Good podcast so far, still listening to it. It is interesting that there is the negative undercurrent about the price of Argonaut’s handmade bikes. I mean, do car enthusiasts express the same angst over the price of, say, a McLaren or a Ferrari? Seems less likely.
Making a limited number of high-margin products is a perfectly reasonable strategy for running a profitable business when your customer demographics support it. If you're not trying to increase production volume to make more lower-margin products, you have no worries about the costs and risks of expansion.
If you're an aspirational brand, you don't need a low-end product to start building brand loyalty. A lot of luxury goods makers know that increasing the price and exclusivity can actually increase the demand.
Don't get me wrong -- I'm delighted when I see innovative builders making cycling more affordable. I'll never be able to afford the high-end stuff. But it's nice to see what craftspeople and artists can do when they don't have to make compromises for cost.
There’s still a substantial glut of mid to entry-priced inventory (specialty market) available for consumers who have a price ceiling in mind when shopping. And much of it is aggressively discounted due to that glut, and age, as newer components and frames are due to be released. So there’s plenty of opportunity for consumers to find the right bike at the right price.
A company with Argonauts scale and distribution model can likely be more selective than BMC. Argonaut also offers a more premium product and buying experience (something the industry does not execute well - broadly speaking) when catering to higher-end consumer purchases. It will be interesting to see how this plays out in the market for BMC.
The company I work for made a very calculated entry to the market with only a few alloy models for these exact reasons. Plus, more focused product lines are easier to manage, execute and evolve in a supply chain environment that only gets more complex each year.
Yes, obviously. I posted that observation because any review of a pricey bike or component is inevitably accompanied by outrage in the comments. The fact is that mid- and lower-range bikes and parts have never been better.
Good podcast so far, still listening to it. It is interesting that there is the negative undercurrent about the price of Argonaut’s handmade bikes. I mean, do car enthusiasts express the same angst over the price of, say, a McLaren or a Ferrari? Seems less likely.
Making a limited number of high-margin products is a perfectly reasonable strategy for running a profitable business when your customer demographics support it. If you're not trying to increase production volume to make more lower-margin products, you have no worries about the costs and risks of expansion.
If you're an aspirational brand, you don't need a low-end product to start building brand loyalty. A lot of luxury goods makers know that increasing the price and exclusivity can actually increase the demand.
Don't get me wrong -- I'm delighted when I see innovative builders making cycling more affordable. I'll never be able to afford the high-end stuff. But it's nice to see what craftspeople and artists can do when they don't have to make compromises for cost.
There’s still a substantial glut of mid to entry-priced inventory (specialty market) available for consumers who have a price ceiling in mind when shopping. And much of it is aggressively discounted due to that glut, and age, as newer components and frames are due to be released. So there’s plenty of opportunity for consumers to find the right bike at the right price.
A company with Argonauts scale and distribution model can likely be more selective than BMC. Argonaut also offers a more premium product and buying experience (something the industry does not execute well - broadly speaking) when catering to higher-end consumer purchases. It will be interesting to see how this plays out in the market for BMC.
The company I work for made a very calculated entry to the market with only a few alloy models for these exact reasons. Plus, more focused product lines are easier to manage, execute and evolve in a supply chain environment that only gets more complex each year.
Relevant economic reality: The fact that you can't afford something does not mean it's overpriced.
Yep, 100%. Though in fairness, it's easy to forget that if you're in a situation where nothing seems affordable.
Yes, obviously. I posted that observation because any review of a pricey bike or component is inevitably accompanied by outrage in the comments. The fact is that mid- and lower-range bikes and parts have never been better.