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Discussion Starter · #1 ·
Watching the Doctor tear up another MotoGP race made me wonder about profit margins on bicycles versus motorcycles at the manufacturer level.

I know a lot of R&D does go into the high-end frames, and that a bicycle is cheaper than a moto, but it's not by very much. Or, I should say, a "high-end racing motorcycle" really doesn't cost much more than a "basic" one. A decent bicycle for training and commuting can be had for $500, sure, and a fine amateur race bike for $2,000. But a professional-level race bike like a Specialized Tarmac retails for $5,500, or $8,200 for the "SL" model.

A 600cc race moto costs about $8,000, and a 1000cc about $11,000. That includes ~400 lbs of machine, wheels, tyres, an ENGINE, lights, electronic fuel injection, whatever.

When you buy an moto like an R1 at the dealership, anyone know about how much the factory makes, compared to buying a protour-type bicycle?
 

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I read it costs 3 to 3.5 million to run one Honda RC211V MotoGP rider. That's a couple bikes and spares. The electronics for one bike is supposedly in the $350,000 range. World Superbike is considerably cheaper. You're probably still looking at $1 million for a competitive team.

Racing anything gets pretty expensive. Even cross-country runners spend a lot of money on shoes.
 

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Discussion Starter · #3 ·
Let me rephrase

Brad2021hk said:
I read it costs 3 to 3.5 million to run one Honda RC211V MotoGP rider... Racing anything gets pretty expensive.
Perhaps my reference to Rossi misdirected things -- I know top-of-the-line prototype racing is Uber-expensive.

I mean, at the retail / dealership level, when you buy a Honda CBR1000RR for $11,000 or so, how much does Honda make?

If you go to a Specialized dealer and buy an S-works Tarmac SL for $8,200, how much does Specialized make?
 

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My guess is that the margins on motos are a bit higher than the margins on velos, and when you take into account the average price of a sport/race bike vs. the average price of a sport moto, the difference is probably pretty substantial. IOW, you're more likely to make your fortune selling motos than velos.

BTW, you should really put 'SPOILER' somewhere in your header or title if you're going to post things like Rossi tore up another race...

Jim
 

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Discussion Starter · #5 ·
I hope the "spoiler" thing was sarcastic, heh. It's a BICYCLE message board, the last MotoGP was a week ago, and Rossi has won so many I could have been referring to any race.

But, really? You think the mfr. cost on a road bike is enough that they're not making as much on their $5-7,000 bike as a motorcycle? My intuit would be the reverse, but I don't really know...
 

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I'd think the Motorcycle would have a higer profit margin. On a normal sport bike it generally has a line-assembled frame (robot welded) and an engine that they make thousands of per year, the per-bike-cost is rather low. Compare that with a top of the line Carbon road bike. All the carbon has to be hand-ayed, all parts are hand-assembled, the parts are made on a much smaller scale and therefore have higher overhead costs. Also the LBS then has to put everything together and tune it up, thereby adding more cost to the process.

That's my take on the whole thing, I could be completely wrong, but this seems to make the most sense IMO.
 

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Seamus said:
IOW, you're more likely to make your fortune selling motos than velos.
I have had friends who owned motorcycle dealerships, and the common opinion is that the way to make a small fortune as a motorcycle dealer is to start with a large fortune.

As for the manufacturers, I don't really know what their profit margins are like. But the retail side of motorcycling is actually very different from bicycling. With bicycling, the LBS sees serious competition from walmart and dept. stores both for bikes and gear. The typical LBS customer is the high-end enthusiast.

Conversely, if you want a motorcycle or gear you pretty much have to go to a specialized motorcycle shop. Also, in the USA the largest segment of the motorcycle market is cruisers. I suspect that cruisers have higher profit margin at all levels of the industry because they use lower tech, lower-grade materials, longer development cycles, and customers pay incredibly high MSRPs for them. Sportbikes are higher tech, need to be redesigned often, and are more price sensitive so I suspect they are a lot less profitable.
 

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I have always wonder about this myself. How certian motorbikes, like a 2006 Suzuki SV650S can have an MSRP of $6500 and a base Harley Sportser can have an MSRP of $7000 and pro buit C50 or Dogma could cost about $8000. I realize that these two motorcycles are not state of the art like a pro peleton bicycle but they are not slouches either. Also Suzuki and Harley probably sell 1000 times as many bikes as company's like Colnago, Pinarello etc.. But come now, the R&D, parts or anything else involved with making a motorcycle far exceeds what goes into a bicycle. I think when you compare a bicycles next to a motorcycles of equal value, that bicycles are way way over priced.
 

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The Bike Brand X's margin on a bicycle can be quite large. I saw an original invoice for a particular frameset once from Taiwan. The Brand X paid $145 for a frame that it in turn sold to the retailer for $625. Granted, the invoice didn't show shipping, brokerage, and duty which would add to the price of the frame but it wouldn't double the price so at the very least the Brand made better than keystone on the frame.

A lot more motorcycles get sold than bicycles and I suspect the margin on a motorcycle for the manufacturer is lower than in the bicycle industry whereas the retailer probably sees a similar margin in both fields (approximately 35% on mid level priced stuff, lower on the high end stuff.)
 

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Argentius said:
Watching the Doctor tear up another MotoGP race made me wonder about profit margins on bicycles versus motorcycles at the manufacturer level.

I know a lot of R&D does go into the high-end frames, and that a bicycle is cheaper than a moto, but it's not by very much. Or, I should say, a "high-end racing motorcycle" really doesn't cost much more than a "basic" one. A decent bicycle for training and commuting can be had for $500, sure, and a fine amateur race bike for $2,000. But a professional-level race bike like a Specialized Tarmac retails for $5,500, or $8,200 for the "SL" model.

A 600cc race moto costs about $8,000, and a 1000cc about $11,000. That includes ~400 lbs of machine, wheels, tyres, an ENGINE, lights, electronic fuel injection, whatever.

When you buy an moto like an R1 at the dealership, anyone know about how much the factory makes, compared to buying a protour-type bicycle?
I know nothing of Motorcycles but I would think the motorcycle retailer in general gets a smaller margin per bike than the LBS.

The rub is (as you point out) the average price of motorcaycle is probably @$5000, the average price of a bicycle is probably @$500.00.

So, if margins are 20% for motorcycles and 30% for bicycles (not meant to represent reality), then the motor cycle dealer can expect to make a $1000 per sale, compared to the LBS at $150.00 per sale. The rest of the bus model for each bus is relatively similiar, ins., prop taxes, electrity, etc.....

All that said, I think your question was about how much the manufacturer makes. I think the model holds true back to that point in the supply chain as well.

Scot
 

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LOW motorcycle margins...

There are several websites where you can get the dealer's cost on a motorcycle, but none of the ones I've seen are free to get the info, unlike autos. I bought an SV-650 a couple of years ago and the dealer only made a few hundred dollars, plus a 3% holdback (just like on cars). Nobody likes to admit to the average 3% holdback on autos and motorcycles, but it is part of a dealer's profit.

A $3000 bike frame on the other hand might have a $1000 markup. That's why I hate paying retail for a bike frame, although I just did because I found a hard to find model/color and wanted it now, not in a couple of years when it was marked down on closeout.
 

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Argentius said:
I know a lot of R&D does go into the high-end frames, and that a bicycle is cheaper than a moto, but it's not by very much. Or, I should say, a "high-end racing motorcycle" really doesn't cost much more than a "basic" one. A decent bicycle for training and commuting can be had for $500, sure, and a fine amateur race bike for $2,000. But a professional-level race bike like a Specialized Tarmac retails for $5,500, or $8,200 for the "SL" model.

A 600cc race moto costs about $8,000, and a 1000cc about $11,000. That includes ~400 lbs of machine, wheels, tyres, an ENGINE, lights, electronic fuel injection, whatever.
I feel like its the same thing. How many motorcycle riders ride real race spec'ed bikes? They're not street legal. The Tarmac retails for $8,200... the 600cc race moto costs $8,000, but they're not real "race" motos. I would imagine a real race moto after all the mods and stuff costs like 50 grand or something. Not that I know for a fact or anything... I guess the difference between the two markets is that the "hardcore racing equipment" in bicycle racing is more readily avalible in stores than it is in the motorcycle racing- so while we see the most expensive bicycle as being $8,200-- it is the top top top end. The $8,000 moto we see is only the entry level racing motorcycle.

Maybe I'm wrong. *shrug*
 

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Normal markup on bikes at shops ive worked at was 34-38%, with the higher percentage being on cheaper bikes. So if you think about it, it takes roughly the same time to build and check out a 250.00 bike as it does a 4000.00 bike. So you make more for the build on the big ticket item than on the cheap bike. That said 34-38% only helps to keep teh lights on and get you in the store, its accessories and LABOR where you make a killing. Mechanic 11.00 and hour, can do two tune ups in that hour at 45.00 each, means a 79.00 swing for the shop. How much the companines charge is to some degree explained by employee purschace programs. If they can afford to give 10-25% than that gives you some idea of the margin. Not perscice but an idea.

Bill
 

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$50k would build a national level privateer bike or a top level local club bike (if we're talking 600 supersports).

Harley Davidson's profit margin is 16.9%. They probably have a higher margin than sportbike manufacturers.
 

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Cruzer2424 said:
I feel like its the same thing. How many motorcycle riders ride real race spec'ed bikes? They're not street legal. The Tarmac retails for $8,200... the 600cc race moto costs $8,000, but they're not real "race" motos. I would imagine a real race moto after all the mods and stuff costs like 50 grand or something. Not that I know for a fact or anything... I guess the difference between the two markets is that the "hardcore racing equipment" in bicycle racing is more readily avalible in stores than it is in the motorcycle racing- so while we see the most expensive bicycle as being $8,200-- it is the top top top end. The $8,000 moto we see is only the entry level racing motorcycle.

Maybe I'm wrong. *shrug*
There are several bikes you could quite literally ride right off the showroom floor to the track. Change out the tires for something stickier, tape the lights and remove the mirrors and you can run pretty competitively. You don't even *need* aftermarket exhaust anymore, the stock stuff is so good.

I think when you pay $8000 for a GSX-R600 and $6500 for a Tarmac SL, you're getting the better deal with the motorcycle.
 

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Discussion Starter · #16 ·
yeah, I never raced my SV-650, but friends did. All they did was tyres, exhaust, tape the lights, and grab a $100 ignition box. Perfectly competitive.

It gets expensive real quick to race anything with a motor if you don't work on your own, of course...
 

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what matters

It seems to me that what matters is what deal you can get as a consumer [unless you are opening your own shop]

And weather it is bicycles, motorcycles, cars, or TVs - the best why to get a good deal is to shop. When I buy a car, I call an out of town dealer - tell them what I want and ask for the best price to buy it and drive it home. When take that price to the local guy to Match.
On bikes, it is easy to compare specs as they all seem to be made in the same places today [with few exceptions]. No reason to not buy the best specs for the money, at least for me.

I worked in a motorcycle shop back in the dark ages - and we made people deals all the time; if they shopped. If they just came in and said 'hey, I love that BSA Hornet. I'll take it' -- we just sold it at list.
 
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