[CR]Re: modern frame manufacturing costs

(Example: Bike Shops:R.E.W. Reynolds)

From: "dave bohm" <davebohm@azstarnet.com>
To: "Jerry & Liz Moos" <moos@penn.com>
Cc: <OROBOYZ@aol.com>, <classicrendezvous@bikelist.org>
References: <20010114.191621.-234787.1.bicyclemark@juno.com> <3A6283BF.6DB8E666@penn.com>
Date: Mon, 15 Jan 2001 10:00:59 -0700
Subject: [CR]Re: modern frame manufacturing costs

Mercian frame pricing may be a fluke. In reality, the cost of materials alone to build a frame for most builders in the US may approach $200. Add the cost of paint if not done in house, and you're up to $ 325 or more. Now factor in wages for half a weeks work, and overhead, and its easy to see why a good frame needs to wholesale for $600 to $700 for a company to break even. Add in a mark-up for the dealer, and you're up to $1,000 just to play ball.

It is true that most of the products we buy have to be produced at a very low price in order to give adequate markups in our retail society. This may be a little off topic but it helps to know what a small framebuilder spends producing a bicycle. It will give you more of an appreciation for the amazing prices that some manufacturers can achieve with the efficiency of mass production. Now realize I am just a small guy and don't have the ability to purchase material is quantity, I can't build up a bunch of subassemblies to speed up production but here are just some of the general costs involved.

1. Go out and drop 20,000 on tooling, fixturing, machinery, welders, computer etc. Realized that modern fixtures (jigs) and other apparatus are usually far superior to those of twenty plus years ago.

2. Tubing- 100-200 for a complete tube set.

3. lugs $56, drop-outs $40, B.B $35, fork parts $45, fork crown $25, (tiddily bits) $10.00, Silver $25

4. Disposables- sandpaper, drill bits, saw blades, tool wear, occasional tool breakage, tool maintenance, etc. $100.00

5. Rent, liability insurance, electricity, two telephones, web site, telephone book, minimal advertising, swap meets, travel etc (I have a low production so these costs are high per unit) 300.00

6. Paint- All I can say on this one is you get what you pay for. 300.00 min

So now we have a grand total of 1136.00.

And that is without labor, jeez, I'm getting depressed!

What I am trying to show here is what a great deal bicycle frames are in general, In my mind the Heron is excellent, Don't even know how Mercian does it, amazing. But I have to think that until the general cycling public realizes that these frames are probably the best value in sports equipment we will continue to see a thinning of the bikes we love and a proliferation of TIG welded cookie cutter frames.

Sincerely,
David Bohm
Bohemian Bicycles