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Simplifying parts (or: get a killer kit for a killer price)

Gerard Vroomen - 18-Feb-2014
In my previous blog I wrote about how we use "relentless simplicity" as our guiding principle. With only two people running the company, it's the key to getting things done without going crazy. And therefore, we regularly look at which parts of the company take a lot of time, and what we can do about it.

Some big time sucks are unavoidable; without product engineering, we don't have a company. But one of the biggest drains the past year have been the component kits. The ordering, coordination, warehousing and shipping of these kits takes more of Andy's time than the selling of our frames. So the simple question that arose was: can we not stop offering component kits?

The direct financial impact would be negligible, since we don't really make any money on them. The only reason to offer kits in the first place is that it gives people an easy way to buy a complete bike, which obviously includes our frame on which we do make money. However, as time went on, we noticed that it really isn't so hard to sell just the frame.

Our dealers can buy the components for not much more money than we can, and sometimes even for less (such is the messy way in which Shimano and SRAM are distributed). Also, if they take the parts out of their inventory, they can easily substitute a few parts. Most importantly, many of our customers don't just want to change a few parts, they want to customize everything. That means that a component kit doesn't bring any benefit at all.

The exception are the limited edition kits. We love doing these because it's fun to mess around with fancy componentry. And although they are also a lot of work, that work is concentrated in a short period of time. The volume is also so small that they don't take a lot of space - mentally or physically. Often we also make a little bit of money on it because the promotional value of our limited editions results in some discounts. Mind you, it's nowhere near a margin to really make an impact, but just about enough to justify the effort.

For the past year, these component kits have merely been a nuisance (easy for me to say, with Andy doing all that work). But going forward, it will become a real hurdle. As we increase the number of frame models from one to two or three, the logistics and sales of those will take more time. This is time we will need to recoup elsewhere.

And so we have decided to stop with the unlimited kit. Not because it isn't a great spec (it is), not because it isn't a great value (it is), but because we need to spend our time where it makes a difference. And whether you build the frame up yourself or do it with your local retailer, you can find these parts all over the globe without much trouble. Again, the only exceptions are some of the parts we use on the limited edition builds, but those we'll keep doing.

What does this mean for you? Well, in the long run likely very little as we will continue to showcase specs to give you inspiration (just like your fellow customers are doing in the Owner's Showcase). But right now, it means that we are clearing out the last few unlimited kits at a big discount. You see, once the decision is made, it's better to rip the bandage off with one fell swoop, rather than let it simmer on in the dark corners of our warehouse.

This means that you can buy a OPEN 1.0 or 1.1 frame as always, but for a limited time combine it with a killer kit for a killer price. At the same time you'd help take a big weight off our backs. Because you can be sure we'll pop open a bottle of champagne when the last kit has left the warehouse and we can concentrate 100% on getting you those new frame models.

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