This one’s making the rounds, but worth watching again even if you’ve already seen it if only for the mild mannered voice over commentary in the face of brake failing fear. Phil Kmetz takes a $179 Huffy Carnage purchased from Wal-Mart down a double black diamond Dh mountain bike trail and puts it through the ringer.
If somebody pays $179 for a Huffy, you have to figure Walmart paid about $110(ish) from Huffy to get it on the floor? Which means Huffy must have about $65(ish) dollars in this bike? Which means the bar/stem/seat post must cost about a dollar each for Huffy to buy from their supplier? Who in their right freaking mind would ride that bike? Surprised it held up at all on that run.
Small scale shops have a profit margin around 25-35% for established brand name bikes, closer to 25% if the bike retails much higher than $3k. If they can buy in big enough numbers in preseason, that margin can be closer to 35-45%, but we’re talking $100k and above contract orders. QBP brands like Surly and All-City are only 20-25% profit margin. Fuji and the other brands in the ASI family hit around 50% margin, we call that “keystone”, but no one ever pays sticker price for a Fuji because there’s just so much more room to offer what seems like a deal, but really you just sell them the bike for the price it should actually cost. Retail profits in shops are really based in apparel, tubes, and little things like pads and cables. Most stuff on the floor hovers around 40%. Theft and building costs eat into any actual retail profits. Essentially, the retail floor is just a carrot to lure in people to pay for service, where the shop charges $35-70 an hour to pay a mechanic $9-15 an hour to wrench on their bike.
