Your assumption is that they make a bunch of standard products, all with the same materials and quality controls, and then a bike company comes along and says, "We want 10,000 of that model there," so they slap their name on it and a bike goes out the door that's identical to one going out with another name and a higher price on it. That's not what's happening!
Each of the three major frame manufacturers in Taiwan is able to make whatever the customer company asks for. They may have a high-end carbon frame being made on one line, and next to it, under the same roof, they're making garbage.
Exactly. The point, of course, is that it IS all very standardized, almost cookie-cutter. In the case of the Windsor Tourist, the suggestion is that they ARE the same bike as the higher priced Fuji's. The ad hype and the glossy magazine covers don't tell that side of the story. What the savvy buyer needs to understand is the concepts of price point vs. features and doing due diligence so as to find out.
As a prominent man in the industry who has traveled to and visited all these factories said, just because the manufacturer has shown that they can make a good bike doesn't mean every bike they make is good. A bike company may come along and ask for a frame and negotiate a price too low to make it right, and the manufacturer obliges and gives them the garbage they asked for with the idea that the people who buy this off brand won't know the difference-- at least not until it's too late.
But further, the distributor that sells Windsor has had a ton of other problems besides the frames themselves, ranging from easily chipped paint to things assembled improperly to false advertising and the worst customer service in the industry. I would never send a friend to them. I know there are some people who are happy with the product; but this company has had a disproportionate number of very angry customers.
The one thing a big-name company has is reputation. It has something to protect in that reputation and makes the extra effort to get it right. Inspections, specifications and more inspections are par for the course for them. Ditto good service and warranty backing, to include distribution and parts availability. That is what really sets them apart - and what subsequently drives the cost up.
Interestingly, I visited my LBS yesterday, mostly to yuck it up with the ladies in the store. Yes, my LBS is female owned and operated

While I was there, I looked closely at the bikes in the $500-$700 range. To be frank, I could tell little practical difference between the various bikes at that price point. Big name, no name - much the same.
I am not a prominent man in the bicycle industry. I work instead in the consumer pharmaceutical industry, which constantly struggles against generic competition. Just like the bike companies. And while there are obvious differences between the two, they have much in common.
The truth is this: anybody can make the same products we do, and many do. We happen to pride ourselves on our reputation and quality, because that is truly all we have in our favor... especially when we are asking the consumer to spend more for our products than the others.
But the specifications for our products aren't difficult to arrive at and the technology exists to meet those specs for anyone able to set up a facility. The regulations are the same for both of us, with the FDA watching us both equally. In fact, we also produce the same products as our name brands - to sell to the private label side of the market. We are just like those Asian cycle factories.
Like I said, more similarities than meets the eye.
Believe me I'm not knockin' the big name cycle folks. Its because of them that cycling is growing as it is in this country. Yeah!
Ditto the LBS, which is taking off (it doesnt hurt to have a limping economy, high gas prices and a strong
Green Movement, either

) Yeah!
There are good reasons to go with both of them, things that smack more of value than price.
However, for those people who are willing to do the diligence and learn to do a few things for themselves, cost effective alternatives exist that meet the same needs... often in much the same ways.