Building a "flat pack" bike

The "bike in a box" arrives ...

... all wrapped up.

Note that the front forks are usually turned
backwards in the box - they need to be turned
to face the "front" during assembly.
The reason they turn the forks "backwards"
for shipping is because they fit in the box better!

The saddle on the right came with the bike. It is a long-nosed
"mens" saddle, despite this being a "ladies" bike! No doubt the
manufacturer would claim it is "unisex"! We swapped it for the
"laddies" saddle, shown on the left, which is shorter, wider, has
more padding, and has springs underneath. The basic "mans"
saddle is just moulded vinyl with a thin covering of foam.

The basic bike finished, with the wider saddle (here covered by a gel seat cover).
Note that the front forks have been turned so that the curve faces "forwards".
It is ESSENTIAL to make sure the forks face right way, otherwise the bike
will only be rideable by a circus clown!

The cheap plastic pedals that came with the bike. Anna broke
one of these on her previous bike, and we replaced that set with
a set of economical rubber and metal pedals. About a week after
building the bike we moved the metal pedals from the "old" bike to
the new one.

Here are the metal pedals on the "new" bike

All finished, and ready to use. We have moved the large basket and the kickstand from the "old"
bike, and fitted mounts for lights (to the basket
and the rear mudguard).

The only other points of note are:
1) make sure you have a set of spanners (wrenches) that include a 10mm, 13mm, 15mm and 17mm size.
The rather pathetic little flat "multi-spanner" ("multi-wrench") that come with the kit isn't really strong enough to do the wheel nuts up properly - it bends a bit, then slips on the nut.
2) a set of Allen Keys (aka "hex keys"/"hex wrenches") is useful, too, as the kit had an unexpected and undocumented (but very welcome!) adjustable steering stem, adjusted by using two diferent sizes of key (wrench).

Good points about the kit:

1. Low cost (£106 delivered to our home, c. $160 US)
2. Good, basic, practical, design and specification, with included luggage rack and mudguards (fenders), with the lack of front suspension making fitting a heavy-duty basket simple. The decent tyre width (ETRTO aka ISO size 47) allows a decent load to be carried and provides some measure of isolation from the irregularities of the surface being traversed (i.e. bigger tyres smooth out some of the bumps!)
3. Six-speed rear derailleur is a reasonable compromise between cost, simplicity, reliability and function
4. Adjustable steering stem included with the kit - this was not mentioned in the specification, and is not mentioned in the assembly instruction booklet (two other types of steering are mentioned instead!). The adjustable design allows the handlebars to be set lower and further forwards, or higher and furth back, or at many points inbetween. This makes the bike more comfortable for a larger variety of rider sizes and posture preferences.

Update: 27th August 2014
So, almost three years later, how is the bike getting on?
Well, the bike is still in regular use!
Anna doesn't do a high mileage - perhaps only about 500 miles a year.
We live near the town centre, and the bike gets used for a lot of shopping trips!
Anna usually takes our pair of Bike Bins hard-sided lockable panniers with her.

Anna's bike on a shopping run, with
her front basket and panniers in use

Nearly three years after we bought it,
Anna is still riding the same
low-cost flat-pack bike.

A few parts have been changed, naturally.
The first, and most important change was the tyres.
Cheap bikes come with cheap tyres, and for practical urban use, something like a pair of Marathon Plus tyres are money well spent, even though they cost more than a third of the price of the bike!
Cheap bikes can have brakes that need a lot of adjusting to get right, and a lot of maintenance to keep them in good order.
So I upgrade Anna's front brake to a Shimano M420-series Acera v-brake, and it works a lot better and needs a lot less maintenance to keep it working property.
The rear brake was better than the front, so I just fitted a set of longer pads to it, and "toe-d" them in properly. Squeaky brakes became a thing of the past, and the brakes work better all round!
I have also replaced the Bottom Bracket bearings on Anna's bike, upgrading the original "loose ball" fitting with a sealed unit.
Apart from that I've replaced a frayed brake cable, and that's about it.

Most importantly of all, though, Anna is still riding the bike!
How many folks have bought "fancy" bike, only for them to spend most of their time sitting at the back of the garage?
Remember, the "best" bike is the one you actually ride!