During the 1896 retail shop and manufacturer bicycle price war in Cortland, the Cortland Evening Standard introduced some mischief on the subject by publishing an article which first appeared in the New York Herald. A spirited response to the New York Herald article by Cortland's Wesson-Nivison Mfg. Co. was published the following day.
Both articles are published here in order of appearance.
PROFITS IN BICYCLES.
IT ACTUALLY COSTS $30.31 TO MAKE A CRACK $100 WHEEL.
An Article Showing What Big Profits Are Made in the Business —
A New Foundation for Large Fortunes--A Fad From Which Millions Have Been Made.
If you buy a wheel for $100 you pay $70 profit, says the New York Herald. You may purchase a more costly wheel and pay more profit, in fact, and in proportion, or you may get a much cheaper wheel and pay relatively the same profit, which will be about 250 percent.
Then don't wonder when you see new cycle signs on our streets every day, find bicycle shops at every available site, and all sorts of shops going into the business by mixing wheels with other merchandise.
Here is a new foundation on which to erect a fortune of mushroom growth. Family wealth has often been founded on war contracts, patrimony has been worked out of the piles upon "rich strikes" in the "diggin's," millions have been multiplied from spouting oil wells and Dame Fortune's smile has been suddenly called forth by other means that have brought the comfortable assurance of millions to the third and fourth generations.
Now there appears a new "open sesame” to the cave of wealth. The bicycle has become a wheel of fortune to turn out riches. We have men of wealth who bear such names as "magnate,"' "king" and "emperor" and other titles that imply the power that money gives. Now we are to have the "Bike Baron."
WHAT BICYCLES COST.
Every purchaser of a wheel knows what it cost him, but very few know what it costs to produce a wheel before the profits are attached. The amount of profit derived from the sale of merchandise is usually a jealously guarded secret, and the larger the profit the more difficult it is for the purchaser to learn the actual cost of production, and how much of what he pays goes into profits.
This is particularly true of bicycles.
Try it and see.
If retailers attempt to give the information they will multiply the correct figures by two or three. If the manufacturer is asked, he will evade the question, or perhaps quite properly say:
"It’s none of your business."
But there are tens of thousands of wheelmen who individually know that the particular wheel he himself is riding cost him a hundred dollars, or thereabout, and would like to know what it cost the man who constructed it, at the moment it stood in its glittering beauty a completed bicycle.
Well, after a search for a competent authority, and after work to induce him to give the figures, The Herald is able to impart the desired information t o its readers. If you have an ordinary high-grade wheel that you were asked $100 for, you are here informed that it costs its manufacturer $30.31.
The information is reliable, for it comes from an unquestionable source. The gentlemen who gives the figures knows exactly what he is talking about. He is an inventor of improvements in bicycles, has invented and patented bicycle machinery, is a manufacturer of and dealer in all sorts of wheels. He knows the business from A to Z, both inclusive. Here you will see a table which shows exactly what every part of a bicycle costs, and the whole, it will be seen, costs $30.31, and no more.
WHAT YOUR HUNDRED DOLLAR WHEEL ACTUALLY COSTS.
Handlebar T. $00.05
Two head clips .10
Two bolts and nuts .12
Crown (receiving fork sides) .12
Seat post brackets .12
Crank hanger .50
Brace lip .06
Rear fork ends .12
Frame braces .05
Handlebar clamp .07
Seat post T .28
Two head cups .12
Crown cone .03
Head adjusting cone .08
Lamp bracket .03
One hundred balls .40
Nipples on spokes .18
Fork sides .26
Crank parts .80
Large sprocket .40
Labor in assembling parts 5.00
HIGHER AND LOWER.
Now if you wish a wheel particularly fine, with the best of finish, full of artistic lines, and suited to the most cultivated taste, you are the man the dealer is looking after. You will pay more money and much more profit for such a wheel. You may pay $125 or $150, and such wheels cost more to produce than the foregoing figures show.
The rims may cost $1.25, the tires $12, the saddle $4 and the pedals $1.60. Then the finish will be better than the standard wheel and there will be more nickel plating on it.
Of course, you may go into silver or gold, and extend the cost to any figure you wish; but the further you go the greater proportionate profit you will pay.
On the other hand, you may indulge in the false economy of going to the other extreme and buying the cheapest wheel to be found, but even then you are paying about the same percentage of profit. You may go below the standard mark of $100, a dollar at a time through the scale of prices, until you reach the lowest figures. At the upper end of the scale there is not much difference in quality, and often it is simply in the amount of profit the seller is willing to accept; but the price of much cheaper wheels is made possible by the grade of material used, and the class of workmanship.
There are tires that cost $2.50, saddles that cost eighty cents, and pedals that cost forty cents. Then second hand, and second, and even third and fourth, rate material is sometimes used.
The work of assembling the parts is another factor. It may be done with skilled labor that costs $5 for each wheel, or by boys who simply throw the wheels together.
COST OF SINGLE PIECES.
The Herald's inquiries among the dealers for singe parts of the bicycle developed the fact that there was quite a variation in the prices put on the articles, but an average shows that the original cost price is multiplied by five. A saddle, for instance, which cost at the factory 80 cents, is sold for $4, and one which cost $2.50 for $7. Handlebars that cost from $1 to $1.50 are sold for $5 to $7. Smaller articles listed in the factory cost at 3, 5, 7, 8, 10 and 12 cents, cost from 25 cents to $1. The 25, 30, 40 and 88 cent articles are sold at from $1.25 to $3.50.
So it goes through the list. If a man anxious to experiment should purchase all the various parts of an ordinary $100 wheel, one at a time, and pay an expert for putting them together, his wheel would cost about $178.
Cortland Evening Standard, Tuesday, June 16, 1896.
We are mad clean through, reason enough, to think that we can't go away for a day's spin through the country without coming home and finding the news editor has been sticking his rusty shears into the New York Herald, May 29, and extracting that old chestnut, headed, "Huge Profit In Building Bicycles," which was so thoroughly ventilated in the New York Daily's and the Cycling Press week before last.
It is bad enough to have The Herald print such nonsense, without every paper in the country copying it. We have a friend here engaged in the bicycle business who would like to engage at once the services of the man who will build his high grade bicycles for $30.31, and pay him a big salary, too.
Anybody with any experience in bicycle construction would know at a glance that The Herald's figures apply to such wheels as are assembled and put on the market without guarantee or pedigree. We have seen a good many sold in a town not 100 miles away from here. The wheel described in The Herald has no more kinship with the high grade $100 wheel than an ordinary cow has with a thoroughbred trotter. Both animals are quadrupeds and there the semblance ceases.
Figures like those given in The Herald might be applied to any business with equally surprising results. We would find road wagons could be bought as low as $20, and also as high as $100. No sane man would say one was as good as the other.
We might figure the cost of editing a newspaper by itemizing the paper and ink at so much per pound, then adding the labor of type setting and tending the presses, subtracting this amount from prices charged for advertising and sale of the paper, we would know just how much profit is being made in running the paper. In both cases invested capital, brain work in the office, cost of placing with the consumers, bad debts, and the thousand and one incidental expenses which come in and cut away the profits, have been neglected.
Unlike newspapers bicycles have to be followed up for a year with a guarantee, and reputable manufacturers make their guarantees good. Guarantees cost money and have to be charged for. The guarantee is the unknown quantity of the equation in calculating cost of bicycles, and prevents the manufacturer from knowing what profit he has made on a wheel till a year after it has been sold.
When we read articles like that in The Herald we feel like exclaiming with the poet, "Fools rush in where angels fear to tread."—Hub Sprocket.
LOYAL WHEELS are daily increasing in popularity, because they are well built and backed by a reliable guarantee. We test them on the Main-st. pavement, and know they will stand riding over any road in the country.
THE WESSON-NIVISON MFG.CO.
Owego and Squires-st.
The Wesson-Nivison Manufacturing Co. changed its name to Wesson Manufacturing Co. in November 1896.