DETROIT (BRAIN) — Tariffs on Chinese bike imports made the partnership of Detroit Bikes and Dick's Sporting Goods inevitable. And it might lead to more retailers collaborating with the Motor City bicycle company.
Detroit Bikes will open an assembly line in March for Dick's Nishiki Colorado mountain bike line for Dick's U.S. retail locations, which number more than 850. Detroit expects to assemble more than 1,600 units in the first half of the year, with additional models added to the assembly line. Zak Pashak, founder and owner of Detroit Bikes, said the goal is 10,000 units in the first year.
The bikes will come to Detroit Bikes completely knocked down with the frames painted. Detroit will build the wheels in addition to assembling the bikes. Then they'll box the bikes and ship them to Dick's distribution centers.
The partnership came about because of "the risks associated with Chinese tariffs" and "a desire for shorter order lead times and more fully assembled final domestic distribution that typically comes with overseas final assembly and shipping," Pashak said. "The tariffs have helped because buyers want to eliminate supply chain risk associated with doing business in China."
Pashak said assembling in the U.S. allows a 15-percentage-point reduction in tariffs.
He said he initially met with Dick's three to four years ago at Interbike and has been trying to find the best way to partner since then. He's also working with other buyers to have additional assembly orders in the near future. "We are in talks with a few others. We are not yet at max capacity and could bring on more workers in the future."
Detroit Bikes recently hired seven additional employees, and Pashak projects an additional 50 employees will be added within the next year or two.
The Detroit Development Fund helped finance the expansion. Detroit Bikes also secured private funding from a British investor with Michigan ties.
"This is a huge benefit to Detroit Bikes in that it is a steady, consistent business," Pashak said. "The (Dick's) customer base is huge, relative to the customer base for our own house brand. The other benefit is that the blessing of (Dick's) helps prove out the opportunity to other potential customers."
Detroit Bikes has a 50,000 square foot manufacturing facility on the west side of the city and is the largest bicycle frame factory in the country.
