General price trends....not down

August 8, 2008

They're going up pretty soon. It's hard to understand or believe or trust any price you see, isn't it? You just don't know. At some point, particularly if you understand anything at all about business and don't just assume that all business is commercial evil and that everybody should work for nothing and give stuff away to people who appreciate its beauty and will say Thank You--once you're beyond that (and many aren't), then you understand that many things can affect the cost of something, and the mere passing of time and oil, not wind, drives up the cost when the goods come by truck or steamer instead of ponies and sailing ships.

And even in bike land, people want and warrant things like a medical plan, and cost of living increases and now and then an outright raise and a Christmas bonus...because fruit that used to sell for $0.49 per pound goes for $2.49 per pound now, and ALL THAT STUFF.

The bicycle trade magazine, Bike Retailer & Industry News, reports that tire prices are expected to go up 20 to 30 percent next year, because they're made with oil, and the labor even in Everywhere gets more expensive every year. Raw materials--steel, carbon, titanium, are way up, too. Next year's Chinese bikes are going way up. Everything is, maybe even more than your paycheck.

Our Japanese bikes have increased by about 30 percent, affecting any frames we get in after September. So they'll go from $1600 to $1800.

The Taiwan frames we're planning---we'd expected to be able to sell them for $800, but it'll probably be $1,000. They have all those investment castings, and steel is way up, and Taiwan labor is way up, as they're losing work to China, and even that super cheap labor is way up.

The normal response, for a manufacturer is to look for ways to cut costs invisibly, because they're afraid of scaring off customers who buy mostly on price, which is most customers. I'm looking at the bikes and seeing nowhere to cut. We're using the best lugs and crowns and bb shells and dropouts. We can find cheaper labor, but don't trust it. The tubes cost what they cost--what do I do?--go to the maker and demand lower tubing prices, when I have no idea of their costs, and we're a minor customer to boot?

It's all OK, because there's no other way, and the bikes are good. It'll be fine. That's the idea, just keep going. More later.

Current AHH prices (etc) will hold for a few months.