MSRP vs. actual sales price

[FoxTrot]

Hola EBR, I have decided to buy an electric mountain bike this summer/fall. I plan to demo several bikes but I think it will come down to a Rocky Mountain Altitude or a Specialized Levo. I'm still looking for a Giant and Cannondale demo and the local Trek dealers don't seem to be interested in emtbs at all.

I am wondering what I should expect to pay for the bike in relation to the MSRP. Any bike that I buy will have to be ordered from the manufacturer as no one stocks an emtb in area. I realize that margins vary between manufacturers but I would love to get a general idea. Are bikes generally sold 20% under MSRP in a store? Can you get a bike for 5% under minimum advertised price (MAP)? I have no idea. Thanks for any help you can give!

 

[PDoz]

This brings up all types of questions about paying for a service!

Are you honestly expecting to demo bikes in other stores, then purchase from an lbs who doesn't stock / offer demos etc? AND expect a discount from that lbs?

For what it's worth, speaking to Australian dealers the difference between wholesale and mrsp is around 20% , that leaves less than 10% margin for negotiation with a loyal customer, or I guess a similar margin of negotiation on the quality of pre / post service you recieve.

Perhaps have a chat with your lbs in advance, ask them if they'd prefer you to buy out of region and pay to service locally?

 

[FoxTrot]

Thank you for your response. My intention is to purchase from a bike store in my region that I can expect to honor any warranty issues that may arise. All of the shops charge $100 USD to demo a bike for the day. They will apply the demo fee to the purchase of any bike that I buy from them. This arrangement is more of a rental than a “service”.

My question is really more about knowing how much bike I can afford than what a fair price would be. I am in the distribution business and we represent 20 different manufacturers. It is not uncommon for retail prices to be offered for 20% below MSRP but be actually sold for 30% - 35% under list if an end user can make a good agreement. Therefore, it is natural for me to wonder if a bike with a $5500 list would have a $4400 price tag sitting in a showroom.

I will also say that a 20% margin is difficult to believe. Dealers are expected to stock parts and operate a service department. When you consider that bikes are larger ticket items and you regularly see last season's models sell for 40% off MSRP, it just seems hard to believe that bike dealerships can exist with a margin that low.

 

[MikeDD]

I have a Specialized tubo levo, my son and grandkids ride Specialized. There is very little wiggle room for a Specialized dealer. Usually the best price will be the same at any dealer. I have been friends for 30 years with my local dealer (a small shop in a small town, Specialized only) and his price is the same on a new bike as a dealer 100 miles away that sells 100 times the inventory he does (other brands also). You will usually find deals in the fall when the new models are coming out.

This is my experience with Specialized.

 

[PDoz]

Thanks for clearing that up - our local shops are desperate enough for sales that they throw demos at us ( including " try this giant reign whilst your bike is being serviced"

I've heard the 20% margin from 3 dealers with no reason to disbelieve them - chatting socially rather than buying type interactions. That's Australia, your local situation may be different - ask the shop?

The huge discounts of outdated bikes is a loss minimising exercise ( again, from what they are telling me) . Occasionally distributors offer further duscounts which helps the stores but kills resale....giant does this at the end of season. Yes, it's hard to believe they can continue to exist - before ebikes many lbs were going under, times are tough etc.

Either way, good on you for supporting the lbs AND being smart enough to pay for demos - a good investment.

 

[PatriciaK]

FWIW, one of my local LBS owners told me (concerning the Giant La Free line) that a popular line like that won't see much, if any, discount on MSRP. It's the bones that are either NOT selling or are closing out that get the discounts.

I did end up getting a discount on my La Free E+2 from a different dealer, but I suspect that was because Giant's new line is going to replace that particular model. He offered me the same percentage off the E+1 when I asked, but the almost $500 price difference between the two models decided me in favor of my original choice.