Why we're going bankrupt...a warning to others.

Discussion in 'Motorized Bicycle General Discussion' started by TigerToothBikes.com, Mar 24, 2009.

  1. TigerToothBikes.com

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    Over a year ago we decided the time was ripe to re-introduce these fabulous machines to the people of the UK. Since then we have enjoyed an excellent reaction and turned over upwards of £10,000 in our first 5 months of operation.

    Now thats changed.

    Since Christmas just gone we have endured a commercial nightmare.

    2 motorised bike sales and a small number of parts sales.

    But this itself isn't the issue, as we had the foresight to prepare for the winter and the expected slump in sales.

    What has put us on the verge of bankruptcy is mainly "buyers remorse".

    Let me explain. put simply buyers remorse is when a customer buys, takes his product and thinks, "bugger, i need that money. Maybe i should have waited, oh well i'll cancel"

    Now this is all well and good but in the last 4 weeks we have had 4 such transactions! 4 you say? but you said you've only sold two! Thats right, 2 were from before christmas PLUS two after. The first, being too proud to admit his guilt, tried to sue us citing all sorts of reasons for compensation including having to ride the bike to test it was working! He wanted £25 per hour for 6 hours spent unpacking, testing and riding, plus expenses of picking up a bike box to return it! This was all because he'd left it too long to cancel. Eventually we were blackmailed into collecting the bike at our expense and refunding him in full.

    The 2nd, again had left it too long to cancel so therefore claimed the bike was terribly damaged in transit and the reason he hadn't contacted us was he was "gathering quotes for repair". We gave him the benefit of the doubt and filed an insurance claim for the damage and eventually the bike was returned - In its original pristine condition! Again, a man who'd had a change of heart and wanted his money back.

    Now ladies and gentlemen, these two transactions total around £1000. In order to refund ASAP the bikes went on eBay, this not only entails added fees but also means the price gained is generally £100-200 below the original value. already these low lives have cost us a total of £586 between them. We didn't ask for nor deserve this! By refunding them promptly, we entered into the overdraft. fees for which this year now stand at £510, £210 of charges incurred this month alone.

    customer #3 had been calling and visiting for around 6 months with numerous test rides on a demo bike etc and finally coughed up and ordered a bike.
    The day before the accessories were fitted he was invited to test ride his bike so we could make any adjustments/changes he required as well as run over its operation and maintenance. All went well and the next day he collected his beautiful shiny new bike.
    An hour later we received a garbled phone call. Something about "want to cancel....not what i expected...bit noisy..."
    WHAT!!!!!! cancel? - thats absolutely fine (annoying but fine) "not what i expected" what the ****?! "bit noisy" why wasn't it so noisy when you test rode it and said it was fantastic?!
    Anyway, we agreed to refund him as he was well within his rights. The trouble was, when the bike was returned, he'd broken the master link, snapped the rear reflector,dented and twisted the chain guard and jammed the petrol cap into the tank .
    This is despite being shown more than once it was a twist and lock job, he had obviously smashed his fist down on it and had the cheek to say "quality isn't too good either"!!!!

    total owed now around £1500+

    Customer #4 - a young rich kid who'd bought a schwinn panther to convert but didn't want to do it himself, so decided to also buy one of our pre-built bike. received his bike and has today changed his mind and thinks he'll give conversion a go after all.

    Total now owed to customers - nearly £2000

    Total of expenses/losses incurred PURELY through "buyers remorse" = £1745

    This enormous loss is no fault of our own but due to the meagre amount of profit we make per bike which is around £50 (after fees deducted for advertising/website/paypal/tax/shipping)

    It is therefore with great sadness that for the forseeable future we must wind down and cease the building and selling of motorised bicycles.

    We will nonetheless remain active and annoying members of this delightful asylum, i mean forum
     
    #1 TigerToothBikes.com, Mar 24, 2009
    Last edited: Mar 24, 2009
  2. TigerToothBikes.com

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    We would like to add for the benefit of our loyal customers that we shall honour all present orders for parts etc, however will not be accepting any new ones.
     
  3. mabman

    mabman New Member

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    Those are some real bad breaks that happened. I am sorry it turned out this way but you will rise again, I feel it. Especially when the price of petrol goes through the roof again!
     
  4. TigerToothBikes.com

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    Cheers mabman, i think we'll probably try and focus on electrics and custom bike builds. Got some crazy ideas in the pipeline that we HOPE will pull us up outta this stink. otherwise its goodnight from me and its goodnight from him.
     
  5. Creative Engineering

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    Mike,

    I'm really sorry to hear this, but I have to ask why!!!

    Are you really, legally, obligated to appease these people?

    Buyers remorse is for children! Growing up we all saved for that beloved item, and when we got it; we wished we had shopped wisely...It's a lesson learned as a child. Buyers remorse for adults???...I don't think so!

    Honestly: If someone brought me back a cobbled-up bike asking for a refund, I'd tell them to grow up and go away! I have zero patience for this sort of thing. I certainly don't want to sound mean, or like I have a bad attitude, but I advise my customers as to exactly what MB's are all about. They have every opportunity to go play tiddly winks instead. A, "buyers remorse", refund does not fit into my business at all!!!

    Now on the other hand, if they come in to the shop and say "I accidently cobbled this up", I will fix it for them for free, and based on the level of the Donkey cobble, give them a long lesson in what "NOT TO DO".

    Cheer up Mike, and change your approach...There are a lot of customers out there that love these bikes, and will not give you childish grief.

    Jim
     
    #5 Creative Engineering, Mar 24, 2009
    Last edited: Mar 24, 2009
  6. TigerToothBikes.com

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    Under the UK Distance Selling Regulations Act 2001 and the Sale of Goods Act 1973 a customer is entitled to a FULL refund as long as the request to cancel is made in writing or by "durable" medium within 7 days of receipt. Of course customer #3 has been charged for the damage and had this deducted from the refund. He can take us to court if he feels hard done by.
    Sadly we simply cannot maintain this run as a) the bank manager won't allow it and b) someone will end up with a blackeye!
    A good suggestion from Dan was a non refundable deposit, i'd say somethign in the region of 15%, this would for us, be the equivalent of a re-stocking fee which is illegal to charge in the UK. Something to consider, as it would certainly eliminate impulse buyers.
     
  7. TyDow

    TyDow New Member

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    Wow, you certainly gave us some things to think about. I am going to re-examine my return policy. I only wish you the best.
     
  8. TigerToothBikes.com

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    thanks guys, we're determined to find a way to power through this. I hope you chaps can use this to avoid a similar predicament.
     
  9. Large Filipino

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    And we wonder why some inflate their prices on fully built bikes.
    They gotta bury their losses somewhere.

    Honestly if I would sell a bike it would be built with good stuff but it's gotta have a decent sticker price meaning decent for my pocket. It's almost like a marriage. You can tack on any kind of guarantee any time line you like but your married to the customer even if the guarantee or whatever lapses because there's the possibility of ruining your name on the boards so you feel obligated to make right for them as much as it's make wrong for you.

    But back on this semi topic sorry for derailing about raising prices on fully built bikes.
    If it's high enough then one may vouch on getting a kit instead way less headaches on the seller I would think.

    Look at it another way.

    How much is an ATV greater than 250 cc? Some goes about 7 grand. Bet it costed the company less than a thousand bucks to build it.
    Cars and trucks. 40 thousand dollar SUV costed the factory 4 thousand to build.

    Kit Cars. Well look here. One can save some $$$ if one would put their own engine in. A little work save some cash.
    Hey! How about YOU build it for me for a hundred bucks!
    Sure? OKAY THEN!!

    How utterly ridiculous is that?
     
    #9 Large Filipino, Mar 24, 2009
    Last edited: Mar 24, 2009
  10. Pablo

    Pablo Master Bike Builder & Forum Sponsor

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    Ouch. Not good.
     
  11. Dan

    Dan Staff
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    Man Tiger, sorry to hear that. Worst boss in the world is a customer. Know it has been getting to you for a while now. Just know your cared about broder.
     
  12. TigerToothBikes.com

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    Mucho Gracias amigo. Am hoping some hard graft will see me through...
     
  13. TigerToothBikes.com

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    After some legal research (quick googling) it appears non-refundable deposits are legal in the UK to cover sellers expenses in the event of customer cancellation. Whilst some retailers charge 50% i feel 15% to be fair. Thank you to Dan for that suggestion (you've probably ensured our survival!) Take heed all vendors. Be SURE your terms clearly state either a restocking fee, which is legal for you guys in the US, or a form of non-refundable deposit. Also be sure to state delivery costs are also non refundable. If you chaps wouldn't mind checking out our "Conditions of Use" page and consider if it's legal&fair i'd appreciate it.
     
  14. deacon

    deacon minor bike philosopher

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    When I built my first bike I loved the bike and the experience of building it. Anyone who was around back then can tell you how I discussed building them and then putting them out for sale. My wife reminded me of my thirty years in the photo business. With that in mind, I gave up all thoughts of the bike business,

    Buyer's remorse is a pain, I had that often but the real problem would have come when someone put the wrong gas in, when the bike blew they would said it was my fault.

    The courts love to find the businessman at fault. They wrongly assume that we have enough money to absorb every loss. I don't hae that kind of money.

    I am glad that I didn't do it. Especially now with business gone bad and jobs disappearing faster then free donuts at an AA meeting. Not that I have any experience with that.
     
  15. TigerToothBikes.com

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    Well now buyers remorse is going to be a rather expensive feeling! and hopefully a thing of the past for us.
     
  16. happyvalley

    happyvalley New Member

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    Interesting and quite poignant your discussing the subject with candor.
    First, it would seem prudent of course to have legal counsel look over your policy pages and offer informed opinion should you choose to continue.

    That said, I did look through the policy pdf and it seems clear to me.
    The other impression I get from your website and your post here is you
    are trying to do the right thing, honor you commitments and would like customers to do the same.
    That is commendable.

    But, I also feel "buyers remorse" is an issue prone to rear it's head and particularly problematic, sooner or later, with these Chinese engines.
    I realize this is slightly different from the immediate problem of fickle customers you are describing but the question of warantees is eventual and one reason that's kept me from pursuing business with these engines.

    If the majority of customers were as handy and enthusiastic as the members of sites like this would be one thing but the sample here is minuscule compared to the public at large.

    I know the low cost of the China engines is seen as a favorable factor in initial start-up and the idea of retailing them at an affordable price is tempting.
    At another extreme I recently heard from one MB builder here in the states who described his mode of operation as only using online want ads (c-list), never giving out his name or address, meeting customers at neutral locations and only taking cash with an all sales final, as is, policy. As disagreeable and unfathomable a way of doing business as that seems to me, his opinion was anyone was a fool to do it any other way. Takes all kinds.
     
  17. dvddtz

    dvddtz New Member

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    I personaly only warranty the installation, since that is what I have done.I didnt build the bike or the motor,just installed the kit.I have and will help fix the problems that arise with the bike or motor.My first motor was from BGF and it blew a rod bearing the first month,and when I wrote them to get it taken care of ,they wrote me back "nice try". I do all I can to help my customers, short of a full refund.
     
  18. lordoflightaz

    lordoflightaz New Member

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    i'm glad to hear you found a way to stay in business.

    Regarding a restocking fee in the US. I have no issue with that kind of thing if the product I received is the product I was led to believe I was ordering. When things are wrong I go the distance to get it corrected by the seller. HGTV actually pulled all info on a product they showcased on TV because of me. It is buyer beware, and I don't understand how a person could return a noisy bike if they heard it running before they bought it.

    My Internet purchase are followed by an inspection of what I got and comparing it to the sellers list. Yes, Pablo, when I got the shift kit, I compared it to the parts list in the doc line by line.
     
  19. TigerToothBikes.com

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    You bring up a valuable point, i would like to stress that the measures in place are in the event of cancellation. If a customer were to feel cheated or misled, or worse the product was faulty, then these measures would not apply. Thats also stipulated in UK laws. For the most part T&C's go out the window in the event of a faulty product as you (the seller) have failed in your part of the contract thus negating the agreement.
    I definitely do not want to seem in the business of effectively stealing money.
    Regarding the customer with a selective hearing problem, classic symptoms of buyers remorse...
     
  20. lordoflightaz

    lordoflightaz New Member

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    Having tinnitus, I live for the noise.
     

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