As usual has taken everything I wanted to say and expressed it in a
nice non-offensive way. For my own work based on my projections and
historically based pricing formula in 10 years I hope to have the rep
and resources to put my frames in the $4000 - $4500 range. I don't
think I'll ever make a $20k frame, but I'm a simple guy who likes
simple bikes. Now someone like Dazza (a.k.a. Darrell llewellyn) is
getting there. This bike was built all out and Dazza won't say what he
charged, but a few of us have extrapolated from hints and such that it
was in the $7k ballpark as just a frame and fork.
http://www.llewellynbikes.com/
On Wednesday, Mar 15, 2006, at 10:27 US/Pacific, Brett Horton wrote:
> I have enjoyed reading this never ending thread. However, the
> comparative rational (shotguns, cars, etc) used to somehow justify the
> raping and pillaging of the rich is incredibly flawed. Based on a few
> of the posts, the inference can easily be drawn that, with a
> conspiracy of thought and action, the cloaked triad of supreme KOF'ers
> can somehow manipulate pricing and demand with a flip of the switch.
> Based on what? That H&H can sell a shotgun for $50,000?
>
> Time for a little reality check. First, one has to determine if a
> bicycle can be a "Giffen good."(ie the higher the price, the higher
> the demand) On the assumption you have convinced yourself there is a
> line of people willing to pop $20k, how do you plan to speak to these
> people? How will go about shaping their decision to purchase your
> output at a price multiple several times that of a more common item?
>
> If you think you are going to fetch $20k for a bike and all the
> other current costs of production will remain the same, you are wrong.
> It speaks to why a modern carbon wonder bike that is factory line
> produced will often sell for more than a full custom steel bike. The
> makers of the carbon wonders have invested a significant amount of
> capital into sponsorship of UCI Division One teams, they take out
> repeated ads in magazines world wide, and they constantly exhibit at
> trade shows, bringing fresh product variances to the market on a
> consistent basis. Many have spent years and years creating brand
> awareness. Alternatively, some newcomers have dumped incredible
> amounts of resources in a short period of time to accelerate their
> brand visibility. BTW, all of those things take money and business
> risk. Many, if not most of the companies that fall into this "carbon"
> category, have a diverse product base and the available cash flow to
> somewhat minimize their risks.
>
> Not that it can't be done. Don't forget, there was a day way back
> when, a guy named Ernesto Colnago was a team mechanic and budding solo
> frame builder. What differentiates his monetary success with that of
> other builders from the same era was, among other things, his vision,
> drive, and even luck. (But even with all this, how many premium priced
> Ferrari Colnago branded bikes were sold worldwide?)
>
> If I look at the pantheon of American KOF builders, I can only see
> one guy that could remotely be in a position to pull the gig off. But
> even in his case, he would likely need outside capital / investors to
> front end the cost necessary to make it happen. Conservatively, unless
> you could ramp production rates up significantly, you would be
> expending $3,000-$4,000 as a minimum per frame in branding expense for
> the first 5-6 years. Oh, and your investor / outside money-person
> would probably like a return on their money as well. If you think
> these numbers are too steep or otherwise unbelievable, try this:
> Calculate the cost of advertising and trade show expenses alone for a
> branding campaign that would truly speak to your perspective buyer
> base. Then divide that by your maximum output. And don't forget,
> you're going to have less time to produce your product because you
> will be increasing the time you spend in trade show booths. You might
> very well find $3,000-$4,000 per frame is low.
>
> From the outside looking in, it seems to me the price increases of
> the last few years from KOF builders can be attributed more to the
> rise of prices of production factory frames than anything else. I
> would argue that at present, like it or not, custom made steel frames
> are the lagging red haired step-child to factory frames when it comes
> to product pricing.
>
> Save the flame email. This has nothing to do with appreciation of
> custom built steel. This has to do with economic reality. You want big
> prices? You want to create a Giffen good? Then draft a viable business
> plan, round up the money, embrace your new life replete with partners,
> and fire up the torch!
>
> Brett Horton
> San Francisco, California
>
>
>
>
> Don Wilson said:
> but $10K to $20K for a bike, if custom bikes were marketed correctly
> and effectively, wouldn't even make today's wealthy blink.