Why are CF wheels like Zipps so pricey?
01-25-09, 02:26 PM
#51
SLJ 6/8/65-5/2/07
01-25-09, 02:38 PM
#52
Member
Join Date: Oct 2005
Location: california
Posts: 43
Bikes: Always in transition.
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Likes: 0
Liked 0 Times
in
0 Posts
Zipp must know its market and I guess they have determined they make more money selling X sets of wheels @ $2K+ than Y sets of wheels @ $1399.
P.S. I have Zipps, I have Williams wheels, the quality seems quite comparable. If anything I'm a bit more impressed with the Williams hoops.
That's my guess exactly, but I probably would have struggled to word it as well. I will say though, that I'm guessing Zip's annual display of their elite special forces Speed Weaponery team at Interbike and other shows probably runs a pretty penny, and that all gets passed on to the consumer. It is quite an impressive tactically strategic display of one-up-manship. Excellent!
01-25-09, 03:03 PM
#53
Zippy Engineer
Join Date: Jan 2003
Location: IN
Posts: 1,801
Bikes: Bianchi 928, Bianchi Pista Concept 2004, Surly Steamroller, 1998 Schwinn Factory Team Homegrown, 1999 Schwinn Homegrown Factory, 2000 Schwinn Panther, Niner EMD9
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 1 Post(s)
Likes: 0
Liked 0 Times
in
0 Posts
Well, I hate to dissapoint P-Cad so I suppose I ought to chime in here.
The price increases in the past few years have been driven by several different factors, and I'll try to delineate some of these issues here without prattling on for a few days. As has been mentioned, everything we sell outside of the bearings in our hubs (Swiss) and spokes (Belgian) are manufactured here in the US, which puts us at a bit of a price disadvantage to begin with. We'll start from the raw materials...
The carbon fiber we use is all sourced from the US, in fact two varieties that we use are deemed "defense critical" and hence only available in the US. There are numerous articles from numerous different sources detailing the increases in carbon fiber material costs over the past few years as aircraft such as the Airbus A380 and Boeing's forthcoming Dreamliner extensively use carbon fiber, so I'll leave it to anyone that's interested in that info to consult these sources.
The aluminum used in the hubs is sourced from Alcoa and is a proprietary alloy. Similarly, the price on these alloys has been driven significantly higher by demand in the past few years. You can have a complete set of hubs from Taiwan (similar to what you'll find on many companies' wheels, including several that have been mentioned in this thread) for roughly the price of the raw material used in our hubs. That's before it goes into the 10-axis lathe to turn it from a 3.5 lb block of aluminum into a 188 gram hub; that process could be done with multiple fixturing operations on multiple machines but the reality is that the tolerance stack-ups would prevent us from holding the tolerances we require for our bearings:
If you look at the various grades of balls used in hub bearings, grade 50 balls run around $1 per kilogram, while a grade 25 ball (as used in a Campy Record hub) will run around $2-3 per kilogram, grade 10 balls cost around $.03 per ball, and grade 5 ceramic balls used by many of our competitors run around $1.50 per ball. Further up the range, a grade 3 ceramic ball (offered by CeramicSpeed among others) will cost around $4 per ball, and the grade 2 ceramics we use cost around $8 per ball. When you multiply that out for 15 balls per cartridge and the Krytox grease we use at $80 per ounce you end up with a set of 6 cartridge bearings used in our hubset that are as expensive as those aforementioned Taiwanese hubs.
Now that we have all the material and components, we get to the process of building the wheels. Given our location in close proximity to the Speedway and the various racing teams locally, we've been fortunate enough to have many employees that have been working with carbon fiber for upwards of 20 years, back to when we were making parts for Indy cars. Considering that 13 people touch each rim as it ventures through the building, the costs associated with having numerous highly-skilled employees adds up. All wheels are hand-built as well, further adding to the costs. I'll spare you the details of the costs of each of our presses, machining centers, and cutting tables, but a single mold tool for a single rim now runs around $25000. This is another area in which raw material pricing increases have hit hard. These tooling costs are significantly higher than those faced by some of our competitors that have moved some or all of their production to Asia in recent years.
Someone touched on the issue of amortizing tooling costs; this is another area in which we significantly differ from our competitors. Our average lifecycle for a rim profile is 3 years, which makes things difficult when you consider the number of those $25k tools that we render obsolete every 3 years.
Then there's the matter of wind tunnel development, which is an expense that is not incurred at all by many of our competitors. Given those tooling costs, it is imperative that we optimize each rim shape to the best of our abilities prior to cutting production tooling. This wind tunnel development involves advanced studies in Fluent prior to fabricating SLA prototypes for testing. As an example, we worked through approximately sixty virtual and physical prototypes just in the course of developing the oft-maligned dimples for our discs and hubs, which have now cone through 5 revisions since their inception. (As an aside, the idea of surface treatments such as dimples is patented and gains 1-3 Watts per rim depending on model and yaw angle; while it is a small gain, the nature of our company involves doing whatever we can to provide any incremental gain possible and this is no exception.) The most recent test we did involved three days and over a dozen prototypes in addition to a plethora of our own wheels and those of some of our competitors. We generally are in the tunnel at least three or four times per year, which certainly adds up when you consider the expense incurred both prior to testing and then at the tunnel itself.
Marketing is an interesting topic of discussion as many refer to us as a marketing juggernaut. The funny thing is there that until late 2007 all our marketing-related activities were performed by engineers or sales group members in their spare time. Since then, we've hired one person that works part-time and jokingly refers to his cubicle as the marketing department. Even now, I spend far more money just on cost of our product I destroy in our lab than we do on marketing.
Obviously, there are costs associated with sponsorship, but this is also one of the best possible opportunities for continued R&D. While we've worked closely with CSC-Saxo Bank and Slipstream in the past, the relationship with the Cervelo Test Team is one of the best things that could have happened to us as engineers as it's further ratcheted up our interactions with some of the most demanding riders putting on some of the hardest miles out there.
I have to say (if anyone has managed to read through this far) that it is always interesting to see people question the value proposition of our wheels relative to others that are less expensive. Obviously, it's no secret that some of the extremes to which we go are for incremental gains, and we understand that the value proposition may not be deemed worthwhile by some. This was the origin of the Flash-Point line, where we actually considered end product cost part of the development equation, unlike the typical Zipp product. With that line you get the bulk of the performance of our Zipp products but at a more reasonable price. However, when you start looking at the costs of open mold rims landed here in group buys paired with the typical Taiwanese hubs, I'm surprised more people don't question the pricing of other companies in the market using these components. I think most will find our prices compare quite similarly to other companies that are actually manufacturing here in the US.
With regard to the comment about our appearances at trade shows, the funny thing is that the hotel they stayed at in Vegas when I first started with Zipp was condemned, and the place we used for the last two years that ran $90 a night (three to a room) has now been torn down in favor of a casino that is to be built on its site. We actually share rooms, have ridiculously small per diems and meal allowances, and everyone up the company ladder including Stan flies coach.
I hope that sheds some light on the costs associated with our product and wasn't too heavy-handed or overbearing (I'm just an engineer that lacks people skills
). There are many competitors that are pushing the envelope in various areas so the biggest benefit in the coming years will be to the end user as we are all pushing each other to improve our products.
The price increases in the past few years have been driven by several different factors, and I'll try to delineate some of these issues here without prattling on for a few days. As has been mentioned, everything we sell outside of the bearings in our hubs (Swiss) and spokes (Belgian) are manufactured here in the US, which puts us at a bit of a price disadvantage to begin with. We'll start from the raw materials...
The carbon fiber we use is all sourced from the US, in fact two varieties that we use are deemed "defense critical" and hence only available in the US. There are numerous articles from numerous different sources detailing the increases in carbon fiber material costs over the past few years as aircraft such as the Airbus A380 and Boeing's forthcoming Dreamliner extensively use carbon fiber, so I'll leave it to anyone that's interested in that info to consult these sources.
The aluminum used in the hubs is sourced from Alcoa and is a proprietary alloy. Similarly, the price on these alloys has been driven significantly higher by demand in the past few years. You can have a complete set of hubs from Taiwan (similar to what you'll find on many companies' wheels, including several that have been mentioned in this thread) for roughly the price of the raw material used in our hubs. That's before it goes into the 10-axis lathe to turn it from a 3.5 lb block of aluminum into a 188 gram hub; that process could be done with multiple fixturing operations on multiple machines but the reality is that the tolerance stack-ups would prevent us from holding the tolerances we require for our bearings:
If you look at the various grades of balls used in hub bearings, grade 50 balls run around $1 per kilogram, while a grade 25 ball (as used in a Campy Record hub) will run around $2-3 per kilogram, grade 10 balls cost around $.03 per ball, and grade 5 ceramic balls used by many of our competitors run around $1.50 per ball. Further up the range, a grade 3 ceramic ball (offered by CeramicSpeed among others) will cost around $4 per ball, and the grade 2 ceramics we use cost around $8 per ball. When you multiply that out for 15 balls per cartridge and the Krytox grease we use at $80 per ounce you end up with a set of 6 cartridge bearings used in our hubset that are as expensive as those aforementioned Taiwanese hubs.
Now that we have all the material and components, we get to the process of building the wheels. Given our location in close proximity to the Speedway and the various racing teams locally, we've been fortunate enough to have many employees that have been working with carbon fiber for upwards of 20 years, back to when we were making parts for Indy cars. Considering that 13 people touch each rim as it ventures through the building, the costs associated with having numerous highly-skilled employees adds up. All wheels are hand-built as well, further adding to the costs. I'll spare you the details of the costs of each of our presses, machining centers, and cutting tables, but a single mold tool for a single rim now runs around $25000. This is another area in which raw material pricing increases have hit hard. These tooling costs are significantly higher than those faced by some of our competitors that have moved some or all of their production to Asia in recent years.
Someone touched on the issue of amortizing tooling costs; this is another area in which we significantly differ from our competitors. Our average lifecycle for a rim profile is 3 years, which makes things difficult when you consider the number of those $25k tools that we render obsolete every 3 years.
Then there's the matter of wind tunnel development, which is an expense that is not incurred at all by many of our competitors. Given those tooling costs, it is imperative that we optimize each rim shape to the best of our abilities prior to cutting production tooling. This wind tunnel development involves advanced studies in Fluent prior to fabricating SLA prototypes for testing. As an example, we worked through approximately sixty virtual and physical prototypes just in the course of developing the oft-maligned dimples for our discs and hubs, which have now cone through 5 revisions since their inception. (As an aside, the idea of surface treatments such as dimples is patented and gains 1-3 Watts per rim depending on model and yaw angle; while it is a small gain, the nature of our company involves doing whatever we can to provide any incremental gain possible and this is no exception.) The most recent test we did involved three days and over a dozen prototypes in addition to a plethora of our own wheels and those of some of our competitors. We generally are in the tunnel at least three or four times per year, which certainly adds up when you consider the expense incurred both prior to testing and then at the tunnel itself.
Marketing is an interesting topic of discussion as many refer to us as a marketing juggernaut. The funny thing is there that until late 2007 all our marketing-related activities were performed by engineers or sales group members in their spare time. Since then, we've hired one person that works part-time and jokingly refers to his cubicle as the marketing department. Even now, I spend far more money just on cost of our product I destroy in our lab than we do on marketing.
Obviously, there are costs associated with sponsorship, but this is also one of the best possible opportunities for continued R&D. While we've worked closely with CSC-Saxo Bank and Slipstream in the past, the relationship with the Cervelo Test Team is one of the best things that could have happened to us as engineers as it's further ratcheted up our interactions with some of the most demanding riders putting on some of the hardest miles out there.
I have to say (if anyone has managed to read through this far) that it is always interesting to see people question the value proposition of our wheels relative to others that are less expensive. Obviously, it's no secret that some of the extremes to which we go are for incremental gains, and we understand that the value proposition may not be deemed worthwhile by some. This was the origin of the Flash-Point line, where we actually considered end product cost part of the development equation, unlike the typical Zipp product. With that line you get the bulk of the performance of our Zipp products but at a more reasonable price. However, when you start looking at the costs of open mold rims landed here in group buys paired with the typical Taiwanese hubs, I'm surprised more people don't question the pricing of other companies in the market using these components. I think most will find our prices compare quite similarly to other companies that are actually manufacturing here in the US.
With regard to the comment about our appearances at trade shows, the funny thing is that the hotel they stayed at in Vegas when I first started with Zipp was condemned, and the place we used for the last two years that ran $90 a night (three to a room) has now been torn down in favor of a casino that is to be built on its site. We actually share rooms, have ridiculously small per diems and meal allowances, and everyone up the company ladder including Stan flies coach.
I hope that sheds some light on the costs associated with our product and wasn't too heavy-handed or overbearing (I'm just an engineer that lacks people skills
). There are many competitors that are pushing the envelope in various areas so the biggest benefit in the coming years will be to the end user as we are all pushing each other to improve our products.
Last edited by Waldo; 01-25-09 at 03:09 PM.
01-25-09, 03:22 PM
#54
Senior Member
Join Date: May 2007
Posts: 368
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Likes: 0
Liked 0 Times
in
0 Posts
Are the rims really that expensive? How the F do wheels go from $800-$900 pair to $2K? That would imply that the cost of the rims is $1K+. Hard to believe. Williams has similar wheels for $1200 or so, which to my mind is more what wheels like this should actually cost..
Once Zipp sees how fast they could sell their wheels at 20$ a piece....they'll up their production, outsource to Chad and drop their prices. Zipps for everyones!
Last edited by the_drain; 01-25-09 at 03:25 PM.
01-25-09, 03:26 PM
#56
I don't even own a cat...
Join Date: Nov 2008
Location: Indianapolis
Posts: 424
Bikes: 2008 LG sonix 6.4, 2002 KHS Flite 500, 1999 Big Sur Gary Fisher
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Likes: 0
Liked 0 Times
in
0 Posts
It's all in the marketing. The R&D is expensive but you have to recoupe the costs and the remainder is money to develop more product. For every product that goes to market many are lost in the development stage. That definitely is the case for pharmaceuticals. But also there is an exhorbitant about of waste that goes on. Most of that marketing money goes to schmooze the sellers. I know that much of marketing for pharmaceuticals isn't for advertising but for paying high priced Drs to push the product to lower end doctors. I've been through it all, from start up to FDA approval. But really they price for the market. If you don't buy it then pricing will lower or the product license will be sold to someone who can sell the hell out of it. Zipp is an exclusive brand and people will buy it. It is kind of the old addage :with cars you can sell a car for $500 but many people will want to know what is wrong with it. Then you can turn around and sell it for $2000 and more people are willing to look at it and buy it. It's all in the head.
01-25-09, 04:31 PM
#57
Zippy Engineer
Join Date: Jan 2003
Location: IN
Posts: 1,801
Bikes: Bianchi 928, Bianchi Pista Concept 2004, Surly Steamroller, 1998 Schwinn Factory Team Homegrown, 1999 Schwinn Homegrown Factory, 2000 Schwinn Panther, Niner EMD9
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 1 Post(s)
Likes: 0
Liked 0 Times
in
0 Posts
If you thought the first paragraph was boring, wait 'til you get through the rest.
Last edited by Waldo; 01-25-09 at 04:39 PM. Reason: I done spelled a word all bad-like.
01-25-09, 05:03 PM
#59
Whateverthehell
Join Date: Dec 2004
Location: U.S.S.A.
Posts: 7,432
Bikes: '06 Blue Competition RC5AL w/ritchey pro fork, spinergy stealth PBO, etc.
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Likes: 0
Liked 0 Times
in
0 Posts
Anyone know anything about Revolutionwheelworks.com? Their 50mm carbos are $900.
__________________
"When once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you have been, and there you will always long to return." - Leonardo daVinci
"When once you have tasted flight, you will forever walk the earth with your eyes turned skyward, for there you have been, and there you will always long to return." - Leonardo daVinci
01-25-09, 05:24 PM
#60
Member
Join Date: Oct 2005
Location: california
Posts: 43
Bikes: Always in transition.
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Likes: 0
Liked 0 Times
in
0 Posts
Well, I hate to dissapoint P-Cad so I suppose I ought to chime in here......
I hope that sheds some light on the costs associated with our product and wasn't too heavy-handed or overbearing (I'm just an engineer that lacks people skills). There are many competitors that are pushing the envelope in various areas so the biggest benefit in the coming years will be to the end user as we are all pushing each other to improve our products.
I hope that sheds some light on the costs associated with our product and wasn't too heavy-handed or overbearing (I'm just an engineer that lacks people skills
). There are many competitors that are pushing the envelope in various areas so the biggest benefit in the coming years will be to the end user as we are all pushing each other to improve our products.What can you do?
01-25-09, 05:31 PM
#61
Peloton Shelter Dog
Thread Starter
01-25-09, 05:33 PM
#62
Arsehole
Join Date: Jul 2008
Posts: 2,280
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 2 Post(s)
Likes: 0
Liked 1 Time
in
1 Post
I don't ride Zipp wheels. I'm far too fat for that. I DO have a Zipp MTB front hub from back in the day, though. No ceramic bearings, but that hub has lasted me 12 years so far without any kind of failure, poor performance, or anything. Yes, it was expensive. Divided up over 12 years though, it was a bargain. I suspect the new generation of Zipp wheels are similar. Also, the integration with SRAM can only help them, financially.
Lastly, the Zipp guys are a good bunch. We get them in the store often, and they're always willing to listen to any concerns we have.
Lastly, the Zipp guys are a good bunch. We get them in the store often, and they're always willing to listen to any concerns we have.
01-25-09, 05:33 PM
#63
Peloton Shelter Dog
Thread Starter
01-25-09, 06:19 PM
#64
175mm crank of love
Join Date: Apr 2007
Posts: 3,387
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 1 Post(s)
Likes: 0
Liked 0 Times
in
0 Posts
01-25-09, 07:12 PM
#65
Senior Member
as much as i'd say yes to having a pair of zipps, i'd never drop the coin.
hell, i'm stilling feeling like i blew too much money on these, and i paid 500 less than you did for your zipps.
hell, i'm stilling feeling like i blew too much money on these, and i paid 500 less than you did for your zipps.
01-25-09, 07:38 PM
#66
Peloton Shelter Dog
Thread Starter
01-25-09, 07:40 PM
#67
Peloton Shelter Dog
Thread Starter
You do realize Waldo that you could post 9 page rationalizations and a 5 year price increase from $1300 to $2100 will make everyone think Zipp is just charging what the market will bear. Nothing wrong with that, but why not just say 'our costs would have warranted an increase to $1600, but as long as the OCP morons out there will pay $2100, why not?'
That I can get behind.
That I can get behind.
01-25-09, 07:46 PM
#68
Senior Member
Join Date: Jan 2007
Posts: 657
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Likes: 0
Liked 0 Times
in
0 Posts
The exciting part for me is the price drop that will hit carbon tubulars within the next couple of years. For now I must live with my "outdated" ksyriums.
01-25-09, 07:50 PM
#69
Peloton Shelter Dog
Thread Starter
01-25-09, 07:50 PM
#70
I eat carbide.
Join Date: Jan 2006
Location: Elgin, IL
Posts: 21,627
Bikes: Lots. Van Dessel and Squid Dealer
Mentioned: 25 Post(s)
Tagged: 0 Thread(s)
Quoted: 1325 Post(s)
Liked 1,307 Times
in
560 Posts
You do realize Waldo that you could post 9 page rationalizations and a 5 year price increase from $1300 to $2100 will make everyone think Zipp is just charging what the market will bear. Nothing wrong with that, but why not just say 'our costs would have warranted an increase to $1600, but as long as the OCP morons out there will pay $2100, why not?'
That I can get behind.
That I can get behind.
__________________
PSIMET Wheels, PSIMET Racing, PSIMET Neutral Race Support, and 11 Jackson Coffee
Podcast - YouTube Channel
Video about PSIMET Wheels
Podcast - YouTube Channel
Video about PSIMET Wheels
01-25-09, 07:53 PM
#72
I eat carbide.
Join Date: Jan 2006
Location: Elgin, IL
Posts: 21,627
Bikes: Lots. Van Dessel and Squid Dealer
Mentioned: 25 Post(s)
Tagged: 0 Thread(s)
Quoted: 1325 Post(s)
Liked 1,307 Times
in
560 Posts
I remember back in the late 80's hearing about "top end carbon fiber frames sell for $3,000 but one day when the technology improves the prices will drop to reasonable levels...."
__________________
PSIMET Wheels, PSIMET Racing, PSIMET Neutral Race Support, and 11 Jackson Coffee
Podcast - YouTube Channel
Video about PSIMET Wheels
Podcast - YouTube Channel
Video about PSIMET Wheels
01-25-09, 08:01 PM
#73
Senior Member
Join Date: Jan 2007
Posts: 657
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Likes: 0
Liked 0 Times
in
0 Posts
No real facts to back up claim. But this is bf. The trickle down effect in cycling gear is nice, as long as you don't need the latest and greatest.
01-25-09, 08:04 PM
#74
Senior Member
Join Date: Jan 2007
Posts: 657
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Likes: 0
Liked 0 Times
in
0 Posts
It's already possible to get off brand 50mm carbon tubulars in the $600- $800 range. Currently I am upgrading my frame-but often wonder if the money would be better spent on wheels.
01-25-09, 08:07 PM
#75
Senior Member
Join Date: May 2005
Posts: 1,485
Bikes: Trek, Giant, PoS
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Likes: 0
Liked 0 Times
in
0 Posts
as much as i'd say yes to having a pair of zipps, i'd never drop the coin.
hell, i'm stilling feeling like i blew too much money on these, and i paid 500 less than you did for your zipps.
hell, i'm stilling feeling like i blew too much money on these, and i paid 500 less than you did for your zipps.
Last edited by gabdy; 01-25-09 at 08:12 PM.