dbakl

Seems to be from a marketing site:



How Rivendell created a million dollar empire by selling just 600 bikes

At first glance, you might think that Rivendell bikes are 20 years old. They are nothing like the modern bicycles. Instead of titanium and carbon fiber, they are made out of steel. Rather than electronic gear shifters, they still have manual derailleurs. And yet a cycling enthusiast goes crazy when he sees one of these bikes. In fact, each one of these bikes sells for $1,300!

The Rivendell bikes are manually made. But that still doesn’t justify spending $1,300 over it when other manual bikes are available at a cheaper price. And to buy one, you have to fill five lengthy forms! So why would any one pay $1,300 for a bike that isn’t as good as other modern ones? Because the “Rivendell bicycle works” have perfected the art of scarcity. They cap the total number of bikes supplied. They don’t sell more than 600 bikes a year.

But Rivendell bicycle works have not only decreased supply. They have also increased demand. They publish a quarterly magazine called the “Rivendell Reader” that contains everything from medical advice for cyclists to essays on good riding. The subscription costs $20 a year. And they have more than 6,200 subscribers. Imagine having 6,200 subscribers who know that there are only 600 bikes to be sold? The competition to get a new Rivendell bike is intense!

But that’s not all. Rivendell bike also sends a catalog that sells bike parts and other Rivendell accessories. Everything from rain capes and woolen pants to tools and handlebars. As people can’t buy the bikes, they buy the accessories instead. In fact, on an average, each subscriber spends 260$ per year! And they all are walking advertising machines for Rivendell. They showcase the products and accessories increasing the demand!


Action summary:

Decrease the supply. Increase the demand. And then you can increase the prices. You can make less number of products but still earn higher profits.

Spread the word of your company by selling accessories. Give people a chance to buy your company shirts instead of Nike ones. Make your accessories cool so that people would buy it and more importantly: show it to their friends.

Build loyalty by publishing a newsletter. Send useful information to customers from time to time and they will end up buying more.

huerro

It looks to be an assignment from a very introductory business or economics course by someone who knows nothing about bicycles. Where did you find it?

They got one things right though..."a cycling enthusiast goes crazy when he sees one of these bikes." Just type the word in the road forum and watch the response.

SoreFeet

Price a Rivendell...Or get a Vintage Miyata and pimp it out with 21st components for a fraction of the cost.

dbakl

Came up in a search when I was trying to find the Rivendell site:

https://www.biztactics.com/bullet-rivendell-bikes.php

maureenkh

Hmmm, where can I find that $1300 Rivendell? Even the Bleirot costs more than that once you add parts to it.
Though, I do plead guilty to buying accessories since I can't afford the bikes.

Maureen

FlatTop

I'm unimpressed with the article, but his blog's not bad. No stilted language, some pretty good points made.

harrier

Funny. I rebuilt a 1982 Miyata with some Rivendell/Velo Orange parts and my brother bought a Homer Hilsen from Riv. His bike was comfortable the first minute he bought it. Mine took 6 months of painful trial and error. He paid $3,000, I am probably in for $1,600.

Now they are indistinguishable. I cannot express how grateful I am that Rivendell exists. Neither of us would have as great bikes if they didn't.

Reynolds 

A lot of manual bikes with manual derailleurs around here.

robatsu

More than one road to Rome. Me, although I agree w/much of the Riv philosophy, no way would I could justify throwing down for one of their bikes. There are too many good old frames out there much cheaper, even if you factor in a repaint/refurbishment. And these days, I can build something up that is right the first time, although that wasn't always the case. OTOH, my sister, who recently finished her cross-country ride on my doorstep, essentially knows doodly about bikes/frames, especially old, used ones, but wanted a bulletproof steel bike for her ride. In her case, it made sense to go with a Riv Atlantis, as starting from a baseline of little mechanical knowledge/experience, she would probably spend a lot more time than it would be worth learning about what sort of old frame to buy, what components to hang on it and so forth.

She apparently had to lean on them pretty hard to get them to install brifters - she had to fend off a pretty concerted hard sell on barcons, which she hates.

There is a funny little paradox about the Riv site and Reader pub - they have to put out enough information to convince many of why their products are desirable and justify the cost. But a lot of that knowledge, once gained, is pretty useful in putting together a Riv (somewhat) equivalent for a lot less. But enough people don't need the hassle, which ends up being a fairly critical component of their business plan, along with warranty service, consistent ready availability, etc, that you don't get with an old bike or old parts - there is a lot of serendipity there.

Like others, even though I probably won't ever buy one of their bikes, I'm absolutely delighted that Riv and Velo Orange are out there, spreading the word and creating enough critical mass to keep a lot of old school components in production and available so we don't have to rely on ever dwindling supplies of NOS parts.

KrisPistofferson

I had no idea Grant Peterson was into capitalism.

onewheeldrive

"Electronic gear shifters"???

hxzero

This person obviously does not really know very much about bicycles.

miamijim

Yes, there is such a thing. They've been a round for a long time.

I'll betcha the article fairly accurate,

Jim

bbattle

Niche Marketing 101. aka Boutique Marketing.

Lamplight

$1,600? I did a similar thing with my Univega and I still may not have topped $1,000, even with Honjo fenders and a Berthoud bag. My brother has spent about $1600 building up his Surly LHT into a "poor man's" Rivendell, though.

bbattle

I turned a Raleigh Sprite into an $800 fixie that GP would be proud of.

Sirrus Rider

I think he was using a little dramatic license to get his point across that rivendell is "Old School" in its philosophy compared to mass production bikes.

Longfemur

I don't agree with all of the Rivendell stuff, but...

Lots of people on here eagerly spend upwards of $3000 for any of the current "you too can be a racer" bikes that are outdated the minute the newer model comes out every year. I don't see why a person who wants a durable, timeless-design bike like a Rivendell couldn't spend just as much.

I don't see too many of the plastic bike lovers posting on here that they could have gotten an old one instead for cheaper. Bikes are no different than any other consumer good. You can always get something used for cheaper if that's what you want.

John E

Used Capo Modell Campagnolo at yard sale -- $20
Professional two-tone paint job -- $500
Joy of riding a true classic -- priceless

MKahrl

There have been articles in the Rivendell Reader on how to adapt older bikes to suit the needs of the current owners, usually involving getting the handlebars positioned where they want them and giving them a useful gear range. There have also been articles about what to look for in an older frame to make it a good candidate for 650B conversion. Grant encourages people to build up bikes using whatever ideas they might find useful. He's even up front telling us they aren't even his ideas and he gives credit where it is due.

robatsu

That is sort of my point - at the highest stage of adherence to Riv's philosophy of old school practicality, durability, self-sufficiency, resistance to marketing hype, and economy, one doesn't buy any of their stuff, just goes out and finds serviceable and cheap old school bike stuff except where Riv clearly is a price beater or has unobtainium.

I'm writing somewhat in jest - I'm a big Riv fan more or less and, accordingly, at my high level of enlightenment, I agree with them so much (except for those darned high handlebars...), I almost never buy their stuff. But sometimes you gotta wonder whether that isn't one of Grant's big aims, since it seems like they certainly don't take the easy way all the time.

It's been written about Harvard, that with their huge mega billions endowment, the university has become, in effect, a marketing arm for a hedge fund. Sometimes I wonder whether Rivendell is similarly just the marketing arm of a bicycling philosophy (Grant's).

BengeBoy 

I've learned a lot from Grant's writing. I've also learned a lot form this forum about different ways to build up a "poor man's Rivendell."

My near-mint condition Univega (acquisition cost $175; total all-in cost to date with some modest upgrades $400) is on its way there. I am about $200 or $300 away from getting it to be exactly what I want, and I may sell my 2006 Trek 520 in order to complete the transition....

Among other things, Rivendell has reawakened in me an appreciation for Japanese bikes of the 80's, which are terrific bargains on the used-bike market, IMHO.

Used

nlerner

Yeah, except Harvard is reaping revenue from that hedge fun, and I'm not sure how much Rivendell profits from its marketing activities.

But I do agree that the Rivendell "brand" does sure sell; an eBay search for "rivendell" turns up all sorts of sellers trying to market by association.

Neal

harrier

$100 for the frame
$600 for the repaint
$600 for new wheels and crankset
$100 for Brooks Saddle
$100 for Nitto rack
$45 for Nitto bars
$50 for Nitto stem

Did it "need" to be $1,600? No way. I could have ridden the $150 bike all day. But it was a little small (25" frame for my 6'3" body). I hated the old seat. The old SR Randonneur bars are too narrow (I wear a 46" jacket). The reach was too low so I got a Technomic Deluxe Stem.

The two biggest costs, repainting and new wheels, were because I wanted them. But the point was that my bike is now an equivalent (new condition, great wheels, great fit), not just an old bike with similar geometry.

And I suppose I should add another $100+ for the innumerable rolls of handlebar tape and brake/derailleur cables I went through to get the look and configuration I wanted.

robatsu

Well, I don't know Grant, but have followed Riv from its early days, used to subscribe to the Reader or just their catalog, can't remember, I think it was free back then. Anyhow, my uninformed impression is that this sort of piggybacking may give Mr. Petersen a whole lot more satisfaction than making a lot of money, that maybe he is the sort who would rather be right than rich.