Price increases

[Jackware]

That would appear to be nothing to do with Brexit, or is it? No doubt someone will know for sure.
How many bikes can you get in a 40' container?

No, it wasn't flagged as a Brexit issue specifically, just a result of market forces as mentioned in the second article posted by @R120

Using bike box dimensions found on Alibaba and an online container load calculator I get to a total of c192 bike boxes, so the cost has risen from approx $10 to $80 a bike, would be interesting to see the numbers for other factors driving the pricing.

 

[Doomanic]

The cost of the shipping container does not change with different contents. You are paying for a 40ft container with a maximum net weight of x tonnes. You can fill it with feathers or bricks, assuming you are booking the whole container the cost is the same. It gets complicated when you are booking space on a container. Then you'll pay whatever is the most expensive, be that weight or volume.

 

[steve_sordy]

..........A couple of years ago, he told me that in his market, the cost of a full container (shipping plus contents plus other costs) almost always works out the same whatever is in it. Apparently that’s because things like volume, weight, materials, cost of production (machinery and labour and materials and design) interact in such a way that it all come out about the same. Three years ago he told me it was about £40,000 all in...........

I understand your point about weight and volume etc. But the key phrase there is "in his market". A container full of Xmas crackers cannot be compared with a container full of jewellery or even bikes.

A mate of mine used to run all global freight for a large multi-national, mostly food products, both finished goods and raw materials. He used to say that the price of freight went up and down like a fiddler's elbow and it had little to do with the actual cost. It was more to do with the direction of travel, what China was importing or exporting that year and other stuff that you would never believe was a factor. One of the factors you would believe is the existence or otherwise of enough container ships for the volume that needed carrying. Given that the volume required to be carried varies on a more rapid cycle than the number of container ships vary, there is always an imbalance of some kind.

 

[Doomanic]

A container full of Xmas crackers cannot be compared with a container full of jewellery or even bikes.

Yes it can, see my reply above. If you are booking a whole container the contents is irrelevant.

 

[steve_sordy]

Yes it can, see my reply above. If you are booking a whole container the contents is irrelevant.

You are talking about container prices, but @Coolcmsc msc was referring to container plus contents.

 

[Coolcmsc]

You are talking about container prices, but @Coolcmsc msc was referring to container plus contents.

I’ll ask my cousin whats happening now — cool dude who’ll know, but not boast ?

 

[Doomanic]

the cost of a full container (shipping plus contents plus other costs) almost always works out the same whatever is in it. Apparently that’s because things like volume, weight, materials, cost of production (machinery and labour and materials and design) interact in such a way that it all come out about the same. Three years ago he told me it was about £40,000 all in.

I think you may have got your wires crossed somewhere down the line. A container full of 10 quid desk fans will not cost the same overall as a container full of 600 quid tablet PCs.

 

[R120]

Isn't there a weight of contents calc thrown in to the equation somewhere?

 

[Coolcmsc]

I think you may have got your wires crossed somewhere down the line. A container full of 10 quid desk fans will not cost the same overall as a container full of 600 quid tablet PCs.

Well, it was similar whatever was inside, which surprised me massively. But I’ve just been chatting with my cousin and you’re correct it has changed and I’ll put what he’s paying this month in a separate post in this yhread in a moment.

But there you’ll see, the price is still only double by having a relatively small number of bigger carefully boxed expensive items inside like computers versus tens of thousands of small things with much less packaging. To understand this apparent conundrum, you have to think about all the costs involved in the computer vs the little widgets. You see in China, a computer is nothing more than a bunch of little widgets inefficiently packed together that can be sold over here by the importer at an absurd premium.

Hope that helps ?

 

[Doomanic]

Isn't there a weight of contents calc thrown in to the equation somewhere?

If you are booking space, yes. If you have the whole container it's pretty much irrelevant. IME, which is admittedly a few years out of date, most stuff is shipped on the volumetric weight, rather than the actual weight, because that gives a higher number and therefore costs more. Unless you are shipping shredded scrap metal it's very unlikely that you will get anywhere near the maximum permitted mass of the container but the container still costs the same to ship and takes up the same amount of space.

 

[Doomanic]

Well, it was similar whatever was inside, which surprised me massively. But I’ve just been chatting with my cousin and you’re correct it has changed and I’ll put what he’s paying this month in a separate post in this yhread in a moment.

But there you’ll see, the price is still only double by having a relatively small number of bigger carefully boxed expensive items inside like computers versus tens of thousands of small things with much less packaging. To understand this apparent conundrum, you have to think about all the costs involved in the computer vs the little widgets. You see in China, a computer is nothing more than a bunch of little widgets inefficiently packed together that can be sold over here by the importer at an absurd premium.

Hope that helps ?

Oh yes, very useful. If only I'd had that information when I was organising the shipment of 6500 tablet computers from Taiwan for Gala Bingo. Or the 8000 for Mecca Bingo. Or the 1200 for Waitrose.[/sarcasm]

 

[Coolcmsc]

..... A couple of years ago, he told me that in his market, the cost of a full container (shipping plus contents plus other costs) almost always works out the same whatever is in it. Apparently that’s because things like volume, weight, materials, cost of production (machinery and labour and materials and design) interact in such a way that it all come out about the same. Three years ago he told me it was about £40,000 all in....

I’ve just had a chat with my cousin. It turns out that he also ran bike shops at one point....

Anyway, he’s right up to date with importing from China this month. This is what he’s paying:—

To buy a container and everything in it including all costs will now be roughly $50k to $100k right now and it was $40k previously. So, it only doubles, even now, if there things that sell for a lot over here inside the container. From a Chinese manufacturer’s perspective, everything is made of small things which they design, source the materials for and then build. Our perspective is entirely different and we place value on certain items over others that might well cost the same amount to build per cubic foot of container space.

He can’t remember how many ready-to-build bike boxes fit in a container — but took a guess at 1000 bike boxes in each.

He says he doesn’t know the Taiwanese prices per container now — so not necessarily the same formula at all compared to China at today’s prices.

But this is still not bike-specific data, although it does account for the whole Covid effect for other items such as water coolers and fans (mentioned above) and so forth.

Any better info out there?

 

[Doomanic]

To buy a container and everything in it including all costs will now be roughly $50k to $100k

Without knowing what's in it this is meaningless. There is no way that a container costs £x regardless of contents. The cost of shipping is not affected by the contents, but the value of the contents will vary wildly.

 

[Coolcmsc]

Without knowing what's in it this is meaningless. There is no way that a container costs £x regardless of contents. The cost of shipping is not affected by the contents, but the value of the contents will vary wildly.

OK, now we’re nearly on the same page. The final part of this is who’s doing the judging of the value of the items inside the container.

And this is China, not Taiwan btw.

With that, we’re saying the same thing - costs vary by 100% per whole container plus content. Cost per actual item here in the U.K. is an entirely different matter, for lots of reasons. Remember, when thinking of design costs, there’s the design of what it looks like here on your shelf and there’s the design of the smaller bits. As we know, bike design for most — not all — bikes are based on suggestions from Taiwanese designers who say, "This is the kind of thing we can do now; give us your tweaks on that and we’ll make it" That final tweeking brings performance, small but important ergonomic improvements and visual appeal for the market in question.

And we pay a big premium for those tweaks that the Taiwanese neither see nor are they interested in in our market (they are obviously very interested in the small details for local markets that they know first hand, which is, in part, how RobRides managed to build his CHEEB 1).

 

[Doomanic]

Same page? We're not even reading the same book! I now have no idea what you are trying to say.

 

[Coolcmsc]

Same page? We're not even reading the same book! I now have no idea what you are trying to say.

Fair enough and apologies mate. I’ll leave it there. No intention to confuse and I realise I haven’t been that clear.

I only pushed the Chinese angle mainly to see if anybody visits here with equivalent current shipping information for big-brand Taiwanese built bikes, not to argue about how Chinese manufacturers and shipping companies interact with western brand names. ?

 

[Gary]

Same page? We're not even reading the same book! I now have no idea what you are trying to say.

I'm just glad I spent all my free time wheelying my bike when growing up if you two still yapping on about this is an example of the sort of kids who spent their free time in the library.
?

 

[Zimmerframe]

Fair enough and apologies mate. I’ll leave it there. No intention to confuse and I realise I haven’t been that clear.

I only pushed the Chinese angle mainly to see if anybody visits here with equivalent current shipping information for big-brand Taiwanese built bikes, not to argue about how Chinese manufacturers and shipping companies interact with western brand names. ?

I think the confusion is arriving from you "bulking" a container with it's contents.

Whilst I'm not discounting that there might be a Chinese B&M Bargains where you buy a "container" of random crap .. which has gone up in price 120%

Doom's is talking about he cost of shipping a container . You pay to ship a container. It's upto you if you ship it empty or full of gold. The price is the same.

If you start randomly adding in price fluctuations and include the contents, it could mean anything. A container of Gold - yes a lot more expensive. A container of toilet waste, maybe the price has only gone up a bit for the contents, but the price will have gone up a lot for shipping the actual container.

Ships are stuck for months waiting to unload. Knowing this they travel slower so are even longer at sea (slightly off set by lower fuel costs). The longer ships are at sea, Effectively less ships are available. (1 ship 1 week, or 1 ship 4 weeks - you need 4 * as many ships) Containers are in more demand because so many empty ones are stuck at ports in England and places full of PPE because people bought them with virtually unlimited funds and have not thought about anything further - clogging ports up so there's no space. Systems which are normally finely balanced, don't take that much of a huge cockup to throw the whole thing out of kilter and it becomes exponential. A sort of infinite douche bag butterfly effect brought on by a mix of incompetent bafoons blended in with a perfect storm of a global virus.

Can I interest anyone in a discounted container of toilet waste ?

 

[Coolcmsc]

I think the confusion is arriving from you "bulking" a container with it's contents.

Whilst I'm not discounting that there might be a Chinese B&M Bargains where you buy a "container" of random crap .. which has gone up in price 120%

Doom's is talking about he cost of shipping a container . You pay to ship a container. It's upto you if you ship it empty or full of gold. The price is the same.

If you start randomly adding in price fluctuations and include the contents, it could mean anything. A container of Gold - yes a lot more expensive. A container of toilet waste, maybe the price has only gone up a bit for the contents, but the price will have gone up a lot for shipping the actual container.

Ships are stuck for months waiting to unload. Knowing this they travel slower so are even longer at sea (slightly off set by lower fuel costs). The longer ships are at sea, Effectively less ships are available. (1 ship 1 week, or 1 ship 4 weeks - you need 4 * as many ships) Containers are in more demand because so many empty ones are stuck at ports in England and places full of PPE because people bought them with virtually unlimited funds and have not thought about anything further - clogging ports up so there's no space. Systems which are normally finely balanced, don't take that much of a huge cockup to throw the whole thing out of kilter and it becomes exponential. A sort of infinite douche bag butterfly effect brought on by a mix of incompetent bafoons blended in with a perfect storm of a global virus.

Can I interest anyone in a discounted container of toilet waste ?

Sure, that’s all correct. And that’s why I made the mistake of suggesting Dom and I are nearly on the same page.

Its simply that what I’m reporting, which is a different aspect, is also true at the same time. And I’ve explained it badly — rather than being simply incorrect.

Last effort now, but really only to get the equivalent ifon for Taiwan which may be very different:—

Whats also correct is that if you look at the total cost of the containers loading onto the container ship, bizarre as it seems to me (us?), you’ll find that total cost of each, will be in the majority of cases be between $50k and $100k for the stuff we buy. So that‘s a figure that bundles together Dom’s shipping cost for the empty box plus your toilet paper or whatever and all the rest of it. Discussing stuff that’s not shipped this way is just a red herring...

So, the 50k-100k is not a single charge, but the sum of all the multitude of different charges. It just so happens, on balance, it works out that when the relevant factors are combined, the price works out to be in that range whatever the object.

The issue of ships being held up obviously increases the figures given for the cost of the container and will continue to increase prices, but it will do so equally for all containers.

The ensuing additional cost due to the container being held up in the way you clearly describe is obviously very significant and I have no doubt that will increase the cost of each container a lot!

But that increase will not be based on the difference in the content of the container. So, the general rule I’m setting out will still apply. It will just apply to bigger numbers due to the shipping holdups. We’ll see that in the price tag and the waiting times.


Right, I really will stop ??????????

 

[Norange]

At this point in time, shipping is pretty horrendous in the UK. You've had massive impact from Covid (factory closures, reduced capacity, massive forecast swings, general container flows). Then you've had people stockpiling before Brexit, some border issues after. Add Christmas, then Chinese New Year and it's carnage and getting pricier. CN to UK is nearly £11k now and only going one way in the near future.

For relatively high value, low volume items, you'll be seeing air freight costs rather than sea. Reckon this might have something to do with Coolcmsc's $50k-$100k container value. Some turnover is better than none Sadly, that equation won't work for a lot of goods from the far east. So you'll see cost increases, long delays and a lot of people on tight margins going out of business. Rubbish really.

 

[Mikerb]

@Norange covered most of the bases. This report adds a few factors. As you can see it is likely container ports in many parts of the world have suffered the same set of circumstances.

UK Port Congestion – what happened? – AK Logistics and Supply Chain

 

[EME]

No the Kenevo was 800 quid more in the UK than Europe. Nothing to do with internet margins or LBS etc. Spesh UK just decided to charge more here. Lord Gun was delivering Kenevo Experts to the UK for 5200 delivered.

I own a Kenevo expert.

Im sorry but you are missing the point.

There are loads of reasons/variables as to why the same product is priced differently in different markets. " Ripping Off' is way way down the list compared to distribution structures, market distribution agreements, local law, exchange rates, volume rebate commitments, tactical sales, local cost structures Commitment to Support as well as the simple Supply / Demand realities. . Ill go a step further and say you're being unfair to distribution channels and LBS in particular in not recognising those elements.

You only have to read the threads on here to see the' expectation' of just one element in that mix, The expectation of our LBS' to support what we believe to be 'warranty' failures. Small companies ( and the e- bike market is 'miniscule/niche' in the global marketplace of products & services generally ) just cant deliver the global management of price, delivery , service etc consistently). They rely on the local-iced market to do that as they haven't got the 'power' to dictate in the same way as , say, car manufacturers hence why you will see significant price variations. What you see as a 'commodity' just isnt.

I , for one, would never buy other than from a local shop. In fact, I would have put that before Brand & Model Choice 12 months ago. That isnt changing. I would not buy an e-bike that I had to travel more than, say, 50 kms for technical support and preferably one I could ride to within 10 minutes or so. A difference of £800 in £6000 as you saved wouldn't be enough for me in that instance. As you can see , I would understand why without the LBS owner ringing his hands with excuses ( and reasons he may not know). It wouldn't stop me pressing for the best deal possible and a choice of local shops in my radius of acceptability would be good.

All IMHO of course

 

[Waynemarlow]

Interesting in depth article on the world bike market. When they are prophesising 2022 for some deliveries then you can understand a bit of milking of the market by the manufacturers

Bike boom in a crisis? Long delivery times, limited availability and higher prices for 2021

Dream or nightmare? The coronavirus crisis has brought an unbelievable boom to the bike industry. Despite this, massive bankruptcies, sinking valuations of a number of manufacturers, long delivery times, servicing issues and higher prices all threaten. We explain what’s going on and clarify the...

ebike-mtb.com

 

[Norange]

OK then. You are wrong btw.

Because all the other bikes were the same price give or take. Except the Kenevo.

That doesn't preclude some of what he said, does it? Not too hard to imagine Spesh US offering big price breaks for volume. Seems more likely on Kenevo, which IIRC is a bit of an end of line design? So EU distribution gambles on higher volumes and thus can sell cheaper. Could also be a pricing error, or as you say, they've just decided to stiff everyone who wants a Kenevo.

 

[Norange]

Interesting in depth article on the world bike market. When they are prophesising 2022 for some deliveries then you can understand a bit of milking of the market by the manufacturers

Bike boom in a crisis? Long delivery times, limited availability and higher prices for 2021

Dream or nightmare? The coronavirus crisis has brought an unbelievable boom to the bike industry. Despite this, massive bankruptcies, sinking valuations of a number of manufacturers, long delivery times, servicing issues and higher prices all threaten. We explain what’s going on and clarify the...

ebike-mtb.com

Who wants a seat in that Budget meeting then! This is your target, this is current margin, but you're only going to be able to realise 70% of projected volume. Not hard to see how that might play out. Bit harsh to call it milking IMO, would prefer to see a sustainable business model, but there's not been much sustainable in the last 12 months (apart from a steady rise in alcoholism )

 

[Doomanic]

And domestic violence.

 

[Zimmerframe]

And domestic violence.

But hopefully not Doomestic Violence .... Except on the MTB trails !

 

[tomato paste]

Better late than never:

- Shipping a normal bike and an ebike will cost the same.
- Insurance costs are based on the monetary value of the goods insured, given normal & ebikes cost similar amounts, there will be a negligible difference.

Al Boneta's use of the term margin here is a bit confusing. Margin = profit, which should already account for costs. Why are you double counting costs?

Generally, bike brands are hiking prices because they recognize they have more market power after the pandemic began and can hike prices. Households have received additional cash from governments which can be used to make purchases. Savings rates are high, people can't spend on many goods and services, but they can buy a bike instead. Bike brands are taking advantage of this.

As a corollary, toilet paper, that sold out and which was shipped from China, hasn't changed price.

 

[Ffcol]

Better late than never:

View attachment 55355

- Shipping a normal bike and an ebike will cost the same.
- Insurance costs are based on the monetary value of the goods insured, given normal & ebikes cost similar amounts, there will be a negligible difference.

Al Boneta's use of the term margin here is a bit confusing. Margin = profit, which should already account for costs. Why are you double counting costs?

Generally, bike brands are hiking prices because they recognize they have more market power after the pandemic began and can hike prices. Households have received additional cash from governments which can be used to make purchases. Savings rates are high, people can't spend on many goods and services, but they can buy a bike instead. Bike brands are taking advantage of this.

As a corollary, toilet paper, that sold out and which was shipped from China, hasn't changed price.

I've been looking for a bike the past few weeks. Could have pulled the trigger on a couple but did not. I'm still trying to get a feel for things as I have not purchased a bike in a long time. The prices surprised my and also all of the financing info I see on these websites. When we are financing bikes it may be a good time to stand back and look at things. I keep telling myself why spend this much money on something you dont truly need and has a good chance of breaking and the warranty process could be painful and long.

 

[tomato paste]

More demand means they can ask a higher price - whoever they is. Supply and demand; "the price of a good tends to increase when the supply of that good decreases (making it more rare) or when the demand for that good increases (making the good more sought after)". Didn't we see this with toilet paper not so long ago? Or hand sanitizer? Or the ingredients to make hand sanitizer?

Welcome to the free economy.

I want to add two things here, because there's no better place than an emtb forum to discuss economic policy.

First, the concept of a "Free Economy" or "Free Market" is a misnomer: all markets exist within a legal system, and therefore a government, which defines laws and institutions governing exchange. When the legal system is removed, such as in England in 400AD after the collapse and withdrawal of Rome, markets and money-based exchange disappear. This is because in order to conduct exchange, parties must be able to create enforceable contracts, but without a legal system and government to enforce laws, that's impossible. So next time someone says to you something like "That's the free market for you", you can respond "There is no such thing as a 'Free Market'".

Second, the concept of price being determined by the intersection of supply and demand is false: as we saw with toilet paper and hand sanitizer during the crisis, prices did not increase. Instead, you saw a shortage which incurred a log of orders that was quickly alleviated by increasing output. Generally, there is no law-like relationship between price and supply or demand, contrary to what you likely learned in the economics course you took. So next time someone says to you "Well [demand, supply] has [increased, decreased]" you can respond to them by saying: "Agent based models of true monetary exchanged have demonstrated that prices are not determined by a law-like relationship between supply and demand."

In case you needed ammo to sound nerdy at your next gathering with the in-laws discussing Brexit.