The “$695 MSRP for only $299!” myth

On the internet, you can find virtually anything you want, but not all is as it appears. That on-line dating profile… says he or she is 39, but actually 43. Stretching the truth a bit.  But what if they’re 56?. Today’s lesson- The “Grab yours NOW at our special price of $299 from $695 MSRP” road bike (Mercier Galaxy SC1), courtesy of This is the 56 year old claiming to be 39.

Advertised as a $695 MSRP bike selling for $299, this is the internet, so anything goes! It never ever sold for anything close to $695, and would be worth, assembled, maybe, $400. It’s not spec’d anything like the bikes it claims to compare to.

This bike came to my attention when I received an email from someone, asking for assistance in setting it up for him, saying that the manufacturer says it should only take “25 minutes.”

If you pull it out of the box, throw on the pedals, tighten the handlebars and inflate the tires, yes, it might be just 25 minutes, and you’ll end up with a K-Mart quality bike with a few nicer parts.

But if you build it the way we (and most other competent bike shops) do, it will involve removing the tires & tubes to make sure the rimstrips in the right place and the tire & tube were correctly installed, lubricating all threaded surfaces (why they don’t come this way from the factory is something I don’t understand), truing the wheels laterally and inspecting them for deformities caused in shipping (happens more often than you think), making sure all bearings are properly adjusted, replace “factory” chain lube (which is often the consistency of light tar) with something that will allow it to shift better, ensure there are no kinks in brake or gear cables & housing and replace as required, and finally, the simple stuff like installing seat, pedals & handlebars. And then it needs to be test-ridden to settle things in, and checked again. And double-checked by another mechanic. That 25 minutes quotes just became two hours.

And the bike still isn’t fit properly to the rider.

Besides frame size (the easiest thing to figure out, but not as important to proper fit as what follows here), you’ve got stem length, handlebar height, handlebar width and handlebar reach. Because people come in all manner of shapes and sizes, and it makes a huge, not subtle difference, getting things right. Bar width should approximate shoulder width. Stem length should be set so the rider is in a relaxed position when using the brakes. Forward reach should be very short for those with smaller hands. Drop from seat to bars is determined partly by rider flexibility. All this stuff comes into play when a decent shop sells a road bike.

But the model has 40cm wide bars on the smallest frame (too wide for just about anyone who’d ever use a bike that size), and a 90mm stem (too long in nearly every case). Minor stuff compared to what comes next.

It “features” a standard, not compact, crank design with a 39/52 chainring combo. Exactly what a real racing bike has… which is great. If you’re racing. But if you aren’t strong enough to ride the Tour de France, and you’ve got hills in your area, that gearing’s going to kill you. Every legit bike company is currently spec’ing a “compact” crank with 34/50 gearing, far easier to get up hills with, on their entry and mid-level bikes. If it’s flat where you live, the model might be fine. Otherwise, it’s a very expensive change to get suitable gearing. How could you be expected to know all this stuff? You can’t. That’s how they get away with it.

And then there’s the pricing comparison. Aside from spec’ing the bike with parts that are often inappropriate and expensive to change, they also use a stem shifter. Yes, the same type of stem shifter you’d find on a K-Mart bike. Saving about $200 over the integrated brake/shift levers found on a quality bike in a local bike shop. Wheels? Cheap old-style freewheel, not cassette, leading to a very shortened lifespan.

They could reasonably claim their bike, fully set up, would rival a bike of approximately $400-$450 in a bike shop, but nothing close to $695 “MSRP.” Nor did the bike ever sell, anywhere, for anything close to that. But you still wouldn’t have a bike that’s been fit properly, nor a bike that has a local shop that maintains a sense of ownership of the bike if something goes wrong. No warranty except by phone and sending the bike back.

Can you save $$$ by buying a bike in a box on the ‘net? If you know what you’re doing, how to get properly fit, have the parts needed to make changes so it’s appropriate for the riding in your area, then yes, you can save a few dollars. But nothing like claims, which puts them into the category of misrepresentation, fraud or even scam.

There are reasons that companies like Trek and Specialized and Giant sell bikes only through local dealers. It ensures that you get a bike appropriate for the cycling opportunities in your area, properly assembled and fit, and a place to bring it back to in case something isn’t quite perfect (because yes, in the real world, there can be defective parts, and what seems to be a great fit at first might evolve a bit as you go on longer rides). A bike offers none of that. Which is fine, people deserve a choice. But what’s not fine is when they tell you it’s the same as buying a much-more-expensive bike, or that just 25 minutes work and it will be in great shape.

The bike of the future might not require as much expertise to assemble, might be more adjustable in fit, and more versatile in capabilities. But that bike isn’t here yet, and until it is, your local bike shop is offering you a whole lot more than what you find offered on-line. Better fit, better service, better components, longer life.  –Mike–

PS: even claims their sizing runs the same as a Trek, essentially encouraging people to find out from a local shop what size they take, so they can order their cheaper bike. But they do not size the same, nor do they offer any degree of customization that is standard with a local bike shop. Nor are the Mercier and Motobecane brands they sell in any way the once-great companies making them back in the day. simply picked up expired trademarks and slapped them onto their bikes. Windsor too, but strategically that was a mistake; anyone familiar with Windsor back in the day would not likely have positive feelings about the name.

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12 thoughts on “The “$695 MSRP for only $299!” myth

  1. The guys behind are Mike Spratt and Dave Sander. Spratt has a long history of “mark it up then mark it down” bike shops. I think his chain was called World Cycle, they had over 100 little shops around the country in the mid-’80s. There was one in Boulder where the REI store is now. They had Peugeots with exorbitant “MSRPs” on them, marked WAY down (to what they should have cost in the first place). Dave Sander had a legit shop in Houston, then decided to be the first Internet bike seller. We had him on the cover of one of the early issues of VeloBusiness (late 1997, I will dig it out if you’d like). Clearly, they’re pretty successful with the Motobecanes, I sure see a lot of them in Boulder. In some ways, you should be grateful to them for cleaning up the consumer gene pool. You don’t want to talk to people who want a $299 road bike. Do you? The thing in your post that about made me spit out my coffee: Stem shifters?!?!?! I thought those died a quiet death along with “safety levers”! Anyway, sorry I missed both you and Steve at Interbike, I usually see at least one of you! Cheers, Ray

  2. I have been a bike rider for over 40 years on and off but recently I was let go from my professional job and now want to try something different. I love bicycling I think its good for mind, body, and environment to practice the art of biking and repairing such an incredible machine. Life is short and to live it without experiencing the culture of being a bicyclist in the purest sense is nobodies fault but yourself. So I always encourage people to bike wherever they are because not only are they doing something good for them, they are doing something good for all of us by creating a beautiful environment run on a machine that does not eat up oil and pollute the very air we breath. It promotes health and a strong body that will always need such exercise to build endurance and strength.

    1. Need to know a bit more than that to be of help; what brand bike is it, and what motor/drive system? Thanks- –Mike–

  3. I bought a BikesDirect Titanium 29er, Sram XO 2X10, for $2,200, now $2,400. Their claim of $5,000 MSRP, as an average, is about right. To refer to internet discounting as “fraud, scam” reduces the credibilty of Mike J’s article. Admittedly, higher priced bikes likely have larger discounts off more realistically set MSRP, but then Mike J implies owners of $299 bikes as guttersnipes anyway. BikesDirect cites comparables by name and model, not too tough for to do one’s due diligence, aye?

    BikesDirect is transparent about drop shipping factory direct, wherein mistakes/damage, which must be photo-documented, can involve shipping the bike back to a warehouse. For many of us, this risk becomes acceptable if net savings are in the thousands because, worst case, some time and patience may be required to effect a satisfactory conclusion, easier for some of us to provide than a couple-three grand extra slap down.

    I’ve bought relatively expensive cars on line, out of state, and frankly found the transaction more honest and straight forward than getting them off local lots. Perhaps Mike J at ChainReaction is letting the envy show instead of modifying their business/marketing/merchandising model to be more competitive.

    1. Not all internet discounting is fraudulent or a scam. Just some. Is this the bike you purchased? You do realize that’s a three year old model don’t you? If you click on their reviews, you’ll see a date of 7/7/2010. We have often had ridiculously-cheap prices on bikes that old that for some reason we still had in stock. Most shops do. No three year old bike, especially a mountain bike, would sell for close to its regular price. Sorry to disappoint you if you didn’t realize what you were getting was quite that long in the tooth. Nothing at all wrong with getting an older bike; just don’t try to tell someone that it’s worth so much more than a bike in a store. Thanks- –Mike–

  4. -I want to buy on bikesdirect the new bicycle seal in a factory box:
    1. Motobecane Fantom Pro (2011) ($1095 – a discount of 57,76 %) or
    2. Motobecane Fantom Elite (2011) ($750 – a discount of 65,87 %).
    At me growth – 182 cm, want a frame of 20 inches, to adjust a bicycle I am able the.
    I live in Russia, in the city of Astrakhan, the postal index 414026.
    Somebody can prompt to me, whether it am possible? If yes, how many delivery to me cost completely? Thanks. It is possible to answer the address:

    1. We’re a local retailer, selling only to in-store customers. You need to go to their website and contact them directly for the info you need. I will note that, at 182cm/6′, a “20″ inch bicycle might not be appropriate. If your height is in your arms & torso, you’ll need something that has a longer top tube than most 20″ bikes would have. You should check out our article on bicycle sizing ( for more information before ordering on-line. Thanks, Mike Jacoubowsky, Chain Reaction Bicycles.

  5. I have now purchased three bikes from bikes direct, 1 road bike, 1 cruiser and 1 MTB. I know that these bikes are not “top of the line” brands and sometimes have odd compentent mixes, however, since I have limited funds I went for an internet bike.

    My LBS is happy to inpsect, assemble and fit the bikes to me for $85.00. As the owner told me he knows I will buy additional tubes, tires, etc. from him in the future.

    I am not sure why some people seem to find bikes direct so loathsome (not this blog but some I have read in the past). My theory is that 3-4 years from now if I am still riding then I can always upgrade to a better brand with better components.

    1. Tim: The issue is what BikesDirect claims on their website and suggests their customers do. Probably most-offensive is when they tell people to visit a local bike shop and spend time checking out brand xyz bike because they size just like their own bikes. Bad enough that they’re suggesting it’s no big deal for a shop to spend time sizing a customer who isn’t going to be buying a bike from them, but even worse are their claims as to the “regular” price or retail value of the bikes they sell. They could be honest and point to approximately 20% pricing differential in many cases, but they’ll claim 50% and sometimes more, which is simply not true. The other thing that’s overlooked is the value of having a local shop that maintains a sense of ownership and responsibility for the bike. But for me, it’s the outlandishness of their “value” claims that is most bothersome. –Mike–

  6. I’ve looked at the Bikes Direct ads for a few years now but never bought anything from them. There’s several things that I’ve noticed that they do that to me makes them seem dishonest besides the so-called MSRP on their bikes. First the Motobecane/Dawes/Winsor names are all complete BS, the current company has no relation at all to those older names, there’s no lineage at all, it’s like an electronics company from China buying the name of a well know defunct brand just to fool people with false name recognition. The main problem for me is is that I’m in my 40′s and didn’t start cycling until the late 1980′s and I never even HEARD of Motobecane, Dawes, or Winsor before Bikes Direct started using the names, they might as well have used Rudge, Pope, or Western Auto for all the difference it makes to me.

    The other thing that annoys me about them is their BS marketing and advertising as if Motobecane/Dawes/Windsor were real bike companies, and they actually have a seperate “manufacturer’s” website for each of those three names brands with the specs, geometry, and MSRP listed, so it makes it look like Bikes Direct is some kind of factory overstock clearinghouse when it’s really NOT. Their ads are deceptive in that they’ll talk about how “the factory” screwed up and put the wrong components on a certain bike and they have to give it a drastic markdown in order to sell it, my favorite one is a bike they have listed as being marked down because “the factory” put brown shifter cable housing on it.

    Another thing I don’t like about them with their prices and the false MSRP’s is the quality of components they put on their bikes, and the “possible substitutions” they have listed. All manufacturers cut corners with components, and you usually wind up with house brand stems, seatposts, saddles, and things of that nature. With Bikes Direct they take it to a whole new LOWER level, since there is no real factory you don’t get house brand components, you get totally generic components from god knows where, and you have no idea of the quality of this stuff or how much it weighs. No-name forks, stems, handlebars, seatposts, saddles, hubs, rims, cranks, brakes, levers, cassettes, etc. If you look at their bike advertisements they love to brag up the derailleur brand names because they know that’s what people look for, a Tiagra bike, or a 105 bike, or an Ultegra bike, but then they screw you over with generic bars, post, saddle, stem, hubs, generic rims, and a generic square taper crank with steel chainrings, so you’re really NOT getting the quality of a bike that the derailluer names would suggest.

    The best part is the possible substitutions. “Due to factory production demand” that aluminum frame may be 7000 series tubing, or it could be 6000 series. You MIGHT get Shimano components, or you might wind up with Microshift, or Sunrace. You might get name brand rims and hubs, or you might get generic no-name rims with no sticker. You might get this Shimano 11-25 cassette, or you might get SRAM or Sunrace, with a totally different gearing range. Of course all of these substitutions are totally done by “The Factory” and Bikes Direct has no control of how YOUR bike will be spec’ed out compared to how it’s listed on the website, and of course they’re not responsible or liable for any cheaper alternative substitutions “The Factory” makes. If I buy a REAL name brand bike I know EXACTLY what I’m getting on it 99% of the time, but somehow Bikes Direct has no control over “The Factory”, or in fact checking or updating their online their spec sheets. It’s like buying a Cadillac from a GM dealership and having them say you might get a Chevy Cavalier as a substitution if the factory is all out of Cadillacs at the present time.

    They wouldn’t be so bad if EVERYTHING about them wasn’t so misleading, everything from their brand names, to their advertising, to their spec sheets, their substitutions, their fake MSRP’s, their so-called factories. They’re not even a real bike company, they’re just a marketing company with somewhat shady advertising and business ethics. They don’t even make their own bikes, and they don’t admit to it in their ads. It wouldn’t be so bad if they’d actually come out and say who actually makes their bikes for them, or that some of them are really frames a few years old that were originally made for other manufacturers. I think if you take a good look at their generic no-name frames and component specs you soon find out their bargain sale prices really aren’t that much of a bargain at all, basically all you’re getting is what you’re paying for, and sometimes you’re getting even less than what you thought you were.

  7. Meh. What do you expect from a $300 bike? BD very clearly documents what’s on each bike. Anything online, including BD, saves 30-60% of the cost of going retail. Some people don’t want or need the services a retail shop offers. There’s room enough for all of us without poopooing your competition.

    But it’s absolutely true: The BD bike is basically a Wal-Mart bike with slightly different parts. The frames are bulk generic, what you could get for $30 each in lots of 100 from Alibaba. It’s all about the parts. Their parts are slapped on and sold at a pretty good price as long as you pick a config where you don’t have to replace many parts.

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