Pricing Small PartsJan Heine
There are different philosophies on how to set prices. The traditional way is to figure out how much something costs to make, add a little profit, and determine the retail price. The more modern way is to keep your prices low on “high-visibility” items for which people comparison-shop, but inflate your margins on “add-on” products that people tend to buy without comparing prices.
I may be old-fashioned, but I dislike having to compare prices on everything I buy. I prefer to shop from companies whom I can trust to sell at fair prices, no matter what I buy. This is how we set prices at Compass Bicycles.
For example, we sell our Nitto handlebar shims for $ 12. Another popular cyclotouring mail-order company charges 25% more and sells them for $ 15.
We sell the Park Tool BBT-18, used to install SKF bottom brackets, for $ 12. Other companies charge between $ 17 and $ 19 for this tool.
For most customers, it may not make a huge difference, but I feel it’s more honest to charge a normal markup on these “add-on” items, even though most people don’t compare prices on them.