If you remember, one of the major goals of this trip was for us to get a better understanding of what Rob and Andrew are dealing with in the South African market and then to see the new Sister Shop distribution operation in Gaborone. We spent a couple days in Joburg, traveling around to bike shops and meeting with their owners. Through this process, we understood why Rob and Andrew are so keen on being a distributor, there’s a huge opportunity to supply that market with products that are less expensive or higher quality than what’s currently available, as well as some products that are not available at all. The combination of our market position and the existing flow of containers to the region gives Bicycle Recycle a huge competitive advantage. There are two main issues with the high-end bike market in S. Africa, the biggest being the lack of consistency in supply. It is very common for the entire country to be out of basic items like Shimano SPD pedals or 29” tubes. The other issue is that parts are very expensive due to the expense of transporting goods there. There is typically one distributor for each brand in the country, and they are generally very poorly run. They bring in a container of stuff and the country is flush for a bit, then they run dry for months while the distributor waits for more product. With our assistance, Bicycle Recycle feels they can beat their competition in both of these situations. So after spending this last week with Rob, we feel we’ve come up up with a pretty cool distribution model that is sustainable and achieves multiple goals.
Bicycle Recycle will receive our containers of donated bikes and warehouse them in Gaborone. They will serve as the distributor for our Sister Shops and “sell” them bikes. The price the shops will pay to Bicycle Recycle covers the cost of shipping the bikes from California to Gaborone, plus the import duties, which comes to about $40 per adult bike. The markets where we have shops can typically afford $50 - $150, so this pricing model works well. Bicycle Recycle will also assist the Sister Shops in getting new bikes and parts from ProBike. The problems of transport and payments are solved by the involvement of Bicycle Recycle – they front the money to ProBike and they transport on their own trucks. These new bikes will supply a growing “middle class” that can afford $200 - $500 for a bike – a market that is crucial for the success of the Sister Shops. By combining the needs of all the shops, Bicycle
Recycle can get ProBike to cooperate and supply their Gaborone warehouse. These bikes and parts are then passed through to the Sister Shops with no additional mark up. You might be asking what’s in this for them, and why they would go to such trouble and expense for us. For one, they just truly believe in the Sister Shop project and they want to help it succeed. But also, they’re now the BikeSmart distributor for South Africa. They feel that our line of accessories could be very successful there, so they will be selling it to shops across the country. They already have placed it in two high-end shops in Joburg and Cape Town, and so far the shops are very happy with it. We are also working with a couple of our vendors in the US who don’t have any distribution in S. Africa. Through our relationship with Wilier, Bicycle Recycle is also now the exclusive S. African distributor for one of the best bike brands in the world. We will continue to help Bicycle Recycle build out a portfolio of brands that will be among the best in the country, and in exchange we achieve our goal of creating a sustainable supply chain of bicycles to a part of the world that could really benefit from it. Pretty cool, huh?