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So I'm doing a fairly basic business plan for a module at uni and my plan is to sell value for money bicycles in a direct sales approach similar to that of YT and Canyon. The bike in question would be a chromoly steel framed tourer that has rear spacing to accommodate either 130 mm or 135 mm hubs, room for 40mm tyres with guards, can run v-brakes/cantis and disk brakes, has all the mounts for bottle cages, racks and guards as well as having horizontal dropouts to allow for gear hubs or SS setups. As I'm trying to keep costs as low as possible the bike would be available in three sizes (S, M, L) and would be manufactured and assembled in Taiwan. Bikes would be back-ordered and shipped based upon demand and customers would be made fully aware of this. I certainly wouldn't mind waiting a bit longer if there was money to be saved! Bikes would be shipped directly to your door or there would be a "click and collect" option which would rely on a distribution network made up of reputable independent bike shops. This would cost the customer slightly more but they will benefit from having their bike fully assembled which will suit the less confident mechanics out there and would hopefully encourage those who know less about cycling to make a purchase. Bike shops would get a cut of the profit and are likely to get after sales as a result.
So I need to work out what parts to spec this bike with and so that's where I need your help to do some basic market research. I need to know the price point at which to aim for and I was wondering, based upon the information I have provided, roughly how much you would be willing to pay for the full bike shipped to your door? It would also be good to know how far you'd be willing to travel to a bike shop to pick up your bike if you chose the "click and collect" purchasing option?
I'm sure I'll have some holes picked in my plan but it would be very useful to hear everyones thoughts.
Cheers,
Tom
What are your competitors selling and how much for?
I guess cost depends on how flush I was feeling and the rest of the market. I would reckon on spending £500 to £2000 on a good tourer.
Personally I wouldn't be prepared to wait more than a couple of weeks if I was buying at the "value" end of the spectrum - I would wait a lot longer for a customised frame and build, it that's what I was going to buy, as I can see the necessity in that, but that's not what you're looking at. I guess if there was a huge saving (40%+) I might wait a bit longer, again if the bike met my needs (probably for a tourer this would involve it coming fully equipped with rack, mudguards, dynamo lighting etc.).
I would also want warranty support within the UK with a good turnaround - waiting for the initial product is a lot less of an issue than waiting for any defective parts to be replaced.
Edit - in terms of travel to a shop, it depends. 10 miles or so probably, as long as it's a fast 10 miles and I have access to a car or there's public transport near.
crogthomas there don't appear to be any direct competitors as my bike would have the spirit of a Surly yet priced and sold in a similar way to those of Ribble. I see Ribble being the main competitor and it's going to be difficult to compete with them on spec and price. I do however think that the use of a steel frame that's more versatile might just win some people over. The Ribble Audax is £699 with a decent spec so ideally I want to undercut that.
philjunior I'm glad you agree that good value is worth waiting for! Bikes would come with mudguards as standard however racks and dynamo lighting would be optional extras. And yes, I haven't given the warranty support much thought so thanks for reminding me!
Cheers,
Tom
Quickest way to make a small fortune in the bike trade, is to start with a large fortune.
you are entering a competitive, semi niche market, as an unknown brand you will need to undercut on price or offer something over and above the mainstream brands.
brand building is important, this doesn’t have to be exclusively done with bikes, other merchandise can have massive value here (T shirts etc)
have a look at how other brands have achieved similar goals to yours.
best of luck to you like.
If I wanted a cheap touring bike I’d just go to decathlon and pay £300 rather than a non brand unknown with a lead time.
IME proper tourers are very fussy about component choice and are unlikely to be happy with any standard build.
Do you know about Rivendell bikes? Cool steel touring bikes etc worth looking at:
A specialist touring bike seller that caters for beginners might be a go-er imo. With top quality add-ons that more experienced tourers might be interested in.
Lead times are circa 6 months from the Far East for established customers/brands ordering in batches.
Yep, business plan is for bankruptcy so far. Being cheaper isn't a USP, the service level you are wanting to offer leaves very little for any profit in there. back to basics
As I live within 10 miles of about 30 lbs, not very much and 10 miles respectively.
Btw Taiwanese bikes are made in batches of 100+s, one offs ain't gonna happen.