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Crazy Pills

Feb. 21, 2017, 2:06 p.m.
Posts: 926
Joined: Feb. 5, 2011

Anyone considering dropping the coin on the SC must be a loon. How can you justify it? Unless you are a privateer racer who's close to riding WC races that bike won't make you any faster than the guy in the line that just picked up the top line YT.

The thing that gets me is that there is no clearly measurable superior feature that a SC bike would have… it's more the brand's image that they are selling. Like if you put Aaron Gwin on every single manufacturers top end DH bike its not like he would for sure be the fastest on the SC V10. Is the V10 even the lightest DH bike? I guess that's one measurable factor that they could argue if that is the case…

Feb. 21, 2017, 2:43 p.m.
Posts: 272
Joined: May 11, 2005

I used to buy Santa Cruz bikes. There's a reason why I switched to YT…

Feb. 21, 2017, 3:16 p.m.
Posts: 1081
Joined: Jan. 1, 2011

What is it that I'm missing here.

What's to miss? YT is consumer direct and SC is a premium brand sold by retail bicycle shops.

While I agree the SC is expensive, let's take a quick look:

Retail shops operate on ~35% margins on bikes, so if $13,950 is MSRP @ full margin it cost the shop $9,067.50 to buy. And SC has to make money on it too, so let's assume they make ~35% margin. That means it cost SC about $5,893.88 to get that bike to their warehouse to sell to shops.

Consumer direct brands cut out shops and distributors. They can make their full margins and sell for way, way, way less.

Let's assume YT make ~35% margin as well. That $7,599 bike cost them $4,939.35 to get to their warehouse to sell directly to you.

Comparing those two price points there's a ~$950 difference between the YT and the SC. Definitely conceivable to have a $950 difference considering a few of the spec differences. It's adding in that second 35% margin that puts the SC into the stratosphere.

Ride, don't slide.

Feb. 21, 2017, 3:19 p.m.
Posts: 20
Joined: Dec. 13, 2016

What's to miss? YT is consumer direct and SC is a premium brand sold by retail bicycle shops.

While I agree the SC is expensive, let's take a quick look:

Retail shops operate on ~35% margins on bikes, so if $13,950 is MSRP @ full margin it cost the shop $9,067.50 to buy. And SC has to make money on it too, so let's assume they make ~35% margin. That means it cost SC about $5,893.88 to get that bike to their warehouse to sell to shops.

Consumer direct brands cut out shops and distributors. They can make their full margins and sell for way, way, way less.

Let's assume YT make ~35% margin as well. That $7,599 bike cost them $4,939.35 to get to their warehouse to sell directly to you.

Comparing those two price points there's a ~$950 difference between the YT and the SC. it's adding in that second 35% margin that puts the SC into the stratosphere.

How does this kind of thing look when replacing YT with say Giant? Mainly just sheer size of the company?

Feb. 21, 2017, 3:31 p.m.
Posts: 1081
Joined: Jan. 1, 2011

I've never worked in a shop that sold Giant, so I can't speak to their margins. I'm also taking a good deal of liberties assuming that YT and SC are making roughly the same as shop margins. Maybe they make more, maybe they make less.

One thing for sure is, the more people that have to make money off something (ie: distributors and/or bike shops), the more expensive the product is going to be.

The bikes themselves may be directly comparable, but the business models are definitely not. People think they're comparing apples to apples (the bikes), but they are actually comparing apples to oranges (the price, which is a result of differing business models).

Ride, don't slide.

Feb. 21, 2017, 3:32 p.m.
Posts: 10975
Joined: June 4, 2008

What's to miss? YT is consumer direct and SC is a premium brand sold by retail bicycle shops.

While I agree the SC is expensive, let's take a quick look:

Retail shops operate on ~35% margins on bikes, so if $13,950 is MSRP @ full margin it cost the shop $9,067.50 to buy. And SC has to make money on it too, so let's assume they make ~35% margin. That means it cost SC about $5,893.88 to get that bike to their warehouse to sell to shops.

Consumer direct brands cut out shops and distributors. They can make their full margins and sell for way, way, way less.

Let's assume YT make ~35% margin as well. That $7,599 bike cost them $4,939.35 to get to their warehouse to sell directly to you.

Comparing those two price points there's a ~$950 difference between the YT and the SC. Definitely conceivable to have a $950 difference considering a few of the spec differences. It's adding in that second 35% margin that puts the SC into the stratosphere.

Wouldn't a 35% markup to $13,950 be $10,333? And 35% marked up to $10,333 would be $7,600? Or about the retail price of the YT?

What makes a brand premium? And can consumer direct bikes be premium?

Feb. 21, 2017, 3:48 p.m.
Posts: 1081
Joined: Jan. 1, 2011

Margin is gross profit divided by MSRP.

Example: $100 MSRP item with $75 wholesale cost = $25 gross profit = 25% margin

Markup is gross profit divided by wholesale cost

Example: $100 MSRP item with $75 wholesale cost = $25 gross profit = 33.3% markup

So if the shop is making 35% margin on the SC @ $13,950 it's $13,950 - ($13,950*.35) = $9,067.50.

I have no idea what constitutes a "premium" brand. Marketing I guess. YT has a world cup DH team and some incredible freeriders, I would consider them premium. SC also has a world cup team and a bunch of rad enduro riders. I would also consider them premium.

Ride, don't slide.

Feb. 21, 2017, 4:05 p.m.
Posts: 10975
Joined: June 4, 2008

Good stuff.

Percentages add up fast and it looks like the major bike companies priced themselves out of the game.

Feb. 21, 2017, 4:46 p.m.
Posts: 2226
Joined: Sept. 5, 2012

Margin is gross profit divided by MSRP.

Example: $100 MSRP item with $75 wholesale cost = $25 gross profit = 25% margin

Markup is gross profit divided by wholesale cost

Example: $100 MSRP item with $75 wholesale cost = $25 gross profit = 33.3% markup

So if the shop is making 35% margin on the SC @ $13,950 it's $13,950 - ($13,950*.35) = $9,067.50.

I have no idea what constitutes a "premium" brand. Marketing I guess. YT has a world cup DH team and some incredible freeriders, I would consider them premium. SC also has a world cup team and a bunch of rad enduro riders. I would also consider them premium.

YT is also one of the top 3 OEM purchasers of SRAM , RACE FACE , and I think FOX . This is one reason they are able to sell a bike for less with better parts , volume purchases and low overheads by not waiting on dealer networks to pay .

They also sell out most of their bikes before they are available so there,s a ton of savings there . Most people buying them are pre ordering and waiting several months . Also price wise YT,s have dropped across the board by $500 to $1000 depending on model .

just think of the frames they could sell if they offered frame,s , I for one would be all over a Jeffsy

#northsidetrailbuilders

Feb. 21, 2017, 5:49 p.m.
Posts: 936
Joined: Nov. 8, 2003

Glory 0 is a few hundred less at $7299 and is fully shop supported…

http://nsmba.ca/civicrm/contribute/transact?reset=1&id=1

Feb. 21, 2017, 5:58 p.m.
Posts: 10975
Joined: June 4, 2008

Why is the American Glory 0 priced at $8,375 USD? It looks to be the same as the Canuckistan one..

https://www.giant-bicycles.com/us/glory-advanced-0

Feb. 21, 2017, 6:05 p.m.
Posts: 2116
Joined: Aug. 4, 2009

How come a chinese made V10 costs $14k but the original Sapa V10s were like what…6k? I can't remember but I sure as hell know it wasnt 14k. Also with products being sold in these price ranges why are industry jobs generally still shit pay?

Feb. 21, 2017, 6:09 p.m.
Posts: 2226
Joined: Sept. 5, 2012

I am still is shock SC has such a high status , they where junk the 1st 5yrs they where in business , every model broke or ovaled the head tube out , and yet here we are talking about a $13K bike that is pretty much 70% offshore LOL

#northsidetrailbuilders

Feb. 21, 2017, 9:15 p.m.
Posts: 15019
Joined: April 5, 2007

YT is also one of the top 3 OEM purchasers of SRAM , RACE FACE , and I think FOX .

LOL. Any actual facts to that claim or is that just a good sound bite?

Also regarding SC early days, almost every damn bike broke in those days.

SC got/gets by on the whole NorCal punk rock/skate/surf nostalgia

Why slag free swag?:rolleyes:

ummm, as your doctor i recommend against riding with a scaphoid fracture.

Feb. 21, 2017, 9:21 p.m.
Posts: 2226
Joined: Sept. 5, 2012

LOL. Any actual facts to that claim or is that just a good sound bite?

Also regarding SC early days, almost every damn bike broke in those days.

SC got/gets by on the whole NorCal punk rock/skate/surf nostalgia

Ask JM at YT yourself he,s the one who told me when I was testing out a bike .

#northsidetrailbuilders

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