# How does Trek keep its prices down compared to lets say, Cervelo?



## RyanM (Jul 15, 2008)

How do Trek's frames compare to say Cervelo... Seems you can get a really nice setup Trek for a lot less than an equally equipped Cervelo...
Are Cervelo's frames that much better, are you paying for the name? (since its Italian) or whatever... Just curious


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## JacksonDodge (Mar 26, 2006)

RyanM said:


> How do Trek's frames compare to say Cervelo... Seems you can get a really nice setup Trek for a lot less than an equally equipped Cervelo...
> Are Cervelo's frames that much better, are you paying for the name? (since its Italian) or whatever... Just curious


Just a quick heads up:

Cervelo is Canadian not Italian.


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## Farmer Tan (Jan 25, 2009)

Take off, Hoser!


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## JacksonDodge (Mar 26, 2006)

Farmer Tan said:


> Take off, Hoser!



Just pointing out the facts.


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## Farmer Tan (Jan 25, 2009)

JacksonDodge said:


> Just pointing out the facts.



All good. :thumbsup: 
Just had to throw in a Strange Brew quote.


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## Ninja #2 (Aug 26, 2006)

where's your tuque eH!


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## filtersweep (Feb 4, 2004)

I do not believe Trek keeps their prices down, but rather Trek's tend to be more likely sold by volume dealers and regional chain bike shops.


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## old_fuji (Mar 16, 2009)

Farmer Tan said:


> Take off, Hoser!


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## 2ndGen (Oct 10, 2008)

old_fuji said:


>


*Take off, eh!

:lol: 

Cooo, loo, coo, coo, coo, coo, coo, coooo!*


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## old_fuji (Mar 16, 2009)

2ndGen said:


> *Take off, eh!
> 
> :lol:
> 
> Cooo, loo, coo, coo, coo, coo, coo, coooo!*


might hafta crack an elsinore...want one?


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## Todd769 (Feb 21, 2009)

Cervelo's are made in China....


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## Getoutandride (Sep 1, 2008)

Alright, firstly as above mentioned Cervelo are canadian and are indeed made in China. As for the price difference not that there is one really, infact at the moment in Australia the Cervelo S2 with Ultegra SL is $6800 - the 5.2 madone is $6999, they are comparable models. In actual fact at the shop road bike sales are not topped by treks, they are overpriced, its a nice product but expensive. 

Remember Cervelo make only 10 bike models, compare that to Trek who make what a few hundred? Treks market is huge, they cater for every market so their production costs can be reduced, they can buy huge amounts of material also - 10,000 Dura ace groupsets cost considerably less than if you were only buying 1000. 

Now look at Cervelo, they solely use carbon fibre, only make bikes catering for the high end market, also factor in the employees at Cervelo, there are alot of engineers working for the company throughout the world, infact in ratio of workers to engineers Cervelo would out number a big contender like Trek. 

Ultimately I have ridden the above mentioned models, and to be honest the Trek was a nice bike, lovely, but not perfect, I bought the Cervelo that itself tells a story  - the Trek just didnt have the edge the Cervelo did.

As for other 'italian' bikes, Pinarello, Bianchi, Colnago ect ect. Factor in, the frames are coming from a manufacturer that has a reputation equal to that of Ferrari or even Ducati (Colnago ferrari series, Bianchi Ductati's - just an example) so a certain amount of the price goes towards buying into the heritage of the company, your buying part of history and to be frank, (sorry if it offends) your not buying an American bike which some people really value. 

Also with italian bikes, factor in that at some point of their build they have to actually be in Italy, they may be created in Asia, but they have to be atleast painted in Italy, so there are expenses shipping to, from and away again from Italy.


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## Marc (Jan 23, 2005)

Getoutandride said:


> Alright, firstly as above mentioned Cervelo are canadian and are indeed made in China. As for the price difference not that there is one really, infact at the moment in Australia the Cervelo S2 with Ultegra SL is $6800 - the 5.2 madone is $6999, they are comparable models.
> 
> Remember Cervelo make only 10 bike models, compare that to Trek who make what a few hundred? Treks market is huge, they cater for every market so their production costs can be reduced, they can buy huge amounts of material also - 10,000 Dura ace groupsets cost considerably less than if you were only buying 1000.
> 
> ...


It is all about markup.

Cervelos frames are made in Asia, and all but the very top end of Trek's lineup are also made in Asia.

The only CF bikes NOT made in China are from the Big 3 of Italy, and Time, and the $10000 wunderplastikbikes from Trek...all the rest are produced dirt cheap, made by the same 4-5 manufacturers in Asia--and sold with a 10X-20X markup by the names we all are familiar with, because that is what the consumer will pay for the sticker on the downtube.


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## Getoutandride (Sep 1, 2008)

That is where you are wrong, the Cervelo framesets are not an off the rack frame with different stickers, the frames are made in Cervelo's private factory in China, the Cervelo frames have unique build processes to make them the frames they are. While actual production of the frames may be cheap the R&D of the framesets is massive, the Cervelo Soloist range are rumoured to have cost an Incredible $80-$100million to develop, and many many years of time at that, riding one proves it.


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## Marc (Jan 23, 2005)

Getoutandride said:


> That is where you are wrong, the Cervelo framesets are not an off the rack frame with different stickers, the frames are made in Cervelo's private factory in China, the Cervelo frames have unique build processes to make them the frames they are. While actual production of the frames may be cheap the R&D of the framesets is massive, the Cervelo Soloist range are rumoured to have cost an Incredible $80-$100million to develop, and many many years of time at that, riding one proves it.



They can be made in a private factory or not-it doesn't change the fact that the frames are dirt cheap to make--that is why every major name in bicycles makes their frames in Asia. And they are made the same way all CF frames are made, with some minor variations here and there. The can pay workers slaves wages, and minimize costs and maximize their markups.

Source for your claim on the Soloist?


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## Getoutandride (Sep 1, 2008)

I have connections with people who have worked with CSC when they were with Cervelo, and I believe it was also in a dealer seminar, could be wrong on the last one there


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## 2ndGen (Oct 10, 2008)

Marc said:


> It is all about markup.
> 
> Cervelos frames are made in Asia, and all but the very top end of Trek's lineup are also made in Asia.
> 
> The only CF bikes NOT made in China are from the Big 3 of Italy, and Time, and the $10000 wunderplastikbikes from Trek...


Trek's $3000. Madone 5 Series bikes are made in the U.S..


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## 2ndGen (Oct 10, 2008)

old_fuji said:


> might hafta crack an elsinore...want one?


:lol: 

Beauty!


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## Richard (Feb 17, 2006)

Simple.

Cervelos are overpriced. Pay for the name and what the market will bear.

All 5 series and above Trek Madones are made in the U.S. And they start in the $3k range for complete bikes.

And I'm willing to bet that Trek's R&D budget is pretty substantial too. But a $100 million - come on! We're not talking Formula 1 here.


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## JacksonDodge (Mar 26, 2006)

Getoutandride said:


> That is where you are wrong, the Cervelo framesets are not an off the rack frame with different stickers, the frames are made in Cervelo's private factory in China, the Cervelo frames have unique build processes to make them the frames they are. While actual production of the frames may be cheap the R&D of the framesets is massive, the Cervelo Soloist range are rumoured to have cost an Incredible $80-$100million to develop, and many many years of time at that, riding one proves it.



I highly doubt that Cervelo can afford to utilize a private factory to build bikes for them. The cost would be astronomical.

They do it like every other bike builder. They contract out work to a specific factory that builds bikes for a variety of brands. That's not to say that Cervelos aren't unique. I'm sure they are. Just don't think they're not being made in the same factory as Specializeds, Wiliers, Asian Treks, etc, etc

As for the $100 million dollar figure...don't believe it. A company that's only doing $50 million a year in sales can't afford to drop TWICE IT'S YEARLY REVENUE STREAM on developing a niche product.

That's like BMW spending 150 BILLION Euros to produce a new M series car and pinning it's future success on that 1 unique car. Not plausible at all.


I'd say 8-10 million is a far more realistic number.


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## MarvinK (Feb 12, 2002)

I think Treks are actually superior technology to Cervelo, and I think their volume of sales helps keep their prices low. Like others have mentioned, all 5 & 6 series Madones are made in the US. The Madone 6 is easily one of the most advanced bikes on the market--and still can be purchased as a WHOLE BIKE (basic parts, including SRAM Rival) for about the same as Cervelo's similar level FRAMESETS!

Trek got lazy in Lance's hay day... their technology wasn't there. They did make a lot of money off him, and when their cash cow dried up, they had the money to sink into R&D. Trek has caught up and now surpassed Cervelo on technology... and has always won the price war.


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## MarvinK (Feb 12, 2002)

http://cozybeehive.blogspot.com/2008/01/cervelos-compete-on-quality-strategy.html

Cervelo says their R&D budget is "seven figures". Certainly that's nowhere near $80-100 million.


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## Blue CheeseHead (Jul 14, 2008)

Marc said:


> It is all about markup.
> 
> Cervelos frames are made in Asia, and all but the very top end of Trek's lineup are also made in Asia.
> 
> The only CF bikes NOT made in China are from the Big 3 of Italy, and Time, and the $10000 wunderplastikbikes from Trek...all the rest are produced dirt cheap, made by the same 4-5 manufacturers in Asia--and sold with a 10X-20X markup by the names we all are familiar with, because that is what the consumer will pay for the sticker on the downtube.


Just a little exaggeration on the Treks. Actually, the 5 & 6 series OCLV frames are made right down the road from me in Waterloo, Wisconsin. Retail starts in the $3k range for an American made carbon fiber bike, not $10k. Oops to late with that info.

I would expect Trek's total R&D to surpass that of Cervelo in that they sell way more bikes from which to recoup the cost. Sorry, no facts just supposition.


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## MarvinK (Feb 12, 2002)

Yes... Actually the LESS expensive and arguably technically superior Trek Madone 5/6 bikes are made in the US by Trek... While Cervelo pays someone to make all their frames (including some very expensive ones) in a shared factory in China.


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## Thom_y (Jan 19, 2007)

RyanM said:


> How do Trek's frames compare to say Cervelo... Seems you can get a really nice setup Trek for a lot less than an equally equipped Cervelo...
> Are Cervelo's frames that much better, are you paying for the name? (since its Italian) or whatever... Just curious


I don't know about the US, but in Canada I have always found that Cervelo is cheaper than Trek when you try to match the bikes for various components.

For example, the current pricing for Madone 6.5 with Dura-Ace 7900 is $6899.99 vs. Cervelo S2 with Dura-Ace 7900 is $6000 and R3 with Dura-Ace 7900 is $6300. So, it appears that you must pay a premium for a D-A equipped Trek in Canada. Although Cervelo is based partly in Canada, their prices are based on American dollar and as a result prices went up about 10-15% last year when our Loonie took a beating. [And yes Cervelo builds their frames in China]:










I guess some people are willing to pay this premium to get Made in USA frame and Lance's brand. You have to decide is it worth it. In the end, it comes down to the ride. But, both Treks and Cervelos are way too common where I am (along with Giants and Specialized)... So, I would rather ride something different.


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## MarvinK (Feb 12, 2002)

I wouldn't compare the S2 and Madone 6... I'd compare S3/R3SL to Madone 6 (both the primary TDF models) and S2/RL to Madone 5 (both raced as pro levels, but not by the very best sponsored riders anymore). In that comparison, the Trek should still come out cheaper.


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## loudog (Jul 22, 2008)

the fact remains that the vast majority of bikes are made in asia by people that make consistently great bikes. asia (taiwan and china) have the manufacturing know how and experience to make really good products that really cant be done on a large scale in the usa. my point is that great bikes come out of asia just as they do from trek's factory in waterloo - and on the whole more good bikes come out of asia than north america or italy. there will always be great specialty/boutique producers but for now the mass manufacturing know how is mostly in asia.


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## terbennett (Apr 1, 2006)

I hate to say it but someone should. Made in USA doesn't mean much in the bike industry. you can rip on Asian made bikes but the quality is equal to (sometimes even surpass) their US built counterparts. Made in Asia is considered cheap because bottom of the barrel department store bikes are made there. However, most high end Asian made bikes are designed in their respective companies and the specs are sent to Asia; while others are designed and built in Asia. Those bikes are approved because they meet the bike companies rigorous standards. 

A Madone is a great bike- like every other bike at that level. Knowing that, the question comes down to equipment and fit. A US built 5.1 Madone might be around $3,000 but let's look at how many bikes Trek sells and how they sell their bikes. Most shops that carry Trek have to carry a good 80% of Trek's products just for the opportunity to sell Treks. That means that most shops that sell Treks are flooded with Bontrager products and Gary Fisher bikes as well. that leaves very little space for any other brand. Heavy marketing plus the "Lance factor" keeps Trek in the spot light. Because of this, the average joe thinks that all Treks are high end stuff and Trek plays that up to the masses. Most people aren't very knowledgeable on bikes so they immediately think that Treks are the best. I'm not saying that Trek Madones aren't awesome bikes because they are. They are "one of the best" out there. 

It's just that when I look at a $4,000 Trek Madone 5.2 and see a heavy carbon fork with aluminum steerer and less than stellar Bontrager Race Lite wheels, I see that they cut corners like everyone else. It's just that they cut cost in places that the average consumer won't notice, but it's there. It's just that you pay $4,000 for it- meaning that they are indeed overpriced. Heck, I used to own the 5.2's predecessor, the 5200 and even it had an MSRP of well under $2700 just 5 years ago (with nearly identical specs). I don't know of any other bike brand that has gone up that much in 5 years. 

The Cervelo has higher level components overall (if you read all of the details) and the frame is made in Asia. Being that the quality will probably be the same regardless of where it's made, on paper, the Cervelo takes the cake. However, in the end, the one that fits the rider is the better bike.


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## Rubber Lizard (May 10, 2007)

I love any threads involving Cervelo. 
Cervelo's are superb bikes, that's not up for debate.
But Cervelo is marketing king. Their bikes aren't special compared to any other high end carbon bike. They aren't made in some private factory- they are made in the same factory, on the same tooling and *gasp* even designed by the same people who design many other companies carbon bicycles. It's how it is with all carbon bikes, from all companies these days to some extent or another (there are about 5 exceptions to this, and none of those companies happen to be Italian). 
But Cervelo's relentless marketing campaign has convinced the world that their bikes are light years ahead of everyone else's. Including many bicycle shop owners who should know how the industry works better. 

And in the grand scheme of things, Cervelo's bikes cost more money because they can charge more money. And because you are paying for their massive ad budget. Trek's are overpriced too. 
You can buy a top end Jamis or Fuji that uses the exact same carbon technology, rides superbly with better spec and costs a whole lot less.


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## Pirx (Aug 9, 2009)

Rubber Lizard said:


> And in the grand scheme of things, Cervelo's bikes cost more money because they can charge more money.


That's correct, and the exact same is true for all high-end bicycles. I mean, if you think about it, and consider that for the price that, say, my own road bike sells for, I could buy a Honda CBR 600 supersports (motor)bike, you really do have to wonder. Then compare the couple of dozen parts that make up my 15-pound road bike, compared to the thousands of parts that go into a 200+-pounds motorbike like that Honda (lots of them high-precision, high end parts themselves, by the way), and it does become clear that these bicycle prices are outright ridiculous. The frame alone of a motorcycle like that beats any bicycle frame as far as complexity and manufacturing expense is concerned.

Yes, I know, it's a much smaller volume business, but with today's manufacturing methods that doesn't really matter as much as you might think. Ultimately, it turns out that that high-end BMC, Cervelo, or Felt, or Pinarello, or you-name-it frame that you may pay five grand for cost a couple of hundred bucks to produce. Same goes for components. My guess is that production cost of a full Dura Ace 7900, or Super Record groupset may be 300 bucks or so, and look what these things sell for... Incidentally, the cost of manufacturing a Dura Ace group is probably within a few ten bucks of what it costs to make a 105...

So, yes, the reason this stuff costs what it costs is that this is what people are willing to pay for it, and that's almost all there is to it.


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## Richard (Feb 17, 2006)

Pirx said:


> So, yes, the reason this stuff costs what it costs is that this is what people are willing to pay for it, and that's almost all there is to it.


Amen!!


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## identifiler (Dec 24, 2005)

Look at any bike company readu to throw millions at team sponsorship let alone team ownership and you got yourslef an extra 400$ per frame directly going to marketing. The calculation is as simple as that. 

80 million in R and D cost for a bike frame HAHAHA HAHAHA HAHAHA wait HAHAHAHA HAHAHAHA... 

and I'm canadian, I still like Cervelo bikes and would pay for one, I'm just not naive.


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## Richard (Feb 17, 2006)

When the chief bean counter from Dorel announced that all American production of Cannondales would cease, he pointed out that labor costs in the U.S. were 20 times that of China.

With that in mind, the owner of our store had a friend who wanted a Cervelo SLC/SL frameset. We're a Trek dealer - no Cervelos. He "comissioned" me to find one. One of our nearby friendly competitors is so I called him. They had one in the right size and quoted me $3800 with a "store-to-store" discount (about $1000 off). This is for a frame and fork only, made, not in Taiwan, but China.

O.K. An American made Trek Madone 5.2 with a full Ultegra SL group retails for $3600 and could be had for as low as $3000 during the June Trek promo. You tell me who is "ripping off" whom?


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