himespau 

I think it's going to come back to bite the manufacturers in the rear. They seem to be moving to online sales, but will need to have a local partner to unbox/assemble/service those online bikes for the system to work for most consumers. They squeeze out the local guy in all but the larger markets (where they have their own partner stores), and they're going to end up losing out on a lot of potential customers. Of course, I don't have a marketing degree, and they have a different way of looking at it.

Cpn_Dunsel

The local 'partner' will be a corporately owned and controlled and franchises will be sold. Artificial scarcity will work to grow demand, not shrink it.


The bike industry has been sounding out death rattles for a few decades now and the manufacturers see the weakness in their chain and will advance their vertical integration efforts. Specialized and Giant moving heavy into online sales as we sit here.


Interestingly enough, there have been just about the exact same number of bikes imported into the USA this quarter as there were in 2019 but they selling right away and very few are showing up in any shops. Demand is still very high and people are now driving 12+ hours to grab their bike of choice when it hits on the net and shows up at some rando location. The new manufacturing model is running very well (from their perspective) so I expect a double down on their part.

Sy Reene

What does this all portend for the non-major bike brands (in the US at least), such as the likes of Felt, Orbea, Cervelo etc, where corporate-owned stores are not, at least yet, a thing?

himespau 

I'm guessing that they have to go to the Canyon model to complete. Hopefully, the corporate stores will recognize that service dollars are service dollars and still work on them.

unterhausen

Spesh and Trek aren't manufacturers. Giant treats their company stores more harshly than those two do though.
I have heard spesh wants to move away from bike dealers towards motor sports dealers. I think this might be an idea that is just as good as Cannondale getting into making motorcycles. Right before that idea put them into bankruptcy.

So one possible future is that niche bike companies actually see more shops carrying their bikes, once the supply chain rights itself. I'm sure some of the more marginal brands are hurting right now though.

2old

That's what the owners reported; they couldn't get any bikes to sell.

2old

You're quite the prophet. COSTCO has an Intense FS bike listed on their site. The "biggies" better watch out; they may outsmart themselves. Might be prime time for mobile mechanics.

CliffordK

So, a couple of years ago, the small shops were so very important that the big manufacturers killed off international parts commerce.

And, now they are so unimportant that they get shoved to the bottom of the queue to get parts.

Or is the issue whole bikes?

It may well not be the Mad-Ones, and similar bikes that are the problem.

My guess is that for every Mad-One that is sold, there are 100 kid's bikes that are sold. Well, at least for every $5000+ road bike.

So the bike shops need to fill up with kid's bikes, beach cruisers, fixies, and the like.

The we find ourselves 99% dependent on imported bikes for these markets.

Of course China only worked about 10 months last year.

Somehow we need to build in surge capacity in manufacturing. Many companies have that built in, working one or two shifts, with the ability to add a third shift.

But, what about the companies that are already running three shifts?

And, if it is marketplace wide, then there won't be workers to populate that third shift. Wage increases? Migrant workers?

This would seem to be a great place for "recyclers" to come in. Find those thrift store deals, rubish bin deals, and internet deals. Repaint, rebuild from bottom to top, and get them back out on the floor. Of course the economics have been tight in the past, but may be here now.

CheGiantForLife

Since the driveline parts are not compatible, he was looking at $275 used or $4000 for a new bike.

base2 

Not for nuthin' but the shop I work in is a local independent with 3 stores. Getting anything Trek is a tough go. But Giant & their related subsidiary brands (Liv, Jett, Momentum, etc...,) & Spesh have stepped in to take up the slack. We have 7000 bikes on order. Trek has shut off their back order system to us & refuses to accept a single bike more than the 1500 we have in back log. Presumably to favor their own branded stores. We are now carrying & have Gazelle's on the shop floor now. Santa Cruz has finally started to make good. We carry & stock Subrosa, Haro of all sizes to pair with Dads who just bought their kids first bike.

A month ago the selling of bikes in boxes, sight unseen to be assembled & picked up in a week or two finally subsided. But it still happens often enough. The hooks above the shop floor are full of bikes on layaway. Our basement is chock full of repairs.

We just bought the building the shop is in, knocked down a wall & doubled the floor space. The up coming ski season is already outfitted & stocked. We are currently using the space for contract bike builders to keep up with bike demand & to stage E-bike repairs that are too heavy to get in/out of the basement.

We have 6 employees in the global flagship store. The other 2 stores have about the same.. We know our stuff. We know the pendulum will swing the other way with NEW bike sales. But, I'll be darned if I didn't see the owner overhaul a Huffy that came through the queue, & later that day r&r, on the spot, a taco'd wheel of a mid-eighties GT a very distraught customer brought in, after spending an hour with a customer on a $3500 e-bike. The owner is a very busy man & puts my average of 5 bike builds/shift while dealing with customers to shame.

Honestly, it's as much as we can do to tread water, here. I really don't understand all the doom sayers about how bike shops can't afford to keep the lights on. WRT to Harris Cyclery & other long standing businesses: Sometimes a shop owner just wants to quit, move on, & do something else for a while. Maybe he'd like to retire & just ride his bike. A pandemic would make a really good cover story.

unterhausen

A shop that has 7000 bikes on back order is an anomaly in the business in the U.S. I doubt there are too many such shops, probably count them on one hand. Most metropolitan areas have a large number of smaller shops. So that's an entirely different thing than the vast majority of shops that get a few hundred bikes in a year. I imagine your priority with bike companies is somewhat higher, because it's easier just to ship a full truck. Small shops fall through the cracks. I'm not sure Harris was that big of a shop that they have priority with bike companies.

I think the owners that really wanted to quit did it last year after they sold all their stock. I'm sure there are people that are really getting tired of customers whining at them and not being able to do much about it and realize it's time to bag it.

CliffordK

As commented, that sounds like a lot of bikes for 3 stores. All in shop sales without mail order?

So, somewhere on order of 8,500 bicycles on order (does that include those that have already been delivered YTD), and working flat out to get them all assembled and sold.

How many bikes did you sell in 2018 & 2019?

Perhaps this is the problem. One shop gets ZERO bicycles, while another gets thousands.

It may also be something where a small shop thought they could pick up the phone and place their order for 100 bicycles in April and get them delivered in May. While the large shops had their orders in last year, potentially with a big down payment.

But, I also fear the bike manufacturers are just giving lip service to trying to protect the small shops. When it comes down to it, they'd prefer to sell bikes by the shipload.

base2 

In 2018 & 2019 The shop was full of bikes from floor to ceiling. The warehouse off site was full of bikes dating back years. The owner has figured out how to make the shop survive on repairs alone & spent a big portion of his 35 years figuring out how to be better prepared than the next guy should an unexpected event occur. Things like owning the building, owning the offsite warehouse. Doing crazy things. Cash is king, as they say. No credit. No loans. No overhead. Assets & capital, no liabilities. It's a pretty simple business model: Own what you own. He's a pretty resourceful guy.

When COVID hit & regional transit shut down, he recognized a bike boom was about to happen & had the means to simply pick up the phone before anyone else & start making orders with all the usual suppliers. It was a huge gamble. Fortunately it has paid off & we are getting full trucks. Well nearly so; Orders of 40, 50, & 60 bikes have indeed happened. (& he's super stressed when this happens.) Usually it's a much more managable half a dozen to a dozen, twice a day most days of the week from a few different shipping companies.

It took until now (2021) to churn through the ages of backstock. I freely admit that the shelves did get a bit bare before the trucks started showing up.

For clarification, it's 7000 bikes total. Not 7000 plus Treks' 1500...& the orders are out until late 2022/early 2023. That works out to a resupply of an average 243 bike sales per shop per year. Or put another way we're only on the hook for about ⅔ of a bike per day around abouts the time this all settles out & the bike boom has finally got around to being bust. Maybe by then we can work on refilling the warehouse.

CliffordK

@base2, it sounds like your store has been working hard to stay ahead of the game, although inventory that isn't moving is expensive... until you really need it.

I presume bike evolution moves slowly in the basic low end market, so it is good to get good deals, and get some in a warehouse.

On the other hand, in the high end market, things move quickly. 9 speed is old news. 10 speed is out. 11 speed was here and gone. 12 speed?

Mechanical Discs? Hydraulic Discs?

It is nice to have a little depth, but if you have a road bike that has been in storage for 20 years, then it is time to start marketing it as a "Classic and Vintage" bike.

burnthesheep

Went to local shop this weekend. I prefer the full length shift/brake cables that shops carry instead of the "snip the end you don't need" kind that come in online kits that always seem to just barely be long enough.

Good price, reach in the box and it's there. Great.

Otherwise, they didn't have something that was shown as "in stock, in store, at location XYZ". "Oh, we don't update inventory sometimes." I get tired of having to call places like an old person from the 80's to ask if something is in stock. Use the dang system how it was designed!!!

Every, single, local bike shop, EVER around here has the inventory control issue. It's just tiring. It's why often I just go "eff it, off to Amazon or Backcountry".

Opposite issue was their website never showed they had any Spesh Ribcage bottle cages in stock. Always showing out of stock. I assume that's true. Order off some internet site. Go to shop for those brake cables.............there's a pile of those exact cages right hanging on the wall. Facepalm.

CheGiantForLife

You're saying you have 7000 people who have paid for a bike and are just willing to accept delivery whenever that may be ?
I would think most people are like, "One bike please. Out of stock? Ok, I'll go elsewhere or find a different hobby or keep my existing bike"

Who exactly orders a bike on backorder?

CheGiantForLife

The hooks above the shop floor are full of bikes on layaway.

What does this mean? They are being slowly paid for and once fully paid for, the buyer can take the bike?

CheGiantForLife

I ride a 20 year old $299 Giant and plan to never buy another bike.
But, who orders a bike in 2020 for a 2022 delivery?
Who buys a bike 2 years in advance?
When I need something, that's when I go to a store to buy it.

unterhausen

Bike shops have to order bikes ahead of time. In a normal year the order would be placed sometime in the summer for delivery the next winter/spring.
This didn't really happen last year, at least not the part of large shipments in February/March. Most of those are still on backorder.

Phil_gretz

Barriers to entry. These were start up costs to begin earning a return.

In the text, I was accumulating expenditures, not earnings. 11 years to exit residency. Resident salaries are about $60K per annum, which won't net you much after expenses in any major city, hence my "break even" for those years.

I stand by my numbers. Cost of entry = $600K, plus intellect and drive, plus 11 years. This justifies the necessity and worth of earning this back with return on the investment.

Why was this difficult to understand for you?

REV160

I'm not sure about your theories and reasons, but I can agree that bike shop repair persons do seem less competent than in the past. I do a lot of my own wrenching more because I enjoy it than because of any philosophy. However, within the last three months I had three problems at the bike shop to which I have been going.

The first is having changed the brake levers and installed new brake cable and housing on one bike, they incorrectly adjusted the brake pads by toe-ing out rather than toe-ing in. I pointed it out when I picked up the bike, but the service guy insisted he was right. The brakes barely stopped the bike on my own test ride, and I had to correct it myself.

Same shop overhauled a cup and cone fixed gear hub with new grease and ball bearings. When I picked it up, it turned more roughly than when I had brought it in. I was then told the cups may have been pitted. When I asked why I had not been contacted as to whether I wanted to replace the cups, I got no response. I don't think he knew the condition of the cups but was just looking for an excuse for how rough the hub adjustment was. It's a bit of an art to tighten cones to the right tightness, but it's not like painting the Mona Lisa. I was able to adjust it to be usable but not at my standards, and I got rid of it.

Last and most recently I had my shop install new Kool Stop brake pads on a bike with cantilever brakes, with which I've little experience. They installed them but were adjusted so loosely that when the lever was squeezed fully it came within a couple of millimeters of the handlebar grip. I took the bike for a test ride, and the pads barely stopped the bike. Only after doing my own research on the Kool Stop website did I understand that the pads were on backwards, despite there being obvious directional arrows on the pads. I brought it back and they reinstalled them but the tension on the brake cable was still off, and I had to finish the job myself at home.

That's it. Strike three. You're out. Now I've got to find another shop and hope it is better.

I've often been told that if I want to avoid disappointment that I should lower my standards, but do I have to lower them to the point of accepting incompetence?

AlanO

I never pay anyone to fix anything because I always have to fix it when they’re done because I’m a fuss.

CliffordK

The cables you find at department stores are generally galvanized steel.

I use almost exclusively stainless steel. It is nice to have adequate spares around that I can just grab some when I need it.

I generally target about $1 to $2 per cable. I've had issues with needing to grind down Shimano shift cables to fit Campy, but that only takes a few seconds. It has been a couple of years since I've had to buy new cables, but not decades.

I'm not sure what the typical bike shop price is, but I'd imagine $5 to $10 per cable. So, enough cables to do a single bike, and I've paid for a big box of cables at online prices.

uber_Fred

If you're riding a $5000.00 racing bike, it might make sense to pay a mechanic $100/hr to work on it. If you're riding a $700 commuter, it quickly makes no financial sense to spend that much money on repairs. And there aren't that many people riding around on $5000 racing bikes. It isn't a question of how much skill is involved, or how difficult those skills are to acquire. It's the same reason you can't find cobblers anymore. Anyone good enough to repair your shoes will quickly cost you more than the shoes themselves, except for very high end shoes. And there aren't enough Bruno Magli wearers out there to support the trade.

fuji105

For bikes, yes. For cars, I have to disagree. While parts are more expensive these days, my 2007 Toyota truck has been more reliable than any car or truck I have purchased in the past, back to 1967. Back in those days my economics instructor told me that cars should be sold when 10 years old because studies had shown the repair costs made buying a new car better for the wallet. I don't think I looked under the hood of my Tacoma for the first 10 years.