An Interview with Alchemy Goods founder Eli Reich
JUST SETTLED INTO ITS NEW HOME IN SEATTLE'S SoDo DISTRICT THE COMPANY IS POISED TO CONTINUE ITS GROWTH
image © www.sustainableisgood.com
PHOTO: ALCHEMY GOODS Ad Bag ($30)
BY RIDER THOMPSON
For Alchemy Goods founder Eli Reich, having to move his two and half year old business out of the bottom floor of his house to a new location is a good thing. The 29 year old Reich recently settled into his new digs in warehouse space in Seattle’s SoDo district. His company needs the space to continue its growth. In a recent phone interview, he talked about his new location and how his company has grown so rapidly. Reich described Sodo (South of Downtown) as a “charming old industrial part of town.” The new space allows Reich & his staff of four employees much needed room to store materials and work in less cramped surroundings. “We were on top of each other in the old space,” said Reich.
Business is good for the company that turns the “useless into the useful.” Supported by its backbone product of messenger bags made out of recycled bicycle inner tubes, the company is working on developing and expanding into new products & more innovative options. “There are a lot more things to be made out of bike inner tubes and lots of other materials that can be repurposed,” said Reich.
Strong brand recognition in Seattle key to growth
Enjoying strong brand recognition in the Seattle area has helped Alchemy Goods grow on the west coast and start to move across the country. Their products are sold in bike shops primarily on the west coast, but are now available in New York and Pennsylvania, among other places. East coasters rely mostly on the Internet to get Alchemy Goods bags. Reich sells his products directly, and some are also available online from Chicago-based Reusable Bags. An international market is developing for his bags as well: he mentioned a retailer in Japan “can’t keep them on the shelves.” Sales are good. In the company’s first year they sold roughly 100 bags, the second year somewhere between 1500 and 2000 bags, and this year are expecting production numbers to be in the thousands.
Reich’s most successful design, the messenger bag, was born several years ago as the mechanical engineer by training made himself a bag out of old bicycle inner tubes. The first bag, a little rough around the edges compared to today’s version, was a big hit among Reich’s circle of friends. “Friends of mine started asking if I could make them one,” Reich said, “So I made a few for them. I didn’t charge them much; that’s how it began.”
Reich's goal is to have his products in as many peoples hands as possible by keeping prices low
His idea seems to be a unique one in a growing market of recycled consumer products. On a recent trip to France I saw several different messenger bag/briefcase-type products made from recycled car tires, but not bike tires. The recycled car tire bags sold on average for about 175 Euro, roughly $100 US more than Reich charges for his messenger bag ($148). Price is an important point for Reich, whose goal is to get his products into as many people’s hands as possible. Accomplishing this goal requires sensitivity to price. In talking to Reich his main concern was cheaper bags and trying to get people to spend the extra money for one of his recycled products. Changing the way people think about buying a product is something Reich holds to heart. “Labor costs are high and production is labor intensive,” Reich said, but those are his main costs. The materials come from a variety of sources across the country.
Access to materials critical to success
One of his biggest raw materials is used bicycle tires that come from bike shops. Without Alchemy Goods these tires would end up in the landfill. Forming relationships with shop owners and people in general is one of the most important parts of the business for Reich. “There is definitely an art to it –talking to people and working with people,” he said. He gets used tires from many of the same shops that now carry his products. It’s this sense of coming full circle that adds to the appeal of his products for consumers. What makes Alchemy Goods products so attractive to consumers is that they can actually see the recycled content in the product. “You can sorta tell what it is,” says Reich. “A lot of recycled materials used in products are ground up and there is no tangible connection for the consumer.” In many of their bags, “You can see the products history, whether it be a patch on one of the inner tubes or a blowout.” It is this connection with the recycled content in his products that Reich believes consumers appreciate. Add to that connection the fact all his products are made in Seattle and you have a winning combination. “People like to know where what they buy comes from, and where it’s made,” he said.
Procuring the raw materials to make his bags in quantity requires a great deal of legwork. Establishing relationships with junkyards and bike shops was a little tricky when he first started out. When asked what it was like approaching junkyard owners to secure seatbelts from junked cars to make the bag’s handles, Reich laughed. “People thought we were nuts at first, but after we produced some of the products and people started noticing they realized we were serious,” he said, adding that now they are a very professional operation. Reflecting back with a chuckle he remarked, “there are all types of junkyard owners.” In addition to junkyards and bike shops, Reich also works with community groups to procure materials. Last year Alchemy Goods established a relationship with Portland’s Community Cycling Center to take nearly 15,000 used bike tubes. Sustainable Industries reported on the positive impact of this partnership, noting that CCC had been struggling to find a recycler for its used rubber when its previous partner could no longer process the bicycle tire components.
Customer suggestion leads to creation of new product - the Ad bag
Customers have even helped Reich secure materials, and some have suggested new directions. One woman worked for a company that dealt with large outdoor advertising banners. The banners were simply discarded after use, and she thought Reich might be able to find a use for them. Sure enough, he did. The banners are now the primary material in his new Ad bag. The Ad bag is 95% recycled material by weight and made of the old vinyl mesh signs, seat belts for handles and a section of a bike tube for the grip on the handle. Selling for a very reasonable $30, the Ad bag is a perfect of example of Reich’s goal to make a quality product and get it into as many people’s hands as possible.
When Reich quit his job as a consultant for a wind energy company to start Alchemy Goods, it was a bold move for the budding eco-entrepreneur with no business background or experience. “I’ve learned a lot,” he says. When asked about his greatest challenges, he sited navigating all the regulations and rules governing business operation and securing materials. Labor was not one of them: “Whenever we’ve had an opening, it’s been quickly filled,” he said.
Main piece of advice to other budding eco-entrepreneurs: have patience
Reich’s main piece of advice for people looking to go into business with an eco-friendly product is to have patience, pure and simple. He hammered home this point several times during our chat. Start slow: when he started making bags he was still working his other job, which gave him the security to continue to explore and develop his product, as well as looking for sources of raw materials. In his first year he made only around 100 bags. That first year was a learning experience for him, and when he felt comfortable about the operation he transitioned into Alchemy Goods full time. His advice for people out there like him is to develop a high quality product, then have the patience to allow it to develop; it will succeed. He said he also learned the importance of “communicating your problems and being open about the process, whether it be to suppliers, distributors or customers.
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Eli, Long time since Cornell. Stumbled across it on the web in my search for an eco-friendly present. A beautiful bag and an exciting business! Congrats! Shoshana
Posted by: Shoshana Eisenberg | October 22, 2007 at 05:40 PM
hey there i was wondering if you do a bicycle pannier seems like it would fit and be real usefull to me as i need a set of them well hope you manage it
thanks alistair
Posted by: alistair stewart | October 24, 2007 at 04:12 PM