# End of Year Closeout Discount= How Much?



## lx93 (Jun 14, 2007)

I'm liking the feeling of getting a new bike (no worries going down mountain descents at 50, 60, maybe eventually up to 70?mph), with the potential of saving money like on a used bike. 

I.e., I'm a last year's model shopper. However, what % can I typically expect to save? For the sake of simplicity, let's say that we're talking about a 2007 bike which back in July 2007 would've sold for $1,100. 

I just don't want to fall for the "Well, it was at $1,100, but we reduced it to $_ _ _", when really that's more than what the bike would sell for before closeout-season. Sort of like a friend who thinks he got a good deal on his car "because they came down a lot in price", when in reality they just inflated their asking price.


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## robertburns3 (Jan 11, 2007)

I know of one shop in Ann Arbor, Michigan that used to take a percentage off a "suggested retail price" that they just made up. They would knock off 30 to 40% and it would be less than 10% off what the real normal price was. Fortunately that shop is now owned by real cyclists, not used car salesmen.

Realistically, most shops cannot knock off more than 10% because bike margins are pretty thin, especially after they build it up and throw in a free tune up.

I have seen shops that do not discount old models at all and I have seen one shop knocking off 15%. 15% is about the best I have seen.

The problem for the Cannondale shops is the fact that the 2008 models look like they are going to be a sweet deal. Even by knocking off 10%, many models are more competitive next year. I am guessing this is why so few shops will admit to knowing what the 2008 line-up is, even though everyone who reads this blog has an idea of what's coming. I am considering a 2008 Six13 with Ultegra which is being priced at $2000 or a System 6 with Rival for $2400. To get one in a 60cm I may have to order unseen.


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## Oldteen (Sep 7, 2005)

It seems to depend somewhat on the specific bike and brand. I got a Cdale R500 in fall season a couple years ago for almost 25% off actual (not inflated) list. It was the last year for the CAAD5 frame and the last one that LBS had in stock. I have never seen another LBS discount like that on other Cdales. OTOH- I shopped hard for a Specialized Rockhopper for my wife and could not even get 10% off on an 07 (dealer had 08's in stock at list). Same experience last fall buying her a previous year Giant OCR3. In both cases there were minimal year-to-year changes, and both are "entry-level" (low margin) bikes which are very popular in my area.


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## lx93 (Jun 14, 2007)

Oldteen said:


> It seems to depend somewhat on the specific bike and brand


That makes plenty of sense- we do live in a capitalistic society, after all (fortunately).

I would think it has a lot to do w/ the store as well. Some stores, it seems, are really great at providing service, advice, etc., and set their prices reasonable, as they just want to make an honest living while doing what they love and are good at. Other stores, on the other hand... 

So while 1 store makes customers feel as though they're getting "bargains", other stores just set their prices reasonable in the 1st place & save everyone time. I suppouse that the key point is to know what the market values are so that you know the difference between a good deal & someone ripping you off.


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## robertburns3 (Jan 11, 2007)

lx93 said:


> That makes plenty of sense- we do live in a capitalistic society, after all (fortunately).
> 
> I would think it has a lot to do w/ the store as well. Some stores, it seems, are really great at providing service, advice, etc., and set their prices reasonable, as they just want to make an honest living while doing what they love and are good at. Other stores, on the other hand...
> 
> So while 1 store makes customers feel as though they're getting "bargains", other stores just set their prices reasonable in the 1st place & save everyone time. I suppouse that the key point is to know what the market values are so that you know the difference between a good deal & someone ripping you off.



Some shops also make it part of their buisness model to have a bunch of last years models at a bit of a discount. Other shops want to get rid of last year's stuff and only want the latest on their showroom floor, so they dump last years stuff to just get rid of it.

I think smarter shops do the later and just get ridof the old stuff. Bikers are just to techie to have a bunch of old stuff laying around.


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## lx93 (Jun 14, 2007)

robertburns3 said:


> Some shops also make it part of their buisness model to have a bunch of last years models at a bit of a discount. Other shops want to get rid of last year's stuff and only want the latest on their showroom floor, so they dump last years stuff to just get rid of it.
> 
> I think smarter shops do the later and just get ridof the old stuff. Bikers are just to techie to have a bunch of old stuff laying around.


True on all of the above- but still, I think there are even bikers who would rather buy last year's model "because they're saving money" even if it's more expensive than this year's model. I don't think my roommie would've bought a brand-new car even if it were less expensive than the 1 year-old off-lease car he actually bought.


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## ahhchon (Apr 16, 2007)

robertburns3 said:


> Realistically, most shops cannot knock off more than 10% because bike margins are pretty thin, especially after they build it up and throw in a free tune up.
> 
> I have seen shops that do not discount old models at all and I have seen one shop knocking off 15%. 15% is about the best I have seen.


your first statement is so far from correct it's not even funny. shops should be knocking AT LEAST 15% off the old model. just "talking" with your lbs can knock off 10% off your new bike purchase. 10% is really not that much to a reputable lbs, they can generally knock that off just to make you feel happy, especially when it's in the 800-1200 range, that's prime 10% knockoff (unless it just came out)

as for last years model, they should be able to do at LEAST 15%.. why would you save (lets just pretend) 150 dollars when the parts on the 08 model are worth that much more? (obviously not always the case) shops get the bike assembled (almost). a good tech can put together a road bike in 30 minutes (tuned and all). a free bike tuneup takes 30 minutes tops unless you are a new tech still learning the ropes. btw, there is a HUGE markup on bikes. bike margins are far from thin..


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## lx93 (Jun 14, 2007)

ahhchon said:


> your first statement is so far from correct it's not even funny. shops should be knocking AT LEAST 15% off the old model. just "talking" with your lbs can knock off 10% off your new bike purchase. 10% is really not that much to a reputable lbs, they can generally knock that off just to make you feel happy, especially when it's in the 800-1200 range, that's prime 10% knockoff (unless it just came out)
> 
> as for last years model, they should be able to do at LEAST 15%.. why would you save (lets just pretend) 150 dollars when the parts on the 08 model are worth that much more? (obviously not always the case) shops get the bike assembled (almost). a good tech can put together a road bike in 30 minutes (tuned and all). a free bike tuneup takes 30 minutes tops unless you are a new tech still learning the ropes. btw, there is a HUGE markup on bikes. bike margins are far from thin..


Ahhchon,

I appreciate your difference of opinion, that's the great thing about the web, you can ask more than one person for advice. 

Can you tell us what experience you have to base this on?


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## ahhchon (Apr 16, 2007)

personal experience..

ie:

my f600. i told them that 1100 was a bit much, especially after taxes, it would have been 1155. i told them that i'm someone that will probably be a returning customer and a slight discount would go a long way in my book. the salesperson talked to the manager (i'm not even sure if he did that) and came back with 10% off the price. 

as for knowing how much bike shops make.. for starters, i work at a shop. i have purchased 3 bikes while working at the shop, all at very fantastic prices.


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## lx93 (Jun 14, 2007)

Ok, so it sounds like you have some good knowledge, and that you're not just someone shooting off random opinions w/ no factual basis.

Thanx!


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## robertburns3 (Jan 11, 2007)

ahhchon said:


> btw, there is a HUGE markup on bikes. bike margins are far from thin..


I would only agree that as bike prices go up, their margins grow because the static costs of assembly and tune ups are the same. The more expensive the bike, the more likely the discount.

That said, bike margins are very small. When you compare it to other products, such as electronics, which mark up a product 100% or more, you can start to understand it. Overhead in a small bikeshop is a huge cost. Bikeshops aren't chains remember, so 30% markup to cover overhead, assembly, tune ups and the sales people is a thin margin.

When I worked at a shop, I received a 20% discount off of wholesale from the manufacturer, I was at about 50% of retail. It wasn't a discount from the shop, it was a discount from the bike maker.

When customers like you came into the store demanding huge discounts and telling us how much we marked up the product, I'd let you walk out the store and bully someone else. I would sell it at near full price to the next guy who appreciated the service.


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## zamboni (Sep 11, 2003)

Depending on the models and price range of the bikes, there is more room on the high end vs. entry level, your LBS normally take15% for low end version and as much as 25% on the high end model.


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## ahhchon (Apr 16, 2007)

robertburns3 said:


> When I worked at a shop, I received a 20% discount off of wholesale from the manufacturer, I was at about 50% of retail. It wasn't a discount from the shop, it was a discount from the bike maker.
> 
> When customers like you came into the store demanding huge discounts and telling us how much we marked up the product, I'd let you walk out the store and bully someone else. I would sell it at near full price to the next guy who appreciated the service.


look, i'm not here to argue with you, i'm here to help this guy with his future purchase. 

you can complain all you want about customers demanding a discount, but a fact is a fact, a bike shop can easily knock 10% off if they want to make the sale, it's that simple. their margin is not as small as you think, if the shop has been around for more than 3 years and they are growing then it means they are doing pretty darn good. no one is in business to lose money.

i have never gone into a bike shop demanding a discount, i work at a bike shop. i stated that i nearly asked for a discount and it was given. most people don't have the cahunas to ask, they think it's embarrassing or they fear the rejection. it's not that big of a deal, the most they can do is say NO. by letting that guy walk out because you won't give him a slight discount (of course you feel the guy out to see if he would be a returning customer) you may have lost yourself thousands of dollars in the future.

you can't just let everyone that walks into your shop walk out. it's a business, as a salesperson you should know how to feel customers out and differentiate the returning customers/serious customers from the non customers.. 10% goes a long way with those guys. in my case i have purchased 2 bikes from that shop and have referred dozens of customers there for a variety of things (bike maps - road bikes that my shop doesn't carry).

in conclusion, you should be getting at least 15% off last years model. don't go into a shop expecting to have a bike that day. if it's last years model they WANT to get rid of it. that piece of asset is depreciating everyday that it's sitting there. the longer you/they wait the less that bike is worth. go a couple times, test ride a couple bikes that are less than the bike you want. they will eventually suggest the bike and tell you that it is discounted since it's last years model. i leave the rest to you, improv a bit.


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## cb400bill (Jul 26, 2007)

robertburns3 said:


> When you compare it to other products, such as electronics, which mark up a product 100% or more, you can start to understand it.


I have worked in the consumer electronics industry for almost 30 years and only on some accessories and some VERY high end speakers do you get close to that kind of markup. Most hi-fi stores operate in the mid to high 30's. 

Now, jewelry and furniture...


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## robertburns3 (Jan 11, 2007)

cb400bill said:


> I have worked in the consumer electronics industry for almost 30 years and only on some accessories and some VERY high end speakers do you get close to that kind of markup. Most hi-fi stores operate in the mid to high 30's.
> 
> Now, jewelry and furniture...


I stand corrected.


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## gradosu (May 17, 2007)

If you shop smart, how much (if any) could you save if you built an equivalent bike up yourself? I was planning on building a bike up over the winter and am contemplating if it is even worth the hassle. Is there any money to be saved? Disregard the service a LBS will provide.


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## ahhchon (Apr 16, 2007)

gradosu said:


> If you shop smart, how much (if any) could you save if you built an equivalent bike up yourself? I was planning on building a bike up over the winter and am contemplating if it is even worth the hassle. Is there any money to be saved? Disregard the service a LBS will provide.


you COULD save money but it would take a lot of time and e-bay searching.. you're much better off purchasing a complete bike. even if it will cost you 50 dollars more..

john


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## zamboni (Sep 11, 2003)

I upgrade mine from Six13 to system Six without paying any service charge to my LBS since the frame was under warrenty. I like to support my LBS due to the fact if you have any issues they will take care of you no questions ask.


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## robertburns3 (Jan 11, 2007)

gradosu said:


> If you shop smart, how much (if any) could you save if you built an equivalent bike up yourself? I was planning on building a bike up over the winter and am contemplating if it is even worth the hassle. Is there any money to be saved? Disregard the service a LBS will provide.



I have built up bikes piece by piece and it usually costs much more than an off the shelf bike and offers little perfomance increases. I recommend buying the off the shelf bike and making modest changes, usually starting with the wheels.


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## afie (Sep 13, 2004)

gradosu said:


> If you shop smart, how much (if any) could you save if you built an equivalent bike up yourself? I was planning on building a bike up over the winter and am contemplating if it is even worth the hassle. Is there any money to be saved? Disregard the service a LBS will provide.


It depends on what country you live in and the bikes specs.
You can do a pricing for yourself: I know alot of cdales stuff is in house, but see what happens when you price the components from the build kit.

I find that I can build a bike using better quality/lighter/individually specialised components than going with their build kit, most often for less. That you have the power to choose coomponents that are more suited to you is very worthwhile.

Note that you may need to spend some money on tools if you are building it yourself.

I would recommend these sites:
www.starbike.com
www.universalcycles.com (15% discount)
www.cambriabike.com
www.jensonusa.com
www.chainreaction.com


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## Cfrone1 (Apr 26, 2006)

*Where are you at?*



ahhchon said:


> you can complain all you want about customers demanding a discount, but a fact is a fact, a bike shop can easily knock 10% off if they want to make the sale, it's that simple. their margin is not as small as you think, if the shop has been around for more than 3 years and they are growing then it means they are doing pretty darn good.
> 
> i have never gone into a bike shop demanding a discount, i work at a bike shop. i stated that i nearly asked for a discount and it was given. most people don't have the cahunas to ask, they think it's embarrassing or they fear the rejection. it's not that big of a deal, the most they can do is say NO. by letting that guy walk out because you won't give him a slight discount (of course you feel the guy out to see if he would be a returning customer) you may have lost yourself thousands of dollars in the future.
> 
> ...


Hey Ahhcon,

Which shop do you work at? I have a friend that lives up in that area, and he would know where to go where normal business is to get discounts for the asking.


Let us know!!!


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## ahhchon (Apr 16, 2007)

Cfrone1 said:


> Hey Ahhcon,
> 
> Which shop do you work at? I have a friend that lives up in that area, and he would know where to go where normal business is to get discounts for the asking.
> 
> ...


put the sarcasm aside.. no bike shop is going to just "give" you a discount because you walked in and said, hey i like this buy, give me 10% off and i'll buy it. (i'm sure that it might work 20-30% of the time though, bike dependent) if you actually read what i said, do your homework, go into the shop and get to know the salespeople.. show them that you are actually interested. putting the right words after another can go a LONG way when making purchases, whether it be a bike, a car, a ___________ . 

there are a couple bike shops in boston where you can go in, show good interested and probably get at least 5% off, up to 10% off. you would most likely NOT get it at my shop though, but it has happened under the correct circumstances. 

john


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## Cfrone1 (Apr 26, 2006)

*Hi John,*



ahhchon said:


> put the sarcasm aside.. no bike shop is going to just "give" you a discount because you walked in and said, hey i like this buy, give me 10% off and i'll buy it. (i'm sure that it might work 20-30% of the time though, bike dependent) if you actually read what i said, do your homework, go into the shop and get to know the salespeople.. show them that you are actually interested. putting the right words after another can go a LONG way when making purchases, whether it be a bike, a car, a ___________ .
> 
> there are a couple bike shops in boston where you can go in, show good interested and probably get at least 5% off, up to 10% off. you would most likely NOT get it at my shop though, but it has happened under the correct circumstances.
> 
> john


Hold on a minute, John….

I did not mean or try to give a sense of sarcasm….I was asking a pretty simple question.

Anyway, I did actually read what you said…Let me refresh your memory…

In your first post you stated “just talking with your lbs can knock off 10% off your new bike purchase. 10% is really not that much to a reputable lbs, they can generally knock that off just to make you feel happy…” Also, “btw, there is a HUGE markup on bikes. Bike margins are far from thin.”

Then, in your second post, it was YOU that said “a bike shop can EASILY knock 10% off if they want to make the sale, it’s that simple. Their margin is not as small as you think…”Also, “by not letting that guy walk out because you won’t give him a slight discount you may have lost yourself thousands of dollars in the future.” And “10% goes a long way with those guys..”

Then, you backpedal (pardon the pun) and say that “you would most likely NOT get it at my shop though.” Why not, John? Is your shop not reputable? (Your words). Do you not want to make people happy? (Your words). You have HUGE margins (Your words), so what’s 10%? You should be able to EASILY knock that off to make a sale, it’s that simple! (Your words). 

Anyway, all sarcasm aside, John….which shop do you work at? You still didn’t answer that one….

In fact, robertburns3 has a much better grasp on the way a retail bike shop actually runs and exists. He mentions overhead, margins, and the way some customers interact when demanding discounts. 

And the kicker is the whole thing is that this is being talked about in the Cannondale forum! ANYONE in the industry knows they have one of the WORST margins in the industry when compared to any of the top 20 brands when sold or compared to others MSRP’s. 

It is real simple, to answer the OP question. If you happen to find a bike you like, that fits well, and you have a good relationship with your shop, and you feel the bike is within your budget and you feel like you are getting a fair price, BUY IT! The difference between 10% and 15% on the bike you used as an example is $55. That could get eaten up in one visit if the bike needs to be refit, was assembled poorly and something is messed up, or the shop turns your back on you for the first real service.

Oh yeah, remember, many 2008 bikes are getting hit with increased tariffs and the costs of raw materials has gone up. That means the same 105 equipped bike may be 8%-15% more expensive because of the new paint/graphic. And don’t make a hobby out of buying a bike either…you are losing to much great riding weather out there.


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## ahhchon (Apr 16, 2007)

i had a feeling you were going to bring that up. i did not CLEARLY specify what i said. yes, just asking for the 10% may be enough to get it. but it takes more than to just ask. you don't go into a shop, say i want this bike and ask for 10% off. 5% of the time you might get the discount. if you do your homework, compare prices to local shops, take a couple trips in and try a couple bikes, and show that you are enthusiastic about bikes then you very much will get that discount. 

like i stated earlier, play smart, if you want that 07 bike that is marked down 10% you might look into an 08 bike that is 50 or so dollars more. they are salespeople and in the end they will ALWAYS offer you that 07 for a bit cheaper. that's where you bring in the fact that maybe it doesn't look as nice, or what not. you'll get told to ride it, which you'll do, and when you come back that's where you might ask for another 5% off. 

whether you get 10% off, or 15% off the bike the shop (if reputable) will take care of you. the techs are not going to remember after 4-5 months that you were the guy that asked for another 5% off, it's not a big deal to them if the shop is a decent sized shop. 

my shop will never offer the 10% off a brand new bike, the reason is that our prices are allready much lower than the lbs around the area (because we are a large store), not to mention that selling bikes is one of the many things we sell. we're kind of like an EMS, sell tents etc and bikes. you'll get the 10% off if the bike has a scratch on it that occurred during installation or what not. you'll get the 10% if it's the absolute last model on a bike that is very large or very small or what not.. it can happen, but it's not going to happen as often as it will in a bike shop.

i don't know why everyone is having a fit over this. i'm telling the OP that he CAN get lower than 10% off retail when purchasing last years model. HE SHOULD and i'm telling him how to.


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## lx93 (Jun 14, 2007)

ahhchon said:


> i'm telling the OP that he CAN get lower than 10% off retail when purchasing last years model. HE SHOULD and i'm telling him how to.


Which I very much appreciate, in addition to everyone else's insight.

For what it's worth, I once got 20% off of backpacking gear which wasn't even on sale. It probably helped that I was buying more than what the regular consumer bought, but-

Essentially, I did what ahhchon & robert burns have both recommended- don't be arrogant, show a love for the sport, know the value of what I was shopping for, including politely dropping hints that I knew where I could get it cheaper, and- imagine this- taking the time to treat the salesperson like a friend by learning their name, what they enjoy most about the sport, saying thanks for how I could benefit from the insights given from their expertise, etc.

I was in San Antonio, TX for training in the Reserves, and hadn't brought any gear w/ me. But the temptation to hike Big Bend Ntl. Park was irresistible, and hey, life is always better w/ TWO sets of tents, sleeping bags, hiking boots, etc., just like one bike sooner or later just isn't enough!


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