Julian Fernau took a ride on an electric scooter from a ride-sharing company and was hooked. He started the online retail business fluidfreeride. In 2019, the online electric scooter retailer sold its first electric scooter. The pandemic hit the following year, forcing people to keep apart, making scooters more appealing than public transit. Sales tripled in 2020 and grew another 50% in 2021.
“In 2020, we were able to capitalize on people sitting at home during the pandemic surfing the web instead of being at work,” says founder and CEO Julian Fernau. “That, and it makes sense that an electric scooter would be popular because it’s a really good socially distanced travel vehicle.”
Fluidfreeride offers different models for customers looking for speed — upward of 50 miles per hour on rugged terrain — or lightweight portability for the urban rider. New York City customers account for 20% of fluidfreeride’s sales. The company maintains its headquarters in Miami, with a service location in Brooklyn, New York.
Fluidfreeride sells electric scooters from three brands in addition to its own brand, Fluid. Fernau says fluid scooters are entry level with a lower price point to entice shoppers to purchase their first electric scooter. Shoppers have five models to choose from, including the fluid CityRider which tops out at the speed of 18 miles per hour and $499.
“We are operating on tight margins, which requires using our own brand,” he says.
Hesitant to add buy-now-pay-later option
A buy-now-pay-later (BNPL) option seemed a natural fit for the fluidfreeride customer, as average order value (AOV) is $1,200. But Fernau did not want to offer customers BNPL — at least at first.
“I believed that if you couldn’t afford a scooter, you shouldn’t buy one,” he says. “I’m German, and we’re not such a credit- and consumption-driven society compared with the U.S. So, yes, I shied away initially [from BNPL] because I thought it was too aggressive to have people rack up debt to buy one of our scooters.”
But Fernau quickly realized that U.S. shoppers wanted a BNPL option.
“I spoke to customers and realized that not only were we losing out on sales, but we were also not delivering what our customers wanted,” Fernau says. “The decision took time, but it made sense to add buy now, pay later.”
The company added Affirm in 2020 as its BNPL option because Fernau was already comfortable with the integration team there, he says. Currently, Affirm advertises that it charges a transaction fee of $0.30 plus 5.99% of the transaction price. fluidfreeride did not disclose what it pays to use the BNPL provider.
In the months after adding Affirm, Fernau says there was a 20% to 25% increase in overall orders on fluidfreeride’s website. But what stood out is that customers paying with Affirm had nearly double the AOV compared with other payment methods. Affirm AOV is nearly $2,400.
Customers pay with Affirm 20% of the time, compared with credit card at 60% and PayPal at 20%.
Fluidfreeride is considering other BNPL options, including Shopify’s BNPL service, which is easy to add to websites like fluidfreeride that are built on the Shopify ecommerce platform.
“But whether we decide to add other payment options or not, we want to make sure we do not overcomplicate the checkout process,” Fernau says.
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