Leave it to a customer to speak truth to an entrepreneur. That’s what happened when Lelac Almagor, a Washington, D.C. school teacher, purchased an electric kid-hauler cargo bike from Bunch Bikes, a Texas-based direct-to-consumer manufacturer and seller.
Supply-chain disruptions during the pandemic almost finished off Bunch Bikes. Then the founder, Aaron Powell, met Almagor at a bike event. “I learned she is much better at selling the bike than me,” he said.
Powell and I recently spoke. He addressed the company’s founding in 2017, its near-demise a few years later, and his gratitude for working with Almagor. The entire audio of our conversation is embedded below. The transcript is edited for clarity and length.
Eric Bandholz: Give us a quick rundown of what you do.
Aaron Powell: I own Bunch Bikes, an electric cargo bike company. I saw them in Europe, where they’re very popular. Imagine a bicycle with a box on the front. You can put up to four kids or a couple of big dogs in there. It’s a way to have fun with the family while you’re going around town, dropping kids off at school, going to the park, or for general transportation.
We launched the company in 2017 in Denton, Texas. We were one of the first in the U.S. to make this product, and it’s going well. We appeared on Shark Tank in March 2021.
I had a business selling kids’ jewelry on Amazon FBA. I had some success, but I learned I don’t want to be on Amazon. I hated looking over my shoulder, knowing everything that could go wrong there. I needed something that’s expensive, difficult to ship, and has lots of barriers to entry. Bunch Bikes doesn’t have many competitors after six years because of those barriers, although I may not have done it had I known how hard it would be.
Shipping is a challenge. We have a good setup now, and we’re at a volume to obtain good freight discounts. But it was a killer initially, trying to figure out how much to charge for shipping. We tried different methods: shipping unassembled, fully assembled, white glove, and less than truckload.
We now ship everything fully assembled, primarily for safety purposes. There are a lot of bike and e-bike companies that ship 70% assembled.
In terms of size and scope, our product is similar to getting a motorcycle delivered in the mail. Can you imagine having somebody put their motorcycle together? I don’t want the liability of somebody building our bike themselves and getting hurt.
Bandholz: You’ve recently gone through some hard times.
Powell: We had mistakes early on. Our first factory was not good — poor quality. But we shifted to a better one. Before the pandemic, we were profitable. It looked like things were going well. Then Covid happened. We were selling even more bikes, but the supply chain disruptions nearly destroyed us.
I tend to focus on the company’s creative marketing vision — not operations. By 2020, I had just gotten a handle on manufacturing lead times. But the pandemic changed it all. Our lead times went from three months to 12 months and beyond. It peaked at three years for some of the components.
I had to put deposits down on inventory — hundreds of thousands of dollars. We brought in outside investors. I appeared on Shark Tank.
Still, we could not keep track of what was happening. Our factory rep lost track of who placed orders. It was chaotic. Our costs were increasing across the board, and I was too slow to notice. Our cost to ship a container went from $3,000 to $22,000. My biggest mistake was not raising prices during 2021. Plus, we didn’t collect enough upfront on the sales we had been doing.
Then iOS 14.5 came out in April 2021, and I learned that our marketing sucked. I was consumed with supply chain headaches. I spent all day in spreadsheets. We were blowing through the Covid small business relief funds that I thought would last for years. I relied on our marketing agency, but the ads never worked again after the iOS update. We started losing money.
Finally, with two months of cash in the bank, my delusional optimism disappeared. I laid off half the staff. We cut all of our advertising — we were spending $25,000 a month. We cut all the ad contractors and called up every freight vendor. We went over every line item on the bank statement.
I made one good hire — our best customer, Lelac Almagor, who rides her bike 10,000 miles a year in Washington, D.C. She had been doing gig work writing for us. I hired her and put her on marketing and communication. Our sales went up immediately. August was the first in 18 months that actually was above the sales forecast. And every month after that was just another new record. November of last year was the best month we ever had.
Bandholz: How did you connect with her?
Powell: She bought a bike from us. She was pregnant at the time. She ordered it and then canceled her order. She came back six months later and completed a purchase. She had been a teacher for 20 years. A lot of folks started questioning their careers during the pandemic.
I tried to hire her for a year. She finally decided to try something new. She’s very passionate about the product. The starting point was our ambassador program called the Bunch Squad, where you can go on our website and connect with somebody locally for a test ride.
She was our best ambassador. I went out to D.C. and did an e-bike event with her. I learned she is much better at selling the bike than me. She held a baby as she showed folks how to use the brakes. It was some next-level mom stuff I could never touch. I knew this was the person we needed talking to our customers.
She improved the copy on our website, which was very feature-focused and too technical. She added all caps and multiple exclamation points. It bugs me a bit — the perfectionist in me — but it resonates with our customers. She helped define the voice of Bunch Bikes.
Bandholz: Where can listeners support you or buy a bike?