Dave and I talk a lot (to ourselves, each other, and you) about Value Curves - that line at the intersection of price and some other important attribute, like performance or weight or brand equity. Any cycling product that sells falls somewhere on that line, though of course for some products the actual price is higher because of all of the other components of value that are being delivered.
Here's an example of what a value curve looks like, plotting Price against Performance:
You could place different wheel brands along that curve. In fact, by plotting all the wheels you can think of is how you'd construct the curve in the first place. Most of us don't go to quite this trouble when selecting a wheelset to purchase, though there is some element of it in every purchase decision. Whenever you're debating whether or not something is worth the price you're plotting on a value curve.
If you are thinking about buying a racing wheelset online, well then welcome - you've come to the right place! More to the point of my discussion here though, your value curve orientation is more along the Y-Axis, which is price here. Absolutely you want performance too, but if you valued performance above everything else you'd start your search with brands that lead with performance instead of brands that lead with price. (I'm not saying you'd be right to start anyplace else if you're looking for performance; only that some brands use performance at the mouth of their funnel.)
All things being equal, a simple value curve makes a lot of sense for evaluating different brands. But all things are never equal, so value curves are a little more complex than that. For example, price does not just impact performance. It also impacts (or rather, is determined by) channel, service, support, warranty, brand, and a thousand other factors that go into how much a wheelset costs. Everything you value costs something to produce or provide. Finding the ideal product for you on the value curve means paying for what is important to you, not paying for what is not important, and also getting everything you need in the product you've chosen.
So when you're making a decision, you're actually plotting a bunch of value curves all at once, thusly:
The radius of each curve here is not important - that's subjective based on each buyer's perspective. But what is not subjective is Price. If you buy a wheelset at a certain price - say $945, for example - you are getting a set of attributes whose value curves intersect price at $945. Practically speaking and using the above curves, that means you can't pay $945 for a level of Performance you're happy with, and expect to receive the same measure of Convenience (in green, above) you would get from a $2800 wheelset. Like I said, everything you value costs money, and if you want $2800 worth of convenience - or service, or support - it will cost more than $945 to deliver. Differentiations happens when brands try to put themselves above the curve line in some attributes. For example, some brand selling wheels online might set up 24/7 phone support and live chat, and offer free overnight shipping and return shipping to service wheelsets. Even if their COGS were similar to ours, they couldn't possibly sell the wheels for $945. Nor would they have to - by rising above the service level of other brands they could charge more, and they would still appeal to buyers who valued this level of service enough to pay for it.
Whereas our orientation starts with price, a shop's entire value proposition revolves around conveninence, service and support. Having a dedicated service department with mechanics on staff during regular hours a mile or three away from your home or office is (in theory, if not always in practice) a very compelling value proposition. But of course it costs more money to provide, which is why you pay more for comparable products sold through the retail channel.
That's not to say we suck at service. We'll go toe-to-toe with any company in any channel in any industry on customer response time and level of attentiveness. But if you dropped your water bottle in your spokes at 28mph and bent one, it will be more convenient for you to have your wheel trued at the shop down the street than it is for you to box it up and send it to us (which is why we use parts available in any shop anywhere in the world, by the way). We know that, and as internet wheel buyers we hope you do too.
Part of the challenge for anybody selling, well, anything is to make sure as many customer expectations as possible are met. For example, if you bought a set of golf clubs online expecting them to include club covers and they didn't, you'd hop straight on the email and fire off a strongly worded letter asking where the eff they are. But if the seller made it very clear before you bought by telling you, "Yeah we have club covers to match these clubs, but if we included them with every purchase we would need to charge you $80 more. We don't, since not everyone wants them. Want a set?" you'd likely be fine with that - even though the price of the clubs is the same and you still don't get free club covers.
In our industry, what that means practically speaking is that the "Hey Joe" support you can get by walking into the bike shop where you just bought $2800 wheels and asking someone there to spin on a cassette for you (and very reasonably expecting them to do it for free, today immediately now) is not available from a brand that sells online, even if you have the upgraded Verizon Fios Internet package with extra high speed uploads.
If you are buying a set of wheels online then, there are some things you need to be able to do yourself in order to recognize the full value of the lower price. It truncates the value proposition of saving money on a wheelset that's shipped directly to your door if you then have to go to a shop to get them set up for riding. To get the full value out of buying any wheelset through a direct-to-consumer channel, here's a quick list of what you should minimally be able to do yourself:
- Install tires. This also includes rim strips. Ours are actual strips (not tape) that you stretch over the brake track and snap into place. The easiest way to install them is to use the valve stem from the tube to anchor the hole for the strip in the right place, and then stretch the strip evenly over both sides at the same time. If you don't achor the hole in the strip it will inevitably move to the left or right during installation just enough for you to have to pry it up with something flat but not sharp, and try centering it again. Better to just anchor it.
- Install valve extenders. If your wheels are deep enough to require them, you'll need to know how to do this. It's actually NOT something you should have a shop do for you, unless you plan to only get flat tires in the shop parking lot. Here's our online photo-tutorial for how to do it.
- Install and remove a cassette. You'll need a couple of special but inexpensive tools for this. Even if you're not buying wheels online, get them anyway - a cassette tool and a chain whip. You need the cassette tool only for installing a cassette; it's essentially a specialized socket for tightening the cassette onto the hub. To remove the cassette you'll need the same tool along with the chain whip. The latter latches onto your cassette cogs to hold them still, allowing you to loosen the cassette the same way you tightened it. The whip is necessary because your cassette ratchets. Park Tool has excellent instructions for this and most other maintenance tasks.
- Glue tubulars. Obviously this only applies to tubular buyers. On the one hand, you could argue that this is a specialty operation that is suitable for a professional mechanic. But if you're going in for tubulars I think you're better off going all in. The tires themselves are expensive, and if you have to add an extra $50 - $90 in labor every time you flat, you're not going to ride them very much at all, are you? No point in saving any amount of money on tubies online if they languish. I've seen that happen too often. Embrace the glue.
My point here is not that you should begin your inexorable march away from LBS dependence. If you have a LBS you frequent, like the idea of professional service, are happy with the incremental expense, satisfied with the quality, and - importantly - if the LBS is happy for the business even though the purchase was not through them (this is an ever-moving target), then by all means keep doing what you're doing. Rather, I'm just trying to explain one of the reasons prices online are lower, aside from the simplistic "cut out the middleman" shorthand. It's less about cutting out the middleman than it is cutting out some of the services - which you may or not value - that the middleman provides. We all operate on the same value curves, just in different points on them.
The alternative title of this post is "You (Don't) Get What You (Don't) Pay For."
5 comments
You're right Joe – my curves are upside down. Or were – I just fixed them. I said to ignore the radius and then I went and ignored the curve orientation myself – that's what I get for graphing without data labels on my axes.At one point I plotted different brands on the value curve, within each product category – including carbon tubulars, as you suggest. I could share it, but it's MY value curve. Or at best, it's an approximation of what we believe is the market's value curve. But it becomes wholly irrelevant if the people who constitute the market change. Your point on hubs is a good one. Some people value the premium hubs by Chris King and White Industries enough to buy them; other people do not. And I believe some of that value has as much to do with the vanity of the hubs as the performance (though in the case of WI and CK it's moot, as you could certainly argue that the full value of the increased cost is justified in the performance – you get the brand for free).Brand or "vanity" is where we get hung up a bit. In this industry, much of what drives brand equity is achieved through conspicuous spending: buying glossy ads, sponsoring a pro team, flying journos to exotic locations to demo new products, renting a 40×40 at Interbike or Sea Otter, sponsoring racing on TV. Building a brand in cycling without incurring those expenses – or rather, by expressly and openly eschewing them – is more complicated. Some people get it right away, while others question the legitimacy of a brand that doesn't follow the conventional route. I will say it's fun as hell trying to figure it out.
I'm surprised by the shape of the curves, esp. given your business model but also given the realities of bikes and wheels. The value curve is asymptotic for Performance (X), not Price (Y) as you've got it. At some point there are no more performance gains (or almost any other gains, depending on your metric), irrespective of price. But these curves imply that $5k wheels are better than $1k wheels and that $10k wheels are even better still. Not so. An interesting question may be 'where is the performance curve asymptotic with respect to price?' Is it $2K? $3K? $4K? You could (you should!) make a case that for carbon tubulars, it's real close to whatever it costs to buy your 58's on solid hubs. The only curve that would extend substantially farther on the X-axis here would be the "vanity" curve. Some people derive more pleasure from the signalling that goes along with paying a lot. Which is not news to you, I know. You guys walk a tight rope.
Mario,We only build on customer's hubs if they have a set of hubs that we build with, in a drilling for which we have rims, and assuming the hubs are in good shape. We can't be a build your own sundae deal here. That's a can of worms that doesn't interest us. Dave
What if someone sends you a hub of their choice to install on your rims+ spokes? Let's say an 11 speed hub on loose ball bearings with cups and cones(you know what that is… Free wheels almost silently) …. How will the cost and warranties be affected? This move sometimes decrease the cost on the customers side while increase performance….sometimes…
Curves shown not to scale and for entertainment purposes only. If we showed what our real interpretation of the X axis is, that would be its own set of issues. Performance can be a very subjective thing.