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Bike stores. Fallout from the Pandemic Bike Boom

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Bike stores. Fallout from the Pandemic Bike Boom

Old 01-02-23, 01:02 PM
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grantelmwood
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Bike stores. Fallout from the Pandemic Bike Boom

https://www.outsideonline.com/business-journal/retailers/fallout-from-the-pandemic-bike-boom
Fallout from the Pandemic Bike Boom

Here’s how some shops are navigating the crisis
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Old 01-02-23, 02:10 PM
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I wouldn't call it a crisis; more like another challenge. Frankly, it's just nice to have parts and bikes in stock again, and we had a busy and profitable holiday season at the shop where I work.
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Old 01-05-23, 12:36 AM
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Vintage Schwinn
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People from age 14 to 95 years of age probably have the bicycle(s) that they need. That was obviously not the case at the start of the pandemic bike craze in March 2020.
At this time, nobody from this group NEEDS another bicycle! They satisfied that NEED during 2020 and 2021 as they purchased NEW or had old bikes repaired at the local bike shop in lieu of either not being able to afford a new bike or otherwise not being able to obtain the new bike they really desired.
DO SOME FOLKS WANT NEW BICYCLES? Well heck yeah they do, but the WANTS and NEEDS take on differing priorities for normal folks with limitations in disposable income. It makes it a helluva lot harder to sell a premium bicycle for a premium price when the customers that are serious about purchasing have so many choices for the exact same model and similar models from competing dealers in several nearby cities and nearby states and via the interweb. The customer is now in a better situation than when supply was selling out and local bike shops were charging full-boat, whatever the market would bear because the demand was then off the charts, and the manufacturers and local bike shops could jack up prices and pad the margins because everybody wanted to get out on a bicycle because there wasn't much else to do for entertainment-fun during the pandemic before the lockdowns ended and vaccines were on the horizon.
Premium bicycle sales will always be a tough sell during any recessionary, inflation laden time period.
Suddenly, you have more and more potential prospects that will choose Wallyworld & Target low cost offerings over the local bike shop offerings, especially for pre-teen children. Those without the disposable income that aren't enthusiast or serious cyclists will always choose Wallyworld & Target, etc for bicycles for the children and family. During economically challenging times, there is no amount of advertising or "educational campaign to educate the public that LBS bikes are better than awful big box store offerings", ---no amount of advertising or attempt to educate the bicycle buying consumer will change that buyers mind during tough economic times as they are going to go with the lowest cost Wallyworld offerings. Local Bike Shops damn sure ought to be worried if they have extra storage buildings full of very late inventory arrivals that they must move. Fixed costs don't go away. Yeah, you can possibly cut back on staff and hours for some staff members to reduce payroll expense. Natural gas heating costs have skyrocketed and though electric rates per kilowatt hours have remained relatively reasonable, they too have increased. Landlord and property owners will likely significantly increase the lease/rent rates when the current lease/rental agreement expires. An era of Inflation is among the worst possible scenarios for a small business owner that operates a retail store selling upscale/high end bicycles. My advice to them if I was their CPA business advisor or just a family member, would be to do whatever is necessary to build store traffic,ultimately product sales and store recognition & reputation with the public. Heck, you might even need to sell whatever is really profitable now, ??? e-bikes, web sales or whatever keeps the store financially strong and an ongoing concern. Nobody of couse has a crystal ball but any good business owner will tell ya that you can't take anything for granted and you must pivot and adapt in a timely manner when that need arises or you'll definitely face a potentially serious crisis that may affect your ability to remain an ongoing concern.
Inflation is a monster. Employees and staff demand and deserve raises to try to keep up with the inflation pressures in their lives. Consumers attempt to react negatively to price increases and resist unnecessary purchases. All costs to the business owner rise dramatically in a short span of time, where their margins get significantly squeezed because they cannot keep the same pace of increases as quickly, risking consumer demand completely going off of the rails. Borrowing costs are significantly higher as the Federal Reserve attempts to get Inflation back to a normalized level but this has consequences too if there is not the almost elusive soft landing that is the desired goal. Yes, I would say that most all local bike shop owners do have very good reasons to be concerned as 2023 moves ahead.
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Old 01-05-23, 01:59 AM
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One word - Paragraphs
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Old 01-05-23, 05:24 AM
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our family needs cars. when is the car boom coming?
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Old 01-05-23, 06:40 AM
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Originally Posted by dedhed View Post
One word - Paragraphs
I stopped reading after the first need. No one needs a bicycle, and if a bike shop owner didn't plan for the arrival of backordered merchandise (I'm sure a lot of them completely forgot about them) then they deserve whatever economic consequences that come their way. Demand is whatever demand is, and if one isn't prepared to be creative and nimble, then the bike biz isn't for them.
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Old 01-05-23, 07:00 AM
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in the article referenced in the first post, it sounds like "Nick" is a Specialized dealer. Ruthless company that is now consumer direct leaving dealers in their wake. So very happy I am no longer in the retail bike biz!
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Old 01-05-23, 04:40 PM
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There is a big boom in e-bikes at the moment. Any local bike stores that don't sell e-bikes, are missing out on this big wave.
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Old 01-05-23, 06:44 PM
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The article outlines problems that were rife throughout retail. Air conditioners, cookware, electronics, clothing and shoes all experienced a similar “bull whip” phenomenon. This really indicates that the supply line issues are more common and complex than most of us ever conceived. All of our eggs seem to come from the same basket carried by a few related couriers. I suspect this will not be the last time we experience a similar bull whip.
The “Just in Time” manufacturing model , so championed and admired, is clearly more susceptible to supply line complications than the older warehoused supply model. Back in the 70’s Bike Boom, when manufacturers couldn’t obtain steady supplies of the spec’ed components, they sought alternate suppliers to keep production going. But the transshipment sources were unaffected by a shortage from any given supplier. Our interconnected global world will continue to be susceptible to supply line issues.
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Old 01-06-23, 12:55 AM
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Originally Posted by wheelreason View Post
I stopped reading after the first need. No one needs a bicycle, and if a bike shop owner didn't plan for the arrival of backordered merchandise (I'm sure a lot of them completely forgot about them) then they deserve whatever economic consequences that come their way. Demand is whatever demand is, and if one isn't prepared to be creative and nimble, then the bike biz isn't for them.
If you're saying nobody who reads this forum needs a bicycle, you're probably correct, or close to it. But there certainly are people who need a bicycle for basic transportation. No car, no accessible, useful public transportation, etc. Sometimes it's not a choice to be car-free.
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Old 01-06-23, 07:07 AM
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Originally Posted by elcraft View Post
The “Just in Time” manufacturing model , so championed and admired, is clearly more susceptible to supply line complications than the older warehoused supply model.
I spent the final 6 years of my career developing mathematical supply chain models and evaluating global supply chains. Some models took months to build and 3-4 days of CPU time to run(hit "run" on Friday morning and take a 3 day weekend with hopes it'd finish by Monday sometime).

...the JIT model has many advantages, however, like most any process in the world, the advantages come with a cost. Supply chains spent years/decades of relative stability inching into the cost savings of JIT (lower inventory, shorter production runs) and finally got first-hand experience with the costs of JIT. I'd expect someone is doing post-op modeling both the older and JIT processes to better understand the real costs of each approach. ..As I think about it more, I'd guess it's already well understood and manufacturers/supply chains are just willing to take the hit when a low probability event (like we experienced in the last couple years) happens. No doubt, lots of folks learned lots of stuff in recent years.
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Old 01-06-23, 07:20 AM
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Sounds like it's soon going to be time to start restocking up on some of the consumables that I've run low on in my parts bin. Good news.
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Old 01-06-23, 07:35 AM
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Originally Posted by TiHabanero View Post
in the article referenced in the first post, it sounds like "Nick" is a Specialized dealer. Ruthless company that is now consumer direct leaving dealers in their wake. So very happy I am no longer in the retail bike biz!
While this is true it is not completely accurate. It seems the "bike direct" route didn't work out quite like they had planned. Spesh lately has been offering "deals" to bike shops on many of the bikes in their inventory which apparently is quite high...not the high end bikes mind you but the "bread and butter" bikes the Spesh Shops have always bought and sold as their main stays.
The shop, where I work, is looking at other bikes and suppliers for accessories as they and many others no longer trust Spesh.
Spesh seems to buy their own sales pitch that they alone sell the best bikes and accessories on the planet and no longer need shops...guess they are learning the hard way not to buy into their own BS.
It will be interesting to see how they navigate their way out of the problems they caused.
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Old 01-06-23, 07:48 AM
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This sounds more like bad inventory management on the suppliers part, though presumably the store has some blame for not updating what they need or just asking for a fairly open "anything you can get us".

Covid lockdowns being over will almost certainly cause a reduction in lower end bike demand, and we're going to see a couple of years of the 2nd hand market being flooded with cheaper "bought during covid, used twice, didn't like it" bikes too.
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Old 01-07-23, 07:29 AM
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Originally Posted by Camilo View Post
If you're saying nobody who reads this forum needs a bicycle, you're probably correct, or close to it. But there certainly are people who need a bicycle for basic transportation. No car, no accessible, useful public transportation, etc. Sometimes it's not a choice to be car-free.
No I meant what I said, no one needs a bike. You can walk, take a bus, or trade sexual favors for rides. And I didn't say anything about cars, free or not, and.... everything is a choice, including not choosing.
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Old 01-07-23, 07:31 AM
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I've read also there is a glut of dogs and cats populating the pounds as people go back to the office.
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Old 01-07-23, 09:41 AM
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One very damaging aspect for LBS's from the pandemic is the number of ccyclists who were forced to shop online and learn to repair their own bikes. People who would never have stopped using their LBS for service had to get parts online wherever they could find them, then they were compelled to do their own repairs.
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Old 01-07-23, 05:49 PM
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Originally Posted by wheelreason View Post
No I meant what I said, no one needs a bike. You can walk, take a bus, or trade sexual favors for rides. And I didn't say anything about cars, free or not, and.... everything is a choice, including not choosing.
Well you've obviously never lived in a place where the options you feel are universal, are not. I think you're an example (as am I) of the biased sample of people participating in this forum, and probably the world in which you live. I agree that nobody in that sample of the population needs a bike.

Last edited by Camilo; 01-07-23 at 05:52 PM.
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Old 01-07-23, 05:51 PM
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Originally Posted by pipeliner View Post
One very damaging aspect for LBS's from the pandemic is the number of ccyclists who were forced to shop online and learn to repair their own bikes. People who would never have stopped using their LBS for service had to get parts online wherever they could find them, then they were compelled to do their own repairs.
Boy, in my state, bike shops were considered essential businesses and stayed open throughout the pandemic. They really cashed in. The only knock I have on a couple locally is that they never enforced precautions in spite of being granted the privilege of raking in cash while other businesses went broke.
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Old 01-07-23, 06:59 PM
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Originally Posted by Camilo View Post
Well you've obviously never lived in a place where the options you feel are universal, are not. I think you're an example (as am I) of the biased sample of people participating in this forum, and probably the world in which you live. I agree that nobody in that sample of the population needs a bike.
I have lived or been on extended stays in with the local populations in South America, Central America, Europe, Africa, and US, not that I think it's relevant.
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Old 01-07-23, 10:01 PM
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Originally Posted by wheelreason View Post
I have lived or been on extended stays in with the local populations in South America, Central America, Europe, Africa, and US, not that I think it's relevant.
I think it is relevant, and I guess I'm surprised that given that you've seen a lot of the world, you don't see some people necessarily ride bikes in places where transportation infrastructure is limited as are people's economic resources. Again, most likely doesn't pertain to anyone on this forum and very few situations that any of us are familiar with, but they exist.

You might be interested in knowing that there's a lot of jurisdictions in the US where bicycle shops were allowed to have business as usual during the height of the pandemic because they were considered as essential as grocery stores. So somewhere among policy makers, bikes are considered a necessity to some people.

I guess if one thinks that in a place without bus service, a 1-1/2 hour, 10 mile walk vs a 45 minute 10 mile bike ride for a daily commute or other utilitarian purpose doesn't make a bike a necessity, then I can understand why nobody actually needs a bike. Maybe saving that much time is not a necessity? I guess we'll just have to agree to disagree.
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Old 01-07-23, 10:06 PM
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Originally Posted by icemilkcoffee View Post
There is a big boom in e-bikes at the moment. Any local bike stores that don't sell e-bikes, are missing out on this big wave.
but now the online e bike sellers all have sals because they are way overstocked.
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Old 01-08-23, 12:07 AM
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Originally Posted by wheelreason View Post
No I meant what I said, no one needs a bike. You can walk, take a bus, or trade sexual favors for rides. And I didn't say anything about cars, free or not, and.... everything is a choice, including not choosing.
Where I live the public transit buses run every half hour or hour. They also do not run on a don't run on Sundays and some don't run on the weekend at all. On top of that there are very few routes where you can take the bus somewhere and then cross the street to get a return bus. Almost all the routes here are Great Circle Routes. So what should be a five minutes bus ride becomes a half-hour or longer bus ride.

My back does not allow me to walk and distance especially carrying stuff such as groceries. Yet I can ride for kilometers (miles) without any problems. So contrary to your statement I DO need a bicycle.

Cheers
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Old 01-08-23, 02:18 PM
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At my age, I have seen it happen before. Gas prices, pandemic, what ever. All of a sudden people think the should have a bike. Many havent cycled since they were a kid. When they get to the bike shop, most of the time they are steered to some form of mountain bike, and they buy it. When they get it home and ride it, they find out there is effort, and the bike doesnt just glide by like the ones they have seen people riding, and seat become a pain. After a dozen or so rides, the bike is hung up in the garage for 4, 5, 6, years and never ridden again. So-----------the bike get sold off in a garage sale for pennies on the dollar!! Kind of sad because if they had continued to ride it, their heath would have improved, and they might have lived longer.

About the only positive here is that it is a good deal for the local bike shops.
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