Super Sized Cycles
(Post: English)
The Challenge
Joan Denizot, the founder, has been agonizing over whether to manufacture bicycles in the United States or to import them from Asia at much lower costs.
The Background
Her business is at a crossroads. Though she has increased sales through her Web site every year, she remains barely in the black - and only by paying herself a pittance.
She has been seeking a marketing breakthrough that would enable her to expand her business and thereby aid more people like herself.
"I've come to peace with the word fat," she said. "I know for a lot of people that's still a sensitive word. But for me, it's not a taboo word. It's what I am. I weigh more than 225 pounds, quite a bit more. I have lost some weight, but for me it's more about being healthy."
Her enterprise might be considered a niche business, except that it is aimed at a growing segment of the population: the obese, who according to the Centers for Disease Control and Prevention, number about one in every three adults.
Ms. Denizot started her company after trying in vain, while recuperating from gastric bypass surgery, to exercise by biking, but could not find a bike that was comfortable and safe. "I'd get on bikes and the tires would flatten," she said.
Ms. Denizot looked for alternatives in bike shops. She searched the Internet and the sites she found, she said, "talked about how much the bike weighed and the parts, but never about how much weight the bike could carry."
Ms. Denizot could have had a bike custom made for her and been done with it. But she wanted to help others her size get moving, get healthier and spend more time outdoors with their children. (She has four, all over 20 years old.)
Her bikes, which range from $699 to $3,395, feature broader, sturdier wheels and tires, wider seats and pedal placement, and strong steel frames.
She said one model can support riders weighing as much as 550 pounds. Over all, she sells about 100 bikes a year.
She has added electric assist bikes to her line and is especially fond of the model she rides on hilly dirt roads around her home near Burlington. Like several of the bikes she sells, this one is made by another American manufacturer and upgraded to her standards.
That is also the case with the Big 29er, which has wheels three inches bigger than on standard bikes and can accommodate riders as tall as 6-feet-7.
Still, Ms. Denizot is banking on two models of her own design, which are the standard-bearers for the company. These models, A New Leaf and Time of Your Life, sell for $2,070.
Until recently, she made these core models entirely in the United States. But that drove up costs and prices, prompting complaints from customers.
Last year, following the advice of an investor who provided the upfront money and the contact with an experienced overseas agent, Ms. Denizot had 70 of her New Leaf bikes manufactured in Taiwan.
That move has left her wrestling with whether to follow her heart (manufacture in the United States) or her head (build her proprietary designs overseas).
The Options
A former employment counselor with the state of Vermont, Ms. Denizot, 52, has not lost her social worker bent and would love to provide skilled manufacturing jobs and perhaps apprenticeships to Americans.
"There's a lot to be said for helping a community and creating jobs here, but I need to be competitive, and I need to make a quality product, too," she said.
She was extremely pleased with the workmanship on the first shipment of bicycles from Taiwan. And she was even happier with the per-bike price. Though one-time upfront costs tied to overseas sourcing pushed her costs up, Ms. Denizot says she believes she could soon be paying $550 per bike, fully assembled.
Currently, she pays $400 to $500 just for her custom bike frames, which are made in Iowa and then shipped to the Vermont workshop of her master assembler - where the manufacturing costs of her American-built bikes rise to $1,250.
On the other hand, manufacturing in the United States enables her to provide a level of individualized customer service not easily matched by producing her bikes overseas.
"As it is, people call and say I've got this issue and that issue, and Tim Mathewson is so good he knows what to do to make the bike right for that person," she said, referring to her Vermont bike guru.
The Decision
In the end, Ms. Denizot's decision had a lot to do with the size of her business ("still very much the Joan show"), which would render her talk of job creation moot. Moreover, the size of her business leaves her ill-prepared to stave off the competition she anticipates.
"Eventually, the big bike builders are going to wake up," Ms. Denizot said. "And when they do, they're not going to fool around with having them custom built in the U.S. They're going to go overseas and get them built. Will they be as good as mine? I don't think so. But I'll still have to be competitive on price."
Shifting manufacturing to Taiwan will position her to do that. Lower prices and increased sales, she reasons, will create other opportunities.
"Warehousing and distribution, marketing and telephone sales - those are the kinds of jobs I can provide, and they will stay in America," she said. "There are tons of things I want to do."
Source: NY Times
