Those of you who are on our mailing list have learned that our prices will be going up a bit at the end of the month. Those of you who've followed us for a while know that we always try to keep prices as low as we can, but the past year has been rough on costs and we have to respond to it.
What we haven't done is decide exactly how much on everything. We know that spoke prices are going up a few percent, and that I9 hubs are going up a few percent more. Other hubs have either already gone up or have let us know of impending increases.
Carbon rim costs have gone up over five percent, and inbound shipping costs on them are a problem. The slowdown in international travel means that there are fewer planes for cargo to hitch a ride on, so it's a bit of a bloodsport to get boxes onto planes. You can pay an arm and a leg to get on carrier-owned (UPS, FedEx) planes, or roll the dice on cargo ship times. Our supplier has worked with us on this in the past year, and we've soaked up a few outrageous shipping bills, but paying $25/rim for shipping just ain't sustainable. Sea shipping isn't an answer either - in the best case it takes too long and for those of you in LA who can physically see the logjam of container ships waiting to get into port know what an absolute fiasco it is at present. This has caused us our pre-order delivery times to temporarily extend, which we hate, but it's an issue the entire world faces right now.
Our outbound shipping rates have stayed the same for 10 years or so, and costs there have gone up a whole whole lot in that time. For simplicity's sake, we've kept that constant. We could bury the shipping costs within the product costs and offer "free shipping" but there is no free shipping. We'll continue to charge the same shipping rate, but we have to figure actual shipping rates into wheel prices.
As ever, we'll attempt to strike the best balance that we can. We know that we offer fantastic wheels at compelling value, but we also know that it's a competitive market.
The 2021 prices will go into effect on March first, so you've got a few weeks to get your order in ahead of that.
Andrew – It’s a great question. As a simple cost constraint, rim manufacturing in the US is wildly more expensive. I made an extensive investigation into carbon rim manufacturing in the US about 5 years ago, and our per rim cost would have been over $500 an an incremental unit basis. Putting capital expense into it, and depreciating that, any cost accountant would have put the per rim price up by another 10%. There is no cost competitive carbon rim manufacturing available domestically. Even Zipp and Enve, the big “US made rims,” produce their price point oriented rims offshore. You can not currently produce domestically at anything other than a super premium price point. I think the market’s appetite for super premium price point rims is substantially gone. Perhaps there are innovations that can change this in the future, but that is definitely not the present state.
We aren’t a manufacturer, and have no desire to be. White Industries, Chris King, Onyx, and Industry Nine all manufacture in the US. We can, and did, have “our own” hubs made for us by them, but that proved to have a value destroying effect – people weren’t willing to pay us as much for a hub made by White Industries for us as they were for a hub made and branded by White Industries. Our costs on the two were identical. So there’s no reason to consider that unless something big changes, and inbound shipping costs on Aivee hubs are small as a box of hubs is small. A box of rims is BIG.
I guess DT makes some spokes here, but our Sapim spokes are shipped to us from Illinois and they definitely test the limits of the USPS “if it fits, it ships” flat rate boxes – we get some boxes I can barely lift!
In most of our wheels, the component cost content is more than 50% US-made. By the time you put the value of our labor in there, every wheel with a US made hub has a majority of US content.
I also wouldn’t call inbound shipping “prohibitively” expensive. Annoyingly expensive, problematically expensive, more than I wish it was, sure you could put it a lot of ways, but prohibitively would imply “holy cow we just can’t do that,” which isn’t the case.
Thanks for a good question.
If inbound shipping is prohibitively expensive, how about manufacturing in the US?