Making chicken salad

Behind the Curtain Bicycle Biz Economics business How It's Made News & Narcissism

I screwed up once again and deleted a very valid comment along with the torrent of spam comments we get every night. And by torrent I mean about 60 a night. It's become insane. Anyhow, the question was "how does a business like ours survive the time of not being able to get things to sell." This is a very good question. 

A guy I used to work with would complain that "they expect us to be able to make chicken salad out of chicken s--t," and that's roughly the position we find ourselves in now. Apart from the reasonably smooth order flow of the QuickShip™ wheels, the amount of non-revenue time and time that could easily become non-productive that's crept in is onerous.

For example, I usually order spokes on Thursdays, and this is usually a longer process than you'd imagine. The first email is "hi we'd like to order these spokes," and then we get a marked up list showing what's in, what's out, and available alternates. That mostly gets reconciled in one further email but it's often two, so from first email to "final order submitted" it's a several hour span with about a 30 minute of active doing price tag. Lately, the out of stocks have been so bad that we're into our second source on spokes, which is more expensive and also getting shot full of inventory holes. The spoke cutter/threader helps a lot with this, but it needs spokes that are max about 6mm longer than the final length, and that's been hard to satisfy lately, and it takes quite a bit of time to run. So "spoke management time" has roughly quadrupled lately. 

We just shipped a set of wheels yesterday that was ordered in February. One rim was just impossible to get, and after spending hours and hours chasing it through every wholesale channel we have, I finally bought one at retail when one became available from a place that was quicker on the draw through a distributor than I had been. Total cost with expedited shipping was almost 2.5x what our costing sheet thinks that rim costs. So our margin got murdered on that one. We had good comms with the customer throughout and he understood the situation, but I couldn't have blamed him for getting upset if he had. And if we charged ourselves any kind of rate for time spent managing the order process, thanks to comms and trying to chase down this one stupid rim, we'd be well upside down on this sale. This is just a business risk that we bear with good humor, there's nothing else to do. 

By and large people have been very understanding of this situation and realize that we're not kidding when we talk about long lead times and lack of certainty about delivery schedules. It feels like we're spending our "good will savings" account recklessly every day, but we don't have another option. We do appreciate your patience and understanding. 

How this all shakes out in the long run is anyone's guess. The order season has been upended completely. Q1 is normally a snoozer for us, almost always our worst of the year. This year, it put us on pace for a record year if it sustained at that level. Q2 has thus far been fairly disappointing. We're still on a good pace but the slope has declined. So who knows how the rest of this year looks. And beyond this year you might as well spin the roulette wheel. 

One upside is that we have been getting to ride bikes a lot, which I'm about to go do. When stuff comes in, you're chained to the wheel bench and cranking them out. When not, go ride your bike.

We've just signed up to be an exhibitor at a very cool mountain bike festival this summer, and we'll have news of that later. 


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  • Hoogle Da Boogle on

    All of those potential cyclists and no bikes for them to ride (or buy). Or are there? The used-bike market is red hot. In some cases, desperate saps are ponying up full retail new-bike prices on 2 and 3 year old bikes. I’m saving my allowance up for the Big Oversupply of the Future. If it doesn’t materialize, at least I’ll have a few bux for post-ride donuts and coffee.

  • Mark MacLeod on

    It must be exasperating to have demand increase and availability decrease.

    I very much appreciate the new wheel components. They are being assembled as we speak, euphemistically speaking. I’ll send photos on the new frame.

    Mark

  • Cat on

    This read, esp the section on thankfulness for patience and understanding was so on the mark for me- if I had the same creativity of expression I might have written it. Sourcing has become a second job, maybe part of a third and it inhabits our dreams sometimes.

    It definitely gives us something to talk about- as do the volatility in prices and the need to hop out of bed at 0247 when the phone pops to let us know BTI has just one Di2 Internal battery and it’s a race to order it before the dude at last call in Portland feels his phone buzz and beats me to ordering it. Without the help of my lesbian friends in Portland distracting him, I might be out another sale. This is what it’s come to.

    Suppliers be driving.

  • Joel Bello on

    That was actually my question! or a variation thereof which I’m sure I wasn’t the only to ask. Like, “what are you doing while you are waiting on inventory to sell.” Anywho, thanks for the response :-)


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