Business Consultancy Gears Up as Bike Peddler

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After more than 20 years advising companies on how to get their products into stores, retail strategist David White is taking his own words to heart.

Whites’ Manhattan Beach consulting company, Centric Industries Inc., struck a deal in June to be the exclusive U.S. distributor for Durban Bicycles, a Rio de Janeiro manufacturer of folding bicycles.

“We could’ve taken our retail advisory approach and continued to march off into the sunset, but the company’s ready to grow now and take the next leap,” he said. “That means getting into distribution.”

The first shipment of Durbans, which retail for from $299 to $1,499, has already arrived. White committed to buy $500,000 in product from the manufacturer – he would not say how many units he’s committed to – and plans to start selling them this month through online retailers such as Amazon.com Inc. and eBay Inc.

White readily acknowledged that moving from advising to distributing means taking on greater risk, but he’s convinced there is a market need to be filled.

“We think the market is thirsty for products like this,” he said.

Folding bicycles are engineered to be easier to store and transport. Though uncommon, they have been around for decades and have gained popularity in recent years. While they account for a tiny sliver of the $6 billion U.S. bicycle market, sales jumped last year. About 65,000 units were sold in 2012, up 18 percent over the prior year, according to the National Bicycle Dealers Association. That’s still less than 1 percent of all 18.7 million bicycles sold.

Gary Coffrin, whose San Jose consulting firm, Coffrin Group, works with bicycle manufacturers and distributors, said he expected the folding bicycle segment to keep growing.

“There aren’t many categories within the bike industry that you can predict will grow and be really certain of that prediction over the next decade, but folding bikes is certainly one of them,” he said.

And while White is entering a growing segment of the bike market, he will be taking on an established market leader.

Dahon North America Inc., based in Duarte, sold close to 500,000 folding bicycles worldwide last year, with half of its sales in China. The 31-year-old company is credited with developing the first modern interpretation of the folding bike.

“We are the market leader,” said Ken Fagut, director of sales and marketing for Dahon. “Our closest competitor does maybe 10 to 15 percent of our volume.”

How Durban and White fare as they attempt to gain a foothold in the United States will depend in large part on distribution.

Jay Townley, a bicycle industry consultant with Gluskin Townley Group in Lyndon Station, Wis., said that hurdle was high, but not insurmountable.

“There’s an old axiom: Distribution is everything when you put a business plan together,” he said. “Distribution today is not simple, but there are more choices because of the Internet. It’s a matter of selecting carefully the channels that will give you the best growth for the product.”

Leveraging global success

Though White’s been acting as an adviser and not a distributor, it’s not an entirely new area for him; he’s sourced and sold inexpensive accessories for consumer electronics. Still, he conceded that importing and selling bicycles to retailers is a whole different beast.

“We’re bringing in containers of bikes, with 450 bikes to a container,” he said. “That’s a lot different than boxes of cables.”

White, who gained retail expertise working for a variety of product companies before founding Centric in 2009, stumbled into the opportunity to take on Durban’s distribution after the company came to him for advice about how to break into the U.S. market.

Durban had a strong presence in South America, Africa and Asia, and as White started making calls to retailers and market analysts, he quickly perceived a large demand for the collapsible bikes. He offered not only to continue consulting on specific retail strategies, but to also help build the brand and distribute the bikes.

White has broadly mapped out three phases to roll out Durban folding bikes in the U.S. market, a plan he expects to inch into slowly.

“We’d love to fill an order for Sears for 2,500 bikes, but we want to grow within our means,” he said. “We think a prudent approach is to crawl, walk, run.”

The first step is through e-commerce. Once the brand has been established online, he said, he’ll push to get them into brick-and-mortar stores. Finally, he’ll bring in branded accessories to sell alongside the bike, including pumps, bells and a bag to carry it in.

Like any risky venture, the challenges are steep.

Dahon’s Fagut said the biggest obstacle in selling folding bikes is introducing the concept.

“The market is largely untapped, to the point where 95 percent of the market is not aware of folding bikes,” he said. “My biggest challenge is making our product more mainstream.”

That will soon be an issue for White to grapple with, but he’s confident he’s representing a brand that can have widespread appeal.

“It’s a smaller company, but it’s already got some good brand presence and awareness,” he said. “Durban makes a high-quality, differentiated product.”

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