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Ari's bikes are looking surpringly good lately.
this comment was written out of Lindon, Utah
Nope.
Just watching the market and the Ari bikes look pretty good is all.
Even before the rebranding i thought they were making big improvements with some of the bikes. And the new models are hitting the marks, IMO.
Yea, I like them as well. Clean, simple and seem to have good numbers for the price. They had a couple bikes test well at multiple media outlets before the re-brand and their new bikes look great.
In my humble opinion hibike was actually the best online shop in Germany few years ago with even better prices than bikediscount, checked it few months ago and the stock was already pretty limited and it already looked like something was wrong... sad to hear :/
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...
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"
Have they posted S series bike for sale yet? Those might be the bread and butter...
I know that when I ordered my A.170 they wanted to have a conversation first because of the myriad of options that they have. I normally would be super annoyed by this because I know exactly what I want and am quite capable of figuring out my own sizing but I'll give them credit in saying it was a worthwhile discussion in that the various builds that they list have several choices you can make within them, e.g. 180mm vs 170mm Fox 38, colors, etc. Yes, I could have handled it myself if they built it out on the site but I get the sense that they are pretty dynamic on that stuff and don't want to try to keep the website in synch with the options that they have. Their customer service along the way is exceptional with pictures of your build as it progresses and I think they are currently in a 16 week backlog so they seem to be doing it right. Speaking of which, I think that is also one of the reasons that they want to speak to you. I was told 12-14 weeks when I ordered which would have been correct had I not modified a couple of things along the way.
FWIW, I didn't expect to like that bike as much as I do. I cannot believe how well it pedals for a 40lb bike (fully built out with pedals, on bike tools, etc).
Having inventory with all of the sizes, build options, etc. is so 2019.
Build to order is the way forward.
Considering the number of companies that have struggled to move excess inventory (esp. complete bikes) over the past couple years, this could be true. Although perhaps with the caveat that build-to-order might become more commonplace only for high-end bikes -- I imagine lower-end bikes (e.g. $1500 hardtails) will probably still be offered as stock completes, since the people buying those aren't usually as concerned about specific component choices or frame features.
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.
Long time lurker but joined just to contribute to this fantastic discussion (loved the podcast as well)
Whilst "Just in time" makes sense from a cashflow perspective it surely only really works if your whole supply chain is setup that way. Otherwise you're going to have a ton of forks, drivetrain etc in inventory anyway to fulfill the final builds.
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.
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