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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Fuzz on October 23, 2014, 09:59:57 PM

Title: How do sales at bike shops work?
Post by: Fuzz on October 23, 2014, 09:59:57 PM
Question: At my local bike shop, the 2015 models are already on the floor. And the 2014 are being marked down 20 to 30 percent. The 2014 models have been marked down for about a month.

Do they keep reducing the price? I've never seen a model marked down 40-50-60 percent. Do they return the bikes to the distributor? They're going to put out winter merch pretty soon.

My understanding is that the markup on a bike is only 20-30 percent. So theoretically the bike shop is losing money on a 40 percent mark down, which is why that won't happen. Basically, I want to know if I keep waiting is there a chance it will get even more discounted. 

I'm looking at a Santa Cruz, if the brand makes the difference.
Title: Re: How do sales at bike shops work?
Post by: kendallf on October 24, 2014, 07:14:35 AM
I've seen it handled a couple of ways around here (I am friends with several bike shop owners.. yes, I have a bike problem).  Most of these guys must commit to a minimum buy and pay for it as it's delivered, so those are already sunk costs for them.  Their agreements with the bike company often specify price floors on current year bikes.  Their goal, obviously, is to end the year with a minimum of expensive unsold inventory.

Once it gets past that year, it varies.  I know a couple of shops that have Ebay businesses selling last year's bikes.  I'm not at all sure what the bike manufacturer's attitude is about this.  Some will continue to discount the bikes.  Some seem to hang onto them indefinitely (they might have a 2008 "new" bike on the floor, not discounted substantially).
Title: Re: How do sales at bike shops work?
Post by: TrMama on October 24, 2014, 11:06:32 AM
Try negotiating the price. I've never bought a bike at sticker price. A further 10% discount should be possible. Otherwise, see if the owner will throw in some other odds and ends for free, or cheap. Pedal, spare tubes, clothing, helmet, etc.

Don't bother trying to negotiate with a regular employee. You usually need to speak directly to the owner in order for this to work.