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What Goes Into The Cost of a Bicycle?

by Dragon Bicycles

The more serious you become about cycling, the more you begin to notice that road bike prices can go sky high — so high, in some cases, that they could compete with motorcycles and cars! It can be hard to determine a reasonable price range to aim for, let alone have a firm grasp of which bikes are actually worth their price tag. So, just how much does a bike cost? Or, better yet, how much should one cost? Once you understand the different components and factors that go into bicycle design, manufacture and sale, it'll become much easier to find the best performing, most affordable road bikes for your riding style and preferences.

How Much Does a Bike Cost?

The big question! Road bikes come at a variety of different price points, with most falling in the $200 to $10,000 range — a pretty big spread. Some luxury mountain bikes and road bikes can even reach prices up to $16,000. However, there's no need to spend every penny of your savings to land one of these elite models. Many avid riders say that the difference in bike performance begins to plateau beyond the $5,000 range. In other words, the jump in quality between a $5,000 and a $7,000 bike will be almost imperceptible, unlike what you might notice between a $2,000 bike and a $5,000 one.

But you shouldn't only refer to bike price guides to determine a bike's quality. It's also important to look into the materials used to make the bike, the reliability of the components and the craftsmanship of the frame. Remember to consider the extras that come with your bike, too: does it come with a warranty? How long is that warranty? Are you able to return your bike if you aren't completely satisfied? A bike can be a big investment — make sure you're getting your money's worth!

Dragon Bicycles is happy to provide a 6-year bike guarantee and a 30-day test ride period when you purchase your road bike from us. In other words, it's easy to send your Dragon back if you aren't completely satisfied.

What Determines Road Bike Price?

The biggest factors that should determine road bike prices are the frame material and components used to create them. Notice we said "should." In truth, a bike's retail price is driven by seven key factors:

  • Frame Material
  • Components
  • Crafting
  • Shipping
  • Marketing/Sponsorship
  • Overhead
  • Retail Markup

The elements used to make the bike are obviously still important. But the bike brand's operating costs wind up having a much bigger effect on the final sale price of a road bike. Let's break down each of these factors a bit further.

Frame Materials

15% of a road bike's cost goes into the frame material. There are three main kinds of frames you'll find with road and mountain bicycles:

  • Carbon fiber: ultra lightweight, demands the highest prices
  • Steel: strong, used for both inexpensive and high-end bikes
  • Aluminum: light, used on mid-level and inexpensive bikes

If you're serious about biking and want a frame that will last for years of riding, we recommend investing in a carbon fiber model. While it is a more costly material, you can still find affordable road bikes that utilize carbon fiber — especially if you shop Dragon Bicycles. We pride ourselves on creating carbon fiber road bikes at an accessible price point so riders of every budget can have an optimal riding experience.

Components

Bikes will typically have between 22 and 25 components, which account for 20% of a bicycle's cost. The graphic below shows Shimano and SRAM mountain bike components by model level (Note: these are the components Dragon Bicycles uses!). XTR Di2 from Shimano is the most expensive, while the Shimano Tourney is the least expensive.

Shimano and SRAM are well-respected bicycle component makers who create products ranging from inexpensive to very expensive. Typically, as components increase in price, so do the quality, durability and weight savings.

In the bike industry, it's common for brands to sell an expensive frame with inexpensive components to bring down the price of their model and gain more sales. In order to avoid being burned, keep this bike components guide in mind to make sure the bike you choose has good, consistent quality through and through. When you shop Dragon Bicycles, you can rest assured that every component used in your bike is as high-quality as the frame for a premium package without the premium price.

Crafting

Bike building is a labor-intensive process that requires extreme attention to detail, and the majority of bicycles are still built by hand. As such, craftsmanship generally makes up another 20% of a bicycle's cost. Steel and aluminum are welded by hand, while carbon fiber is molded and shaped by hand before curing.

Shipping

5% of a bike's cost goes to transporting it from the factory to the dealer. On average, a bike will change hands 4 to 5 times before reaching the customer. Here's an example of a typical bike's travel itinerary:

  1. Frame Builder
  2. Bicycle Assembler
  3. Brand HQ
  4. Distributor
  5. Retailer

Road bike prices increase with each set of hands they're passed off to. Everyone has to get their slice of the profits, after all! But with Dragon Bicycles, you won't be paying for all these extra steps. Our road bikes are designed, manufactured and sold to you in-house, and we don't have retail store costs to factor in, either. Our streamlined process means a more accessible price point for you!

Overhead

The brand leaders of the bike industry employ hundreds of people in various locations around the world — that's an entire network of craftsmen, marketers, designers and salespeople creating and advertising new products. When all's said and done, overhead makes up a healthy 20% of a bike's cost.

Retail Markup

The cost to operate a retail storefront can account for 6-10% of a bike's cost. Rent, utilities and maintenance are just a few of the many costs associated with operating a retail store.

Marketing/Sponsorship

You have to spread the word about your brand somehow, right? Roughly 8-10% of a bike's cost goes to brand advertising and marketing campaigns. Larger brands will often sponsor bike teams, races and other events to increase awareness. However, Dragon Bicycles doesn't strive for big sponsorships. Instead, we focus on teaming up with smaller, local biking teams and clubs and are totally open to talking everything bike-related. Contact us to learn more about what we do!

How Do I Know Where My Money is Going?

In other words, is it possible to figure out how much of a road bike's price is going toward great materials versus how much is funding the brand's next big marketing campaign? It'll take a bit of digging, but the information is out there. Most of the largest bike brands are publicly traded companies, and they regularly share their financial info with the public. And pretty much all bike brands have a presence on Facebook, Twitter, Instagram and other social platforms where they regularly post about events, sponsored riders and races. By scoping out those accounts and checking out websites like CyclingTips and BikeRadar, you should be able to fill in the rest of the story. And, of course, there's good ol' Google!

Get Your Dream Bike at a Great Price from Dragon Bicycles

At Dragon Bicycles, we make sure that all of our resources go directly into the same high-quality materials and components that big luxury brands use — but without the big luxury price tags. Our lean operation cuts out middlemen, celebrity sponsorships and glitzy marketing campaigns while focusing all our energy on designing and delivering great bikes straight from our in-house facility to you. The result? Some of the highest-performing, most affordable road bikes on the market. Check out our carbon fiber bikes and bring home your Dragon today.

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