Distributing and selling a bike brand…

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  • Distributing and selling a bike brand…
  • Sancho
    Member

    it’s hard, i have been developing my own stuff and sell it through the shop, we are trying to get our own frames built, but its tricky as it’s very expensive for tooling and sample costs are high.

    if you are selling a foreign brand in the UK then you will need a lot of money as it will take time to get the brand recognition etc

    i’m willing to put a lot of time into promoting the brand and coming up with ways to advertise it and get it out there i don’t see that as being a massive issue… because that’s my bag… getting the bikes over here and getting stock is the issue

    bencooper
    Member

    Be prepared for lots of STWers moaning about how you bump up the price, it’s much cheaper to buy one in the States on holiday, and distributors don’t do anything for their 20% – oh, and can they have a warranty repair on the broken frame, please?

    😉

    Premier Icon Northwind
    Subscriber

    bencooper – Member

    oh, and can they have a warranty repair on the broken frame which they bought used from the classifieds, please?

    FTFY 😉

    wilsonthecat
    Member

    As a distributor you might make 20-30%. For these margins you to need manage stock, agree a payment terms with your supplier, cover all UK marketing costs including any trade shows. Manage staff, delivery and warranty in the UK.

    Shipping and stock is the least of your worries, this is something that you cant really control and is left in the hands of your supplier. Sales and marketing strategy should be your primary focus.

    Premier Icon mogrim
    Subscriber

    A mate did something similar, here in Spain – seemed to be a lot of grief for not much money. Clothing/accessories were a better bet.

    Sancho
    Member

    Best will in the world, you may have the expertise to promote, etc but advertising is expensive.

    I would say it boils down to how much money you have to advertise and give bikes away to magazines, journos, shop demo’s etc

    plus managing stock is going to cost a fortune, as you will need distribution, storage etc.

    wrecker
    Member

    Money for old rope. Direct sales are the way forward.

    i’d need to ride the things before i committed to selling them, I would demand a few bikes first at least then i can make a judgement and gauge some opinion…

    bencooper
    Member

    i’d need to ride the things before i committed to selling them, I would demand a few bikes first at least then i can make a judgement and gauge some opinion…

    Demand? From the manufacturer’s POV, why should they go with you rather than someone else who is willing to order a couple of container-loads up front?

    Premier Icon mogrim
    Subscriber

    Demand? From the manufacturer’s POV, why should they go with you rather than someone else who is willing to order a couple of container-loads up front?

    More to the point, who are you? Why would a manufacturer send you a couple of expensive bikes, with no guarantee? CRC can make that kind of demand, a small independent just starting out can’t.

    The guy I mentioned earlier was importing Transition, he had to buy the bikes off them, albeit at cost. If he wanted a demo bike, he’d buy that too. And of course reselling a demo bike…

    Demand? From the manufacturer’s POV, why should they go with you rather than someone else who is willing to order a couple of container-loads up front?

    well’ it’s my angle anyway, maybe they will appreciate my back to basics approach…

    noted though, they will probably look at it that way.

    bencooper
    Member

    Indeed. I’ve been doing this for more than 15 years, and I’ve almost never found a small manufacturer* willing to lend or give away bikes. Partly because they cost money and they don’t know you from Adam, partly because often they can sell all they can make.

    In fact, if the manufacturer sounds too keen to have you, it might be an idea to ask why.

    *because that’s who you’ll be dealing with – Giant, Specialized and Cannondale already have distributors, and the big brands which don’t have a UK presence aren’t interested in getting one right now.

    bencooper
    Member

    If I were you (and I was you when I was starting out), I’d go to lots of shows first – Eurobike, Interbike, etc. Find brands you like. Get to know the people who run them. Then work from there.

    thanks for all the advice so far… i’m completely in the dark on it really, if you don’t ask you don’t find out, so all this is very useful

    Shibboleth
    Member

    I’m sensing another cyclist who thinks setting up a distribution network for imported off-the-peg Chinese frames will be a great way to get free bikes…

    I’m sensing another cyclist who thinks setting up a distribution network for imported off-the-peg Chinese frames will be a great way to get free bikes…

    hit the post, trundled along the line and went behind for a goal kick . . . 🙂

    thinking on this….. i’d be independent

    anyone have any real world experience of this?

    pitfalls, do’s and don’ts?

    Tah

    wilsonthecat
    Member

    I think your idealistic view of how this process works is not going to hold much weight with the manufacturer.

    Bikes are sold primarily through marketing and secondly through solid product development not because of one guys opinion.

    If it was me I would start talking to the sales channel manager at the bike manufacturer. You need to ask how they would support you, discuss any T&C’s, what is in the product pipeline, understanding your part in their company structure is key.

    They wont make any commitments until you become credible, and neither should you.

    butterbean
    Member

    It would be brave, there are plenty of big brands who should work, but don’t in the UK. I would suggest it would be bloody hard to get the bikes out into shops in the first place.

    Shops don’t really take a ‘punt’ on a brand over something they know they can shift numbers of.

    Most people learn the hard way, you know what you want to sell, but the reality is you go with the volume.

    luke
    Member

    I’ve thought about doing it several times, I see products that would be ideal for importing then don’t do anything and in a year or two’s time they become avaiable in the UK, and I end up kicking myself.

    Premier Icon D0NK
    Subscriber

    oh, and can they have a warranty repair on the broken frame which they bought used from the classifieds, please?

    seeing as someone brought it up… what’s the issue with a warranty on second owners? shirley an X year warranty covers the frame for X years. I accept a 2nd owner has no idea how much abuse the original owner gave it but an original owner is hardly likely to ‘fess up to abusing the hell out of a frame in a warranty situation.

    just seems a bit weird to me

    Why not start small? Buy a load of stuff from Tiawan (bars, stems, posts, saddles, grips, pedals, rims, hubs, consumables, maybe even some off the peg frames). I’m guessing the margin on that kinds stuff is bigger, and a £10 seatpost from an unknown brand is an easy sell compared to a £1k frame. If you can flog those then you’d have set up all your network before you start dealing with higher capital investment stuff like bikes (say you need 100/year, that could be £100k upfront in November, and have to be sold before next years model comes in a different colour otherwise they’re half price!).

    just seems a bit weird to me

    Anything above/beyond statutory rights is a contract between you and the manufacturer, there isn’t any contract between the manufacturer and the 2nd owner. There’s really no incentive for the manufacturer to offer one either, it’d cost them money in replacements and impact their sales!

    what about selling direct, by passing the bikes shops?

    bencooper
    Member

    what’s the issue with a warranty on second owners?

    A warranty is, basically, a sales gimmick to sell more stuff. Like those add-on ones Currys keep trying to sell you, except it’s given away free with the bike to encourage you to buy (and reassure you that the brand backs it up).

    Manufacturers have no incentive to extend warranties to second owners because every second owner is one less new owner 😉

    Shibboleth
    Member

    Have a look at Onix bikes as an example. They ballsed up by claiming to have ‘developed’ their first bike only for the cycling press to question their integrity due to the fact that it was simply an “open mould’ Chinese frame with a pretty paint job.

    They now use Rob Hayles to ‘endorse’ and, supposedly, ‘develop’ their frames. There’s still a feeling of suspicion that they’re still just charging top-dollar for something that’s readily and more cheaply available.

    Premier Icon Northwind
    Subscriber

    I was looking at ebay-shopping some stuff that doesn’t currently have any UK resellers… I shot for free samples, they didn’t bite for that but did get samples at just a little above postage cost, and below their normal unit cost, which was nice. Unfortunately they kinda sucked, but at least I found out before ordering in a crate full 🙂

    “demanding” samples is the wrong word but if it’s a new market for the supplier then it’s a mutual benefit- they want to sell you stuff.

    Premier Icon D0NK
    Subscriber

    A warranty is, basically, a sales gimmick to sell more stuff.

    and there was me thinking it was a producer/manufacturer showing/endorsing faith in their product, how naive of me.

    AFAIK Turner do 2nd owner warranty, not sure how many others do

    because every second owner is one less new owner

    not sure how serious you are being but “every 2nd owner is one more person who refuses to pay rrp” IME

    bencooper
    Member

    I’m never entirely serious 😉

    Sure, a warranty is a way of the manufacturer showing faith in their product. But why do they want to do that? So people will buy their product. So it’s a sales tool.

    There is an argument that 2nd owner warranties make sense for some products – if you make it easier for the first owner to sell on, then the first owner is also more likely to upgrade sooner.

    Premier Icon cookeaa
    Subscriber

    thisisnotaspoon – Member

    Why not start small? Buy a load of stuff from Tiawan (bars, stems, posts, saddles, grips, pedals, rims, hubs, consumables, maybe even some off the peg frames). I’m guessing the margin on that kinds stuff is bigger, and a £10 seatpost from an unknown brand is an easy sell compared to a £1k frame. If you can flog those then you’d have set up all your network before you start dealing with higher capital investment stuff like bikes (say you need 100/year, that could be £100k upfront in November, and have to be sold before next years model comes in a different colour otherwise they’re half price!).

    +1

    all too often people want to jump in the deep end and flog complete bikes and framesets from day one which is putting you straight into an area already choc full of established brands, the competition would have you beaten before you got started…
    Much better to at least get your eye in with parts and perhaps clothing/kit?

    Direct marketing has some appeal too, your marketing spend goes on banner ads, and the odd page in MBUK, and you’re not having to service a dealer network (but stock control and an order processing are your responsibility to get right of course).

    This way of course lies “Superstar” and they’ve carved a nice niche for themselves, without too much real challenge…

    Premier Icon cookeaa
    Subscriber

    I’m never entirely serious

    Sure, a warranty is a way of the manufacturer showing faith in their product. But why do they want to do that? So people will buy their product. So it’s a sales tool.

    There is an argument that 2nd owner warranties make sense for some products – if you make it easier for the first owner to sell on, then the first owner is also more likely to upgrade sooner.

    Of course every time a warranty is claimed on a bit more margin is lost, 2nd owner warranty increases the potential for those losses, certainly a show of faith, but you now have an effective doubling of liabilities against your older products, and is a transferable warranty really a selling point? I don’t buy new kit thinking about the potential warranty claims for the next owner…

    Sancho
    Member

    I’ve been adopting a similar plan, started bringing in a few components and learning who the manufacturers are that we can trust and can produce the quality we want, also spent over a year trying out products to test their durability and the back up from the manufacturers, and its developing slowly but Im not in a rush as we sell all we can get at the moment.

    Rorschach
    Member

    Is’nt this what Neil/Fruit did/does?
    He gets undeserved praise on here all the time.How hard can it be? 😉

    Happy to have a chat offline about this. We bring in, what is now, an established brand but I know other people who’ve done the ‘order a load of frames and sell them’

    There are lots of shops rebranding ‘standard’ frames and selling them but that’s not a great way to build a brand – there’s nothing to shop someone else bringing in the same frame with their own brand and undercutting you by £X. In fact, why would any shop choose to sell your frames when they can buy them direct?

    That said, Superstar have managed it with parts – you can buy most of their parts under other brands as well.

    The *right* way to do it is to actually design your frames so that you are actually developing frames that are a bit different. You can do it – look at On One and Cotic – but there are actually engineers behind both of those co’s and a fair bit of money invested building and testing prototypes.

    Nicolai offer second owner warranty. It’s a good marketing tool and shows a faith in what you’re making.

    Premier Icon D0NK
    Subscriber

    but you now have an effective doubling of liabilities against your older products

    how so? you make 1000 frames you have 1000 potential warranties to cover, no matter how many people own them, even if you have complete confidence in your product you will expect a % of failure rate and budget for that I’d have thought.

    and is a transferable warranty really a selling point?

    I’d certainly consider it a selling point, not because I expect to sell it later on but it implies “we stand by this product for X years, not until an original owner with fickle tastes gets bored and flogs it 6 months later”

    With single owner warranties and what has been said previously my cynical mind starts thinking that bike companies, instead of doing proper QC and R&D, break out the spreadsheets and calculators. “hey our warranty is 3years, it’s a shoddy product but it’ll last 12months of reasonable use, so part time/fair weather cyclists are a win for us, fickle customers are a win too, subtract the remaining long term owners warranty claims and we’ll still be quids in, right send it out.” Not confidence inspiring.

    bencooper
    Member

    I remember one of the early scandium frames that came with a suspiciously specific 18-month warranty 😉

    Happy to have a chat offline about this. We bring in, what is now, an established brand but I know other people who’ve done the ‘order a load of frames and sell them’

    Sounds good, my email is in profile, couldn’t see yours.

    even if you have complete confidence in your product you will expect a % of failure rate and budget for that I’d have thought.

    Yes, but youre trying to minimise your costs, there’s a saving associated with those fickle customers selling on quickly as it’s a frame you’ll never have to warrenty.

    You could look at it another way too “we stand by the reliability of our product, but it’s actualy crap so you’ll want to sell it”.

    With single owner warranties and what has been said previously my cynical mind starts thinking that bike companies, instead of doing proper QC and R&D, break out the spreadsheets and calculators. “hey our warranty is 3years, it’s a shoddy product but it’ll last 12months of reasonable use, so part time/fair weather cyclists are a win for us, fickle customers are a win too, subtract the remaining long term owners warranty claims and we’ll still be quids in, right send it out.” Not confidence inspiring.

    It’s probably partialy that, although they’ll also know that a frame that lasts 1 year of heavy use will likely last 3 or 5, or 7, or a lifetime. It’s against manufacturing defects, not wear and tear, accidental damage, or just plain old age. There will be a mean time to failure for the bike, but it’ll be designed well into the future, not for anywhere near the warrenty period.

    It’s all about reducing costs, not to rip people off, but if it costs you (or you can avoid having to put asside for warrenty claims) £5 less per frame, that’s £5 more into the next R&D cycle, or £5 off RRP boosting sales.

    Sounds good, my email is in profile, couldn’t see yours.

    There now. That explains why my adverts rarely resulted in a email

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