Why are bikes so expensive? Explained

I love dreaming about riding and owning new bicycles. If you’re familiar with Bicycle2Work you know that I have a list of dream commuter bikes that I wish were mine. These bikes remain a fantasy, because every time I see a price tag I am reminded that they’re out of my budget. How can anyone afford some of these bicycles? Many of bikes are more expensive than owning an actual car with prices ranging as high as $12,000 to $15,000 for a bike! Seeing these astronomical prices made me question why bikes are so expensive? What is it about bicycles that push the cost so high? Out of curiosity I dug into the facts to look at the reasons for their high costs.

Why are bikes expensive? Bicycles are expensive, because of the materials, manufacturing costs, and research and development that goes into them. Bike companies also know from market research how much they can sell bikes to receive maximum profits.

There are many factors that go into a bicycle’s cost, and I will give insight into the main factors of bike costs to hopefully give you an understanding into why they can be so expensive.

Materials

Bicycles nowadays are made of a variety of materials. While frames used to be primarily made of steel we now have bikes made of more expensive materials like carbon fiber and titanium. Clearly using better quality materials will increase the cost of the bike. In addition, using materials like carbon fiber are more difficult to shape and so manufacturing costs increase when using these materials.

Customized for the Rider

If you’re looking for a basic, default bike without the bells and whistles you can find one that is reasonably priced. Bicycles get increasingly more expensive depending on what you want with the bike. Anything other than the basic paint job will increase the cost. Choosing specific handlebars, customizing the seat, and even adding racks or fenders will all make the bill go up.

Nowadays many of bike part companies such as Shimano, Campagnolo, and SRAM offer different tiers of components. The more expensive Shimano Dura Ace groupset will offer smooth shifting, will help you power up hills, and pedal faster than ever before. Of course, it costs more though and so you may need to settle for the less expensive Shimano 105 groupset. The more you customize the bike the more expensive it will be.

Research and Development Isn’t Cheap

The bigger cycling companies spend a great deal of money researching, designing and getting creative with their new bikes. They’re looking for innovative ways to push bikes to the next level and be on the cutting edge of the market. All of this costs money as they pay for the software, prototypes, materials, and employee costs.

If you would like to have a peek into Specialized Bicycles Headquarters in Morgan Hill and their new research and development center check out this link. It is pretty cool to see all that goes into coming up with the new bikes. It is a reminder that this are top notch business really working hard to make the best bicycles ever.

The more research and development that goes into a product will increase the cost of the bikes. They must make money for the R&D.

Keeps the Local Bike Shop (retail store) Open

It is not easy being a brick & mortar retail shop these days, and the local bike shop isn’t an exception. With the consistent increase in online sales, local bike shops are working hard to stay open and afloat. I have heard cyclists say that shops are trying to “rip them off” by rising the price on bikes, and I can’t speak for every bike shop, but I imagine most local bike shops aren’t trying to rip off their customers. The truth is they need to make money off of their products (including bicycles) so that they can pay the salary of their employees, pay rent for the building, and have money for everything else that comes with running a business.

There is a good reason why the bikes at a local bike shop are marked up more than you’ll find them online, and if you enjoy your LBS and want to support it I would recommend buying products there.

The Scarcity Principle

While not the case for every expensive bicycle there are some bikes that are expensive, because there are less of them manufactured. If a company only produces 100 of a specific bike and there’s a high demand for it than the price will be driven up. Some bike companies mass produce their bicycles and can keep their costs lower, other companies focus more on quality and less about the number of bikes they’re producing.

Labor and Manufacturing Costs

Depending on where a bike company makes their bicycles will affect the price. Companies that make their bicycles in China or other countries with cheaper labor can afford to sell their bikes at a reduced cost. Companies like Rock Lobster who make their bikes in the United States are going to have expensive bikes, because the cost of labor is higher in the U.S.. The price can increase even more for companies like Bianchi who make some of their bicycles in Italy.

Branding & Marketing Matters

The branding and marketing makes a difference in the price of bikes. Some companies decide to brand themselves as an elite product even if they’re no better than their competitors. They know they may sell less bikes, but the ones they do sell will be sold at a higher price. The truth is if a bike is incredibly expensive, but it’s still being sold than the company will continue to sell at that price. Whenever a bike sits too long in the inventory they may decide to lower the cost, but there is a strategic plan to lower the price in small increments to maximize profit.

Bike companies make a big deal of their newest models knowing that there are bike enthusiasts who will go head over heels for anything new. While cycling isn’t only for the wealthy it does attract people with discretionary income. Manufacturers release new products with the newest technology and innovation at a top dollar price, and if they’re sold at that price point than they may increase the cost to see if they can get a little more out of the customer. If a company is able to sell a product at a higher price why would they sell it for less?

Related Questions

Do I need an expensive bike for commuting? There are few things that you need to start commuting by bicycle, and an expensive bike isn’t one of them. I recommend starting with the bike you own or purchasing a used bike. You can get a decent older, used bicycle for around $250 that will work for most commuters. Check on Craigslist, thrift stores, and your local bike store. Before you spend a huge amount of money on a commuting bike you’ll want to make sure that bike commuting is for you. For more tips and advice on bike commuting see here.

Why are road bikes so expensive? It’s not just road bikes, but if you look at mountain, cyclocross , and even hybrid bikes you will notice prices varying from $400 to several thousand dollars. I do think it’s easy to sell road bikes at a higher price point, because companies know riders who invest in a road bike are looking for more than a casual ride. Road cyclists are usually concerned with going fast, and so road bikes have nicer components and features compared to a generic bicycle.

How much does a good bike cost? You can get a good used bike for around $300 if you’ll be using it primarily for cruising around town and commuting. For a good road bike you could be looking at anywhere between $750 – $1,500. I would steer clear of any new bikes that cost less than $300, because they are not going to work as well as you expect and hope.

Are expensive bikes worth it? The word “expensive” is subjective. What’s expensive for me may not be expensive for you. With this said, generally bicycles that are more expensive are higher quality. They will last longer and perform better. I purchased a $1,300 carbon fiber Fuji bike years ago, and this was a high cost for me. But it’s lasted many years and continues to perform even after thousands of miles. I really have few complaints about the bicycle.

On the other hand, if you check out reviews of “cheap” bicycles online you’ll read plenty of low reviews remarking on how poorly the bikes handle, how they break easily, and don’t meet expectations. My father says, “you get what you pay for” and I have found this to be true in the realm of bicycles. Does this mean you need to throw $10,000 for a bicycle? Absolutely not. Decide on your budget and your bicycle needs. You can purchase excellent bikes of every variety if you do due diligence and are willing to not have the newest and best.

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