Price Questions

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I don’t shop much.  Well, I do shop, but usually only when I need something.  I like wandering around places, checking stuff out in different places, but I’m not sure I classify that as shopping.  More like looking.

While Bromont was at the Vet’s yesterday, we had all day to just mess around Fort Collins.  We went downtown and walked around.  Fort Collins has a nice downtown.  Viable.  We ate some soup at Spoons and then drove down to Sierra Trading Post.  I used to buy some stuff at Sierra Trading Post, but it didn’t seem like the magazine.  It seemed like an outlet store in an outlet mall.  Very unappealing.

Anyway, I have to admit, and I’ve done it before here, that I have no idea how much something should cost.  Some things seem way too cheap to me and many other things seem astronomically expensive.

In cycling, I don’t know why you can buy at cyclocross tire that costs the same amount as a tire for your car.   A car tire seems like it should cost a ton more.  It used to be the same way with lights.  A good set of lights cost up to $300, when you could buy a nice headlamp at a camping store for $25.

There are lots of examples everywhere, not just cycling.  Here are a few photos I took yesterday of prices out of wack.

$750 for a pair of hiking boots.  I'd ralther use my old boots and buy a plane ticket to Swizerland and hike in the Swiss Alps instead.

$750 for a pair of hiking boots. I’d ralther use my old boots and buy a plane ticket to Switzerland and hike in the Swiss Alps instead.

A $14 Snickers bar.  I don't know how many bags I could buy of mini Snickers around Halloween, but it would have to add up to more than this one big bar.

A $15 Snickers bar. I don’t know how many bags I could buy of mini Snickers around Halloween, but it would have to add up to more than this one big bar.

These ski gloves were on sale for $179 dollars.  I can't imagine them being any better than $75 Pearl Izumi gloves.

These ski gloves were on sale for $179 dollars. I can’t imagine them being any better than $75 Pearl Izumi gloves.

I don't even know what this is, but $21 is a joke.  But it is Whole Foods.

I don’t even know what this is, but $21 is a joke. But it is Whole Foods.

You can get twice as much here, in Whole Foods, for 3 bucks.  Maybe it's the difference between beef and pork lard?  Grass feed or grain feed?  Who knows?

You can get more here, also in Whole Foods, for 3 bucks. Maybe it’s the difference between beef and pork lard? Grass fed or grain fed? Who knows?

 

28 thoughts on “Price Questions

  1. Wildcat

    Hmmm… I thought you would have posted something about a certain basketball game last night. O’ well, you seem to fit the mold of a typical KU fan. It’s OK, I understand. BTW, I think the best part about those items is the name of that cooking oil company – “fatworks”. Lol

     
  2. Bill K

    I always get a shock when I see prices if cycling equipment compared to prices I paid back in the dark ages. Back then, I could pick up a CX for $29. Now they retail for $100. Conti Comps were a few dollars more and now you see them for $115. I guess that I just have to get used to things costing much more. Just look at the retail price of a Dura Ace crank….Crazy.

     
    1. channel_zero

      Most of the branded world has adopted Manufacturer Approved Pricing for the U.S., so there is no price competition any more even at Sierra Trading Post. But, also inflation (time value of money) is at work as well as some technical innovations that increase manufacturing costs.

      Meanwhile, many manufacturers divide up the U.S. in places where having a meeting to fix prices and distribution is not illegal. For example, Taiwanese manufacturers will meet at a bike show in some other part of the world (not Taiwan, not China, not U.S.) and set price and distribution for the U.S. It’s not illegal. And since most bike brands are just resold Giant/Merida/KHS they divvy up the customers and gently compete with each other so as not to put too much stress on their profitability.

       
      1. channel_zero

        Time value of money: http://www.econedlink.org/lessons/index.php?lid=37&type=educator
        How/why time is a fantastic inflator for things you buy and a great discounter for when people are paying you.

        Inflation: http://en.wikipedia.org/wiki/Inflation
        A $200 crankset in 1990 costs $362.26 in 2014 accounting for inflation.

        The correct technical term for “manufacturer approved pricing” is Resale Price Maintenance.
        http://en.wikipedia.org/wiki/Resale_price_maintenance. Manufacturers like Specialized would argue it preserves their brand. Others would argue there is lost utility/value when retailers are not allowed to compete on price.

         
  3. euro

    I want one of those huge Snickers bars! Yum. We in the cycling world really can’t say much about crazy pricing. Remember when nice downtube Campy shifters were $100 and we thought that was nuts? Now Di2 junk is $800 or more. Crazy!

     
  4. AKBen

    I would tend to agree, but calling a pair of Italian handmade high altitude mountaineering boots “hiking boots” is like calling a Pinarello Dogma a touring bike. Something meant to keep your toes from freezing at -40F while climbing ice in the high mountains is going to cost a bit more than a basic hiking boot.

     
    1. Steve Tilford Post author

      AKBen-I know, there is a very short list of humans needing boots above 6 or 7 thousand meters altitude. So, I guess they can demand a higher price. But, it seems like they would be in line with high end cycling shoes, which are crazy expensive. Something like in the $400-500 range.

       
      1. Craig

        No comparison to high end cycling shoes. Not only is there more expensive material in them but they are used by less people. That is a crazy price but if you need something of that nature to keep your toes, it is cheaper than the helicopter ride off the mountain.
        Compare those prices to Campagnolo anything and well, then they seem like a bargain.

         
  5. Mike

    Economy of scale.
    Invest in the equipment to make car tires, sell 100,000
    Invest in the equipment to make CX tires, sell 1,000.

    Make bike lights, sell them to the 1% of people that ride bikes at night.
    Make camping lights, sell them to the 25% of people that think they might need a light for walking outside or working in dark spaces.

     
    1. Phil Lassio

      You can spout all the economic opinions you like, but the real reason cycling products cost so much is all down to one word. That word is greed.

      Bikes and equipment are ridiculous. The manufacturers rake in the cash spent by gadget hungry cyclists who all have to have the latest and the best equipment buyable. It’s all a cash-grab and it prices many out of the sport and they will never come back. I see people riding $10,000 bikes with $2500 wheelsets in criteriums! How stupid is that?! It seems the worst offenders are out of shape and fat racers who think those carbon wheels are going to get them to the front of the pack. It’s sad, really.

      Until people start replying to manufacturers and dealers by not buying the overpriced gear, the trend will continue. Let’s face it- if you really love your sport and want to continue, then they got you by the balls. The only way you can make yourself heard is by refusing to buy…and where does that leave you?

       
      1. chuck martel

        Yeah, the “greed” word. How do you define greed, anyway? Nobody’s holding a gun to the head of a cyclist, forcing him to cough up the cash for an expensive tire. If bike tires are being sold for an exorbitant profit why don’t you sell them cheaper? You should do just fine.

         
      2. Mark K

        Good comment. It’s sad but true. There is no justification in the world that supports the high prices of cycling equipment.

         
      3. Mike

        First, I agree with you that consumers play a huge part in the issue. Their greed is part of the imbalance…

        Secondly, however, please do not assume I support the economy of scale or greed. You want to know the background of my “economic opinions”? I’m a social worker working with a full spectrum of the disadvantaged- and love what I do and have been doing it for decades. Unless you have a similar background, I very much doubt that you have a greater appreciation of the concept of “social justice” than I do.

        That does not, however, stop me from understanding the basic concepts of economies of scale.

         
    2. Dave Eckstrom

      I once wondered aloud to my friend Roger once why roller skis (which are basically an extruded rectangular aluminum tube with the ends notched for rollerblade wheels) cost so much. His response was spot on: “Because you don’t need them.” Same is true for all high(er) end sporting gear.

       
  6. Robo

    As Mike points out, it’s all about volume and economies of scale. So the catch-22 is that we need more cyclists to buy this stuff so manufacturers can be more efficient. But it’s hard to get your friends into cycling when they go to the LBS and see the price of even the entry-level equipment.

     
    1. terry

      I don’t agree. cycling doesn’t have the problem with the multiple recurring usage fees as with other sports like hockey, skiing, soccer, etc…. You can get a very good road bike with 105 for under 1500 that could last years, and if you decide never to race, never pay another cent. The upfront cost could be considered significant, but still less than a high-end television set.

       
  7. Hamish

    Yep car v bike tyres annoys me. Bike tyre on chip seal roads they’re getting pretty thin and cut up from about 5000km (3000 miles) v car tyre maybe 40,000km if I keep an eye on air pressure and wheel rotation. Even on discount buying bike tyres the car wins out in this regard.

     
  8. grumpy geezer

    i get all my bike stuff from the UK on the cheap with free shipping

    fish and chips baby. Tell Stetina I laugh at MAP

     
  9. Jim S

    High end sports products are Giffen goods. The high price signals quality and appeals to aspirations and status concerns. Joe Blow CX racer wants PRO tires to show/reinforce what a bad ass he is and cheap tires just won’t do. It has very little to do cost or incremental objective performance compared to other goods. It takes a lot of experience to see it as just a tire and strip away its social signifiers. Boat loads of money is spent on marketing to maintain the illusion.

    As for a one pound $15 Snickers bar, I got nothing.

     
    1. Bill K

      Cheap tires won’t cut it when you’re flying through a turn at “pucker speed”.
      On the other hand, all my training is done on cheap clinchers (on 32 hole wheels)

       
  10. Skippy

    Spent 3 months in Oz looking for 2nd hand parts . All over the attitude was ” we only sell new , lack of space “! Finally found a guy that was willing to help out . Now i have a lot of ” Spares ” , but still seeking items such as 55 + chainrings & one sided SPD race pedals .

    WHY pay for NEW , when so many bikes get broken thus allowing parts to be available ?

    LBS owners have a hard job competing with ” Online ” websites , BUT , it is the Manufacturers that make the decisions that cause their ” Prices “!

     
  11. wasfastnowimnot

    Cost of replacement and race entry are among many of the reasons I stopped racing. Its not just the equipment either. The cost of entry for events is really high. Especially when you consider doing 30+ events in a year. Im a teacher and have a very limited income and even more limited disposable income.

    I’ve become quite the expert at finding great deals on used equipment and buying behind the curve. I buy all my Nordic, alpine touring and ski equipment used from individuals, via ebay, craigslist, etc.. or commercial re-sellers like snowsportdeals and others. Many of the wealthy cycling enthusiasts in my region go through high end equipment and sell it off cheap. I try to take advantage of that.

    Im also a motorcyclist. Its astonishing to me that I can buy a fantastic motorbike new from a dealer for the same cost as a new MIDDLE end race bike. WTF is that???? I understand supply and demand but really?? But I also buy used there. New just doesn’t make sense to me anymore.

     
  12. JR

    Phil is SO off base with his greed comment. If it were really greed, then other manufacturers (presumably more altruistic) would enter the market and produce the products at lower prices.
    Econ101

    The comment about Giffen goods is spot on.

     
    1. CF

      Phil Lassio is right on the money. Wasfastnowimnot is also right on the money. Bikes and components are WAY overpriced. If you can’t see that, then you definitely failed Econ 101. If you can’t understand why, then you failed Econ 101 and 102. Plus, wasfastnowimnot is speaking the truth about entry fees and the fact that you can buy a brand new quality motorcycle for less than alot of bicycles. It hurts, but it is the truth.

       
      1. chuck martel

        Is there a “greed index”? How is greed measured? When corn goes from $3/bu. to $6/bu. are farmers being greedy? When the government raises taxes, which aren’t voluntary, are they being greedy? There are options available in most consumer goods, there is more than one manufacturer of bicycles and parts. You’re not compelled to equip your bike with SRAM Red, you can use 105 stuff. Brifters aren’t mandatory to get from point A to point B, even pro stars once used down-tube shifters. Is a diamond retailer greedy because he wants a lot of money for an engagement ring? When you sell a house for which you paid $75K for $225K are you being greedy? When you ask your boss for a raise are you being greedy?

         
  13. Jim

    I got to thinking about this recently and it fits in perfectly.
    A Garmin for my bike would cost about $600-700.
    A MUCH nicer Garmin for my car, which has a lot more features, cost me about $300.
    This includes Bluetooth, MP3, photos, weather, traffic avoidance, and so on.
    Why?? because cyclists are stupid and will spend the money.

     

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