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BUSINESS UPDATE

Updated: Apr 27

Our during and Post COVID-19 Plan of attack.





Hi everyone,


The following is an update about how Negative Split Carbon is being impacted by the outbreak, and most importantly how we are planning to respond and to turn this difficulty into an opportunity to re-invent ourselves and to double down where you need us the most.


The information below is relevant to current and potential customers, to our athletes, suppliers and shareholders, and generally, to everyone involved or interested in the cycling / triathlon / duathlon sport, and carbon wheels -of course!


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Due to the economic consequences that the COVID19 outbreak has had, is having, and will continue having in our business, we’re now introducing a set of changes to the way we operate that attempt to ensure the continuity of Negative Split Carbon and that -importantly, don’t compromise our ability to keep providing you with valuable products and services.



The economic impact we’ve experienced includes;


  • Suspended activity under lockdown -zero revenue.

  • A disrupted supply chain putting on hold non-essential shipping from China to NZ. This will continue to be a significant challenge for us in both the short and medium term due to border restrictions, global trade disruption, and especially -given we are a low volume customer to our manufacturing and assembly partners as well as to international shipping companies, we’re likely to experience additional delays as our orders are de-prioritised against larger ones.

We also expect;


  • Current and future uncertainty and economic instability to affect the demand for carbon wheels.

  • Sport events to be impacted in terms of timing (delayed events), number of events held, and also in the way they are held (stricter precautionary measures, hygiene, social distancing, avoidance of mass gatherings, etc.), potentially further impacting the demand for our products.



Our purpose remains the same


We’ve always put our customers and full time athletes in the center of everything we do and will continue to do so. During the past 6-8 months, we’ve confirmed there is indeed demand for other ways to engage with carbon wheels -try before buy, rent towards purchase, and racing-only usage approaches are ways to use and benefit from high-end cycling equipment without having to spend large amounts.


We’ll be, essentially, doubling down on this line of work, in detriment of traditional selling activity. We believe this is the best we can offer you and the communities we live in (conscious consumption, maximise use of products, circular economy) and the reason to look at it as an opportunity, not a difficulty.



Changes we’re introducing

  • Re-orienting our business model towards rentals. This is going to become our main focus moving forward. For that reason, we’re bringing additional stock to ensure we have all popular spec combinations.

  • Due to rentals becoming our number 1 revenue generating stream, and due to the fact that this stream was less profitable than our selling stream, we’ll be (1) slightly increasing our pricing (+$10), and (2) adjusting our current rental policy which allowed to accumulate rental spend and use it towards a potential purchase. The amount accumulated will be reduced to 10% of rental spend instead. Both these changes aim at compensating the losses from a reduced selling activity and ensure this activity is financially sustainable in the long run.

  • To mitigate any risk of COVID19 spread we’ll be (1) ensuring we keep (at least) +2m of distance when doing deliveries and pick ups, and (2) disinfecting our wheels and accessories before delivery/shipping.

  • And lastly, we’ll be focusing (more) in the NZ market, as opposed to having an international mindset before the outbreak.



What doesn’t change


  • Customers that have already rented wheels with us would have accumulated that spend towards potentially purchase a wheelset. Changes to the policy come into effect today 25th April 2020.

  • Athletes continue to be central to who we are and what we do. There are no changes to the support provided to our athletes and our sponsorship program.

  • We continue to sell wheels. However, note that delivery times are expected to be substantial (please check with us to get a delivery time estimate before purchasing). To shorten timeframes we encourage potential customers to choose the ‘no-decal’ option (all black, matte back finish), which will save the decal printing/painting process as well as associated costs.

To strengthen our re-oriented line of business we have additional initiatives under exploration;


  • Franchise model; allowing sole-traders and entrepreneurs to set up their nscarbon rental business

  • Provide other wheel brands for rentals, with some of those coming from users that don’t actively use them and that would like us to rent out on their behalf in a sharing sales scheme


If you want to know more about any of those two ideas please get in touch with us.



Hoping this is clear and useful, and that we can continue providing free speed to NZers in ways never explored before.

Thank you,

Jared, Hugh and Javier

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