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Is there a machine that does the lacing or does it have to be manual work? And in the first case, what does it look like and how does it work?

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There are machines, I've seen one in a video once, but I can't remember where. –  arne Dec 19 '13 at 15:05
    
That's what I thought, I just can't figure how it is done –  Vital V Dec 19 '13 at 15:11
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Check youtube.com/… –  arne Dec 19 '13 at 15:13
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Definitely there are machines, and the vast majority of wheels are machine-built. Though many consider a machine-built wheel inferior to a hand-built one, built by a skilled builder. –  Daniel R Hicks Dec 19 '13 at 16:16

2 Answers 2

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Manufacturers will use machines to build the wheels, however on top end bikes the manufacturer will build the wheels by hand (a skilled wheel builder's work is considered better than that of a machine). Your LBS will unlikeley have a machine to build wheels and this will be done by hand.

So in summary. New bike - wheel was most likeley build by machine. Repairs - wheel was almsot certainley built by hand.

As @arne said. You can search youtube for "cycle wheel building machine"

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If you buy your wheel from a bike shop and they lace it up for you, it's almost certainly laced by hand as the cost and calibration of the machines are not practical for one-off wheelsets. This is the preferred method and you arguably get a better wheel.

Most less expensive wheelsets that are ordered from distributors are machine built, although that is not always the case. For instance, J&B Importers is a wholesaler that has a large selection of inexpensive wheelsets, most of which are purportedly hand laced.

On the flipside, nearly all more expensive wheelsets are going to be built by hand, and while I'm sure that somewhere out there a nice/expensive pair of machine built wheels exists, I don't personally know of any examples.

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