The Art of Business: an open but serious thread about the framebuilding business

[Rody]

No worries Lane, I'm with ya.

I also agree with Richie as to the state of the industry.

I do feel there is space for a US made product like Hinmaton wants to produce that can exist in the midst of the Surly to Trek/Spec/Giant matrix, offering skilled fabrication with keen attention to detail at less than custom prices. The path to success is much more difficult to navigate but can be had.

Gonna take a special guy to make it happen though long term.

r

[11.4]

Gonna take a special guy to make it happen though long term.

That's the heart of the problem. Everyone should read Richard's most recent comment, which addresses the same issue. This is where being successful at frame building is not even about the mechanical or the business skills, but about the ability to be unreservedly self-examining and honest to oneself.

[e-RICHIE]

That's the heart of the problem. Everyone should read Richard's most recent comment, which addresses the same issue. This is where being successful at frame building is not even about the mechanical or the business skills, but about the ability to be unreservedly self-examining and honest to oneself.

I think the last company that succeeded in out-building the Euros (or anyone who was at the top of the food chain at a given time) was Trek. Folks forget that they began as a small shop that was, in essence, created to mass-produce handmade frames. Find me another perfect storm of the Burkes (who were in the appliance business) and Dick Nolan (who was among the first through the door there and found ways to mechanize the small details that were the domain of the famous makers from Italy and beyond...) - find me this and I'll agree that it can be done here. Short of farming out your concept to China, study this model from the past and then mirror it in the 21st century.

[Stijl Cycles]

What people have to understand and process is that the small (and large) production shop is what spawned the independent framebuilder model we now think of as normal. Most of us who are from several different eras in this business are one-man shops and/or low output makers because, despite using the European model as a leaping off point, the trade couldn't support the low remuneration (here) that was standard fare abroad. In short, all shops there were making lots of frames using lots of hands. These were family businesses, many were second and third generation. Labor was cheap. And these entities all also thrived in eras that preceded art files being sent to large Asian factories to have goods made. The one-man, one-frame concept is the flaw in this discussion. Few, and that's precious few, pull it off. Too many people cling to it out of some romantic notion of the ideal, or how things should be. Batch making and production is where it's at. I'm not pushing that here on this thread because, as yet, my questions regarding experience to date have gone unanswered or ignored. And whatever happens or whoever is involved, they are in the arena with Trek and the others rather than the rank and file independent framebuilder.

Meant for me? Did I miss the memo this time?
My business experience is primarily small to medium sized production, both as an owner and an employee. I was not trained as a production engineer, but I have spent most of my working life filling this role. Whether it be arts / craft based or straight up production manufacturing- I've done it.
I have built batch frames for myself, and I have done batches of contract building.
I apologize that I didn't answer this sooner, I must have missed it.

[e-RICHIE]

Meant for me?

Ya' atmo. The thing about a conversation online is that we all come and go at our own pace. It's part of the unnatural order of things, and I accept it. But as a courtesy to the original issues, I didn't want to lose sight of important talking points.

[shirk]

Ian Ritz of Chromag has done an amazing job of building a brand based on hand made production frames.

Chromag as a brand has an almost cult like following. Their frames bucked the trend of full suspension in the heart of the riding local that begs for full suspension (coastal BC).

Frames are batch built by hand by Mike Truelove and Chris Dekerf (just the Surface frame to my knowledge).

TRUELOVE | 7Mesh Inc.

Dekerf Cycle Innovations

Chromag Bikes - Home

As the rest of the brand has gown Chromag now keeps 5 guys going full time in Whistler on top of the two builders.

edit to add link to interview with Ian Ritz http://www.7meshinc.com/7messages/the-corridor/chromag/

[Stijl Cycles]

No worries Lane, I'm with ya.

I also agree with Richie as to the state of the industry.

I do feel there is space for a US made product like Hinmaton wants to produce that can exist in the midst of the Surly to Trek/Spec/Giant matrix, offering skilled fabrication with keen attention to detail at less than custom prices. The path to success is much more difficult to navigate but can be had.

Gonna take a special guy to make it happen though long term.

r

That's the heart of the problem. Everyone should read Richard's most recent comment, which addresses the same issue. This is where being successful at frame building is not even about the mechanical or the business skills, but about the ability to be unreservedly self-examining and honest to oneself.

I think the last company that succeeded in out-building the Euros (or anyone who was at the top of the food chain at a given time) was Trek. Folks forget that they began as a small shop that was, in essence, created to mass-produce handmade frames. Find me another perfect storm of the Burkes (who were in the appliance business) and Dick Nolan (who was among the first through the door there and found ways to mechanize the small details that were the domain of the famous makers from Italy and beyond...) - find me this and I'll agree that it can be done here. Short of farming out your concept to China, study this model from the past and then mirror it in the 21st century.

For those that know me some or have read my Smoked Out, probably already realize this, but just in case:
I have both hands and both feet in the fire, have myself way over-committed, but am still able keep it all in focus and make it all work.
I do not require Stijl Cycles to be my only source of income, I just require it to be profitable and fun to maintain.
I can continue to build custom complete bikes or frames only- maybe 3-4 a year as time permits (time being the defining factor).
Or I can schedule production of 10-50 frames a year in batches of 5-10 as needed. It's a completely scale-able.
And I can still squeeze out a few customs as I have time for.
If the dealers aren't interested or if I can't sell them direct either, I still can build my handful of tailored frames a year.
I have no intention of making a building full of frames in hopes of sales, just enough to establish the line and develop the production system.

It's also possible that I'm too busy filling parts orders that I'll never get a chance to attempt this.

Rody, you had mentioned something that i'm interested in getting clarification on:

Just to clarify, when I state we operated on a 20% margin, it should look like this using arbitrary numbers..

Cost of Goods Sold, inclusive of material, labor, insurance, warranty allotment, marketing, communication/service, utilities, etc for a frame - $600

This is the total investment to get the product out the other end ready for sale, covering all expenses.

Fixed price of finished product - $1000.00

This is the fixed price of the product that becomes income for the shop.

Retail Price of product (20% up) - 1200.00

This is the minimum retail price partner shops will agree to sell at. Some sold higher leveraging on immediate availability to the customer, some sold at the minimum maximizing the profit of the component sales end.

Simply an scaled down example, the numbers obviously need to be modified based on personal business planning. Also note, my experience with this model is now over 20 years old...worked then, may not meet the current climate.

In this example are you suggesting that the Dealer Cost is $1000?

[e-RICHIE]

For those that know me some or have read my Smoked Out, probably already realize this, but just in case:
<cut>

Hinmaton I am writing this with all the love and support I can muster - what is the question here (on this thread)? I'm aware of your background, and with 20.000 square feet of workspace you're already the envy of most of the career cats here. I know you make nice frames, have a good corporate identity, and appear to have resources that dwarf what many reading here have. I just don't know what we're trying to solve. Is it the batch building, or the wholesale/retail thing, or separating brands from within the larger umbrella you work under? I'm lost. But lost with love atmo.

[andrew flowers]

chromag does it

marinoni does it

I'm not sure what % of their sales are batch built steel frames however

chromag does saddles, bars, stems, pedals, etc

marinoni does carbon bikes and their distributor thing

is there a defined hole in the market that you are seeking to fill, or are you trying to make one?

[Stijl Cycles]

Hinmaton I am writing this with all the love and support I can muster - what is the question here (on this thread)? I'm aware of your background, and with 20.000 square feet of workspace you're already the envy of most of the career cats here. I know you make nice frames, have a good corporate identity, and appear to have resources that dwarf what many reading here have. I just don't know what we're trying to solve. Is it the batch building, or the wholesale/retail thing, or separating brands from within the larger umbrella you work under? I'm lost. But lost with love atmo.

ha!
I'm not necessarily trying to solve anything, other than creating a platform (this thread) for builders to discuss business related issues.
I felt it only fair to begin this with a real question pertaining to me. And that's not to say that it was a question posed just for argument sake.
As I said, it is something I have been thinking about and a change from my historical business model. It would be foolish of me to dive into any new business without doing the proper research.
I am still on the fence in regards to this issue for myself, but I have learned a tremendous amount and have a better handle on what the issues are and how I should go about handling them.
The next piece for me is running the numbers, and being very honest with myself about whether this is good for me.

But more importantly- much of this discussion has revealed many gems on how to look at your framebuilding business regardless of which model you choose.
My hope is that more questions / topics are posed on this thread, and newer builders are learning something that they may not have known.
At the risk of sounding cheesey: I feel the better informed we are about business, the better business people we will be, the better business we will do, the better the business of framebuilding will be.

Thank you everyone for participating thus far.

[crumpton]

marinoni does it

marinoni does carbon bikes and... snip

they don't make em.

[David Payumo]

This company does just that: Gallant bicycles. Stock sizes and pick your paint colour on everything. Stock single bikes that are powdered coated in Toronto but frames made in China. Not really custom in my mind.