Saturday, November 15, 2008

Xtracycle Pricing

Maybe a cargo bike is better than a car?...=-)

A member of the Bike Forums Utility Sub-Forum asked if the Xtracycle was over priced and after typing out a mondo response I decided I'd post it her as well.

" I've made some posts on my Big Dummy Blog that were critical of the pricing of some of the new Xtracycle accessories that came out in late 2008. The president of Xtracycle commented on them and although I think he was a bit annoyed he was polite and constructive. I've tried to see it from Xtracycle's point of view as well as from my own as a consumer and someone who has been responsible for being new products from scratch.

Here are some things I think we can agree on or at the very least I feel solid about:

- the Xtracycle folks are not trying to get rich or charging more just to gouge the market
- the Xtracycle product works pretty well and is a very flexible cargo bike solution
- Xtracycle put time and money on the line developing the Xtracycle when it wasn't popular or clearly going to be a successful product
- Xtracycle has inspired a whole slew of cargo bike new products
- designing new products can be expensive and getting them built can cost more than anticipated
- Xtracycle's new open source project is a progressive idea that seems to have the best interests of the cargo bike market in mind

From this I definitely think we need to be appreciative that some guys years ago decided to invest in a crazy cargo bike add on contraption that probably seemed really far out at the time. I don't question Xtracycle's motives or intentions and I think the product they produce is, for the most part, pretty nice.

So is the cost reasonable?

- a free rad kit is $490
- 2 wideloaders are $108
- 1 long loader is $49
- a set of footsies $59
- a kickback centrestand is $139

For a total of $845.

This represents to me the stuff you'd need to fully use your Xtracycle. You can off course spend way more if you buy the rest of the add ons like a bike carrier, snap deck pad, cargo bags, stoker bar, security collars or pannier kit.

I think there are three ways to answer the cost question:

1) some people compare the functionality of the Xtracycle to a car and therefore suggest the way to evaluate the price is to compare it to what a car would cost you to operate. In those terms the Xtracycle is relatively inexpensive.

2) you could look at what other products of similar manufacturing complexity and raw materials are being offered for by other companies that get their stuff made in Taiwan. Interestingly RANS' new Hammer Truck is a similar cargo bike system and parts will be made in the US and/or Taiwan. This should provide a pretty good comparison, but individual part prices are not available yet from RANS. The over all bike is priced at ~$2K similar to an Xtracycle spec'd Big Dummy.

3) You could evaluate the cost from the perspective of a cyclist who is interested in an Xtracycle, but who is part of the majority of the cycling market and isn't going to drop $2K on a bike without flinching. Clearly Xtracycle and Surly with their Big Dummy are doing brisk business [based on lack of stock in 2008] with those folks who routinely spend $1K+ on a bike. These are folks that wouldn't be shocked by $845 for a complete Xtracycle kit or $2K for a Big Dummy. The problem is that there are a limited number of these people and eventually that part of Xtracycle's market will get saturated. The majority of the bike market thinks $1K for a bike is crazy talk. Will they see $845 in value in an Xtracycle kit to add to an old bike they already have? I'm not sure.

One of my friends who got a ride on my Big Dummy and then saw it in action wanted an Xtracycle. I got her a smoking deal from a shop I know - keep in mind this was back in the early part of 2008 before the prices went up. Even with the lower prices, the discount I got her and the fact I was going to lend her any add ons she needed [wideloaders, bike carrier, etc...] the cost was still so high I ended up paying $50 of my own money to take the sting out of it for her. She is solidly middle class and has some disposable income, but $500CDN+ for something you add to a bike kind of blew her mind. If the cost was $600, $700 or more she just wouldn't be interested. With the current cost of an Xtracycle I haven't bothered trying to get other people I know interested as the price point wouldn't work for them.

Obviously everyone has to draw their own conclusions as to how much value they place on an Xtracycle and what they'd be willing to pay for it. If you really can replace your car with it and use it regularly [taking kids to school, getting groceries, hauling recycling, etc..] I can see it being worth the money for sure. For more occasional use or for those who think $300 for a Walmart bike is a lot I'm not sure they'll be able to justify an Xtracycle.

From my perspective I appreciate the fact that selling bike products can be a tough business and Xtracycle has to make enough $$$ to make it worthwhile. Two things I'd like to see are:

1) better discounts on complete kits so that people are rewarded for buying accessories - perhaps even an additional discount if you buy stuff with a Big Dummy or Xtracycle Freeradical. Yes they do have some packages at the moment, one I checked offered ~15% off buying a la carte, but I'd like to see even deeper discounts at time of purchase of a BD or Xtracycle kit. This will help overcome the sticker shock when people price out a complete Xtracycle system and they can still charge the normal rate for accessories purchased down the road.

2) better interoperability between Xtracycle accessories. I was keen on a KickBack centrestand until I found out they are not compatible with the footsies I already own and my passengers like plus they make adding/removing wideloaders a chore. This seems really odd for a company that makes and sells all these parts to not make them more cross compatible. As an example an aftermarket centrestand option for the BD and Xtracycle uses a different set of mounting points and is totally compatible with the footsies and wideloaders. It's ironic to me that the stand made by a third party is more compatible with Xtracycle's own accessories then their in house design.

I guess we'll find out what happens. If Xtracycle continues to sell strongly as they did in 2008 then their prices were acceptable to the folks that were interested. If their sales start to slump perhaps we'll see costs come down. Time will tell. "

11 comments:

SiouxGeonz said...

So...your first two comparisons are to products; the other perspective is basically saying "the Xtracycle is expensive to people for whom a thousand dollars is expensive."

There's a place in between for the first and the last categories. I found Xtracycle in 2005 when I wearied of "I would take my bike but I have to take so much stuff." I had a rack but no panniers... not even a good bungee collection.

The price of the Xtra was a big barrier; not being able to remove it was, too. Yea, they said "you won't want to" but it wasn't clear that it really doesn't handle that differently. Its history nudged me over the brink, and I cringed anticipating buyer's remorse and wishing I'd gotten something "simpler" like rack and panniers.

I'd like to see "packages," too... but I suspect effecting the culture changes so it's normal to use a bike will be what makes further good things happen.

Vik said...

I'm not suggesting these three approaches of looking at product value/pricing are an exhaustive list. Just what comes to my mind and what I've read.

What I do think is important to realize is that different people will come at this from different perspectives than our own.

Gunther said...

Why no mention of the Radish, Vik? At $1,200 I think the folks at Xtracycle have done a lot to bridge the gap between preceived value and cost. All us X owners know that, whether you bought a kit and bolted it onto a bike you had or went the Dummy route, the investment was well worth it.

Vik said...

I didn't mention the Radish, because it isn't anything different than an Xtracycle + a $700 donor bike.

As I noted in my post evaluating whether it is worth it as you say is a personal choice. Obviously there are folks out there [incl myself] who thought a Big Dummy was worth it enough to invest $2K+. However, there are also lots of cyclists out there for whom that is stupid expensive and totally not worth it.

Krystal said...

I'm one that wished I could afford a Big Dummy but "NO WAY" on the price tag. I do think they are worth it though. I took an old $700 bike - Trek 520 - and added the Xtra to it. I sold other items I had (and valued) to pay for the Xtracycle. I say that just to say the perceived value of an Xtracycle for me was high - just going out and getting one 'cause I wanted it wasn't an option. I don't drive a car anymore for anything if I can help it. The Xtracycle is what makes that possible with my family of four. I saw the Xtracycle as a $500 investment not $800. The other accessories including the wide-loaders can be added later if needed as far as I'm concerned.

Mr. Crankypants said...

The cost of the Xtracycle is certainly holding me back from buying one right now. No question that I’d like a cargo bike and I really like the Xtra, but when I look at the dollars involved, I’m torn four different ways:

- Xtracycle freeradical: The kit is $535CDN at the moment here in Calgary. Not sure of local pricing on the center stand, but I’m guessing it could push the price up over $700. While I don’t absolutely need the center stand, it certainly would be nice. There’s some pro’s & con’s to the bolt on approach. These have been covered many times so I won’t go into that here. My main reservation is plunking down $500-700 on something I can’t try out and evaluate before buying.

- Kona Ute: At $900 it’s a few hundred more than the Xtra, but you get an entire bike. No, it’s not compatible with the Xtra accessories, that however, is not an issue for me as the Ute comes from factory with all I need. The mis-matched brakes bug me though.

- Big Dummy: While the most appealing, is also the most expensive. I like the fact that it’s designed from the ground up for it’s intended purpose. No question that it’s worth the $1K, but it’s overkill for what I need. Kinda like buying a one-ton dually when all you need is station wagon.

- Or I can wait and see what other bike makers offer now that the Xtracycle system is open source.

Hmmmmm, what to do?

David said...

I assume the prices of Xtracycle products are fairly dependent on the costs of making them. So, are you critiquing their mark-up, or do you think they did a not-so-good job in design, from a cost-perspective?

Also, I'm not too surprised the $140 Kickback is out-performed by a $375 kickstand. It's not quite apples to apples.

Last, not everyone needs all the accessories on your list. For an average fella or gal, buying average groceries and stuff, a longloader and the wideloaders are not necessities. They're useful, sure, but you have to look at the marginal utility. Not everyone needs a pickup truck, some just need a station-wagon.

The same goes for the centerstand: We've all (many of us) been xtrabiking for years without them. Yeah, sure, we wanted them, but we didn't NEED them. I agree that it would be nice if it was compatible with footsies. I imagine the next version will be.

Vik said...

"I assume the prices of Xtracycle products are fairly dependent on the costs of making them. So, are you critiquing their mark-up, or do you think they did a not-so-good job in design, from a cost-perspective?"

Well first off I'm saying there are a variety of ways to evaluate the cost of a product. So I'm not suggesting there is anything fundamentally wrong with what Xtracycle is doing. If it makes sense to you buy it, use it and enjoy it. I own a Big Dummy so that says something right there.

From a personal perspective I do have issues with the cost of specific accessories relative to the function they provide. I have issues with the design of the KickBack in particular. That's not Xtracycle's problem in any respect other than I won't be buying those accessories.

The other issue I have is that the overall cost of the product is high enough that I don't bother trying to get people I know interested in it. It's simply too much of a financial investment for a bicycle product to get them to see the utility. Again that is not Xtracycle's problem in any way other than the fact the market for the product at the current price levels is limited relative to the total potential market of would be utility cyclists.


"Also, I'm not too surprised the $140 Kickback is out-performed by a $375 kickstand. It's not quite apples to apples."

The $375 centrestand is made by one guy in small batches in the US without be benefit of the scale of economies that operating within a larger business enterprise offers. So I'd suggest that the $375 stand would probably cost $150 if made by Xtracycle in Taiwan.

The design of the $375 stand is what sets it apart and makes it far more functional.

David said...

Ok, I get it.

When you say "the overall cost of the product is high enough that I don't bother trying to get people I know interested in it." You're refering to the cost of a bike+kit, etc., right? I get what you're saying, but is there another bike for significantly less that can do what an Xtrabike can?

I was super excited about the Yuba Mundo, because it really seems to be going after that entry level market. I've yet to try one though. Have you seen the Madsen kg271. I see several potential design flaws there, but also some good ideas.

How do you feel about the Xtracycle standard? I think it might be to early--there is still too much innovation going on. The Xtracycle designs certainly have a lot of good features, but they aren't perfect. Maybe. Hedge.

Vik said...

"When you say "the overall cost of the product is high enough that I don't bother trying to get people I know interested in it." You're refering to the cost of a bike+kit, etc., right? I get what you're saying, but is there another bike for significantly less that can do what an Xtrabike can?"

Well I'm referring to the cost of the kit mainly as I know people with bikes who could benefit from an Xtracycle, but once I work out the costs for them with a few accessories they are likely to need it simply becomes too much to swallow for a casual cyclist. Again not Xtracycle's problem except for the fact that these folks make up the majority of cyclists out there.

As for bikes that are a better deal than the Xtracycle the Kona Ute and Yuba Mundo come to mind. However, I would say there are pros and cons depending what the main thrust of your use is so this isn't an apples to apples comparison. The Xtracycle does have a lot going for it.

"How do you feel about the Xtracycle standard? I think it might be to early--there is still too much innovation going on. The Xtracycle designs certainly have a lot of good features, but they aren't perfect. Maybe. Hedge."

I think the Xtracycle open source concept is a good idea. More choices are not a bad thing and there is room for improvement in the design of the Xtracycle system.

The thing is the open source idea doesn't stop anyone from developing a new cargo bike platform if they want to.

annaliese said...

well guys don't feel too hard-done-by! here in the UK, Xtracycle gear is priced pound sterling-for-USD, meaning 164% of your prices! Ouch! it's still great stuff though.