Saturday, September 16, 2023

Signs Of The Times

"buycycle", a used bike purveyor, is coming to the USA.
Winter is not far off, and here in most of North America, the season for sales in bicycles and accessories is winding down. As a salesperson and mechanic in this sector of retail for 20+ years, I've seen the ebbs and flows of sales over the course of a year to know how this business cycle should work. However; things are not working well at all, and the signs are all over the place that upheaval is coming sooner than later. 

First, the obvious sign is all the unprecedented discounting of new bicycles over the course of the year. Most notable to me was the 20% off on Surly and 25% off on Salsa bikes sales that ran recently. Those companies rarely, if ever, have run any discounts on new inventory. Trek has been running an ongoing discount on their electrified bikes since February, and they have had discounts on accessories throughout the year at certain times. These are just a few examples.

The reason for all of this is the incredibly high levels of inventory at warehouses and dealers coupled with lackluster sales. Inventory has to be moved or the new stocks coming in will make matters worse, and, you know, there are bills to pay. Some companies are in pretty bad situations right now. Some have already filed for bankruptcy protection. 

Another sign is the eBike market, which for five years saw record growth and nothing but blue skies ahead. Now? In 2022 I'm seeing some concerning headlines coming out of that sector of the industry.

Used Bikes:

Trek announced recently that their dealers will be offering a used bike program and that Trek will be facilitating the sales of used bikes nationwide. Another company from Europe, "buycycle", who are used bike purveyors, are also coming to the USA to do business. (You may have seen their pop-up ads already)

The used bike sector is one of the only bright spots in the sales of bicycles right now. One problem - Almost none of that business is done in a retail setting. It's all private exchanges, for the most part, facilitated by Facebook Marketplace, Craigslist, and other forums on the internet like "Pink Bike". 

Theories abound as to why this is happening. Some point to the backlash after the wave of big sales during COVID. Others say it has to do with rising bike prices at retail that are not affordable. Whatever the reasons, retail cycling businesses want in on the action, and I look for this to be a hotly contested marketplace for a while. The only way this cools off is when, not "if", but when, new bike prices plummet due to discounting or from going out of business sales and those new bike deals turn a significant amount of people back toward looking at retail for a new bike. 

A lot of things might or might not happen here, but I do know that sales going into Fall and Winter at retail bicycle shops will naturally tail off to a very low level. That's how it works here. November and January are typically dire times at bike shops with December not far behind. The addition of tough times will only exacerbate things, I am afraid. Hang on to you hats! It's going to be a bumpy ride.

1 comment:

Phillip Cowan said...

I just snagged a new Bombtrack Audax Al from TPC for 50% off. I have to laugh at the name because this is no audax bike. I've had my eye on one for a while because the geo is a bit tighter than a typical gravel bike and I intend to use it as "road plus". To be honest I feel that what I paid is what it's worth for a bike with aluminum frame and mechanical discs. Maybe I'm being too hash.