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USDA Prime Hubs

Blog time has been at a premium lately. The other element, quite honestly, is that the editorial idea pile hasn't exactly been overflowing. Today's topic comes, as many have, thanks to my morning perusal of the industry headlines. It's about hubs.

Very early on, we became convinced of the value of great hubs, and we emphasized it. Certainly with rim brakes, the hub is the only non-consumable part of the wheel. Spokes can act non-consumable, but when your rims wear out and you get new ones, if you get different rims than the ones you had you probably need new spokes. But a great set of hubs can be used nigh on forever if it's well cared for. Plus they usually survive whatever crash you might throw at them. 

A lot of the brands against which we're compared have always primarily used hubs that are closely comparable to the Novatec hubs we first sold. That's not a bad thing, as they are pretty nice hubs. You can read more in-depth about hubs in this post which is from 18 months ago. Now, many of those brands are offering more boutique or name brand hubs as options in their builds. The critical thing is that we were so often being compared against them as we were at or near price parity with them when our build had name brand hubs (White Industries T11s more often than not) and theirs had OEM-spec hubs. Now they are bolting a few hundred dollars onto their prices with the name brand hub options. For many, it's an exercise in "more expensive must mean better." If you're reading this, I expect more from you than that. 

Red may be the fastest color and all, but we sell an awful lot of pink

We're currently doing a featured build with Industry Nine hubs. We've been flirting with I9 for a long time, and I'm not going to lie a big part of that has been that they are dead sexy, but they've also got a great rep coming mostly out of the mountain bike sphere, and mountain bikers trash hubs. Like the old Life cereal ads, if they like it, it's got to be good. They also do some things uniquely nicely, which is a separate topic. But we're also not far away from adding back some OEM hub options to the mix, which will provide a marked contrast to some of what we've seen.

Let's say Wheel Company A has a build for $750 with OEM hubs, good house-labeled alloy rims, and CX Rays. Leaving aside the whole "are CX Rays worth it over Lasers" question for a moment, there is no second of my life that I'll think that our $785 Select+ build with T11s, Easton R90SL rims, and CX Rays doesn't absolutely blow Company A's build out of the water. There's no comparison to me. But when Company A adds a name brand hub as an option and adds $300 or even more to the price of their wheels, you have to be kidding me. The only thing better about the Company A proposition in that case is their increased margin.

Conversely, when we reintroduce OEM spec hubs as an option, we will categorically NOT be chopping $300 or more off our price. They will be less expensive, for sure. The benefit of offering a still-awesome set of wheels with a more attainable price is self evident - they will be great wheels and a great value. But we never puffed up the price with the name brand hubs so there won't be a price reduction equivalent to the increase we're seeing from others as they add name brand options. 



A complex sport's beautiful simplicity 

Eurobike 2016 is a wrap. From what we've seen, this was a year of refinement and normalization rather than a year of "that's just crazy enough to work!" new stuff. For cycling to work best, in our view, there needs to be a cutting edge, but the cutting edge should be just that - the edge. For the huge majority of people, what gives the best ownership experience will come from evolution and not revolution (and 12 demerits to me for using one of history's worst cliches - sorry).

This is perhaps why we like cross so much. I mean, yeah, disc brakes are disruptive, but they also work better for the average racer who doesn't have mechanics tuning a fleet of 8 bikes and 47 sets of wheels. And tubeless is evolving quickly in cross, but again that marches toward a real world benefit - the ability to use more tires while owning fewer wheels, with less installation hassle than tubulars. And tubulars are still available and work the best (yes, tubulars are the best use experience, but come with an ownership hassle) so it's not that anything has been sacrificed in order to make way for tubeless. 

No front shifting, no tubes, and a more in-shape Dave

In anything, cross sees more addition by subtraction than addition by addition. Many people, me happily included, are down to one chainring. Didn't need a new crank or anything to do it, just a chainring that needed replacing anyway. The front derailleur now sits in the parts box, and the cable for it is long gone. 

A cross race is short, and you want to maximize your experience with it. A bit like riding in general for most people; you don't get enough time to do it, so you'd like to optimize the time you have. My road bikes (yes I have two - one disc, one rim brake - this is necessary to do my job) have achieved "this works perfectly so why would I change a thing?" We aspire to being the wheel part of an equivalent situation for each of our customers. Sometimes the real jewel is the new thing that offers something great, but more often the prizes are the tried and true things that work perfectly. Maybe not the lightest, or deepest, or widest, or anythingest, but often as not the best.

What achieves that best for you will depend, of course, on you. We're here to help you sort through finding that, and then to execute it as well as it can be done. 


New year new stuff same focus

A mistake that the bike industry so often makes is that it decouples use experience from ownership experience. So much top level use experience comes from emaciated pros who ride at improbable speeds over inhospitable terrain, and then having crossed the finish line hand their bikes to a mechanic who ensures that said bike is perfect for the next stage. Ownership is a little different, and often involves a bit of compromise. Also, pros race on tubulars. Tubulars are so different than clinchers that lessons learned on one are more or less inapplicable to the other, rim-wise.

What we sell over the next year will be perhaps more different than it's been in any year since we introduced the Rail 52 nearly 4 years ago (and a brief "holy cow it's been almost 4 years" on that one). The focus that we've always had on advocating wheel products that offer a tremendous ownership experience, which of course includes the use experience as a hugely significant subset, will steadfastly remain. 

The Rail 52 stays the same, since it's still so well suited to the job of being a very fast road wheel for road bikes. One of the themes at Eurobike, and throughout everything, is disc brakes. We are building and shipping the first round of Range builds right now, and we're quietly confident that we've hit the bullseye on that one. 

Unless HED throws some unforeseen changes in, their rim lineup will stay substantially the same. The asterix on that is that they're doing a little subtraction by subtraction, with the excellent Belgium+ disc tubular going away. The simple fact is that tubulars are a non-entity in the current consumer landscape, with the exception of cross racers. Even in cross, tubulars seem to be tailing off. 

The Easton R90SL rims have elbowed their way into a position of prominence in our order book, and in our esteem. Easton has had a series of hub designs that maybe tried too hard to be innovative, and their factory builds have always been a bit underspoked for our tastes, but the rims are a stunning example of normalcy. They aren't the lightest, nor widest, nor deepest, nor anything-est. What they are is well constructed, of a current shape that makes a ton of sense for their intended use, and as light as they can reasonably be. Anyone self-identifying as a "weenie" of any stripe will be totally non-plussed by them, which goes a long way to explaining why we, as dyed in the wool "normal stuff that works well weenies" like them so much.

As stated before, there is a new road rim that the internet has begun to talk about, which we've been testing for nearly 1000 miles of use now. An ever present challenge is that you'd like to have 10 people of various weights and riding styles and agendas test them for a complete life cycle before you get excited about them. The reality is that reality never affords this opportunity. Since a lot of this rim's story is about aerodynamics, we more or less demanded that they be wind tunnel tested, and we've successfully made that case so we're spearheading a wind tunnel test with them.

Some existing rims are going away and being replaced with new models. We've had the opportunity to beta test a bunch of these (seriously, I either need to spend all day riding or just get a bike that uses 6 wheels) and ultimately time will tell. There are always cases where time has told a different story than the initial "ooh ahh pretty new!" excitement gives, so as much as is possible for a company the size of ours, we put a big focus on getting to the time that will tell as quickly as possible.



2016 Tubeless CX Progress Report

Last year, we went super whole hog on the CX tubeless setup testing. We're not going to go quite as deep into it, because we already have the info from last year, we don't have to waste time with stuff that didn't work and hasn't changed, and we haven't got the time to throw at it this year, but there are some new things we did want to test so we're doing that. 

New entries for rims are Easton R90SL, Kinlin XR31T, and a prototype 2017 model that may or may not make it into circulation for this cross season, plus the Range. New tires are the Schwalbe X-One, IRC, and (finally) the Clement tubeless line. We're still waiting for the IRC to arrive.

The Clement is as expected. The one gripe we can find so far is that the treads aren't exceptionally straight. The first time I rode the BOS after doing all of our inside torture testing, I immediately pulled over thinking the wheel have gone all wiggly. Of course it hadn't, it was the tire. One of the really nice things about tubeless tires as opposed to tubulars is that they are generally straighter and rounder. But yowza do they stay on tight. In the "lay a way at 45* and repeatedly push down on it" test, it holds 100% of air down to roughly 21psi on all rims. On the Easton, it even does a little better than that. For what it's worth, many tubular glue jobs would probably come unstuck in this test. In use, no burps. And while there is no LAS tread in tubeless as yet, the other Clement treads that you know and love are present and accounted for. 

The Schwalbe is also really solid, similar to the Clements. Not entirely sure of the X-One tread. It's sort of kind of a similar-ish tread to like the Kenda Small Block 8? It's knobbier than a file tread, but the knobs are super close together. It would pack up instantly in mud (it's been dry AS A BONE around here lately) and in dry conditions I think the Hutchinson Black Mamba is the fastest tire alive. I have a man crush on that tire something bad.

For rims, the Kinlin is actually surprising us with how it does. Every tire thus far has inflated on it with just a floor pump and not really even very vigorous pumping. It doesn't stay as ultra secure down into the low low inflations that many of the other combos do, but a couple of extra psi and it's secure like what.

The prototype rims have been quite good, which hasn't been surprising. We knew they would be. They're hush hush so we can't open the kimono on those. 

At this point, none of the combos we've tested have shown anything like a catastrophic burp. In the most extreme cases, some have gotten a little more squishy, but the "holy crap there's no air in the tire anymore!" moment doesn't happen. 

Since I have to say it absolutely every time I talk about tubeless, yes we know that no tubeless setup will ever match the absolute performance of FMB or Dugast tubulars at 16 psi. But at the 23 to 26 range where tubeless works best, the setups that we've worked with are as secure as glue. 


Alloy rims, continued

When we price a wheel product, we have a pretty standard formula wherein we put in all the costs, and then add on a nearly fixed amount which is the amount we know we'll need to make doing this worthwhile if sales are good. This convention is somewhat unique, in that most businesses follow a margin model. To do it by margin model, you input your cost of goods sold and multiply that by 1.65 (which gives you a 40% margin, which is generally considered to be the minimum healthy retail margin), then add on direct labor, and that's your price. 

The problem we've found with the margin model is that it doesn't work. 

The issue is that lower cost builds get underpriced, and higher cost builds get overpriced. We can only build so many wheels, answer so many emails, take so many phone calls, print so many shipping labels, pack so many boxes, and provide so much after-sales support in a week. So we really only have "x" purchase slots available in a week. Whether you're buying a set of HEDs with Chris King hubs or a Powertap (the price apex of our alloy builds) or this week's feature build (the lowest price build we do), the costs we incur and the care we put into turning that pile of parts into your wheels is exactly the same. Our inventory is nimble enough, and we have enough inventory turns, that the carrying cost for an expensive HED rim isn't that crazy different from a less expensive Kinlin rim, and the same is true of hubs. Spokes sit in huge bins waiting to be cut and threaded precisely for whatever build they're going into.

To turn this into a simplified word problem, let's say wheelset A has parts (rims, spokes, hubs, nipples, skewers, rim tape, box) that cost us $100, and wheelset B has a $1000 cost for the same parts. In both cases, our direct labor is the same (which we'll call $100). Using a margin model, wheelset A would sell for $265, and wheelset B would sell for $1750. To keep simple things simple, I will simply say that we need much more than $65 over parts and labor to sustainably sell alloy wheels, and we need much less than $650 over parts and labor to sustainably sell alloy wheels. 

Keeping the simplicity going, we have "x" number of build slots available per week. In order to keep the lights on, pay insurance, etc and make an acceptable income for ourselves, we need to charge "y" per build slot to come up with a weekly net that accomplishes those goals. That's the best and fairest way we can envision doing it - it's the lowest price that makes this business a valid and viable pursuit. 

What does this have to do with alloy rims and wheels specifically? Brands that sell alloy wheels as complete units need much more than our "y" per set sold. The dealer for sure needs that 40% retail margin - at least - to keep the store open and things stocked on the shelves. And the brand needs something like "y" to do their work, but probably more because bean counters. By the time the brand is done with sales programs and incentives (remember, shelf space is a competitive game and if you want to sell bikes from the big three, the big three want you selling their accessories - wheels included - too, so the dealer has very finite capacity to stock and sell different wheel brands) the gap between MSRP and the dealer's cost could well be in excess of that 40% number. But there is often a discounting game which erases the dealer's extra margin. 

My somewhat more complicated point there being that if you want to be in the business of selling alloy wheels through a dealer channel, then selling component rims at a price that's going to work for independent wheel builders is a huge challenge. The component prices are so transparent. You as the consumer see that rims have an MSRP of $250 a set, and the hubs have an MSRP of $400 a set, and the spokes cost $120 for the lot of them, and so a built wheelset price of somewhere between kind of $770 and $820 makes sense. A comparable wheelset (almost always with a less attractive hub option) for $1300 on the dealer floor becomes a bit of a head scratcher.