Company: FLYE
Filing Date: 2025-02-19
Form Type: 10-Q
Source: 0001213900-25-015334
Chunk: 60

Company: Fly-E Group, Inc.
Filing Date: 2025-02-19
Form: 10-Q
Item: Part I, Item 1
Chunk 60
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, each store will have
at least one trained repair professional. Effective management of payroll expenses remains crucial to our ability to grow revenue and
enhance our financial results, especially as we navigate a reduced workforce.

Vendor and Supply Management

During the three months ended December 31, 2024,
we worked with three principal vendors, Xiamen Innolabs Technology Co., Ltd, Depcl Corp. (previously known as Fly Wing E-Bike Inc.), and
Anhui Ineo International Trading Co., each of which respectively supplied approximately 49.6%, 25.4%, and 7.0% of the accessories and
components used in all our products for the three months ended December 31, 2024. During the nine months ended December 31, 2024, we worked
with three principal vendors, Xiamen Innolabs Technology Co., Ltd, Depcl Corp., and Anhui Ineo International Trading Co., each of which
respectively supplied approximately 44.8%, 28.7%, and 10.0% of the accessories and components used in all our products for the nine months
ended December 31, 2024.

We have implemented a centralized vendor management
system that streamlines purchasing, enhances our negotiating power and maintains strong vendor relationships. We believe this approach
delivers cost savings, improved risk management and increased negotiating power, ultimately benefiting our operating results. Changes
in costs related to our major vendors can significantly affect our financial condition and operating results.

Market Trends, Competition and Tariff

We
operate in a rapidly growing EV market with a special focus on E-motorcycles, E-bikes and E-scooters. However, increased competition may
pressure prices and margins, reducing sales volume, revenues, and sales margin for us. Additionally, marketing and advertising costs may
rise as we differentiate ourselves and maintain our market position. Moreover, competitors may impact customer acquisition and retention,
satisfaction and loyalty. While we believe we maintain competitive advantages in several areas, including brand, product design and quality,
smart features, omnichannel retail model, customer satisfaction and loyalty, we must continuously innovate, invest in research and development
and marketing to maintain our competitive edge and unique selling points. Recently, the U.S. government issued executive orders imposing tariffs
on products from key international suppliers, citing national security and public health concerns. These tariffs are expected to impact
a wide range of imported goods, including components used in e-bike manufacturing.