Is MSRP/MAP holding back ebike sales growth?

[stevenast]

I have gone on record as opposing those who advocate on this forum the purchase of a regular bicycle over an e-bike. Of course regular bicycles have their place in the market, they dominate it! ...but ebikes have a place too!

That said, the ebike critics have a point when they discuss missing value: high cost vs low quality. The quality e-bikes seem to have a price that is sky-high, and the lower cost ebikes seem to use bottom- end components.

But, is this because ebikes inherently lack value, or is it due to marketing strategies? Obviously I think it's marketing. My experience indicates the MSRP is greatly inflated, probably so dealers and manufacturers can fatten up on those consumers who fail to negotiate strongly enough.

"That's capitalism", you say. Okay, sure, sellers have the right to charge whatever they can get. However, I believe that when consumers look at these list prices, many of them just give up on the idea of an ebike - too expensive for what you get! The effect of running this "wild-west" marketing system, while completely within the rights of the manufacturers and dealers, is inhibition of the entire marketplace for ebikes.

By prohibiting dealers from advertising whatever price they want, the manufacturers are damaging the overall market.

By using the MSRP as a negotiating crutch, dealers are also harming the market, although making what I'm sure they perceive is a necessary profit right now.

By overpaying for what is admittedly a very exciting product, consumers are also playing a role in holding back growth of the ebike market.

I don't know the answers, but I think letting dealers advertise whatever price they want is a good start. I also think consumers who are informed that the MSRP is hugely inflated will also help make things better.

 

[Operator7]

Great topic. I have no idea about the mark-ups or the profit margins, and I am all for businesses making a profit, but I agree that educated buyers make for a better market, all the way around. So having said that, what would you suggest a good price on a new ST1?

 

[Brambor]

under $3000

 

[Operator7]

How should I got about negotiating for that price?

 

[stevenast]

How should I got about negotiating for that price?

I sent you an IM, because the topic of this thread is more general, thanks!

 

[Operator7]

I guess in a general sense, I'm wondering if the local dealers WILL negotiate, or if they attempt to stick to the MSRP. At Bike Attack, Martin told me that he'd "give me a good deal", but we didn't get into price specifics. I'm not cheap, and I know he needs to make a profit, and I certainly want to give him that profit, because I certainly want to have an ongoing relationship and service from his business in the future. But the bikes DO seem awfully pricey, and for what I want, with taxes and accessories added, we're talking well over 4k, if buying at MSRP level.

So if I could get an ST1 for $3,500, or maybe a significant discount on the ST2 msrp, I'd be content. I'm just wondering if that is realistic expectation of a local dealer like Bike Attack, or if I'm going to have to order over the internet and have a bike shipped. In the second case scenario, I guess I'd be screwed in regards to servicing though.

 

[Cameron Newland]

I guess in a general sense, I'm wondering if the local dealers WILL negotiate, or if they attempt to stick to the MSRP. At Bike Attack, Martin told me that he'd "give me a good deal", but we didn't get into price specifics. I'm not cheap, and I know he needs to make a profit, and I certainly want to give him that profit, because I certainly want to have an ongoing relationship and service from his business in the future. But the bikes DO seem awfully pricey, and for what I want, with taxes and accessories added, we're talking well over 4k, if buying at MSRP level.

So if I could get an ST1 for $3,500, or maybe a significant discount on the ST2 msrp, I'd be content. I'm just wondering if that is realistic expectation of a local dealer like Bike Attack, or if I'm going to have to order over the internet and have a bike shipped. In the second case scenario, I guess I'd be screwed in regards to servicing though.

You wouldn't be screwed in regard to servicing...wouldn't your bike have a manufacturer warranty?

 

[NoDTMF]

When I bought my bike I had sent an email to the bike shop telling them what I'm looking and my price limit. I got an email response with one bike in the limit and some others to consider.
I went to the bike shop spent three hours riding and talking. Ended up buying the bike that was recommended. The experience was good, for both parties, I wanted to get an bike, and the bike shop knew I was serious. I think it helps to have a plan, it helps both parties involved. For the record I bought a 2nd bike from them for my wife.

 

[stevenast]

I think it helps to have a plan, it helps both parties involved.

I agree. Also I like to do thorough research ahead of time. One of my goals (which I don't always achieve) when shopping for something major, is to know more about the product than the person selling it to me. That way when I'm buying I can focus on price and VALUE.

 

[Marko]

At least Turbo and Stromer have CoC so registering it should be no problem as long as the parts needed for type approval are still there. I dont think the shop is needed for any of it.

A big part of the e-bike's price come from the battery which are pricey still especially if good quality. Also if the other parts are quality these all sum up quickly. But I dont see that the e-bikes aging a huge issue. Well, the battery technology may advance and the bikes may get more advanced features like the ST2, but as long as the bike continues to function I am not that concerned. This actually happened already with the Turbo; the battery capacity was increased from 342 Wh to over 500 from MY 13 to 14. Luckily the battery fits the old model as well. Where there is room for improvement is the software upgradability. The consumer should be able to get easily bug fixes or additional features to the bike sw. Smartphone software integration with the bike sw would be nice to have.

 

[NoDTMF]

@JayVee When you say obsolete what do you mean? That you can get a replacement battery? Or if the motor breaks you can't get a replacement? It will be interesting to see what my bike will require in 3 years from now. I expect I'll replace the battery, but actually I hope there will be a higher capacity version. I also wouldn't mind upgrading the motor (from Bosch active to performance) but really it works perfect for my commuting (though my steep weekend hill ventures I would like to see how the performance version works)

The one thing about buying a basically generic bike other than the motor, is I can upgrade all the other stuff as much as I like. So while I worry about the customized motor mount, I never worried about obsolescence when I bought the bike. But now you have me thinking about it...

 

[stevenast]

I don't know anything about the European market ....well, maybe I can infer a few things about the European market.

Here in the United States, relative to the MSRP, or the MAP, the biggest part of a bike's price is... profit. The markups are out of sight. This means huge discounts are available from motivated sellers.

In any free-market economy in Europe that's bound to be the same story.

You can buy a decent quality bike, ready to ride, for the same price as a decent quality kit, without all the hassle, if you find the right seller.

As for obsolescence, if you're buying a bike at a lower price, and riding it regularly, you won't feel so bad about replacing it in a few years.

 

[flipper]

As Steve says, finding the right seller is key. You might have to hunt around a little bit, but it's well worth the effort.

 

[Marko]

You can buy a decent quality bike, ready to ride, for the same price as a decent quality kit, without all the hassle, if you find the right seller.

If you buy, for example, a Bionx D-500 to get an s-ped, it is already close to 2k. Add a bike with quality components it's another 2k. You would be left with a frame that was not necessarily built for such speeds and have low stealth looking set up. And you have to install it. I know there are cheaper kits but what makes them cheaper; smaller profit?

 

[PowerMe]

When you look at the MSRP of a purpose-built eBike you immediately need to rationalize to yourself why you need the "e" part. "Is my riding such that I need electric assistance?" "Am I trying to use my bike in a new/different way that requires assist?" "Am I in a physical state in which I need assistance?"

For me it was a simple realization: I encounter even small hills and I spend all my energy trying to ride a mile or 3 and I end up walking the bike and feeling discouraged and then wanting to avoid that experience so I start avoiding riding the bike altogether. I knew if I wanted to cycle in my area I was going to need assistance, and if I wanted to enjoy it and deal with the rolling hills, I needed electric assist.

Then it was a progression of "what's available out there already," to quickly learning that my existing hybrid bike with carbon fork would not be a good candidate for a kit so I might as well start looking at purpose-built eBikes instead of conversion strategies.

 

[George S.]

Buy a bike with a throttle. Most of the 'improvements' are things like auto shifting and more refined pedal assist. A new throttle is 8 bucks.

The typical ebike buyer around here is suffering from physical limitations, generally older, and the level of components is not that pressing.

Why is the bike obsolete? A real advance was mid-drive, because it can use the power more efficiently, and the bike will be better balanced. But if you don't need the hill-climbing capability for what you ride? Maybe people should buy mid-drives, but should they abandon a hub drive just because MD is out there?

I'm hoping people will find bikes in the $800-$1800 range, partly driven by crowdfund bikes, and pay less attention to super-premium bikes with auto-shift, features that double the price. I think the market is served by basic bikes. There are two different worlds, in the US, and the low-margin world is pressing in on the high margin. The high margin world needs to create the illusion of obsolescence more than the low margin seller. There is going to be a lot less marketing.

 

[stevenast]

low-margin world is pressing in on the high margin

Yes! "Low-margin" is like a flood pushing "high -margin" higher and higher up the hill, until they have no place left to stand.

 

[PowerMe]

I have what I consider a basic bike (Easy Motion) with a few costly additions (lithium battery pack) which is making it sell for a premium price. But among my choices in 2015, were premium price bikes whether they warranted the price or not.

 

[stevenast]

I have what I consider a basic bike (Easy Motion) with a few costly additions (lithium battery pack) which is making it sell for a premium price. But among my choices in 2015, were premium price bikes whether they warranted the price or not.

I was shopping as well, and I figured that to buy a regular bike of comparable quality to a Haibike 29 would cost about $900. So, I mentally deducted that amount from the price I paid for my e-bike. Then, not paying retail was nice, as you also know.

I ride almost every day, and haven't had a moment of regret. Duplicating this purchase would not be easy, maybe when model year closeouts come around... I'm just grateful I was in the right place, at the right time, and talking to the right person.

If someone is reading this, and considering an e-bike, my advice is take your time and look around. After you test ride one, you will be so excited you won't want to wait. I did several weeks of intense shopping and I know that others put even more time and effort into their search.

Be deliberate and thorough, it's worth it in the end!

 

[Bike_On]

Good thread.

I suggest a quality entry level ebike should be $1500-2000.
As we add speed, suspension, stronger frames, hydr brakes, bigger battery, computer Dash interfaces, I think the MSRP should be in the 3500-4000 range.