Sachs frame prices rising faster than their lead time is lengthening!



B

Buster Mudd

Guest
WTF?!?!?

In the (very brief) time it has taken Richard Sachs' production lead
time to go from 5 years to 6 years, his prices have increased *twice*,
from $3400 to $3800 and then again (apparently quite recently) to
$4000.

I don't begrudge him the long lead time. If you want a Sachs, you
wait, that's the deal. But at this rate, the 10% deposit you put down
today will only be a 2% deposit when the frame is completed!

Is this just inflation? Or is Richie finally taking the advice of
armchair economists and trying to reduce the waiting list by
increasing the price? (Hint: It ain't working.)
 
In article <[email protected]>,
Buster Mudd <[email protected]> wrote:

> WTF?!?!?
>
> In the (very brief) time it has taken Richard Sachs' production lead
> time to go from 5 years to 6 years, his prices have increased *twice*,
> from $3400 to $3800 and then again (apparently quite recently) to
> $4000.
>
> I don't begrudge him the long lead time. If you want a Sachs, you
> wait, that's the deal. But at this rate, the 10% deposit you put down
> today will only be a 2% deposit when the frame is completed!
>
> Is this just inflation? Or is Richie finally taking the advice of
> armchair economists and trying to reduce the waiting list by
> increasing the price? (Hint: It ain't working.)

He may be making a genuine Veblen good.

http://en.wikipedia.org/wiki/Veblen_good

Cheap at twice the price!

But one can hardly begrudge him the pricing. He's got more customers
than he can sensibly deal with, and he can make about 5-6 frames a month:

http://www.belgiumkneewarmers.com/2007/10/interview-with-richard-sachs.ht
ml

Also, he has a reputation as one of the two or three best frame-makers
in the country, if not the world.

Since the demand is, at this point, ludicrously high, he should at least
make a good living out of it.

Are they worth it? They are to the customers. I think they're
gorgeous-looking frames, built to a ruthless standard, and e-Richie
himself seems like a pretty decent person. ATMO, he should charge what
they're worth, and at this point I think if he didn't charge $4000 a
frame he would be liable to be subject to waiting-list speculation and
scalping, if he hasn't experienced that already.

Indeed, I don't know what the used market for Sachs bicycles is, partly
because he's producing well under a hundred frames a year, so it's
likely quite rare for one to come up for sale. It would not shock me to
find out that by now, most of his old bikes are worth more than their
original sale price, possibly even after inflation.

--
Ryan Cousineau [email protected] http://www.wiredcola.com/
"My scenarios may give the impression I could be an excellent crook.
Not true - I am a talented lawyer." - Sandy in rec.bicycles.racing
 
On Wed, 17 Oct 2007 06:57:04 -0700, Buster Mudd wrote:

> WTF?!?!?
>
> In the (very brief) time it has taken Richard Sachs' production lead
> time to go from 5 years to 6 years, his prices have increased *twice*,
> from $3400 to $3800 and then again (apparently quite recently) to $4000.
>
> I don't begrudge him the long lead time. If you want a Sachs, you wait,
> that's the deal. But at this rate, the 10% deposit you put down today
> will only be a 2% deposit when the frame is completed!
>
> Is this just inflation? Or is Richie finally taking the advice of
> armchair economists and trying to reduce the waiting list by increasing
> the price? (Hint: It ain't working.)

It's probably a combination of factors, at the head of which, the cost of
any source materials from overseas has risen recently because the dollar
has taken a dive on the international markets
 
> WTF?!?!?
>
> In the (very brief) time it has taken Richard Sachs' production lead
> time to go from 5 years to 6 years, his prices have increased *twice*,
> from $3400 to $3800 and then again (apparently quite recently) to
> $4000.
>
> I don't begrudge him the long lead time. If you want a Sachs, you
> wait, that's the deal. But at this rate, the 10% deposit you put down
> today will only be a 2% deposit when the frame is completed!
>
> Is this just inflation? Or is Richie finally taking the advice of
> armchair economists and trying to reduce the waiting list by
> increasing the price? (Hint: It ain't working.)

Correct, it isn't working... because he hasn't yet increased his prices
enough. If he continues to raise his prices, he *will* accomplish the goal
of shortening his lead time.

I have no idea how the man works; if he does everything himself, and
produces 5 frames/month (another post mentioned that as his production
capability), that woud be income before expenses of $240k/year. From that a
one-person operation could turn a tidy profit. Let's say he manages a
taxable income of one-half that, or maybe a bit more... $150k. In this day &
age, people don't bat an eyelash at that type of number if, say, you were
employed by a firm in silicon valley and had even a small number of stock
options. Or if you were engaged in any number of activities where profit is
made from pushing paper, rather than actually producing something tangible.
That sort of thing is OK, but there's this underlying feeling in your post
that it may not be OK to profit from building a successful bicycle frame
business. Or maybe it's the opposite and I'm reading your post wrong.

The fact that an artisan who cares about his craft and builds product of
unquestionable quality can make a good living is something we should
research and support as a good thing, in my opinion. The irony is that he's
obviously priced himself out of the "common man's" market and into the world
of the paper-pushers.

--Mike-- Chain Reaction Bicycles
www.ChainReactionBicycles.com
 
"Mike Jacoubowsky" <[email protected]> wrote in message
news:[email protected]...
Or maybe it's the opposite and I'm reading your post wrong.
>
> The fact that an artisan who cares about his craft and builds product of
> unquestionable quality can make a good living is something we should
> research and support as a good thing, in my opinion. The irony is that
> he's obviously priced himself out of the "common man's" market and into
> the world of the paper-pushers.


Richard is a legendary builder, no doubt. You are correct that his product
has become unaffordable to the common man---but isn't that going to create
opportunities for other, younger builders?

That being said---I think the lead time on Vanillas is even longer than
Sachs. :)
 
>> The fact that an artisan who cares about his craft and builds product of
>> unquestionable quality can make a good living is something we should
>> research and support as a good thing, in my opinion. The irony is that
>> he's obviously priced himself out of the "common man's" market and into
>> the world of the paper-pushers.
>
>
> Richard is a legendary builder, no doubt. You are correct that his product
> has become unaffordable to the common man---but isn't that going to create
> opportunities for other, younger builders?

One could hope that, yes, but remember that the 70s and early 80s were known
as the Renaissance time of the steel frame... huge numbers of small-time
guys (yes, we can be sexist here, 'cuz it was pretty much 100% guys) who had
some skill with a file but didn't realize that there's more to building a
frame that will last than what you can read in a book (especially if you use
the lighter-weight tube sets) and built a whole lot of frames that...
failed. Beautiful, gorgeous stuff that simply didn't last. There's much more
to building a fine steel brazed frame than meets the eye. Experience counts
for a lot, and those younger guys, if they don't have the opportunity to
apprentice with someone who knows what they're doing...

And yes, even *I* built myself a frameset. It's just what you did back in
the day. The frame came out fine, and I rode it a bit, but I never did use
the fork I built. Just didn't trust it; I'd seen too many other forks fail
by having the blades pull out of the fork crown. It did look quite nice
though. I have no idea where it is now.

> That being said---I think the lead time on Vanillas is even longer than
> Sachs. :)

I was on an 18-month waiting list for my Cinelli back in '71 or '72,
whenever it was. Didn't matter, that's what I had to have. I got very lucky,
as someone cancelled out on almost exactly the bike I'd ordered (different
amount of chrome plating, but same beautiful Cinelli Orange color), so I got
mine in just 6 months. $217 if I recall correctly, making it one of the
most-expensive frame available at the time. More expensive than the $180 a
Masi was going for.

--Mike Jacoubowsky
Chain Reaction Bicycles
www.ChainReaction.com
Redwood City & Los Altos, CA USA
 
On Oct 19, 12:30 pm, "Mike Jacoubowsky" <[email protected]> wrote:
> I have no idea how the man works; if he does everything himself, and
> produces 5 frames/month

Yep, that's my understanding: one man, no assistants or interns, every
single bike handbuilt from start to finish by the guy whose name is on
the downtube.



> That sort of thing is OK, but there's this underlying feeling in your post
> that it may not be OK to profit from building a successful bicycle frame
> business. Or maybe it's the opposite and I'm reading your post wrong.


Ooh, no, no, that wasn't my point at all. I certainly don't begrudge
Mr. Sachs (or any esteemed framebuilders) making a decent living; in
fact, I want him to be very successful & profitable so that he keeps
doing it!

My point was that his prices have risen twice in less than a year.
Now, maybe that's just a reflection of the metals market; I know
copper prices have gone through the roof in the past 18 months, so
maybe raw steel material costs are skyrocketing & Sachs is just
keeping his margins relative to his expenses. But a year ago if you
paid your $400 deposit you were putting almost 12% down; today it's
10%.

Ironically, despite Sachs not being able to use a deposit to hold a
final sell price, it seems as if that's how interested consumers
should view it: placing a deposit NOW doesn't fix the final sell
price, but it does ensure that that final sell price will only be
inflated by six years worth of inflation rather than, say seven or
eight or...

It's just frustrating being enamored over such a moving target. :)
 
Buster Mudd wrote:
> On Oct 19, 12:30 pm, "Mike Jacoubowsky" <[email protected]> wrote:
>> I have no idea how the man works; if he does everything himself, and
>> produces 5 frames/month
>
> Yep, that's my understanding: one man, no assistants or interns, every
> single bike handbuilt from start to finish by the guy whose name is on
> the downtube.

Except for the paint.
This ad is from 1988 - $1,000 for a custom frame.
http://tinyurl.com/39hdbs
 
>> That sort of thing is OK, but there's this underlying feeling in your
>> post
>> that it may not be OK to profit from building a successful bicycle frame
>> business. Or maybe it's the opposite and I'm reading your post wrong.
>
>
> Ooh, no, no, that wasn't my point at all. I certainly don't begrudge
> Mr. Sachs (or any esteemed framebuilders) making a decent living; in
> fact, I want him to be very successful & profitable so that he keeps
> doing it!
>
> My point was that his prices have risen twice in less than a year.
> Now, maybe that's just a reflection of the metals market; I know
> copper prices have gone through the roof in the past 18 months, so
> maybe raw steel material costs are skyrocketing & Sachs is just
> keeping his margins relative to his expenses. But a year ago if you
> paid your $400 deposit you were putting almost 12% down; today it's
> 10%.
>
> Ironically, despite Sachs not being able to use a deposit to hold a
> final sell price, it seems as if that's how interested consumers
> should view it: placing a deposit NOW doesn't fix the final sell
> price, but it does ensure that that final sell price will only be
> inflated by six years worth of inflation rather than, say seven or
> eight or...
>
> It's just frustrating being enamored over such a moving target. :)

Perhaps an alternative would be to do something like the new
1st-class-forever postage stamps. Pay the current full price, up-front, and
it doesn't matter what the current going price is, whenever it's actually
delivered.

Of course, that wouldn't provide much incentive to work down his backlog,
would it? :>)

--Mike Jacoubowsky
Chain Reaction Bicycles
www.ChainReaction.com
Redwood City & Los Altos, CA USA
 
Mike Jacoubowsky wrote:
>> WTF?!?!?
>>
>> In the (very brief) time it has taken Richard Sachs' production lead
>> time to go from 5 years to 6 years, his prices have increased *twice*,
>> from $3400 to $3800 and then again (apparently quite recently) to
>> $4000.
>>
>> I don't begrudge him the long lead time. If you want a Sachs, you
>> wait, that's the deal. But at this rate, the 10% deposit you put down
>> today will only be a 2% deposit when the frame is completed!
>>
>> Is this just inflation? Or is Richie finally taking the advice of
>> armchair economists and trying to reduce the waiting list by
>> increasing the price? (Hint: It ain't working.)
>
> Correct, it isn't working... because he hasn't yet increased his prices
> enough. If he continues to raise his prices, he *will* accomplish the goal
> of shortening his lead time.
>
> I have no idea how the man works; if he does everything himself, and
> produces 5 frames/month (another post mentioned that as his production
> capability), that woud be income before expenses of $240k/year. From that a
> one-person operation could turn a tidy profit. Let's say he manages a
> taxable income of one-half that, or maybe a bit more... $150k. In this day &
> age, people don't bat an eyelash at that type of number if, say, you were
> employed by a firm in silicon valley and had even a small number of stock
> options. Or if you were engaged in any number of activities where profit is
> made from pushing paper, rather than actually producing something tangible....

Is not $150,000/year about what four (4) LBS owners would make?

--
Tom Sherman - Holstein-Friesland Bovinia
Beer - It's not just for breakfast anymore!
 
On Oct 19, 5:41 pm, Diablo Scott <[email protected]> wrote:
> Buster Mudd wrote:
> > On Oct 19, 12:30 pm, "Mike Jacoubowsky" <[email protected]> wrote:
> >> I have no idea how the man works; if he does everything himself, and
> >> produces 5 frames/month
>
> > Yep, that's my understanding: one man, no assistants or interns, every
> > single bike handbuilt from start to finish by the guy whose name is on
> > the downtube.
>
> Except for the paint.
> This ad is from 1988 - $1,000 for a custom frame.http://tinyurl.com/39hdbs

According to westegg.com, $1000 in 1988 is a bit over $1700 in "2006
dollars", so Mr. Sachs is running well ahead of inflation. Of course,
with throughly average, production line steel frames selling for $1500
(Hello,"A. Homer Hilson"!), $4000 for a true custom, handcrafted, no
compromise frame seems pretty reasonable.
 
On Oct 19, 7:18 pm, Tom Sherman <[email protected]> wrote:
> Mike Jacoubowsky wrote:
> >> WTF?!?!?
>
> >> In the (very brief) time it has taken Richard Sachs' production lead
> >> time to go from 5 years to 6 years, his prices have increased *twice*,
> >> from $3400 to $3800 and then again (apparently quite recently) to
> >> $4000.
>
> >> I don't begrudge him the long lead time. If you want a Sachs, you
> >> wait, that's the deal. But at this rate, the 10% deposit you put down
> >> today will only be a 2% deposit when the frame is completed!
>
> >> Is this just inflation? Or is Richie finally taking the advice of
> >> armchair economists and trying to reduce the waiting list by
> >> increasing the price? (Hint: It ain't working.)
>
> > Correct, it isn't working... because he hasn't yet increased his prices
> > enough. If he continues to raise his prices, he *will* accomplish the goal
> > of shortening his lead time.
>
> > I have no idea how the man works; if he does everything himself, and
> > produces 5 frames/month (another post mentioned that as his production
> > capability), that woud be income before expenses of $240k/year. From that a
> > one-person operation could turn a tidy profit. Let's say he manages a
> > taxable income of one-half that, or maybe a bit more... $150k. In this day &
> > age, people don't bat an eyelash at that type of number if, say, you were
> > employed by a firm in silicon valley and had even a small number of stock
> > options. Or if you were engaged in any number of activities where profit is
> > made from pushing paper, rather than actually producing something tangible....
>
> Is not $150,000/year about what four (4) LBS owners would make?
>

Which four LBS owners are making $150k a year? :->
 
Ozark Bicycle wrote:
> On Oct 19, 5:41 pm, Diablo Scott <[email protected]> wrote:
>> Buster Mudd wrote:
>>> On Oct 19, 12:30 pm, "Mike Jacoubowsky" <[email protected]> wrote:
>>>> I have no idea how the man works; if he does everything himself, and
>>>> produces 5 frames/month
>>> Yep, that's my understanding: one man, no assistants or interns, every
>>> single bike handbuilt from start to finish by the guy whose name is on
>>> the downtube.
>> Except for the paint.
>> This ad is from 1988 - $1,000 for a custom frame.http://tinyurl.com/39hdbs
>
> According to westegg.com, $1000 in 1988 is a bit over $1700 in "2006
> dollars", so Mr. Sachs is running well ahead of inflation. Of course,
> with throughly average, production line steel frames selling for $1500
> (Hello,"A. Homer Hilson"!), $4000 for a true custom, handcrafted, no
> compromise frame seems pretty reasonable.

Custom geometry steel frames from $1075 to $1175, made in Wisconsin:
<http://www.gunnarbikes.com/custom.php>. However, you are not Granted
(pun intended) Hobbit status when you buy a Gunnar!

--
Tom Sherman - Holstein-Friesland Bovinia
Beer - It's not just for breakfast anymore!
 
Ozark Bicycle wrote:
> On Oct 19, 7:18 pm, Tom Sherman <[email protected]> wrote:
>> Mike Jacoubowsky wrote:
>>>> WTF?!?!?
>>>> In the (very brief) time it has taken Richard Sachs' production lead
>>>> time to go from 5 years to 6 years, his prices have increased *twice*,
>>>> from $3400 to $3800 and then again (apparently quite recently) to
>>>> $4000.
>>>> I don't begrudge him the long lead time. If you want a Sachs, you
>>>> wait, that's the deal. But at this rate, the 10% deposit you put down
>>>> today will only be a 2% deposit when the frame is completed!
>>>> Is this just inflation? Or is Richie finally taking the advice of
>>>> armchair economists and trying to reduce the waiting list by
>>>> increasing the price? (Hint: It ain't working.)
>>> Correct, it isn't working... because he hasn't yet increased his prices
>>> enough. If he continues to raise his prices, he *will* accomplish the goal
>>> of shortening his lead time.
>>> I have no idea how the man works; if he does everything himself, and
>>> produces 5 frames/month (another post mentioned that as his production
>>> capability), that woud be income before expenses of $240k/year. From that a
>>> one-person operation could turn a tidy profit. Let's say he manages a
>>> taxable income of one-half that, or maybe a bit more... $150k. In this day &
>>> age, people don't bat an eyelash at that type of number if, say, you were
>>> employed by a firm in silicon valley and had even a small number of stock
>>> options. Or if you were engaged in any number of activities where profit is
>>> made from pushing paper, rather than actually producing something tangible....
>> Is not $150,000/year about what four (4) LBS owners would make?
>>
>
> Which four LBS owners are making $150k a year? :->

Those that have another job that pays $100,000+/year.

--
Tom Sherman - Holstein-Friesland Bovinia
Beer - It's not just for breakfast anymore!
 
On Oct 20, 7:49 am, Tom Sherman <[email protected]> wrote:
> Ozark Bicycle wrote:
> > On Oct 19, 5:41 pm, Diablo Scott <[email protected]> wrote:
> >> Buster Mudd wrote:
> >>> On Oct 19, 12:30 pm, "Mike Jacoubowsky" <[email protected]> wrote:
> >>>> I have no idea how the man works; if he does everything himself, and
> >>>> produces 5 frames/month
> >>> Yep, that's my understanding: one man, no assistants or interns, every
> >>> single bike handbuilt from start to finish by the guy whose name is on
> >>> the downtube.
> >> Except for the paint.
> >> This ad is from 1988 - $1,000 for a custom frame.http://tinyurl.com/39hdbs
>
> > According to westegg.com, $1000 in 1988 is a bit over $1700 in "2006
> > dollars", so Mr. Sachs is running well ahead of inflation. Of course,
> > with throughly average, production line steel frames selling for $1500
> > (Hello,"A. Homer Hilson"!), $4000 for a true custom, handcrafted, no
> > compromise frame seems pretty reasonable.
>
> Custom geometry steel frames from $1075 to $1175, made in Wisconsin:
> <http://www.gunnarbikes.com/custom.php>. However, you are not Granted
> (pun intended) Hobbit status when you buy a Gunnar!
>
> --

Welded frames fail the "aesthetics test" for many who would appreciate
something like a Sachs.

OTOH, something like a Soma Speedster, while not custom, is both
lugged and affordable (~$750 for frame & fork). *And*, you don't get
stuck with a weird, moribund wheel size (which disqualifies the 650B-
only Bleriot from consideration).
 
Ozark Bicycle wrote:
> ...
> OTOH, something like a Soma Speedster, while not custom, is both
> lugged and affordable (~$750 for frame & fork). *And*, you don't get
> stuck with a weird, moribund wheel size (which disqualifies the 650B-
> only Bleriot from consideration).

If the ISO 584-mm (650B) does become popular, Riverdwell [1] could
always switch to ISO 587-mm (700D). ;)

[1] Gratuitous gdanielsism.

--
Tom Sherman - Holstein-Friesland Bovinia
Beer - It's not just for breakfast anymore!
 
On Oct 20, 9:05 am, Tom Sherman <[email protected]> wrote:
> Ozark Bicycle wrote:
> > ...
> > OTOH, something like a Soma Speedster, while not custom, is both
> > lugged and affordable (~$750 for frame & fork). *And*, you don't get
> > stuck with a weird, moribund wheel size (which disqualifies the 650B-
> > only Bleriot from consideration).
>
> If the ISO 584-mm (650B) does become popular,

Hah! Right after Satan needs a parka! ;-)


> Riverdwell [1] could
> always switch to ISO 587-mm (700D). ;)
>

Or ISO 630mm (aka, 27") if they become a little harder to find. The
Grant could cook up a fresh batch of folksy BS re:the golden age of
"10 speed bikes", etc.
 
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