Rims and Builds

I'm racing the Killington Stage Race this weekend.  Blogs need pictures, here it is.  

We get a goodly number of requests from shops to sell our wheels.  I don't know if the world in general knows this, but any legitimate shop can buy rims from us at a discounted rate, one that actually allows shops that can build wheels to sell Rails.  Why, then, don't we sell complete wheels through shops?  

First and foremost is that in order for us to make it work for shops, we'd have to raise prices by quite a bit.  If a shop isn't making 40% margin on wheels, there's no way in hell they're going to stock them.  That's nothing but an accurate statement of the economic realities of retail.  Less than that, we're not going to get the time of day from retailers.  You can argue all day and night about the relative merits of dealers, I will simply sum up my thoughts as "there are great ones and there are others that are not great."  The capacity to do wheel builds is probably a good proxy for the shop being good in other ways, but that's an untested thesis.  

The other thing is that, with rims, we're willing to take a quite low margin for ourselves.  We, whether rightly or wrongly, feel like a Rail-build customer going through a shop is a customer gained to the Rail universe, rather than an opportunity cost against a direct sale.  But the primary reason we welcome the lower-margin-to-us shop rim sale is that we aren't production constrained on rims.  We've got the supply chain dialed to the point where, when a rim order comes in, boom we just ship them out and continue life as normal.  

Wheel builds take time.  We are, indeed, time-constrained.  If we opened up the dealer channel full bore, we might create a situation where all of our wheel building time was dedicated to low margin (to us) dealer sales.  Without raising prices, if we gave dealers a 40% margin (which, let me emphasize, is the bare minimum they even want to consider), we would make approximately no money on those sales.  In order for us to make any money at all whatsoever on those sales, we would have to reallocate the direct labor that goes into wheelbuilding into a general overhead pool, which essentially means that we'd be doing the builds for free.  That ain't happening.  We've developed WAY too much skill and value the time it takes to build a set of wheels way too highly to just give it away.  Plus, the amount that we allocate to direct labor on wheel builds is absolutely nothing like an acceptable overall margin to us in any case.  So it's a useless exercise.

Many people who are far along enough in their cycling to be considering a set of wheels like Rails are, quite honestly, at a competence level where any shop would be happy to have them on staff.  They're fully capable of researching the purchase on their own, and don't need any support in getting them up and running. Modestly, I will also say that we work pretty hard at providing direct support to our customers.  For these people, the higher costs associated with a shop-based purchase of complete wheels just wouldn't make sense.

We're very into supporting shops and wheel builders who run with the Rail build program.  We've had an awesome experience with all the shops and builders who've taken part.  We also support them pretty hard with low barriers to entry (minimum rim order = 1 rim) and very easy logistics, so we think that program is a great one for all involved.