Frame and Wheel Services transactions

Through Frame and Wheel Services, Frame and Wheel sold three bicycles, a set of rollers and a bike stand over the past two weeks for two clients. The auctions were orderly and smooth. The Kona Major Jake transaction was just below expectations perhaps because Frame and Wheel was too conservative in its description of the condition of the bike, or perhaps because another Major Jake that was a later year had just sold that week. Regardless, buyer and client were satisfied. Elsewhere, the Felt B-12 transaction was way ahead of expectations. The market seeks time trial bikes even in advance of winter, perhaps because some people who live in the northern hemisphere train for triathlons in the southern hemisphere during winter months. Indeed, Frame and Wheel received two enquiries about the bike from buyers in Australia and New Zealand, where summer is just beginning. Other enquiries came from Brazil, Peru and Switzerland. 

The most notable feature of the exercise was that the S-22 and the "F" Model Inside Ride Rollers were bought by buyers in Canada. Frame and Wheel is not surprised given the strong tradition of cycling in Canada and the weakness of the U.S. dollar against the "Looney". Indeed, the weakness of the U.S. dollar relative to all other global currencies, the popularity of shopping for cycling equipment on line and on eBay and the shaky economic conditions in Western economies explains why Frame and Wheel experienced strong demand for the items. An article in the Wall Street Journal titled Dollar's Fall Roils World provides good insight on the situation.

Frame and Wheel believes that international demand for used cycling items will remain strong because of the currency factor, but also because consumers want selection, value and convenience. EBay can deliver this. Frame and Wheel is not completely convinced that a stronger yuan will mean substantially higher costs of cycling equipment for the U.S. market because labor costs in China, although clearly on the way up, are still much lower than most places. Additionally, the market is competitive and price increases will be hard to pass along to consumers. Nevertheless, there is the risk of import tariffs being put in place by a Congress that seeks to please its angry constituents or worse, a wild rush by major countries to devalue their currencies so that their exports remain cheap, The hazards of this approach are described in the context of the Great Depression in Goodbye, Free Trade. Clearly, politicians and central bankers are not spending enough time on their bikes.