The Bike Industry and Inflation

The supply problems faced by bike companies have pre-pandemic roots.

Toward the end of 2019, major brands held off placing orders from China, where most bikes and parts are made, to await an exemption on 25% tariffs imposed by the Trump administration, said Jay Townley, a former bike company executive who now works at consultancy Human Powered Solutions.

The exemption came through and bike companies placed their orders in early 2020 when Chinese factories were closed for Lunar New Year, he said. But then Covid-19 hit, and the factories remained shuttered.

Now they’re running full tilt and reluctant to expand capacity, likely because of concern over how long increased demand will last, Townley said.

Meanwhile the tariff exemption for bikes has expired, and there’s no indication it’ll be renewed. And the price for shipping a container from China to the U.S. West Coast has been hovering near record highs for several months. Many of these added expenses are set to remain, with high shipping prices getting sealed into contracts for the next year.

How many of you have a bike currently on order? I do and I just pulled my deposit from my LBS because I was able to find a bike through an online retailer. Sad to do it, but I don’t want to wait until autumn for a bike that inevitably might end up costing more than it did when I put my deposit down back in February, let alone even arrive.

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I was absolutely shocked in October when both of my LBSs told me stock was so backed up that they encouraged me to search online and buy whatever I could find unless I could wait until Feb/March.

Would you mind sharing where?

Pulled the plug on Trek vs Specialized and bought a gravel bike in March from Excel Sports. 10 days ago received top dollar from ProsCloset on my 2015 Trek Domane.

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Sure—I just ordered a Vitus Rapide 29 VR from ChainReaction Cycles. The only retailer that had a 29er hardtail in my price range.

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Excel Sports had a small supply of Cervo Asperos last week…especially the one w/ GRX 810 mechanical.

Competitive Cyclist has Aspero options w/ Force mechanical builds.

There are bikes out there, but damn few & far between. You basically just have to get lucky.

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I’ve just sent my Kask mistral back to be replaced after a crash last August. It looks perfect but I know I used it as a brake :open_mouth: I should have sent it back earlier but with the wee c thing it got put off. Anyway I looked at the price since I bought it April 2020 to now, it has went up 18%

That was my LBS told me when I ask them to build a tri bike for me.

They call me back and told me they could put it together for 3k plus whatever frame i could find!
and that was with mechanical gears…

its crazy!
I wonder how much longer can the market hold at this level.
I can see a correction happening soonish that will cause some companies to just disappear.

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Giant has an excellent website where you can put in the bike, color, and size you want, and it will tell you where they are. I had to order one from hundreds of miles away. Had them ship it to my LBS for assembly and maintenance.

So that is part of the problem….most in the industry don’t see this as a long term sales boom, just a bubble. As a result, there has not been significant expansion in capacity because no one wants to invest and then see the bubble burst.

That said, I think most expected the market to correct itself by now and it has only gotten worse. And it is now being fueled by suppliers placing huge orders to component suppliers just so they can get anything.

So no one really knows that the true demand is…lot of market noise out there.

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Interesting. And all of those bikes are significantly “better” at the same spec level.

I would not have expected the numbers to come out like that.

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The outliers are interesting but in general it reflects what I found after a 15 year hiatus from cycling (equipment-wise, 24 years, 1990 to 2014) that prices are cheaper adjusted for inflation. I still love the DA 7400 and find the 9100 to be butt ugly. Interestingly, same frame and like wheels, my DA 9100 was more expensive than the 2 year later purchase with SRAM Red eTap. $100 cheaper or approximately 4%. (Was rear ended by a minivan and brought a newer version of the same bike as a settlement).

I think it was states somewhere that the companies aren’t ramping up production because they see this as a bubble that will correct itself. A lot of companies got in a jam with this in 2008-2009.

The biggest problem for the LBS is lack of inventory and cashflow. Hope they manage their money well!

My local Specialized LBS has been sold out of roadies and gravel bikes for months now. Still has a good amount of mtb but that is pretty much it.

Owner is a good guy and want to give him more business with either a Diverge or potentially a Sworks Tarmac and he said Q1 probably and that is only if I order by July. He said business was good obviously but now with no bikes to sell much different. He does not take advantage of people either. Crazy times.

Thankfully my SL6 Tarmac Di2 comp I got from him is amazing.

This is not “inflation” in any meaningful sense.

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The good news is that most shops should have outstanding margins this year, since labor will be such a massive part of the revenue.

The bad news is that it takes a lot of hours to make up for bike sales…so either revenue will be down or they will be worked to death.

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This.

My local-ish bike store (the one I trust) has a great team of staff. Helpful to a fault, knowledgeable and they always have a smile to greet you.

I know for a fact that they have hired two more mechanics to cover the spring-summer-autumn periods because the original (solo) mechanic was putting in 14 hour days just trying to hold back the tide. That’s not good for him and in the long run, it migh have been reflected in the quality of his workmanship…

Personally I won’t take my bike to the shop unless I’ve booked an appointment and I can give the team 3-5 clear days to resolve my issue(s). I love riding my bike(s) but I don’t want to be heaping stress onto another individual.

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My LBS in Zurich, Switzerland, was buying whole bikes to stripe them of parts for custom builds because that was the only way to get the needed components. That option has apparently run its course. As for my situation, I’m upgrading my gravel bike to eTap and some of those parts won’t come in for another couple of months (the order was placed in April). Even so, the LBS is not hurting for business.

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Inflation occurs when prices rise, decreasing the purchasing power of your dollars.

So yes… It’s inflation… Unless all salaries have gone up the same amount. Some have but most haven’t…

:man_shrugging: