Follow the Money
Purchasing a Bamboosero bicycle generates reliable income for the builders. For the umbrella Bamboosero organization, fees and profits fund the creation of new Bamboosero networks. These monies cover extensive training associated with a steep learning curve and the development of previously non-existent infrastructure. Bamboosero operates in remote areas introducing micro-manufacturing – a crucial first step towards generating economic growth. The rest of the costs and expenses are typical for the bicycle industry.
Pricing Structure
| Category | Description | Margin | Cost |
| Cost per frame (COGS) | See detailed COGS breakdown below | $109.40 | |
| Gross Profit | Direct to builder – can be used for capital investment in their business | 27% | $40.60 |
| Price paid to builder | Subtotal | $150.00 | |
| In country transportation | Expense to cover transportation from production site to inspection center | $25.00 | |
| Quality Assurance Inspection | Inspection fee covers production oversight ensuring all aspects of frame are to specification and prepared for end user | $25.00 | |
| Painting | Cost of materials and labor for two part UV protectant clear coat | $35.00 | |
| International Shipping | Bulk shipments to reduce expense – subject to going rate for locality | $50.00 | |
| Distributor’s Landed Cost | Subtotal | $285.00 | |
| Distributor Margin | Fee to distributor for importing and distributing product to wholesale and retail customers | 18% | $72.00 |
| Licensing fee (Bamboosero) | Fee collected by Bamboosero to reinvest in brand’s quality reputation and for manufacturing expansion. | 12% | $50.00 |
| Re-work Frame | Reworking of frame once arrived-Alignment/Cracks/Paint | Est: | $133.00 |
| Wholesale price | Total | $540.00 | |
| Retail Margin | Standard margin for bicycle industry retail businesses to service the end user | 40% | $360.00 |
| Retail Price (Frame Only) | Total (not including tax) | $900.00 |
Example of COGS using historical costs in Ghana
Cost of Goods Sold
| Locally Sourced | Cost |
|
Labor *
|
$60.00 |
|
Bamboo
|
$2.00 |
|
Fiber
|
$1.00 |
|
Lacquer
|
$0.75 |
|
Subtotal Loc. Sourced
|
$63.75 |
| Supplied by Bamboosero | Cost |
|
Treatment chemical
|
$3.00 |
|
Epoxy (fast and slow curing)
|
$20.00 |
|
Dropouts
|
$13.00 |
|
Head tube
|
$1.00 |
|
Bottom bracket shell
|
$2.00 |
|
Seat tube insert
|
$2.00 |
|
Brake bridge / other
|
$1.00 |
|
Subtotal Supplied
|
$42.00 |
|
Total Cost of Goods Sold
|
$105.75 |
| Expenses (per frame) | Cost |
|
Gloves (reusable, 2 frames / pr.)
|
$0.25 |
|
Release wax
|
$0.10 |
|
Vinegar
|
$0.10 |
|
Lacquer Thinner
|
$0.25 |
|
Brushes
|
$0.10 |
|
Sandpaper (80, 120 and 220 grit)
|
$1.50 |
|
Electrical Tape (2 rolls)
|
$1.00 |
|
Markers
|
$0.10 |
|
Newspaper / Rags
|
$0.25 |
|
Total Expenses
|
$3.65 |
|
Total Direct Cost Per Frame
|
$109.40 |
*Bamboosero income on per person basis is comparable to what a tradesperson would earn in the same location. Bamboosero differs in that it aims to provide steadier employment than a rural-based tradesperson could otherwise count on.