What I think is being neglected here is that Riv doesn't actually make frames. 
The companies that make Riv-brand frames make frames for other brands too. Most 
of those other brands use TIG welding, which is fine for them. But then Riv 
comes along, with a relatively small order, and the guys and gals on the 
assembly line suddenly have to put their usual tools away and get out the 
seldom used brazing torches. It might be a little more costly to lug any given 
joint rather than TIG it, but it's a lot more costly (and probably annoying) to 
have to retool the usual operation for a relatively small order. I would 
imagine that the fabrication company would be inclined back-burner Riv's orders 
until a slow day when they have nothing "better" to do, and then they'll charge 
a lot just for the added hassle of having to switch to an unusual procedure. 
That's the true added cost for a lugged frame in 2014. Thirty or forty years 
ago, even relatively cheap frames were lugged. Today, the lugged frame is a 
novelty.

To sell a high quality complete bike for $1500, it's more a matter of economy 
of scale, rather than finding a slightly cheaper way to make the frame tubes 
stick together. At dealer wholesale pricing on parts, I can't buy a Surly LHT 
frame and decent parts and expect to make a profit at $1500 retail. But Surly 
buys a few thousand frames and parts kits, so they can wholesale me a complete 
bike, and still leave enough margin for me to make a decent profit at the $1350 
msrp. Riv is unlikely to compete with Surly on volume, but Riv can probably 
compete with the LHT quality and price at lower volumes simply because Riv 
mostly sells directly to customers, and doesn't have to account for a dealer 
profit margin.

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