Sondors financial troubles

[Art Deco]

Exclusive: E-bike maker SONDORS up for sale as company enters receivership

The latest event in e-bike maker SONDORS' financial struggles has seen the company enter receivership and begin searching for a buyer.

electrek.co

 

[Jeremy McCreary]

Lots of ebike manufacturers seem to be in trouble now. The market seems ripe for a major consolidation.

Wonder what business model will prevail? Hoping there will be more LBS involvement. But for that to have a net positive impact on customer experience, we'll need a lot more competent ebike mechanics, a lot more electrical standardization across the industry, and a lot less black-box design. None of that will happen quickly.

 

[Art Deco]

Lots of ebike manufacturers seem to be in trouble now. The market seems ripe for a major consolidation.

Wonder what business model will prevail? Hoping there will be more LBS involvement. But for that to have a net positive impact on customer experience, we'll need a lot more competent ebike mechanics, a lot more electrical standardization across the industry, and a lot less black-box design. None of that will happen quickly.

There needs to be some price stability and profits for ebikes at your LBS to go mainstream. An LBS is usually a low growth local business, not a tech startup aiming at an IPO. Different business.

From the article linked above ...

SONDORS, Inc. has sold over 63,000 electric bikes and has over 10,000 cash deposits for its Metacycle electric motorcycle that total over $19.9M

Don't put down a deposit you can't afford to lose . Anywhere.

 

[Tom@WashDC]

Those deposits are listed as a $19.9M liability on the balance sheet, and they most likely burned through that cash

 

[Art Deco]

Those deposits are listed as a $19.9M liability on the balance sheet, and they most likely burned through that cash

Even worse... those deposits are listed as cash assets of the company that is for sale ... I don't expect refunds to be available, just a credit against a future purchase of a vaporware product.
Such a deal!

 

[Tom@WashDC]

Wonder what business model will prevail?

Manufacturers that have this "model" will prevail: "All bike purchases must ship to an authorized retailer"
~From the Trek web site.

Manufacturers that base thier long term growth and stability on a quality product first, and provide a profit opportunity for the local retailer with dependable parts, service, and service training, will almost alway survive in the long run.

Manufacturers that want to bypass the LBS and sell thier bikes strictly online, that don't assist the local retailer with the financing of bike inventory, parts inventory, service equipment, and trainning, will almost alway fall by the wayside in tough times. Manufacturers that choose to avoid long term capital investment in the local dealer network will come and go.

I say this from the persepective of somebody that purchased his first two ebikes from a U.S. based assembler that sold Chinese sourced bikes striclty online, but now boasts over 1,000 LBS parts and service providers in the U.S.. My second bike was my DIY, that built from online sourced parts. My third bike was from a boutique U.S. assembler that sold Chinese sourced bikes, and my fourth bike from a Chinese manufacturer with no U.S. presence except a shipping warehouse in CA. The risk to me was acceptable becuase if I have the manual and the right tools, I believe I can fix anything, and I was interested in learning through repair and modification of ebikes.

The vast majority of ebike sales will be to consumers that cannot, and do not want to fix thier ebike themselves. It is astounding to me how many bikers pay the local LBS just to change brake pads, and we know how simple that operation is. This type of owner is willing to drop thier bike off to the LBS for a week just to get this service performed, and it costs a pretty penny. This is where the money is. Aftermarket service and sales at the retail level generate long term, repeat revenue, and financial stability for the manufacturer, the LBS, and local community.

When people ask me where to buy an ebike, I direct them to my local TREK bike store (carrying Trek and Electra ebikes) becuase they will be best served by the local dealer with inventory, parts, and trained service personnel.

I have one qualifier: If they reside near Petaluma CA, I would advise them to first take look at bikes built by @PedalUma

 

[PedalUma]

A new business model is just opening in my town. They demo, sell, and service typically direct to consumer bikes, and some quality popular brands. They have negotiated with suppliers. What is interesting that I just noticed is that when I Google Petaluma Electric Bikes, my listing on Google Maps is number one and I have never paid to advertise. The ones that have paid big bucks somehow have lower rankings. I do not know how or why. Here is that new store's model.

Petaluma Motor Wheel - EBIKES

Petaluma Motor Wheel is an exciting new Ebike showroom in Petaluma California.

petalumamotorwheel.com

 

[Tom@WashDC]

A new business model is just opening in my town. They demo, sell, and service typically direct to consumer bikes, and some quality popular brands. They have negotiated with suppliers. What is interesting that I just noticed is that when I Google Petaluma Electric Bikes, my listing on Google Maps is number one and I have never paid to advertise. The ones that have paid big bucks somehow have lower rankings. I do not know how or why. Here is that new store's model.

Petaluma Motor Wheel - EBIKES

Petaluma Motor Wheel is an exciting new Ebike showroom in Petaluma California.

petalumamotorwheel.com

Good to see that they are offering bikes in the $1,300-$1,600. Where I see a lot of LBS's go wrong with ebikes is they don't carry a really inexpensive introductorty bike line. Most people don't want to shell out $3K+ plus per bike, and $200-300 in accessories to get back into biking. My first foray into ebiking during COVID, I did not want to shell out $6K-8K for my wife and I, to find out we did not like biking together afterall.

The LBS won't make a high margin on the inexpensive intro bikes, but once they get a customer, it could be a revenue stream for many years.

 

[PedalUma]

won't make a high margin

A drug dealer does not make much margin on the first couple of free samples either.

1) This new store is getting discounts from manufactures who have no way to demo or service bikes in the area. 2) They may first demo a less expensive bike that brought someone in and then show the difference with a slightly more expensive bike. Leader in /Upsell out. 3) As you say, once they establish a customer base, the stream will keep coming back.
Many people don't have the interest to do things for themselves. They like to be served. That is why there are all these places that do pedicures and nails. Most don't have the bandwidth to figure out what is going wrong with their brakes, how to source and order the right parts, or the tools and aptitude to make it right, and they just like the role of being the consumer. Here, fix it. Serve me. They can't run a little $5 nylon snake down a drain, but call a Plumber.

 

[Gionnirocket]

A drug dealer does not make much margin on the first couple of free samples either.

1) This new store is getting discounts from manufactures who have no way to demo or service bikes in the area. 2) They may first demo a less expensive bike that brought someone in and then show the difference with a slightly more expensive bike. Leader in /Upsell out. 3) As you say, once they establish a customer base, the stream will keep coming back.
Many people don't have the interest to do things for themselves. They like to be served. That is why there are all these places that do pedicures and nails. Most don't have the bandwidth to figure out what is going wrong with their brakes, how to source and order the right parts, or the tools and aptitude to make it right, and they just like the role of being the consumer. Here, fix it. Serve me. They can't run a little $5 nylon snake down a drain, but call a Plumber.

I always "hire" a "pro" when I want to be "serviced"

 

[JRA]

I was skeptical of Sondors first offering via CSF and somehow he pulled it off. With the beating the bike industry as a whole is experiencing currently the wheat will be separated from the chaff until the next boom arises. Caveat Emptor.

 

[gromike]

I'm waiting for liquidation of those hundreds of Metacycles that were made and not delivered. If I can get one or two of them within the next half year I would give up on my emoto Grom quest.

 

[Rome]

There's Sur Ron ultra at the dealer where I bought my Bulls.
It can go 60 mph. Asking price is $7K.
With upgrades, wide tires and rims lights grippy pegs and the whole she Bangkok.
$8.5k out the door.
It's gotta be better than Metacyle.
Very tempting. It's a moped no insurance required but will insure it on home owners insurance.

 

[Art Deco]

I'm waiting for liquidation of those hundreds of Metacycles that were made and not delivered. If I can get one or two of them within the next half year I would give up on my emoto Grom quest.

I don't know if they were ever finished, but I am certain that they will take a deposit on one if you are feeling lucky.

 

[gromike]

Yeah, their website is still up.

 

[Tom@WashDC]

I'm waiting for liquidation of those hundreds of Metacycles that were made and not delivered. If I can get one or two of them within the next half year I would give up on my emoto Grom quest.

No need to wait. Those bikes are in a Chinese based warehouse. From my scant reading, Sondors never paid for the bikes, or put a deposit on the bikes, they are not a Sondors asset and are out of reach of the Canadian BK. They are wholey owned and controlled by the factory in China. I'm sure they wold be happy to sell one to you right now if you send them the cash. You can be sure that factory is short of cash right now. You should reach out. They will probbly never make it to the U.S. when they can easily liquidate them in China.

 

[Taylor57]

I almost paid full price for a Rockstar during Covid. Could not get a straight answer out of Sonders as far as when it would ship. Looking back, it was a good move to not order. Instead I ordered the Frey CC and Frey was great at communicating...

 

[Tom@WashDC]

I almost paid full price for a Rockstar during Covid. Could not get a straight answer out of Sonders as far as when it would ship. Looking back, it was a good move to not order. Instead I ordered the Frey CC and Frey was great at communicating...

Yup, my comms with Frey were very good,and they were up to date with shipping info. My buddy bought a Rockstar, took him 7 mos to get it. He was twisting in the wind for a while. He likes the bike, but really concerend about spare parts, lack of communication, and he needs a new battery.