The Business Side of Framebuilding -Getting an account with a distributor, Trademarks

[Ride to Live]

Just a quick background on me and what brings me to my question:

-Riding a bike for the first time was one of the best feelings I have ever felt.
-I wrenched in shops and worked odd welding jobs throughout highschool and college, raced in college (was no good).
-Became a mechanical engineer, have been tortured by cube life since. Have wanted to build for a long time.
-Currently building a frame jig from 80/20 and parts I machine secretly in an employer’s tool room. I feel like I have found salvation.

I am currently tooling up (minimally) to start building steel frames. Right now the goal is to start as a hobbyist but build as much as I can and see where it goes.

My question has to do with the business and law side of a small operation like this. I will be using a "brand" for my bikes which at a hobby level is inconsequential. However, at what point is it wise to consider things like trademarks and registering as a sole proprietorship or LLC?

Also, the main reason for my interest in these aspects of the trade at this point is how do I obtain an account with a parts distributor? With the intention to be a legitimate builder (on the side for now - I need to keep working my normal job to support this and me), how can I access wholesale tools and parts? In shops I worked with distributors like QBP, J&B, Down East. I know these companies require things like a physical commercial space, resale tax number, and proof of liability insurance.

Unfortunately, I don't have an "at cost" type of relationship with any shops where I currently live. The things I'm really concerned about having access to are the expensive frame and wheel tools like a good truing stand to build wheels and frame/fork reaming, facing, tapping tools. I'm not going to pay a shop to face/chase a frame I just built - nor do I think they'd let me build a wheelset and use their frame tools.

Can anyone recommend a distributor that works with non-established builders? What are some avenues builders have taken to deal with some of these initial barriers?

[Eric Estlund]

If you are supplying bikes to anyone other than yourself you are crossing a line out of hobby work. Dream big, but realize it's going to take a lot of work at a hobby level before you make anything that should go out under someone (possibly even yourself, and that's ok).

Regarding your remark:"I know these companies require things like a physical commercial space, resale tax number, and proof of liability insurance. "

All of the hoops you need to jump through to set up accounts will already be jumped when setting up your business. I'd strongly recommend a small business class and a sit down with both a lawyer and accountant specializing in small biz. The things they ask for are the things you will need to have in place already.

I'll say this- all of the expense in frame tools and such is a drop in the bucket of the costs of setting up an independant business of any sort. Scale your reach and expectations on your experience and education.

Best of luck- and check out local community colleges and local small business resources for business education and professional development options.

[Andrew R Stewart]

I agree 100% with Eric. Remember that there's no need for payment to constitute as a sale. Also it's not always the rider who will make the decision to chase a lawsuit, survivors, spouses, executors of estates, children, all have a stake in the financial outcome of a loss of a rider. Even those only secondarily involved in an incident have the right to sue.

To set up your business/life so there's no financial benefit to sue you for your mistakes (that cost some one their health or life) is a denial strategy that denies one's responsibilities of doing the right thing and honoring your actions. You need to get insurance before you build for any one other then yourself (and maybe your spouse...). If this doesn't fit your business model you need to rethink your model or get out now before you spend too much.

I would also suggest that besides the professional consul Eric mentions that you bend a pro builder's ear for a few beers. Just like owning a bike shop isn't about selling DI2 bikes or fixing flat tires, frame building as a business is not about brazing or frame design. Andy.

[Ride to Live]

Thank you Eric and Andy. I will certainly take your wisdom to heart. Sounds like I should bite the retail bullet, build a bunch, and cross bridges to legitimacy as I come to them.

[steve garro]

Thank you Eric and Andy. I will certainly take your wisdom to heart. Sounds like I should bite the retail bullet, build a bunch, and cross bridges to legitimacy as I come to them.

And as someone who has been in bikes going on three decades and 14 years of building, look REALLY far down the road and ask "How will I ever retire"

And

"What if my health is failing"


As I am nearing 50 and watching all the "HELP THIS AILING FRAME BUILDER!" kick starters and bake sales.



As my body winds down my current option seems to be DIE YOUNG



- Garro.

[abbeyQ]

In the modern day of online discounters and grey market product a wholesale account with a big distributor isn't worth nearly as much as it was 10 years ago. I wouldn't spend the time or money to setup a proper business just to get 'wholesale' on bike parts.

[shirk]

In the modern day of online discounters and grey market product a wholesale account with a big distributor isn't worth nearly as much as it was 10 years ago. I wouldn't spend the time or money to setup a proper business just to get 'wholesale' on bike parts.

This.

Price check the German sites if you've done so in the past.

bike-discount.de
bike24.de
bike-components.de

[e-RICHIE]

However, at what point is it <cut>

Jake - When you finally take the business model to the public, get a resale certificate, pay use tax, and report your income/expenses on a 1040, use the wholesale and distribution system that the industry has in place. If something irks you, bring it up and try to reconcile it with the vendor or sales staff. But don't buy retail from a retailer, a mail order house, or the grey market.

[Eric Estlund]

I don't sell products from grey market- I want all of my vendors to provide the same level of customer protection I am committed to.

[abbeyQ]

I don't sell products from grey market- I want all of my vendors to provide the same level of customer protection I am committed to.

You are still the one handling the warranty claim on behalf of the end customer. What difference does it make if you're dealing with Competitive Cyclist or QBP to do that?

To clarify my previous statement. Once you've decided to make a business out of frame building, by all means go through the hoops to set up a proper business and get the accounts with suppliers that can help you turn the frames into bikes. While you're in the learning phase of all of this I wouldn't worry about it though. There's not much money to be saved on the kind of tools you'll need to procure or the parts to build the bikes for testing. You might decide this whole frame building thing is for the birds and realize that working as an engineer isn't so bad after all. Frame building is the hardest way to make a living in the bike industry after all.

[steve garro]

In the modern day of online discounters and grey market product a wholesale account with a big distributor isn't worth nearly as much as it was 10 years ago. I wouldn't spend the time or money to setup a proper business just to get 'wholesale' on bike parts.

Wholesale = loosing

OEM = winning!






- Garro.

[MDEnvEngr]

As a dude that supports the family as an engineer, I can totally relate to the OPs desire to build. I picked up framebuilding as an outlet to design, fabricate and finish something - as opposed to the shovel-shit-against-the-tide-everyday which has become the normal engineering job in this world run by asset managers. I had been riding forever, drempt of building for a long time (since I bought a house right down the street from Peter Weigle). So i started building. I had the advantage of picking JPW's brain, and a powerplent full of amazing brazers/welders to learn from. I loved it and still love it. I thought at one time that framebuilding could be something to do in "retirement." But the business aspects of it just annoy me. So i build for me and my family. They are growing, so it keeps me busy enough. To the OP - take your time and build cool stuff. If you are a mountain biker, look to the full suspension side of things - so much more to think about, play with and try.

Resist building for others - it'll just stress you out.

I like your phrase, "bridges to legitimacy..."