Herb Swanson for The New York Times Joan Denizot: “I need to be competitive.”
We have just published a case study of Super Sized Cycles, a company based in Vermont that manufactures and adapts bicycles for overweight riders who are too big for conventional bikes.
Written by John Grossmann, the article explains why Joan Denizot, founder of Super Sized, is torn between having her bikes manufactured in the United States (keeping the jobs local) or in the Far East (where her costs are much lower).
Below, you will find the analyses of several small-business owners and experts who have had similar experiences. Please leave your own thoughts in the comment section.
Kevin Czinger, chief executive of CODA Automotive, an all-electric car company:
“Given her desire to expand production and create jobs domestically, Ms. Denizot should search for a new, domestic manufacturer and negotiate a competitive rate in exchange for a long-term commitment. If she is unable to find a supplier who can provide a competitive rate, her only option is to risk losing her business or look elsewhere for manufacturing.”
Robert Buckley, founder and chief executive of Marin Bikes, which makes mountain bikes:
“Business is business, and in this world today, it’s a world economy. Nationalism can bankrupt a company.
“Taiwan is a good start, but the small quantities that she is buying are not a very appealing order for these very large frame factories. It sounds like she has the foundation for expansion set with lower pricing and good quality.”
Angelo Santinelli, founder of Dakin Management, a strategy consultancy and a lecturer at Babson College:
“My advice would be to take advantage of the additional gross margin dollars made available through the much lower cost of offshore manufacturing of her most popular models ($400 versus $1250) and apply those new-found dollars to design, sales and marketing. By focusing on design and brand development she’ll increase her chances of survival, growth and perhaps non-manufacturing job creation in Vermont. She might choose to keep the more highly customized work in Vermont, for which she can charge higher prices.”
Noel Zeller, co-founder with his wife, Adele, of Zelco, which is best known for inventing the Itty Bitty Book Light.
“We too started with the idea that we wanted to manufacture in the U.S. for all the same reasons. What we quickly learned was that having a good product and a well-thought-out marketing plan was just the beginning. No start-up that I am familiar with began over-capitalized. Having enough money for R&D, manufacturing, inventory, and account-receivable financing usually does not leave enough for setting up your own factory and/or subcontracting domestic production.
“My advice is to concentrate on market and not get caught up in manufacturing, which sounds like an area you really are not familiar with. There should be no doubt on your part that larger companies are already aware of the market niche that you have created. The advantage you have is that you are the first to recognize it and to exploit its possibilities.”
John Sortino, founder and chief executive of the Vermont Teddy Bear Company and founder and chief executive of the short-lived Chicago Bicycle Company (and an occasional mentor to Ms. Denizot for several years):
“It’s really hard to make bicycles in the United States. And it’s really expensive. I had to buy all my own equipment. I had to train my guys on how to bend big steel tubes for the curved frames. The Taiwanese and overseas manufacturers are way better at building bicycles. They’ve been doing it longer.
“I lived in Vermont most of my adult life—and it’s the kind of place where people, as a culture, go overboard making things — toys, cheese, even Teddy bears, like we did. So I can understand her desire to build bikes in her home state, because of the Vermont culture. But she’ll create more jobs, I think, by making them over there [in Asia] efficiently and using the cost differential to have more money to spend on educating the overweight public about getting off the couch and getting out and riding a bicycle and getting some exercise.”