The MADE Show was fantastic. So glad to see so many inspired builders of frames and wheels!
February 06, 2014 2 Comments
A Nerdy but needed discussion
Economics is the engine that drives the human experiment. Many events embellished by history as “clash of religions” or “perceived insults” or “cultural collisions” are, on closer analysis, driven by economic forces. Salt, gold, trading routes, lumber, silk, these were often the real goals.
Bottom line: too little attention is paid to the economics of matters, in particular bicycle wheel building. For each perceived objection about shop wheelbuilding there are good economic solutions.
Objection - Lack of resources
“I can’t afford to stock wheel components. There’s no choice but readymade wheels.”
Solution - Decide how many wheels you want to sell. Without projections, you won’t get anywhere. Ask other stores and experts (I answer inquiries). Now back-calculate an affordable inventory size. That’s what you must work with. Today’s JIS (just in time) distributors make quick ordering a reality. Use it. For years at Wheelsmith we stocked only Mavic rims. There were fewer choices those days and Mavic mainly sold rims. But our purpose was to reduce inventory. Look at a small restaurant’s menu. Their decisions are often more about what not to offer. You can also hugely cut down spoke inventory with a cutting/threading machine.
Objection - Takes too long
“I can’t find a fast wheelbuilder.”
Solution - Fast builders are out there. Advertise, make it worth their while. Uncertain? Then pay by the wheel. Make sure they take home 50% of your customer charge. The difference between a slow and fast builder is huge. Slow builders may love the work but are often impractical perfectionists stalling on details, talkers, whiners, and wanting to work less, not more. Fast builders are often modest, quiet, dislike interruption, and welcome more work. Whether it’s wheelbuilding or cleaning fish, trust that some people are blazingly fast and enjoy the work. Dismiss rumors from bike advertising, your Big Brand rep, or slow builders that they don't exist.
Objection - Technology
“Big Brands have awesome technology I can’t match.”
Solution - Big Brands can buy persuasive ads, trademarked acronyms, and sponsored pro’s. In spite of all that, many fail to impress anyone. It is fun to analyze claims and performance. On all counts that affect your customer, readymade wheels are often not the best. For weight, value, beauty, function, and match to the user; made-to-order wheels can be a step ahead.
Objection - Expensive tooling
“I can’t afford all the gizmo’s the Big Brands show off in their video’s.”
Solution - For one, Big Brands don’t need a lot of that equipment (dynamic computerized load testers, wind tunnels, etc.). For two, shops can afford more than they think. Bike shops are a blend of commodity merchant and manufacturing. Few businesses are more different. Merchants put money in inventory and measure it by turn and margin. Manufacturers buy expensive equipment and own it for many years. A lot of calculation goes into whether a $50,000 tool is affordable, math that merchants don’t need. For example, if I show you a tool that saves $2K in inventory or speeds your building 20%, can you tell me what it’s worth to your business? You need to.
Obstacle - Automation is the future
“Everything is automated. I should let robots build all my wheels.”
Solution - Automation is the future for mass produced commodities (hubs and rims, for example) but not for a zillion needs in our economy. Wheels for IBD’s (independent shops) can be mass produced but only made-to-order can meet varying customer need and timing. Besides, you might be stunned to learn how many millions of wheels are made worldwide without robots. Short production runs, the cost of setup with automation, the need for careful handling and highest quality, all keeps hand building a major force. Look how craft breweries, wineries, and distilleries are claiming such a large part of the beverage market, IBD’s and IWB’s (independent wheel builders) continue to hold significant share.
Economic trends are pendulums with slow, broad swings and over correction. We’re now in a phase where IBD’s and IWB’s are reclaiming wheel market share. In 2013, Mavic’s sales were up only 1%, Easton down perhaps as much as 30%. Other Big Brands did not fare well either. No reason to rejoice, we all want a robust wheel scene with winners big and small.
However, the trends are clear and if you want your share, check the economics!
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