4 reasons you'll pay more for a bike in 2011

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There's a lot of news swirling around the industry right now, all of it pointing towards higher bike prices in 2011. To wit:

  1. The UCI's Approval of Equipment Seal. Last week the UCI announced that it has solved the problem of manufacturers launching non-conforming products into the market by requiring that products (frames and forks at first, to be followed by wheels, handlebars, seats and clothing) pass a UCI inspection ensuring that they meet the organization's technical standards. The duly approved items will then be given a sticker certifying compliance, which will then grant that product unfettered entry into UCI events. No mention of the expense of this program has been provided by the UCI, or who will shoulder it. Which means, of course, that it will almost certainly be the bike manufacturers who are expected to fund the program, along with the added internal expense of coordinating with the UCI in advance of new models going into production. What that may mean logistically is manufacturing delays that need to be compensated for by expedited shipping, or rushed production, or an accelerated internal engineering process to hit much earlier deadlines. Whatever the scenario, the UCI-compliant cutting-edge new model high-end bikes will be even more expensive to produce. Fortunately for bike companies, it's the cutting-edge new model high-end bikes that have shown the greatest resistance to margin erosion. Don't expect that to change - expect those added costs to show up in the price tag hanging from the handlebars.

  2. Shimano is protecting its dealers by raising everyone's prices. Shimano just announced a new distributor pricing policy - essentially one where margins are lower than before. This strategy is to combat online discounting and give retailers who charge closer to MSRP more of a competitive chance to win the business. The policy is restricted to the aftermarket - any shop or online retailer or brand that buys Shimano product either to sell a la carte or as part of a build kit. There is nothing about the announcement to suggest that the big brands that buy direct from Shimano for OEM (ie, complete bikes with Shimano gruppos delivered to shops) will be affected. Directly, at least. But these big brands are competing with small brands and online discounters for the same market. A customer who buys a frame from one place online and then buys  a gruppo from the cheapest place he can find online is now off the market for the shiny new 2011 model at the LBS. Don't be too surprised if some big brands take advantage of the aftermarket price increase their competitors are facing, and try to squeeze a little more margin out of the complete bike you're suddenly considering since that gruppo you were going to buy to finish off that frame you've been eyeing is now $200 more expensive. 

  3. The non-endemic sponsorship market in pro cycling is in the toilet. Whose marketing department would you rather be running right now - Saxo Bank, Geox or Radio Shack? You're either worried about a drug scandal (at best) eroding the ROI of your ProTeam investment or (at less than best) reflecting directly on your brand, or you just spent a ton of coin to come into the sport at the highest level, only to find out your team was denied a license that guarantees the team access to the Tour de France and other marquis events. When the snot hits the fan, Cannondale needs pro cycling a lot more than Liquigas does. The more inhospitable the environment is for non-endemic sponsors, the more burden the cycling companies will have to bear. Transitions cedes its title sponsorship to Cervelo, Doimo hands it over to Cannondale, and BMC keeps doing its thing on its own. But there are also teams with no title sponsor at all, on whose success the cycling companies have already pinned their hopes. The sponsorless Luxembourg project proudly straddle Specialized bikes, and Pegasus had already signed on with Scott before the UCI pulled the asphalt out from under them for not meeting their financial obligations. The Pegasus story is particularly interesting because of the 11th hour cash infusion from an existing sponsor. That sponsor wasn't named, but it's worth nothing that when Saunier Duval (smartly) distanced itself from the antics of Ricardo Ricco and Leonard Peipoli at the 2008 Tour, it was Scott that rode in on its white horse to resurrect the team as Scott-American Beef. Good money after bad? It doesn't matter so much if it's justified in bolstered margins at the register. 

  4. Carbon fiber is more expensive. We mentioned this a couple times previously. 

 I could add a couple other reasons to this list, like a (perceived) rebounding economy and the increased cache cycling is set to enjoy in the US with the 2013 CX Worlds and a chance at the 2015 Road Worlds in the U.S. But that would be like your coach prescribing your hardest interval workout of the season, and then ending it with "repeat until failure."

All of which is to say that if you don't know where to find a bargain on a racing bike, now is a good time to start looking.


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