If you spend any amount of time online reading up on bicycles or doing research about where to buy a bike, the subject of "department store bikes" comes up. I think the term is fairly broad and applies to generally any bicycle sold by a retailer which does not deal exclusively in bicycles as their primary merchandise. This category includes big box wholesale warehouses and this term can also apply to big box sporting goods stores which feature bikes for sale next to BBQs, canoes, shotgun shells, and tents.
When someone is posting a question about which department store bike to buy, instantly, as soon as the question is raised, someone (or a gang of someones) will squash, no, stomp out the idea, suggesting a host of reasons for not going that route. They range from issues of reliability and build-quality to issues of economics, such as challenging people to consider spending their money locally at a local bicycle shop (a.k.a. "LBS"). I am not intending to open up this discussion here, however, I wanted to share a few photos I snapped at a wholesale big box retailer last night to provide an example of why you might want to reconsider some of these "bargains".
What I saw was an army green Diamondback Recoil full-suspension mountain bike (two of them shoved way to the far corner of the store next to some BMX bicycles and where they sell coffins) offered for just under $400. It featured mechanical disc brakes and a suspension fork and rear coil-sprung suspension. On the outset, it is probably a pretty good price for this bicycle and for the price, a person could buy worse (based on suggested MSRPs listed on the Diamondback web site).
When I visit these places, and while my wife and kids wander around loading up the shopping cart, I sometimes like to look over how these bicycles were assembled. Typically, these are not assembled by professional bicycle mechanics. I am not a professional bicycle mechanic, but I know enough to know when certain things, such as what I mention below, are assembled incorrectly.
The most common thing I notice is tires are thrown on without any concern for whether the tire is directional or not and never is enough air put into the tires. (I assume this is because they don't want kids riding bikes through "Home & Garden" while their parents are buying a rototiller). Additionally, no one ever seems to adjust brakes properly - they are always too loose. In these cases below, this was true, but you'll notice a bit more too.
I admit, this photo isn't that good, as it was snapped with an older cell phone camera, however, you should be able to at least see where the suspension fork has been installed BACKWARDS. The handlebars face forward but the fork is facing the rear. See the suspension fork crossmember above the front tire, it is behind the front wheel when it should be over and in front of the front wheel. Also, the brakes (or handlebars) were tilted upwards like polished silver antlers, effectively making them unusable for a rider.
This close-up shows how poorly the rear brake cable was routed between the fork and wheel.
None of these things could be considered unfixable, however, unless someone has the skills and tools to make these adjustments - which I am guessing most consumers might not be able to do (they might not even know that these bicycles are not "ready to ride" as-is) - hopping on one of these bikes to hit the trail could be potentially dangerous.
My best-guess is it would cost anywhere between $45-100 for a LBS to set-up one of these bicycles to ride, depending on what issues the new bicycle came with. So, a consumer who buys one of these bikes should plan on spending $450-500 plus tax for a bicycle that's "ready to ride" which might be about what you could have bought a similar bicycle for from a LBS, plus you might get additional benefits, such as a free tune-up, not to mention, the bicycle would be fitted to you.
Just something to consider if you're potentially going to buy a bicycle and you're concerned with cost and more importantly VALUE.
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