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Old 10-17-2011, 09:48 AM   #750
kirb
should be out riding
 
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Joined: May 2010
Location: Musky, MI
Oddometer: 1,681
Quote:
Originally Posted by Gadget Boy View Post
It depends on what their business model is.. If they have a capacity to build only 200 bikes a year at $25K to $30,000 per bike, and sell them all, then that's good for their business plan, keeping a certain mystique that it's an exclusive bike that few can afford and fewer still can own.. that seems to work as a business model for some products. Maybe it will work for this one.
It also keeps your overhead low. Hand build from parts sourced from suppliers and charge more per unit. The cost per unit is higher, but you can sell everything you build and don't have to invest in a large mfg environment. You can ebb and flow with sales and not have a large stock of bikes sitting on the showroom floor waiting for discounts to move.

It does take longer to recover your R&D, but gives you far less exposure to costs in large capital eating shops. Labor, the most costly item of all, is kept low and allows you to source very talented people.

The videos taken along the first tour explained the exact business model. They are going to be exclusive bikes that are not 'old rich guy only' priced. I think they are filling a market hole that could easily see some progress. I'm still in.
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