from outside the EEA into the UK needs to stop. Significantly, these helmets may not carry a certification to the European Standard CE EN 1078, which is required for bicycle helmets sold in the UK and elsewhere in the EU."
So are Madison saying Giro makes crappy helmets for overseas and awesome ones for the EU? I'm surprised that Easton-Bell allowed them to release a statement like that.
does this mean some cheap Giro shoes out there?
Wondering rather than worrying (it's a slow day here today now that I've fixed the washing machine).
Orange 5 huh.... makes sense 😉
Surely more to do with the legality of selling them without the relevant sticker rather than the safety of them?
Trek Stache actually. F all to do now I've finished deliberating that one.
I'm sure they wouldn't make a separate somewhat shitter version for outside the EU!
I wouldn't count on that. Helmet safety standards are like speed limits - everyone uses them as a target. Manufacturers all want to make the lightest, most ventilated helmet because that's what customers want, so they don't want to over-engineer them when they don't have to.
The shop has to cover it's costs, rent, businesses rates, staff.
Even if the helmet comes in at £45 and they sell if for £90, £18 of that is VAT so by the time they cover all their costs the profit margin is pretty slim.
In this case I think the shop is trying to avoid a loss.
Clothing, lids, bikes, all the same principle - make a normal/good margin during part of the season, but potentially forced to clear at just over cost (to cover overheads if you can) later in the season or by discounters, then look at the average over the year for the true margin made on that line. Helmets and other clothing items are generally the most extreme examples of boom-bust, same in outdoor gear retail.
I'm surprised that Easton-Bell allowed them to release a statement like that.
I can't imagine Madison give a f*ck what EBG think...
In this case I think the shop is trying to avoid a loss.
Most people are clearing Giro out because everyone is about to start discounting it heavily.
There is no VAT on helmets however some retailers/brands will fill this gap with profit!
And the likes of Madison always have deals on, like the SLX clutch mechs from Merlin. They were all boxed so i suspect Merlin took the lot on a largely reduced rate. They generally do a clearout price for 10+, 50+, 100+ etc so take them all and corner the market means you buy cheap, sell cheap but shift them all and make a fast buck!
Not quite the truth, not sure if the announcement about Giro distribution has been made yet
I thought it had been made public... Might be wrong though?
Certain Yorkshire based company right?
Its still made of polystyrene and plastic whatever price you paid for it
Often thought this, why are they so expensive in the first place? Couple of quids worth of materials squirted ito a mold and retails at £90
[b]bland[/b] - Member
There is no VAT on helmets ..
Is that really true ? On what basis are they exempt ?
Safety equipment
Couple of quids worth of materials squirted ito a mold and retails at £90
and how much did the mold cost?
Helmets aren't going to be that cheap to shift around, yes they are light but they do take up a fair amount of space.
Couple of quids worth of materials squirted ito a mold and retails at £90
Yep and it's moved by magic carpet, sold by pixies and designed & tested by magic...
just to finish the manufacturing costs thing.
If coal is cheap and iron ore cheap, why are cars so damn expensive?
There is no VAT on helmets however some retailers/brands will fill this gap with profit!
Not strictly true- they're zero rated if they carry the 'ce' mark.
Presumably the vat is being paid on any grey helmets sourced outside the eu....
With regards to the margins, I don't know what it is like now but I remember that when I worked in a shop there wasn't that much margin on bikes but quite a lot on accessories especially stuff like tubes. Admittedly we bought a lot being a biggish shop but the mark up was pretty massive.
We also used to get a lot of deals from distributors that would enable us to have special offers. I remember the Michelin reo trying to clear a load if tyres...I bought some Hots for three quid each and some DH tyres fir not much more.
What most seem to miss is that the difference between what you pay for something and what you sell it for is not profit 🙂
On the distribution thing, I'd be fairly pissed if someone was selling stuff in an area that I had exclusive distribution in, you put in the hard work marketing, selling, supplying etc then you get undercut by someone doing none of the work. Especially if you have a written agreement for distribution. (if thats whats going on) great for the consumer for 10mins then crap after that.
Often thought this, why are they so expensive in the first place?
Because expensive helmets are fashion items.
And fashion items == bigger margins right through the chain (manufacturer, distributor, shop) because it's more speculative than selling everyday bread-and-butter stock, i.e. (a) people will pay a premium for the "in" brand/style/colour but (b) there's more risk of getting stuck with a pile of unsold last-years-model which then has to be dumped at 50% off.
Does this bother you? Get a cheap mass market one for £24.99, it'll protect your head just as well...
There is no VAT on helmets however some retailers/brands will fill this gap with profit!
Think it changed about 5 years ago. I seem to remember buying a Xen in a hurry for £70 as they were going up by 20% the next month.
It amuses me when consumers make wild speculations about margins/costs on items.
Helmet margins are better on cheap branded stuff like raleigh helmets or the stuff out of Aldi.
High end brands from entry level cost to top level cost make the same margin.
Our of intrest, has anyone read why more expensive helmets cost more to make? I'm not saying people will get more out of them but at least be open to reading up on a manufacturer as to why they are what the are.
I seem to remember buying a Xen in a hurry for £70 as they were going up by 20% the next month.
really?
There is definitely no VAT on cycle helmets.
be open to reading up on a manufacturer as to why they are what the are.
I spent a lot of time deciding between a Specialized Propero II helmet (£70) and a Prevail (£160). They look virtually identical and I could not see a material 'performance' advantage with the more expensive one.
I would be amazed if there wasn't a significantly larger margin on the more expensive helmet.
you'll make more on a more expensive helmet but the percentage margin will stay the same.
generally helmets spend longer 'baking' and will have more inmold features, better materials going on.
marketing folks call it 'value based pricing', but in reality its 'charge what you can get away with'.
The cosmetics industry makes sports goods providers look like caveman at this.
Mind you, if you buy an expensive brand you're the source of the problem, not the victim 😉
Got it the wrong way round, must have waited a month for them to go down, and it was 13 years ago.
http://www.bikebiz.com/news/read/its-no-joke-vat-dropped-from-cycle-helmets/05400
I seem to remember from when I had a Saturday job at an lbs helmets used to be one of the biggest margins to make sometimes up to about 65%.
Couple of quids worth of materials squirted ito a mold and retails at £90
These are very true statements. I believe that helmets are one of the biggest earners in the bicycle industry, precisely because they are only a few pence worth of materials squirted into a mould.
Moulds can be quite expensive of course, but they are usually made in the east (approx 35%cheaper than the UK) and of course the cost is amortized over all f the helmets made. Not to mention that some are modified to produce next years helmets.
If coal is cheap and iron ore cheap, why are cars so damn expensive?
Only 50% of a car cost is manufacture related. The remainder comes from marketing, forecourts bla bla bla. A typical car body in white comes in at just over 100quid fully formed and welded.
its sad, but we all want cheap stuff and I used to get annoyed when I found out the retail industry typically buy something at 50% of what they are selling them for.
A 10 quid top, they buy for 5.
That 5 quid usually costs 2.50 to produce the top.
So it sounds mad to pay 7.50 on top right?
But having recently done a lot of work sourcing raw materials for a clothing line and the cost of prototyping, manufacturing, marketing etc chances are most of us are getting good value. on top of that the shop has to pay rent/rates/wages/utilities and to hold stock...
... I reckon you got a bargain and they were selling to clear space for new stock or new lines coming through. Either way well done.