I wanted to follow up my earlier post with a few more details as to why I made my Atherton Bikes (very speculative) prediction. Again, please take my thoughts with a giant grain of salt. This was a total hare brained speculative Monday morning musing I probably should have kept to myself.
In any event, here is why I feel really any brand like AB has a challenging future ahead.
All performance continues to asymptote. Paying more for a product is getting the bike rider less and less in the way of absolute performance. While I know Atherton has a some secret sauce on the sizing and fitment side of things, I personally feel their semi-custom fit isn't enough to really tip the scales in their favor on the rider experience front, and the underlying performance while good, not an order of magnitude better than I'd likely find in a number of other brands. What's worse, is these other brands can often be found for (significantly) less money supported by a large (well established) dealer network. Now, of course, there will always be room for niche players in the market, like Frameworks, but I have a sneaking suspicion Atherton has another big overhang (see next point) that the companies like Frameworks do not .
Cost structure is too rich. This is really what underpins wrote what I wrote. While there is nothing inherently bad about the approach Atherton Bikes is taking (in fact, I like a lot of it), what seems hard to palate is how much money the brand has spent on manufacturing and marketing against the number of units they are likely selling (and will sell in the future). When you add up all the capex + the yearly race budget, marketing budget, operations, SG&A etc I don't see it being a default alive operation (aka, they are making more than they spend). Moreover, I don't see how they turn that boat around without some massive changes.
If they are running in the black, kudos, and cool company with a novel approach. If they aren't, they'll need to cut a lot (lot) to continue to operate, being its likely very challenging for a business like that to raise any additional capital in the new year. At a point, somebody might say "the juice isn't worth the squeeze", and that'll be that.
I wanted to follow up my earlier post with a few more details as to why I made my Atherton Bikes (very speculative) prediction. Again, please...
I wanted to follow up my earlier post with a few more details as to why I made my Atherton Bikes (very speculative) prediction. Again, please take my thoughts with a giant grain of salt. This was a total hare brained speculative Monday morning musing I probably should have kept to myself.
In any event, here is why I feel really any brand like AB has a challenging future ahead.
All performance continues to asymptote. Paying more for a product is getting the bike rider less and less in the way of absolute performance. While I know Atherton has a some secret sauce on the sizing and fitment side of things, I personally feel their semi-custom fit isn't enough to really tip the scales in their favor on the rider experience front, and the underlying performance while good, not an order of magnitude better than I'd likely find in a number of other brands. What's worse, is these other brands can often be found for (significantly) less money supported by a large (well established) dealer network. Now, of course, there will always be room for niche players in the market, like Frameworks, but I have a sneaking suspicion Atherton has another big overhang (see next point) that the companies like Frameworks do not .
Cost structure is too rich. This is really what underpins wrote what I wrote. While there is nothing inherently bad about the approach Atherton Bikes is taking (in fact, I like a lot of it), what seems hard to palate is how much money the brand has spent on manufacturing and marketing against the number of units they are likely selling (and will sell in the future). When you add up all the capex + the yearly race budget, marketing budget, operations, SG&A etc I don't see it being a default alive operation (aka, they are making more than they spend). Moreover, I don't see how they turn that boat around without some massive changes.
If they are running in the black, kudos, and cool company with a novel approach. If they aren't, they'll need to cut a lot (lot) to continue to operate, being its likely very challenging for a business like that to raise any additional capital in the new year. At a point, somebody might say "the juice isn't worth the squeeze", and that'll be that.
I’d like to say you’re wrong, but it’s hard to argue with this analysis. I was not surprised to see the Kolb announcement today. I hope they’re not making the mistake of trimming at the margins (remove one expensive rider) when they need to cut fast & deep (the entire race team plus whatever else needs to be done). I’ve heard rumors of government subsidies so perhaps that’s giving them a lifeline.
For those that want to dive a little deeper, the default alive essay from PG is a classic…
I wanted to follow up my earlier post with a few more details as to why I made my Atherton Bikes (very speculative) prediction. Again, please...
I wanted to follow up my earlier post with a few more details as to why I made my Atherton Bikes (very speculative) prediction. Again, please take my thoughts with a giant grain of salt. This was a total hare brained speculative Monday morning musing I probably should have kept to myself.
In any event, here is why I feel really any brand like AB has a challenging future ahead.
All performance continues to asymptote. Paying more for a product is getting the bike rider less and less in the way of absolute performance. While I know Atherton has a some secret sauce on the sizing and fitment side of things, I personally feel their semi-custom fit isn't enough to really tip the scales in their favor on the rider experience front, and the underlying performance while good, not an order of magnitude better than I'd likely find in a number of other brands. What's worse, is these other brands can often be found for (significantly) less money supported by a large (well established) dealer network. Now, of course, there will always be room for niche players in the market, like Frameworks, but I have a sneaking suspicion Atherton has another big overhang (see next point) that the companies like Frameworks do not .
Cost structure is too rich. This is really what underpins wrote what I wrote. While there is nothing inherently bad about the approach Atherton Bikes is taking (in fact, I like a lot of it), what seems hard to palate is how much money the brand has spent on manufacturing and marketing against the number of units they are likely selling (and will sell in the future). When you add up all the capex + the yearly race budget, marketing budget, operations, SG&A etc I don't see it being a default alive operation (aka, they are making more than they spend). Moreover, I don't see how they turn that boat around without some massive changes.
If they are running in the black, kudos, and cool company with a novel approach. If they aren't, they'll need to cut a lot (lot) to continue to operate, being its likely very challenging for a business like that to raise any additional capital in the new year. At a point, somebody might say "the juice isn't worth the squeeze", and that'll be that.
The biggest issue I see with Atherton is that let's say they do get really popular and sell heaps.
Great, start 3D printing lots of lugs and making lots of frames. The unit costs of the frames are the same if they make 20 or 2000. Sure some things may come down in price for them to bulk purchase, purchase more tubes at once, more adhesive, maybe more SRAM parts, but the actual frames don't get cheaper.
They can pay off 3D printing machines faster as they'll have more revenue, but they don't generate the economies of scale of a traditional production line when they scale up. Marginal profit is pretty flat for them.
Which means they have to have systems to run the manufacturing super efficiently from low volume to high volume anyway. And often what happens in small factories is an influx of orders can't be processed more efficiently, it just creates long lead times and potential lost sales because of it.
I can assure you there's less Capex with their method of manufacturing than the traditional carbon molding methods. Same goes for their alloy frames vs. traditional construction methods. Their unit costs might be a touch higher and might not scale as easily or cost effectively but my assumption is they don't sell enough frames to be successful the traditional way with amortizing tooling costs so it seems they are taking the right approach.
Capex can higher on alu projects than carbon ones, but the volumes with alloy make it worthwhile to turn a profit.
For all small and medium brands today the most serious risk to their business is weathering the heavy discounting from the largest brands. Until that situation resolves itself (my prediction is it will take a few years) then it's best to ensure your operation is lean in order to reflect the tighter margins.
Atherton Bikes have an enviable position in that they offer a unique product that is also less labour intensive, have a strong marketing presence, and, I assume, can supply frames with a shorter leadtime than their competitors. They still face many of the same problems assemblers do with managing their suppliers but frames are always the choke point.
Isn't there one other factor for Atherton though? I could've sworn that they also get a significant amount of help from the Welsh government. A quick look says yes but that may have already been fully accounted for and now all of the above applies post Welsh support. I'm honestly not sure.
Either way, very interesting analysis and well explained.
Definitely agree on making some speculations at this point! :)About your Atherton Bikes statement: I am able to go to checkout if I have chosen a...
Definitely agree on making some speculations at this point!
About your Atherton Bikes statement: I am able to go to checkout if I have chosen a fitting frame size. Maybe what you are experiencing is a US thing?
Regarding the rumor mill for 2025: Still heard that BMC will stop the Scor "project"
Really hope BMC doesn't pull the plug on Scor. All bikes get great reviews and one single frame mold has been feeding two different, mx-compatible bikes for a few years now already. Cost structure seems quite low for the quality of what they deliver.
I wanted to follow up my earlier post with a few more details as to why I made my Atherton Bikes (very speculative) prediction. Again, please...
I wanted to follow up my earlier post with a few more details as to why I made my Atherton Bikes (very speculative) prediction. Again, please take my thoughts with a giant grain of salt. This was a total hare brained speculative Monday morning musing I probably should have kept to myself.
In any event, here is why I feel really any brand like AB has a challenging future ahead.
All performance continues to asymptote. Paying more for a product is getting the bike rider less and less in the way of absolute performance. While I know Atherton has a some secret sauce on the sizing and fitment side of things, I personally feel their semi-custom fit isn't enough to really tip the scales in their favor on the rider experience front, and the underlying performance while good, not an order of magnitude better than I'd likely find in a number of other brands. What's worse, is these other brands can often be found for (significantly) less money supported by a large (well established) dealer network. Now, of course, there will always be room for niche players in the market, like Frameworks, but I have a sneaking suspicion Atherton has another big overhang (see next point) that the companies like Frameworks do not .
Cost structure is too rich. This is really what underpins wrote what I wrote. While there is nothing inherently bad about the approach Atherton Bikes is taking (in fact, I like a lot of it), what seems hard to palate is how much money the brand has spent on manufacturing and marketing against the number of units they are likely selling (and will sell in the future). When you add up all the capex + the yearly race budget, marketing budget, operations, SG&A etc I don't see it being a default alive operation (aka, they are making more than they spend). Moreover, I don't see how they turn that boat around without some massive changes.
If they are running in the black, kudos, and cool company with a novel approach. If they aren't, they'll need to cut a lot (lot) to continue to operate, being its likely very challenging for a business like that to raise any additional capital in the new year. At a point, somebody might say "the juice isn't worth the squeeze", and that'll be that.
I think one thing you ignore is the "cool" factor. As a person that does not want to buy another chinese/asian frame, what are your options in the DH space? Atherton, Nicolai, Foes, else? There are some smaller builders, but they are IMO not on the level of engineering and production as the others mentioned. I bet Atherton looked/are looking at the "bespoke" road bike market and bet on that DH riders are now well-earning folks in their 40-50-ies and want something special, tailor-made, exclusive.
For me the best example of losing your uniqueness as a brand is Intense. Previously they had the race heritage and "made in the USA" brand recognition that justified their prices. There was rarely an argument why you would buy an Intense over a Santa Cruz, which were pretty similar. After Intense moved to offshore production, they basically have abandoned their brand's core uniqueness and now need to compete on price alone. If you are someone following racing, you would now rather buy a Santa Cruz because of their marketing efforts (=race team) instead of an Intense. So Intense bikes now have to be the "cheaper" alternative to SC and not the other way around as it used to be. As a brand, this is not the spot you want to be in IMO.
I wanted to follow up my earlier post with a few more details as to why I made my Atherton Bikes (very speculative) prediction. Again, please...
I wanted to follow up my earlier post with a few more details as to why I made my Atherton Bikes (very speculative) prediction. Again, please take my thoughts with a giant grain of salt. This was a total hare brained speculative Monday morning musing I probably should have kept to myself.
In any event, here is why I feel really any brand like AB has a challenging future ahead.
All performance continues to asymptote. Paying more for a product is getting the bike rider less and less in the way of absolute performance. While I know Atherton has a some secret sauce on the sizing and fitment side of things, I personally feel their semi-custom fit isn't enough to really tip the scales in their favor on the rider experience front, and the underlying performance while good, not an order of magnitude better than I'd likely find in a number of other brands. What's worse, is these other brands can often be found for (significantly) less money supported by a large (well established) dealer network. Now, of course, there will always be room for niche players in the market, like Frameworks, but I have a sneaking suspicion Atherton has another big overhang (see next point) that the companies like Frameworks do not .
Cost structure is too rich. This is really what underpins wrote what I wrote. While there is nothing inherently bad about the approach Atherton Bikes is taking (in fact, I like a lot of it), what seems hard to palate is how much money the brand has spent on manufacturing and marketing against the number of units they are likely selling (and will sell in the future). When you add up all the capex + the yearly race budget, marketing budget, operations, SG&A etc I don't see it being a default alive operation (aka, they are making more than they spend). Moreover, I don't see how they turn that boat around without some massive changes.
If they are running in the black, kudos, and cool company with a novel approach. If they aren't, they'll need to cut a lot (lot) to continue to operate, being its likely very challenging for a business like that to raise any additional capital in the new year. At a point, somebody might say "the juice isn't worth the squeeze", and that'll be that.
I think one thing you ignore is the "cool" factor. As a person that does not want to buy another chinese/asian frame, what are your options...
I think one thing you ignore is the "cool" factor. As a person that does not want to buy another chinese/asian frame, what are your options in the DH space? Atherton, Nicolai, Foes, else? There are some smaller builders, but they are IMO not on the level of engineering and production as the others mentioned. I bet Atherton looked/are looking at the "bespoke" road bike market and bet on that DH riders are now well-earning folks in their 40-50-ies and want something special, tailor-made, exclusive.
For me the best example of losing your uniqueness as a brand is Intense. Previously they had the race heritage and "made in the USA" brand recognition that justified their prices. There was rarely an argument why you would buy an Intense over a Santa Cruz, which were pretty similar. After Intense moved to offshore production, they basically have abandoned their brand's core uniqueness and now need to compete on price alone. If you are someone following racing, you would now rather buy a Santa Cruz because of their marketing efforts (=race team) instead of an Intense. So Intense bikes now have to be the "cheaper" alternative to SC and not the other way around as it used to be. As a brand, this is not the spot you want to be in IMO.
I agree with this sentiment, except for the DH riders are well earning folks in their 40-50s and want high end products.
In my experience they're are extremely from 40-50 year olds hurtly down mountains on race ready DH rigs.
Those people are much more likely to get long travel e-bikes to go around the alps.
I came pretty close to buying an A150 last year and I certaintly fit the described demographic. For me it'd be the kind of bike I'd get for a signiciant birthday or similar. However, at least for me in Canada, by the time you take into account ForEX, shipping and import taxes the frame alone cost the same as a complete high end carbon bike so the market has to be limited. But then again they don't appear to be aiming for anything else.
I can assure you there's less Capex with their method of manufacturing than the traditional carbon molding methods. Same goes for their alloy frames vs. traditional...
I can assure you there's less Capex with their method of manufacturing than the traditional carbon molding methods. Same goes for their alloy frames vs. traditional construction methods. Their unit costs might be a touch higher and might not scale as easily or cost effectively but my assumption is they don't sell enough frames to be successful the traditional way with amortizing tooling costs so it seems they are taking the right approach.
Capex can higher on alu projects than carbon ones, but the volumes with alloy make it worthwhile to turn a profit.
For all small and medium brands today the most serious risk to their business is weathering the heavy discounting from the largest brands. Until that situation resolves itself (my prediction is it will take a few years) then it's best to ensure your operation is lean in order to reflect the tighter margins.
Atherton Bikes have an enviable position in that they offer a unique product that is also less labour intensive, have a strong marketing presence, and, I assume, can supply frames with a shorter leadtime than their competitors. They still face many of the same problems assemblers do with managing their suppliers but frames are always the choke point.
I hear you, and again, I like a lot of what they’re doing. I want to be clear that when I’m being critical of a company, it’s not meant personally—it’s just an assessment of what I see, and requires a whole bunch of assumptions to be made (which might be wrong). Much like the original post I made in this thread about GG, I really do tip my cap to anyone who takes risks and makes things happen, but I’m also going to analyze where any company might’ve gone wrong or what I see as questionable decisions. This is largely the point of this thread, and hopefully a way we can all learn and grow as people interested in bikes, business and company building in the future.
I actually really like Atherton Bikes’ approach in a number of ways. Their bikes clearly rip, they’ve got a novel manufacturing method, the aesthetic is amazing, they’ve built real brand equity, and they’re just flat-out sexy as hell. All of those things can be true, but the underlying company can still fail—this thread alone has plenty of examples of that happening in our industry.
So, with that in mind, I’m going to unpack a little more and offer a counter perspective to what you’re suggesting:
Capex and Costs: There’s a big difference from a capex perspective when you’re just paying for molds vs. footing the bill for the entire manufacturing process (even if that process might be cheaper—though I’m not convinced Atherton Bikes can actually manufacture at lower prices). Correct me if I’m wrong, but if I go to Asia to have my carbon frame manufactured, I pay for the tooling (molds/setup) and then a unit cost per frame (which varies based on volume). That might not be “cheap,” but it’s certainly less capital-intensive than in-housing the entire manufacturing process.
Remember, capital expenditures (capex) and costs (expenses) are different on a financial statement and mean different things. A frame can cost less to make but still require high capex—or vice versa. In Atherton’s case, I’m suggesting they needed significantly higher capex to get their operation up and running, and at lower volume levels, their fixed costs (factory overhead, lease, staff, etc.) are going to be high. Plus, paying wages in the UK is a significant burden relative to Asia (probably around 3x higher).
Manufacturing Method & Unit Costs: I’ve priced out additive manufacturing of titanium for various projects, and it’s not cheap. Even if I owned the tooling, I’d still be skeptical that it’s a more cost-effective way to produce things. It’s cool technology, but I doubt it provides a massive cost advantage. In fact, one big reason you go that route is because it’s cheaper from a capex standpoint—but it tends to be higher in ongoing costs. And with Atherton’s alloy bikes, they’re CNC’ing every lug, which can’t be cheap either, especially when you compare their bikes to other alloy bikes.
So, I’m not convinced that Atherton is magically able to bring their bikes to market at a significantly lower cost. Add in a per-unit fee to license the DW link (most likely) and the fact that UK manufacturing is generally pricier than Asia, and it’s easy to see how costs could stack up.
SG&A and Austerity: The more units you sell, the more money you make, and the more you can spread out your SG&A (selling, general, and administrative expenses). That’s why it can be easier to run a large company than a small one—you’re not wearing as many hats, and you can afford the extra “niceties.”
I find it very challenging for a smaller brand to justify fully supporting a WC team unless they’re at the scale of Trek or Specialized, especially on the men’s side. Juniors are a bit different, or you can pull in outside support like Frameworks did, but I’m not sure how Atherton does it. From where I’m sitting, the company doesn’t appear to operate with a high level of austerity (though I could be totally wrong). If they do have that scrappy vibe—salaried employees working crazy hours, wearing multiple hats—then I’d say they have a decent shot at success. But if their cost structure is built more like a big bike company’s, yet they’re not moving that level of volume, then it doesn’t matter how cool or desirable their bikes are. They’ll be burning more cash than they’re making, and that boat will eventually sink.
That’s really my main point. Anyway, time will tell. Cheers, y’all.
You're combining several topics here, like manufacturing in Asia vs. domestically. Apples to apples, cnc lug and round tube frame construction is less expensive than both hand-laid carbon frames or welded, hydroformed, alloy frames. The former, per frame project, will have a lower Capex up to a certain volume, then the latter will gain the advantage as volumes increase.
There are many unknowns for me: I don't have knowledge of what additive manufacturing costs are, and I don't know how many units they are moving. My assumptions is that they are still comfortably in the low volume zone, with enough margin in their product that they can sustain whatever size operation they currently have. If not, moving your operations to Asia, Spain/Portugal, Poland, etc isn't the only solution.
On the marketing side, there's more than one way to fund a team and relying on operational performance is just one of them. For all we know the cost structure of the team can be a completely separate entity, like Specialized Gravity.
First let me say I am an Atherton fanboy, I own two of them and they are a fantastic bike so some of this might be biased.
Two other comments to follow up on first. @SteveClimber, yes I fall into that 40-50 demographic but no I don’t get enough time hurtling down mountains or own a DH rig. @sweaman22, yes getting a Atherton landed to you in Canada is expensive, and has only gotten significantly more expensive from the first one I bought to the second one to now.
I think we are mixing two business into one in this discussion and I’m not sure that is fair or accurate to lump them together. There is the bike business and the WC race team business. As talked about in other forums there are many, if not most of the WC teams that are not actually the bike brand themselves, and they seem to be able to operate in the black or at least the longevity of these teams would at least have you believe they are default alive. Heavily funded through sponsorship deals and free frames is likely how Atherton makes the WC team work. The fact that Kolb is moving on to likely a bigger pay cheque is an indication that the WC race team is operating within a specific budget that couldn’t afford to keep him around. Much the same as I’m guessing Frameworks has zero chance of keeping Asa around in 2026. I’d be willing to bet that the WC race team is a complete separate entity from the bike brand itself. As for the bike brand, saying this as a fanboy, saying this as someone who works in middle management of manufacturing, within a niche industry, with manufacturing in both high and low-cost regions, with a decent amount of experience on tooled and 3D printed parts, I don’t know how the bike business does it. The CapEx was definitely high, Renishaw machines aren’t cheap but I’m sure the Welsh government had a lot of incentives, specifically SR&ED, that could have greatly lowered that. The move into the new facility couldn’t have been cheap, but if I remember BK is their neighbour and I think he talked about incentives that he got for moving there from the government, I assume Atherton as a crown jewel in the area would also be getting incentives. The manual labour costs for building a frame for sure are high. Referencing back to an email from Atherton there are 11 steps in building a frame and only three of them have more machine time then operator time (printing the lugs, heat treating, and bonding the frame), though all three of them still have significant operator time. I must assume that Atherton has figured out the economics that ensure that at the volume they are selling supports the cost structure they have, but man it must be tough to make a dollar.
I came pretty close to buying an A150 last year and I certaintly fit the described demographic. For me it'd be the kind of bike I'd...
I came pretty close to buying an A150 last year and I certaintly fit the described demographic. For me it'd be the kind of bike I'd get for a signiciant birthday or similar. However, at least for me in Canada, by the time you take into account ForEX, shipping and import taxes the frame alone cost the same as a complete high end carbon bike so the market has to be limited. But then again they don't appear to be aiming for anything else.
I also don't think us 'Berta peeps are their target market, let alone most of North America. Of all the high end or small batch bikes I've seen around Moose Mtn, and Atherton is the one that I haven't seen yet.
I think the UK and Europe is their target at this point in their existance, as no dollar in the world is not even touching the pound in exchange rates. Most of the users on this site seem to be from NA, UK, EU or Oceana and as of this post, exchange rates are 1 Euro/.83 GBP, $1 USD/$.80 GBP $1 CAD/$.56 GBP, with both Aus/NZL being around $1.00/.50GBP) why would any one outside of the UK or somewhat the EU buy an Atherton? its a minimum of 20% more than MSRP right out of the gate, and then shipping and import tax so unless you really had to have it, you're buying something else and I have no doubt they know this. I'm guessing in the UK its a bit more manageable to afford one and the Athertons have no shortage of fans there, as well as a want for UK made products. With many of us being NA and Oceana based, we just don't see them.
One of the aspects of the Atherton bikes in particular that I haven’t seen anyone mention yet is the fixed overhead cost for doing a lugged frame, electricity consumption in particular comes to mind. And then there’s the raw material, and yield costs. The raw high quality titanium(?) is expensive in the sizes required to mill one of their lugs from. One cnc machine goes haywire or a bit hangs up and the part is scrap, not to mention the amount of waste material that comes from one single lug. I realize that material is recycled but it’s pennies on the dollar for the cost of the raw material going in.
The concept is really cool and undoubtedly the cnc machined manufacturing has to be orders of magnitude cheaper and less oversight intensive than the original 3d titanium printed method Robot bikes employed before they bought the company but with fixed overhead costs that they are facing I don’t see how those can be lowered easily. Especially given that they are based in Europe where energy and man power costs are some of the highest in the world. Like the others before me I’m not rooting for them to turn the lights off at all but if I was an investor I would get cold feet looking at it from a purely roi standpoint.
I also don't think us 'Berta peeps are their target market, let alone most of North America. Of all the high end or small batch bikes...
I also don't think us 'Berta peeps are their target market, let alone most of North America. Of all the high end or small batch bikes I've seen around Moose Mtn, and Atherton is the one that I haven't seen yet.
I think the UK and Europe is their target at this point in their existance, as no dollar in the world is not even touching the pound in exchange rates. Most of the users on this site seem to be from NA, UK, EU or Oceana and as of this post, exchange rates are 1 Euro/.83 GBP, $1 USD/$.80 GBP $1 CAD/$.56 GBP, with both Aus/NZL being around $1.00/.50GBP) why would any one outside of the UK or somewhat the EU buy an Atherton? its a minimum of 20% more than MSRP right out of the gate, and then shipping and import tax so unless you really had to have it, you're buying something else and I have no doubt they know this. I'm guessing in the UK its a bit more manageable to afford one and the Athertons have no shortage of fans there, as well as a want for UK made products. With many of us being NA and Oceana based, we just don't see them.
Just curious - What do you mean by "20% more than MSRP right out the gate"?
One of the aspects of the Atherton bikes in particular that I haven’t seen anyone mention yet is the fixed overhead cost for doing a lugged...
One of the aspects of the Atherton bikes in particular that I haven’t seen anyone mention yet is the fixed overhead cost for doing a lugged frame, electricity consumption in particular comes to mind. And then there’s the raw material, and yield costs. The raw high quality titanium(?) is expensive in the sizes required to mill one of their lugs from. One cnc machine goes haywire or a bit hangs up and the part is scrap, not to mention the amount of waste material that comes from one single lug. I realize that material is recycled but it’s pennies on the dollar for the cost of the raw material going in.
The concept is really cool and undoubtedly the cnc machined manufacturing has to be orders of magnitude cheaper and less oversight intensive than the original 3d titanium printed method Robot bikes employed before they bought the company but with fixed overhead costs that they are facing I don’t see how those can be lowered easily. Especially given that they are based in Europe where energy and man power costs are some of the highest in the world. Like the others before me I’m not rooting for them to turn the lights off at all but if I was an investor I would get cold feet looking at it from a purely roi standpoint.
Some clarification. The Titanium is not CNC at all. Still printing those. On the aluminum bike the lugs are CNC. So material cost isnt crazy on that.
I think there is another key thing about Athertons. Size range. 12 sizes stock in both carbon and aluminum. This is more than any other frame manufacturer can do, because they only make what they sell.
Also, with the ti/carbon bike they can make it full custom for a minimum upcharge of designing the lugs. This isnt possible with any other carbon MTB that I can think of on the market. you can change the bike to whatever you personally want. And there is no increase in costs for atherton besides some design time.
On top of that they know how many frames they can make a year based on print time. cant sell more than that... makes it way easier to budget a business based on that number, and therefore stay within that budget.
I think he's referring to currency exchange rates, as the pound sterling is prouder than just about every other currency in the bike universe.
I think he might be referring to import duties instead of conversion as the price of the bike is known from the beginning.
My A.170 was delivered the second week of December so I can give you a pretty accurate breakdown of current costs:
I have the Fox spec'ed version and the price when I bought it was $9608.33. This was on August 5th. I made some changes along the way that increased a bit but that was my choice and I was always informed of the price before needing to commit. Once it went to DHL I was required to pay import duties and fees to have it delivered. That amounted to $1244.95. Of course there was no VAT so I don't know that it is really a penalty in comparison.
One of the aspects of the Atherton bikes in particular that I haven’t seen anyone mention yet is the fixed overhead cost for doing a lugged...
One of the aspects of the Atherton bikes in particular that I haven’t seen anyone mention yet is the fixed overhead cost for doing a lugged frame, electricity consumption in particular comes to mind. And then there’s the raw material, and yield costs. The raw high quality titanium(?) is expensive in the sizes required to mill one of their lugs from. One cnc machine goes haywire or a bit hangs up and the part is scrap, not to mention the amount of waste material that comes from one single lug. I realize that material is recycled but it’s pennies on the dollar for the cost of the raw material going in.
The concept is really cool and undoubtedly the cnc machined manufacturing has to be orders of magnitude cheaper and less oversight intensive than the original 3d titanium printed method Robot bikes employed before they bought the company but with fixed overhead costs that they are facing I don’t see how those can be lowered easily. Especially given that they are based in Europe where energy and man power costs are some of the highest in the world. Like the others before me I’m not rooting for them to turn the lights off at all but if I was an investor I would get cold feet looking at it from a purely roi standpoint.
Some clarification. The Titanium is not CNC at all. Still printing those. On the aluminum bike the lugs are CNC. So material cost isnt crazy on...
Some clarification. The Titanium is not CNC at all. Still printing those. On the aluminum bike the lugs are CNC. So material cost isnt crazy on that.
I think there is another key thing about Athertons. Size range. 12 sizes stock in both carbon and aluminum. This is more than any other frame manufacturer can do, because they only make what they sell.
Also, with the ti/carbon bike they can make it full custom for a minimum upcharge of designing the lugs. This isnt possible with any other carbon MTB that I can think of on the market. you can change the bike to whatever you personally want. And there is no increase in costs for atherton besides some design time.
On top of that they know how many frames they can make a year based on print time. cant sell more than that... makes it way easier to budget a business based on that number, and therefore stay within that budget.
Definitely talking above my pay grade on this one, wasn’t totally sure on the lugs as far as which process they’re using. Your last sentance is what I was really getting at, they know exactly how many bikes a year they can produce and the only way to scale that is purchasing more cnc machines/ 3d printing witchcraft which is a very expensive way forward.
Continuing with the numbers they have could prove fruitful, I have absolutely no idea how many bikes they’re selling vs what they can produce: but there is a very strict capacity overhead with their manufacturing method. If they’re need to scale it would require very expensive investment on the machinery side.
On the plus side their production method would allow a purchase of materials when costs are low to sit on, or alternatively have very little inventory on hand by way of materials… only need enough to build what has already sold. So from that aspect I can see benefits.
They also might not be printing every bike in-house on their machine(s). They could be (and probably are) using an outside vendor to supplement their production. This could also allow they to scale or quickly react to demand without the huge capex of a dmls machine. Yes, the print cost would probably be higher, but possibly a negotiated long term contract with a vendor could offset it a bit.
That said, from the few glimpses of their process I've seen on IG, yeah it's amazing they can sell those for what they do. The A bikes look so time intensive; printing, grinding, machining, etc. It seems like the S bikes are really their path forward, skip the printing and grinding and jump straight to the machining.
I'm not so sure the Atherton approach is really so bad capex wise?
First, I'm not sure they own the 3D printer(s) for the lugs. Pretty sure they don't own the cnc mill? You really want to have a good utilization rate on these to make it viable...
The rest of their process is somewhat labor intensive (the A versions more so than the S), but equipment is not much more than a few jigs for the bonding. (Okay, some reaming tools for pivots on A series)
Also I guess you'll have trouble finding someone in asia willing to produce such small volumes. Their total yearly frame sales must be in the hundreds max?
Also quite a bit of guessing from my side, and my 2 cents to go along with it 😀
The rumor here in Kamloops is that We Are One has been sold to industry 9. Which explains why they have stop making bikes and there DH program is cancelled as well.
I think he's referring to currency exchange rates, as the pound sterling is prouder than just about every other currency in the bike universe.
Correct, However looking at the Atherton site and doing some quick math, I may over over simplified it. The 20% VAT is already added on their website to the UK pricing, so it seems like there's only a 10% difference between the UK and US pricing, but take away the vat and the base price difference on the base S170.3 is about 24% difference between the UK and US pricing, being $3839 GBP/$5119USD. That is before any kind of tax, credit card exchange rate fee's, import duties or fee's or shipping. If I were to purchase it in Canada from the Atherton website, lets just use USD as my currency of choice for simplicity, the S170.3 would be $7355 CAD before any duties, shipping and other fee's for a base model alloy bike with a Domain and NX. It would be $9085 in NZD.
That's why there are few Atherton bikes outside of the UK.
Correct, However looking at the Atherton site and doing some quick math, I may over over simplified it. The 20% VAT is already added on their...
Correct, However looking at the Atherton site and doing some quick math, I may over over simplified it. The 20% VAT is already added on their website to the UK pricing, so it seems like there's only a 10% difference between the UK and US pricing, but take away the vat and the base price difference on the base S170.3 is about 24% difference between the UK and US pricing, being $3839 GBP/$5119USD. That is before any kind of tax, credit card exchange rate fee's, import duties or fee's or shipping. If I were to purchase it in Canada from the Atherton website, lets just use USD as my currency of choice for simplicity, the S170.3 would be $7355 CAD before any duties, shipping and other fee's for a base model alloy bike with a Domain and NX. It would be $9085 in NZD.
That's why there are few Atherton bikes outside of the UK.
Ah I see what you mean now.
I was actually strongly considering an atherton, the carbon version. But the country where I reside in europe, its currency is not the strongest right now, and the exchange rate VS the pound is terrible. Bring higher VAT and customs fee into consideration - Just the frameset ended up being about the same cost as the full frame-up build I did myself going with a Megatower CC frame. I got some deals on stuff on sale, but it has pretty much all top end components.
So full bike, or just a frameset for the same price, it was a no brainer going with something else. Athertons are cool, and I would probably ride it for longer, but not for close to 3x the price.
(Converting to CAD, the frameset would have costed me more than $10k cad)
We should probably do a few predictions posts, eh? I've got a number of thoughts going into the new year, and will synthesize them into one...
We should probably do a few predictions posts, eh? I've got a number of thoughts going into the new year, and will synthesize them into one post, but I do think we're going to see more companies pull the plug this year.
I'll go out on a limb and say Atherton Bikes may be one of those stragglers who calls it quits. I have literally no data on this, so please take this with a huge grain of salt, but when I was poking around their website I realized I can't just "buy it now" with respect to a frame or bike. You need to have a conversation with someone to put your order in. While this may work well for a small batch frame company (frameworks or Reeb for instance), Atherton employees more people, has real investors, has real capex on the manufacturing side and has real costs (I think) to run the business. This model coupled with their cost structure has to be challenging in an environment like we are currently in. At some point someone who is floating the operation has to go "okay, enough".
Anyway, this is my hare brained one off speculative prediction for the year with low confidence completely based on intuition. I'll make a less flippent list of things I think may happen this year in a bit - but figured I'd throw this one out there and see if anyone else has any thoughts...
I’ve been getting lots of ads for evil bikes on sale. Some on IG are even some of their quite old frames (straight steerer tubes). Any...
I’ve been getting lots of ads for evil bikes on sale. Some on IG are even some of their quite old frames (straight steerer tubes). Any idea on if they are in trouble?
Kevin has gone through the mud for that brand, the Revolt fiasco should’ve been the nail in the coffin but he soldiered on, would be sad...
Kevin has gone through the mud for that brand, the Revolt fiasco should’ve been the nail in the coffin but he soldiered on, would be sad to see them close up shop now. I saw a little while ago that they let go of a bunch of people from hq. Not sure if it was only retail/ wrench type employees or what.
IMO they’ve sort of priced themselves out, they make a premium product to be sure but not many options on full builds, and the sorts of people laying out the sort of cash they want for their frames/ full builds are gonna have some specific parts requests… a $4000 frameset really limits your already limited market imo. But hey I’m just a dork on the internet.
Blows my mind that Norco and Rocky want $4000 for a frame. I’ll never spend that much on a frame, but if I did Evil would be above those two (still low on the list of $4k frames though!). I say this as a person with no industry insider discount who buys a new frame every year. Surprised frame prices aren’t at least a tad less insane, in order to hook this segment of the market. Maybe discounts on framesets will be the new norm and only the early adopters will pay full freight?
Bullish Propain and Commencal since they have just in time builds. (any others?) Even on those it’s hard to justify a full build since all my existing components are amazing and are compatible with pretty much any frame out there. (Of which they’re all really good now)
I wanted to follow up my earlier post with a few more details as to why I made my Atherton Bikes (very speculative) prediction. Again, please take my thoughts with a giant grain of salt. This was a total hare brained speculative Monday morning musing I probably should have kept to myself.
In any event, here is why I feel really any brand like AB has a challenging future ahead.
All performance continues to asymptote. Paying more for a product is getting the bike rider less and less in the way of absolute performance. While I know Atherton has a some secret sauce on the sizing and fitment side of things, I personally feel their semi-custom fit isn't enough to really tip the scales in their favor on the rider experience front, and the underlying performance while good, not an order of magnitude better than I'd likely find in a number of other brands. What's worse, is these other brands can often be found for (significantly) less money supported by a large (well established) dealer network. Now, of course, there will always be room for niche players in the market, like Frameworks, but I have a sneaking suspicion Atherton has another big overhang (see next point) that the companies like Frameworks do not .
Cost structure is too rich. This is really what underpins wrote what I wrote. While there is nothing inherently bad about the approach Atherton Bikes is taking (in fact, I like a lot of it), what seems hard to palate is how much money the brand has spent on manufacturing and marketing against the number of units they are likely selling (and will sell in the future). When you add up all the capex + the yearly race budget, marketing budget, operations, SG&A etc I don't see it being a default alive operation (aka, they are making more than they spend). Moreover, I don't see how they turn that boat around without some massive changes.
If they are running in the black, kudos, and cool company with a novel approach. If they aren't, they'll need to cut a lot (lot) to continue to operate, being its likely very challenging for a business like that to raise any additional capital in the new year. At a point, somebody might say "the juice isn't worth the squeeze", and that'll be that.
Fun Fact: They've raised ~$4M. https://pitchbook.com/profiles/company/453406-24#faqs
I’d like to say you’re wrong, but it’s hard to argue with this analysis. I was not surprised to see the Kolb announcement today. I hope they’re not making the mistake of trimming at the margins (remove one expensive rider) when they need to cut fast & deep (the entire race team plus whatever else needs to be done). I’ve heard rumors of government subsidies so perhaps that’s giving them a lifeline.
For those that want to dive a little deeper, the default alive essay from PG is a classic…
https://paulgraham.com/aord.html
The biggest issue I see with Atherton is that let's say they do get really popular and sell heaps.
Great, start 3D printing lots of lugs and making lots of frames. The unit costs of the frames are the same if they make 20 or 2000. Sure some things may come down in price for them to bulk purchase, purchase more tubes at once, more adhesive, maybe more SRAM parts, but the actual frames don't get cheaper.
They can pay off 3D printing machines faster as they'll have more revenue, but they don't generate the economies of scale of a traditional production line when they scale up. Marginal profit is pretty flat for them.
Which means they have to have systems to run the manufacturing super efficiently from low volume to high volume anyway. And often what happens in small factories is an influx of orders can't be processed more efficiently, it just creates long lead times and potential lost sales because of it.
I can assure you there's less Capex with their method of manufacturing than the traditional carbon molding methods. Same goes for their alloy frames vs. traditional construction methods. Their unit costs might be a touch higher and might not scale as easily or cost effectively but my assumption is they don't sell enough frames to be successful the traditional way with amortizing tooling costs so it seems they are taking the right approach.
Capex can higher on alu projects than carbon ones, but the volumes with alloy make it worthwhile to turn a profit.
For all small and medium brands today the most serious risk to their business is weathering the heavy discounting from the largest brands. Until that situation resolves itself (my prediction is it will take a few years) then it's best to ensure your operation is lean in order to reflect the tighter margins.
Atherton Bikes have an enviable position in that they offer a unique product that is also less labour intensive, have a strong marketing presence, and, I assume, can supply frames with a shorter leadtime than their competitors. They still face many of the same problems assemblers do with managing their suppliers but frames are always the choke point.
Hmm, an ex-rocky employee here explaining costs and how to survive.... that seems a little... comical.
No harm ment @kperras
Sometimes it takes a hard lesson to learn?
I would argue that Atherton frames have a higher labour cost than traditional frames, both alloy and carbon
Isn't there one other factor for Atherton though? I could've sworn that they also get a significant amount of help from the Welsh government. A quick look says yes but that may have already been fully accounted for and now all of the above applies post Welsh support. I'm honestly not sure.
Either way, very interesting analysis and well explained.
Really hope BMC doesn't pull the plug on Scor. All bikes get great reviews and one single frame mold has been feeding two different, mx-compatible bikes for a few years now already. Cost structure seems quite low for the quality of what they deliver.
I think one thing you ignore is the "cool" factor. As a person that does not want to buy another chinese/asian frame, what are your options in the DH space? Atherton, Nicolai, Foes, else? There are some smaller builders, but they are IMO not on the level of engineering and production as the others mentioned. I bet Atherton looked/are looking at the "bespoke" road bike market and bet on that DH riders are now well-earning folks in their 40-50-ies and want something special, tailor-made, exclusive.
For me the best example of losing your uniqueness as a brand is Intense. Previously they had the race heritage and "made in the USA" brand recognition that justified their prices. There was rarely an argument why you would buy an Intense over a Santa Cruz, which were pretty similar. After Intense moved to offshore production, they basically have abandoned their brand's core uniqueness and now need to compete on price alone. If you are someone following racing, you would now rather buy a Santa Cruz because of their marketing efforts (=race team) instead of an Intense. So Intense bikes now have to be the "cheaper" alternative to SC and not the other way around as it used to be. As a brand, this is not the spot you want to be in IMO.
I agree with this sentiment, except for the DH riders are well earning folks in their 40-50s and want high end products.
In my experience they're are extremely from 40-50 year olds hurtly down mountains on race ready DH rigs.
Those people are much more likely to get long travel e-bikes to go around the alps.
There are many current and recently ex-employees from Rocky, and almost all of them had no bearing on the current financial outcome of the company.
I came pretty close to buying an A150 last year and I certaintly fit the described demographic. For me it'd be the kind of bike I'd get for a signiciant birthday or similar. However, at least for me in Canada, by the time you take into account ForEX, shipping and import taxes the frame alone cost the same as a complete high end carbon bike so the market has to be limited. But then again they don't appear to be aiming for anything else.
I hear you, and again, I like a lot of what they’re doing. I want to be clear that when I’m being critical of a company, it’s not meant personally—it’s just an assessment of what I see, and requires a whole bunch of assumptions to be made (which might be wrong). Much like the original post I made in this thread about GG, I really do tip my cap to anyone who takes risks and makes things happen, but I’m also going to analyze where any company might’ve gone wrong or what I see as questionable decisions. This is largely the point of this thread, and hopefully a way we can all learn and grow as people interested in bikes, business and company building in the future.
I actually really like Atherton Bikes’ approach in a number of ways. Their bikes clearly rip, they’ve got a novel manufacturing method, the aesthetic is amazing, they’ve built real brand equity, and they’re just flat-out sexy as hell. All of those things can be true, but the underlying company can still fail—this thread alone has plenty of examples of that happening in our industry.
So, with that in mind, I’m going to unpack a little more and offer a counter perspective to what you’re suggesting:
Capex and Costs:
There’s a big difference from a capex perspective when you’re just paying for molds vs. footing the bill for the entire manufacturing process (even if that process might be cheaper—though I’m not convinced Atherton Bikes can actually manufacture at lower prices). Correct me if I’m wrong, but if I go to Asia to have my carbon frame manufactured, I pay for the tooling (molds/setup) and then a unit cost per frame (which varies based on volume). That might not be “cheap,” but it’s certainly less capital-intensive than in-housing the entire manufacturing process.
Remember, capital expenditures (capex) and costs (expenses) are different on a financial statement and mean different things. A frame can cost less to make but still require high capex—or vice versa. In Atherton’s case, I’m suggesting they needed significantly higher capex to get their operation up and running, and at lower volume levels, their fixed costs (factory overhead, lease, staff, etc.) are going to be high. Plus, paying wages in the UK is a significant burden relative to Asia (probably around 3x higher).
Manufacturing Method & Unit Costs:
I’ve priced out additive manufacturing of titanium for various projects, and it’s not cheap. Even if I owned the tooling, I’d still be skeptical that it’s a more cost-effective way to produce things. It’s cool technology, but I doubt it provides a massive cost advantage. In fact, one big reason you go that route is because it’s cheaper from a capex standpoint—but it tends to be higher in ongoing costs. And with Atherton’s alloy bikes, they’re CNC’ing every lug, which can’t be cheap either, especially when you compare their bikes to other alloy bikes.
So, I’m not convinced that Atherton is magically able to bring their bikes to market at a significantly lower cost. Add in a per-unit fee to license the DW link (most likely) and the fact that UK manufacturing is generally pricier than Asia, and it’s easy to see how costs could stack up.
SG&A and Austerity:
The more units you sell, the more money you make, and the more you can spread out your SG&A (selling, general, and administrative expenses). That’s why it can be easier to run a large company than a small one—you’re not wearing as many hats, and you can afford the extra “niceties.”
I find it very challenging for a smaller brand to justify fully supporting a WC team unless they’re at the scale of Trek or Specialized, especially on the men’s side. Juniors are a bit different, or you can pull in outside support like Frameworks did, but I’m not sure how Atherton does it. From where I’m sitting, the company doesn’t appear to operate with a high level of austerity (though I could be totally wrong). If they do have that scrappy vibe—salaried employees working crazy hours, wearing multiple hats—then I’d say they have a decent shot at success. But if their cost structure is built more like a big bike company’s, yet they’re not moving that level of volume, then it doesn’t matter how cool or desirable their bikes are. They’ll be burning more cash than they’re making, and that boat will eventually sink.
That’s really my main point. Anyway, time will tell. Cheers, y’all.
You're combining several topics here, like manufacturing in Asia vs. domestically. Apples to apples, cnc lug and round tube frame construction is less expensive than both hand-laid carbon frames or welded, hydroformed, alloy frames. The former, per frame project, will have a lower Capex up to a certain volume, then the latter will gain the advantage as volumes increase.
There are many unknowns for me: I don't have knowledge of what additive manufacturing costs are, and I don't know how many units they are moving. My assumptions is that they are still comfortably in the low volume zone, with enough margin in their product that they can sustain whatever size operation they currently have. If not, moving your operations to Asia, Spain/Portugal, Poland, etc isn't the only solution.
On the marketing side, there's more than one way to fund a team and relying on operational performance is just one of them. For all we know the cost structure of the team can be a completely separate entity, like Specialized Gravity.
First let me say I am an Atherton fanboy, I own two of them and they are a fantastic bike so some of this might be biased.
Two other comments to follow up on first. @SteveClimber, yes I fall into that 40-50 demographic but no I don’t get enough time hurtling down mountains or own a DH rig. @sweaman22, yes getting a Atherton landed to you in Canada is expensive, and has only gotten significantly more expensive from the first one I bought to the second one to now.
I think we are mixing two business into one in this discussion and I’m not sure that is fair or accurate to lump them together. There is the bike business and the WC race team business. As talked about in other forums there are many, if not most of the WC teams that are not actually the bike brand themselves, and they seem to be able to operate in the black or at least the longevity of these teams would at least have you believe they are default alive. Heavily funded through sponsorship deals and free frames is likely how Atherton makes the WC team work. The fact that Kolb is moving on to likely a bigger pay cheque is an indication that the WC race team is operating within a specific budget that couldn’t afford to keep him around. Much the same as I’m guessing Frameworks has zero chance of keeping Asa around in 2026. I’d be willing to bet that the WC race team is a complete separate entity from the bike brand itself. As for the bike brand, saying this as a fanboy, saying this as someone who works in middle management of manufacturing, within a niche industry, with manufacturing in both high and low-cost regions, with a decent amount of experience on tooled and 3D printed parts, I don’t know how the bike business does it. The CapEx was definitely high, Renishaw machines aren’t cheap but I’m sure the Welsh government had a lot of incentives, specifically SR&ED, that could have greatly lowered that. The move into the new facility couldn’t have been cheap, but if I remember BK is their neighbour and I think he talked about incentives that he got for moving there from the government, I assume Atherton as a crown jewel in the area would also be getting incentives. The manual labour costs for building a frame for sure are high. Referencing back to an email from Atherton there are 11 steps in building a frame and only three of them have more machine time then operator time (printing the lugs, heat treating, and bonding the frame), though all three of them still have significant operator time. I must assume that Atherton has figured out the economics that ensure that at the volume they are selling supports the cost structure they have, but man it must be tough to make a dollar.
I also don't think us 'Berta peeps are their target market, let alone most of North America. Of all the high end or small batch bikes I've seen around Moose Mtn, and Atherton is the one that I haven't seen yet.
I think the UK and Europe is their target at this point in their existance, as no dollar in the world is not even touching the pound in exchange rates. Most of the users on this site seem to be from NA, UK, EU or Oceana and as of this post, exchange rates are 1 Euro/.83 GBP, $1 USD/$.80 GBP $1 CAD/$.56 GBP, with both Aus/NZL being around $1.00/.50GBP) why would any one outside of the UK or somewhat the EU buy an Atherton? its a minimum of 20% more than MSRP right out of the gate, and then shipping and import tax so unless you really had to have it, you're buying something else and I have no doubt they know this. I'm guessing in the UK its a bit more manageable to afford one and the Athertons have no shortage of fans there, as well as a want for UK made products. With many of us being NA and Oceana based, we just don't see them.
One of the aspects of the Atherton bikes in particular that I haven’t seen anyone mention yet is the fixed overhead cost for doing a lugged frame, electricity consumption in particular comes to mind. And then there’s the raw material, and yield costs. The raw high quality titanium(?) is expensive in the sizes required to mill one of their lugs from. One cnc machine goes haywire or a bit hangs up and the part is scrap, not to mention the amount of waste material that comes from one single lug. I realize that material is recycled but it’s pennies on the dollar for the cost of the raw material going in.
The concept is really cool and undoubtedly the cnc machined manufacturing has to be orders of magnitude cheaper and less oversight intensive than the original 3d titanium printed method Robot bikes employed before they bought the company but with fixed overhead costs that they are facing I don’t see how those can be lowered easily. Especially given that they are based in Europe where energy and man power costs are some of the highest in the world. Like the others before me I’m not rooting for them to turn the lights off at all but if I was an investor I would get cold feet looking at it from a purely roi standpoint.
Just curious - What do you mean by "20% more than MSRP right out the gate"?
I think he's referring to currency exchange rates, as the pound sterling is prouder than just about every other currency in the bike universe.
Some clarification. The Titanium is not CNC at all. Still printing those. On the aluminum bike the lugs are CNC. So material cost isnt crazy on that.
I think there is another key thing about Athertons. Size range. 12 sizes stock in both carbon and aluminum. This is more than any other frame manufacturer can do, because they only make what they sell.
Also, with the ti/carbon bike they can make it full custom for a minimum upcharge of designing the lugs. This isnt possible with any other carbon MTB that I can think of on the market. you can change the bike to whatever you personally want. And there is no increase in costs for atherton besides some design time.
On top of that they know how many frames they can make a year based on print time. cant sell more than that... makes it way easier to budget a business based on that number, and therefore stay within that budget.
I think he might be referring to import duties instead of conversion as the price of the bike is known from the beginning.
My A.170 was delivered the second week of December so I can give you a pretty accurate breakdown of current costs:
I have the Fox spec'ed version and the price when I bought it was $9608.33. This was on August 5th. I made some changes along the way that increased a bit but that was my choice and I was always informed of the price before needing to commit. Once it went to DHL I was required to pay import duties and fees to have it delivered. That amounted to $1244.95. Of course there was no VAT so I don't know that it is really a penalty in comparison.
Definitely talking above my pay grade on this one, wasn’t totally sure on the lugs as far as which process they’re using. Your last sentance is what I was really getting at, they know exactly how many bikes a year they can produce and the only way to scale that is purchasing more cnc machines/ 3d printing witchcraft which is a very expensive way forward.
Continuing with the numbers they have could prove fruitful, I have absolutely no idea how many bikes they’re selling vs what they can produce: but there is a very strict capacity overhead with their manufacturing method. If they’re need to scale it would require very expensive investment on the machinery side.
On the plus side their production method would allow a purchase of materials when costs are low to sit on, or alternatively have very little inventory on hand by way of materials… only need enough to build what has already sold. So from that aspect I can see benefits.
They also might not be printing every bike in-house on their machine(s). They could be (and probably are) using an outside vendor to supplement their production. This could also allow they to scale or quickly react to demand without the huge capex of a dmls machine. Yes, the print cost would probably be higher, but possibly a negotiated long term contract with a vendor could offset it a bit.
That said, from the few glimpses of their process I've seen on IG, yeah it's amazing they can sell those for what they do. The A bikes look so time intensive; printing, grinding, machining, etc. It seems like the S bikes are really their path forward, skip the printing and grinding and jump straight to the machining.
I'm not so sure the Atherton approach is really so bad capex wise?
First, I'm not sure they own the 3D printer(s) for the lugs. Pretty sure they don't own the cnc mill? You really want to have a good utilization rate on these to make it viable...
The rest of their process is somewhat labor intensive (the A versions more so than the S), but equipment is not much more than a few jigs for the bonding. (Okay, some reaming tools for pivots on A series)
Also I guess you'll have trouble finding someone in asia willing to produce such small volumes. Their total yearly frame sales must be in the hundreds max?
Also quite a bit of guessing from my side, and my 2 cents to go along with it 😀
The rumor here in Kamloops is that We Are One has been sold to industry 9. Which explains why they have stop making bikes and there DH program is cancelled as well.
Correct, However looking at the Atherton site and doing some quick math, I may over over simplified it. The 20% VAT is already added on their website to the UK pricing, so it seems like there's only a 10% difference between the UK and US pricing, but take away the vat and the base price difference on the base S170.3 is about 24% difference between the UK and US pricing, being $3839 GBP/$5119USD. That is before any kind of tax, credit card exchange rate fee's, import duties or fee's or shipping. If I were to purchase it in Canada from the Atherton website, lets just use USD as my currency of choice for simplicity, the S170.3 would be $7355 CAD before any duties, shipping and other fee's for a base model alloy bike with a Domain and NX. It would be $9085 in NZD.
That's why there are few Atherton bikes outside of the UK.
Ah I see what you mean now.
I was actually strongly considering an atherton, the carbon version. But the country where I reside in europe, its currency is not the strongest right now, and the exchange rate VS the pound is terrible. Bring higher VAT and customs fee into consideration - Just the frameset ended up being about the same cost as the full frame-up build I did myself going with a Megatower CC frame. I got some deals on stuff on sale, but it has pretty much all top end components.
So full bike, or just a frameset for the same price, it was a no brainer going with something else. Athertons are cool, and I would probably ride it for longer, but not for close to 3x the price.
(Converting to CAD, the frameset would have costed me more than $10k cad)
You are quite a lot closer than you realise 🤫
Blows my mind that Norco and Rocky want $4000 for a frame. I’ll never spend that much on a frame, but if I did Evil would be above those two (still low on the list of $4k frames though!). I say this as a person with no industry insider discount who buys a new frame every year. Surprised frame prices aren’t at least a tad less insane, in order to hook this segment of the market. Maybe discounts on framesets will be the new norm and only the early adopters will pay full freight?
Bullish Propain and Commencal since they have just in time builds. (any others?) Even on those it’s hard to justify a full build since all my existing components are amazing and are compatible with pretty much any frame out there. (Of which they’re all really good now)
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