Thesis launches bike brand with unusual fulfillment model

Editor's note: A version of this article ran in the Jan. 1 issue of Bicycle Retailer & Industry News. 

SAN FRANCISCO (BRAIN) —  A new bike brand from an industry veteran is making waves with innovative products and its fulfillment system, as well as with its alignment with the Professional Bicycle Mechanics Association.

Thesis is being launched by partners Alice Liu and Randall Jacobs. Jacobs has worked as a product developer at Specialized and in Asia on product strategy and supply chain consulting projects. He was also co-founder of OpenBike, an open platform for bicycle electronics and software.

Thesis offers one carbon frameset that is built up with various part kits as a gravel, road, 'cross, or adventure touring bike. On the Thesis website, customers can choose frame and handlebar tape colors, component sizes, gearing, and wheel and tire options.

Bikes drop ship from Thesis' Taiwan consolidation facility in two boxes — one with the Chinese-made frameset and one with everything else, including wheels with tires, rotors and cassettes mounted. Thesis calls this a 20 percent assembly level and said it keeps costs down while allowing consumers to work with a local assembler who presumably will do a better job than a factory assembly line and who can customize the build.

Thesis is enlisting shops, fit studios, mobile service providers and independent mechanics to finish bike assembly. Consumers can opt to assemble bikes themselves, but then the bike will not be covered by warranty.

Complete bikes start at $3,000 with a single-chainring SRAM Rival drivetrain, house brand carbon wheels with DT350 hubs, and aluminum cockpit parts. Customers can expect to pay $250-$350 for professional assembly by a Thesis "Local Bicycle Professional." Under the plan, the LBP receives the assembly fee from the customer. If the LBP sold the bike, he or she also receives a 10 percent commission. Because the bikes are customizable, many customers are opting to pay the LBP for a bike fit as well, Jacobs said.

The program is not wildly different from that offered by many boutique brands that enlist shops to fulfill online bike orders. And many online brands have aligned with mobile service providers including Velofix to provide assembly and fulfillment. Thesis' difference is the lower price, custom options and its openness to working with various types of LBPs, as long as they have requisite mechanical skills, licenses, insurance and a solid reputation for service.

"We are somewhat agnostic about whether the Local Bicycle Professional has a [physical] retail location or not. We are more inclusive of new business models like mobile service, independent fitters, studios and even people working from home spaces if that's legal in their area. For us, what matters is that they are skilled mechanics and can provide outstanding service," Jacobs said.

Thesis is the first bike brand to sponsor the PBMA, signing on as a bronze-level sponsor (a $750 annual cost). In an email message to the PBMA membership, Jacobs made the case that many shops don't make money on bike sales under the traditional system.

On social media, some PBMA members disagreed with the premise and some saw the sponsorship as an end run around the IBDs that employ most PBMA members. "We caused a little stir," Jacobs said. "I could have crafted the message better. But it's inevitable that people don't like to talk about things changing."

Jacobs conceded that while some shops have closed in part due to lack of margin on new bikes, some that remain have learned to profit on bike sales, especially on urban and higher-end bikes.

"Brick and mortar is not going away, but the old-school model of pumping shops full of inventory and debt is not sustainable," he said.

"The fact that we are the only bike brand supporting the PBMA I find shocking, but also telling. Mechanics are often unsustainably paid and we risk losing the base of expertise that the industry relies on. We believe mechanics and fitters are the backbone of the industry."

PBMA's president, James Stanfill, said a handful of members were upset by Thesis' sponsorship. "The email went out to 8,000 people and there are just five to eight people on social media making noise about it," he said.

He noted that Thesis is one of the few brands that vets potential retail partners for technical skills as well as business bona fides.

"[Thesis] is interested in working with individuals and companies that are qualified to work on bicycles. For most brands, that's not even a piece of what they think about," Stanfill said.