nickl wrote: ozdavo wrote: nickl wrote:
If it were as simple as that someone would be buying 1000 Ultegra Di2 groupsets and selling them on Ebay
for $1200 and be making a killing.
if you have a spare million dollars sitting around, I doubt this is the best way to get a 20% return.
But when you think it though, this is pretty much what they are doing by selling the bike for $1995 - except in this case they need more than $1 million and the return is less than 20% (because of the other parts required to make the bike). Even in cases like supply on credit they must be sure they can get the parts for that price no matter how few orders they make.
Somehow they must be able to get smaller numbers (~100) of groupsets at this price ($800-$1000) - which makes me wonder how, and for what price exactly? Is it the kind of numbers it would make sense to put together a group-buy for?
By the back of the envelope math being thrown around costs are at around $1450 and sale price is $2200.
I would suggest that the frame is around US100, wheelset US75, US75 on seat/bars/stem/tape/tyres/pedals, US800-1000 for group. Price comes in at US1000-1250. Manufacturer sells for US1500-US1800.
I'd argue it is the bike shop here that is taking the hit and slashing markup. It's actually quite a smart strategy for the following reasons:
[*]Their shipment is typically sold out and paid for before it even arrives.
[*]They would likely have 30, 60 or 90 day terms on their shipment. I.e. they don't have to pay for it until 30/60/90 days after the shipment has been shipped.
That would suggest they are making what is pretty much risk-less profit, and on top of that are earning interest on their revenue (not just profit) for up to 30/60/90 days.
So even if they are making 20%... well put it this way, if you could walk into a bank, promise to deposit $100,000 in 90 days and they'd give you $120,000 on the 91st day, you'd make the promise, right?
A shimano, or a shimano wholesaler would not entertain a group buy. It compromises their entire supply chain structure.