My wife speaks in acronyms. She works in software, and the people there, they are syllable avoidant. Very seldom is she explaining something to me about her day, that I don’t have to ask what some acronym means. Most of them turn out to incorporate other words I don’t know, but occasionally one pops up that I think will be useful.
TCO is one of those. It stands for Total Cost of Ownership.
What I know from selling bikes and bike stuff over the years, is that almost no one thinks about their purchases this way. They don’t think about how long a bike is going to last. In fact, the real question usually isn’t how long it’s going to last, but rather how long they’re going to want to use it. For a long time, the conventional wisdom was that avid riders rode a bike for 3-5 years on average. Shops banked on that. Riders seldom did the purchasing math with time as one of the variables.
For those of us trying to get away from consumerism for its own sake, TCO is a big deal. It becomes a good guide to responsible buying.
What affects TCO?
- Price – Quite often this is the only part of the cost the consumer considers, which is why discounting is such a successful sales strategy. It’s also why things cost $1999.95 instead of $2000. We all see the trick, but it remains effective. Price, like weight, is an instantly knowable number, and so we give it more importance than we probably should.
- Durability – Many of the dollar costs related to durability are captured in the next item in this list, incremental costs, BUT there is an important factor of durability that almost no one thinks about when buying a bike. How long are you really going to use it? This isn’t about how long it’s going to last, but about how long your interest in it is going to last. How susceptible are you to “the next new thing?” Often, when we buy bikes that are discounted, for example, the reason their price is lower is that they incorporate last year’s technology or aesthetics. When that technology takes yet another step forward, are you still going to want a bike that is two-generations behind. ‘Yes’ is a good answer, but few ask themselves the question before they put their credit card on the counter.
- Incremental Costs – This is periodic maintenance and parts that will need to be replaced. Can you service the thing yourself or does it go to a shop? What does that cost? How often will it need to go? What do replacement parts cost? Will you even be able to get them?
- Warranty – It’s a good idea to read them because both the length of warranty and the exceptions to the warranty pretty much tell you exactly what you can expect to get out of the product. If it has a 5-year warranty for example and none of the moving parts is covered, the company expects it to break down at one of those crucial points shortly after 5 years have passed. This is actually a really good way to estimate TCO.
- Materials – As an example, carbon fiber will naturally break down faster than metal, assuming you’ve taken reasonable care of the metal. Steel corrodes. Aluminum corrodes. Stainless steel and titanium don’t, but there’s still a level of care those materials need.
None of this is rocket science. You understand what I’m trying to say. But as a person who also works on the sales and marketing side of the industry, what I’m trying to get across is that flashy new designs, well photographed with snazzy copy DO NOT communicate TCO. I am nearly as susceptible to the charms of a new thing as you are, and I know all the tricks.
What I can tell you is that talk is cheap, which is a lot for a marketing writer to admit. If you want to spend your money on only the things with the best value, the most reasonable TCO (notice I didn’t say the lowest), then asking yourself a few of these questions or even doing a basic, back-of-the-envelope calculation on things before you buy them is not the worst use of your time.