Some high end carbon fiber/wood bikes can cost as much as – or more than motorcycles or even decent used cars with prices ranging from $1000-$12,000. But why are bikes so expensive?
There are many factors that affect the cost of a bicycle, including: research and development, manufacturing costs, and materials. There’s also the cost of labor, supply and demand, profit margins, marketing, shipping, and maybe brand loyalty.
Keep reading for details on the main factors of bike costs:
Research and development
While bikes are not high tech, a lot of work goes into research and development to produce frames and components that are quality, durable, and lightweight. Most bike manufacturers don’t even do this research and development themselves, they just buy and assemble pre-built, unbranded frames and components. But they are still expensive due to the research and development and manufacturing process carried out by the manufacturers that make the frames and components.
Material Cost
The price of a bike is also determined by materials used to manufacture it. The more expensive the materials, the more expensive the bike will be. For example, steel is cheaper than titanium and aluminum. However, steel is heavier and therefore less efficient for touring and competitive biking.
Many high-end brands use carbon fiber to make lighter bikes. Carbon fiber is a very critical material when it comes to bike manufacturing and is one of the most expensive materials in the world. The price of carbon fiber varies depending on its quality and the country of origin. Carbon fiber, in and of itself, really isn’t all that expensive. Instead, it is to do with the cost of molds and attendant machines, the cost of engineering the part, and the skills required to properly assemble it.
The price of a bike can also be determined by its features such as gears and brakes. These are often considered when deciding on which type of bicycle to buy. For example, if you live in an area with a lot of hills, you may want to invest in a bicycle with gears that will make it easier to go up hills and brake for going down hills.
Labor Costs
Labor costs are also a major factor in the price of bikes. The more labor that goes into making a bike, the more expensive it will be. Custom bicycles, which are assembled by hand, can cost up to $20,000.
Labor costs can be high in some countries such as bikes made in Italy can be more expensive because the cost of labor is higher in Italy.
Manufacturing costs
Manufacturing costs—not just parts and labor—also contribute to the ever-rising cost of bikes. The bike is a simple machine but it takes a lot of time and effort to put together a bike.
Profit margins
The retail price of bikes is often increased by the distributor or retailer to cover their costs and make a profit. For many popular bicycles, the profit margins are often less than 18%.
The profit margins can vary depending on the bike. The average margin is about 34%.
Shipping
The cost of shipping bikes also plays a role in the high cost of bikes. The cost of shipping bikes can be reduced if you purchase them from a local dealer or shop. However, you will have to pay for the delivery charge which could be more than $50 on top of the price of the bike.
Marketing
Marketing cost is also a huge contributor to the price of bikes. Companies have to spend a lot on marketing (print ads, television commercials, online ads, etc.) because they need people to know about their products as well as to convince them to buy their bikes and not someone else’s.
Brand loyalty
Bikes are expensive because of the brand loyalty that is associated with them. The more popular the bike brand, the more expensive it will be.
The consumer is often willing to pay a higher price for a bike if they know that it has been manufactured by a reputable company. This is because they are confident in the quality of the bike and that it will last longer than other cheaper alternatives.
You may also want to read: The list of popular bike brands
Conclusion
We spend tens of thousands of dollars on cars, most of which will be rusting in a yard in ten years. However, a high-end bike can cost $12000, but could be good as new fifty years from now, even if ridden daily. If you want a quality bike but are on a low budget, you may want to consider used ones.
