Dear Members of the Brooklyn Bicycle Community,
As you’ve no doubt gleaned from the news, the United States is currently levying tariffs on goods imported from China. These tensions have produced a number of economic consequences both domestically and abroad. And they’re making a very real impact here at Brooklyn Bicycle Co.
On September 24, a new wave of tariffs took effect. These tariffs tax billions of dollars of imported Chinese goods at a rate of 10 percent. On January 1, this rate will increase to 25 percent. This means Brooklyn’s costs will also rise by 25 percent come 2019.
Since the tariffs were announced, our team has spent hours putting our heads together to determine the best possible response for our customers, our employees, and our company.
We’ve known since day one that we’re unwilling to compromise on the quality of our bikes—even though that would be a simple way to cut costs. A radical commitment to bicycle quality is fundamental to who we are as a company, and we’ll never ask our customers to ride lesser bikes just so we can save money.
We’re also unwilling to compromise on our employees’ well-being by cutting salaries or benefits in order to accommodate our increased costs. We care just as much about our team as we do about our customers. And much as we’d love to produce our bikes domestically, the realities of the bike industry mean that domestic manufacturing is also out of the question, especially given the identical tariffs levied on intermediate parts not available domestically.
After looking at it from every angle, we’ve determined the most effective way to maintain the quality of our bikes, the quality of our customers’ experiences, and our employees’ well-being, is to slightly increase the cost of our bikes. These increases won’t be dramatic. Prices for some of our bikes may increase by approximately eight to 12 percent, while some bikes may not see a price increase at all.
Even though these changes are small, we want to be transparent about why and how they’re taking place. Here’s an inside look at the many factors we’ve taken into consideration and why we believe this decision is best for our customers and our team.
The Infeasibility of Domestic Bike Production
Purportedly, the tariffs are an attempt by the U.S. government to level the playing field between Chinese manufacturing and domestic production of the same goods. Given the way the bike industry currently functions, there are almost no large-scale bicycle manufacturing facilities in the entire U.S. For better or worse, most products originate from very few countries.
In fact, virtually every part necessary to build a bicycle—from tires to rims, reflectors, hubs, spokes, frames, fenders, stems, forks, pedals, chains, crank sets, brakes, seat posts, and even screws—is manufactured abroad. For the most part, every single component on our and other brands’ bikes comes from different suppliers (even for those brands that claim to be “Made in the USA,” in almost all cases the parts are still imported; that label simply reflects the fact that the bike is assembled in the U.S., or in rare instances, the frame is welded here). Approximately 90 percent of those suppliers do not exist domestically. Instead, they exist primarily in Asia with China, Taiwan, Cambodia and Vietnam being the largest.
This explains why during its founding in 2011, Brooklyn Bicycle Co. made the decision to manufacture its bikes in China. We would love to have a domestic supply chain, but the option to do that—especially while maintaining the quality and affordability of our bikes—simply does not exist.
In lieu of manufacturing domestically, we’ve worked hard to connect with factories that live up to our stringent standards. These standards revolve around treating employees fairly, building high-quality products, and maintaining the safety and well-being of factory employees and our customers at every stage of the manufacturing process.
We choose to work with manufacturers whom we believe surpass all others, and we’re proud of that. And if you look at our customer reviews, you’ll see that our international suppliers are doing an excellent job.
Our Ongoing Commitment to High-Quality Bikes and Experiences
Because manufacturing our bikes domestically is currently out of the question, one of the only other options available to us would be to swap in cheaper bike components in order to maintain our current prices. But we’d rather produce no bikes at all than sell lower-quality bikes to our customers.
In order to absorb a 25 percent increase in our costs, it would be very easy for us to make some reductions in the quality of our bikes’ components and designs. But in our view, every cut in quality represents a sacrifice on the part of our customers. For example, a cheaper seat sacrifices comfort; cheaper tires sacrifice puncture resistance; cheaper delivery would require our customers to assemble their bikes on their own (as opposed to having them professionally assembled), and so on.
We don’t want our customers to make these kinds of sacrifices. Quite frankly, we really give a shit about the quality of our bikes and the quality of the experiences that we offer our customers—and because we care, we’re not considering qualitative changes as a cost-cutting measure.
It’s for this same reason that we’re also unwilling to sacrifice our employees’ livelihood, our partnerships with independent bike shops around the U.S. and Canada, and our ability to remain a sustainable business.
So come December, please be aware that you may see a slight change in the pricing for some of our bicycles. What you will not see—now or ever—is a single negative change in the quality of our bikes or the quality of our customer service.
Sincerely,
Ryan Zagata
President, Brooklyn Bicycle Co.