Inventory? Check.

With global shipping still completely messed up, Mike and I decided a while ago to push a lot of chips into the table on stocking up inventory for summer. Those orders are now being delivered, and man do we have a lot of rims. 

This is the first half of what's coming, and the rest should be trailing in over the next two weeks or so. What's significant with this is that we've always held inventory below what we could build over any time frame. By that I mean that if we are doing monthly orders, we can build "X" number of wheel sets a month, and we expect some significant portion of monthly sales to be alloy wheels for which we don't have to stock rims, then we stock slightly under ".5X" in carbon rims. The pre-order does a good job of buffering the rest of demand. But for this round, we went harder because turnaround times are elongated, and now that it's nice out and a lot of people are in a good position to do a whole lot of riding, we want to be ready to meet that demand. We're ready now. 

These are all Cafe Racers, GOATs, RCGs, and All Roads. The All Roads are all spoken for (more of them will come in the back end of this delivery) but if you want a set of Cafe Racers, GOATs, or RCGs, it's just a question of getting your hubs in and we're good to go. 

Carbon rim inventory is expensive. I see Instagram photos from wheel builders who have piles and piles of inventory on racks, and either they must have a ton of production capacity, and sell a lot more wheels than we do (not unlikely - we're pretty small) or they're holding too many month's of production worth of inventory. We'd like to get carbon inventory turns to 12 or better and keep them there. Our balance sheet doesn't like a ton of working capital in inventory; the ideal balance for us is to have just enough inventory that stock outs don't cost us a lot of lost sales. 

The pre-order now includes Rail 55s. There's slightly less of a pre-order discount on Rails than the others. Rails are a bit easier to stock because our whole "carbon rim brake rim" catalogue is 2 items (20h and 24h Rail 55s) and we made the margins on them a little bit less than on the disc builds. This is mostly because the labor time to build a set of carbon rim brake rims is low. Seriously, with really good rims and a skilled builder, the build time is about 1/3 less. Time's wicked expensive for us, so any time you have less of it, that's a good thing. 

On a personal note, I just finished my summer semester MBA class on Organizational Behavior (a fun class when your organization is two people) and had a ride last night where pushing hard on the pedals did not elicit an existential crisis! Game on. 


Older Post Newer Post


  • Dave on

    Science!! Yeah, there are a lot of things where even though you’re studying something that happened at Hewlett-Packard or the way MedTronic does things (they had a CEO who did incredible things), I find a lot to apply to our little 2 person company. But the final paper was an exercise in how to apply a bunch of stuff we learned to your current organization, and I had to get special dispensation to write it about another much bigger company that I know well. It wouldn’t have worked writing it about November.

  • Catherine on

    Congrats on another class down towards your MBA. My partner is also taking Organisational Behaviour – being a STEM nerd hearing her observations on the class teachings versus my business experience IRL in a 1,000 person plus business has been eye opening for me! It’s almost like there’s a science I was unaware of previously which can help make some sense (but not too much) of the seeming chaos around organisations.


Leave a comment

Please note, comments must be approved before they are published