What Makes Bikes So Expensive?

What Makes Bikes So Expensive?
June 1, 2021 Bikes

Here are 8 factors that drive bike prices

Have you recently visited a bike shop and gasped at the price tag? While most people probably think that bike prices are absurdly high, others would disagree, because the expensiveness of a bike is relative to the financial position of the bike buyer, so let’s say that ‘expensive’ means ‘I have to think twice about buying the bike at first glance’.

8 Possible Reasons Bikes are Expensive

Bikes can be relatively expensive because there are more factors than materials and labour that contribute to the price of a bike, such as research and design, materials, manufacturing, supply and demand, Quality Control and lack of competition in the bike parts business.

Research and Design

1.      Research and Design

New bike designs and components come out all the time; some would even say that the rate of innovation is a lot closer to that of mobile phones. Major players in the bike industry heavily invest in research and development to keep their customers happy and the main thrust of R&D is usually centred around making the bike lighter higher performing.

Even the few grams of weight and the tiniest amount of drag that can be taken out from one design would mean heaps to pros and competitive bikers, who are the majority of customers who are willing to pay the corresponding price. That’s because they understand that R&D doesn’t come cheap, especially when it comes to pushing bikes to the next level. It takes a lot more money and effort to achieve that extra degree of performance that niche customers crave.

High Cost of Materials

2.      High Cost of Materials

Sourcing the best materials goes hand in hand with R&D. The perfect design can only be turned into reality with the use of the best materials available on the market. This is one of the biggest factors that determine the cost of bikes.

Most high-end brands use carbon fibre to make lighter bikes. The higher the quality of carbon, the more expensive it becomes to purchase or even source it.

Bicycle costs do not stop at the price of carbon, however – there is also the care needed to transport it to consider, including the use of a cold storage facility. Fabricating new bikes out of carbon fibre also requires greater attention to detail and precision.

Carbon fibre is the lightest, strongest and stiffest material and has the best shock absorption capability. But it is also very expensive to produce and will drive up the price of a bike. Aluminium is also another popular material, and it is less costly than carbon fibre. It can, however, fatigue over time and is not easily repairable.

Manufacturing Costs

3.      Manufacturing Costs

Materials of higher quality need more care during the manufacturing process. For example, aerodynamic frames made of carbon fibre sheets require surgical precision when being assembled in controlled processes with extremely small tolerances.

Bike frames made of aluminium and titanium also demand clean welds, which means that even if the welding process is automated or done by a robot, it is still necessary for a human to oversee the process to ensure precision and prevent weak joints.

Small Scale Production

4.      Small Scale Production

Does small scale production mean more expensive bikes? It sure does, especially in the case of some manufacturers of higher-end models. That’s because these manufacturers craft carbon fibre frames by hand which entails production in limited quantities with high engineering and tooling costs. High-end brands take about 1,500 employees to manufacture approximately 15,000 frames per year using the latest technology.

Supply and Demand

5.      Supply and Demand

The number of products produced versus the demand for that particular product is another reason why bike prices increase. For example, a company only produces 500 of a specific model, but there’s a high demand for it. As such, you can expect a high price. Big brand bike companies focus more on quality and performance rather than mass production and this affects the output they can produce.

Quality control

6.      Quality control

Quality control sets big-name bike brands apart from generic and big box store brands and so, makers of more expensive bikes routinely assign engineers to visit their facilities to check every aspect of their manufacturing process to ensure quality and precision. This results in a fantastic final product, that comes with higher associated costs.

Lack of Competition

7.      Lack of Competition

If an industry only homes a few companies, they will naturally control the industry which will ultimately drive up prices, especially when it comes specific parts.

For example, Shimano and SRAM are the 2 main companies producing drive trains and, as a rule, if a bike utilises a Shimano or SRAM drivetrain, every part of that system must also come from those two brands.

Shimano and SRAM shifters were purposely designed so that they only work with their own derailleurs. So, if a manufacturer wants to use shifters from either of these brands, they have to buy the whole system to work seamlessly and bike producers or owners can’t just use a cheaper aftermarket component or spare part.

The Pandemic

8.      The Pandemic

Demand for bikes increased with the devastation that the COVID-19 has brought throughout the world: lockdown. It seems that people around the world did not want to get stuck at home doing nothing or be left on public transport without knowing who amongst the passengers were infected.

People who didn’t previously use a bike for commute started buying bikes to go to work. Some bought bikes so that they can ride around the neighbourhood or in the park. On their bikes, they are getting to work without worrying about catching the virus, exercising, and practising social distancing all at the same time.

Get a Bike That Works With Your Budget at Stead Cycles

Whether you are looking for high-end, expensive bikes or just want a regular everyday bike, Stead Cycles has them for you. We carry some of the more well-known bike brands such as Cannondale, Mongoose, and Felt Bicycles. We also have a range of bike accessories and equipment, so you can buy everything you need under one roof.

Stead Cycles has been around since 1923 and we are known for our friendly service and knowledgeable cycling sales advice. Give us a call today at 02 4966 2141, send us an email to info@steadcycles.com.au or visit us at steadcycles.com.au for enquiries.

Sources:

https://www.active.com/cycling/articles/why-are-bikes-so-expensive

https://www.gearpatrol.com/outdoors/a691720/bike-price/

https://www.theguardian.com/lifeandstyle/2020/apr/22/bicycles-are-the-new-toilet-paper-bike-sales-boom-as-coronavirus-lockdown-residents-crave-exercise

https://www.bbc.com/future/bespoke/made-on-earth/the-great-bicycle-boom-of-2020.html

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