Thinking of Creating a New Bike Brand?
Every week we receive emails from individuals enquiring about creating a new complete bike, frame, or component for their new brand. These days, as the trend is almost entirely electric bicycle related, enquiries are all about e-bikes – e-bike frames, e-bike components, e-bike accessories, e-bike production. While most people are just a few clicks away from finding a generic China-based supplier on Alibaba, insiders know that creating genuinely unique and quality bikes require extensive planning and vetted manufacturers. Here, Oerus is offering some quick tips on what to prepare for when seeking to create your own bicycle or e-bike brand.
Research
Many enquires we receive from individuals seeking to build their own bike brand do not have experience in the bicycle industry. Moreover, many of these individuals do not possess backgrounds in sales, engineering, or manufacturing. The good news is that all of this is not important towards the goal of creating a new bike brand. What is important, however, is spending time researching about bicycle import regulations in your home market and basic bicycle specifications. Most of our client brands are from two largest markets we serve are the United States and countries from the European Union.
The first major difference between the two is price point. The EU general price point for bikes is generally higher than the USA, therefore choice of components and pricing are important differentiating factors. Following this logic, choice of components for your bikes will ultimately determine where it is economically more advantageous to produce them. Keep in mind that we advise this based on various factors that can determine price such as overhead costs, bicycle frame costs, logistics costs, and production quality. For example, if e-bikes destined for the USA are using Bafang drive systems, they should be produced in China, Vietnam, or Cambodia. If e-bikes are using Shimano drive systems, production in Taiwan or Vietnam will prove to be most efficient. It all comes down to cost.
Next, due to EU anti-dumping tariffs against China origin bicycles and select components, brands from the EU tend to prefer producing their bikes in Taiwan and Southeast Asia. This has been a mainstay for the past decade. Initially, brands in the USA faced some difficulties importing bikes from China due to trade tariffs imposed by the USA during the Trump Administration, but most of those tariffs have been successfully excluded. The USA continues to import a majority of bikes from China and Southeast Asia (notably Vietnam, Cambodia, Bangladesh, and Indonesia).
Doing your research ahead of time will help you make the right supply chain decisions.
Due Diligence
Conducting proper due diligence is generally good advice for any situation involving business. In regards to bike manufacturing, prepare to have the essentials before entering into any correspondence with prospective suppliers. These include NDAs, Tooling Agreements, Manufacturing Contracts, Pricing Agreements, etc. Depending on where your suppliers are based, you will also need to ensure that the contractual agreements meet the requirements of local laws and jurisdictions. Otherwise what use is the contract if it cannot be enforced?
Ensuring your supply chain vendors are vetted and in good standing financially is equally important. It makes perfect sense to make several personal visits, or visits via intermediaries to ensure vendor performance lives up to their sales and marketing material. On top of this, it is extremely important to ensure vendors are well capitalized, work well with other supply chain vendors, and sufficiently insured to cover potential product liability mishaps in your home market.
Besides the paperwork, conducting proper due diligence also means having the right people carry out auditing of the supply chain. Audits are best carried out early before work begins, first production, and intermittently in future production.
Management
Considerable time and energy need to be invested in managing your supply chain so that acceptable results can be expected. Anything short of this will almost always result in unfavorable surprises. As any bike industry veteran will advise you, the bike manufacturing world is not the most structured. Expect to spend a lot of time hands-on: reviewing specifications, pricing, quality requirements, deadlines, and general correspondence.
Having a good team in place will certainly help with supply chain management tasks. It often requires an experienced product manager and engineer to oversee most bike and e-bike projects from start to finish. Another way to alleviate a lot of this work is to find vetted manufacturers that have the experience and know-how to carry out most of the tasks autonomously. Only minimal oversight will then be required and you can invest more time on things like business development.
Lastly, it is important to invest in quality control either by sending a member of your team to conduct the inspections on-site or hiring a third party to do it. There are obviously countless advantages in doing this. By planning structured QC guidelines and inspections, the entire supply chain will be better suited to work towards delivery of better bicycle and e-bike products.
