Yeah, this is true; you can’t compete with the wholesale prices the companies can get for groupsets, wheels, etc. Even w/ ebay, etc. But you can probably build up a bike that is as cheap (or cheaper) than a bigger name brand bike. Don’t forget that a bike costs more than a frame + a groupset too. The cost of the wheels+tires, stem, handlebars, pedals, seatpost, seat, cables + housing can add another few hundred dollars (or more) to the build.
For steel bikes, there’s the Nashbar that Dismal mentions. And the Motobecane Gran Premio from BD: http://www.bikesdirect.com/products/motobecane/gran_premio_xiii.htm (Looks like sizes are a little limited right now.)
(Yeah, $799 for a complete bike w/ 105 is getting close to the price of the 105 group alone. I know that some folks buy BD bikes just for the groupset and turn around and sell the frames.)
OTOH, building a bike up is a ton of fun and I wouldn’t do it any other way. But that’s mostly because I’m particular about the build, and know that I’d replace the stock stuff anyway. I want to build my own wheels and use tires that I like. I want a specific handlebar. I definitely don’t want the saddle that will come with the bike. I want a two-bolt micro-adjust seatpost, probably a Thomson. I want my own pedals (of course, that’s typically not included anyway on any higher-end models). And I want Jagwire ripcord housing. So, yeah, I’d rather pay a little more and get exactly what I want. This probably doesn’t apply as much to someone that is building up a bike for the first time, but the fun/educational factor is still relevant.
If you do decide to build by pieces, I have a Kinlin XR300 wheelset that I built but no longer need (I’m a “wide rims” convert) that I’d be happy to sell at massive discount to support the cause.
.
