Framebuilders pricing...

I've been emailing some framebuilders re a new steel frame. I'm not
listing names, but I was quoted $1250US for a frame and $350US for a
fork, because he thought the WA was Washington, not Western Australia.
When the error was discovered, the local price list was given -
$2450AUS for the frame $450 for the fork.

At current exchange rates, I would pay $1905AUS if I lived in the US,
but $2900AUS in Australia.

What would account for the difference? I imagine it's because he
hasn't updated his US price list to take into account the value of the
South Pacific Peso. If it isn't, what's going on?

Brendo

Did you ask him why the difference?

You can always pay in USD, current exchange rate is around 84cents
which means $USD1250 is $1488 Oz.


--
matagi

On Apr 20, 11:16 am, matagi matagi.2pb...@no-
mx.forums.cyclingforums.com wrote:
Did you ask him why the difference?

You can always pay in USD, current exchange rate is around 84cents
which means $USD1250 is $1488 Oz.

--
matagi

I asked him why do I pay $1900Aus if I live in the US, but have to pay
nearly 50% more if I live in Australia. He indicated that the US
prices are set so that the frames are competitive in the US. 80% of
his sales are in the US, but the other 20% 'subsidise' the US sales.

It didn't make a lot of sense to me. If your product is good (and I
believe it is) price it accordingly. I don't mind paying for quality,
or at least, I can understand paying for quality.

It isn't a matter of paying in US dollars. You are required to be
living in the US to receive his US price list.

Wierd, huh?

Brendo

In aus.bicycle on 19 Apr 2007 21:39:45 -0700
Brendo wrote:
It didn't make a lot of sense to me. If your product is good (and I
believe it is) price it accordingly. I don't mind paying for quality,
or at least, I can understand paying for quality.

sounds like "market for lemons" or similar, mentioned at
http://www.schneier.com/blog/archive...rity_mark.html

=========

In 1970, American economist George Akerlof wrote a paper called "The
Market for 'Lemons'" which established asymmetrical information theory. He
eventually won a Nobel Prize for his work, which looks at markets where
the seller knows a lot more about the product than the buyer.

Akerlof illustrated his ideas with a used car market. A used car
market includes both good cars and lousy ones (lemons). The seller
knows which is which, but the buyer can't tell the difference -- at
least until he's made his purchase. I'll spare you the math, but what
ends up happening is that the buyer bases his purchase price on the
value of a used car of average quality.

This means that the best cars don't get sold; their prices are too
high. Which means that the owners of these best cars don't put their
cars on the market. And then this starts spiraling. The removal of the
good cars from the market reduces the average price buyers are willing
to pay, and then the very good cars no longer sell, and disappear from
the market. And then the good cars, and so on until only the lemons
are left.

In a market where the seller has more information about the product
than the buyer, bad products can drive the good ones out of the
market.

=========

Pretty much there are more frames available, the US market won't buy
the expensive ones because most folk can't tell the difference, so
won't pay the money.

Zebee

"Zebee Johnstone" wrote in message
...
In aus.bicycle on 19 Apr 2007 21:39:45 -0700
Brendo wrote:
It didn't make a lot of sense to me. If your product is good (and I
believe it is) price it accordingly. I don't mind paying for quality,
or at least, I can understand paying for quality.

sounds like "market for lemons" or similar, mentioned at
http://www.schneier.com/blog/archive...rity_mark.html

=========

In 1970, American economist George Akerlof wrote a paper called "The
Market for 'Lemons'" which established asymmetrical information theory. He
eventually won a Nobel Prize for his work, which looks at markets where
the seller knows a lot more about the product than the buyer.

Akerlof illustrated his ideas with a used car market. A used car
market includes both good cars and lousy ones (lemons).

I get the concept, I just can't grasp how that was worth a Nobel prize...

Brendo Wrote:
I've been emailing some framebuilders re a new steel frame. I'm not
listing names, but I was quoted $1250US for a frame and $350US for a
fork, because he thought the WA was Washington, not Western Australia.
When the error was discovered, the local price list was given -
$2450AUS for the frame $450 for the fork.

At current exchange rates, I would pay $1905AUS if I lived in the US,
but $2900AUS in Australia.

What would account for the difference? I imagine it's because he
hasn't updated his US price list to take into account the value of the
South Pacific Peso. If it isn't, what's going on?

Brendo
Postage on a frame from the US to here costs about AU$400, so that
should account for some of the difference. Where the extra $600 comes
from is a mystery to me though.


--
SomeGuy

On Apr 20, 1:37 pm, SomeGuy SomeGuy.2pb...@no-
mx.forums.cyclingforums.com wrote:
Brendo Wrote: I've been emailing some framebuilders re a new steel frame. I'm not
listing names, but I was quoted $1250US for a frame and $350US for a
fork, because he thought the WA was Washington, not Western Australia.
When the error was discovered, the local price list was given -
$2450AUS for the frame $450 for the fork.

At current exchange rates, I would pay $1905AUS if I lived in the US,
but $2900AUS in Australia.

What would account for the difference? I imagine it's because he
hasn't updated his US price list to take into account the value of the
South Pacific Peso. If it isn't, what's going on?

Brendo

Postage on a frame from the US to here costs about AU$400, so that
should account for some of the difference. Where the extra $600 comes
from is a mystery to me though.

--
SomeGuy

Which I could understand, if he was posting from the US to here. But,
he's an Australian builder. He posts from his workshop in Australia to
me in Australia. If anything, that makes the US price even cheaper.

I'm contacting some US and UK framebuilders to see if that sort of
thing works in reverse i.e a frame that would cost a Yank $2500Aus
will only cost me $1800.

Results will follow...


Brendo

On Apr 20, 3:37 pm, SomeGuy SomeGuy.2pb...@no-
mx.forums.cyclingforums.com wrote:
Brendo Wrote: I've been emailing some framebuilders re a new steel frame. I'm not
listing names, but I was quoted $1250US for a frame and $350US for a
fork, because he thought the WA was Washington, not Western Australia.
When the error was discovered, the local price list was given -
$2450AUS for the frame $450 for the fork.

At current exchange rates, I would pay $1905AUS if I lived in the US,
but $2900AUS in Australia.

What would account for the difference? I imagine it's because he
hasn't updated his US price list to take into account the value of the
South Pacific Peso. If it isn't, what's going on?

Brendo

Postage on a frame from the US to here costs about AU$400, so that
should account for some of the difference. Where the extra $600 comes
from is a mystery to me though.

--
SomeGuy

Naah, that's only if you get the rip-job. I'm sure you can do better.

On Apr 20, 4:03 pm, Brendo wrote:
On Apr 20, 1:37 pm, SomeGuy SomeGuy.2pb...@no-





mx.forums.cyclingforums.com wrote:
Brendo Wrote: I've been emailing some framebuilders re a new steel frame. I'm not
listing names, but I was quoted $1250US for a frame and $350US for a
fork, because he thought the WA was Washington, not Western Australia.
When the error was discovered, the local price list was given -
$2450AUS for the frame $450 for the fork.

At current exchange rates, I would pay $1905AUS if I lived in the US,
but $2900AUS in Australia.

What would account for the difference? I imagine it's because he
hasn't updated his US price list to take into account the value of the
South Pacific Peso. If it isn't, what's going on?

Brendo

Postage on a frame from the US to here costs about AU$400, so that
should account for some of the difference. Where the extra $600 comes
from is a mystery to me though.

--
SomeGuy

Which I could understand, if he was posting from the US to here. But,
he's an Australian builder. He posts from his workshop in Australia to
me in Australia. If anything, that makes the US price even cheaper.

I'm contacting some US and UK framebuilders to see if that sort of
thing works in reverse i.e a frame that would cost a Yank $2500Aus
will only cost me $1800.

Results will follow...

Brendo- Hide quoted text -

- Show quoted text -

Oh come on, don't be coy, give us a name.

Campag_nut wrote:
"Zebee Johnstone" wrote in message
...
In aus.bicycle on 19 Apr 2007 21:39:45 -0700
Brendo wrote:
It didn't make a lot of sense to me. If your product is good (and I
believe it is) price it accordingly. I don't mind paying for quality,
or at least, I can understand paying for quality.
sounds like "market for lemons" or similar, mentioned at
http://www.schneier.com/blog/archive...rity_mark.html

=========

In 1970, American economist George Akerlof wrote a paper called "The
Market for 'Lemons'" which established asymmetrical information theory. He
eventually won a Nobel Prize for his work, which looks at markets where
the seller knows a lot more about the product than the buyer.

Akerlof illustrated his ideas with a used car market. A used car
market includes both good cars and lousy ones (lemons).

I get the concept, I just can't grasp how that was worth a Nobel prize...


That's easy. I'm guessing it was a Nobel prize in economics
which is known as the "dismal science" - you don't have to do
much to stand out in the economics crowd.

DeF (a mathematician, does it show?)

--
e-mail: d.farrow@your finger.murdoch.edu.au
To reply, you'll have to remove your finger.