The Fixie Biz

No doubt prompted by coverage here at The Repository, none other than The Wall Street Journal recently ran its own story on the fixed-gear bike phenomenon.

In addition to the usual blather, it includes an interesting aside about the profit margins for fixies. Apparently, the fixed models that the major manufacturers are beginning to produce are roughly 5% more profitable than your regular road/mountain going bike. And the margins on these are already pretty healthy at around 25% to 30%.

Which just goes to show how important this new fashion dimension is to any market, bike or otherwise. The fashion dimension makes the market less price sensitive.

(Original WSJ article is behind its paywall, but can be found pastebombed on the Cycling Plus forum here.)

Comments

[picklin paul]

Interesting article - but lots of scaremongering about the dangers of a fixie.

As for the profit margin if you looked at the total profit from selling someone a fixed vs normal bike I'm sure it would be much lower. The maintenances costs of a fixie are much less than a geared bike as there's less that can go wrong. (maybe they make up the diffrence selling them crumpler bags...)

[Patrick]

Oooh, nice angle.

But I think we're talking about two different profits: the manufacturer's and the retailer's. And you're right, there's certainly a packet to be made on maintenance. And that's likely to get bigger as the technology increases. (Did I imagine it or has someone developed a cable-free/electronic gear change thingy?)