electric bike maker 50cycles is turning back to the far East

Electric bicycle importer 50cycles began life in Japan and now plans to export back to the far East.

By Widget FinnPublished: 11:41AM BST 02 Oct 2009

The brothers cycle around Nottingham University Business School Photo: MARTIN POPE
Scott Snaith was working for a financial consultancy in Japan when his elder brother Tim contacted him about an electric bike manufactured by Honda. “Tim was based in London, didn’t have a driving licence, and was fed up with using public transport,” explains Scott, 32. “He wanted to buy an electric bike, and asked me to investigate Honda prices locally.”
The bikes were much cheaper in Japan, so Scott shipped two back to the UK where his brother created a one-page website and sold the second bike over the internet within a fortnight.
It seemed an easy way to make a bit of money, so they ordered and sold five, ten, then twenty bikes. “Things were going well,” says Scott, “then the Japanese manufacturer ended production. I had finished my job in Japan, so having found a supplier of the electric bikes in China I visited them en-route back to the UK. I ordered a container-load of forty-five bikes using a £10,000 overdraft, followed the container home and found that three quarters of the consignment was sold before the container arrived.”

This provided cash flow, so the brothers ordered another consignment. Within nine months the brothers were selling 40 bikes a month from Tim’s flat in Loughborough, and branching out into accessories like helmets and safety products.
An enthusiastic write-up in the publication A to B, which specialises in pedal-power, put 50cycles on the transport map. “Having an electric bike is life-changing,” claims Scott. “People get a pushbike, think it’s great for a couple of weeks then get bored and leave it in the shed. But people love electric bikes, and so do companies because it boosts their green credentials if they encourage their staff to cycle to work.”
As the business expanded the brothers got IT advice from their local Business Link. “We established an e-commerce system to make our business more efficient, and changed our online checkout method,” he said.
Currently the bikes are supplied by a German manufacturer which has meant that, like many businesses, the company’s finances have been affected by the weak pound. Scott explains “We had major problems at the beginning of 2009 because we were holding a lot of stock to see us over the winter, much of it on 30 days credit. When the value of the pound to the euro went from 1.35 to 1.05 in a month it wiped out our profit. We had to react quickly, cutting down expenses to the bone and letting go of a couple of temps.”
Their caution has paid off, and encouraged by the green shoots of economic recovery Scott, with his experience of working in Japan and Indonesia is keen to develop an export side.
“Business Link has been particularly helpful with exporting advice, given us a grant of £3,500 to research a new product in the US. It is also supporting us on a trade mission to Malaysia and Singapore and has arranged a whole lot of appointments with key people when I arrive. We plan to launch a website in Singapore where bicycles are still the commonest form of transport,” said Scott.
50cycles.com is a business whose time has come, he says. “Initially we grew slowly, but the electric bike market is on the verge of rocketing because with increasing fuel prices people are looking at other forms of personal transport.” And the reason for the name? “All electric bikes have a frequency of 50 cycles per second. Eventually we aim to sell 50 cycles per second.”
Company: 50cycles.com
Founders: Scott and Tim Snaith
Founded: 2003
Start-up funds: £10,000
Staff: 8
Turnover: £1.5m
STARTING OUT
DO watch your prices, especially if you’re exporting. We were competitively priced with European suppliers then the changes in the exchange rate took us by surprise. If you price too keenly at the start there’ll be nothing left if exchange rates drop.
DO make the most of technology. We use Google documents a lot, and found software to help with the admin side which is free on the internet.
DON’T hold a lot of stock – it ties up your money, and can lose value. That’s how we were caught out when the exchange rate dropped.
DON’T grow to quickly, or splash out unnecessarily. There’s no need to have flashy premises – we started in my flat.