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From the mag: Consumers go straight to the source

Published May 21, 2013
From the May 1 issue of BRAIN

BOULDER, CO (BRAIN) — Troy had a garage full of bikes, 20 years’ experience wrenching, a daughter getting braces soon—and an itch to try a lightweight carbon 29er hardtail. 

So when the 41-year-old from the Pacific Northwest—who asked that his last name not be used in this article—read on an Internet forum that he could buy frames directly from China for perhaps a fourth the cost of a comparable brand-name frame, he got curious. 

He contacted a Chinese vendor and asked if they had what he wanted in stock. After about a month of email communication back and forth, he finally made his order. A few weeks later he unpacked a matte black carbon hardtail frame and fork, with no labels or stickers.

“I was nervous opening the box. It was coming from China, I had fears of getting the wrong size or something, just that I would have to return it. But it was all packaged really well, everything was what I ordered. The finish was nice. I had no issues with the bottom bracket. Everything built up really easy,” he said. The frame and fork cost him about $500.

In the words of a friend, Troy has been “riding the piss” out of the bike ever since, on tough Northwestern trails, with nary an issue. 

In the latest evidence of the world’s flattening, consumers are increasingly buying products directly from Chinese factories, cutting out retailers, brands, importers, distributors and other layers of middlemen. The result is carbon road framesets selling for under $400, perhaps one-fifth of the retail price of a comparable brand-name frame sold by a bike shop. Sub-1,000-gram carbon tubular road wheels are available for about the same price, compared with perhaps $2,000 to $3,000 for brand-name wheels. 

Worried about your order? Some Chinese vendors offer live video chat features on their websites, and will custom finish frames to the buyer’s specifications, or build wheels with chosen hubs and spokes.

And if you find these matte black frames and rims too bland, follow the link to one of several websites that offer decals of major brand logos, including American Classic, Zipp and Easton rim stickers to Pinarello, Specialized and Cervélo frame stickers.

The market might have been nearly impossible before the Internet. Besides the facilitation of marketing and communication between the factories (or their agents) and end users, chat forums are critical for consumers to share information and reassure one another that buying directly is not a risk.

Troy researched his 29er purchase on an MTBR.com forum thread for weeks before he started communicating with the seller in China.

“Just based on other people’s experiences, it seemed less risky. I’m not a pioneer in buying Chinese frames direct from China. A lot of other people are doing it, so it seemed like a safe deal,” he said.

Besides MTBR, threads on buying direct exist on its sister site, Roadbikereview.com, on Weightweenies.com and elsewhere. And a few Google searches will quickly lead the curious to many more related sites, from eBay to Amazon to VeloBuild.com, a site that acts as a sort of middleman between sellers and buyers, bundling orders to do group buys from factories. Alibaba.com, sometimes called the Chinese eBay, is another major resource for buyers.

‘Chinarellos’ and ‘open mold’

The term often used for frames sold straight from factories is “open mold.” Chat forum participants often use the term to refer to bikes that they believe are made in the same molds as brand-name products. 

Bike industry veterans with experience in Asian factories say open-mold products do exist, but to paraphrase “The Princess Bride,” the term might not mean what consumers think it means.

Many factories — especially those that don’t currently serve major OE customers — make carbon molds for frames and other products so they can serve small OE customers and produce samples and prototypes for potential customers. The molds allow a small degree of customization and multiple brands can share the mold with different finishes and labeling. 

“Open mold for me says, ‘I don’t have to pay for either tooling or development [only graphics]. I can buy it as is with a relatively small minimum order quantity,” said John Neugent, owner of Neuvation Cycling, which sells Asian-made frames consumer direct. “Most companies have it for smaller customers and most try to make the open molds as good as they can without stepping on a big customer’s toes. In my experience in Asia, smaller customers pay more but not that much more, and the quantities are negotiable. Everything is negotiable in Asia,” he said.

But open molds are not exactly the same as brand-name frames, in part because the factories that make those frames are near capacity already and don’t want to risk losing those big customers. 

“If you think you are getting a first-quality bike from the same mold as a brand, you are out of your mind,” said Richard Wittenberg, vice president of international operations for Belgian bike brand Ridley. Wittenberg has decades of experience in Asian factories with Asahi, Cannondale and other brands. 

The factories supplying the major brands are already over capacity fulfilling those orders and wouldn’t risk losing their contracts by selling frames direct, Wittenberg noted.

“It’s not like there is a whole bunch of excess capacity over there,” he said.

Still, it’s undeniable that there are lots of frames and other products coming direct from Chinese factories into consumers’ hands. Where are they coming from? Mostly B-level factories, Wittenberg said. 

“There are always some really, really small carbon guys with a set of molds and a press who are starving for business. There are new guys all the time,” he said.

Sometimes these builders offer counterfeit bikes that resemble brand-name products in shape and sometimes even with counterfeit decals. Wittenberg calls these “Chinarellos,” because Pinarello is a frequently counterfeited brand. 

Beside the obvious legal and moral objections to intellectual property theft, such products are probably more risky purchases than an open-mold product, Wittenberg said.

“People have to understand when they are buying a carbon product, if you miss 10 percent of what’s going on in the design process, that’s the difference between a good bike and piece of crap. 

“Even if somehow the builder got an exact copy of the mold [from a brand-name frame], they don’t know the whole layup structure. What about the pre-preg? What about the temperature of the raw materials? And on and on. … When you are buying a carbon product, you are buying a warranty, and an insurance policy.”

No worries

Troy, the carbon hardtail rider from the Northwest, said he understood his purchase was something of a risk, or an experiment. But he has other bikes, he has mechanical skills and he knew what he wanted in terms of size and geometry. 

“I understand you get what you pay for,” he said. “It felt a little risky, but for the price ... it’s not an insignificant amount of money, but it’s not $2,500, either.”

Troy has bought several of his bikes online and frequently buys parts online. He said he visits a few local bike shops when he needs something in an emergency, but generally prefers the convenience of shopping online. “To do it from your living room, that’s what I like about it,” he said. 

Still, he asked that his last name not be used because he didn’t want to become “a poster boy, the [jerk] who doesn’t support his local bike shop.” He said he wouldn’t dream of bringing his Chinese frame into a shop for service.

“Oh no, I’d cringe. I wouldn’t go there,” he said.

BRAIN spoke with another consumer who bought a frame direct from China, via Alibaba.com. Like Troy, he asked that his name not be published, so we’ll call him Chad.

Unlike Troy, Chad likes to hang out at several bike shops in his hometown of Boulder, Colorado, and considers the shops’ owners personal friends. He said he spends “probably $1,000 a year” at shops, but has ordered a carbon time trial frame and a set of carbon wheels from Alibaba, and he’s considering another set of wheels.

Far from cringing at the idea of bringing his bike into a shop, he likes to tease his shop owner friends about the frame.

“I tell them, ‘I’m just not going to pay thousands of dollars to support some big company’s marketing.’ It doesn’t do anything for me, as the end user, you know? I don’t care what sticker is on the downtube,” Chad said. 

Besides the wheels he’s eyeing, Chad sees opportunity in the market.

“I think a lot of guys are scared of buying from China. I’d like to order a few dozen frames and sell them. I could mark them up a few hundred dollars and they’d still be cheaper than the big company bikes,” he said.

Topics associated with this article: From the Magazine, Web/Internet

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