Tech articles | Commentary articles | Starting a business part 2 | Startng a Business Part 3 | Starting a Business Part 4

John Neugent probably knows more about bicycle wheels than anyone else alive. Maybe more about bikes as well. He's spent his life in the bike business, at every level. He now owns Neugent Cycling, a firm devoted to delivering world-class equipment at the lowest possible price. If you are in the market for a set of wheels, please, check out John's site. He really knows his stuff. —Chairman Bill

Author John Neugent

Currently I am semi-retired and work from home selling custom bicycle wheels. I still often put in a normal work week in terms of time but it’s flexible. I can handle e-mails anytime and pretty much from anywhere, and there is no commute. In many ways it’s an ideal situation.

Lots of people would like to start a small side business focused on their interests and now, more than ever, there are many opportunities. While this is by no means a complete article on the subject I can give you some ideas of what the opportunities and challenges are.

In any business you need capital, infrastructure, a product to sell, and a sales and marketing method. Strangely enough, the most difficult thing is the last – sales and marketing. Without sales nothing else matters. This article will focus on sales and marketing.

Twenty years ago, when I started Neuvation, Ebay was just getting to be strong and Amazon was really just beginning to become the powerhouse they are today, so I first targeted selling only to distributors and bike makers. That’s not a realistic option for most people.

If I were starting all over again from scratch, my focus would be to sell through both Ebay and Amazon which give you access to a great number of potential customers. Many people worry that selling through those platforms will debase their product. That may or may not be true but unless you have a large marketing budget, they are the most effective platforms to get early sales. If your product is unique it may be possible to also sell through some of the online bicycle retailers too. When I started I did a lot of business with Performance, who, at the time, was the leader in online sales.

It goes without saying that you need to develop a website, which, is pretty straightforward. There is a learning curve but with a little common sense and hard work anyone can do it. When looking for web sites, I believe the best thing to do is look for a shopping cart. That is a web site that is essentially a store that will accept orders. On all of them that I am aware of, there is plenty of opportunity to customize pages so people think it’s a normal web site but is really just a structure to collect orders. I use Shopsite.com.

There are many challenges selling on Ebay and Amazon that are well-documented with a Google search. but to boil it down, the biggest challenge is in making money on your products. You can pick a product like bicycle tubes and if the price is low enough you can sell a lot but your profit margin will probably be too low to make any money.

Let me make another key point. For most of my life I thought that if I were to start a new company I needed exclusive products. To the point, I thought I needed something that was new and better. Sometimes you can get lucky but it’s not a good business plan. The first thing you should focus on is selling something people want to buy. In the old days, figuring what those products were was easy because the Performance web site automatically sorted each category by sales volume so if you went into the tube category the best sellers would be the first you would see on top. My guess would be most retailers do the same. You can certainly do an Amazon search and get a good idea by looking at what is on the first couple of pages.

It’s important, even with a pretty run-of-the-mill product, to brand it, which is best done on your web site. For high end products, if you have the resources, a tried and true method is to associate yourself with professional riders. That’s expensive if you are going to go after the top riders. Scott Montgomery, who was the marketing manager for Cannondale, once told me that the only thing that worked for them was to go after the top pros. He said the second tier didn’t generate sales. Realistically, if you are well funded enough to consider that option, this article isn’t going to tell you anything you don’t already know.

There are many less expensive ways to brand your product. My choice has been to focus on being just a normal person who respects my customers without any smoke and mirrors and hype. I do that through my web site and newsletter. I keep my message simple and to the point, avoiding overstating any performance advantage (unless it’s clear and true). I am not a professional or even top level amateur rider so trying to attach that image wouldn’t work. But each person needs to figure out what they are offering that makes their products compelling. Spend time on this because it’s one of the most important things you will do.

One other critical point. Prototype your marketing the same way you prototype a product. That is to say, make lots of trial balloons but don’t bet the bank on any one. It’s impossible to reason a success story. If one could, one could take a course that would give them an ironclad success. It can’t be done. People who succeed make far more mistakes than successes. It’s just that the mistakes don’t cost too much. A good saying about this is “Ready, fire, aim.” The people who don’t try different things are the ones who don’t succeed.

The people who succeed are the ones who refuse to fail. That sounds like a simplistic statement but I find it to be accurate. When I started my own business I tried about ten different business plans until I fell into the wheel business. All of them were well thought out and based on decades of experience in the bike industry. Expect it to be difficult and take a long time. If you don’t need success to make a living you are not under too much pressure and can enjoy it more.

Finally, to sell any product, you need to make a lot of positive impressions. Way more than one could imagine. For example, I have 7500 newsletter readers. Most of them have bought products from me and almost all of them have been on my newsletter list for over ten years. They are not only all bike enthusiasts but more are interested in exactly the same categories that I cover. If I send out a newsletter and I get five orders I consider it a success.

All of this may sound like it’s too big a hurdle to overcome. That it’s not going to be fun. I get a lot of enjoyment just communicating with other bike riders and I believe selling cycling is a positive thing to do. Most people in the industry feel the same way. When Covid finally runs its course and things are back to normal, if you are in the industry, you can do shows – which, while being a lot of work, are also a good way to meet other people in the industry and consumers, and make a little money doing it.

In the next article, I will address the infrastructure, from software, office and warehouse space, and information on importing. The Internet hasve made all of these much easier than in the past.

John Neugent was was one of the first to establish quality hand building in Taiwan around the turn of the century. He now owns Neugent Cycling, a firm devoted to delivering world-class equipment at the lowest possible price.