Friday, October 3, 2008

The Final Countdown

I'm not sure whether you've heard, but the American economy is in pretty bad shape right now. We're down to like three national banks, a sandwich in London would cost you roughly $47, and even Canadians are laughing at our currency. Our bills are green because they're jealous.

We had it coming, I guess. But I'm not gonna get into all the politics here, because a) that's not the point of this blog, and b) I'd just be doing a lot of re-hashing of things that were written by the media elite. And by golly, the elite have no place telling normal people like you and me what we can and cannot do! Why can't we have a normal person in the White House who does normal things—like carrying out personal vendettas while serving in a public office, marrying off their pregnant teenagers while fighting comprehensive sex ed, and shooting moose from helicopters? Drill baby, drill!

(Wait, did Sarah Palin design the Rob Wise frame?)

Anyway, the real question is, for me—or, rather, us—is how will this financial crunch affect BMX? Well, a lot of us are gonna have less money to play with. And the costs of everything, from raw materials to shipping, are rising. Ouch. It's hard to justify spending $400-plus on a frame when you're spending $60 a week to fill your gas tank. I found it very interesting (and cool) that Ryan Sher said at Interbike that Subrosa will be offering an aftermarket frame for right around $200 that just skips all the neat (but expensive) little details. Assuming there's any profit to be made at that price point at all, every company would be smart to offer a bare-bones frame. If I had a frame company, mine would be called "The Bailout".

But there's another side to this sordid story, and that's on the other side of the Atlantic. With the Euro kicking the dollar's ass from sea to shining sea, it's a lot cheaper for our Old World brethren to order parts from the US of A, even with international shipping factored in. Gone are the days when a French guy would have to pay $800 or whatever for a Terrible One frame. Crossing the ocean the other way, it's sort of surprising that Eurocompanies like Federal, United, Simple, Mankind, We The People, KHE, etc., even bother selling their products in America. I suppose volume (not Volume) makes up for the lousy dollar and the overcrowded market. For now. So we get things like $410 United frames, while the exchange rate renders other products too expensive for American mailorders to carry. Thank God G-Sport stuff isn't actually made in the UK anymore or a Marmoset/Ribcage front wheel would cost $27,000.

What next? Who knows? Maybe the focus switches back from weight to strength. Imagine that. With money tight, would you rather have a 35-ounce pair of bars that'll last you six years, or a 25-ounce pair that'll last you six months? Maybe 48-spoke wheels will make a comeback. And titanium might disappear from BMX entirely. (Which reminds me, what the hell is KHE thinking making titanium cranks NOW? Oh that's right, the Euro is still worth something.) It's gonna be interesting—and frightening—to watch.

•••••••••••••••


33 comments:

bman said...

even though i run a cassette at the moment, this is why i kept hold of my gsport homer. means i will still be able to ride when new parts cost too much.

oh yeh, funny that you link to winstanleys. its like, THE shittest mail order ever. they deserve to die.

Anonymous said...

just sayin....who the fuck is mike wise? haven't seen his frame yet...

Stephen said...

Rob Wise?

I have an SFA and I am 33. I think this is the last frame I will need.

Anonymous said...

American kids want what they want and are spoiled enough that their parents will miss a car payment or two just so their ungrateful little angel will still be the one at the park with the lightest, tightest, newest tailwhip machine in town. if you let price dictate how heavey your bike is the Europeans have won.

Russ said...

Fuck, Mike Wise is an NBA columnist for the Washington Post. Got my lives crossed. Thanks.

waesa said...

If it gets bad enough I'll eba my stable of shitty mid-school bikes.. And you know that stable's pretty goddamn extensive.

gsport george said...

Actually the Dollar is doing better now against the Pound and Euro than it has for most of the last year. There was a point when we were looking at over two dollars to the pound and about 1.6 to the Euro... but now we are back down to 1.75 and 1.35ish respectively which is "better" than it has been for a while...

Mind you that might just be because the Saudis are having to keep a lot of their dollars to buy up US real estate...

Although people are feeling the pinch, that $60 a week on petrol is often easier to cut back on (and makes more difference) than bike parts. Sure some people HAVE to drive a lot for work, but if you think there arent millions of miles of short pointless journeys carried out every day too then you are mad... The bike industry as a whole is probably seeing a slight boom (or at least the effects of the "depression" are being cancelled out) as people buy bikes to use for short journeys etc to save fuel.

For most of us, I think we will cut back on Video games, holidays, sneakers (though not the addicted obviously) and other "frivolities" before we cut back on something as important as BMX...

Anonymous said...

A NEW CONCEPT YOU MIGHT SAY :
http://forum.pijin.co.uk/viewtopic.php?f=4&t=152

llumapi said...

Buddy

I thought you knew that most bikes are made in the Far East and sold in US$ so the price for the American distributors of European companies aint affected at all.

Josh said...
This comment has been removed by the author.
Josh said...

I was going to post about the rising cost of Taiwanese made frames but it's already been covered. $410 for a United? $370 for a Mirraco. By the way, didn't Mirra say that he started his little venture to "give back to bmx?" I guess giving back to bmx includes receiving 400% profits on your frames. Not so long ago I was debating if I could drop $299 on an S&M, now the new $299 is $399. Production and distribution costs simply haven't gone up enough to justify it. Props to Ryan Sher, his heart seems in the right place.

SkidMark said...

Be careful, a lot of those VintageBMX guys are conservative :P

I'm heavy as fuck so I'll be keeping a 48 in the back. If I want to save weight I have a drill press or I could go on a diet.

Anonymous said...

"Production and distribution costs simply haven't gone up enough to justify it." Yes they have, you come off on here as if you know everything. The exact same margins are being made by shops and companies, it's the Taiwanese that are getting greedy and banking off all the increased costs.

Anonymous said...

bugger me....$60 dollars to fill?! in the uk its about £1.22 a fucking litre!

Anonymous said...

Some of my favorite parts come out of (or via) Australia. Lately there's been a lot of "Oh hell no" when I see the $US tags. But the prices on US-branded Taiwan parts are getting stupid, too. A Redline G5 more expensive than a Colony.

I've never been "keep it in the family" guy, but when awesome "boutique" frames from Quamen or Liquor are cheaper than a Fit Dent.5, don't buy a damn Fit.

Anonymous said...

I just buy old used frames for like 70$ ...no need to buy brand new stuff...I think I only bought 1 brand new frame in my life..

Anonymous said...

and it's all your fault! i hope you're proud

Anonymous said...

i was once interested in selling bmx frames. So i contacted a manufacturer in Taiwan, the same factory that does alot of Macneil's and a couple other companies frames. I submitted my pro CAD drawing of the frame i wanted(stolen from a nameless bmx site) 5lbs frame, cromo,21"TT short rear,itegrated headset,drilled tabs yada yada. After a few weeks they emailed me back. They told me $40USD FOB unpainted each, minimum 100 frame order. So i'm thinkin, there's still money to be made in bmx if those frames are selling for $250-300 USD. that's almost 4 times the price i would pay to make them.. just my two cents.

Anonymous said...

"They told me $40USD FOB unpainted each, minimum 100 frame order. So i'm thinkin, there's still money to be made in bmx if those frames are selling for $250-300 USD. that's almost 4 times the price i would pay to make them.. just my two cents." Unfortunately, your two cents isn't worth a shit. You may have noticed recently a massive increase in the price of just about everything. Companies are making the exact same margin as always, the prices from Taiwan have increased significantly. Now companies have to "invest" more money to make the same shitty margin. Low volume, low margin is a shitty recipe for success.

Anonymous said...

soo.. i guess it's back to the days of makin frames in the good ole US of A..like it should be..

the truth said...

"Low volume, low margin is a shitty recipe for success."

So is flooding the market with the same bullshit handlebars 28" w x 8" rise. Maybe if we offered more colors, it would set us apart... ?

If you don't like making bikes, then don't. Stop acting like saviors by living off 15% margin - that is YOUR choice and my choice to hate.

hate, hate, hate.

Anonymous said...

JPR is the reason that I won't buy an FBM.

brien said...

Eastern already makes a sub $200 frame.

http://www.danscomp.com/211367.php

Rully said...

"Buddy

I thought you knew that most bikes are made in the Far East and sold in US$ so the price for the American distributors of European companies aint affected at all."

No. I've bought from Taiwanese manufacturer several times now.

Taiwanese frames are priced based on Taiwanese Dollar. As for how are they affected by the weakening US economics, i don't know.

Anonymous said...

will somebody please shoot that fucking canary

gob said...

The actual cost of making a frame in taiwan is completely irrelevant to what a company charges for it. There are us employees to pay, magazine ads to buy, team riders to send on trips, videos to produce, insurance to protect them from catastrophe, electricity to keep the lights on at headquarters, and rent for headquarters. All of these are the cost of doing business, and all of these have to come from somewhere. Unless you want to go back to 1992 quality videos and 1996 quality websites, and everyone with a bike company to move back in with their parents and run their companies out of the basement.

BMX parts are so frigging cheap compared to any other facet of cycling, any one of you who bitches about pricing should eat a huge dick. And pay for it, too.

Imagine spending 2600 dollars on a frame and fork alone. A frame and fork that stands an excellent chance of shattering in one severe impact. Even $400 dollars is a more than fair price for a BMX frame. At least it should be.

Dan said...

" any one of you who bitches about pricing should eat a huge dick. And pay for it, too. "

What great customer service.

I think it is insulting for you to insinuate people do not understand there are overhead costs of doing business.

"There are us employees to pay"

What company do you work for? Its a shame that they have someone who is calling potential customers bitches representing them.

It doesn't usually help your argument when you resort to name calling.

Josh said...

"Any one of you who bitches about pricing should eat a huge dick."

Hi, you're on the wrong site. There are plenty of others run by juveniles like yourself who like to tell others there business...you can call them all the names you want and they will respect you for it. Most on here are able to comprehend that costs of doing business are rising, but they are not rising nearly as quickly as the cost of the products themselves. If most of these frames are produced at the same place (which they are), I am simply asking why a Mirraco is $100 - $150 more than most other Taiwanese frames?

Anonymous said...

"BMX parts are so frigging cheap compared to any other facet of cycling, any one of you who bitches about pricing should eat a huge dick. And pay for it, too."

the chances of breakin bmx parts vs. breaking road bike parts are far greater. that's why i never buy any bmx part that isn't garrenteed again't bending or breaking. Thanks Odyssey! :-)

gob said...

My intention was not to tell all of you reading this to eat a dick for no reason, I meant that people who complain that BMX stuff is too expensive clearly don't understand the process, and before they start yapping, they have an open invitation to consume a peener. If you do understand the process, then I wasn't inviting you to do anything, other than read my painkiller influenced rantings. I just had a surgery, I was feeling very little pain at the time. I apologize if I was less than clear.

If I had to guess, I would say that the Mirraco's frames are 2009's. Most Chinese and Taiwanese factories were saying months ago that there would be at least a 15% price increase on their goods. Mirraco being part of Trek, maybe they decided that they wanted to increase their margin, I don't know, ask Jim Ford. As always, if you think it's too expensive, you don't have to buy it. I wasn't aware that Mirraco bikes were in such great demand that a price increase would even be noticed by most readers of BMX "core" websites, but hey, to each his own.

Most of my tirade was dedicated to Anon who wanted to have his own BMX company with 40 dollar frames. He clearly didn't understand that all of the rest of the overhead goes into the retail cost of the frame, including the substantial cost of shipping the frames over here, getting them painted and stickered, and finally actually selling them.

Everything is going to get more and more expensive, not just BMX parts. It's an economic downturn, recession, depression, whatever you want to call it, inflation happens.

It costs about 8-12 hundred dollars to have a Pro-Level BMX bike. You could spend more, and you could spend less, but in any other competitive aspect of cycling, 8-12 hundred bucks is basicly just getting your foot in the door. Be grateful, it could be much more expensive, and probably will be in the future.

It's not really a secret what company I work at, although my commenting here has nothing to do with that company. It's my personal opinion, and everyone knows what they say about those.

Anonymous said...

it seems as though there are more and more "anon" posts popping up on here. i always liked this site for it's ability to get responses from people that were willing to stand up for them and post a name, whether they be screen names, fake names or someone elses name...at least they didn't take the lazy sissy way out. just my opinion

Skidmark said...

I'm confused, why would you ask Jim Ford about MirraCo or Trek? I thought he owned Haro.

I don't think BMX parts are any cheaper than let's say, track bike parts. You get the same amount of quality (materials, bearings) for the same money.

Anonymous said...

"I found it very interesting (and cool) that Ryan Sher said at Interbike that Subrosa will be offering an aftermarket frame for right around $200 that just skips all the neat (but expensive) little details. Assuming there's any profit to be made at that price point at all, every company would be smart to offer a bare-bones frame." Out of all the things you hate, this strikes you as cool? They are taking a $40 China made frame from a $500 complete and selling it aftermarket. Do the math, there's a substantial margin for all parties involved for a $200 retail frame that costs $40. Eagle eye Bengtson on the case again!