Maybe lots of you get these email updates from Grant at Rivendell. If you do not, here is a little progress report from totally trustworthy Grant Petersen there, even including sale items and other sorts of retail offerings you're not used to finding on my blog. I frequently (but not always) agree with Grant - but I always love him. You may find yourself in the same frames of mind...
The industry insider view stuff is worth reading for sure. When he talks about his feelings about things, what you read is what's in his heart. Grant would never fool you to sell you something.
Rivendell Bicycle Works Email Update - February, 2009 New year, new everything, time for an email update. It may be long.
THE TOPICS, IN THIS ORDER:
How we did last year Some internal changes Some ideas for 2009 Grant s internal attitude shifts & wishes/hopes Observations on bikes, the bike industry, and the outdoor industry in general About our suppliers Current brands news Imminent bikes Future bikes New Stuff Old Stuff
HOW WE DID LAST YEAR
We were hurt badly, and I mean ferociously, by the strong Yen, weak Dollar. It is horrible. The Japanese frames and parts are really good. As good as good gets, as great as great gets, as expensive as all get-out. We hold prices too long and raise them too little & late, always with extreme discomfort and fear.
Our Japanese prices are on the low side. It s not ideal in the big picture. Our business model is buying direct, selling direct, and that saves the day for us, but it makes life harder for other retailers who also sell the same Nitto parts, for instance.
It s the cause of much concern here, lots of internal debate (in my head, anyway). On one hand, we don t want to be low-ballers. On the other end, we are 100 percent committed to Nitto, offer virtually no other options so far, so don t feel compelled to match prices with dealers for whom Nitto is fringe if that makes sense.
Our 2008 sales were fine, but our profit is off. Our end of year taxes will wallop us, because our inventory counts as cash. We get walloped every year; but this year we ll end our fiscal year earlier, which may help. That way we can have more inventory by Christmastime without fearing the higher taxes on it.
SOME INTERNAL CHANGES
We hired Dave and Jay full-time, and Aaron and Harry for Saturdays. They were all customers before, with plenty of skills, the right personality, good work ethics, and they re totally familiar with our bikes. Now we re going to settle in, and see how much we can do with this final staff. Payroll is higher than ever, but nobody wants a pay cut, and nobody is lighting Roi-Tans with five dollar bills, either.
SOME IDEAS FOR 2009
Trying to get RR41 out in February, and then, believe it or not, three more Readers out this year. Trying. They ll be the OLD size, and 32 to 40pp. And we re going to shoot for smaller and more frequent catalogues, too.
In addition to the Flickr Rivendell gallery, we re going to have one on our site, too is the plan. Many of the gorgeous bikes we assemble never go Internet public, but we ll try to have them on our site.
For five months we ve been working on a new US-made line of saddlebags that will sport a new look and have some new and some old features, and the brand is Sackville. Made by a small staff of experienced stitchers headed up by two ex-chieftains from Coach and Dooney & Bourke.
The first two models have been thoroughly tested and refined, and will be harshly slick and highly functional, and you can expect them in February. Cost will be about $200 which is the place things end up when zero corners are cut and they aren t made in China. (Some more expensive saddlebags are made in China, now. So .)
I still think of saddlebags as costing $65. There s about $20 in leather on each of the SaddleSack seat bags, and that much in fabric. Only the best and most expensive hardware, and labor rates that keep the manufacturers in business in America. Labor is always the highest cost of our bags. We absorb the development cost (always) and the cost of cutting dies and prototypes. There will be a Large and a Medium before February. The large will be priced where it has to be and if it had the same markup as a women s handbag, it would be $420.
ANYWAY, THEY WILL BE GOOD.
The big thing is bikes. The Toyo-built bikes are so beautiful and so expensive, so we have to cut back. We order them mostly to help Toyo, but if the ¥ keeps getting stronger, that's going to stop it.
GRANT S INTERNAL ATTITUDE SHIFTS & WISHES/HOPES
I m less snobby than I used to be, because over the years I ve seen too many things & too much bikefinery exhibited and oohed and ahhed over and either not ridden, or maybe meticulously crafted but poorly designed, at least according to my values which I admit may not be universal.
The look I like in a bike is skinny tubes, chubby tires, high bars, fenderable, and fenders in the Winter at least, and rackable, with at least one rack, and a bag or two. Good clearance, simple decals, easy to read and properly placed. Useful gears, leather saddles (still snobby there), and I still like the lugs and crowns. I m going more and more to heavier and fatter tires, because in most cases the weight gives you something you can t get without it either a longer-wearing tread, or a tougher sidewall that can take many more months of sun, or both. I m deep in to visibility these days, and I have come to really like the look of the triangles, and spoke reflectors (the light kind we have, or simply reflective tape folded over spokes). I don t mind filthy bikes, but I hate squeaky chains. Filthy chains are OK, and recent experiments with non-Boeshield chain lubes have left mine filthy.
OBSERVATIONS ON BIKES, THE BIKE INDUSTRY, AND THE OUTDOOR INDUSTRY IN GENERAL
I m convinced that it s everybody s plan to start a new company groovy and green, establish prices based on US labor, then expand the product offering way too much, sell out to buyers who take the line to China. It happens all the time.
This happens with the old brands in Europe, some not-so-old brands in the U.S. Try to buy a thermos bottle that s not made in China. China may, in fact, make the best thermos bottles in the world, who knows? But they re all made there, except one.
When brands go to China, the price doesn t go down. The price has been established, and now there are public shareholders, so the price can t go down. You can tell a shoe that s made in China. It is a composite of leather, mesh, nylon, reflectorization, with all kinds of unnecessary stitching and features a massive complication of details consolidated into a pair of size 6 1/2s, all for $39 to $89 retail, with enough left over to ____
Another carbon fork recall. There have been so many now, and there will be many more. Any material can break, but it takes carbon to break shockingly suddenly, way out of proportion to its cost and theoretical strength.
ABOUT OUR SUPPLIERS
We try to buy American-made products first, but not when they re substandard, and they sometimes are. But still that s always the first choice. Last choice are things made in China, and nothing we sell except, well, one thing, is made there. We bought some cheap tape measures from a company with American flags all over its web site, and U.S. in the name. Ordinarily we verify the country of origin, but with the flags and that name, dove in head first and ordered them. When we re out, we won t reorder.
WHENEVER POSSIBLE, AND IT S OFTEN POSSIBLE, WE BUY FROM:
Small makers; not because big is bad, but only because we re small ourselves, and it feels right to support other small businesses. Traditional makers who ve been making the product in question for many years, or things just like it, for many years Makers to whom our business matters. Sometimes it s because they re small and have no big accounts, but many times it s just because we hit it off, and they re proud to have us sell their widget. Makers who are intimate with what they re doing, who refer to the widget by its name, who know exactly how it will be mounted (if it gets mounted) and exactly how it will be used. This may seem obvious, but it is not the norm these days.
This is a high-hassle and sometimes costly way to buy things. It s a hassle because often the makers are little-known and hard to find. If they make something that s almost but not quite right for us, the minor change can drag on for half a year or more. Often they re struggling themselves, and we ve even lent money to our makers to help them make payroll and pay their material suppliers.
We sell really well-made goods that tend to be expensive, and your purchase is your way of supporting this way. Since it is the only way we get things made, since it is the way almost everything we sell is made, we re deeeeeeeeeeeeeeply grateful to you for supporting us and these special manufacturers.
CURRENT BRANDS NEWS
Got a call today from a lawyer representing the firm that owns the rights to the middle-earth names in the Movie, and we can keep Rivendell (we predate the movie by far, and there are numerous companies with Rivendell in the name); but they have a prob with Legolas, and might squawk some about Bombadil and Quickbeam (but they weren t in the Movie, so maybe not); and Baggins won t fly for sure--. So we may have to rename the Bombadil and Quickbeam. This is a much more pleasant call to get than, Your carbon fork snapped, and my client s family... The lawyer was seemed sincerely normal and friendly, and it s not like BIG news here, just a little things we have to deal with. If our names came before the Movie, we may be off the hook. Legal things, we ll play according to the law and the right standards, but I ll be bummed if Bombadil has to go. How does Yves Gomez sound for a mountain bike?
In March: Sam Hillborne, Betty Foy & Quickbeam. The Sam will be sold out by the time it arrives; the Quickbeam will be about 65 percent sold out.
We re continuing the A.Homer HIlsen forever. I think it is the best production bike of all time. It is understandable how it might be that I d think that, but it is perfect in every way, I sincerely believe. We have decent stock and are getting in more. It is the functional equivalent of the Sam, but with U.S. or Japanese labor and more detailed details.
The Bombadil and Atlantis are staying, too, and they both continue to do well. The Atlantis now stops at 61cm, and above that, we say just get a Bomba. We can t afford to stock all those sizes.
We ll do one last run of Toyo-made mixte frames. The Betty Foy will replace them in time. The Foy is a great value, but if an extra thousand won t kill you and you want the nicest mixte ever, the Glorius (for women) and Wilbury (guys) are still it.