Five Tips for Electric Bike Businesses

OTH · Dec 7, 2010

What else would I recommend?

That's easy. Make electric bikes look as much like mainstream bikes as possible.

Having seen the enthusiasm for Wispers on this site, I was tempted to try one recently. Yes, I had the grin as I tried it - but that's because I knew noone was looking.

If I took one home, I'd know my sons would be weeping inside, even if they managed to hold back their derision. Earlier this year, I planned to buy a Trek Madone. How can I turn up with something that looks like a two-wheeled praying mantis?

I mean no offense, Wisper owners. I may yet join you.

But, if the industry want to grow significantly, it's got to appeal to the general public. And, whether we like it or not, image matters these days.

jbond · Dec 7, 2010

OTH said:
That's easy. Make electric bikes look as much like mainstream bikes as possible.

I'd second that and change it slightly. Make them work well as bicycles first. It's mildly annoying to spend > £1k on an electric bike and then want to upgrade the brakes, forks, tyres, rims, cranks, gearset and so on. I'm not looking for top of the range items but I don't want real budget items either.

NRG · Dec 8, 2010

You can spend 2K+ and still need to change pedals / mudguards etc!

Re the OP, I think this falls at the first hurdle. E-bikes are a niche product in the UK and raising cost will kill an already fragile industry. Costs need to be driven down IMHO, especially with regard to the biggest component headache that cripples E-Bikes from the outset: The battery. Or at the very least the 'cost' to the customer should be made more bearable IE: Battery leased replacement scheme. This may prove impossible in which case E-Bike will always be niche and not make any 'money'...

As for design, there seems precious little other than frame shape, geometry and colour. The majority of bikes come with standard off the shelf components of varying quality offering no real design differentiating. I think the push bike matured many many years ago, this desire to always re-invent be modern and funky is on the whole doomed from the start.

Sure, there are already some neat designer style bikes around but if anything screams more loudly than a normal E-Bike then its an E-Bike with 'styling'! You want to be discrete? Sorry, look elsewhere....also very often with these designer bikes the ride quality or some other ride experience is badly compromised. Bikes are simple things that have one function in life and they do it very well, adding iPhone functionality just screws things up and for no obvious benefit.

I've not found Email marketing to work, people are numb to 'spam' emails. They end up in the junk filter, are not read, get deleted and become annoying...even for focussed email blasts.

I think most shop based outlets for E-Bikes do offer try before you buy, its something every one on this board recommends to all newcomers, the unfortunate reality is the dealer base is not there, I know of only two locations to try out a Kalkoff for instance. Not everybody can make the journey or wait for the next show (and have limited exposure to a test), however, Wisper at least is good in this respect. I don't know what the answer to this is, maybe increase the penetration in to Halfords?

Anyhow thats just my 2p's worth.....

CeeGee · Dec 8, 2010

NRG said:
Anyhow thats just my 2p's worth.....

I think that is worth at least 5p. I fully agree with everything you said.

As for raising the prices: if Wisper were to add £200 to their price, it wouldn't make them a better bike - it would make them one that more people couldn't afford. There is no question of "what" not "if". Strangely, not everybody has large amounts of money to throw away on a whim.

On the subject of targeted emails: if Wisper had got my email address before I bought one and they had started sending unsolicited publicity material my reaction would have been the same as I have for any other company that cold calls me on the phone or email: straight on my ignore list and I refuse to have any dealings with that company.

Colin

(I use Wisper here because when I was upgrading I found them to be the sort of company I like to deal with and hopefully would never resort to the suggestions made in the OP)

Mussels · Dec 8, 2010

EdBike said:
When mobile phones first became mainstream they were designed to look just like phones... Then Apple came along and completely changed the whole mix. Now, everyone's trying to emulate a touchscreen display with 3G internet and a whole host of 'iphonic' (yes, I just made up a word there ) features. Home phones still look the same, but mobile is a whole different world.

What would happen if 'the Apple' of electric bikes arrived with a completely different look, new functionality and a fun-kay design?

The gadget geeks might adapt it, but would the mainstream? What do you reckon?

Interesting how you remember mobile phone development, the iPhone has never been cutting edge technology. Apple took something that already existed (including the name, they stole it from Cisco) and made it simple and pretty.
Maybe that's the answer for eBikes, make them simple, pretty and stick an erroneous capital letter in the name.

NRG · Dec 8, 2010

Ironically, given the products name, its the one function the iPhone is not very good at. There are better handsets available that perform their primary function much better......or.....maybe that's the point... it's not the prime function of an iPhone

tillson · Dec 8, 2010

I agree with NRG, the OP failed at the first point raised. Any significant increase in price would seriously harm sales.

My bike cost about £1500 and with Cycle Scheme discounts, I eventually paid about £1200. Having used it regularly for over two years now, I can say it is good and was worth the outlay. But don't lets get carried away, these ebikes aren't £2000 + good.

If I needed a new bike, which I don't because not much has changed in the last 30 months, I would be willing to pay about the same again. But however much smoke the manufacturers and retailers try to blow up your @r$e, ebikes essentially remain the same, a push bike, a motor and a massively expensive (to you) battery which can at best be described as, "flakey". Even though, if I raided the local orphanage collection box, I could afford one of the new Super Duper Bikes, I wouldn't buy one. They simply are not worth the money and any attempt to increase prices further will damage a very minority market.

Really, the reverse should be happening. I think ebikes have the potential to become a massive market and prices should fall enough to be attractive to the public at large. How this is achieved is a tad more difficult and would require brave financial investment. It's probably not the best climate for that at the moment.!

flecc · Dec 8, 2010

The style of bike varies by country, the bikes that the Dutch, Danes and to some extent the Germans like is very different from that which appeals in Britain. That's because they are cycling countries, Britain isn't, it's a fashion market.

The British e-bike market is far too small to design for, even for one manufacturer, let alone the number of manufacturers out there, so the design by most manufacturers is increasingly biased to the preferences of the main markets.

As for the rest of the marketing points, I doubt they matter much in a Britain where cycling will probably never be mainstream again in our lifetimes and the majority of the public won't contemplate any kind of bike as transport.
.

Trevor Holloway · Dec 8, 2010

Whilst over in France in the "summer" I was looking out for ebikes without much success, however there were several in the large hypermarkets around the €600 mark if I remember correctly.
Those were of standard bicycle design (unfortunately I could not translate the details enough to confirm warranty etc.).

What is needed is the likes of Tesco selling decent basic bikes with low (5 miles) range / medium (15 miles) range / long (25 miles) battery options, to my mind they should look "standard".

Buyers can then decide to opt for alternative manufacturers once the see the light !

Leasing batteries I doubt would be workable but "trade-in" for different capacity or when worn out (similar to Calor Gas bottles) would be better.

indalo · Dec 8, 2010

I agree largely with Tillson's comments.

There are examples out there of high quality bicycles retailing at around £700-£800 which, with a little frame modification and the addition of the electrics, suddenly become £2000-£2500 ebikes.

Now, given that it's possible to walk into a supermarket right now and purchase a perfectly ok bike for less than £100, (and they're not rubbish!) it's difficult to see how the ebike market might grow. I've spouted off before about the cost of Li-ion batteries and it seems there are many people ready to jump to the defence of the manufactures, reminding us all of the fantastic nano-science involved and that we should be grateful a replacement battery only costs about £500.

You don't have to look any further to see why ebikes will never take off in a big way. It can only ever be a niche market until those battery prices become believable. It's not as if the battery manufacturing companies fund all the research and need to charge high prices to recoup their outlay as much of the funding at MIT comes from the US Defence dept and NASA. The manufacturing set-up costs aren't huge as that's what those people do....they make batteries!

Much as I love my ebike, I doubt I'll ever buy another one unless there's some choice in where I can buy a replacement battery easily at a decent price. Leaving possible patent issues aside, greater competition is essential but I think it was Flecc who made the point about higher volume sales being needed before prices come down, etc. Sadly, I don't expect things to change any time soon and I guess China is our best hope for future battery supplies.

I do like Trevor's point about some form of leasing arrangement but that seems difficult to imagine in such a small market. Hey-ho....life goes on!

Indalo

flecc · Dec 8, 2010

indalo said:
There are examples out there of high quality bicycles retailing at around £700-£800 which, with a little frame modification and the addition of the electrics, suddenly become £2000-£2500 ebikes.

Volume!!!!!

I seem to be forever explaining this basic fact. The e-bike made and brought in in tiny quantities will be expensive, the importer alone has to double the arrival price just to make a living. If he's bringing in many thousands of cheap normal bikes each one only has to carry a small added amount to give him his living.

indalo said:
I've spouted off before about the cost of Li-ion batteries and it seems there are many people ready to jump to the defence of the manufactures, reminding us all of the fantastic nano-science involved and that we should be grateful a replacement battery only costs about £500.

Just facing facts, not jumping to anyone's defence. The new Nissan Leaf small hatchback electric car is well over £28,000, over half of that being the battery. The same is true of two other e-cars due for release imminently. You can see that this has nothing to do with e-bike companies treating anyone unfairly, it's what these batteries really do cost.

indalo said:
It's not as if the battery manufacturing companies fund all the research and need to charge high prices to recoup their outlay as much of the funding at MIT comes from the US Defence dept and NASA. The manufacturing set-up costs aren't huge as that's what those people do....they make batteries!

Not relevant since it really is the battery companies who do the true research and development. The blue skies stuff such as on anodes currently for example is what the universities do, unlikely to be of use as a starting point for further research and development for years yet.

The end result of what universities do is just a possibility. Only industry R & D can ascertain whether it's practical and how much it needs to be developed to be successful. Lithium-ion batteries were first proposed by M.S. Whittingham at Binghamton University, at Exxon, in the 1970s and appeared on the market in some forms much later, but it took the battery industry decades of work to arrive at one that works in transport, the late 1990s for e-bikes and only now in 2010 for e-cars. Industry has paid for all of that R & D, which means we now have to repay as we buy the products.
.
.

indalo · Dec 8, 2010

Obviously, my understanding that MIT as the world's leading research facility in the use of nano-science to further develop Li-ion technology is misplaced. Maybe the US government should invest American tax dollars elsewhere.

Following your logic Flecc, I guess all cheap ebikes must be rubbish and your arithmetic, I'm afraid, is lost on me. I'm not aware of any rule which states that a dealer/importer has to have a 100% mark-up just to make a living. If we could persuade Tesco to start supplying good quality ebikes during 2011, I'd bet their prices would be far cheaper than those extant elsewhere right now.

When large bicycle manufacturers and their dealers in a global market can knock out standard bikes for £X, then it's beyond me how we can have virtually the same machine with the necessary additions and modifications priced at £X multiplied by 2.5 or 3.

While many people celebrate the fact that technological improvement has brought us more powerful batteries, at the prices demanded for this improvement we will see the industry shrink unless competition can bring about price reductions. Who would want to invest in a diminishing market though?

It's one thing for the industry to talk up their product and explain to us why the only deal in town is a good one but to have to read on this user site from customers how benevolent these people are is rather sad in my view.

If every single one of us stopped just accepting the industry's propaganda about their costs and criticised them for their grossly inflated prices, reminding them also that the market may be ripe for expansion but for those prices, then maybe the message might hit home. I shan't hold my breath though.

Oh, and by the way Flecc, please spare me the guff about what batteries actually cost. What they actually cost to produce and what we have to pay for the privilege of owning one are two distinctly different propositions. The only regulator in the battery manufacturing industry is the industry itself and they will charge the absolute maximum price they believe the market will tolerate.

Indalo

Mussels · Dec 8, 2010

indalo said:
If we could persuade Tesco to start supplying good quality ebikes during 2011, I'd bet their prices would be far cheaper than those extant elsewhere right now.

Tesco have already tried selling ebikes a couple of times, there was no huge discount and the bikes were rebranded Izips. As far as I know it made no difference to the rest of the market.

flecc · Dec 8, 2010

indalo said:
your arithmetic, I'm afraid, is lost on me. I'm not aware of any rule which states that a dealer/importer has to have a 100% mark-up just to make a living.

The rule is simply the economic one which you still do not seem to understand despite my just explaining it. An importer has certain unavoidable costs which have to be met to stay in business. If he sells one item, the whole cost goes onto that, if he sells 10,000 cheap items the costs do not rise pro-rata and the added cost per product is much smaller. That in turn means the dealer percentage based margin is much less and the VAT percentage based amount is much less, making the end price very different. This is very basic stuff which I expect any adult consumer to understand.

indalo said:
by the way Flecc, please spare me the guff about what batteries actually cost.

The cost to the consumer is the end cost in their market, not factory gate in the Orient.

indalo said:
When large bicycle manufacturers and their dealers in a global market can knock out standard bikes for £X, then it's beyond me how we can have virtually the same machine with the necessary additions and modifications priced at £X multiplied by 2.5 or 3.

So let me explain to you why this happens, and why the difference factor is actually much larger than 2.5 or 3, using examples with typical margins and some precise figures, not even including all the costs like transport, carriage insurance etc:

Normal bike £100 at Chinese factory gate

Add current 48.5% EU anti-dumping duty = £148.50 total now

Add UK importer margin for bulk selling item 15% = £170.78

Add normal cycle dealer margin 40% = £239.09

Add UK VAT at current 17.5% rate = £280.93 Final price.

Similar bike as an e-bike, now £400 with motor, controller, battery, controls etc

Add EU anti-dumping duty 48.5% = £594.00

Add UK importer margin for small selling item @ 100% = £1188

Add cycle dealer margin 40% = £1663.20

Add UK Vat 17.5% = £1954.26

So there you have it, £281 against £1954, all clear now?

Since our importers aren't "dragons" running around in chauffeur driven Maybachs but live very ordinary lives with many of them going under over the years, clearly the margin I've shown is necessary to survive. But even if we pretend they could survive on half that, the price of the e-version would still end up at £1466, way above the £281 for the mass selling ordinary bike.

Sorry Indalo, but the truth is that the consumer is too ignorant of the facts to form a realistic judgement.
.

CeeGee · Dec 8, 2010

indalo said:
If we could persuade Tesco to start supplying good quality ebikes during 2011, I'd bet their prices would be far cheaper than those extant elsewhere right now.

Indalo

Tesco buy in bulk; there is no way they could shift the amount of quality ebikes far cheaper than current dealers and get their money back. They didn't have any success with the Meerkat at the cheap end of the market and they would make no money out of anything more expensive, either in-store or Tesco Direct.

Colin

Alex728 · Dec 8, 2010

Trevor Holloway said:
Whilst over in France in the "summer" I was looking out for ebikes without much success, however there were several in the large hypermarkets around the €600 mark if I remember correctly.
Those were of standard bicycle design (unfortunately I could not translate the details enough to confirm warranty etc.)..

I remember folk posting stuff about these e-bikes - they seemed to be a similar specification and quality to the Powacycle Salisbury or Cyclamatic available in the UK.

I don't even think we're that badly off TBH - once you've converted from the Euro to GBP, ebikes here cost much the same as in the the "bike friendly" countries, particularly NL, and this is something I've been doing a fair bit of research into as I'm trying to learn Dutch, and my French and German just about stretch to reading bike specificiations and prices.

I think important factor is that e-bikes are most popular in areas already influenced by European cycling culture, even London's trade routes go via the North Sea, so if the UK manufacturers put their prices up too much, they will lose their business to Sparta etc as borderless Europe is much "smaller" these days. (A friend of mine was trying out a Sparta and he didn't find it underpowered, and he was riding it here where there are much more hills than coastal areas..)

Alex728 · Dec 8, 2010

even if its a niche market its still ruthlessly competitive..

I went to SPARTA - Spezialist fÃ¼r spezielle FahrrÃ¤der out of curiosity - the site automatically detected I was in the UK, and offered me a list of British dealers. Last time I went on there (just a few months ago) the site was in Dutch. They appear to have spent a fair few Euros on marketing their new site.. The dealers are all in places where e-bikes are already relatively popular.

Scimitar · Dec 8, 2010

EdBike said:
Share Customer Leads!

No seriously! There’s an ago-old marketing story. Back when mail order suddenly became popular and the door-to-door salesmen went out the door (haha), the Europeans and Americans did their marketing very differently. The Europeans, fearing the competition and wanting to selfishly capture as much of the market as possible didn’t share their leads. The Americans did, and prospered. The mail order industry collapsed in Europe whilst the Americans thrived...

Really? That must be why GUS, Grattans, Littlewoods, etc were nothing more than one-man-inna-van operations, then? That's only the UK - mail-order in Europe was pretty healthy and for exactly the same reasons as in America; many rural (and urban) customers had High St fashions and gadgets brought to their doors, along with easy payment options.

Five Tips for Electric Bike Businesses

Pedelecer

Pedelecer

Pedelecer

Esteemed Pedelecer

Esteemed Pedelecer

Esteemed Pedelecer

Esteemed Pedelecer

Esteemed Pedelecer

Esteemed Pedelecer

Member

Pedelecer

Banned

Member

Banned

Esteemed Pedelecer

Member

Esteemed Pedelecer

Esteemed Pedelecer

Esteemed Pedelecer

Esteemed Pedelecer

Advertisers