There’s an old, cautionary and rueful joke in the booze game: If you want to make a small fortune in wine, start with a large fortune.
You might guess that making bicycles, especially in the wake of the pandemic and its heavily reported “bike boom,” wouldn’t be so fraught. But in actuality, that very upswing, which saw e-bike and stationary bike sales explode due to lockdowns and the loss of gym access, also exposed a long-understood challenge of building bikes — they’re made of a ton of parts, and when you can’t get something critical, like handlebars, you can’t sell bikes.
Even heavies such as Trek, Specialized and Cannondale don’t manufacture all these intricate components themselves. In the teeth of the bike demand upswing, a shortage of both manufacturing capacity but especially all those parts led to backlogs of orders lasting years. (Spoiler alert: That’s cleared up and now there’s a bike glut.)
If you’re in the bike-building business, that sort of gyration will give you a heart attack. One “hack” for consistency instead is to control the one component that doesn’t have to be made overseas — the bicycle frame.
And, yes, in a trendline very much akin to the upsurge in microbrewing, a handbuilt bike renaissance dates way back to the early 2000s, with notable trade shows devoted to that very craft. But so much of that scene, even if you’re a devotee of a genius maker like Portland’s Ira Ryan, has been about making perhaps 50 bikes a year, max — and frequently waiting lists in the years. (No, we are not exaggerating.) What’s more, most of the custom crowd only works in steel, because that enables ordering commercial tubing and needing less specialized welding equipment.
Such a nuanced scene was what drew Ryan Cannizzaro, co-founder of Golden, Colorado-based Alchemy Bikes, to get into the game.
“It was 2008,” he says. “I still had another job at the time. We were in an 800-square-foot garage and we had like a basic welding machine. I’m talking Harbor Freight.”
Today Alchemy still makes the bulk of its frames domestically, but the brand is no longer like its tiny-output rivals, producing just a fistful of bikes a year with years-long waiting lists, either. They’re also not using Harbor Freight welders.
Alchemy’s rise can in part be traced to the idea that anything novel is attractive, particularly among bike dorks. (If you want an analog, just look to watch nerds or sneakerheads.) For Cannizzaro that meant advancing beyond steel to titanium and carbon fiber — the latter of which is still pretty unique since most carbon frames are made overseas.
“That was like 2010-2012 and making custom carbon fiber and winning a bunch of awards,” he says. A decade on Alchemy is still relatively small, with only nine employees, but produces “a few thousand bikes a year,” according to Cannizzaro.
There’s a somewhat similar story behind Bentonville, Arkansas-based Allied Cycle Works, which came along in 2016. It’s still scaling, with capacity up to 5,000 bikes per year, and a larger operation, with 45 employees. And from the outset Allied has made carbon bikes domestically, too.
That’s impressive, but its operation is yet more complex, too, because unlike the tube-to-tube construction Alchemy uses, Allied produces monocoque frames (i.e., like an Airbus wing).
“What we do is infinitely crazier because it’s a different layup for every bike and every size with all these intricate subtleties,” CEO Drew Medlock explains. (It helps that Allied gets sizable backing from a group called RZC Investments, which also has a majority stake in the upscale Rapha cycling apparel brand and is partially backed by Walmart heirs Tom and Steuart Walton.)
Still, being the relatively little guy, no matter how much people dig boutique products, is no easy road. The old rule of thumb is that you can be two guys making bikes in a garage or you can be 500, but anywhere in between is death, because you become a health insurance company that makes bikes as a hobby; your costs are too high for a too-low volume of production.
Here’s how these two burgeoning brands are defying that adage to keep delivering bikes people covet — and keep doing (most of) it in the United States.
2020: American-Made’s Time to Shine
As 2020 stretched into 2021, a lot of bike brands were deeply backlogged; the bike business simply wasn’t designed to see doubled demand when a typical pre-pandemic “boom” year might look like a 5 percent bump. Add to that the fact that most bike makers don’t own their means of production. They contract it out to facilities in China and Taiwan and those plants build lots of frames for dozens of brands.
Allied and Alchemy don’t do things that way, however, so both were in a comparatively great position when the pandemic struck.
“We were hearing [our competition] saying, ‘Yeah, your bike might be here next year,’” Medlock says with a laugh.
But Medlock, whose background includes managing the fine details at companies as big as online retailer Backcountry.com, knew the hangup wouldn’t be in making frames — they had that nailed — but in tracking down parts, from shifters to wheels to shocks.
“We swam through it because we knew how long it would take to make a frame and we assemble in house,” he explains.
Medlock adds that because Allied emphasizes building to order with custom paint, it was able to give customers most of what they coveted: beautiful cosmetics on a bike that they wouldn’t have to wait years to ride. No, Allied didn’t necessarily have all the parts customers wanted, but unlike its larger competition, it was used to giving buyers a lot more parts options, so it was better positioned.
“You can wait three months,” Medlock says of those customer interactions, “or have your bike right now because we have these other parts mixes.”
Alchemy’s Cannizzaro had similar control over the building and parts supply process. The bulk of the company’s bikes, including tube making, are all crafted in house in Colorado.
But unlike Allied, Alchemy had recently pulled back from having a dealer network. The reason? Cost. Most bike shops get extended terms, frequently with low up-front charge on the bikes on their shop floors. They’ll be in perilous debt if they cannot sell them, “but those shops might have 180 days to pay back a Specialized,” Cannizzaro says. “If Specialized has 60 percent of the inventory in that shop, guess who they’re paying first? We just couldn’t compete with having tens of thousands of dollars in inventory out there.”
Instead, Alchemy had switched to a direct-to-consumer model — exactly when pandemic shutdowns saw retailers of all stripes with locked doors.
“We thought it might take a few years for people to get comfortable buying online,” Cannizzaro recalls. “But right at the beginning of the pandemic, I had this thought that we just leapfrogged that [hesitation] because everyone’s buying everything online.”
Domestic Manufacturing’s Upsides — and Downsides
For both brands, making bikes domestically has led to legs well beyond the pandemic; Alchemy is growing 25 to 35 percent per year and Allied has doubled sales since the onset of COVID-19. But they’re taking different paths to that success.
Allied rebooted its all-road gravel bike, the Echo, a year ago, “and that was 60 percent of our sales,” Medlock says. “But what surprises me is that it almost doesn’t matter what we come out with next, because people just want what’s new.” The brand’s freshest whip, the BC40, is a cross-country mountain bike, “and now that’s getting 60 percent of our sales.”
Alchemy’s on the exact opposite path; its Arktos mountain bike came out a few years back but its latest Lycos gravel bike frame (not final assembly or custom paint) is now amping sales — and is made overseas, to hit a lower price target.
“We just wanted to be able to deliver an Alchemy to more customers,” Cannizzarro explains. The bike now starts at $4,999, $2,500 less than its original incarnation.
Still, he says the fact that it constructs bikes in the U.S. and has production facilities here, not overseas and not farmed out to an outfit that makes bikes for 15 other brands, “lets us build complete running prototypes right in-house.” That way, when they get samples back from their partner “we can directly compare them to the target; we know the exact ride characteristics because we’ve ridden it already.”
Cannizzaro adds that prototyping domestically enables faster innovation — and way more control over what the team creates. A lot of the trade war with China has been about intellectual property, and it’s no different in the bike business.
Beyond Bikes
Allied hasn’t turned to overseas production, but unlike Alchemy, it doesn’t do custom frame sizes, where your body’s dimensions are matched to the tubes of the frame, like a tailored suit. It can’t, because it makes monocoque carbon fiber frames, rather than frames with tubes like Alchemy, where millimeters can more easily be added or reduced.
That said, most of Alchemy’s customers buy stock frame sizes, and with either company’s wares you’re looking at north of $10,000 for a complete bike. Still, it’s not like competitors manufacturing bikes overseas are charging less, and Allied’s Medlock says he sees his customers willing to pay a premium for a bike made here.
In a similar vein, 1Up USA makes all of its bicycle car racks domestically, with 100 percent domestic parts — a claim competitors cannot make. Marketing director Kurt Barclay says that put the brand at a cost disadvantage pre-pandemic, “because labor is the one thing you can’t do anything about.”
But like Allied and Alchemy, it’s making a premium product and customers know it. “We can pay people a living wage and we don’t change stuff just for its own sake — there are like three parts that are different since we started in 2001.”
Barclay concedes that doing everything domestically can limit innovation. “We wanted to add LED turn signal and brake lights, because if you’ve got fat bikes, especially on your car’s tailgate, that can block your car’s lights.” But the only source of domestically made LEDs charges several hundred dollars a pop. So 1UP won’t offer that, “because then we’ve got a non-competitive product.”
Selectively Electric
Cannizzaro hears that lament loud and clear. Alchemy got into ebikes a few years ago and while a custom-painted eRonin gravel bike is incredibly unique — and you can also buy it as a frame-only — a $10,000-plus electric gravel bike is a tough sell. Which is why, for now, Cannizzaro says there won’t be an Alchemy electric mountain bike.
“You could partner with a leading drivetrain manufacturer like Bosch or Shimano,” he says. “And you’re working two years out and then when it comes out the technology has already changed.”
Allied’s Medlock agrees, knowing full well he cannot afford to go chasing magic pixie dust in the form of ebikes.
“I’m not saying never, but we have to become masters of manufacturing rather than students, first,” he explains, stressing that the only way you can win at domestic manufacturing is with higher quality. “Never be rushing. We live and die by the ethos that you do great work and you pass on great work. And when it’s handed to you, you verify that it's great work before you do what’s next.”
Ultimately, Alchemy and Allied customers want something that their friends don’t have, “not just quality, which is everything,” but a unique paint scheme, Medlock adds. “A more personalized finish matters to almost everyone.”
Cannizzaro concurs: “It's building our product so well so that on those group rides, you know, a customer tells a buddy ‘You gotta go buy one — it’s the best-riding bike I’ve ever ridden.’ ”
Available in five different stock sizes, with five different component packages, the Lycos offers lots of options — and uncompromising performance off the beaten path.
The number in the name refers to the amount of travel (in millimeters) in the rear shock. Up front you get even more, thanks to a 170mm FOX Factory 38 front suspension.
The Echo features flip chips and a corresponding dropout design that lets you shift its geometry, optimizing for road or for gravel, so it's two bikes in one.
Yes, this XC bike is pricey, but the BC40 won raves from our reviewer, who dubbed it a "speedy, lightweight mountain-ready ripper."
