The long con, or there is no "free" shipping

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A lot of blog topics are created when we get the same question multiple times. The question in question (which isn't really a question) is "in this day and age of Amazon and free shipping, I'm surprised I have to pay shipping on wheels." Shipping is a hard cost. You either bury it in the price of the product or keep it out as a separate item. Same thing with "free" rim tape, skewers, extra spokes, t-shirt, water bottle - whatever. We include rim tape because it's a necessity for using your wheels, and because we can efficiently supply very good rim tape. Same with skewers. The rest of the stuff, you shouldn't or don't need. Any amount that we would have spent on that is instead put into getting the product out at the lowest price we can make it. Things may be included in the price, but they're not free. 

 

Mike has always described our strategy as "the long con." You may picture us wth Dick Dastardly moustaches (if I grew a moustache, it would cause an Amber Alert - the moustache is NOT a good look for me), having a nefarious laugh about how we'll pull the bait and switch and abscond with the piles of cash. That's not what he means. 

Instead, Mike means that we'll never sacrifice tomorrow for today, next week for tomorrow, or next year for next week. We've had to fluidly adapt to a constantly changing marketplace, both upstream (supply side) and downstream (demand side), but the strategy has always been the same. Deliver the best product and service we can. Excellent prices and price integrity (the whole "you don't pay more because we gave someone else a bro deal for less"). Minimize supply chain, overhead, and promotional expenses. Stick to our knitting and execute. Prioritize reinvestment in the company. Consistent manageable growth. 

The biggest diversion to that strategy was when we decided (really, I pushed us into it) to sponsor a women's team last year. It failed for 3.5 reasons: 1/1a. It diverged from our more important long-standing strategy, so while we committed meaningful material to the project, we didn't make our involvement with the team a bigger operational priority 2. Sponsorship below the WorldTour level doesn't meaningfully create awareness (not even 100% sure WorldTour level does) 3. Bad partner choice on our part. Sometimes you have to get slapped in the face, and I've apologized to Mike a couple of times about this foray. 

To our strategic end, we're both quite similar to and different from Amazon (NASDAQ: AMZN). We don't have access to or rely on the capital markets to fund our growth. It's not a lark that I use their ticker symbol for the link - Amazon is well-known among astute anaysts for their constant reinvestment strategy, which is a big part of why they've been able to become one of the world's biggest companies by market cap and most other measures, without showing consistent or meaningful profits. But without the willingness of others to invest in AMZN and fund its growth, they would have been out of the game long, long ago. We fund our growth entirely through operations and a small line of credit (under 10% of gross revenue). We're also just in this bike business; there's no "November Web Services" or any other auxiliary business that secretly piling up the profits, facilitated by our bike business work. 

Kind of a klunky bit of blog writing, but you get the point. And in my mind, I'm still riding in shorts among palm trees next to beaches, so cut me some slack would ya?

 


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