Steelman Closing Shop?

[Uncle Jam's Army]

Brent, I am very happy you decided to keep at building bikes, as you are incredibly talented. Selfishly, I am happy I bought my frameset from you when I did, but I completely understand your need to price your work in a rationale way that allows you to earn a decent living. I hope that this new model brings you that.

[pdmtong]

Originally Posted by Louis

I see things differently: If a builder decides that Business Model A is just not the right thing for him, so he refunds deposits, reorganizes, and shifts over to Business Model B, I see no reason why he would be obliged to go back to the Model A pricing for the folks who were previously in line. (caveat: I'm not a lawyer)

While the amounts in question are non-trivial, IMHO they are not large enough to warrant a litagation ... which means that in the end, it's an unfortunate circumstance for the folks in line and they can chose to get back in line at the new pricing or go somewhere else. how they feel about the situation or brent is up to them...they just happen to be in the wrong place at wrong time. life is full of mis-timings...so while easy ot say, it's best to just get over it and move on. moaning about what could or should have been won't help. good luck to brent...and hope it all works out for him.

[efleigh]

so now is probably a bad time to order a long sleeve jersey off of his website huh...

[Spin71]

Originally Posted by mistermo

I wasn't on the board back then, but I doubt Dario was told he'd lost credibility, had to re-establish himself, and was compared to other builders of questionable repute, when he came back.

Are you seriously comparing the two situations?

[Marcusaurelius]

Well I can see making a decent wage for your labours. Building a bicycle frame by hand takes many hours of sweat and toil (I tried to repaint a frame and that was enough for me).

Good luck on your adventure.

[weiwentg]

Originally Posted by sarion

http://www.steelmancycles.com/prices...fork_stem.html

steelman's new price list...

$5500 for lugged frameset http://forums.thepaceline.net/images/smilies/eek.gif

This is for a top notch builder who has thousands of frames out there. If the market can't bear that price, he'll just have to drop it - and I think he commented here or across the hall that some framebuilders thought he could and should charge higher.

That said, if you Google Baumol's cost disease ... when some sectors of the economy display a rise in labor productivity and some don't, the ones that don't have their prices go up a lot faster, which is the Baumol effect aka disease. The big framebuilders can and do mass produce, which is the very definition of increased labor productivity. The one man custom shops of the world have to build by hand, and I don't foresee that their labor productivity can increase (once you get up to a certain skill level, that's about it). So, I think the one man shops are either going to get more expensive, or they'll have to accept lower wages if the market can't bear their price.

From what Steelman said, he was doing the latter. That's not right. Imo labor is generally under-compensated in the US - there are certainly a number of egregious union contracts, but given that most of the US is not unionized, they would be the exception. But on the flip side, that means that gradually, the one man shops are going to get less affordable for cyclists.

I could afford a Vanilla at my relatively young age as I got clobbered by a truck and I got a settlement from the guy's insurance company (albeit it could have been 3x larger and it still wouldn't have been worth it). If I hadn't, I'm honestly not sure it would have been worth it to me with what I'm presently earning, which is good but not Wall Street (and imo Wall Street is way overcompensated relative to the actual value they produce). I'm not saying it wasn't, just that I'm not sure I would have been able to produce the change.

[Earl Gray]

Originally Posted by weiwentg

......Imo labor is generally under-compensated in the US .....

Really!?

Relative to what? Certainly not the rest of the world.

[SamIAm]

Originally Posted by b.steelman

I know the new prices seem high. After my brain crashed and burned, and the decision was made to start over, some serious reevaluation was necessary to avoid a repeat. I have been doing this for almost 30 years and have sold a lot of bikes. Outside the satisfaction derived from seeing happy customers, the ratio of reward to hard work is out of balance. If you want to call me I will tell you the average bottom line on the schedule c for those years of work. It is embarrassing. Is it an evil thing if I want my wife and I to live on 60K instead of 21k? Most people in America make much more than a good frame builder and they don't work nearly as hard. If I don't sell bikes at the new prices, which are based on real costs and a decent wage, then it shows the market is unwilling to reward the skills needed to produce a top level product. I am not embarrassed by the prices because they are actually a fair value. You get a great bike and maybe I can buy some health insurance and start a small retirement account.

I don't think its evil at all. I'm all for making as much money as the market allows. Its just that products, typically, have to be priced in line with the competition. Clearly there is technically no competition for a Steelman, as you are the only outlet. But there are many framebuilders who can build a very similar product and currently charge a substantially lower price. The fact that you have 30 years experience is only relevant to pricing power if it translates into differentiated product in the eyes of the consumer.

I recall speaking with Bruce Gordon a couple years ago about one of his customs, the price tag was north of 5k and he felt quite justified in his pricing when considering the time, effort and experience that went into it and maybe he was right, but that was still too much money for me and I will bet he didn't sell too many of them.

Perhaps the price of a handmade steel frame is artifically low because some of the artisans have working wives with benefits, lower overhead, less monetary ambition, high quality of life etc.

No question you do some mighty fine work, so best of luck going forward.

[weiwentg]

Originally Posted by Earl Gray

Really!?

Relative to what? Certainly not the rest of the world.

That was unclear. I meant labor vs capital, in the US. Yes, our overall labor costs are higher than anywhere else.

[mistermo]

Originally Posted by Spin71

Are you seriously comparing the two situations?

Yes, indeed I am. PM me if you want to discuss.

[BCS]

Originally Posted by b.steelman
"I know the new prices seem high. After my brain crashed and burned, and the decision was made to start over, some serious reevaluation was necessary to avoid a repeat. I have been doing this for almost 30 years and have sold a lot of bikes. Outside the satisfaction derived from seeing happy customers, the ratio of reward to hard work is out of balance. If you want to call me I will tell you the average bottom line on the schedule c for those years of work. It is embarrassing. Is it an evil thing if I want my wife and I to live on 60K instead of 21k? Most people in America make much more than a good frame builder and they don't work nearly as hard. If I don't sell bikes at the new prices, which are based on real costs and a decent wage, then it shows the market is unwilling to reward the skills needed to produce a top level product. I am not embarrassed by the prices because they are actually a fair value. You get a great bike and maybe I can buy some health insurance and start a small retirement account."

Assuming you have built between 100 and 200 frames per year, this would imply a per frame profit of less than $200. Frame builders must really love their work. FYI, you can probably qualify for Medicaid at 21K per year.

Best of luck with all future endeavors.

[rugbysecondrow]

Originally Posted by BCS

Originally Posted by b.steelman
"I know the new prices seem high. After my brain crashed and burned, and the decision was made to start over, some serious reevaluation was necessary to avoid a repeat. I have been doing this for almost 30 years and have sold a lot of bikes. Outside the satisfaction derived from seeing happy customers, the ratio of reward to hard work is out of balance. If you want to call me I will tell you the average bottom line on the schedule c for those years of work. It is embarrassing. Is it an evil thing if I want my wife and I to live on 60K instead of 21k? Most people in America make much more than a good frame builder and they don't work nearly as hard. If I don't sell bikes at the new prices, which are based on real costs and a decent wage, then it shows the market is unwilling to reward the skills needed to produce a top level product. I am not embarrassed by the prices because they are actually a fair value. You get a great bike and maybe I can buy some health insurance and start a small retirement account."

Assuming you have built between 100 and 200 frames per year, this would imply a per frame profit of less than $200. Frame builders must really love their work. FYI, you can probably qualify for Medicaid at 21K per year.

Best of luck with all future endeavors.

100-200? Don't most frame builders only build 45-65 a year? One frame a week average with time built in for shows, time off etc?

[mistermo]

As compared to the new Serotta pricing, Steelman pricing seems to be in line. Serottas now go for $3800-$8600 for frame/fork.

Steelman could be a "bargain" at $4350-$5500! Speaking for myself, I'd rather have the Steelman.

Lest we need reminding, Serotta and Steelman aren't competing with Trek, Giant, Specialized, etc. They are "luxury goods" and competing with other luxury goods like Ducati's, Benz's, Rolex's, etc. Pricing for luxury goods is less elastic than pricing for a Trek.

[BCS]

Originally Posted by rugbysecondrow

100-200? Don't most frame builders only build 45-65 a year? One frame a week average with time built in for shows, time off etc?

This was based on 25+ years at the bench and having handled thousands of frames-direct quotes from across the hall. Who knows what this really means. The numbers still suck. IMO, prognosis is guarded

[Joachim]

Originally Posted by mistermo

As compared to the new Serotta pricing, Steelman pricing seems to be in line. Serottas now go for $3800-$8600 for frame/fork.

Steelman could be a "bargain" at $4350-$5500! Speaking for myself, I'd rather have the Steelman

I guess that would make Spectrum, Firefly and Dave Kirk a lower/middle tier builder on pricing. Now that is a bargain!