Origin of Cooler Helmets?

Donald Gillies said:

So is it true that at a bike show 15 years ago, a customer came up to
the Giro booth and said,

"I need a cool helmet"

And in fact, he was asking for a helmet with better ventilation. But
the Italian marketing rep thought he was looking for a helmet that
"Looks cool", and this is why so many helmets cost $125-$225 rather
than $50 any more ??

- Don "grin" Gillies
San Diego, CA

You mean retail for $125. They sure don't cost that much!

Joseph

Quoted message said:

Donald Gillies said:

So is it true that at a bike show 15 years ago, a customer came up to
the Giro booth and said,

"I need a cool helmet"

And in fact, he was asking for a helmet with better ventilation. But
the Italian marketing rep thought he was looking for a helmet that
"Looks cool", and this is why so many helmets cost $125-$225 rather
than $50 any more ??

- Don "grin" Gillies
San Diego, CA

You mean retail for $125. They sure don't cost that much!

Just move that decimal one place to the left. :-)

Ozark Bicycle said:

Quoted message said:

Donald Gillies said:

So is it true that at a bike show 15 years ago, a customer came up to
the Giro booth and said,

"I need a cool helmet"

And in fact, he was asking for a helmet with better ventilation. But
the Italian marketing rep thought he was looking for a helmet that
"Looks cool", and this is why so many helmets cost $125-$225 rather
than $50 any more ??

- Don "grin" Gillies
San Diego, CA

You mean retail for $125. They sure don't cost that much!

Just move that decimal one place to the left. :-)

Maybe even two! I'll bet the snazzy packaging costs as much as the
helmet does. A piece of styrofoam made in hundreds of thousands in
China? Of course marketing and R&D costs money, but you gotta use the
sales revenue on something, right?

Tires is another racket, I think.

Joseph

Ozark Bicycle said:

Donald Gillies said:

You mean retail for $125. They sure don't cost that much!

Just move that decimal one place to the left. :-)

And then slice it another 50 to 80%, I suspect. 10:1 is typical for
manufacturing/retail ratios, but the disparity goes way up for fashion
items. I don't think there's much chance that a $225-retail Giro
helmet really costs ten times as much to make as a $20 Bell.
--
Typoes are a feature, not a bug.
Some gardening required to reply via email.
Words processed in a facility that contains nuts.

Werehatrack said:

Ozark Bicycle said:

Donald Gillies said:

You mean retail for $125. They sure don't cost that much!

Just move that decimal one place to the left. :-)

And then slice it another 50 to 80%, I suspect. 10:1 is typical for
manufacturing/retail ratios, but the disparity goes way up for fashion
items. I don't think there's much chance that a $225-retail Giro
helmet really costs ten times as much to make as a $20 Bell.

Yep, I would guess the cost of manufacture of a ~$190 (retail price)
helmet to be in the $4-6 range (i.e., buying one is a confirmation that
Barnum was correct!).

On 26 Apr 2006 11:07:06 -0700, [email hidden] (Donald Gillies)

Quoted message said:

So is it true that at a bike show 15 years ago, a customer came up to
the Giro booth and said,

"I need a cool helmet"

And in fact, he was asking for a helmet with better ventilation. But
the Italian marketing rep thought he was looking for a helmet that
"Looks cool", and this is why so many helmets cost $125-$225 rather
than $50 any more ??

Naah, I'm pretty sure that the helmet makers probably collected a clue
from the way riders were decorating their lids, and got the idea that
they could offer "fashion statement" versions at extra cost. And, of
course, once their marketing people figured out that making a swoopy
"aerodynamic" helmet enhanced the profit potential, it was pretty much
inevitable that there would be stupid-price lids to go with the
stupid-light bike bits.
--
Typoes are a feature, not a bug.
Some gardening required to reply via email.
Words processed in a facility that contains nuts.

Werehatrack said:

On 26 Apr 2006 11:07:06 -0700, [email hidden] (Donald Gillies)

Quoted message said:

So is it true that at a bike show 15 years ago, a customer came up to
the Giro booth and said,

"I need a cool helmet"

And in fact, he was asking for a helmet with better ventilation. But
the Italian marketing rep thought he was looking for a helmet that
"Looks cool", and this is why so many helmets cost $125-$225 rather
than $50 any more ??

Naah, I'm pretty sure that the helmet makers probably collected a clue
from the way riders were decorating their lids, and got the idea that
they could offer "fashion statement" versions at extra cost. And, of
course, once their marketing people figured out that making a swoopy
"aerodynamic" helmet enhanced the profit potential, it was pretty much
inevitable that there would be stupid-price lids to go with the
stupid-light bike bits.

All aimed, with great financial reward, at the stupid.

Ozark Bicycle said:

Werehatrack said:

Ozark Bicycle said:

Donald Gillies wrote:
>
> You mean retail for $125. They sure don't cost that much!
>

Just move that decimal one place to the left. :-)

And then slice it another 50 to 80%, I suspect. 10:1 is typical for
manufacturing/retail ratios, but the disparity goes way up for fashion
items. I don't think there's much chance that a $225-retail Giro
helmet really costs ten times as much to make as a $20 Bell.

Yep, I would guess the cost of manufacture of a ~$190 (retail price)
helmet to be in the $4-6 range (i.e., buying one is a confirmation that
Barnum was correct!).

Well, yes and no. While the *incremental* cost of a high-end helmet is
certainly within this range, the molds to make the helmets are not
cheap. When I worked as a reporter for a bicycle trade magazine,
someone at Giro once told me that a typical helmet mold (CNC'd from
aluminum) cost on the order of $100,000.*

Since a separate mold is needed for each size, a set of three molds
(S,M,L) is around $300K. The FEA software required to simulate impacts
(e.g., LSDyna) is not cheap either at ~$20K per seat. So there are
significant investments to be amortized over the helmet's lifetime.

Giro's top-end helmet used to be the Pneumo. Then they introduced the
Atmos. They've kept the Pneumo around because once they've paid off the
helmet molds, Giro's margins go through the roof--there's no reason to
retire a perfectly good $100K mold. But the huge costs to be amortized
should not be ignored just because the post-amortization margins are so
good. At $300,000 for molds, Giro has to sell about 3,000 helmets ($189
retail, $99 dealer cost) before they break even. They've certainly
broken even on the Atmos.

Also, while a cheap helmet might only require two molds (two shell
sizes, with a third produced via thick pads), a higher-end helmet will
have three or maybe four molds. Since the cheaper helmets cost less to
produce initially and require much less R&D time and are made in vastly
higher numbers, the economies of scale are amazing. Cheap helmets
spread lower costs over more helmets. Expensive helmets spread higher
costs over fewer helmets, which helps explain the amazing price deltas.

That's not to say that all helmets are reasonably priced. I've found
that a $100 Giro ($75 on sale) has about 98% of the functionality of a
$189 Giro. My only point is that one should not confuse incremental
cost with total cost.

Jason

* That was about a decade ago. Helmet mold costs may have come down due
to better, cheaper rapid prototyping technologies and 5-axis CNC
machines. Even so, helmet molds are expensive.

Well I got the quote _almost right_. People have informed me that the
customer actually said :

"I'd pay anything for a cool helmet"

And in fact, he was asking for a helmet with better ventilation. But
the Italian marketing rep thought he was looking for a helmet that
"Looks cool", and this is why so many helmets cost $125-$225 rather
than $50 any more ??

- Don "grin" Gillies
San Diego, CA

<[email hidden]> wrote in message
news:[email hidden]...

Quoted message said:

Ozark Bicycle said:

Werehatrack said:

On 26 Apr 2006 11:25:54 -0700, "Ozark Bicycle"
<[email hidden]> wrote:

> Donald Gillies wrote:
>>
>> You mean retail for $125. They sure don't cost that much!
>>
>
>Just move that decimal one place to the left. :-)

And then slice it another 50 to 80%, I suspect. 10:1 is typical for
manufacturing/retail ratios, but the disparity goes way up for fashion
items. I don't think there's much chance that a $225-retail Giro
helmet really costs ten times as much to make as a $20 Bell.

Yep, I would guess the cost of manufacture of a ~$190 (retail price)
helmet to be in the $4-6 range (i.e., buying one is a confirmation that
Barnum was correct!).

Well, yes and no. While the *incremental* cost of a high-end helmet is
certainly within this range, the molds to make the helmets are not
cheap. When I worked as a reporter for a bicycle trade magazine,
someone at Giro once told me that a typical helmet mold (CNC'd from
aluminum) cost on the order of $100,000.*

Since a separate mold is needed for each size, a set of three molds
(S,M,L) is around $300K. The FEA software required to simulate impacts
(e.g., LSDyna) is not cheap either at ~$20K per seat. So there are
significant investments to be amortized over the helmet's lifetime.

Giro's top-end helmet used to be the Pneumo. Then they introduced the
Atmos. They've kept the Pneumo around because once they've paid off the
helmet molds, Giro's margins go through the roof--there's no reason to
retire a perfectly good $100K mold. But the huge costs to be amortized
should not be ignored just because the post-amortization margins are so
good. At $300,000 for molds, Giro has to sell about 3,000 helmets ($189
retail, $99 dealer cost) before they break even. They've certainly
broken even on the Atmos.

Also, while a cheap helmet might only require two molds (two shell
sizes, with a third produced via thick pads), a higher-end helmet will
have three or maybe four molds. Since the cheaper helmets cost less to
produce initially and require much less R&D time and are made in vastly
higher numbers, the economies of scale are amazing. Cheap helmets
spread lower costs over more helmets. Expensive helmets spread higher
costs over fewer helmets, which helps explain the amazing price deltas.

That's not to say that all helmets are reasonably priced. I've found
that a $100 Giro ($75 on sale) has about 98% of the functionality of a
$189 Giro. My only point is that one should not confuse incremental
cost with total cost.

Jason

* That was about a decade ago. Helmet mold costs may have come down due
to better, cheaper rapid prototyping technologies and 5-axis CNC
machines. Even so, helmet molds are expensive.

Wow. A well reasoned, non-reactionary anti-establishment, business savvy
answer. What the hell is it doing on RBT?

Ozark Bicycle said:

Quoted message said:

All aimed, with great financial reward, at the stupid.

It's funny to hear someone who takes pleasure in old junky cars
mocking people for buying stuff that's eye candy.

JT

****************************
Remove "remove" to reply
Visit http://www.jt10000.com
****************************

The large-mouth, small-brain bass rises to the bait:

John Forrest Tomlinson said:

Ozark Bicycle said:

Quoted message said:

All aimed, with great financial reward, at the stupid.

It's funny to hear someone who takes pleasure in old junky cars
mocking people for buying stuff that's eye candy.

Tell me about my junky old cars, buffoon.

Quoted message said:

Ozark Bicycle said:

Werehatrack said:

On 26 Apr 2006 11:25:54 -0700, "Ozark Bicycle"
<[email hidden]> wrote:

> Donald Gillies wrote:
>>
>> You mean retail for $125. They sure don't cost that much!
>>
>
>Just move that decimal one place to the left. :-)

And then slice it another 50 to 80%, I suspect. 10:1 is typical for
manufacturing/retail ratios, but the disparity goes way up for fashion
items. I don't think there's much chance that a $225-retail Giro
helmet really costs ten times as much to make as a $20 Bell.

Yep, I would guess the cost of manufacture of a ~$190 (retail price)
helmet to be in the $4-6 range (i.e., buying one is a confirmation that
Barnum was correct!).

Well, yes and no. While the *incremental* cost of a high-end helmet is
certainly within this range, the molds to make the helmets are not
cheap. When I worked as a reporter for a bicycle trade magazine,
someone at Giro once told me that a typical helmet mold (CNC'd from
aluminum) cost on the order of $100,000.*

Since a separate mold is needed for each size, a set of three molds
(S,M,L) is around $300K. The FEA software required to simulate impacts
(e.g., LSDyna) is not cheap either at ~$20K per seat. So there are
significant investments to be amortized over the helmet's lifetime.

Giro's top-end helmet used to be the Pneumo. Then they introduced the
Atmos. They've kept the Pneumo around because once they've paid off the
helmet molds, Giro's margins go through the roof--there's no reason to
retire a perfectly good $100K mold. But the huge costs to be amortized
should not be ignored just because the post-amortization margins are so
good. At $300,000 for molds, Giro has to sell about 3,000 helmets ($189
retail, $99 dealer cost) before they break even. They've certainly
broken even on the Atmos.

Also, while a cheap helmet might only require two molds (two shell
sizes, with a third produced via thick pads), a higher-end helmet will
have three or maybe four molds. Since the cheaper helmets cost less to
produce initially and require much less R&D time and are made in vastly
higher numbers, the economies of scale are amazing. Cheap helmets
spread lower costs over more helmets. Expensive helmets spread higher
costs over fewer helmets, which helps explain the amazing price deltas.

That's not to say that all helmets are reasonably priced. I've found
that a $100 Giro ($75 on sale) has about 98% of the functionality of a
$189 Giro. My only point is that one should not confuse incremental
cost with total cost.

Jason

* That was about a decade ago. Helmet mold costs may have come down due
to better, cheaper rapid prototyping technologies and 5-axis CNC
machines. Even so, helmet molds are expensive.

All this is pretty much true of any manufacturing endevour, Jason. The
classic saw that "the first one costs $1,500,075 and all the others
cost $75", etc., etc.

The point with the high end helmet biz is that there is a *very* steep
upside once the costs are paid off. And what drives this end of the
helmet biz? Better "protection"? No. Meaningfully better function in
any discernable way? Guess again. It's "fashion" and consumerism, plain
and simple. The helmet makers spend money to make (even more) money,
while the buyers spend stupid amounts of it to be "cool". The helmet
makers are betting that Barnum was right, and they usually win that
bet.

Quoted message said:

Quoted message said:

Well, yes and no. While the *incremental* cost of a high-end helmet is
certainly within this range, the molds to make the helmets are not
cheap. When I worked as a reporter for a bicycle trade magazine,
someone at Giro once told me that a typical helmet mold (CNC'd from
aluminum) cost on the order of $100,000.*

Since a separate mold is needed for each size, a set of three molds
(S,M,L) is around $300K. The FEA software required to simulate impacts
(e.g., LSDyna) is not cheap either at ~$20K per seat. So there are
significant investments to be amortized over the helmet's lifetime.

Giro's top-end helmet used to be the Pneumo. Then they introduced the
Atmos. They've kept the Pneumo around because once they've paid off the
helmet molds, Giro's margins go through the roof--there's no reason to
retire a perfectly good $100K mold. But the huge costs to be amortized
should not be ignored just because the post-amortization margins are so
good. At $300,000 for molds, Giro has to sell about 3,000 helmets ($189
retail, $99 dealer cost) before they break even. They've certainly
broken even on the Atmos.

Also, while a cheap helmet might only require two molds (two shell
sizes, with a third produced via thick pads), a higher-end helmet will
have three or maybe four molds. Since the cheaper helmets cost less to
produce initially and require much less R&D time and are made in vastly
higher numbers, the economies of scale are amazing. Cheap helmets
spread lower costs over more helmets. Expensive helmets spread higher
costs over fewer helmets, which helps explain the amazing price deltas.

That's not to say that all helmets are reasonably priced. I've found
that a $100 Giro ($75 on sale) has about 98% of the functionality of a
$189 Giro. My only point is that one should not confuse incremental
cost with total cost.

Jason

* That was about a decade ago. Helmet mold costs may have come down due
to better, cheaper rapid prototyping technologies and 5-axis CNC
machines. Even so, helmet molds are expensive.

All this is pretty much true of any manufacturing endevour, Jason. The
classic saw that "the first one costs $1,500,075 and all the others
cost $75", etc., etc.

The point with the high end helmet biz is that there is a *very* steep
upside once the costs are paid off. And what drives this end of the
helmet biz? Better "protection"? No. Meaningfully better function in
any discernable way? Guess again. It's "fashion" and consumerism, plain
and simple. The helmet makers spend money to make (even more) money,
while the buyers spend stupid amounts of it to be "cool". The helmet
makers are betting that Barnum was right, and they usually win that
bet.

Those are excellent points. The
high-initial-investment-low-incremental-cost phenomenon *is* true (to
a greater or lesser extent) for almost any manufacturing endeavor.

The CNC phenomenon of the mid-90s is one example; by its very nature,
the CNC-machining process is expensive on a per-part basis. Forging,
however, costs a lot up front but the incremental costs are low. That's
why Sugino can make a crank so much cheaper than, say, Topline.

While CNC'd parts cost about the same no matter how many you make,
helmets benefit from economies of scale much more than most parts--that
is, more than most manufacturing endeavors. Of course, the same is true
of almost anything molded or forged. My only point was that helmet
manufacturing requires high sunk costs and incurs low incremental
costs.

Now, as a consumer, I agree with you--Giro sells a lot of $189 helmets
because "that's what Lance uses." Giro also likely sinks more R&D
resources into designing those helmets (especially because high-end
helmets push the limits with regard to weight and vent hole
area/volume). If the Atmos passed the relevant ANSI test with a 40%
margin, I'd bet the farm that it would be sent back for a redesign.

Is the Atmos worth $189? Well, economics says that a good is worth the
price a buyer and seller agree upon. By that metric, the Atmos is worth
it for the people who bought it. Does that make them P.T. Barnum's
suckers? Maybe, maybe not. Either way, you and I are free to buy less
expensive helmets.

Cheers,

Jason

P.S. Bestesthandsander, you flatter me.

Quoted message said:

Ozark Bicycle said:

Werehatrack said:

On 26 Apr 2006 11:25:54 -0700, "Ozark Bicycle"
<[email hidden]> wrote:

> Donald Gillies wrote:
>>
>> You mean retail for $125. They sure don't cost that much!
>>
>
>Just move that decimal one place to the left. :-)

And then slice it another 50 to 80%, I suspect. 10:1 is typical for
manufacturing/retail ratios, but the disparity goes way up for fashion
items. I don't think there's much chance that a $225-retail Giro
helmet really costs ten times as much to make as a $20 Bell.

Yep, I would guess the cost of manufacture of a ~$190 (retail price)
helmet to be in the $4-6 range (i.e., buying one is a confirmation that
Barnum was correct!).

Well, yes and no. While the *incremental* cost of a high-end helmet is
certainly within this range, the molds to make the helmets are not
cheap. When I worked as a reporter for a bicycle trade magazine,
someone at Giro once told me that a typical helmet mold (CNC'd from
aluminum) cost on the order of $100,000.*

Since a separate mold is needed for each size, a set of three molds
(S,M,L) is around $300K. The FEA software required to simulate impacts
(e.g., LSDyna) is not cheap either at ~$20K per seat. So there are
significant investments to be amortized over the helmet's lifetime.

Giro's top-end helmet used to be the Pneumo. Then they introduced the
Atmos. They've kept the Pneumo around because once they've paid off the
helmet molds, Giro's margins go through the roof--there's no reason to
retire a perfectly good $100K mold. But the huge costs to be amortized
should not be ignored just because the post-amortization margins are so
good. At $300,000 for molds, Giro has to sell about 3,000 helmets ($189
retail, $99 dealer cost) before they break even. They've certainly
broken even on the Atmos.

Also, while a cheap helmet might only require two molds (two shell
sizes, with a third produced via thick pads), a higher-end helmet will
have three or maybe four molds. Since the cheaper helmets cost less to
produce initially and require much less R&D time and are made in vastly
higher numbers, the economies of scale are amazing. Cheap helmets
spread lower costs over more helmets. Expensive helmets spread higher
costs over fewer helmets, which helps explain the amazing price deltas.

That's not to say that all helmets are reasonably priced. I've found
that a $100 Giro ($75 on sale) has about 98% of the functionality of a
$189 Giro. My only point is that one should not confuse incremental
cost with total cost.

Jason

* That was about a decade ago. Helmet mold costs may have come down due
to better, cheaper rapid prototyping technologies and 5-axis CNC
machines. Even so, helmet molds are expensive.

All this is pretty much true of any manufacturing endevour, Jason. The
classic saw that "the first one costs $1,500,075 and all the others
cost $75", etc., etc.

The point with the high end helmet biz is that there is a *very* steep
upside once the costs are paid off. And what drives this end of the
helmet biz? Better "protection"? No. Meaningfully better function in
any discernable way? Guess again. It's "fashion" and consumerism, plain
and simple. The helmet makers spend money to make (even more) money,
while the buyers spend stupid amounts of it to be "cool". The helmet
makers are betting that Barnum was right, and they usually win that
bet.

Quoted message said:

Quoted message said:

Well, yes and no. While the *incremental* cost of a high-end helmet is
certainly within this range, the molds to make the helmets are not
cheap. When I worked as a reporter for a bicycle trade magazine,
someone at Giro once told me that a typical helmet mold (CNC'd from
aluminum) cost on the order of $100,000.*

Since a separate mold is needed for each size, a set of three molds
(S,M,L) is around $300K. The FEA software required to simulate impacts
(e.g., LSDyna) is not cheap either at ~$20K per seat. So there are
significant investments to be amortized over the helmet's lifetime.

Giro's top-end helmet used to be the Pneumo. Then they introduced the
Atmos. They've kept the Pneumo around because once they've paid off the
helmet molds, Giro's margins go through the roof--there's no reason to
retire a perfectly good $100K mold. But the huge costs to be amortized
should not be ignored just because the post-amortization margins are so
good. At $300,000 for molds, Giro has to sell about 3,000 helmets ($189
retail, $99 dealer cost) before they break even. They've certainly
broken even on the Atmos.

Also, while a cheap helmet might only require two molds (two shell
sizes, with a third produced via thick pads), a higher-end helmet will
have three or maybe four molds. Since the cheaper helmets cost less to
produce initially and require much less R&D time and are made in vastly
higher numbers, the economies of scale are amazing. Cheap helmets
spread lower costs over more helmets. Expensive helmets spread higher
costs over fewer helmets, which helps explain the amazing price deltas.

That's not to say that all helmets are reasonably priced. I've found
that a $100 Giro ($75 on sale) has about 98% of the functionality of a
$189 Giro. My only point is that one should not confuse incremental
cost with total cost.

Jason

* That was about a decade ago. Helmet mold costs may have come down due
to better, cheaper rapid prototyping technologies and 5-axis CNC
machines. Even so, helmet molds are expensive.

All this is pretty much true of any manufacturing endevour, Jason. The
classic saw that "the first one costs $1,500,075 and all the others
cost $75", etc., etc.

The point with the high end helmet biz is that there is a *very* steep
upside once the costs are paid off. And what drives this end of the
helmet biz? Better "protection"? No. Meaningfully better function in
any discernable way? Guess again. It's "fashion" and consumerism, plain
and simple. The helmet makers spend money to make (even more) money,
while the buyers spend stupid amounts of it to be "cool". The helmet
makers are betting that Barnum was right, and they usually win that
bet.

Those are excellent points. The
high-initial-investment-low-incremental-cost phenomenon *is* true (to
a greater or lesser extent) for almost any manufacturing endeavor.

The CNC phenomenon of the mid-90s is one example; by its very nature,
the CNC-machining process is expensive on a per-part basis. Forging,
however, costs a lot up front but the incremental costs are low. That's
why Sugino can make a crank so much cheaper than, say, Topline.

While CNC'd parts cost about the same no matter how many you make,
helmets benefit from economies of scale much more than most parts--that
is, more than most manufacturing endeavors. Of course, the same is true
of almost anything molded or forged. My only point was that helmet
manufacturing requires high sunk costs and incurs low incremental
costs.

Now, as a consumer, I agree with you--Giro sells a lot of $189 helmets
because "that's what Lance uses." Giro also likely sinks more R&D
resources into designing those helmets (especially because high-end
helmets push the limits with regard to weight and vent hole
area/volume). If the Atmos passed the relevant ANSI test with a 40%
margin, I'd bet the farm that it would be sent back for a redesign.

Is the Atmos worth $189? Well, economics says that a good is worth the
price a buyer and seller agree upon. By that metric, the Atmos is worth
it for the people who bought it. Does that make them P.T. Barnum's
suckers? Maybe, maybe not. Either way, you and I are free to buy less
expensive helmets.

Cheers,

Jason

P.S. Bestesthandsander, you flatter me.

Donald Gillies said:

So is it true that at a bike show 15 years ago, a customer came up to
the Giro booth and said,

"I need a cool helmet"

And in fact, he was asking for a helmet with better ventilation. But
the Italian marketing rep

Considering that Giro is 100% American...no. But if you tell it often
enough, the lie will seem real to republicans.

[email hidden] wrote:

<snipped>

-on expensive styrofoam helmets-

Quoted message said:

Is the Atmos worth $189? Well, economics says that a good is worth the
price a buyer and seller agree upon. By that metric, the Atmos is worth
it for the people who bought it. Does that make them P.T. Barnum's
suckers? Maybe, maybe not. Either way, you and I are free to buy less
expensive helmets.

This brings us to an interesting chicken-and-egg question: which came
first, the over-priced product or the fashionista suckers who will buy
it?

Quoted message said:

Wow. A well reasoned, non-reactionary anti-establishment, business savvy
answer. What the hell is it doing on RBT?

Is it in fact savvy and not reactionary?

1. Since helmets can obviously be produced and sold at a profit at
$20-$30 retail, are the arguments presented relevant and applicable
$125 and $189 models? If the question was "Why does a freakin piece of
styrafoam with a nylon chin strap cost $30???" then I would agree.
2. In spite of my agreement stated above, nevertheless, a styrafoam
ice chest has about as much foam as a helmet (I am guessing, I admit).
Shape is a bit simpler but requires a lid too... and sells for what,
$2? $5? And which sells more, and therefore pays for the mold quicker,
bike helmets or styrafoam ice chests?
3. The author is owner of a $100 Lance helmet. I use a $39 model
myself. I like the looks of the more $$$ models but, not being a
competitive racer, cannot justify the expense. Therefore I think that
the author has a $60 vanity piece to protect and is reacting to defend
that.

dkl

Bestest Handsander said:

<[email hidden]> wrote in message
news:[email hidden]...

Quoted message said:

Ozark Bicycle said:

Werehatrack wrote:
> On 26 Apr 2006 11:25:54 -0700, "Ozark Bicycle"
> <[email hidden]> wrote:
>
> > Donald Gillies wrote:
> >>
> >> You mean retail for $125. They sure don't cost that much!
> >>
> >
> >Just move that decimal one place to the left. :-)
>
> And then slice it another 50 to 80%, I suspect. 10:1 is typical for
> manufacturing/retail ratios, but the disparity goes way up for fashion
> items. I don't think there's much chance that a $225-retail Giro
> helmet really costs ten times as much to make as a $20 Bell.

Yep, I would guess the cost of manufacture of a ~$190 (retail price)
helmet to be in the $4-6 range (i.e., buying one is a confirmation that
Barnum was correct!).

Well, yes and no. While the *incremental* cost of a high-end helmet is
certainly within this range, the molds to make the helmets are not
cheap. When I worked as a reporter for a bicycle trade magazine,
someone at Giro once told me that a typical helmet mold (CNC'd from
aluminum) cost on the order of $100,000.*

Since a separate mold is needed for each size, a set of three molds
(S,M,L) is around $300K. The FEA software required to simulate impacts
(e.g., LSDyna) is not cheap either at ~$20K per seat. So there are
significant investments to be amortized over the helmet's lifetime.

Giro's top-end helmet used to be the Pneumo. Then they introduced the
Atmos. They've kept the Pneumo around because once they've paid off the
helmet molds, Giro's margins go through the roof--there's no reason to
retire a perfectly good $100K mold. But the huge costs to be amortized
should not be ignored just because the post-amortization margins are so
good. At $300,000 for molds, Giro has to sell about 3,000 helmets ($189
retail, $99 dealer cost) before they break even. They've certainly
broken even on the Atmos.

Also, while a cheap helmet might only require two molds (two shell
sizes, with a third produced via thick pads), a higher-end helmet will
have three or maybe four molds. Since the cheaper helmets cost less to
produce initially and require much less R&D time and are made in vastly
higher numbers, the economies of scale are amazing. Cheap helmets
spread lower costs over more helmets. Expensive helmets spread higher
costs over fewer helmets, which helps explain the amazing price deltas.

That's not to say that all helmets are reasonably priced. I've found
that a $100 Giro ($75 on sale) has about 98% of the functionality of a
$189 Giro. My only point is that one should not confuse incremental
cost with total cost.

Jason

* That was about a decade ago. Helmet mold costs may have come down due
to better, cheaper rapid prototyping technologies and 5-axis CNC
machines. Even so, helmet molds are expensive.

Wow. A well reasoned, non-reactionary anti-establishment, business savvy
answer. What the hell is it doing on RBT?