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12 Posts
From time to time, I see posts on the markup structure on bicycles - shop prices, online prices, import prices etc.
Most seem to be from consumers; with some answers from retailers. Thus the overall picture is missed; as retailers only see their part of the channel
I think it is interesting though not much different than other industries, except that the information flow is more 'underground' in bicycles.
P&A markup is all over the place. But Bicycles as whole units do have a set 'rule of thumb' on pricing from FOB factory price to consumer list. It is 3 times. For example, a bike that leaves a factory at $500 will have a list price [msrp] of $1500.
This mutiple covers all duty, shipping, markups, and re-markups alone the way. Each step of course adds a percentage based on previous step's cost. So the retail markup applies to the factory cost, the duty, the shipping, the distriputor's markup [which in turn is on duty, shipping, etc]. So $10 of shipping is passed to retailer as $14.00 and then passed to customer as about $25.
The math is simple but kinda fuzzy along the way; but the rule stays about the same - MSRP = 3 x factory FOB
Most seem to be from consumers; with some answers from retailers. Thus the overall picture is missed; as retailers only see their part of the channel
I think it is interesting though not much different than other industries, except that the information flow is more 'underground' in bicycles.
P&A markup is all over the place. But Bicycles as whole units do have a set 'rule of thumb' on pricing from FOB factory price to consumer list. It is 3 times. For example, a bike that leaves a factory at $500 will have a list price [msrp] of $1500.
This mutiple covers all duty, shipping, markups, and re-markups alone the way. Each step of course adds a percentage based on previous step's cost. So the retail markup applies to the factory cost, the duty, the shipping, the distriputor's markup [which in turn is on duty, shipping, etc]. So $10 of shipping is passed to retailer as $14.00 and then passed to customer as about $25.
The math is simple but kinda fuzzy along the way; but the rule stays about the same - MSRP = 3 x factory FOB