Team Sponsorships?

I was recently approached by a small team to build cross bikes for next season and am hesitant based on watching some other builders seem to get the short end of the stick on these deals. The deal so far is:

5 bikes, all women, 1 existing customer and another a good friend.
They're willing to put up money, so they didn't come to me just looking for handouts.
Mixed level of skill from Cat 4 to Nationals-bound racers.
There are kits already in the works with whatever I request for logo placement.
They came to me in January for a season that starts in 7 months so it works in to my scheduling even conservatively.

My questions start here:
How do you generally charge for team sponsored bikes?
Do you just cover costs and consider the time a donation?
Someone recommended contracts to me, but I feel a little like that might be a lot for a cat 4 racer?

Excuse the boring business-like nature of the post, but I don't make it a habit to give away frames often and am constantly blown away by large team sponsorships by small builders.

Much to consider, but lets start with "who are you?"...forum rules dictate a first and last name on all posts.

As for team sponsorship, details can go on for pages, but here are the main questions you need to ask of yourself:

Do you have a business plan and if so, do you currently have line items that addresses fiscal donations and marketing allowances?

Do you have commercial liability insurance and if so, will your underwriter support a separate clause for sponsored equipment used during race conditions?

What is your desired level of commitment...build the frame and pass it on, build complete bikes with similar componentry to sustain your vision of the machine, maintain bikes throughout season to insure performance, attend races as well to represent your brand and sell your product?

These three small starter questions will help you define if your business is in a place to participate, and if so, should help you anticipate the amount of time you are committing to.

I sponsored racers/teams for almost 20 years, I no longer do so and am quite happy with that decision, as is my accountant.

cheers,

rody

Excuse the lack of signature. I'm not in the habit of using many forums, but I got drawn into a conversation over here recently and am trying to pay a little more attention.

Anyhow, I'm insured, but I would have to look at the clause situation, but if there were an exchange of funds, I imagine that would be a frame covered like any other? I've already told them I can't do free if I commit, but have not yet offered a price.

I've generally been in a place of not giving bikes to anyone with two small exceptions. My ex got a couple track bikes outta me, and I co-sponsored a racer on a Steher he has been racing in Germany, but there wasn't an out of pocket expense on either. My ex had to pony up cash for tubing and the build on the Steher was paid for by his current team who couldn't begin to put together an appropriate bike for him. Those were both fine and worked as much in my favor as anything.

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Originally Posted by Rody

Do you have commercial liability insurance and if so, will your underwriter support a separate clause for sponsored equipment used during race conditions?

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Hi Rody,

Why would your standing insurance policy not apply to sponsored frames/bicycles?

Megan,
I have a fairly large grassroots MTB team at about 50 members. We range in ability from beginners, to a few USAC pro license holders. We've been able to set up deals (through our shop) with a couple different builders where we could purchase frames at discounted prices. This was not a frame sponsorship, per se, but a benefit through the shop. Some members were really stoked to have the opportunity to purchase a nice frame at a discount, others not so much. The ones that were'nt stoked, wouldn't typically buy a custom or semi-custom hardtail anyway... they're either FS guys or carbon race bike guys.

If we were to have a deal with a builder directly, I would expect that the builder control the design and spec of the frame (you can maybe use this for R&D) as well as the paint job... basically, you get their measurements or use stock geometry or whatever you decide and run with it. I'd expect that the frames be your - the builder's - team livery. I would expect you to have some requirements of us as well. You'd need to figure a way for the team to promote your business outside of just showing them off on the start grid. I'm not sure how that would work with a framebuilder... maybe have team members work your booth at trade shows along side of you? pics for press releases, advertisements, websites, etc, go without saying but need to be in the contract.

I don't think that a contract is over the top at all and actually should be required, regardless of level. It spells out the relationship and expectations.

I can only speak for how I've handled it up to this point. I have sponsored a cross team for six seasons. Team size for any given year is around 5-7 racers. All of the racers are given complete bikes up front and they are free to ride and race them all the time. But, the bikes are mine. If you leave the team, if you relocate, if things don't work out, etc the bike comes back to me. I always make sure up front EVERY question and expectation is sorted because it is a difficult bell to un-ring later on. The vetting process of potential racers is not taken lightly.

I also make sure racers on my bikes are at all the races and are there all day. No one is allowed to swoop in an hour before their race and then are back on the road an hour later. Racers are there all day from first race to last race. The presence of the team has yielded far more interest and attention than the actual bikes. But sponsoring a cross team has sold me more bikes than any other marketing/advertising venture I have done to date.

So my advice: If you want to build the team bikes then go for it. But make 100% sure you are comfortable with who the people are riding your bike. If they aren't ambassadors to the sport and your brand then it is wasted money.

Speaking with my marketing hat on, some thoughts:
- Figure out where it fits in the big picture of your business. This will help you determine pricing, because you'll be figuring out what other commitments you want from the team/riders, and you can place a value on these, as well as the $ they'll pay you.

- Rule of thumb is 2x marketing budget for 1x sponsorship. This has changed a lot with social media, but the principle still applies: the sponsorship alone is worthless without marketing. At a minimum, this might include:
- Professional photos of the team/bikes
- Blog entries from racers
- Race reports
- Photo cards for racers to hand out at events
- Events that feature your team that promote your business; maybe a couple of group rides, team presence at Grand Fondos, etc.
- Bonus/commission for team members who directly refer a new customer

- You might also want to think about an agreement that protects your brand. Some elements of this might include:
- Never drop out of a race; if you get pulled, fine, but you keep riding til the whistle blows
- Obey rules of the road (hard to enforce, but make the point that they're representing you in the community)
- Agree to not disparage equipment on social media/private blogs

IMO sponsoring a women's team makes a lot of sense, for both female & male frame builders. Less 'noise' in the space, teams often have smaller budgets and are more appreciative/better ambassadors for sponsors. Assuming you have the capacity, you can charge them a nominal amount to offset/cover materials cost, and you have a few concrete marketing exposure goals around it and clear expectations for participation (in writing!) then it's worth exploring.

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Originally Posted by hmbatrail

I can only speak for how I've handled it up to this point. I have sponsored a cross team for six seasons. Team size for any given year is around 5-7 racers. All of the racers are given complete bikes up front and they are free to ride and race them all the time. But, the bikes are mine. If you leave the team, if you relocate, if things don't work out, etc the bike comes back to me. I always make sure up front EVERY question and expectation is sorted because it is a difficult bell to un-ring later on. The vetting process of potential racers is not taken lightly.

I also make sure racers on my bikes are at all the races and are there all day. No one is allowed to swoop in an hour before their race and then are back on the road an hour later. Racers are there all day from first race to last race. The presence of the team has yielded far more interest and attention than the actual bikes. But sponsoring a cross team has sold me more bikes than any other marketing/advertising venture I have done to date.

So my advice: If you want to build the team bikes then go for it. But make 100% sure you are comfortable with who the people are riding your bike. If they aren't ambassadors to the sport and your brand then it is wasted money.

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This makes sense to me and doesnt sound unreasonable at all. Its a commitment up front but when you get the bikes back immediately after the season, you can liquidate them and recoup some of the investment.

My comments above are assuming that the athletes are buying the frames. If the athletes are paying something for them, even at a deep discount, there needs to be a balance and I dont think you can expect the bikes/frames to come back to you.

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Originally Posted by hmbatrail

I can only speak for how I've handled it up to this point. I have sponsored a cross team for six seasons. Team size for any given year is around 5-7 racers. All of the racers are given complete bikes up front and they are free to ride and race them all the time. But, the bikes are mine. If you leave the team, if you relocate, if things don't work out, etc the bike comes back to me. I always make sure up front EVERY question and expectation is sorted because it is a difficult bell to un-ring later on. The vetting process of potential racers is not taken lightly.

I also make sure racers on my bikes are at all the races and are there all day. No one is allowed to swoop in an hour before their race and then are back on the road an hour later. Racers are there all day from first race to last race. The presence of the team has yielded far more interest and attention than the actual bikes. But sponsoring a cross team has sold me more bikes than any other marketing/advertising venture I have done to date.

So my advice: If you want to build the team bikes then go for it. But make 100% sure you are comfortable with who the people are riding your bike. If they aren't ambassadors to the sport and your brand then it is wasted money.

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This definitely lines up with what I was thinking, aside from not really considering the bikes coming back to me at any point. I recently put a friend in LA on a cross bike and in just a couple hours visiting in LA and hanging out at a race she was handing a new customer over to me.

The women are all working out their sponsorship asks and offerings for things beyond bikes, and so far seem extremely transparent and interested in working out a deal to benefit all of us so I'm leaning towards moving forward with things. I find a lot of folks see me as a track-only builder and I'm seeing less and less track bike orders come through as more and more tracks are suffering, and promoting women racing certainly lines up with the majority of my years in bikes.

Looks like I have some guidelines to draw up. Thanks for the input so far folks!

Quote:

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Originally Posted by hmbatrail

I can only speak for how I've handled it up to this point. I have sponsored a cross team for six seasons. Team size for any given year is around 5-7 racers. All of the racers are given complete bikes up front and they are free to ride and race them all the time. But, the bikes are mine. If you leave the team, if you relocate, if things don't work out, etc the bike comes back to me. I always make sure up front EVERY question and expectation is sorted because it is a difficult bell to un-ring later on. The vetting process of potential racers is not taken lightly.

I also make sure racers on my bikes are at all the races and are there all day. No one is allowed to swoop in an hour before their race and then are back on the road an hour later. Racers are there all day from first race to last race. The presence of the team has yielded far more interest and attention than the actual bikes. But sponsoring a cross team has sold me more bikes than any other marketing/advertising venture I have done to date.

So my advice: If you want to build the team bikes then go for it. But make 100% sure you are comfortable with who the people are riding your bike. If they aren't ambassadors to the sport and your brand then it is wasted money.

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Did your team immediately start out this way, or quickly evolve into this?

What you're doing is the route I wanted to go, but opted to charge steep discounts for team members. I created a team pricing structure and everyone who is on the team, knows the price. It's consistent and transparent. The next step will be to supply bikes, but things need to mature a bit first. Do you offer the bikes up for sale at any point to your team members?

Also, for the OP, the team is my team, and not a collaboration with another group/shop/entity. I feel like if I'm going to put a lot of effort into this, it's going to have to to benefit me the most. This does add some complexity, but I think it works out better.

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Originally Posted by Will Neide

Did your team immediately start out this way, or quickly evolve into this?

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From Day One this is how the team was managed. Racers keep their bike(s) year-round. Race winnings are kept by the racers. But we have a few fund raising efforts throughout the season in addition to other jersey sponsors and that goes to repair and maintenance of the bikes throughout the season. If anything is left over (sometimes yes and sometimes no) it goes toward entry fees. Everyone on the team has a specific responsibility throughout the season (tent set-up, bike tune, photos, travel arrangements, etc) and we all carry the water in the pits. I've had a few folks leave the team (pregnancy and relocation) and the bikes came back to me and were used as either B bikes for existing team members or an A bike for someone new. Each season I will build one or two more team bikes to re-circulate the older stuff. That is either sold to someone on the team or donated to one of the local junior devo teams.

The team is now seven of us and, frankly, that is too many. But they are all good folks and they work their asses off and we are the definition of a team so I don't want to disrupt that.

Some time ago I spent some money sponsoring riders
Now I sponsor myself

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Originally Posted by Amaro Bikes

Some time ago I spent some money sponsoring riders
Now I sponsor myself

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Do you have contract and suitable insurance? ;)