When the US government began issuing stay-at-home orders in March, co-founder and CEO of Rad Power Bikes LLC, Mike Radenbo, put in place a plan for tough times. He thought the temporary shutdown of the US economy would do badly. His startup, which sells electric bikes online, should be based in Seattle.
“We started filling in the gaps,” says Radenbo. “It was really about cash planning, preserving business in the event of a meltdown.”
By mid-April, however, Radinbo realized he had miscalculated, as Rad Power Motorcycle Company had not been harmed by the shutdown. Moreover, it was not able to replenish its stock of bicycles quickly enough, as sales tripled in that month compared to the same period in 2019.
Since then, orders for the company’s bikes have not subsided. Rad Power was able to sell its inventory by mid-May, forcing it to restock. Despite this, there are many orders on hold on several types of bikes.
This happy crisis of its kind is experienced by all shops operating in the field of bicycles throughout the country, as the Corona pandemic disrupted vacation plans, exercise, and transportation, which made Americans use bicycles in record numbers.
Despite being a relatively small market, it is a very dynamic market, with sales more than doubling in the first eight months of this year compared to the same period last year, according to the NPD Group Inc, which specializes in tracking Motorcycle shops and supermarkets, but they do not track brands, such as Rad Power Bikes, which are selling directly to the consumer.
Ed Benjamin, founder, and president of the Light Electric Vehicles Association says that the United States last year imported about 270,000 e-bikes, most of them from China. Benjamin expects total imports this year to be between 500 and 600,000 bicycles.
Also, this number will not fully meet the demand, as the Coronavirus forced many Chinese factories to close during the spring. “There are stark demands for more bikes,” Benjamin notes.
$ 100 million in sales
Benjamin adds that Rad Power Bikes sells more electric bikes than any other company, and this private company, which was established in 2015, has sales of up to $ 100 million last year.
Most of Rad Power’s bike customers are suburban, middle-aged, and rural retirees. According to Tay Collins, co-founder, and head of marketing. He adds that they don’t care about the fact that motorcycles are “mechanical doping” in the world of cycling. They just want a little help to beat a hill on their way to work, get their kids to school without a sweat, or simply ride a bike for the first time in years.
Bicycle makers hope that the Corona pandemic will turn this population into permanent e-bike riders, which has already happened in Asia and Europe (about 270 million e-bikes are used daily in China alone).
In the United States, during the oil crisis of 1973, a precedent occurred, as bicycle sales rose, which led to a long-term change in the cycling culture.
“Before that bike boom, bicycles were considered toys for children,” says Benjamin, who was working for a Schwinn dealer at the time.
He adds: “In those times, any adult or even a teenager who rode a bicycle was seen as a non-normal human being, a judgment similar to the current way of looking at e-bikes. It is somewhat strange, but with the arrival of a year from now, e-bikes will be considered an effective option. Fully acceptable for carriage. “
Prices are cheaper than the competition bikes
In case Benjamin is right, the company “Rad” has a strong start in the market, as there is more than 100 thousand “rad” on roads around the world, and the success of the company is largely due to its prices. Dollars sometimes even in thousands of dollars.
The company’s production of the RadWagon cargo bike, for example, sells for $ 1,700, while the Riese & Müller Elite First Edition sells for more than $ 8,000. RAD keeps its prices somewhat lower by cutting out bike shops. The stores raise the bike’s price by $ 600 if the average price is $ 2,600, according to the non-profit organization People For Bikes.
In addition, Rad uses engines, brakes, gear and other parts that are cheaper than many of its competitors in bike stores.
In order for Rad to live up to its vision of selling everyday vehicles to millions of people and reshaping the way Americans travel from one place to another, it must demonstrate that low cost does not mean low quality. In addition, it needs to prove itself in the midst of increased competition from traditional bike makers.