Are my LBS BTN concerns valid?

ebikemom

Administrator
Staff member
I saw that bike on THIS forum which led me to believe ...
I'm not part of the "review" side of EBR--I'm just a volunteer forum moderator. But a review can't replace the buyer looking into things that matter to them, as you are doing. An online review, no matter how positive, doesn't mean that a particular bike, or model, or company, or warranty, etc., is right for you. No review can cover all of the bases. It's just one (hopefully helpful) data point for the shopper to consider. :)
 

OldDudet67

New Member
I'm not part of the "review" side of EBR--I'm just a volunteer forum moderator. But a review can't replace the buyer looking into things that matter to them, as you are doing. An online review, no matter how positive, doesn't mean that a particular bike, or model, or company, or warranty, etc., is right for you. No review can cover all of the bases. It's just one (hopefully helpful) data point for the shopper to consider. :)
I"guess" BUT in one video the reviewer is saying generic CN Batteries are no good, buying from CN based companies can leave you with an unsupported product, issues with replacement parts then in the paid review no mention of these shortcomings, a bit confusing.
 
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Chris Nolte

Well-Known Member
The broker of record is an important consideration. In the case of a liability claim a consumer would seek compensation from the entity that imported the bike. It’s way too complicated to sue an entintity without a us base. If a shop is the importer they would be the broker of record and they should be responsible to hold the product liability insurance. The problem is product liability insurance is very expensive and it’s not usually necessary if the individual brand is the importer of record and they hold liability insurance.

Product liability insurance can be upwards of 10% of your gross sales. If a shop carried it that would be a percentage of all of their sales, under the entity they insure. Technically they could setup another entity just for importing bikes, but it’s a complex and expensive endeavor. I think it’s a prudent stance for a shop not to sell bikes that don’t have product liability insurance, frankly even working on one could open a shop up to a liability case. This may seem overly cautious, but one case could be catostrophic, this is one reason why many brands from Europe don’t want to sell to the US, we’re a very litigious society comparatively speaking.

Hope this helps give another perspective.

Below is an article that gives some additional insight on a related topic from a shop perspective

https://www.marshmma.com/blog/protecting-your-retail-bike-shop-from-private-labeled-part-liability
 
You would first sue the LBS in a products liability case, as they are liable for selling the “defective” product. Jurisdiction would be straight forward, and you wouldn’t need to worry about The Hague Convention for service on the foreign entities, or jurisdiction over them.
 

OldDudet67

New Member
The broker of record is an important consideration. In the case of a liability claim a consumer would seek compensation from the entity that imported the bike. It’s way too complicated to sue an entintity without a us base. If a shop is the importer they would be the broker of record and they should be responsible to hold the product liability insurance. The problem is product liability insurance is very expensive and it’s not usually necessary if the individual brand is the importer of record and they hold liability insurance.

Product liability insurance can be upwards of 10% of your gross sales. If a shop carried it that would be a percentage of all of their sales, under the entity they insure. Technically they could setup another entity just for importing bikes, but it’s a complex and expensive endeavor. I think it’s a prudent stance for a shop not to sell bikes that don’t have product liability insurance, frankly even working on one could open a shop up to a liability case. This may seem overly cautious, but one case could be catostrophic, this is one reason why many brands from Europe don’t want to sell to the US, we’re a very litigious society comparatively speaking.

Hope this helps give another perspective.

Below is an article that gives some additional insight on a related topic from a shop perspective

https://www.marshmma.com/blog/protecting-your-retail-bike-shop-from-private-labeled-part-liability
Wow Chris great information!!!

So if the manufacturer who is importing the bike is a CN based entity (No US business entity) and does NOT have liability insurance (as this LBS states is the case with BTN) and is selling to an LBS who sells to the consumer is the LBS on the hook if there is a product liability or the manufacturer who import the bike?

From the link you sent, it sounds like even though these companies (BTN) names are on the bikes they are treated as private label products sold by an LBS and their policy would not cover the bikes and getting coverage would be an expensive proposition negating any savings. Seem that this LBS is acting responsibly and in good faith.
 
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Chris Nolte

Well-Known Member
You would first sue the LBS in a products liability case, as they are liable for selling the “defective” product. Jurisdiction would be straight forward, and you wouldn’t need to worry about The Hague Convention for service on the foreign entities, or jurisdiction over them.
Yes correct, but it would be the LBS’s insurance companies responsibility to put the liability on the manufacture and if someone was going to sue they would probably want more than what the shops small policy could pay. That would be my expectation if I was in this sort of scenario. The problem is when your LBS is the only entity in the US it might be the only entity worth pursuing from a legal perspective.

Wow Chris great information!!!

So if the manufacturer who is importing the bike is a CN based entity (No US business entity) and does NOT have liability insurance (as this LBS states is the case with BTN) and is selling to an LBS who sells to the consumer is the LBS on the hook if there is a product liability or the manufacturer who import the bike?

From the link you sent, it sounds like even though these companies (BTN) names are on the bikes they are treated as private label products sold by an LBS and their policy would not cover the bikes and getting coverage would be an expensive proposition negating any savings. Seem that this LBS is acting responsibly and in good faith.

To my understanding that is correct. I’ve actually had exstensive conversations with the same guy who wrote this article, as he is also my insurance agent. I think the industry has a lot to learn in this arena.
 

Ravi Kempaiah

Well-Known Member
Yes correct, but it would be the LBS’s insurance companies responsibility to put the liability on the manufacture and if someone was going to sue they would probably want more than what the shops small policy could pay. That would be my expectation if I was in this sort of scenario. The problem is when your LBS is the only entity in the US it might be the only entity worth pursuing from a legal perspective.
I tried to look up Riese and Muller's USA office. There is none.
As far as I know, they do not have a USA warehouse or fixed office which is legally listed on the documents or on the website. They ship bikes from Germany, where their HQ is.
So, LBS who carry their bikes become the sole liability entity ?
When there is no legally verified warehouse or office location in the US, in an unfortunate event, who is responsible?
 

Chris Nolte

Well-Known Member
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I tried to look up Riese and Muller's USA office. There is none.
As far as I know, they do not have a USA warehouse or fixed office which is legally listed on the documents or on the website. They ship bikes from Germany, where their HQ is.
So, LBS who carry their bikes become the sole liability entity ?
When there is no legally verified warehouse or office location in the US, in an unfortunate event, who is responsible?
They do actually have a US office solely for this purpose. It’s not for other uses though.
 

OldDudet67

New Member
Yes correct, but it would be the LBS’s insurance companies responsibility to put the liability on the manufacture and if someone was going to sue they would probably want more than what the shops small policy could pay. That would be my expectation if I was in this sort of scenario. The problem is when your LBS is the only entity in the US it might be the only entity worth pursuing from a legal perspective.




To my understanding that is correct. I’ve actually had exstensive conversations with the same guy who wrote this article, as he is also my insurance agent. I think the industry has a lot to learn in this arena.
That is crazy!! So I have moved on from considering a BTN product.

Are LBS just unaware of the risk they are solely taking on by reselling products imported by foreign entities who do not have liability insurance or just rolling the dice and protecting themselves via setting up an LLC and using BK protection if @(#*% hits the fan?

Seems pretty short sighted and shady
 

Chris Nolte

Well-Known Member
That is crazy!! So I have moved on from considering a BTN product.

Are LBS just unaware of the risk they are solely taking on by reselling products imported by foreign entities who do not have liability insurance or just rolling the dice and protecting themselves via setting up an LLC and using BK protection if @(#*% hits the fan?

Seems pretty short sighted and shady
I just want to be clear. I don’t know the legal structure of BTN. Mainly, if the bike shop is importing the bikes directly and they are taking care of the duties and taxes they are considered the importer of record. They would be the ones responsive in the case of a claim. I’m definitely not an expert on this topic though.
 

OldDudet67

New Member
I just want to be clear. I don’t know the legal structure of BTN. Mainly, if the bike shop is importing the bikes directly and they are taking care of the duties and taxes they are considered the importer of record. They would be the ones responsive in the case of a claim. I’m definitely not an expert on this topic though.
That's how I read that article is well whoever imports the bike is liable, but if that entity is not US based and is selling uninsured products liability is solely on the shop that sold it.

The initial question was whether the bike shop who said he did not want to carry BTN because their lack of proper product liability insurance seems to be a valid concern.

Based on the article which outlined a LBS doing business with a non US entity who does not have Insurance becomes the defacto manufacturer and would need the appropriate insurance coverage to protect itself and this sort of policy is very expensive for LBS.

It would seem any saving a consumer might realize would lost on the increased cost of insurance the LBS has to absorb becuase the manufacturer (BTN in this case) is passing that additional expense on to LBS. Sounds like the only winner would be the manufacturer?
 
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Thomas Jaszewski

Well-Known Member
BTN is Chinese. All they can lose is existing stock and being unable (maybe) to sell in the USA.
We can be pretty certain they and many others are insulated from serious claims. That leaves the bikes costing 2 to 3 times the cost from the likes of Trek, et al.

Pity the poor mom and pop that will take the hit.

I don’t need an expensive nanny. But I fear the market is going to change. IMO it’ll be the high speed motors on bikes designed for 25% of the speed/power.

As far as reviews here, I like them, but I understand there is an income derived from reviews. It’s up to each buyer to ferret out details regarding customer service and reliability.

There’s a side of me that wants to react by saying, “stick to pedaling if it’s worrysome.”

I’d still buy a BTN bike if I liked something they sold. My pension won’t support a $3500 plus bike or a $1000 battery.
 
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OldDudet67

New Member
BTN is Chinese. All they can lose is existing stock and being unable (maybe) to sell in the USA.
We can be pretty certain they and many others are insulated from serious claims. That leaves the bikes costing 2 to 3 times the cost the the likes of Trek, et all.

I don’t need an expensive nanny.
Expensive nanny, I dont understand?
 

OldDudet67

New Member
I shared this article with the LBS I was talking about and he confirmed this the exact reason he would not carry BTN's products. While at the shop he looked at the 1000 watt bike that they are selling and he agreed with Bills comment and it yet was another reason he would not carry their products. I ordered a Civi from them. :) Like bills asking in his comments how are things like generic batteries, 1000 watt motors with no chain guards, the bike squeaking and creaking down the road 1000 watts and no major call out on Mechanical Disk Brakes, This is why I asked the question if the Manufacturers lack of Liability coverage and putting the liability onus squarely on shoulder of the LBS encourages profit over safety and quality ? If so I think it should be not reviewed for $$$ (I would love to hear BTN's side of this story... Yeah right!!!) I read how..." these are nice guys, I hope these nice guys step up if an LBS is held liable for a problem with their product.

Protecting Your Retail Bike Shop From Private-Labeled Part Liability



Over the past couple of years, a lot of bicycle retailers have started selling privately labeled bicycle parts: Frames, wheels, components, etc. It's easier than ever to have a product created with your shop's logo on it, and it can drive additional revenue into your business. But, as in everything in life, there are other things to consider. For example, many shop owners forget to consider the risks they are exposing themselves to by doing this. Will their insurance protect them in the event of a liability claim if their privately-labeled frame breaks and a cycler gets injured, for instance? This is kind of a loaded question, but the short answer is probably not.
Most bike shop retailers have a Business Owners Policy (BOP), which is designed to cover retail operations. The insurance carriers providing these policies assume that most of the products and completed operations risk is transferred to and absorbed by the manufacturers of the products the retailer is selling. So, for example, if a bike frame fails, and bodily injury occurs, the claim ends up being paid for by the frame manufacturer (or its insurance company). The same thing applies for wheelsets, seat posts, etc.
So, who insures the privately-labeled products sold in a retail shop? Likely, and often, there isn't any coverage. Most of these products are manufactured overseas and chances are that the manufacturer's insurance coverage isn't valid in the United States or any other country, other than where the product was made. Technically, unless the lawsuit originates in the country of manufacture, then there isn't any coverage provided to the reseller.
So who pays the bill? Well, unless your insurance carrier rated your policy for this unique exposure (and that's not likely), you, the bike shop owner, are likely on the hook.
Products that are manufactured in the United States tend to pose less risk to retailers because the insurance coverage is broader than the insurance provided by overseas manufacturers and more likely to provide some protection to the retailer. However, retailers selling private-label products made by domestic manufacturers still may have to pay legal fees to defend a claim until a suit is settled. So regardless of where the product is made, by private-labeling something, you open yourself up to more risk.
Retailers who want to have their own product or label should start a separate company-corporation, LLC, etc.-and get an insurance policy for the manufacturing exposure (products and completed operations liability) itself. Ask your current insurance carrier if they will cover this under your existing policy. Chances are that they won't. They will probably make the same recommendation, which is to get a separate policy to cover the proper, unique and specific exposures. In fact, I've heard twice in three months from retailers who had privately-labeled products. Each were told that their current carriers and policies would not cover this exposure under their current policy. To make matters worse, the carriers also told the retailers that unless they got separate coverage, they would discontinue providing any coverage at all.
While not glamorous or fun work, it pays to make sure you're protected ahead of time, rather than finding out the hard way after a claim, and you end up liable for the damages.
 
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Mr. Coffee

Well-Known Member
When there is no legally verified warehouse or office location in the US, in an unfortunate event, who is responsible?
The cynic in me says whomever has the deepest pockets and best attorneys.
Actually, the cynic in me says that the party with the worst attorneys will likely end up holding the bag.

The cynic in me also says that if you take a broad view, there are far, far more stories in the US legal system of people who were seriously harmed by a defective product and got either no compensation or a horribly inadequate amount of compensation than there are stories of grifters who took advantage of the system to extract money from honest businesspeople for cases where no compensation was justified.

The perception that everyone is suing each other into the ground in the USA is just that, a perception.
 

Ravi Kempaiah

Well-Known Member
The cynic in me also says that if you take a broad view, there are far, far more stories in the US legal system of people who were seriously harmed by a defective product and got either no compensation or a horribly inadequate amount of compensation than there are stories of grifters who took advantage of the system to extract money from honest businesspeople for cases where no compensation was justified.

The perception that everyone is suing each other into the ground in the USA is just that, a perception.
I always operate from the understanding that people have gentler and kind side to them and also dark, ruthless side to them. It would be too naive to take anyone's nicety as reality.

There are Chinese companies that have low ethical and moral standards and that same goes for big corporations with muscle to bend the corporate laws.
Bosch is one of the biggest automakers in the world and is also the company that is involved in the biggest auto scandal (Diesel-gate) in the last 10 years. While we accuse China of creating pollution with sub-standard manufacturing practice, nobody knows how much pollution resulted from using Diesel engines emitting excessive amounts of NOx and COx emissions. After the Dieselgate, the number of Diesel car sales in EU decreased substantially.
Turning a blind eye to this fact is like how Trump supporters think his attitude towards women is "locker talk".

Knowing that there are two sides to everything and humans do have dark and self-centered side, one will not be blindsided by anyone's aggressive or manipulative behavior, especially in the world of business.

My perception is still that, most E-bike companies and dealers have no deep understanding of many of the intricacies. if there is an opportunity to throw some of the Chinese companies under the bus to create sales, they will happily do it. If you pin them down to get the details, you will see it's empty talk. The fact is that 90% of the components in their store is made in China or Asia. Majority of the eBikes and their components are made in China.

Hey, at the end of the day, it is a survival thing and business for the people involved. There are some amazing companies coming out of EU, China and the US. It is amazing to witness the whole spectrum of business practices :)
 

Thomas Jaszewski

Well-Known Member
I shared this article with the LBS I was talking about and he confirmed this the exact reason he would not carry BTN's products. While at the shop he looked at the 1000 watt bike that they are selling and he agreed with Bills comment and it yet was another reason he would not carry their products.
Great insight, thanks!