Bicycles have, without a doubt, gained traction among bikers as a healthy and environmentally friendly mode of transport, mainly due to the challenging economic times.
Nonetheless, the prices of these popular two-wheelers have continued to hike in recent years globally, ranging as high as $15,000 a bike. But why are bicycles so expensive? I did extensive research about this, and this is what I discovered!
Why Are Bicycles So Expensive?
1. Quality Of Materials Used
It’s a no-brainer that the cost and the quality of materials used to make a bicycle directly impact its pricing.
Bicycle manufacturers are migrating from using steel to make bicycle frames to using expensive materials such as titanium and carbon fiber for comfort and durability.
Since these materials are high quality and have high manufacturing costs, manufacturers push these additional costs to their customers to avoid incurring losses.
It’s worth noting that most cycling companies use about 15% of a bicycle’s price on making light and fatigue-resistant frames.
2. Customizable Features
Bicycle manufacturers worldwide have increasingly become innovative by adding customizable features to their bikes to improve rider experience.
For instance, these companies allow you to customize your bike by adding fenders or racks, choosing specific handlebars, and customizing your seats.
On average, bicycles come with over 20 expensive components such as slim wheels, brakes, brake levers, and drivetrain components that you can customize.
Unfortunately, adding these customizable features to your bike increases the manufacturing costs, making the prices of the cycles hike.
3. Research And Development Costs
Unknown to many, bicycle manufacturing is no mean feat since it involves researching and developing creative designs and innovative features to stay abreast of competitors.
However, researching and developing new, creative, and innovative designs require large sums of money to pay for skilled labor, prototype materials, and software.
Since the consumers are the beneficiary of all this hard work, these cycling companies increase the prices of their bikes to cover these additional costs.
4. Operational Costs
Typically, bicycle manufacturing companies are brick and mortar retail shops that work hard to stay afloat and open.
They need to make profits from their products to pay the required operational costs, such as salaries and rental bills, and still make profits.
These cycling companies are forced to increase the prices of their bikes to cover the heightened operational costs and break even.
5. Scarcity Principle
Typically, the scarcity principle is an economic theory that maintains that scarce products often have a higher value.
While not all bikes are scarce, there are some specific bicycles in the market whose high prices are caused by their scarcity.
Some cycling companies focus on manufacturing quality bikes and care less about the number of cycles they produce.
This small-scale production creates a scarcity of bikes in the market, which, in turn, increases their prices.
6. Manufacturing Costs
Where a cycling company manufactures its bikes directly affects how much you’ll pay for your favorite two-wheeler.
For instance, bikes manufactured in China and other countries where manufacturing and labor costs are low sell at a low price than those made in the United States where the costs are high.
But, as a rule of thumb, bicycle manufacturers spend 20% of the total bike price on manufacturing costs.
Therefore, increased manufacturing and labor costs mean high bicycle prices, while low manufacturing and labor costs mean low bicycle prices.
7. Branding And Marketing
Cycling companies that brand and market themselves as elite brands in the industry sell their bikes at higher prices than their competitors.
But, it’s worth noting that their hiked prices don’t necessarily mean that their bicycles are superior in quality to their counterparts.
Bicycle manufacturing companies spend significant time and cash in branding and marketing to increase their visibility to potential customers.
8. Retail Markup
It’s essential to note that some cycling companies sell their bikes directly to their customers, thus eliminating additional retail charges.
Nonetheless, most bike manufacturers use various retail stores such as Amazon and Walmart to sell their bicycles.
These retail stores, in turn, add their charges to the total cost of the bicycles to earn their profit, exponentially affecting the bike’s pricing.
9. Market Economics
Bicycle prices are often affected by prevailing market economics such as inflation, demand, and supply.
While an expensive bike will often sit in the inventory for a long time, a lowly priced bicycle won’t be able to recoup the overhead and production costs.
Thus, most cycling companies use trial and error, market economics, and market research to determine how much they’ll sell their products.
10. Quality Control
Quality control is among the leading factors that set the big bicycle companies apart from generic and department store brands.
Well-known bike brands employ highly trained engineers who conduct routine checks on all the aspects of the bicycle manufacturing process.
Therefore, while the bicycles manufactured by big brands are expensive, they compensate for their high prices by offering safety, durability, and comfort.
11. Lack Of Competition
If a few companies dominate the bike manufacturing industry, these companies tend to control it, which ultimately increases the prices of the bikes.
For instance, SRAM and Shimano companies have conquered the drive trains producing industry, which has driven up the prices of these specific parts.
In addition, since SRAM and Shimano purposely designed their shifters to only work with their derailleurs, bike manufacturers can’t use a cheap aftermarket spare part.
This dominance by a few companies in the bicycle manufacturing industry forces manufacturers to increase their prices.
As you may have noted by now, many factors directly affect the prices of bicycles worldwide.
Nonetheless, most expensive bicycles are made of high-quality materials for comfort and durability.
Thus, buying a well-designed and manufactured two-wheeler will give you a return on your investment.