Sorry about the cross posting - But, I thought this might be interesting to people who do not subscribe to all the groups
-----Original Message----- From: Mann, Dave [mailto:damann@mitre.org] Sent: Tuesday, March 07, 2006 11:15 AM To: bgcycles@svn.net; internet-bob@bikelist.org Subject: RE: [BOB] NAHBS Thoughts (late and long and opinionated)
"""""While I find this to be very interesting, I'm not sure what to do with this information. Perhaps I'm confused with what your desired affect is with putting this information out."""""
Someone asked my purpose in writing about this. I'm writing to expose "the dirty little secret of the bike biz", that no one wants to talk about. First I want to commend Don for the show. It was the most unique gathering I have been to in my 35 years in the bike business, it was also the most troubling. I write this because I think most of the visitors are totally unaware of the plight of the small builder. First - I really like bikes, I like making them, I like thinking about them, I like riding them - I hate the bike business. Like many of you - I might say that I am passionate about bikes. One of the most disturbing moments of the weekend was when I was having dinner at the hotel after spending an exhausting day at the show talking to people. A builder whom I really respect, who has been building about as long as I have, quietly ordered a bowl of soup. I could tell it was not because he was not hungry - it was because entrees were $15 to $20. In the last 18 months I have been to 5 shows like the NAHBS. Don's show in San Jose was the biggest. I have been to the Velo Rendezvous in Pasadena 2 times, the Cirque in North Carolina, and the Handmade Bike Fair in Tokyo Japan. In each show except the NAHBS I have won first place awards for my bikes. I am humbled and honored by the awards. However, it has cost over $20,000 with almost no sales. I have sold 3 frames in the last 16 years. I was hoping to sell some of the prize winners at the NAHBS show to recoup some of my expenses. No luck (they are still all for sale) and I spent $2000 to attend and display. Making the fancy lugged frames bikes is very therapeutic for me. It gets me back to my roots. At the NAHBS I got to talk to some builders I have known and admired for 30+ years. We talked bikes, but we also talked business. I handed out an anonymous questionnaire I had printed up about the business. Some of the answers might shock you. The first question was "what should a competent frame builder earn a year?" The most common answer was $40,000 to $50,000 per year - certainly not Greedy. I have a 30 year old friend who is a Union Plumber who just turned Journeyman. He just started a job in San Francisco doing copper piping in a new Condominium at $43 per hour + health coverage + retirement. I should have been a plumber. I could have afforded to go the Plumbing Shows and show off my fancy edged carved Copper plumbing fittings. I found in the questionnaire that no one including the well known small builders even made $35,000. Most were about $20,000, which is where I fit in. I asked if they could ever retire on their current income - everyone replied NO. As for health insurance - 75% had no insurance, or if they had insurance - most had it through their spouse. When I started building in 1974 with Albert Eisentraut he would say: "You won't get rich building frames, but, you can make a living." For the first 28 years of my business I could always afford an employee, that has not been the case for the last 4 years. Even working alone I have had to dip into my personal savings to pay the bills. If sales stay the same, I have 1 or 2 more years left before my savings are gone. Most of my business for the last 16 years has been making more utilitarian TIG welded touring frames and racks. But even those TIGed bike sales have dropped from 60 to 70 bikes a year to 25 last year. Is it because my stuff is lousy?? I don't think so. I think I make pretty good, reasonably priced touring stuff. What has happened is that the business has been taken over by what I call "Marketers". People who have discovered that "Why make it yourself if you can have it made overseas for a lot less?". That way you can spend more on marketing, which seems to work better. Fine, some will say, THAT IS CAPITALISM!. But, something to think about is this. Over the past 30 odd years I have seen many innovations in the bike biz. Almost all were from 1 to 3 person shops. A couple that come to mind are Merlin, the first viable Titanium frames (early TI attempts, Teledyne, etc. just did not work) and especially Mountain Bikes. Now, if you go into a bike shop - 90 to 95% of Mountain Bikes are made in Taiwan or China. If we were to wait for the Taiwanese or Chinese to invent the Mountain Bike - we would still be waiting. One of my most vivid memories of my first trip to France in the late 1980's was that it was a country that almost everyone drove French cars. Not because they were the best, they weren't (they have vastly improved since), but because they were built by French people, and they liked to support their own industry. What has hurt my business the most are the Rivendells, Surlys, Somas, Kogswells, etc. I AM NOT TALKING ABOUT THE QUALITY OF THEIR PRODUCTS!!!!! When Rivendell started - they were only going to be made in USA, then, maybe some made in Japan, then, OK maybe some from Taiwan. It is a slippery slope, and there is NO chairlift back to the top of the mountain. For me in California, I cannot compete with a $249 wholesale Surly Touring frame. I know the argument - we are better in the USA doing the designing and outsourcing the production. B.S. - People in India, Taiwan and China have the same computers we have. In fact, my Hewlett Packard computer as made in China. They also have people who can use them. The only jobs that can not be outsourced are the jobs pouring your coffee at Starbucks, and the job wearing an "Orange Apron" and saying - "Welcome to Home Depot". That gets me back to the question of why I wrote the original post. If we want to have the passionate, small, innovative builders - we have to start buying from them. We need to buy from the people who are passionate about building them, NOT just from the passionate people who Market them. I doubt that the factory workers in Taiwan, or China, etc. are passionate about bikes like you are.
If you got this far - thanks for reading and letting me get this off my chest. Regards, Bruce Gordon Bruce Gordon Cycles http://www.bgcycles.com