Waterford is not only making lugged bikes for Rivendell, I wouldn't
think it's quite as dramatic as you make it out to be, to make a small
lugged order.  I would guess they have people doing lugged every day.

On Mon, Sep 22, 2014 at 11:48 PM, Jim Thill - Hiawatha Cyclery
<thill....@gmail.com> wrote:
> 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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