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Money Exchange

How much for rare parts in the window? 

by Jim Cunningham, CyclArtist

A real life Email exchange about the cost of vintage parts.  Not for the squeamish…

CyclArtist,
Did you see that creep dealer advertising  the NOS (New Old Stock) Campagnolo Nuovo Record triple crankset for $700?  What a pirate!  I have one I'd sell for $200, just to make him look bad. I think that greedy bastards like that should be run out of business.

Regards,
Slen@AOL  (not his real name)

Actually, he was much more vile, hostile and long winded than that, his prose filled with nasty expletives… but you get the idea.  The hostility troubled me, so I wrote back:

Dear Slen,  (not his real name)

I'd like to buy your cranks for $200. 

I must comment on the rest of your post, however:

I don't feel any hostility toward someone running a legitimate business asking top dollar for hard to find parts which are in demand among those who are maintaining or restoring fine old bikes. 

Such businesses need and deserve your support.  It is stupendously hard to be a small business owner in this country, so I'm careful to give anyone courageous enough to try all the consideration I can.  Last I heard, small business still pays something like 70% of all taxes in the US.  Giving most of us a relatively free ride. Don't forget that 30% of whatever margin our Small Business Owner had goes to taxes.

For those who appreciate and remember the "good old stuff", it should be obvious that dealers with long experience, deep technical expertise, patience, compassion and dedication to cycling have mostly been replaced by corporate chains, big box super stores or narrow mainstream shops with their focus on profit margins.  I think much of the attraction we feel for certain bikes was instilled by dealers passionate about cycling.  If you are lucky enough to find one who still has it, support him today, or he'll be gone tomorrow. 

Let's see… The last time those crank sets were available through distributors was many years ago, the price was about $229.  Retail overhead averages about 33% according to NBDA (National Bicycle Dealers Association), so a minimum margin  makes $343.50.  Note, however, that this margin presumes normal modern retail practices. NDBA assumes efficient and predictable parts ordering, while I suspect that our vintage parts retailer may have spent many hours and considerable expense locating such inventory. I certainly have spent hundreds of dollars traveling and advertising for what sometimes amounts to a handful of parts. NDBA also assumes local, not national advertising, and average bicycle consumers, not rabid, anal, vintage enthusiasts.

Another frequently misunderstood factor is that, for a while,  it WAS possible to move such goods to Japan for much more than the domestic market would pay.  I'm not jingoistic, but I'd like to see enough of this stuff stay in the US to give enthusiasts something to work with.  Pricing for worldwide market value is one way of helping that cause.  You might consider someone advertising high prices for stuff you have, or have easy access to, as doing you a real favor!

The sin, it would seem, would be denying the value to buy cheap and selling quietly overseas to maximize profit. I know that has been done, quite deliberately, on a large scale by people and organizations probably not on your shit list.  There is not an endless supply of this stuff, as enthusiasts of several categories of collectibles can tell you.  I understand certain classes of cameras & stereo equipment, have been strip-mined to extinction from the US, leaving no possibility for those here who love the stuff to work with it. 

Lastly, it is unfair to compare prices offered by a small business owner to those offered by hobbyists, swap meeters or guys just clearing out their garage. Cyclists, bless 'em, still sometimes give (or sell cheap) old parts rather than trashing, hoarding or maximizing their resale value.  It's a bit of a tradition, perhaps, one I'd like to see preserved.  But remember, there's a difference between moving  midline mundane mass produced stuff along to riders who can't afford better and selling parts which were considered the pinnacle of excellence in their time and which always were expensive, for market value.  

As to what the market value of any of this stuff actually is, that's another story.  The markets too thin for there to be any guideline pricing. Here are a couple of ways to look at it:

One starting point for an old bike or part could be the value of it's contemporary equivalent. Nice, rare, old stuff has nostalgia, exclusivity, classic styling and usually, simplicity, serviceability and durability going for it.  It's value may increase with time.  New stuff has today's buzz and "tech" appeal, availability, contemporary styling, and usually, is easier to use and requires less servicing.  Depending on what you want these considerations could balance.

In the case of the crankset with bottom bracket mentioned above, we could start with a current Record, worth about $392 retail.  Which seems about right for NOS 170 NR/SR doubles.  Campy does not make a triple in the top quality range, (not when this was written) as was the NR triple, so if they did, we're probably about $445.  A good starting point, from there we adjust for demand and rarity.  Long cranks were not popular in the 1970's now they are, so the demand for long, vintage cranks is especially high.  Does that get us to $700?  I don't think so, I've never seen any trade that high. 

The second method is to consider actual cost.  Start with the original purchase years ago of about $90 wholesale. The first year, that part was still sitting in inventory, it cost 30% or so in taxes so add $27.  Interest on the $90 cash laid out plus the $27 tax @15%, for 20 years is  $468. After all if the money was not in inventory, it would be invested in something else, or if money was borrowed to buy that inventory, the interest would be a direct cost paid to the lender.  Proper storage, (for NOS you'd need reasonable climate control in most areas) a little labor to move it a few times, dust it, etc. for 20 years, let's allow $5 a year or $100.  OK, by this method,  the real COST of that crank is: $90 purchase + $27 tax, + $468 interest + $100 overhead.  =  $685 COST

I hope I've helped you see the dealer's point of view and trust you will temper your accusations of piracy with a little understanding.  I'm disappointed, to see such vitriol.  Are you equally angry about the price of certain big name shoes?  

I hear there are huge amounts of money being socked away by corporate executives and legions of workers being exploited.

You know, one of the reasons the stuff we love is increasingly rare, is that most businesses that produce really great stuff or give really great service & are run by people who are passionately involved with the product.  Unless they are supported by enthusiasts, these people are pilloried by bargain hunters and crucified on the mighty dollar sign.

Your thoughts?

CyclArtist

 

Dear CyclArtist,

I offered mine for $200 and here's a typical response:

That is a fair price but I have 3 sets now 1 in use and 2 awaiting the right frames. I gave $ 200 for the last set but it came with a complete 1975 P-15 all NR Paramount, the other 2 I got for $5 and $25 each. Regards Jack >>

Slen@AOL

Dear Slen,
I suppose your point is that market value is very low, but the above proves nothing.  I've got NR crank sets I'd sell for $5 too, but they are not in NOS condition. What we have here is either a tall tale, or a means to drive the seller's price down.  The guy has nothing to loose with such a statement and possibly he'd contact you under another screen name to offer less.

Further, it obviously does not compare apples to apples. We're talking NOS, virgin, never assembled old stock. This guy implies he got the same thing plus the rest of the bike for $200. I kind of think if he got a virgin bike kit, he'd have mentioned it.  I'd bet the bike was well used and the cranks in poor condition. 

Why would anyone sell a new crank set for $5?  A widow of a cycle enthusiast who was clueless about what she had?

This could even be the electronic equivalent of the "swap score boast."  I've witnessed the phenomenon several times; I've been at a swap meet, noticed a buy occur & later happened to be standing next to the buyer when his buddy asks how much he paid.  Some buyers "boast" a much lower than actual price. 

Odds are, if I contacted this guy without his suspecting I'd seen this post, telling him I really need a triple for a project, I'd bet he'll swing to the opposite side of the buy/sell continuum. 

I'm not comfortable with people who buy at extremely low prices, especially when all they are doing is hoarding.  But what one pays under one set of circumstances is no reason to demean someone else for asking or paying more in another.  If someone is  trying to preserve our disappearing cycling heritage or even just rekindling an old passion through nostalgia and pays a high price for a particular piece, there is no reason to vilify them! 

Please don't use the Email post you sent above to justify slander of a legitimate business, or your disdain of those who feel strongly enough about certain cycling hardware to pay or ask the premium price it commands. 

Thanks for the opportunity to hash this stuff through.

CyclArtist

Dear CyclArtist,
Got your feedback. I consider it worthy of a thoughtful response, please stand by. On the other hand, should let you what kind of bird (myself) you are dealing with here. When a local shop owner started selling TA bottle holders w/o bottles for $35, (you and I both know original wholesale cost less than $2), in his shop AND had gall to try it at local swap meet, I proceeded to pull out my inventory (total of 9), which included the bottles. I flooded the local market as much as I could with them for $10. I feel I made plenty of profit, I think the other guy (who just happens to be an East coast trans
plant), was just a poor old greedy excuse for a human being. Does the guy hate me and think I am a jerk? I surely hope so, I think it is an honor to be hated by assholes. I hope word gets around to other assholes that I have a desire to do the same thing to them. Recently I sold 8 pairs of NOS Fiamme Ergal rims for $40/pair.  Someone on the East Coast wanted $115/pair!  You and I both know that they originally cost $50 for all 8 pair.
      
The crank I am selling, you claim is less than what distributors would be selling for. How come they are selling so high? Did they just recently buy their inventory at equally high prices? You and I both know that's not the case. Those kinds of spiraling costs merely resulted from speculation, greed, and a blithely bizarre desire as one of the eastern folks put it, to "lead the market".

On the other hand I am very sympathetic to your disdain of the opposite, but equally damaging character, the gouging "collector".  Yes, I have seen the individual who will tell you that your wares are worth a whole lot less than what they are actually worth, just so he can buy them and then sell them for 10 times the amount. Surely these folks leave a transaction with the other party feeling like he had diarrhea poured over himself---Yuck!  On that note let me end this message with a question. At the end of the day, what is the price/cost of imparting a lasting goodwill?--
--Slen@AOL

Dear Slen,
You say:  "I should let you what kind of bird (myself)) you are dealing with here"

You mean foul, vindictive and proud of it?

Two of our distributors made an effort to stock a few vintage Campy parts, they both say they have had to increase their prices, because they are paying much more lately due to short supply and because what little there is does not come from the manufacturer.  Further, they sold out again, which indicates those prices work at the current wholesale level. 

I don't know what you "know".  The costs you give are low.

You obviously did not yet absorb what I sent you. 

I'll give you more time.
CyclArtist

Dear CyclArtist,
<< You mean foul, vindictive and proud of it?  >>

I am out of my league-
take care of yourself and good luck to ya.
Slen@AOL

Dear Slen,
Sorry, but thanks.

I appreciate the opportunity to spar with ya.  No malice intended.
CyclArtist

The above Email bounced back as Slen had blocked my mail to him. 

Of course, the $200 crank set never arrived.  ~ JFC