Re: [CR]Situation Desperate--Frame prices and demand


Example: Events:Cirque du Cyclisme:2007

Date: Sat, 28 Feb 2004 18:38:03 GMT
To: taztaylor@mindspring.com
Subject: Re: [CR]Situation Desperate--Frame prices and demand
From: brianbaylis@juno.com
cc: classicrendezvous@bikelist.org
cc: classicrendezvous@bikelist.org

Taz,

There are a few things that I must correct in terms of what you understand regarding the time it takes to build a frame. The build times of various builders are not "standarized". There seem to be two basic and distinct catagories. The typical effecient long time professional framebuilder is shooting for a 15 to 20 hours MAXIMUM build time. The are lots of ways to achieve this using "modern" framebuilding parts and methods, even amongst lugged steel builders. A feame is generally constructed in a 2.5 to 3 day period.

The other catagory, which is not well recognized, are in fact the "art builders" whose general production takes AT LEAST 60 hours to complete; and can often reach 80 hours and over for something custom designed and unique. I can rarely even get in that much effort over the period of a month, even if I had nothing else to do. It is not routine work and requires motivation and a focused mental approach. The methodology and the primary purpose of each of these catagories of frames/framebuilders differs as much as the build time does. And there are in fact a few "Zen-like" builders out there. It IS NOT about the money. That is not to say that there is no money involved; there most certainly is, but these builders have other sources of higher monitary returns per hour that the framebuilding. These people severly limit their production and produce special works in small quanitity, as opposed to trying to make a more profitable product in enough volume to make a good living. A more comprehensive explaination may be forthcomming from me on this, but it is to appear on the framebuilders' list. These distinctions have existed for a long time, but the list of actual "zen-like" builders has dwindled to a fairly small number. I was just talking to Peter Johnson about this just last night. He plans to build about 4 per year.

So some of this does not fit with the traditional business/economic guidelines. Zen-like framebuilding is outside that box.

Brian Baylis La Mesa, CA I can dig the Zen thing; but mountain top cave framebuilding is out!


-- "Taz Taylor" wrote:


Grant,

This is the other side of pricing your work below it's true market value. Time=money, so if someone is waiting six months or three years for a frame, it's true cost is greater than the dollars they pay to the builder.

Certainly, the allure of owning a Weigle or Baylis is partly from the exclusivity, but I don't think waiting increases its desirablity. It may make the owner more emotionally invested if they waited a long period of time.

Although you can't pop into Richard's or Brian's shop and leave with a frame immediately, I think you could get one back in 1 or 2 weeks. (I believe that's how long they've said it takes them to build one frame). It's a question of how much you're willing to pay. If a builder builds frames for a living and not as a hobby, they will move you up the waiting list if you're willing to pay more.

If a builder doesn't respond to the offer to pay more by accepting or raising his prices, he's going to create a gray market (or scalper's market) where people buy his frames just to turn around and sell them for a higher price, capturing the excess value for himself that the builder left on the table. This is more difficult for bicycle frames than other items since they are customized to the buyer's specific body dimensions but it can still happen, or the scalper can sell his place in the queue when it nears the top. Bicycles are not immune from market forces.

I think you are shedding some light on this with your question about wait times for various builders.

I'm reluctant to post this to the list because it's moved pretty far off-topic and some people get insulted when you suggest they are influenced by money. I'm not, it's a very rational influence. Not to suggest there aren't others. But anyone who says it's not an influence is either being dishonest or irrational (or achieved some Zen-like state where nothing beyond actually building the frame exists for them :-) ).

Taz Taylor in Atlanta, GA - going for a ride...
> Date: Fri, 27 Feb 2004 09:54:00 -0500
> From: Grant McLean <Grant.McLean@SportingLife.ca>
> To: "Classic Rendezvous Mail List (E-mail)" <classicrendezvous@bikelist.org>
> Subject: Re: [CR]Situation Desperate--Frame prices and demand
>
> Taz, Lou, whoever is still following this thread,
>
> Imagine what the demand for frames from small custom shops would be
> if you could walk into a frame shop, buy one, and go home with it.
>
> Leaving aside the physical impossibility of filling out an order form,
> being measured, picking out your lugs and paint jog, and having
> Brian or E-Richie pop into the back of the shop, and return a few
> minutes later with your completed frame!
>
> The fact that it takes, on average, a few YEARS to get one, certainly
> reinforces the commitment of the customer! At that point, does it
> really matter what it costs? You are willing to wait, or you're not.
> Plus, you've got all that time to save up, come up with an explanation
> to your spouse, and build that extension on the garage!!
>
> The internet has made so many high end items available at only a few
> clicks away, most people just don't want to wait for things anymore.
> Maybe that's part of the allure of a Baylis or a Weigle, since you're
> joining a club when you own one, a club with very patient members!
>
> Grant McLean
> Toronto.Ca
>
> O \O/
> _< \_ _< _
> (_)>(_) (_)>(_)
>
>
> Peter wrote:
>
> > > If you have more work than you can possibly handle, that, by definition,
> means that your prices are too low.
>
> Lou replied:
>
> > I disagree. The basic assumption is that you have efficient output and
> that you are working at a sustained and consistent efficiency. In other
> words, if you were able to build 10 frames per month, but now your
> efficiency has dropped to 5 frames per month, that doesn't necessarily mean
> you should raise prices just because you can't keep up with your workload.
> On the other hand, if you are still building frames at 10 per month and you
> have orders that would sustain 20 per month, you have to determine whether
> the reason you have those orders is because of your lower price compared to
> the competition. Raising prices may drop demand. If you can raise prices
> without dropping demand, you are certainly in a good position. How to do
> that is a difficult business decision. Lou Deeter, Orlando FL
> >
>
> my 2 cents:
>
> As my econ professors kept beating into my head - changing the price of
> Brian's frames does NOT change demand - it changes the Quantity demanded.
> Changing some aspect of Brian's frames (like outsourcing the paint) may
> cause a decrease in demand.
>
> For example: if Brian charges $1.00 per frame, then I would buy one (maybe
> even two) and so would many other people. If Brian charges $100,000 per
> frame, then only Chuck would buy one ;-). At $100,000 I still want one so
> the demand hasn't change but I can't afford it, so only the quantity
> demanded has changed.
>
> Now say Brian decides he will only make frames out of paper mache'. I don't
> want any at $1.00 or even $0.01 so there is a change in demand.
>
> As far as where Brian should price his frames, that price point would be
> where the quantity demanded equals the quantity that Brian is *willing* to
> supply and leaves no one with cash in hand saying "I'll pay that price"
> without getting a frame. That's assuming of course, that Brian's goal is to
> maximize his economic gain ($) instead of other objectives. Production
> efficiency doesn't play a role in demand. (Marginal revenue and marginal
> cost on the other hand...)
>
>
> Taz Taylor - looking for that $1.00 Baylis frame in Atlanta, GA
>
> (I knew an Econ degree would come in handy someday...)