I’m not just looking at one piece. I thought for sure there would be more used “2020” models for sale and that’s not happening. I just thought the impulsive “now’s a good time to get into biking because we are in a lock down” purchases would be showing up for sale, and that doesn’t seem to be the case.
This is what I’m talking about, I think most of these purchases will get sold next year or the year after. I thought maybe this year, but it seems like most people will hold onto something for 2-3 years before admitting they can’t justify the cost to let it collect dust.
The pandemic yanked all the slack out of every supply chain and market.
Add in freight issues (too much product, not enough capacity), IC shortages, and now the main port in Hong Kong getting shut down for a ~month and you have a total schittshow.
I usually keep at least 3 months supply of inventory for my main customers…and because of the confluence of all of the above, I am hand-to-mouth for them right now with no relief in sight.
I have had containers of product sitting in Long Beach for up to 7 weeks with no ETA…and my lead time for IC chips (especially bluetooth modules) is up over a year. Hell, I can’t accuratley forecast what next month will be, let alone June 2022.
Sorry, that’s very stressful and unfortunately all too common. It may be little comfort, but you’re not alone.
I didn’t discuss the Supply curve above, but all the inputs are constrained and your frustration is echoed in many industries. The labor input was suppressed first by the lockdowns; now in the States by the stimulus and enhanced unemployment benefits.
Take for example the savings rate. It looks like a rocket gantry. No wonder, there’s a shortage of high quality assets available. Meme stonks, Dogecoin? Ridiculous, but I digress.
When (if?) this finally unwinds you don’t want to be in a business that relies on labor or plant and equipment. The shortages will crush your margins. What’s left? IP? IT?
Currently in consumer medical devices…primarily blood pressure monitors and thermometers. But my career started in the bike industry, doing product development.
I have an opportunity to get two new products placed at a major National retailer this fall and I can’t get the products sourced in time. Could end up missing out on millions in sales as a result.
Some suppliers are forcing customers to place fully guaranteed and pre-paid orders because no one knows who really needs what. Everyone is inflating their orders in the hopes they can at least secure something.
There’s a healthy debate going on whether this is a good or bad thing, but if the health of the US economy is dependent on the average worker living on a knife’s edge, maybe we need a different economy.
Those are currently where most of the problems lie, contrary to all the noise about Intel and TSMC building new high-end fabs. We can source chipsets and CPUs and GPUs, but end up short on 50 cents audio codecs.
Not sure I can arrive at the same conclusion based on the information that I posted. Although I would be interested in hearing the details of your position.
Back to my point from earlier. The pain inflicted by the pandemic landed on workers. Owners of capital did okay in general. Owners of financial assets fared quite well. The virus and/or the response to it made people keenly aware of where they rank in the hierarchy of political power. The political class came out best.
Nobody knows exactly what will happen when the savings rate returns to Earth (implying spending) but it is likely to coincide with the supply chain coming back online. With massive liquidity waiting in the wings, my best guess is that it will cause more inflation.
Taste and preferences will change between now and then. Demand for specific items is what interested me in this thread. I wondered if any of us had started to think differently about bikes or cycling.
Won’t affect enthusiasts much since Malaysia is where they produce lower-end stuff…but for the industry as a whole…oooof.
On a side note, it is interesting to see how some Asian countries are now really struggling with COVID. Taiwan did exceptionally well in 2020, but is now basically locked down.
The main port in Hong Kong is shut down due to COVID as well.
Besides the obvious struggles that these countries are going through, all of that will have negative impacts on the bike biz.
Good Nerd Alert podcast where they discuss a lot of the issues we have mentioned above…I found Lousberg’s answers to be surprisingly honest and transparent.
Sorry to revive an older thread, but it seemed to make the most sense to post here (I think)…if chad wants to leverage his encyclopedic knowledge of the board to move it to another thread, I’m good with that.
So Specialized is the latest to lay off some of its workforce, announcing they are cutting 8% of their staff. Ouch.
But yet, they somehow also have the money to but the old Pearl Izumi building in Longmont, CO now that PI has been moved out to CA.
That would not sit well with me if I was one of the 8%…
Sales is just one part of the equation…it is just the revenue they receive. If they have too much overhead (rents, labor, etc), it doesn’t matter how much revenue they bring in, they will still be unprofitable (or not as profitable as they would like).
I’m sure some of this will be laid that the foot of the COVID bubble bursting…and while it likely played a bit of a role, I think some of this is just cutting costs to be more profitable.
