Amazing how cheap bikes are to make...

[WizardWeb]

Found this on Alibaba.com. 2yr(?) old low level GT direct from manufacturer only $39 !! (wholesale obviously) Shows you how cheap they are to make and the other $150 or so before it gets to the customer obviously has a lot of overheads. But with my Dragon's Den head on, I'm wondering if the cost to retail can be done cheaper...

http://www.alibaba.com/product-gs/342644193/freestyle_bmx_bike.html

[Dark Diggler]

Duty is the biggest cost, when it leaves, when it arrives and when its sold, 3 lots of it, then there's shipping, not that much as it goes, then there is margin, wholesaler/importer and Dealer/shop so 2 lots of margin.

I went to Bali about 9 years ago, unleaded fuel worked out at 5p per ltr, it was about £1.50 here if my memory serves me rightly 

[WizardWeb]

There's Haro's on there too.

http://www.alibaba.com/products/freestyle_bike/----------------351-8260,/2.html

I wonder if GT and Haro are happy their wares are being offered this way.... I'm presuming they'll also put the customers stickers on them...

[SaMAlex]

I heard a few years ago that if you started a bike co (based in the UK) and you got frames made in the far east. You could get a batch of frames shipped to you, painted, stickered, in boxes printed with your logo, totally ready to sell to shops/customers ..... for less money than it'd cos you to make the box here, or to make the frame decals here.
You dont even have package them up and the frame almost comes for free! 

[brass monkey!]

Duty is the biggest cost, when it leaves, when it arrives and when its sold, 3 lots of it, then there's shipping, not that much as it goes, then there is margin, wholesaler/importer and Dealer/shop so 2 lots of margin.

I went to Bali about 9 years ago, unleaded fuel worked out at 5p per ltr, it was about £1.50 here if my memory serves me rightly 

yep, duty will bump up gthe cost,

I remember Petrol being about that price in Sri Lanka about 10 years ago..., un - believable

[WizardWeb]

I heard a few years ago that if you started a bike co (based in the UK) and you got frames made in the far east. You could get a batch of frames shipped to you, painted, stickered, in boxes printed with your logo, totally ready to sell to shops/customers ..... for less money than it'd cos you to make the box here, or to make the frame decals here.
You dont even have package them up and the frame almost comes for free! 

Just been looking it up and frames are about $15 on there. Found a titanium frame for a road-racer at $43 ! Handlebars seem to be 50c to $2. Interestingly, the materials is just referred to as 'steel' and no mention of Cro-mo anywhere... I guess it's generic and the detail comes with the price.

[evamedia]

Interestingly, the materials is just referred to as 'steel' and no mention of Cro-mo anywhere... I guess it's generic and the detail comes with the price.

The first link on this thread mentions cr-mo 6 times?

[WizardWeb]

Interestingly, the materials is just referred to as 'steel' and no mention of Cro-mo anywhere... I guess it's generic and the detail comes with the price.

The first link on this thread mentions cr-mo 6 times?

Good point, well made. But I think that's the exception.... the ones that talk about "to the buyers requirements" don't mention it. They probably just see it as a subset of steel.

[gossa]

Guys, I have a bike shop and import company and am launching my own brand so I know what's what.

For example, take a carbon MTB suspension frame that retails in the UK for £2000.  The Government take £350 of that in VAT. Then knock off the dealer margin which is 35%, then my 25% distributor margin (hell I don't work for free). Now take off the import duties and vat, then the shipping which on these bad boys is $100 a pop as we bring them in from the USA. Now knock off the manufacturers margin (probably minimum 30%) and then their shipping from Asia. I'm guessing the FOB price (Frieght On Board) i.e. sat at the dock waiting to go on a boat, maybe £500?? That's how it works baby.

Look at an iphone cover at apple, £20-£25 some of them and I reckon they cost about 25cents to make, that is profiteering in my book!

So you can buy that POS from Alibaba at $39, make sure you add in your public liability insurance, team and marketing budget so someone wants to buy it, your warehouse and office staff  so someone can take the order and ship it out (christmas parties are the killer cost there!), reps salaries, vehicles, advertising, trade shows, maybe 2% to cover warranty etc etc etc.

There aint many millionaires in the bike biz, except Carlo Griggs of course!

[WizardWeb]

I forget who said it, but I always remember a quote in one of the mags "no one got rich starting a bike company". I know Bob Haro made a fair bit when he sold his company to West Coast Cycles in 1987 but it wasn't enough to retire on. If I recall, it was only about $1.5m....

The new super-port near Grays (if it ever gets built) was supposed to be a state of the art centre where the products are sorted automatically and sent out from there, meaning the distributer doesn't have warehouse costs as the product goes straight to the retailer/customer and the distributer doesn't touch it at all. In theory that could mean that the distributer is cut out altogether as the company could organise it all over the Net. That would cut out so much of the overhead, or if it didn't reduce the price, make someone so rich ! LOL !

Mind you given the lead-time for products coming from Asia or where ever, that might not suit all products. Retailers don't like ordering too far ahead (unless they're Tesco/Argos) and one-off's would be expensive compared to "here's one we imported earlier".... Hmmm.... deserves more of a ponder...