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


Example: Component Manufacturers:Chater-Lea
Date: Wed, 25 Feb 2004 15:18:16 GMT
To: LouDeeter@aol.com
Subject: Re: [CR]Situation Desperate--Frame prices and demand
From: <brianbaylis@juno.com>
cc: classicrendezvous@bikelist.org

Lou,

I tend to agree with you, but I also happen to know that my paint prices are quite low compared to others who work at the same or near the same level. My adjustments will likely be in the paint department. What I need is effecient time to focus on the demanding part of framebuilding the way I go about it, which I feel is still rather unique in the world. That will be my primary goal in framebuilding, accomplishing effeciency at doing what I do best. The paint situation is easily dealt with, and prices will have to come into alignment with the type of work I do. Craig will handle that, I'm quite certain.

Brian Baylis
La Mesa, CA


-- LouDeeter@aol.com wrote:


> If you have more work than you can possibly handle, that, by definition, means that your prices are too low.

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