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This isnt something that is always an issue, but there have been occasions where I have ran into component prices that make me scratch my head. One area I notice this the most is with MTB stems - they are almost all damn near identical in function and form. What makes one $300 and another $60? Is it really all just brand name that is justifying 2-3x cost differences?
Here is a recent example i can share, not only are these stems essentially identical as far as i can tell, but they are also made by the same brand and nearly the same model. Is there some hidden thing im missing that validates their deviation in price?
https://www.theinsideline.ca/chromag-hifi-bsx-318-stem.html
https://www.theinsideline.ca/chromag-hifi-v2-318-stem.html
Marketing, for the most part. See Title for reference.
One is bead blasted then anodized the other one is polished when anodized. The bead blast is going to be a much cheaper and more forgiving process. Quality polish is going to be hand work. This a price difference.
Related question: is there any real difference between the factory cost of production of low/middle end suspension vs high end? Like say a Zeb select vs an ultimate (Usually a damper change and external adjustments).
the chassis no, just different paint ops (typically). the difference is in the cost / complexity of the dampers. more complex = more time = more cost.
The process can be the difference in price. I believe that the chromag bza is machined and finished in Canada. The HiFi is forged in Taiwan
In those specific instances as people have said, polishing and anodizing multiple colors vs. bead blasted black. More steps=more money.
It can also come down to steps you can't even see. 3d vs. 2d forging. full CNC, just adding a machining pass pre or post ano, etc. Laser graphics vs. decal. All these little steps add up on the price of anything. They can be integral to getting what you want out a product, and are never actually seen. Plays into that damper discussion as well.
Bars are another thing where unseen tech can play into the price of a bar. different and multiple butting locations, material cost, etc. to get the ride quality that is desired.
All the things that PMs go back and forth on again and again...
Ah okay now that makes sense! I know little about metal finishing process' and the costs of it.
Both of the stems you listed are cold forged, meaning they are forged at room temperature. As far as forging goes, this way is slightly more optimum for resulting grain structure/strength then flow formed or cast. Since the manufacturing method is the same for both of these stems, you're paying for the surface finishing of bead blasting and painted vs anodized. What you're paying for is the surface finishing to prep for anodizing and the anodized finishing.
If you would add their top of the line Riza stem to the question/equation, then what you're paying for there is CNC machining (manufacturing time) and then a greater level of surface finishing to remove any tooling marks. The CNC process adds the ability to do more complex shaping and geometry that would otherwise be too hard to accomplish in a casting/forging scenario. It should be noted that all of these stems are using 6061 aluminum.
The irony of all of this, is that technically... CNC parts are less strong then a properly made forged part. This has to do with cutting into, vs maintaining and shaping the grain structure of the aluminum. The truth is that stems, as are many parts on a mtb or motorcycle, are overbuilt with a comfortable safety factor. So the delta in strength between a forged vs cnc'd part will never enter the equation... This is purely a vanity and aesthetic mission. One last item to note, forging is not exactly easy and does require a lot of knowledge and nuance to get it right and not have voids, contamination and heavily reliant on qa/qc. There is a lot of technology and industry intellectual property involved with different forging/casting methods and there companies that are better at it then others.
There are two examples that come to mind: Car wheels, there is a TON of technology into different methods of forging wheels for cars and there is a lot of interesting reading you can do (ok maybe not actually interesting). Second, Shimano. Shimano is really a forging/stamping company at it's core, and that's where their strength, economics of scale and manufacturing flexes it's muscle. In contrast, I would largely view many of Srams tactics as centered around machining/tooling their way through problems. You can look at the various ways of making high end cassettes and keep this in mind and certain themes will start to surface.
It would actually be the other way around. While both are automated processes, polishing is much faster and cheaper as nearly all of the material is recovered and can be reused over thousands and thousands of components. Polishing aluminum components, Type II color anodizing, and powder coating account for only a very small portion of a product's COGS.
Wouldn't there be a much lower QC reject rate on a single color (black), bead blasted part versus a polished, multi-color ano part?
Interesting. I've only priced this out with rather low/limited run (under 500 pieces) car parts sourced through chinese factories. In that case, the polished and anodized parts were more expensive due to finishing then the tumbled and bead blasted finishes. When dealing with overseas factories, it's always hard to get the real story behind the pricing and options you're looking at without being there in person to ask questions. Preaching to the choir on this one I know... this is one of many reasons why keeping this in house is a totally different level of execution.
Pretty sure I trust that Ian and the crew at Chromag don't have it backwards. They wouldn't price the bead blasted black stem cheaper than the polished coloured stems if they were not getting it cheaper from the supplier. It would seem odd also for a stem manufacture in Taiwan to not know their input costs per unit for different end finishes. While I don't doubt it's a small portion of the COGS it's still a factor. The basic black can likely batch EVERY customer together. The colour runs are going to be smaller runs and possibly customer specific to their colour tones.
Let's give Darren the benefit of the doubt here. He did not say that chromag had it wrong, he was responding to my post. It could easily be that the bead blasting and painted finish is more expensive, but the quantity that they are purchasing of the same color/finish sizes provides them economics of scale to bring the price down.
Our fork crowns and axle lugs are sandblasted prior to Cerakote. We also polish tens of thousands of aluminum parts per month here at our facility that are then sent to an outside vendor for anodizing.
I was just providing my experience as a manufacturer. I wouldn't be able to comment on what a supplier might charge. As a component manufacturer, polishing and anodize comes at a lower cost.
Darren
Clear and Black anodize are extremely consistent and have a low scrap rate. It's only when you get into the red/blue/green/etc colors that matching becomes more challenging.
We use automated polishing systems here at our facility, so it's very rare to have a QC problem related to that part of the operation.
Darren
Great discussion.
Regardless of the the cost for each respective finish technique, it does seem like Chromag would buy and sell a larger number of the SKU for the cheaper black stem than any one of the individual SKU's for the more expensive stem that comes in multiple colors. Maybe the difference in cost comes down to minimum order sizes and economies of scale? For instance, even after paying for the products from their manufacturers in Taiwan or wherever, Chromag's warehouse in Canada is more likely to get caught carrying excess inventory of one of the four colored stem SKU's than a SKU for the stem that only comes in black. And as we all learned from Trek Bicycles current struggles, carrying excess inventory is expensive.
I once heard from someone inside Shimano that the price difference between XT and XTR and between Ultegra and Dura Ace was mostly a result of different surface finishing techniques and processes, not primarily a result of fancier materials or more sophisticated technology. However, this does not apply to Shimano chains.
with regards to your first specific example - I think that one might be simple, I don't know chromag that well but the V2 means its probably the replacement of the old one - which is either on a closeout price or was made/developed at a pre-inflation pre-pandemic time but is otherwise basically the same thing
However there are examples of functionally similar stems with very different construction and pricing -
Manufacturing processes - how intensive/expensive and also whether its done by the same factory or outsourced. Outsourcing a step will add a ton to the price to build something
Tolerances - tighter tolerances = more money. With something like a stem that will definitely affect how well it clamps the steerer tube and handle bar. If it isn't made well it won't grip the tubes properly or things like hard edges can create stress risers. So if you have a basic alloy bar, its probably fine to pair with a cheap stem but if you have lightweight carbon then you will benefit from the more expensive stem. Unfortunately its not something you really ever "feel" the difference in, apart from having intact teeth at the end of every ride.
Again, coming from the manufacturer's perspective. You mention that "outsourcing a step will add a ton to the price". In reality, it's often outsourcing a step that saves considerable time and money.
One specific example I'll share would be our shock shafts. We used to machine our steel shafts, complete with in-machine diamond burnishing process to the critical outside surface. The burnishing process was slow and required constant monitoring of the coolant ratio used for cooling and lubricating this process. Now, we outsource this step using an OD grinding operation to achieve the same results at a much lower cost. This is one of many examples that are deployed in product manufacturing.
Darren
Yeah sorry I over-generalised that statement, it should have been "could" add a bunch of cost, but equally possible to save time and money too, and that is a great example you gave
Could for sure. But generally speaking, if a manufacturer is outsourcing a portion of the process it's not because it's going to add costs.
You're not going to find someone who knows more about the granular details of manufacturing than Darren, and he is correct here as well. I'm currently looking at cost breakdown of several part I'm having made with a supplier in Taiwan and it tracks with his experience outsourcing certain processes in the US. The additional costs related to surface finishing and machine time are fairly small. Color anodizing only adds about $1-1.50 to the COG. For the current project the difference between the cheapest possible option (basic machining, utilitarian appearance, black ano) and creating a more premium looking product with quality finishing, color anodizing, industrial design, laser etching, etc probably added less than $5 to the COG. Obviously this is going to be size dependent and adds more than $5 to the consumer cost but it's not as expensive as you might expect.
Regarding outsourcing, our supplier handles all 5-axis machining in one facility, while all turning and grinding is done at another site, and all anodizing is handled by a separate vendor with about a 2-3 day turnaround. While this going back and forth may seem inefficient and costly from the outside, it's precisely this concentrated, coordinated integration and specialization that keeps costs lower and lead times shorter.
I can't speak at all to what other companies are doing, but I suspect part of what accounts for variation in price comes down to accounting and business practice. Lower tier parts may be priced at smaller margins than top tier products as opposed to being a straight reflection of their respective manufacturing cost. This is true across all industries. If one component is perceived to be of higher value than another - by way of finishing, machining, color, marketing, etc - it can command a higher price even if the actual cost of manufacturing is relatively similar. There's also the possibility that the lower tier parts are from an open mold source and the higher end version is exclusive. There are too many variables involved for any one formula to apply broadly.
To the earlier question about low and high end forks, some of the difference is related to sunk development and marketing costs. The low end models, besides utilizing more cost effective parts and procedures benefit from the development that was done years ahead and has trickled down - think older dampers, CSU, tooling, not flying all of MTB media to Queenstown for a week, etc. Those cost have been recovered and aren't passed on to the consumer in the same way they would need to be on a new or high end model.
And finally, prices are also a reflection of what the market is willing to pay not necessarily the actual COG.
Thanks for checking in Darren -
I have a question - legit question -
When the first prototype NineOne fork came off the line and you held it up in front of you and doing the math to arrive at a retail price, what percentage of the retail price is " it's just fucking cool to look at" ?
There has to be a number - I don't think I speak for myself when I say the part has to function as intended of course, however if it looks bitchin as well, there has to be a $ amount for that - What % is it?
Thanks for your time.
I'm currently saving for a Nine One.
The first prototypes were very exciting, but definitely didn't look like something that could command much money!
The first pic is an example of one of the early prototypes that didn't look very good, and didn't work well either! The second pic is a later-generation prototype where I definitely started to say out loud, "Damn, this thing looks sick!". Even at this stage, we didn't have a full understanding of the costs, as we were still trying to get a certain level of performance out of it and weren't there yet.
a few things to add here:
certain processes - like anodizing - are generally outsourced because of the high cost / capital it would take to try and set up that kind of process in house. for the companies that do specialize in something, again using ano as an example - the high capital means they typically need to keep their processing running in order for the business to be profitable.
another aspect to consider is quantity / price breakdowns. generally speaking the more units you order, the lower the per-unit cost winds up being. many suppliers have a MOQ (minimum order quantity), and in my experience that's based on a combination of tooling cost and run time - basically they won't make tooling and run the line if its not profitable.
Haha, imagine developing the fork in the middle of Covid, when nobody wanted to work at an Aluminum mill and the first round of tariffs flipped the script on even the domestic material. The price and lead time of raw material was changing month to month or even week to week. I think at the prototype stage the conversation was more often, "are we going to be able to get the material to make this thing?"
Another factor is adonization is generally a pretty dang toxic activity. While also being common enough most industrial cities is going to have multiple people competing for your business. Unless there is a lot of money to be saved or some very specific reason to do it yourself why not just utilize someone doing that work day in and day out.
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