23/11/2015 7:28 AM AEDT | Updated 15/07/2016 12:51 PM AEST

This Hipster Bike Manufacturer Says Bargain Sales Could Kill Their Small Business

Thomas Antcliff

Christmas is coming but there's one thing you'll never see in the window of this specialty bicycle store -- a grab-a-bargain sales sign.

Brown Jersey is a Sydney-based brand of retro-style urban bikes that has successfully traded on the rise in hipster culture. Its range has expanded over the past five years since inception, from its trademark oh-so-hip fixies to commuter bikes and road bikes.

Husband and wife founders James and Nicole Connell have nurtured it from an online-only brand to supplying bike retailers to opening their own store last week in Ultimo.

But James Connell says discounted sales are a no-go and for a very simple reason -- they want their business to survive.

He says the business moved from purely being online to a wholesaling model because they didn't want to compromise their products' quality to compete with other heavily discounted bike websites.

"We realised the average consumer when they are looking at this product, let's call it a retro fixie, online and they don't know much about bikes it's very difficult for them to distinguish the finer details that distinguishes the quality product from the not-so-quality product, and so they make their choices on price," he told The Huffington Post Australia.

"That wasn't something we wanted to be involved in. We just wanted to make quality product."

So the pair worked out wholesaling to bike shops would be a better option -- they could keep up the quality of their cool bikes and move greater numbers.

But they needed one thing --- floor space.

James Connell says Brown Jersey is a premium brand, not a discount specialist.

Connell said they realised the brand would only do well if retailers gave them a prominent spot in their showrooms to display a large range of bikes.

In exchange, the Connell made a deal to never sell the bikes for less in their online store.

"We knew that if we can get the floorspace and the commitment from the dealer to actually carry a good range of our products -- and our range is expanding quite a bit -- then that pays for itself," he said.

"So we agreed with the dealers to only sell on our site at the recommended retail price plus the full delivery charge to their local area. So that means if Velo Cycles in Carlton sells a $600 bike the customer can come in and pick up a fully assembled bike off them with the after-sales service and relationship that goes with that.

"But if the same customer buys from our website it will cost them $600 plus a $35 shipping charge and then they have to assemble it can you lose that rapport with your bike shop. It's an arrangement we have to not undercut them."

Not fixie-ated on price

Connell says the brand's relationship with their dealers is paramount, and so the same rules will apply to the new store in Ultimo -- they will never snake a sale at a lower price than one of their retailers would offer.

"The reason we're opening the store is not just delivering the product into what I think will be a fairly busy market for us in inner city Sydney with all the students and semi-transient population around here, it's to showcase our product not just to the consumers but to the dealers as well," he said.

"We want more brand recognition, particularly in Sydney but it's also to show dealers how we want to display and sell our product."

Connell said he worked so closely with his dealers that designs of his new high-end Speakeasy range had been furnished with feedback about what customers wanted -- something he said global brands would never do with local retailers.

"We've had to make more commercial decisions working with our dealer network and done things we haven't done previously -- fatter tyre commuter bikes for instance.

"That's the feedback we're acting upon from some of our bike shops. Love the brand , love how sexy the bikes are but you've got to do some stuff that's more appealing to the mass market not just the edgy pieces."

Connell said it was a very collegiate way to operate his business, and builded on the reputation they already had.

"We are able to custom the models specifically to suit what our market is looking for," he said.

"The bread and butter for us is always the fixie stuff because that whole hipster thing is kind of the image that when we talk about what we are, an urban cycle brand, but particularly in places like Sydney where it's a bit hilly it's not always a practical option -- Melbourne is a great place for fixies and its wall-to-wall fixies down there. In Sydney to ride a fixie you have to be a pretty hardcore hipster.

"So we made fixies into a slightly more practical bike while still being a sexy looking retro bikes by using internal gear hubs so that a five speed looks like a fixie to an untrained eye."

Brown Jersey's new store is now open at 478 Wattle St, Ultimo.