Pricing for noobs

[edoz]

Any suggestions for new guys on how to figure out your pricing?
Starting out, I'm not going to be as efficient as I will later, but I can't really charge based on time put into a frame. So is looking at what other guys are doing and shooting a little below that because of no name recognition and less experience a good thing to do?
If I do something a bit extra, like a cute decorative seatube sleeve that should bring the price up a tad, no?
I know I need to factor in the material costs, insurance spread out over how many frames I think I'll build in a year, other stuff I'm not thinking of and profit.

[steve garro]

when i started my frames were $500.00, and that was about what they were worth, too. - Garro.

[themanmonkey]

Price is something your market decides, and to a lesser extension your situation and waitlist. I don't have huge rent, or tooling, or outstanding debt, so I could sell cheaper than I do, but once you get known as a "cheap builder" it's hard to change. My base frame price is $1250 for full custom with good tubing, lugged of fillet. That price pays me and allows me to put some to the side to improve tooling. I've run the numbers on $800, and less, frames and know how they do it, but I don't have any interest in doing it personally.

[steve garro]

first we need to know "what is you sum total on framebuilding and bicycle mechanic/metalworking experience" or more plainly "what are you bringing to the table?" - Garro.

[EricKeller]

Paint seems to be the big problem with pricing to me. If I'm spending $400+ to get a frame painted, that really puts a floor on the price of the frame. Right now, my powder coating price is a lot less than that, but it doesn't look that great with lugs. And furthermore, it seems like the people you get by selling cheap may not be the customers you want.

The thing that I see I'm going to have to do is effectively pay my initial customers for helping me get known. My thought is that if they know I'm doing that, the low price will not stick with me as badly.

[edoz]

Good point, Steve.
I've been a professional welder for about 12 years, and by the time I actually hang out a shingle it'll be 13. I currently work in aircraft, but I've done code pipe, misc oil/gas stuff and a couple of shops that did all kinds of military and civilian whatever projects. I've built everything from bbq grills to parts for the space program.
Prior to that I did the whole bike mechanic thing for several years.
I can build a pretty decent frame. I'm not too swift on the designing to fit part, but I'm trying to study as much about that as I can. I've recently gotten away from copying geometry from X brand in favor of making my own geometry decisions.
I took Carl Strong's business seminar at NAHBS, and I'm still trying to work out everything before I get skin in the game as he put it.

[steve garro]

Good point, Steve.
I've been a professional welder for about 12 years, and by the time I actually hang out a shingle it'll be 13. I currently work in aircraft, but I've done code pipe, misc oil/gas stuff and a couple of shops that did all kinds of military and civilian whatever projects. I've built everything from bbq grills to parts for the space program.
Prior to that I did the whole bike mechanic thing for several years.
I can build a pretty decent frame. I'm not too swift on the designing to fit part, but I'm trying to study as much about that as I can. I've recently gotten away from copying geometry from X brand in favor of making my own geometry decisions.
I took Carl Strong's business seminar at NAHBS, and I'm still trying to work out everything before I get skin in the game as he put it.

awesome - thanks for awnsering that is a rational, non-defensive manner. i would say "don't quit your day job" as if you are a profesional welder i reckon you are doing OK. just build 1st. this may seem obvious, but many tend to focus on T-shirts & stickers before being able to actually build frames. build one, keep good track of your time investment, add up every piece of flux, H2O bolts, cutting oil & tubing & braze-ons, add these all up, multiply your time x an acceptable $$$ wage & see what you think. now, is that price more then an established builder's frame prices? is the frame comparable? lastly, remember that you have to build something nicer then what is off the peg. I consider a Surly to be the lowest common denominator as to what a perfectly "A-OK" steel frame to ride, one that will work just fine, they are what? $500.00? . you must do better..........Sorry for the rant, i'm slacking but the coffe is gone & there is brass to polish. - Garro.

[EricKeller]

I just wish there weren't so many established builders giving away their frames. I guess it keeps you in customers.

[shand]

I just wish there weren't so many established builders giving away their frames. I guess it keeps you in customers.

from a very established builder here in the UK:

Frame only price list

Reynolds 853 £500.00 ($755)
Reynolds 725 £410.00 ($620)
Reynolds 631 £345.00 ($520)
Reynolds 531 £290.00 ($438)
Reynolds 525 £290.00 ($438)

Columbus Spirit £650.00 ($982)
Columbus Life £625.00 ($944)
Columbus Zona £375.00 ($566)

includes transfers, single color stove enamel

madness!

[Tommy Nash]

I think another component to look at is the other builders in your area. Make contact! Opening communications with other folks in the neighborhood is a great way to share information and gauge what your direct (friendly) competition is. If someone can get a frameset from builder x at price y, where does your product fall in comparison?

To me it's also a way to figure out what is missing in that market and how your frames could fill any gaps.

Cheers,

[Curt Goodrich]

I think worrying about what to charge is putting the cart before the horse. You don't have a product yet so how can you measure demand? You have to build bikes first. You have a job that presumably pays the bills. Given that, you have no need to be making money while learning to build frames. Build bikes for pals at cost. Start a race team. Do something to get your bikes out there. When you've built 50-100 bikes then figure out how much to charge.

[Freddy]

I think worrying about what to charge is putting the cart before the horse. You don't have a product yet so how can you measure demand? You have to build bikes first. You have a job that presumably pays the bills. Given that, you have no need to be making money while learning to build frames. Build bikes for pals at cost. Start a race team. Do something to get your bikes out there. When you've built 50-100 bikes then figure out how much to charge.

Curt that is what I did, and the demand was there even when I wasn't ?

[edoz]

I wouldn't say that, Curt. It's more like I'm riding the horse and I'm shopping for carts.

It's not about measuring demand, I've got more of that than I have time for at the moment. I have a number of frames in circulation under close friends and myself. I have no problem building a safe, nice riding and nice looking frame. (based on homebrew destructive testing, test rider input and personal bias)
I'm at the point where I have friends wanting second frames, their friends wanting frames, and people I don't know wanting frames.
That reaches far outside the inner circle of 'test riders' that are taking a risk on me and vice versa.
Soooo, that means (to me) that I should step up and go legit at some point. Business license, insurance and all that stuff. Even if it's just part time for a few years, I want it to sustain itself like a stand alone business should and not be subsidized by my day job. So I figure it's better to get all this stuff sorted now, so I can start out with good business practices and not learn by financial ruin.
I do appreciate your input though, 'cause working the tough crowd makes you a better comedian.

[crumpton]

*snip*It's not about measuring demand, I've got more of that than I have time for at the moment.

if this is true then follow the model of "what ever the market can bare" cause when you are in high demand the sky is the limit right?

but seriously if you think you are ready to productize, then

(Direct costs(COGS)+your shop labor+paint+additional services)*(a fair margin like say 40%)=retail price. The fair margin covers the indirect costs like electric, advert, toilet paper. see? if you have an extremely high indirect costs to volume or revenue ratio then the margin should be higher see?

just be sure you know what your COGS and direct costs really are.

the worst thing you can do is throw darts at the board to establish pricing. only you and those looking at your desk/books know what your frames should costs.

[Craig Ryan]

I wouldn't say that, Curt. It's more like I'm riding the horse and I'm shopping for carts.

It's not about measuring demand, I've got more of that than I have time for at the moment. I have a number of frames in circulation under close friends and myself. I have no problem building a safe, nice riding and nice looking frame. (based on homebrew destructive testing, test rider input and personal bias)
I'm at the point where I have friends wanting second frames, their friends wanting frames, and people I don't know wanting frames.
That reaches far outside the inner circle of 'test riders' that are taking a risk on me and vice versa.
Soooo, that means (to me) that I should step up and go legit at some point. Business license, insurance and all that stuff. Even if it's just part time for a few years, I want it to sustain itself like a stand alone business should and not be subsidized by my day job. So I figure it's better to get all this stuff sorted now, so I can start out with good business practices and not learn by financial ruin.
I do appreciate your input though, 'cause working the tough crowd makes you a better comedian.

I would get the insurance and count it as the expense of making the frame. It's why mine are all still in my shop. Once I feel confident enough to clear that hurtle, I'll take the next.

[Archibald]

How much do you want to make a year & how hard do you want to work? Add your desired annual income to the real expenses you'll incur building frames less labor (tubes, paint, overhead, etc.) and divide the total by the number of frames you see yourself building per year (35-50 is good starting point).

So, if you want to make the US median income of $43K a year income and you only make 35 frames, your base price is $1,250'ish before you even begin to add your frame building expenses. Builders who price too low or under value the cost of what it takes to actually build frames and make a sustainable living at it make it hard on everybody.

[Freddy]

Up the list of posts are prices for tube sets,
The entire realtime value of those tube sets without the market is in tens of dollars but the captive market drives along.
As a captive small market this has become very out in stellar pricing by suppiers that have no option to protect the builder
if another 753 comes along.
I have observed for decades as the independent pays the bills and the large suppliers open the margin of profit for them.
A business model in realtime for any product that has a wild card in the supply chain, is flawed ATFO
They get wealthy and we wait like a bride left alone at the alter.

[Curt Goodrich]

Builders who price too low or under value the cost of what it takes to actually build frames and make a sustainable living at it make it hard on everybody.

Amen brother!

Edoz,

I'm glad that you've got some bikes on the road. How many? Running out of friends to build bikes for? You need more friends. The reason I was telling you to build a bunch of bikes at cost wasn't just about learning how to stick tubes together. That's the easy part. I hear there's a two week class that will teach that. What I'm talking about is the time to actually develop a style/aesthetic and try many different designs and geometries. Let's say you've built 10 frames. Probably not enough to know if they're competently built but it's a good start. 10 is not enough to even scratch the surface of aesthetic/design possibilities. But here's the thing, a competently made frame isn't enough. Anybody can walk into any LBS and buy one of those off the floor. What I'd suggest is that you spend the time developing a product. By product I mean you and your frames. When you've got a product then bring it to the market. It's a pretty simple business principle that has fallen out of vogue recently. I know you're itching to jump in, figure you've got it figured out and are wondering why somebody doesn't just say charge X but I'd take some time. Building bikes is easy. Being a professional frame builder with a real product and expertise takes time and persistence. There are no short cuts for that. One could say then "Why not hang up your shingle now? The sooner the better." Because when you go into business you should have a real product or the market will eventually see that you don't.

[Craig Ryan]

Thanks Curt, I needed to hear that. And all of the above as well. At a certain point, you look at all those frames hanging there and do mental math tricks figuring how much all this has cost. There is a real feeling one needs to somehow get some money out of it all. It's difficult to step back and realize this is all needed experience, and the expense and time are just part of it.
Craig

[anthonymaietta]

Cart =

I have a number of frames in circulation under close friends and myself.

Horse =

I should step up and go legit at some point. Business license, insurance and all that stuff.

To me you do have the cart before the horse.