|Title||Bike Co-op Goes Flat: Difficulties faced by worker-owned bike co-op offer lessons for others of potential business pitfalls|
|Year of Publication||2006|
In the fitness-oriented town of Eugene, Ore., a different kind of cooperative struggled with many of the problems familiar to modern agricultural, value-added co-ops. In the end, the difficulties inherent in the worker-owned cooperative model forced Burley Design Cooperative, a manufacturer of much-sought-after premium bicycles and bike accessories for 28 years, to sell out to a private investor.
Burley built high-end bicycles, including tandems and recumbent bikes, on which the rider reclines as if in a chair. It originated the child-carrying bicycle trailer and produced a line of outdoor clothing and rain gear. The new owner has announced that the bicycles and clothing will be dropped; only the trailers, Burley’s strongest product line, will continue in production.
The products had a reputation both in the United States and overseas for high quality, durability and affordability. The bike co-op competed in a market in which competition is fierce from China and other countries with much lower production costs. Burley child trailers, which can be converted to athletic strollers, retail from about $240 to more than $400. Its tandem bicycles ranged in price from about $1,000 to more than $5,000.
Burley had no problem selling its wares — in fact, its main dilemma was the opposite: it couldn’t make enough product to meet demand. Further, as the new millennium began, inefficiencies ate away at its bottom line and it began having trouble meeting its delivery obligations. After more than two profitable decades, the cooperative began losing money in the early 2000s. By 2005, it was losing $1.5 million a year.