Bucket List Bikes – The Rise of the Five Figure Ride

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via- The Wall Street Journal 

The prices of even completely ordinary bicycles have crept over $1,000, while the prices of fancier ones can start at $10,000 and keep climbing. WSJ’s Rachel Bachman reports on Lunch Break with Tanya Rivero. Photo: Baum

Last year, Ted Perry dipped into his 401(k) to buy a $20,000 bicycle.

Mr. Perry, of Dublin, Calif., knows it sounds crazy to own a bike worth more than his 2007 Honda Civic. But he has no buyer’s remorse about the custom-built two-wheeler he purchased from bike maker Baum of Australia, which captivated him with its superior welding, titanium frame and willowy 15-pound weight.

“I can’t afford the nicest car or the nicest house,” says the 51-year-old. But he is willing to splurge on the best cycling equipment. “Once you buy it and ride it, it becomes an extension of you, almost,” says Mr. Perry, a production manager at a sheet-metal-manufacturing company who bicycles about 150 miles a week.

Prices for elite bicycles are soaring. High-performance materials, such as titanium and carbon fiber, and more advanced components, including electronic gear-shifting systems, drive up costs. The average wholesale price of a bicycle sold at specialty shops, which generate the most dollars in U.S. bike sales, jumped 75% in 2013 from a decade earlier, according to the National Bicycle Dealers Association.

And bicycle enthusiasts, typically wealthier than average and competitive, seem willing to pay for the most advanced bikes available.

 

Trek, a leading bicycle manufacturer, offers seven stock models priced at more than $11,000. A growing number of small companies make hand-built bicycles, which can be far more expensive than mass-produced ones. Ben Cox, owner of the Newbury Park Bicycle Shop, in Newbury Park, Calif., says he sells five to 10 bikes a week at $10,000 or more. For a handful of his customers, Mr. Cox says, “there is no ceiling.”

Avid cyclist Alan Taylor, strategy director for a Sacramento, Calif., marketing company, vowed not to spend more than $3,000 when he went shopping for a mountain bike in the spring. But he wound up paying $5,000 for a carbon-fiber-frame bike that, at 25 pounds, weighed about 5 pounds less than a comparable aluminum model.

“You kind of amortize the price of your bike over miles ridden, and it gets pretty cheap after a while,” says Mr. Taylor, who kept his last bike for 12 years. “It’s ‘smileage,’ not mileage, and I am really happy with my bike.”

The more widespread use of carbon fiber in bike frames, instead of steel or aluminum, is perhaps the biggest reason for higher bike costs, industry experts say. Used by airlines and the military, carbon fiber is prized for its light weight, durability and vibration-dampening properties. It is also used in bike components such as wheel rims and handlebars.

“You can’t say the words ‘carbon fiber’ without pretty much tripling the price,” says Andrew Juskaitis, global senior product marketing manager for Giant Manufacturing Co., of Taiwan.

Ted Perry, of Dublin, Calif., with his $20,000 bike Chad Norwall

The brand’s top road bike has a $10,300 sticker price, which Mr. Juskaitis acknowledges is “stratospheric.” But he says high development costs mean slim profit margins for such top models. An electronic-shifting system, which changes gears at the touch of a button and minimizes chain wear, can be three times as costly as a traditional shift system. And hydraulic disc brakes, which offer more stopping power, can add 15% to a bike’s price over traditional clamp brakes. Mr. Juskaitis says Giant expects to sell a few hundred of these high-performance, or “halo,” bikes a year.

Research and development are the biggest cost drivers at Toronto-based bicycle manufacturer Cervélo, whose basic bikes cost $2,500 to $10,000.

“When frame designs could be drawn on a piece of paper and built from off-the-shelf tube sets, R&D was a small component of overall cost,” says Cervélo co-founder Phil White. “But designing a Cervélo takes a whole team of engineers, from materials specialists and designers to production engineers and aerodynamicists.”

Most bicycles are sold at big-box stores like Target and Wal-Mart for less than $100, according to the National Bicycle Dealers Association. At specialty shops, the average road bike, designed for long-distance riding and racing, sell for nearly $1,000, the Bicycle Market Research Institute says.

Last year, 35.6 million Americans rode a bike at least six times. That is down from 57 million people in 1989, according to the National Sporting Goods Association. But more cyclists today are true enthusiasts. The number of people who cycled on a road 26 times or more last year is up slightly in recent years to 21.4 million, says the Sports & Fitness Industry Association.

Some 30% of dedicated cyclists have household incomes of $100,000 or more, the association says. In the overall population, 22% are in that income bracket, according to the U.S. Census Bureau.

Not everyone thinks it is worthwhile spending so much for a bicycle. Dave Moulton, of Summerville, S.C., built and sold bicycles for more than three decades before retiring in the early 1990s. He says high-price carbon-fiber bikes built by major manufacturers exist for “snob value” and so-called “weight weenies” who obsess over superlight cycles. A few ounces make no difference to an amateur, Mr. Moulton says.

John Pryor, of Seattle, paid $10,000 apiece for custom cyclocross and road bikes. Ian C. Bates for The Wall Street Journal

John Pryor, an orthopedic surgeon in Seattle, celebrated passing his medical board certification two years ago by buying a $10,000 bike made by custom builder Seven Cycles of Watertown, Mass. Dr. Pryor, 38, bought the bike to compete recreationally in cyclocross, a form of racing on varied-terrain obstacle courses that is surging in popularity. Cyclocross participation is up about 300% since 2005, according to USA Cycling.

“There’s a combination of comfort, performance, aesthetic and craftsmanship that I felt I got over a mass-produced bike,” Dr. Pryor says. He has since bought a second Seven Cycles bike for $10,000 for long road rides.

Dr. Pryor is hardly alone in doubling up on bicycles. Of Seven Cycles’ customers, who spend an average of $7,500 on a bike, 99% already own at least one other bike, company founder Rob Vandermark says.

Write to Rachel Bachman at rachel.bachman@wsj.com

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