#!markdown
Your points are taken, though I never said frames should be sold to the public
for $950. I would argue they could sell to the public at distribution cost of,
say, $1800-2000, which is still 35% less than shop retail. Point is, there is
some room to play with there - the current model is pretty far from efficient…
As for YT, Commencal etc, I guess you're arguing they haven't damaged
Trek/Spesh/Giant yet, but I'm will to bet Commencal will do more business this
year in North American than ever before, and next year will be better still. I
never predicted an overnight revolution, but I'd bet things won't look like
this in five years. Hell, even Intense being at MEC is a surprise. I have no
idea what their margins were, but you can bet the Coop is doing higher volumes
on lower margins, which is why Intense USA made the switch. Last thought -
Canyon is, I believe, massive compared to Commencal and YT (they have 10x the
models of either, and sponsor a TdF team…). I believe their launch here will
be significant. I'm not saying they'll put Trek/Spesh/Giant into bankruptcy,
but at some point those guys will have to reconsider their business models.
Oct. 12, 2016, 10:01 a.m. - Mike
#!markdown Your points are taken, though I never said frames should be sold to the public for $950. I would argue they could sell to the public at distribution cost of, say, $1800-2000, which is still 35% less than shop retail. Point is, there is some room to play with there - the current model is pretty far from efficient… As for YT, Commencal etc, I guess you're arguing they haven't damaged Trek/Spesh/Giant yet, but I'm will to bet Commencal will do more business this year in North American than ever before, and next year will be better still. I never predicted an overnight revolution, but I'd bet things won't look like this in five years. Hell, even Intense being at MEC is a surprise. I have no idea what their margins were, but you can bet the Coop is doing higher volumes on lower margins, which is why Intense USA made the switch. Last thought - Canyon is, I believe, massive compared to Commencal and YT (they have 10x the models of either, and sponsor a TdF team…). I believe their launch here will be significant. I'm not saying they'll put Trek/Spesh/Giant into bankruptcy, but at some point those guys will have to reconsider their business models.