Mountain Cog

128 - Are Chinese Brands Disrupting the Mountain Bike Industry?

• Josh Anderson & Dane Higgins • Episode 128

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If you've been paying attention to the mountain bike market lately, you've probably noticed some unfamiliar brand names popping up — and some surprisingly low price tags attached to them. Episode 128 is Josh and Dane's deep dive into the growing wave of Chinese brands entering the US market not as behind-the-scenes manufacturers, but as direct competitors to the brands you already know and ride. From complete enduro bikes priced well below comparable US brands to electronic drivetrains at half the cost of Shimano and SRAM, something is clearly shifting in the industry.

What makes this episode worth your time is that Josh and Dane don't just point at the price tags — they explain the machinery behind them. Vertical integration, fee-on-fee cost removal, reverse engineering, government subsidies, and the post-COVID/tariff driven factory crisis in China all played a role in getting us here. They also call out the stuff you should actually be worried about — inconsistent quality control, after-sale support that's still figuring itself out, and software ecosystems that need work. Brands like Amflow/Avinox, XDS/X-LAB, Elite Wheels, Seekrun, L-TWOO, and others get specific attention, and Josh makes a bold prediction about DJI and the future of the AMFLOW brand that's worth hearing.

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YouTube Launch And Life Updates

Host - Josh Anderson

Hello, my friend. Hey, how are you? Doing all right. Got a little bit of a cold. Excited for a couple reasons. First, uh the Mountain Cog Podcast, our entire uh audio catalog is now available on YouTube and YouTube Music.

Host - Dane Higgins

I I I've been pushing for that because like I've been deep diving on YouTube and I think it's cool. I think there's a lot of people on YouTube and it's easier to find us. Yeah. So what do you do if you go to YouTube? You just type in Mountain Cog Podcast. Mountain Cog Podcast pops up and there you are.

Host - Josh Anderson

And also on YouTube Music for the folks that use that.

Host - Dane Higgins

But you don't have to be on YouTube Music.

Host - Josh Anderson

No, you don't have to be on YouTube Music. It comes up on the normal video player, although it's just like the Mountain Cog logo.

Host - Dane Higgins

We don't have any video yet. Yeah, you don't have to deal with our faces. Yep. Which, you know, we'll see.

Host - Josh Anderson

We might experiment with that and see how you guys like in the future, but uh no promises.

Host - Dane Higgins

So I got this um uh I went and visited my mom for mom mom's day.

Host - Josh Anderson

Yeah.

Host - Dane Higgins

Uh I rode Sunrise, our downhill park with uh um share lift access, and then headed over to hers. And um she doesn't have a lot to do there, right? You know, it's like a grandma's house that doesn't have a lot of stuff to do. And um, so I got her old tablet and I was playing this video game, and I got totally addicted immediately. Um but I noticed when I'm playing it, it's one of these um little games where you build towers and defend and and it's it's very time consuming, it's total time suck. I don't suggest anyone do it. Right. Um, but the reason I bring it up is because I could put YouTube on and I can't really watch it. So like our podcast would be perfect, and I could play my little game and still be here.

Host - Josh Anderson

Or do your suspension work.

Host - Dane Higgins

Well, that's actually what I do at work, yeah. Absolutely.

Host - Josh Anderson

But um, yeah, so that's out there, so that's cool. The other thing I'm excited about is um Lacey, my wife, and I decided to make the plunge and buy a van, van life van. Did you buy it yet? So um I haven't yet. I'm flying out uh Friday morning to uh Dana Point, California.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

Actually, I'm flying into John Wayne, which is in Orange County, just north or northeast or southeast of uh LA. You don't have to give directions, man. Nobody cares. All right, whatever. So I can't help it, man. I'm a strategist. We try to tell things.

Host - Dane Higgins

Anyways, I'm buying it from a dude in Dana Point, California. But I will tell you back. Just get under that thing because uh see air and rust. Like no joke. Yep, you know.

Host - Josh Anderson

No, I I absolutely plan to do that. Yeah. Um, okay, so uh we have an interesting uh special topic podcast today.

Chinese Brands Show Up As Brands

Host - Josh Anderson

Um and I'll start with a joke. Okay.

Host - Dane Higgins

Is it gonna be bad? Like it's I don't think so.

Host - Josh Anderson

I don't think so. We were looking for this so the podcast today is gonna be about Chinese brands that are we're seeing starting to see pop up, and many of them were manufacturing OEM providers to the brands that you all know, but now they're starting to pop up and become brands selling direct. Uh they've either started or they've indicated that they're gonna start. And I want to talk about like a bunch of stuff related to that. So it's a joke about China or Chinese people. I don't think it's too bad. So let's see. Be careful. I'll be careful. I I tried to pick one, okay. It it might not even be it's it's probably not even funny, but we'll see. All right. Why do Chinese people love fireworks?

Host - Dane Higgins

Oh, well, I mean, yeah, like they they're like the leaders in it, right? They I guess.

Host - Josh Anderson

I don't know. I yeah. Either China or Mexico. One of the two is the leaders in fireworks. Oh, not Mexico. Really? Yeah, they do a lot of fireworks, I think. But yeah, I think you're right. I think China's probably that got the firework capital. We don't know. Uh they love it because it's their culture. Because they know how to ignite a celebration.

Host - Dane Higgins

Oh god. That is a horrible joke. It's not even oh man. All right. Well, um I would rather have what what if we do trivia instead of dad jokes? We could do whatever you want, bro. Okay.

Host - Josh Anderson

Okay.

Host - Dane Higgins

I'm just saying that joke was so bad I may not want to do jokes again. I may be non-jokal from now on. Non-jokal, that's a word.

Host - Josh Anderson

I'm pretty sure. Like Well, fucking contribute and bring a joke that's funny, man.

Host - Dane Higgins

Yeah, I always forget, man. I have some of the best jokes and then I'll immediately forget them. You got it written down, man. You got it written down. It's horrible.

Host - Josh Anderson

I just uh anyways, you all have signified to us that you like these kind of strategy podcasts where we kind of go research some stuff and pontificate about things that are happening in the industry. You are uh telling us that through your consumption rates and the amount of you that are listening to the episodes. So we're gonna keep doing them. They they take a little longer to prepare for.

Host - Dane Higgins

So I had three people come in the shop last week that are like, hey, are you that that uh what do you say, mountain cog guy or that that podcast guy, or something like that? And one of the guys I was like, damn, am I famous or something? He's like, Yeah, you you kinda are. And I'm like, No, I'm not. That's so stupid. I'm not. But uh you are a little famous. It's funny, I was riding Bean Peak after, so I did this big tour of Arizona. So hit sunrise parks, then visit my mom on mom's day, and then um she's up near Flagstaff, and then came back down to Prescott, and they have a new mountain bike gravity park. Prescott. Uh Prescott and um Prescott, and uh it's called Bean Peaks, and they just uh finished what phase five?

Host - Josh Anderson

I I don't know, but they finished a new phase.

Host - Dane Higgins

Yeah, well they have the fifth hub, and which is the top, yep, and uh went and rode those, and it's it's gravity, it's pretty awesome. They've got uh black jump line that's got gaps, really nice. Wow, and then they've got a blue line that I like better because I'm a tabletop guy, and really good jumps, and they go all the way from the top. You have a feeder trail up to the top, and it's all been funded. Um, it was pretty awesome. I gotta say, it was it was a lot of fun. So that's cool, man.

Host - Josh Anderson

Yeah. Okay, so um, for this one, uh, and I gotta give a shout out to the Pink Bike podcast because it was actually in one of their post um uh Sea Otter podcasts that one of the folks that was there, one of the folks from Pink Bikes that was there, and I can't remember which one, but he was mentioning that there were a number of Chinese brands that were there as brands, not as OEMs to service the brands. Yeah. And he thought that was really unusual, uh, more than he had seen in the past. And and they talked about it for a minute, but they didn't really dive into it, but it really got my wheels spinning. And so I went and uh and I started just researching like and research a handful of things like um which companies, which Chinese companies are trying to enter the US market as a brand.

Host - Dane Higgins

Okay.

Host - Josh Anderson

What is the heritage of those companies? Um and by the way, I I think I I I've uncovered about 18 different companies across all different, you know, some are you know e-bike providers, e-bike motor providers, um, bicycle, mountain bike providers, component providers, different type like every type of component. And there's way more than that, but there are, but there's way more than that that I think are like making a conscious decision to to try and break in and like compete against like trek and specialized and pivot and Rocky Mountain and you know whatever. Okay. Um so so like I asked myself a handful of questions. Like, what are the companies, like what's their heritage, why are they coming? Like what would cause them to do that? Um, and I have a handful of questions here that I think we'll run through first. Uh I'll tell you what the questions are and then we can go through the logic. Uh and you can question me, tell me you think I'm an idiot or whatever, but these products um from these 18 different brands um are significantly cheaper. Uh they might be lower quality too. I think that's up to up for debate. But um they are significantly cheaper, and so like why are they cheaper? I want to talk through the reasons why they're cheaper, and I and I don't think it is what everyone thinks. It there's it's more nuanced than what everyone realizes. So I want to go through the logic there.

Host - Dane Higgins

Okay.

Host - Josh Anderson

Then um, like why are they entering the US? This is an interesting thing because why are they entering the US market as a brand? This is an interesting thing when you think of the value stream, and my company actually went through this. We we made a strategic decision a long time ago before I was a strategist at the company. Wow, that was like ancient times. Ancient times. Um but they made a decision to go up one level in the value chain. And what that means is that you're now competing against your customers.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

So previously you were a supplier, you were, you know, let's say you're you're providing frames to all the big brand names that you know, and now you're gonna say, you know what? We're not just gonna provide frames, we're also gonna compete against you. And to me, that's a really interesting proposition because it changes the dynamic of your customer-supplier relationship if you're now a competimate in addition to just a supplier. Uh hold on one sec.

Host - Dane Higgins

There we go. Okay. All right. Just I didn't want to over. I didn't want to crack one open over your uh pontification.

Host - Josh Anderson

We also took a look at in the different categories that they're entering, like what are the differences in prices? Like how much cheaper are them? How much cheaper are the Chinese products? Um I I like there are several reasons why you should not consider these uh and why not to buy is another category. And the final one is there's a handful of these companies that I think are worth like looking into deeper.

Host - Dane Higgins

Okay.

Host - Josh Anderson

Uh, and then some that may or may not be, and one that I actually bought one of their products, and I'm gonna test it out, so we'll talk about that too.

Host - Dane Higgins

Okay.

Host - Josh Anderson

How's that sound?

Host - Dane Higgins

Sounds good. I I'm I'm excited. We have an outline, so we'll try not to squirrel too much. Um, I will definitely tell stories, yes, uh, because I always do. So, but yeah, let's dive into it. So, why are Chinese products cheaper?

Why Chinese Gear Can Cost Less

Host - Josh Anderson

Right. So that's the first topic. So why are they cheaper? So, what everybody thinks, like what do you think? What is the first thing that comes to your head?

Host - Dane Higgins

I think what people think, I know different. Yep. Uh just because I'm more exposed to stuff, but I think everybody thinks, oh, it's just cheaper labor.

Host - Josh Anderson

Right.

Host - Dane Higgins

Right.

Host - Josh Anderson

And that is, yeah, I think my research suggests that is an element. Yeah. But that is is shrinking. Yeah. Like the labor situation is getting slightly better uh for uh the Chinese factory workers. And so it's not as big of a factor as it was in the past.

Host - Dane Higgins

Okay. Hey, can I give you like three things that I think people think of the thing? Yeah, yeah, keep going, and then I'll go through my list. We'll see if we're gonna do it. Okay, so like the uh cheaper labor, I think is the one thing. Sounds good. Second, it's like knock off like cheaper quality. And then I would say the third thing is they tend to copy and not and not do their own design. So those those would if if I had to like put like three things that I think people think of when they think Chinese uh products, that's probably what I think most commonly comes up.

Host - Josh Anderson

And I think all three of those with some slight like tweaks are actually aspects. Okay. But there's more.

Host - Dane Higgins

Okay, all right.

Host - Josh Anderson

So definitely labor costs, yeah. But but that is actually shrinking, it's not as big of a variable. Um the second thing is vertical integration. So I I so um I think of giant.

Host - Dane Higgins

Correct. Okay.

Host - Josh Anderson

Right, good, okay. So so they there's this thing called fian fee. Okay. So if you do you step in that? How do you get it off your shoe if you step in that? That's not that kind of fee. Fee on fee. So fee on fee, like if I buy a frame from you, you're gonna charge me a margin. So you're gonna have your costs, and then there's gonna be a margin that's your profit.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

My cost is your cost and your margin. Okay. All right. And so as you vertically integrate, you remove that fee on fee, but your operating costs do go up, and so it's a balancing act. But if you can get it to the point where you're efficient and your operating costs are less than the fee that you would pay, it's actually cheaper to manufacture if you're vertically integrated.

Host - Dane Higgins

So so when we talk about Giant, Giant owns the mine, right? That they get the aluminum. We've talked about that, the Schmelter, the the processing of the aluminum, then they make the frames, then they make a lot of the components, then they make the bikes, and then they even have giant I think they have giant stores. I'm not sure.

Host - Josh Anderson

But uh our hypothesis is that vertical integration makes it cheaper for them to produce the and and deliver the product.

Host - Dane Higgins

And your fee on fee concept is that when that uh giant frame manufacturer needs aluminum, they're buying it from themselves.

Host - Josh Anderson

So they're not or you know if I'm like, I don't know, pick any brand, I don't know who buy, I mean, I do kind of know who buys from Giant, because Giant makes frames for lots of people, right? We talked about that previously. But um, if I buy a frame and it costs Giant 600 bucks, yeah, well, they might put a $200, and I'm just making up numbers here. Margin. They may put a $200 margin. And so if I'm the bike brand, you know, brand XYZ, yeah, my cost for that frame is $800.

Host - Dane Higgins

Yeah. Right? And and Giant's frame, Giant's cost to make the same one with their name on it is is six hundred.

Host - Josh Anderson

Assuming, yeah, correct. Correct. Yeah. So so you pull that fee on fee out.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

Um, so vertical integration, a lot of these companies are are heavily vertically integrated. Yeah. Uh the second thing is, and this kind of gets to part of what you said, their research and development costs are lower uh for two reasons. One is you said copy. Um the right way to say that is reverse engineering. Oh my god. Which by the way is legal. Yes. It's even legal for US companies to do that.

Host - Dane Higgins

So if you c if you say you copied it, is that legal or is that semantics?

Host - Josh Anderson

Um reverse engineering is legal. You can't violate a patent and you can't violate intellectual property law, but you can reverse engineer. And I don't I don't know that I fully understand all the nuances between that.

Host - Dane Higgins

Okay. Um because knockoff, like a Chinese knockoff, is different.

Host - Josh Anderson

That is they're trying to like Yeah, yeah, they're representing it as as Nike instead of Nike. Yeah.

Host - Dane Higgins

That's that's and then there's counterfeit, which is where they're trying to represent the city. That's not what I'm talking about.

Host - Josh Anderson

I'm talking about they take the you they take your your component, they strip it all down, and they try to use your your concept and just re-rebuild it.

Host - Dane Higgins

Figure out how you did something, they skip the line.

Host - Josh Anderson

Yeah. Okay. And we talked before, like in the last episode, when we talked about um suspension. Yeah. You were kind of your hypothesis was that like Fox and RockShock were going back and kind of doing the same thing to each other.

Host - Dane Higgins

Yeah, I think they trade that and I think they trade engineers. So a lot I'm not kidding. Uh not trade, but like an engineer quits.

Host - Josh Anderson

Equip and they go work for rock shock and they swap back and forth. Um, and then also um cheap licensing of others' intellectual property.

Host - Dane Higgins

Okay.

Host - Josh Anderson

So they can pay a small fee and just get the design instead of having to reverse engineer it. Okay. So lower R and RD research and development costs. Um, the third thing, and this gets to part of your quality thing. Okay. There are some costs that I would say are deferred. Like we talked when we went through, you know, how much do or what our hypothesis was on how much uh bike companies make. And by the way, a couple of them reached out.

Host - Dane Higgins

Yeah. Yeah.

Host - Josh Anderson

And we I I would say they've asked us not to say who they were or what they said in any detail, but they did tell us that we were directionally correct. Yeah. Um, maybe I'll correct one or two things minor things. They actually make less on e-bikes than they do on acoustic bikes. Okay. All right. Uh, and that's due to outsourcing much more expensive research and development is what they told us. Okay. Uh and we had said that that was uh an additional cost, but I don't think we hit scaled it correctly.

Host - Dane Higgins

Yeah. Okay, gotcha.

Host - Josh Anderson

So the e-bikes aren't making the same margins. Um, but they said that we were directionally correct. Not perfect, but directionally correct. Okay. Um and and maybe maybe they'll give us the green light to like talk more, even if we don't name the the brands, but um, we did get some feedback. Nice. So uh so we it wasn't perfect, that episode wasn't perfect, but it was not wrong.

Host - Dane Higgins

Yeah, and and the the feedback we got from the industry that we were talking about was kind of like you're not off base. So yeah, you're you guys aren't crazy. Yep. So okay.

Host - Josh Anderson

Uh so deferred costs. So we talked about the fact that the brands like will re retain a uh warranty, like like a fund for warranty, and they'll amortize that into the the the cost of the bike.

Host - Dane Higgins

Yeah, so like when I go to pivot, yeah, there's a whole area that has bikes in it or frames or pieces or whatever you want to say, and the sales guys can't touch it. Uh they they're not allowed to to go in there and grab that stuff. There, they have to, that's warranties, uh, and they have to keep it for a certain amount of time. I I can't remember if it's actually law. I don't know. Yeah, I don't know. I don't know if it's law or policy, but but all almost all the companies I've ever known do. And after a certain amount of years, you'll see a bunch of these random things show up. That's because they're clearing out their warranty that they're because they no longer have to clear out their warranty. Yeah, no longer have to keep it.

Host - Josh Anderson

So a couple things. Um one of the hypotheses here is that they're just not reserving the funds for the warranty.

Host - Dane Higgins

Okay.

Host - Josh Anderson

You know, we looked at one of these brands earlier, it was a carbon wheel brand. And if you look at the competing U.S. companies, most of them, I think almost all of them, have like lifetime warranties on their carbon wheels or it's all over the place, but yeah, the the what was it, a three-year warranty? Yeah, so that was the point. Was that like this particular company's only got a three-year warranty, so they don't have as much warranty exposure.

Host - Dane Higgins

And these were on mountain wheels. Road wheels, you know, a three-year warranty is not unheard of or crazy because roadies aren't regularly slamming them against rocks on purpose. You know, um and maybe the gravel wheels, you know, but um mountain wheels, I think uh a lot of people really think about uh who makes that wheel and and who's backing it up, and the warranty can make a much bigger impact on that customer uh because they they don't want to spend all that money and have the thing just break, especially where we're at. You know, there may be places where it's not as rocky and not sharp.

Host - Josh Anderson

Yep, you know, so so um so I like to keep people remembering what we've talked about. So this is again, why are the Chinese products cheaper? Talk about labor costs, real but shrinking, yeah, vertical integration, talk about lower RD, talk about deferred uh uh costs like warranty. Yeah, also, and I think you hinted at this like the quality control uh is not yet at US levels for brand. I I did counterdain when we were kind of jousting before this episode that many of these companies actually do manufacture the products that we use today. Yes. So so some of them at least have good quality control. Otherwise, we would be having problems with the products that we get.

Host - Dane Higgins

Yeah, and I'll poke at you because um a lot of that quality control. So when a US company, you know, goes to an Asian market to get their supplies, uh, their frames or whatever, whether it's China or Taiwan or whoever, um, a lot of times that US company is on the ground there. Doing their own QC. Doing the QC. Because if you think about it, like they're kind of buying that that product from them. Yep. And so if the person who's qualifying it um is also the same one that's making it, yep, their motivation is to pass a lot more that may not. Uh and if you're the one buying it, you're gonna be more likely to fail a lot more. Yep. Uh so uh a lot of these companies, I've talked to a few where the I know the people that go there and check some of the QC and and uh they're in-house, they're at the factory, and sometimes they even have segregated little areas where they work in. But um, so that's different because again, if it's a a Chinese company who's making the frame for somebody else, they if they're doing the QC for their own product, they're they're not they don't have that they don't have that support of the Western brands. Well, well, they also don't have the as much of a motivation to to uh fail product, they have much more motivation to qualify product because they're as a supplier. Yeah, yeah, because they're not purchasing it, so they're not like being careful. They're like the more that we get out and sell, and if not they waste the product.

Host - Josh Anderson

So yes, but there is something about reputation and there is something about yeah, it it in it it will you you can put out crap product today, you're not gonna sell that tomorrow. True, yeah, right? So they you gotta have a longer vision. Yeah. Um, all right. So the the next element here is like there is no brand tax yet. And so what does that mean? Yeah, so so there's this kind of like unwritten thing around brand tax that like maybe you pay a little bit more for a pivot for no other reason than it's got the name Pivot on it. Yeah. You pay a little bit for the name.

Host - Dane Higgins

Yeah, so I have a I had somebody say that the other day. Yeah. And it's tough because as a pivot dealer, and uh if I've drinken the Kool-Aid, you know, and all of these these companies, they they want you to drink their Kool-Aid. They want their own.

Host - Josh Anderson

We've seen amazing stuff, yep. And we think there's a ton of value there, right?

Host - Dane Higgins

Yes, yeah. I would say that um it's hard if you don't know the specifics to justify why something costs more than the other until you get into it. And so, like my old story about my digital camera, yeah, where you know, I went and spent $500 and got this amazing camera and I was all excited and thought I had spent so much money on this camera, and my buddy is telling me how much his he's a photographer, his lens was $2,500. To me, you know, that was an expensive, like outrageous amount. To him, he sees the value. And so when you ride uh a brand that is a higher quality and you're paying more, and your buddy thinks it's you know just for the name, they may not have the knowledge to know why.

Host - Josh Anderson

Yeah. Let me give you an example that might illustrate what I'm saying. Okay. So let's say that we start mountain cog mountain bikes. Yes. Right? And we use let's do it. Let's mountain cog money mountain bikes. Let's let's all be pink. Let's completely go out of business. Let's make them pick. All right. And we just hire the the the best. You know, bike designers in the world. We steal all faction bike studios guys. Yeah. Yeah. We just hire like the best bike. We learn French. We learn Jean-Aparpose. We learn French. And uh so so and we and we basically like outclass pivot. We outclass him on the design, we outclass him on the manufacturing quality, we outclass him on the spec, we outclass him on everything.

Host - Dane Higgins

Okay.

Host - Josh Anderson

And we bring a mountain cog mountain bike that is a higher quality product than the pivot.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

And we put it right next to the pivot.

Host - Dane Higgins

Yep.

Host - Josh Anderson

The pivot will people go to the pivot. Right. Because they know the name.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

Yeah. And so the point is, is you can have a super high quality product that you're not able to sell. The name has value itself.

Host - Dane Higgins

So what does that mean when you say no brand tax yet?

Host - Josh Anderson

So that sounds like I so so we're gonna talk about XDS and X Lab. Yeah, yeah. I bel this is a Chinese brand.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

XDS, one of the biggest frame builders in the world.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

They've released uh now rode we think soon to be mountain.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

I believe their bikes are super high quality.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

Nobody knows that name yet.

Host - Dane Higgins

Yep.

Host - Josh Anderson

So part of the reason why they're they're and they're entering the market so cheap and they've probably got their margin so low is because that's the only way they can break into the market is with a lower price.

Host - Dane Higgins

Okay. So the brand okay, so uh with um X Lab, they have a a World Cup or Pro World Pro shit. I'm so bad with Road. They have a a uh Euro team. They have a pro team, like Tour de France team. They do. Okay. And um and so they're becoming more known. Right. And so that's gonna the price will go up. Yeah, because it it costs them money to do that. And so that's the brand tax you're talking about. To get their name out established, it costs more money to get that name out there. Right. And that's it.

Host - Josh Anderson

And then people know it, and then okay.

Host - Dane Higgins

Okay. All right. I'm following you. I don't know if anyone else is, but I'm following you.

Host - Josh Anderson

Well, they seem to like these episodes. All right, all right, all right. And uh, and we're already 23 minutes in. I don't know that we're gonna even get through.

Host - Dane Higgins

All right, well, let's let's move fast. Okay.

Brand Tax Subsidies And Going DTC

Host - Dane Higgins

Okay.

Host - Josh Anderson

So uh the next thing is Chinese government export incentives. Yeah. So first um for exporters that are building product that's leaving China and being sold uh internationally, um, China has historically offered tax rebates to those companies, though though they are scaling those back.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

Um they've also offered things like cheap industrial land, so like subsidies on the on the um land that they would buy and and use to build the factory and and and then manufacture the product, um, subsidized electricity costs, and then low interest state bank loans. Yeah. And so effectively what that means is the cost of capital, like how much it costs for them to get money, is structurally lower than like a US brand would be that's like privately financed.

Host - Dane Higgins

And and so I I was watching uh a video about BYD, which is an electric car manufacturer that's doing Chinese, and they're not in the States because they won't let them in the States, but everywhere else that they're going, they're putting other businesses out of uh they're putting other car companies out of business. Yeah. And um it was a good video because it did it in it basically talked about everything you said, but it also said that because the China has done so much in investment in manufacturing to where they're almost building cities of manufacturing, if they look at their manufacturing as if it broke even, uh all of their um population would have a job and prosper. So they don't even need they don't have the same profit incentive we do. Yeah, yeah. They're like you know, if they're just breaking even and we're churning stuff out to the point where if they don't get that stuff out of the country. People can't eat. People can't eat, they don't have jobs, they go back into poverty. And so So So they're f they're they're feeding their poor, yeah, and we're buying yachts. Yeah. Well with our profits. But it's it's you know, one of the reasons that that business does not have to make the same level of profitability or meet the same level of profitability that a a business in another country may have to. Yep. You know, because they don't have the so I I I think corn is one of my examples of subsidies. And so where you're like, you don't, you know, the they're you're getting propped up so that you can't fail, you know. And I think China is doing a lot of that with this market, what we're seeing.

Host - Josh Anderson

Yeah. So labor costs, vertical integration, lower RD costs, those deferred costs like warranty and quality we talked about, the brand tax, and then these these kind of government export incentives. And then you said dealer network tax. Yeah, you push back on me about a little bit about that. But effectively what I was saying was they are starting, uh all of them, I believe, have started to enter the market DTC.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

They want to get away from that and go to a dealer network. Yeah. But at for the moment, they don't have the they don't have your profit.

Host - Dane Higgins

Yeah. I I think there's two things about that. Like I think one, direct to consumer is much harder than a lot of people know uh or think. And so I think they recognize that. But I also think that they want the they want to shake off the Chinese cheap, all those things that we said uh that we think of China. And by being in a dealer, uh you have a lot legitimate. Legitimizes them a little bit more legitimacy.

Host - Josh Anderson

So all right, so we're gonna move on to the next section, and this is where it gets really interesting, I think.

Host - Dane Higgins

Okay.

Host - Josh Anderson

Okay.

Why OEMs Move Up The Value Chain

Host - Josh Anderson

So why are they actually entering the market? Why are they moving up the value chain? Okay, uh, and competing with their customers. It's weird. What would cause them to do that?

Host - Dane Higgins

Yeah, so so we're talking about companies that make a product for somebody else, and now they're like, oh, we're gonna make our own too, and now they've got to go head to head.

Host - Josh Anderson

Yeah, yeah, yeah. It's yeah, why the hell are they doing that? And we made that decision in my company, and it turned out to be a horrible decision. Yeah, yeah. Right. And I can't go into the details and get myself in trouble, but like that's an interesting uh move. So what what caused them to do this? And this was super interesting. The first one I think will be obvious, the second one won't. When the bike market crashed post-COVID, okay, the Western orders dried up, and the factories in China went empty. Gotcha.

Host - Dane Higgins

So they were like, we can't count on our customers. Right? Well, then we come in, we throw all these tariffs on bikes and products manufactured in China.

Host - Josh Anderson

Yeah. Which has forced many of the established brands to move their fight their final assembly and much of their manufacturing out of China into Taiwan, Cambodia, Vietnam, etc. Okay. Lower tariff rates. Okay. All right. So they had the so just like everybody, they had the post-COVID crash, emptied their factories, then their customers started pulling their product out of their factories because the tariffs changed the accounting structure.

Host - Dane Higgins

Yeah, made their their profitability go away. Right. So yeah. And so now they're sitting there with empty factories. Which we already talked about is means their populace goes into poverty. Right, you know.

Host - Josh Anderson

So the Western brands, because we've been so reliant on having them help us manufacture design, yeah, we taught them how collectively as a team to like manufacture the right products. The Western brands all went and and tested the direct to commercial model and proved it out to some point. We've got an episode in the past that says it's kind of it's failing. Yeah. The carbon manufacturing process has matured and got simpler, easier to work with. It's just gotten better, it's just technology matures.

Host - Dane Higgins

Yeah, it's not as proprietary. More people know how to do it. Right.

Host - Josh Anderson

So they're like, they know how to do it, they've got a market entrance channel and DTC. Yeah, their manufacturing of carbon has gotten easier. The tariffs have resulted in their factories being emptied.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

And the bike market crashed and impacted everyone.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

So they're like, well, shit. Take control. We'll take control. Take control. That's exactly it. We'll take control of our own destiny, yeah, make our own brand and our factories. We don't have to rely on the OEMs anymore, and we'll get in. And and because we don't have that brand tax, that name brand recognition, that the only way we can get in right now is on cheap brands. And my hypothesis here is that they're gonna many of them are gonna try to break in. Okay. They're gonna some of them are gonna establish good names.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

Then those products will eventually get more expensive.

Host - Dane Higgins

Yes.

Host - Josh Anderson

Um but they're breaking in on low prices.

Host - Dane Higgins

Crazy. So we um okay. So Western brands, okay. So that's why are they they're coming here.

Host - Josh Anderson

Yeah, so why that's why that's my hypothesis on why I think they're actually entering. It's that series of events. And the one that surprised me that I hadn't thought of, and maybe it's obvious, you know, is that like the tariffs have actually caused like us, you know, uh like US companies and European companies pulling or mostly US companies, I think, pulling the uh manufacturing out of China and putting it Taiwan, Cambodia, Vietnam. Yeah, like that is in that is hurt the Chinese companies. Yeah, yeah. And it's interesting that our president today isn't or maybe it was yesterday, but maybe I think it is today, is in China today. Okay. Trying to negotiate something. Okay, so yeah, interesting. F first time a US president's been in China in like decades or something, or at least a decade. Yeah.

Host - Dane Higgins

Yeah. Interesting. I it's it's it's crazy to me to to you know, like we go from thinking it's just cheap, copies, not that great, but then when you actually and this is not meant to, this this is not meant to be pro or for, like for or pro.

Host - Josh Anderson

No, it's this is just a or against.

Host - Dane Higgins

Yeah, we're not pro or against this is just something that's happening. Yeah, it's just kind of analyzing it and going what's going on, what's kind of causing it, and and and seeing what's happening. Because when I did see that that one um uh video article about BYD, it kind of showed me a little bit different uh idea of what China is doing. The the fact that they've kind of built this social and economic base, like engine, and if they don't keep it running, they don't eat, it they don't eat. And so it's very different, you know, and then everybody has to go back to the way they were, and that's very difficult to do, and their prosperity goes backwards, and so it is makes a lot of sense why they're pushing, you know. Yeah, and then you think, well, why would they push when the tariffs are on? Like they're they can't be that competitive, but if they're gonna take the the business stance that they don't need to be super profitable, they just need to keep those factories churning so that if they're breaking even, it allows them to kind of push into markets. Now, is that is that dumping?

Host - Josh Anderson

You know, it's interesting. I didn't research that. I knew you were gonna ask me that, and I should have. Well, because that's like it's because dumping is you think like HANA in the 70s when they dumped their cars.

Host - Dane Higgins

Wasn't it Fujifilm? Yeah, whatever. Yeah.

Host - Josh Anderson

I I I'm not smart.

Host - Dane Higgins

I I haven't I can't speak intelligently about it. Just I I don't know. Yeah, and that's something that I've thought about. Are these companies purposely not making money on the product? Um I I'll give you a little insight. Like, for instance, most companies offer an employee purchase price on a bike. When I work for a bike shop or have a bike shop, uh, if I talk to one of my brands and say, hey, I personally would like a bike, they often have a special price for us because they've seen the value of the the bike shop guy having a bike. Yeah, because then he sells if he digs it, he sells that bike. It's uh it's a marketing expense. And that's you know one of the incentives for a lot of people to even work in bikes shops is thinking you're getting. Yeah, you you just get a killer deal on a bike and and that's the perk, right? And um I noticed with one of our brands that's from China that they don't have that. There that is not an option. And so if one of my employees wants that bike, they they don't pay any different than the shop does. They don't get any incentive for that. Yeah. And so can I name the brand or do you not want to?

Host - Josh Anderson

No, I don't. I mean I mean it's it's pretty much obvious.

Host - Dane Higgins

Yeah, if you're if you're a longtime listener, first-time caller, or if you've listened to one episode, you've heard Dane talk about one Chinese company. Yep, yeah. And so uh, but I found that interesting because it's the first time we're dealing with a Chinese company that's straight up from Chinese. It's not just a Chinese product where we're bringing it in. So all right.

Host - Josh Anderson

So so um yeah, so the you know, why are they entering the you know, the market crashed, yeah, dried up their factories after COVID, tariffs driving up their factory drying up their factories. Yep. The Western brands taught them how the Western brands, you know, proved out the DTC model, their carbon manufacturing process is getting easier and like they took you know, they took they took control of their own destiny, right? Yeah, because that's what they're trying to do. Yeah, taking control. Okay,

How Much Cheaper Are The Options

Host - Josh Anderson

so I did uh have uh an agent go and survey price differences and it gave me big ranges. Okay. Uh I'm just gonna pick the lower of the numbers. And then we did a little bit and we'll talk about that. Yeah, yeah. So you can tell me what you think.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

So I have like uh six different categories here. Okay. Um for mountain for for e-mountain bikes, it appears that their offerings are about 25% cheaper. Okay. So like why don't you just like right now, like what what is an is an Avinox e-bike 25% cheaper than a comparable brand?

Host - Dane Higgins

My my big um my big example is if you compare uh Amflow uh with a specialized. Yeah. And the top of line Amflow is right around 10 grand, just over that. And the top line specialized until recently um was like 15k. So that's like 33%. Yeah. And the top life specialized has essentially the same things and is much heavier and has a feature that the Amflow doesn't, which is the removable battery, so you can swap batteries and stuff. Um other than that, the Amflow kind of beats it on power, um, watts, all the features are the same or better, and so the Amflow is kind of kicking their butts, you know. And then they just I think specialized just announced the lowered their all their prices on their e-bikes. And and I don't think they're doing that because they're like super nice guys. They're just trying to compete. I think, yeah, I think they're being being you know, hurt. Yeah, they're being hurt. Yeah, the the pie, the piece of pie that they expected to eat is much smaller now because somebody else is eating it.

Host - Josh Anderson

Yeah, DJI surprised everyone there.

Host - Dane Higgins

Yeah, yeah.

Host - Josh Anderson

All right, so so my twenty I said it was the lower margin, so like 25%, that's not unreasonable. So uh on complete bikes, just just uh uh mechanical acoustic mountain bikes, I have about 40% difference.

Host - Dane Higgins

I could see that because the the well, like we were talking about, you know, when in our analysis of uh bike business, yeah, the e-bike costs are higher. Yeah, and I think that's not just you know Bosch or Germany, I think that's also China.

Host - Josh Anderson

And our our uh you know our our friendly brands that gave us comment on that last episode did say that we had overestimated their margins on e-bikes a little bit.

Host - Dane Higgins

Yeah, okay, yeah. And so I I would say that's probably 40% seems crazy, you know? Yeah. Um so a ten thousand dollar bike you'd get for six grand. Yeah, and the only grain of salt I would throw in here is when you take a tried and true bike that's been developed, it's got a lot of RD behind it, and then you take a Chinese version that's supposed to look like that. Yeah, we're not saying they're better. Yeah, it's we're not even saying they're good. Yeah, I'm just saying they're cheaper. If you just say it's a carbon, you know, enduro-shaped object, and this is a carbon Santa Cruz Enduro bike, and they're 40% cheaper. I don't think people would be upset with that.

Host - Josh Anderson

But but I will say that it's not just all cheap, garbage Chinese stuff, which has been proven by the Avenock Amphlow bike I'm looking at right there.

Host - Dane Higgins

Yeah, yeah.

Host - Josh Anderson

That's a good bike.

Host - Dane Higgins

Yeah, it is.

Host - Josh Anderson

I didn't get along with it.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

Not because it's a crappy bike, I just didn't get along with the kinematics on that bike. Yeah, it just didn't feel good to me.

Host - Dane Higgins

And that's gonna always be the case. Yeah, yeah. You know, there's always 20 different bikes, five of them I'll like, 15 I won't.

Host - Josh Anderson

Yep, exactly. Um all right, so then we get into some uh group sets. There's a couple companies, what's it like Wheeltop and L2, they're doing uh electronic shifting. Yep and I did ver verify this. They're like they're significantly cheaper, like a half price or 40% cheaper, is what I have here. Yeah, whether they're as good, I have no idea. Um Mechanical group set, uh 12 speed, uh 70% cheaper.

Host - Dane Higgins

Yeah, and again, uh don't yeah, yeah. So so grain of salt, because I've ridden the cheapest. Some of them are not good, they're very bad.

Host - Josh Anderson

But like we're not saying that they're all very bad, just some of them are bad.

Host - Dane Higgins

Yeah, I would say that in my experience, as as many decades as I've I've been doing this, anytime somebody's trying to cheap out on their chain and cassette, they often just will not, it just won't feel that great. Like and and for the Shimano fanboy that you are, Shimano is just gonna kick their ass. Oh, yeah. So um, so you can go cheaper, but you'll feel it. And the drivetrain is one of the worst places to do it.

Host - Josh Anderson

But it's something, it's something to watch.

Host - Dane Higgins

Yeah. I'd rather have a good carbon frame that's a little heavier and I paid 40% less for that frame than have a drivetrain that's 70% cheaper brakes that is awful and can't shift right and pops and skips and and and and constantly.

Host - Josh Anderson

I'm not making any any any statements that you should do this. Okay. Although I do have some companies I want to recommend.

Host - Dane Higgins

Okay.

Host - Josh Anderson

The next is wireless dropper posts, and this one's interesting because I actually ordered one of these. Okay, we'll see. Um, we're gonna see. So this was a total, I have no idea, I don't think anybody knows. Yeah, this was a total like drop in like crazy experiment. But at um Sea Otter, a company called Seek Run, um uh introduced a very simple wireless dropper for $238.

Host - Dane Higgins

Yep, yeah.

Host - Josh Anderson

And I need I'm in need of a wireless dropper right now. I've got a bike that switches between two people, yeah, and I'm constantly futzing around with the uh dropper post and it's getting you know hung up and I'm having problems with it. So I'm like, I'm gonna put a wireless on this. But I just couldn't bring myself to spend the five or six hundred bucks. Yeah, yeah. So I'm taking a shot. Yeah. So I will be able to firsthand report how this thing works. Okay, so we'll we'll get to product test that.

Host - Dane Higgins

We'll product test the seek run wireless. We've we've already looked at it. I can't even find specs to figure out how to repair it or take it apart. So we'll see how it goes. Yeah, we'll see.

Host - Josh Anderson

We'll see. So that's so so significantly cheaper.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

Uh and then carbon wheels, 35%.

Host - Dane Higgins

Yeah. And so we uh so are we talking about the stuff that do you want me to do the comparisons?

Host - Josh Anderson

Well, let's let's uh go through a couple more of these topics, then we can jump into brands.

Host - Dane Higgins

How's that sound? Uh let me let me talk about these comparisons because they directly result relate to your percentages. Okay, cool. So and like uh we were talking about Trail and Enduro, but we took one of the brands that we're gonna talk about is um took a downhill bike. Yeah, Quick Pro, right? Um we're taking QuickPro and we looked at their downhill bike. So it went online. You can get them in the US. Um their downhill bike comes with a boxer on the front and uh I think it's a Sutra Deluxe coil on the back with GX and aluminum wheels. It's kind of a VPP style. Yep. It you know, it's tough because it's got an idler on it.

Host - Josh Anderson

It's so I'm I'm I'm gonna off-put you a little bit here because what you're doing is cherry picking.

Host - Dane Higgins

Yeah, well, I just picked one of the brands that I think that's cherry picking.

Host - Josh Anderson

Yeah, you just picked a random bike and a random bike, and you're trying to compare them, and you're gonna make the assumption that this one's a better deal because of that, that's a good thing. Well, I just I want to that is not a comprehensive analytical method. Don't don't step on my dick. I'm just like that's not even cool. Like I'm just saying don't represent it as a comprehensive analytic method. You're just cherry-picking two brands and comparing them.

Host - Dane Higgins

I uh I just looked at one bike and they had a downhill bike, and I'm like, let's look at another one. Just as a one data point. A name brand US company versus and they're probably the factory that makes the frame could be the same factory as far as. I love that you just said step on my PP. That's awesome. So you actually used the bad word too. You don't swear very often. Not very often. Um so so this Quick Pro is kind of a uh like a kind of it's got all the new stuff. It's got an idler, it's supposed to be like VPP. I think they're saying it's kind of like uh the new proofs. I'm not sure. Yeah. Um anyway, uh uh the component groups are GX downhill group um with uh Boxer, the older Boxer and Super Deluxe and Aluminum Wheels, and they have it on their website for $52.99. So it's not crazy cheap. It's not like three grand, you know, with all the parts on it. Because I can't imagine these companies can really make any money on the parts, right? Like when we're talking about these companies coming in, it's they're not getting the boxer.

Host - Josh Anderson

Yeah, if it's not if it's not a brand that they're vertically integrated into that business.

Host - Dane Higgins

Yeah, if it had like a quick pro fork on it, it would be different. The belief is they're probably paying similar to any other bike brand. For for the most but they may get an advantage because if it's made overseas, they may get some advantage. But um, so it's good. If it's made in China, they might get some advantage. So $52.99. And then what I did was pull up a V10 uh Santa Cruz, you know, and I'm I'm like, okay, it's $88.99. And so obviously, much more expensive bike. But then the spec better. Yeah, but the gravity from QuickPro, I look, and you can get it with a Shram XO DH group. It's not the new T-type, I believe. It's the the the XO, it's what I have on my bike. And it comes with Olens and then still has alloy wheels, and it's an extra $2,300 to get it built that way. So now it jumps up to basically five, six, seven. Yeah, it's like a thousand dollars. Yeah. And so now the Santa Cruz with the XO downhill group and Fox Factory on it with alloy um uh what are they called, reserve downhill wheels, their house brand, right? Um, is only a little bit more. And so what I told you is if you were gonna go race a downhill bike, which one would you pick? Would you pay an extra grand for that Santa Cruz heritage? And so is that the brand tax or is there actual reason?

Host - Josh Anderson

Yeah, I I I don't know. I didn't study that particular bike or that company at all. Um I yeah, I d I don't know. But the truth of the matter is, man, is that like there's gonna be some people that like they only have five grand.

Host - Dane Higgins

Yeah. I I I don't like that argument. Like, first of all, I would say look for a good used one. So would I. Yeah. So would I. Um, because you know, I'm in the market of selling new ones, but yeah, like uh I You sell used bikes too. Yeah, I do. I do. Um, but uh I would say, you know, so so that's that brand tax that you're talking about. This quick pro downhill bike, I've never seen anyone riding it.

Host - Josh Anderson

Or it could be any of those other things that we talked about why their products are cheaper.

Host - Dane Higgins

Okay. All right. Now, if we go back to, you know, brands that are worth considering. What are what are some brands that you would consider?

Host - Josh Anderson

Yeah. Um, well, first there's one other section I want to get to, and then we'll get to that.

Reasons To Think Twice Before Buying

Host - Josh Anderson

So, like there's some reasons not to buy. Okay. All right. Like, like not like we don't like don't buy. First is like the the quality. You mentioned this before. Yeah. I can test, or at least what I'm seeing, is that it's better than the stereotype. The stereotype is Chinese stuff sucks. It's not as bad as the styrode. It's better than that.

Host - Dane Higgins

Okay.

Host - Josh Anderson

But not all of it is better than that.

Host - Dane Higgins

Okay. All right. So that's it. Still hard to know what's the good stuff and what's not.

Host - Josh Anderson

Yep. Okay. The second reason is um the after-sale support, like warranties, whatever, yeah, is like in its infancy.

Host - Dane Higgins

Yeah.

Host - Josh Anderson

Like they haven't figured it out. It's gonna be a shit show.

Host - Dane Higgins

Yeah, we're seeing that uh with our Chinese brands. It's not that they don't want to help. It's just that if you're used to, you know, dealing with a manufacturer, yeah, it is way different than if you're dealing with a consumer. And as a as a shop, we're really kind of a more of a consumer, you know, when we're buying stuff than we are the manufacturer. Yeah. And so like if I'm buying a thousand rims for guru, uh, which I do, you know, for our wheel sets, I don't have a lot of well, I don't have a lot of requirements from my manufacturer who makes the rims.

Host - Josh Anderson

I don't really need much from them because it's only are you just publicly announcing guru wheels? Because I don't think you've ever talked about it on the podcast before.

Host - Dane Higgins

I mean, people that come to Guru know we have our own wheels.

Host - Josh Anderson

Um you want to just talk for two minutes on what you're doing with it?

Host - Dane Higgins

No, it's not an advertisement. It's and and honestly, I couldn't build them fast enough if everybody in the country wanted them. If you want me to tell people why we do it, it's not to make money. It's um I'm a huge fan of Reynolds wheels. I think their warranties are way better. But Reynolds always have black hubs and black nipples and black spokes, and like there's no personality to them. And we build enough custom wheels where we wanted to have an option where we could build somebody with the good carbon wheel set. Yep, yeah. And so what we did was we found one of the companies that makes most of the carbon wheels for most of our manufacturers, probably one of my favorite companies too. Wink wink nod nod. Um, and so that company makes those, we know the quality is good. We can have those wheels come in and offer a custom wheel set with a similar warranty, not the same. And but you can have personality. Like on one of our first sets that we did was for a buddy. He wanted Onyx hubs, which are silent. Yeah, and they're cool. And he had this awesome pivot um switchblade that was like this green.

Host - Josh Anderson

Yeah.

Host - Dane Higgins

And we got these like um, what do you call it? Uh antifreeze green hubs on these things, and then we got the same matching nipples and built them up and they matched his bike, and the uh we had the the rims are laser etched with guru logos in them. Yeah, and they're just so sexy and cool. And and then we can control the QC. So I've built You realize you're gonna get a bunch of orders now. Fuck, man. No, I don't know. Do you want me to cut this out? Uh no, but but I I can I can tell you at some point, you know, we may we may offer these like Guru Bikes is also looking for wheel builders.

Host - Josh Anderson

So if you're a if you're an unemployed and very good wheel builder in the southwest, give us a call.

Host - Dane Higgins

And that's the drawback, right? You know, that is the drawback, is uh that but I I do get a little passionate about them because sometimes just getting some sweet wheels for your bike is really fun. And the my favorite brand that we sell just makes kind of boring ones. They're great quality and they're awesome, but they're just not super flashy. So right on.

Host - Josh Anderson

All right, so back to why not to buy quality, uh uh better than the stereotype, but not all of it. Um the after sales support again in its infancy, that's where we stopped. If you get anything that is heavy on an app, like uh an iPhone or an Android app or software, that ecosystem right now, with Avinox being the ex uh the Amphlo, sorry, being the well Avinox and Amphlo being the exception, yeah, it's very clunky. Yeah, they haven't figured that stuff out yet. Um and then these products have had fewer reps of refinement because they're younger brands.

Host - Dane Higgins

Yeah, that the finished product, right? They can make the raw material.

Host - Josh Anderson

Yeah, just when I say reps of refinement, it's like, hey, oh crap, I shouldn't expect that thing on that bike.

Host - Dane Higgins

Yeah, yeah.

Host - Josh Anderson

Right? Or oh, hey crap, man, maybe I was you know a 0.2 degrees off on the headset there. The the the band the more mature brands have had lots of refinement over lots of repetition, lots of trial and error, things worked, things didn't, you know, and they learn from that and all those lessons get factored into.

Host - Dane Higgins

And do you think that they, you know, since so let's say a company that's super innovative and heavy engineering, which like Pivot, yeah, uh, is like doing a lot of testing and really refining, and every little thing about that bike is really refined. If they develop that bike and then put it to market through one of these companies, yeah, let's say that that that's the case, we don't know. Um, and then that company now has all that info to kind of go, oh, we can use this, but the next version of the pivot is already refined. Yeah, so they're always delayed and a little behind. Could be.

Host - Josh Anderson

I I would say I could be. But you got to give them some credit too. They're smart people.

Host - Dane Higgins

They are. A lot of times some of these companies you can go to with a napkin drawing.

Host - Josh Anderson

And I think a lot of the a lot of the brands don't have heavy, a lot of the uh established brands they don't have heavy engineering departments and they rely on their manufacturer to help them.

Host - Dane Higgins

Yes, and that's what I was about to say. You can go, remember the Grim Donut is something bike just drew this thing out and and took it to a manufacturer and they were able to make it a reality. So

Brands Worth Watching And Testing

Host - Dane Higgins

all right.

Host - Josh Anderson

So um I wanted to give you some, just based on my research and my own personal experience, and Dane, you can throw your your thoughts in here.

Host - Dane Higgins

Okay.

Host - Josh Anderson

Um Chinese brands that are here right now, that you can buy right now, yeah, that I think are probably worth considering. Okay. Um first and foremost, the Avinox motor. Yes. I think is definitely worth considering.

Host - Dane Higgins

Tricky, tricky there. So just uh FYI. There's a lot of Chinese manufacturers making motors that are already out here. So it's more the Amflow bike. So I am not recommending the Amflow bike because I didn't get along with it. Yeah, that's the Avinox, but the motor in that bike was amazing. What I'm saying though is that the Amflow bike is a good bike, all Chinese, all produced by them. Yep. Whereas, you know, you could say that some of the motors in some of the bikes that we've had for years have been Chinese, Panasonic and and things like that. There's been a lot of motors that we've seen. I I don't know that, but I believe it. Yeah, and so uh so I would say it's it's the Avinox motor is yes, it's killing it, and every other company is trying to adopt it and put it into their bikes because it's doing so well. Yeah. And it does not just seem to be hype, it seems to be something that's gonna stick around.

Host - Josh Anderson

Yeah, and we can we can actually you and I both can speak with first hand knowledge, me with a little bit, you with a lot of first hand knowledge that that motor is fantastic.

Host - Dane Higgins

Yeah, I have it on two bikes now and two different brands. So like you can you can get a better idea. You've got an amp flow and a pivot. Yeah, and so I I can I can tell the difference, and the motor is fairly consistent.

Host - Josh Anderson

So I heard that those amped pivots are sold out already.

Host - Dane Higgins

Is that yeah, yeah, we sold one today and we're out now. So uh they they went super quick. So yeah. Um I have yeah, I have so much news.

Host - Josh Anderson

Yeah, you can't share, but um, in the previous episode, you had mentioned that you had taken that amped out and you were struggling to get along with it, and it's set up as a mullet. Yep, yeah, and you told me that you just switched it to a 29 in the back. Yes, yeah, it feels a lot better to you.

Host - Dane Higgins

It balanced me on the bike, and it could be a personal thing. Yeah, I I feel like I feel like I'm not a mullet person, and our terrain isn't that. Um, so it it's the first time I've jumped on the pivot and just not absolutely just gone blasting out, and I could not figure out if it was me after a few big crashes and like just being tentative on the bike, or if it was the bike. And I actually talked to my rep about it and was kind of just kind of like, hey, I don't know what's oh, sorry, buddy. I just hit my mic and cut out there.

Host - Josh Anderson

Sorry about that.

Host - Dane Higgins

Technical difficulties. So um, long story short, um, it seems like I'm a 29er guy, you know. I wrote uh I wrote uh that frameworks as a mullet. And some of the characteristics on the mullet that I noticed, wham, this is a big tangent. Sorry. Um, I uh the point I want to just make is that you had said, hey, listen, I'm struggling with this. Yeah. I think you fixed it. Yes. Today I wrote it. That's the only thing I wanted to say. I wrote it once so far as a 29er, and it was like night and day. Yeah. And now I'm not saying everybody should go out and get a 29 version, but if you are struggling with a bike, there's little things you can do. Yeah. So and although changing a wheel is not necessarily a little thing, but no, no, but like your experience with the amflow, you you rented it. You didn't really need to.

Host - Josh Anderson

And I've talked about that. I did not set it up. Yeah. But you know how sometimes you can just tell.

Host - Dane Higgins

No, I think you're wrong. Okay. I could be. I don't trust you because I could be wrong. You don't even like shram. So there's that. You love rock shock.

Host - Josh Anderson

Yeah. Oh my god, dude, last night we did this ride, and you know I'm our buddy. I'm I'm now I'm going down a tangent. Jesus Christ.

Host - Dane Higgins

Well, we got super technical, and I'm just gonna tell everybody right now listening. Here's a little break to like let your brain relax. Yes.

Host - Josh Anderson

Long story short, I ended up on a on a long dirt road. Yeah. It was not part of the plan. Okay. Rescue rescue situation. You got a disabled bike. We got a disabled friend. Yeah. We were we were the farthest point you could be from civilization on this ride. Yeah. Pitch blackout. Pitch blackout, middle of the night, and we're going down this washbore road that just will never end. Yeah. And I've got my I'm on a bike that's got the Zeb on the front. Yep. It's got the coil DBO on the back. Yep. Yeah. And I'm just going through that stuff like butter. Yeah. And there's a guy next to me with full fox, front and back. Yeah. And he's just like, and he's looking at me like, dude, your bike is so much smoother.

Host - Dane Higgins

I'm like, I'm telling you, man. Yeah. Zeb is shit. People don't listen. It's like when you see those videos of the trophy trucks and the like the the body is still and the wheels are. That's what my truck was doing. That's what my bike was doing last night.

Host - Josh Anderson

Anyway, that's cool. Okay. Okay. So Avinox Motor. Avinox Motor, I definitely think worth considering. And Dane would say Amflow bikes as well.

Host - Dane Higgins

Yeah, yeah. I would say the Amphlo bikes is the the big package.

Host - Josh Anderson

So and then uh I have not tried these, but maybe I will. But they do have a use, they are one of the Tour de France uh sponsored teams. They are sponsoring a team with at the UFrance and they are UCI, the UCI continental team. And that's Elite Wheels. Yes. We did do just some quick price comparison, and it was about 850 to 950 for a carbon wheel set. Yep. Depending on like I think the 950 was like the big burly downhill ones, and then it the the kind of trail and XC were 850 or something. But we might be a little bit off, but roughly in that price range. It but it did only have a three-year warranty. Three-year warranty, house brand hubs.

Host - Dane Higgins

Yeah. Um which we don't know. No technical documents. And as uh somebody who works in a shop, that always worries me because if your free hub body goes out, like how do you repair it? How do you replace it? And and that happens a lot with um entry-level bikes. So a lot of times uh house brand wheels are are just scary because that brand may switch different suppliers for who gets them hubs, and they may not even know who made that hub like three years ago, you know. And so that's that's a little so they were cheap, but there was nothing on them that was like that was screaming this is high quality. So I don't I don't know. Except for the fact that they're being used by uh Tour de France. Dude, I could pay them to use like wooden wheels. They wouldn't. If you give them enough money, they'll ride whatever they want. They would not they they ride whatever they're paid to ride.

Host - Josh Anderson

I don't agree. I do chime in if you agree with me. I do agree. And chime in and agree if you if you agree with Dane.

Host - Dane Higgins

I I don't remember the downhiller that I was watching, but he's no longer sponsored, or he's sponsored by Komodo or something like that. Um, excavators. The dragon? No, not the dragon. Kumbata? Oh, what I don't know, dude. We were way out of our lane right now. Anyway, anyway, this guy, it was cool because he's basically taking whatever bike he feels like. Yeah, whatever works. Yeah, and so I remember back in the day when all the pros, the giant pros and the mongoose pros back in the day were riding in tents and they would just paint their intents.

Host - Josh Anderson

I mean, they're doing that today with tires, right? Don't a lot of people like like black wall black wall the tires.

Host - Dane Higgins

Kind of, kind of. Like not to the extent where you're riding an entire bike, you know. Yeah, fair enough. Um, but I will tell you right now, like if you are being paid to ride a crappy bike, you're gonna ride that crappy bike. You know, you may be on a new team next year because you're tired of losing.

Host - Josh Anderson

So X Lab Bikes, uh, which is a brand of XDS, right now it looks like it's just gravel and road bikes. Yep. If I was buying a gravel and road bike right now, I would buy one of these. They look like a good deal. There's a local shop here that has them.

Host - Dane Higgins

Yeah, we've had John from or uh Steve. Steve from uh bicycle ranch on the podcast. I got to check them out and in in first hand and they look pretty amazing. I would say that if I was a skeptic, if I'm if I'm negative about stuff, yep, when it comes to carbon, you always have to be careful of the quality and the weight and the the layup. So you can make a carbon-shaped object and call it carbon and make it cheap, and it won't ride very well.

Host - Josh Anderson

And so I don't know XDS is the biggest bike frame, carbon bike frame manufacturer in the world.

Host - Dane Higgins

Yes, I but I got to see their alloy version. Oh, I don't know about the alloy, and it was super cheap for the parts that were on it, and it had carbon wheels and carbon bars, like one piece carbon bars. Um, but dude, it was a tank. So I it's uh all I'm saying is just because something looks good. Yeah, look at all the specs. Yeah, well, it may not ride good. So and we haven't ridden one yet. Yeah, yeah. So but not that I'm gonna ride a X Lab. I'm just not going to. Yeah. Well, you you're riding a Chinese bike right now, buddy. Yeah, but I'm oh an X Lab mountain bike, maybe. But I'm just not riding a road bike. Yeah. I'm sorry. Unless we put a microphone.

Host - Josh Anderson

If they put a motor in it, maybe you would.

Host - Dane Higgins

I have one of those and I'm selling it.

Host - Josh Anderson

So sweet. Wow. All right. Uh I think I'll skip the next one. Okay. Um uh okay. So we've we've talked for about an hour. Let me just let's look through I brought up this book.

Host - Dane Higgins

Well the last one is wheeltop and LT L2.

Host - Josh Anderson

Yeah, yeah, we'll we wheel top and L2. I got a question mark there because I don't know.

Host - Dane Higgins

They make a really inexpensive electric dry electric driver. From my standpoint, LT L2. L2, sorry. I keep wanting to say LT woo, because that's how it's spelled, but um L2 is um they are gaining traction quite a bit. And they're gonna, I would say this year, maybe next, uh, they're gonna give Shimano and Shram a serious run. No, it's true. Uh shut the front door. It's coming. And so those are uh wheeltop bot um rotor, yep, and they have stuff that they're developing. Yep. I'm not a hundred percent on with what they're doing because they're doing a different way of things, but um L2, god, that's hard to say when you look at it. It's just totally weird. I don't even know if that's the right way to pronounce it, by the way. Uh L-T Wu? I don't know.

Host - Josh Anderson

Yeah, it's L T W O H O O O. No, it's W-O-O-O.

Host - Dane Higgins

Yeah, it's there's no H. So just L T W O O Yeah, that's what you wrote anyway. Fuck, I don't know. Anyway, uh a lot of what I'm seeing from industry people is we're gonna start seeing those on regular bikes. So interesting. That'll be interesting.

Host - Josh Anderson

Yeah. All

Predictions On Avinox And The Market

Host - Josh Anderson

right. Um so uh like what is the what's the wrap-up? Like what's the wrap-up? What's the key takeaway? Okay. All these factors have put the Chinese brands, the manufacturing houses and other companies in a weird position, and many of them are trying to break into the US. We kind of went through why, the pricing, you know, and and our thoughts on it. I think they're coming. Be ready. Yeah, and uh it'll be interesting to see how it plays out.

Host - Dane Higgins

Yeah, and and my take on it is there is gonna be a lot of discussion over the quality of what you're riding. Yeah. And that is going to have to go right up against so like uh, you know, if I if I talk about Avinox and that motor system is popping up in a lot of mainstream bikes and not on Chinese only, you know, bikes that you don't know. Yeah. And now, if the conversation is, hey, I can get this bike uh that's only been around for a year or two, or I can get this one, which I've got four of already and I love them, with the same motor, yeah, are the decisions gonna be because before, if that brand didn't have the motor and you just wanted that motor, you just bought wherever you could get that motor.

Host - Josh Anderson

Yeah, so so let's talk about Amphlo for a second. So there is a hypothesis out there in the world that is not my hypothesis, yeah. That Amflow was created simply as a launching platform for the Avinox motor.

Host - Dane Higgins

Yeah, I I've heard people say that. I I can't imagine that that is okay. So let's let me rephrase what I was gonna say. That uh that is maybe something that they started with.

Host - Josh Anderson

Yeah.

Host - Dane Higgins

But the amount of money I think that they've spent to establish in distributorship in the different countries that they have has kind of made it really clear that they can't just abandon that. Right. But but it they may sell it.

Host - Josh Anderson

Oh, they may sell the brand? No. Why would they do that? Because they wanted to launch the Avinox Motor, and they've separated the names intentionally.

Host - Dane Higgins

Yes.

Host - Josh Anderson

And and made them what we call separable. Oh. So my hypothesis is DJI is gonna sell Amflow, it's gonna go off as a standalone brand, and they're gonna continue to sell the Avinox motor, and that's their bread and butter. That's my that's my prediction.

Host - Dane Higgins

I did not think about that. I don't think that's a horrible idea. Like I think that's I don't know if the financials make sense, but yeah, that's I mean, they're well if they just don't want to deal with the the bike portion of it and just want to make the motor.

Host - Josh Anderson

Now you could also say that they wanted to have two discrete products and you wanted to have separation so that they can sell the the Avinox motors to other brands as well. Yeah. And so and that whole competitive thing, so that could be a reason why you separate the brands.

Host - Dane Higgins

Well, why you don't call the motor and flow motor. Exactly. I know that they got rid of DJI mostly because as they were going to start moving to the U.S. market, they did not want to the negative. Trump was like hating on DJI. Uh you know, not not even talking about Trump, but just talking about um the security issues with their drone systems. Yeah. I'll take Trump out. Yeah, if we don't talk about uh politics, then we can't piss anyone off.

Host - Josh Anderson

We haven't said negative or positive about anything.

Host - Dane Higgins

I I'm just saying that the it wasn't really about who's in office, it was about the security risk that Chinese companies that have ability to transmit a lot of data, including video, uh, was a real concern. And because of that, it it caused a lot of issues.

Host - Josh Anderson

Listen, if the Chinese government wants to know where I'm riding my bike, have that at work.

Host - Dane Higgins

Totally, totally get that. Um you could have it. Yeah, I I totally get that. I post that on Strava anyways. But they they didn't want that stuck onto the bike brand. I gotcha. Which may go more to your point, you know, because that's the you're the first person I've heard where officially right now, you're the first person I've heard suggest that they might sell Amphlo. Yeah, yeah. It's it's a possibility. If I was their strategist, I'd be thinking about it. Well, like if they just are like, look, this is a pain in the ass. Because the theory, I don't know the the actual facts, but the theory right now is that when they were trying to launch this, I remember listening to that podcast that Chris did with Pivot, that they went and saw it. There was a whole ton of people that wanted to see it, but it was so new that nobody wanted to commit to it. So they launched it on their own bike. But but they literally like went to one of their neighbors and was like, hey, you know, Uncle Bobby, you you build bikes for a living, build us a bike. And so the idea is that they used you know that that Chinese um, you know, community of manufacturing to easily build this product, but that may not be what they want to spend their money on. And so they can be like, Hey, Uncle Bobby, why don't you just do this and we'll supply the right or someone else because Amflow, the the brand name's got value. Yeah, for sure.

Host - Josh Anderson

They built it up quick. Right, right. Okay. All right. Well, we are uh yeah, let us know if you like this kind of content. Um, you know, we don't know this stuff, we're just researching it and thinking through it. We think it's interesting and fun to talk about. If you guys continue to think it's interesting and fun to listen to, then we will keep doing it. If you think this is stupid and we're idiots, and by the way, we've been getting a lot of comments lately. Yeah, there's some hate in there.

Host - Dane Higgins

That's okay.

Host - Josh Anderson

Bring it.

Host - Dane Higgins

Yeah, I'm not worried about it. You're not hurting our feelings. Wait until we have video and you get to see our faces.

Host - Josh Anderson

Can you imagine our female listenership's gonna go through the roof?

Host - Dane Higgins

I know, they will. They'll be like, hey, these guys are amazing. And they remind me of my grandfather.

Host - Josh Anderson

Oh god.

Host - Dane Higgins

We appreciate you guys. Like and script, subscribe. Oh, yeah, we get to say that now.

Host - Josh Anderson

I don't know what that was.

Host - Dane Higgins

Can you dig it? Can you dig it? Can you dig it?

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Dane "Suspension Guru" Higgins

Host
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Josh "Magellan" Anderson

Host