The bubble is upon us?
01-15-22, 05:23 PM
#126
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What time were on you on the Alpe this morning? I did the 9am (central US time) tour du zwift long ride. Did not see the Psimet tag - but I did see Psimet himself take umbrage with some impending embargoed announcement on the twitters. I immediately followed him, of course.
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01-17-22, 11:01 AM
#128
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The bubble refers to demand. There was a rapid increase in demand that started at the beginning of the pandemic. I more than outstripped supply and capacity by an order of magnitude. That demand has subsided in the last 3 months of last quarter in the bike industry by demand returning to the same levels as pre-pandemic for that time of year.
Parts were being made then entire time. Shimano only shut down 1 factory for a couple of months and that was mandated by the government there and the factory was making lower level components. Parts were not available in the aftermarket channels because OEM demand ate them all up and then some.
When the demand bubble hit everyone throughout the value stream of finished bicycle sales went completely nuts and panic bought. Shops ordered as much as they were allowed to because they didn't know when they would actually get anything and no one knew how long any of this would last. That demand aggregated up to the OEMs. They bought up all the component manufacturer's capacity. That pushed the smaller brands to have to step up and buy more in order to even make it on to the component manufacturer's lists. This is not a Milk and eggs style value stream. It has lead times of years. What was in the pipe for 2020 and 2021 was quickly eaten up. They increased starting at late 2021 dates and on. Luckily most companies didn't add capacity during this time. If they had they'd be hurting. Shimano did announce their capacity addition but that was already on the books and the pandemic coinciding with it was a coincidence.
So the demand bubble pops. There is still debate as to whether this is the pop we all knew was coming or not yet. We all know it WILL happen it's just a matter of when. Some in the industry feel that pop is now and thus the article and the thread here.
So demand drops back to normal levels...bikes that have a 2-5 year lead start showing up in stores. Stores don't want all of them and start cancelling their spots in the queue and passing on their options.
As for parts - the OEM channels are so baked up we won't see regular availability for most parts for quite a while. Some Shimano stuff late this year maybe? Most likely next year though as a start.
So yeah - that 7 month estimate was a complete shot in the dark. Whomever you ordered from told you that because that's what the OEM (Most likely Shimano) told them. Shimano has moved dates back over a year on items I have watched for over a year.
When the demand bubble hit everyone throughout the value stream of finished bicycle sales went completely nuts and panic bought. Shops ordered as much as they were allowed to because they didn't know when they would actually get anything and no one knew how long any of this would last. That demand aggregated up to the OEMs. They bought up all the component manufacturer's capacity. That pushed the smaller brands to have to step up and buy more in order to even make it on to the component manufacturer's lists. This is not a Milk and eggs style value stream. It has lead times of years. What was in the pipe for 2020 and 2021 was quickly eaten up. They increased starting at late 2021 dates and on. Luckily most companies didn't add capacity during this time. If they had they'd be hurting. Shimano did announce their capacity addition but that was already on the books and the pandemic coinciding with it was a coincidence.
So the demand bubble pops. There is still debate as to whether this is the pop we all knew was coming or not yet. We all know it WILL happen it's just a matter of when. Some in the industry feel that pop is now and thus the article and the thread here.
So demand drops back to normal levels...bikes that have a 2-5 year lead start showing up in stores. Stores don't want all of them and start cancelling their spots in the queue and passing on their options.
As for parts - the OEM channels are so baked up we won't see regular availability for most parts for quite a while. Some Shimano stuff late this year maybe? Most likely next year though as a start.
So yeah - that 7 month estimate was a complete shot in the dark. Whomever you ordered from told you that because that's what the OEM (Most likely Shimano) told them. Shimano has moved dates back over a year on items I have watched for over a year.
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01-17-22, 11:08 AM
#129
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I have been so behind and it's US production. I can't get jars and those are done by an injection molding house that is less than 12 miles form my place. On the wheel side Chris King is out over 6 months. They make almost everything in house to my knowledge. Velocity is out 2 months or so. Industry nine is 6 months. They are in house. Onyx is 8-10 weeks. White Industries is 12 weeks. All of these places manufacture either in house or domestically.
So laymen want to think everything is "China's" fault and that it's all to do with the backups in ports, etc. While that absolutely was the initial stimulus we are now dealing with the fallout ripple effects that travel through every part of every industry now. It will be YEARS before any of this starts to really ease. Years. Think about that people.
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01-17-22, 11:17 AM
#130
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If you think that $95 to service a wheel is too expensive, then cycling is not for you.
01-17-22, 11:36 AM
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01-17-22, 11:53 AM
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But, this is a forum, and we're all mind readers. Well, except me.
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01-17-22, 11:59 AM
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The bubble refers to demand. There was a rapid increase in demand that started at the beginning of the pandemic. I more than outstripped supply and capacity by an order of magnitude. That demand has subsided in the last 3 months of last quarter in the bike industry by demand returning to the same levels as pre-pandemic for that time of year.
Parts were being made then entire time. Shimano only shut down 1 factory for a couple of months and that was mandated by the government there and the factory was making lower level components. Parts were not available in the aftermarket channels because OEM demand ate them all up and then some.
When the demand bubble hit everyone throughout the value stream of finished bicycle sales went completely nuts and panic bought. Shops ordered as much as they were allowed to because they didn't know when they would actually get anything and no one knew how long any of this would last. That demand aggregated up to the OEMs. They bought up all the component manufacturer's capacity. That pushed the smaller brands to have to step up and buy more in order to even make it on to the component manufacturer's lists. This is not a Milk and eggs style value stream. It has lead times of years. What was in the pipe for 2020 and 2021 was quickly eaten up. They increased starting at late 2021 dates and on. Luckily most companies didn't add capacity during this time. If they had they'd be hurting. Shimano did announce their capacity addition but that was already on the books and the pandemic coinciding with it was a coincidence.
So the demand bubble pops. There is still debate as to whether this is the pop we all knew was coming or not yet. We all know it WILL happen it's just a matter of when. Some in the industry feel that pop is now and thus the article and the thread here.
So demand drops back to normal levels...bikes that have a 2-5 year lead start showing up in stores. Stores don't want all of them and start cancelling their spots in the queue and passing on their options.
As for parts - the OEM channels are so baked up we won't see regular availability for most parts for quite a while. Some Shimano stuff late this year maybe? Most likely next year though as a start.
So yeah - that 7 month estimate was a complete shot in the dark. Whomever you ordered from told you that because that's what the OEM (Most likely Shimano) told them. Shimano has moved dates back over a year on items I have watched for over a year.
Parts were being made then entire time. Shimano only shut down 1 factory for a couple of months and that was mandated by the government there and the factory was making lower level components. Parts were not available in the aftermarket channels because OEM demand ate them all up and then some.
When the demand bubble hit everyone throughout the value stream of finished bicycle sales went completely nuts and panic bought. Shops ordered as much as they were allowed to because they didn't know when they would actually get anything and no one knew how long any of this would last. That demand aggregated up to the OEMs. They bought up all the component manufacturer's capacity. That pushed the smaller brands to have to step up and buy more in order to even make it on to the component manufacturer's lists. This is not a Milk and eggs style value stream. It has lead times of years. What was in the pipe for 2020 and 2021 was quickly eaten up. They increased starting at late 2021 dates and on. Luckily most companies didn't add capacity during this time. If they had they'd be hurting. Shimano did announce their capacity addition but that was already on the books and the pandemic coinciding with it was a coincidence.
So the demand bubble pops. There is still debate as to whether this is the pop we all knew was coming or not yet. We all know it WILL happen it's just a matter of when. Some in the industry feel that pop is now and thus the article and the thread here.
So demand drops back to normal levels...bikes that have a 2-5 year lead start showing up in stores. Stores don't want all of them and start cancelling their spots in the queue and passing on their options.
As for parts - the OEM channels are so baked up we won't see regular availability for most parts for quite a while. Some Shimano stuff late this year maybe? Most likely next year though as a start.
So yeah - that 7 month estimate was a complete shot in the dark. Whomever you ordered from told you that because that's what the OEM (Most likely Shimano) told them. Shimano has moved dates back over a year on items I have watched for over a year.
Last time I checked, there is not a single SRAM D1 blip box anywhere. This is not an OEM new bike kind of part. SRAM grouppos are like hen's teeth.
Where are the Continental GP5000 TR tires?
12 Speed chains?
I see the same shortages in bike parts as I do with other consumer goods. If bike shops overordered, then, they will have to sell at fire sale prices or go out of business. Big mistake if true. Trek to the rescue.
01-17-22, 12:04 PM
#134
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Well, perhaps your original statement should have read more like ' the expensive bike shop did excellent work, and I feel $95 for the service was well worth it, however, there was another shop that offered the same service for much less to draw in customers. Unfortunately, their workmanship was sub-par, and they eventually went out of business despite their lower costs.'
But, this is a forum, and we're all mind readers. Well, except me.
But, this is a forum, and we're all mind readers. Well, except me.
The "correlation" cannot be determined by the information I provided on my original post. There are just too many factors on a case by case basis (shoddily run business, gambling debts, etc.) to draw any conclusions. Even I cannot tell you why the "cheaper" shop went out of business. So to answer your original reply to my statement, no, I don't see the correlation.
01-17-22, 02:20 PM
#135
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Overly simplistic picture of global manufacturing. Rarely are there production runs of more than 10,000 units and this may seem like a lot but it really is not. A company wanted mine to sell its products to Home Depot. Home Depot has 2300 stores and if they sold one of these products each day in each store then annual production would need to be more than 839,500 units and that was more than this company could begin to produce even if they stopped production of all their other products and sold only to Home Depot.
Demand went up for many recreation oriented products by more than 70% and this was everything from kayaks to motorhomes. Money that would have otherwise gone to pay for trips to Disney resorts or on cruise ship vacations was diverted. The appearance of electric bikes added more fuel to the fire with older riders encouraged to start riding again and these were people with the income needed to afford the expensive e-bikes. I do not expect the bike boom to collapse when the pandemic subsides around the world in several years time.
Demand went up for many recreation oriented products by more than 70% and this was everything from kayaks to motorhomes. Money that would have otherwise gone to pay for trips to Disney resorts or on cruise ship vacations was diverted. The appearance of electric bikes added more fuel to the fire with older riders encouraged to start riding again and these were people with the income needed to afford the expensive e-bikes. I do not expect the bike boom to collapse when the pandemic subsides around the world in several years time.
01-17-22, 02:26 PM
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Overly simplistic picture of global manufacturing. Rarely are there production runs of more than 10,000 units and this may seem like a lot but it really is not. A company wanted mine to sell its products to Home Depot. Home Depot has 2300 stores and if they sold one of these products each day in each store then annual production would need to be more than 839,500 units and that was more than this company could begin to produce even if they stopped production of all their other products and sold only to Home Depot.
Demand went up for many recreation oriented products by more than 70% and this was everything from kayaks to motorhomes. Money that would have otherwise gone to pay for trips to Disney resorts or on cruise ship vacations was diverted. The appearance of electric bikes added more fuel to the fire with older riders encouraged to start riding again and these were people with the income needed to afford the expensive e-bikes. I do not expect the bike boom to collapse when the pandemic subsides around the world in several years time.
Demand went up for many recreation oriented products by more than 70% and this was everything from kayaks to motorhomes. Money that would have otherwise gone to pay for trips to Disney resorts or on cruise ship vacations was diverted. The appearance of electric bikes added more fuel to the fire with older riders encouraged to start riding again and these were people with the income needed to afford the expensive e-bikes. I do not expect the bike boom to collapse when the pandemic subsides around the world in several years time.
01-18-22, 10:59 AM
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Overly simplistic picture of global manufacturing. Rarely are there production runs of more than 10,000 units and this may seem like a lot but it really is not. A company wanted mine to sell its products to Home Depot. Home Depot has 2300 stores and if they sold one of these products each day in each store then annual production would need to be more than 839,500 units and that was more than this company could begin to produce even if they stopped production of all their other products and sold only to Home Depot.
Demand went up for many recreation oriented products by more than 70% and this was everything from kayaks to motorhomes. Money that would have otherwise gone to pay for trips to Disney resorts or on cruise ship vacations was diverted. The appearance of electric bikes added more fuel to the fire with older riders encouraged to start riding again and these were people with the income needed to afford the expensive e-bikes. I do not expect the bike boom to collapse when the pandemic subsides around the world in several years time.
Demand went up for many recreation oriented products by more than 70% and this was everything from kayaks to motorhomes. Money that would have otherwise gone to pay for trips to Disney resorts or on cruise ship vacations was diverted. The appearance of electric bikes added more fuel to the fire with older riders encouraged to start riding again and these were people with the income needed to afford the expensive e-bikes. I do not expect the bike boom to collapse when the pandemic subsides around the world in several years time.
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01-18-22, 11:19 AM
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All of the handful of very large online retailers that I use have had those tires on backlog for about 6 weeks with an ETA in mid February on average.
At least not as bad as dishwashers or large appliances. I went to several local specialty appliance stores, they were giving me 12+ month wait.
01-18-22, 11:47 AM
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It's the non-warranty stuff too. Example - guy bought a set of ENVE wheels used off Pros closet. Took them to a local shop because one, that was set up tubeless, was slowly losing air. it was a trek shop. The tech there put new rim tape on it and inflated it. *BOOM*
Blew the whole side of the rim off.
Shop guy goes, "I've never seen that happen. That's a defective rim. You should take that up with ENVE." Customer is like, "I wasn't the original buyer." They shrugged and said, "We've never built on carbon. There's this guy that builds carbon wheels. Try him." and sent him my way. I take the time to track down a rep and find out it's a common occurrence. The nipple beds, because they're molded, create a tight enough interface between the nipple and the rim that they become air tight. Then if the tubeless tape fails then the lower rim chamber gets pressurized like the upper tire side does. Their rims can't handle that hoop stress and *BOOM*. Instead of calling it a problem they call it a feature and tell everyone it's because they didn't use the official ENVE tubeless valves. Ones where the nut to tighten them against the rim is off centered drilled to allow for air that escapes into the lower chamber to vent from the rim instead of pressurizing it.
I process a claim, get a rim at cost, swap the rim, explain the problem, and get the guy going again.
So to your point - big shops just don't have the knowledge or expertise to handle anything that is beyond getting on to their dealer portal and filling out a claim form and getting a new part. Us service shops just know how to fix stuff and get people rolling again.
Again on the "simple machine" stuff. 10 Years ago I would agree. It's not that way anymore. Most of the problems and fixes I do aren't simple installs or adjustments. They're troubleshooting electrical systems or hydraulic systems. They involve an ever increasing number of specialized tools and background knowledge and even then the actual fixes are never really in a book, on a video, or in a forum because the root cause is usually not found before the OEM says, "tell the customer to buy a new one".
Externally routed, mechanical, rim brake with a standard English threaded BB days are over. Now it's suspensions, droppers, Odd ball BB standards or proprietary headshock BS, strange internal frame routings, and known electrical issues that the OE claims don't happen but there's forums full of people with the same issues. We've taken a simple pen and paper thought making a word processor would help make writing faster and ended up with twitter.
Blew the whole side of the rim off.
Shop guy goes, "I've never seen that happen. That's a defective rim. You should take that up with ENVE." Customer is like, "I wasn't the original buyer." They shrugged and said, "We've never built on carbon. There's this guy that builds carbon wheels. Try him." and sent him my way. I take the time to track down a rep and find out it's a common occurrence. The nipple beds, because they're molded, create a tight enough interface between the nipple and the rim that they become air tight. Then if the tubeless tape fails then the lower rim chamber gets pressurized like the upper tire side does. Their rims can't handle that hoop stress and *BOOM*. Instead of calling it a problem they call it a feature and tell everyone it's because they didn't use the official ENVE tubeless valves. Ones where the nut to tighten them against the rim is off centered drilled to allow for air that escapes into the lower chamber to vent from the rim instead of pressurizing it.
I process a claim, get a rim at cost, swap the rim, explain the problem, and get the guy going again.
So to your point - big shops just don't have the knowledge or expertise to handle anything that is beyond getting on to their dealer portal and filling out a claim form and getting a new part. Us service shops just know how to fix stuff and get people rolling again.
Again on the "simple machine" stuff. 10 Years ago I would agree. It's not that way anymore. Most of the problems and fixes I do aren't simple installs or adjustments. They're troubleshooting electrical systems or hydraulic systems. They involve an ever increasing number of specialized tools and background knowledge and even then the actual fixes are never really in a book, on a video, or in a forum because the root cause is usually not found before the OEM says, "tell the customer to buy a new one".
Externally routed, mechanical, rim brake with a standard English threaded BB days are over. Now it's suspensions, droppers, Odd ball BB standards or proprietary headshock BS, strange internal frame routings, and known electrical issues that the OE claims don't happen but there's forums full of people with the same issues. We've taken a simple pen and paper thought making a word processor would help make writing faster and ended up with twitter.
I contacted SRAM/Zipp through their online customer support chat and eventually got a response stating that this was fine, any shop could do the work, no issue with warranty, etc - but I decided to just take the wheels to another shop (the one where I purchased my Cannondale bike). They re-dished the rear wheel for a nominal fee, and seemed puzzled by the original shop's concern.
From my perspective, the first shop was overly complicating what should've been a relatively simple service to a set of new wheels that I bought from them, but maybe they've been caught up in enough exploding rim finger pointing situations that they're leery of doing anything that isn't just standard plug-and-play.
01-18-22, 11:49 AM
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I keep an eye on compatible tires all of the time - the 5K S TRs are out there if you're willing to pay for them. I do want to try them out, but I can't swallow the ~$80-100ea at this point. I figure that I've got about 5000 miles - hopefully I can snag a few if they dip, otherwise I'll try something else on the list.
01-20-22, 10:04 AM
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Very interesting thread
I've enjoyed the read but have to ask - what does “the bubble bursting” mean for the bicycle industry? Companies shutting down, prices dropping, oversupply?
I know it’s probably too complex to simplify, but it would help me understand this better (I’m not in the industry)
thanks
I know it’s probably too complex to simplify, but it would help me understand this better (I’m not in the industry)
thanks
01-20-22, 10:16 AM
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Had a conversation with my LBS store’s owner
…last year during COVID. He said the supply chain would be jacked for years and repairs were keeping the shop alive. There were barely any new bikes. Recently I went to the same store and it was packed with new bikes - most with SRAM drivetrains (they said because Shimano is so hard to get)
sure are weird times
im waiting for the COVID bikes that people bought and don’t ride to drop in price on the used market - hasn’t happened yet
sure are weird times
im waiting for the COVID bikes that people bought and don’t ride to drop in price on the used market - hasn’t happened yet
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01-21-22, 01:32 PM
#145
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If I take you what you say as true (demand not a supply issue), where are all the OEM bikes with Shimano 12 speed? The stuff Shimano introduced what.......6 months ago?
Last time I checked, there is not a single SRAM D1 blip box anywhere. This is not an OEM new bike kind of part. SRAM grouppos are like hen's teeth.
Where are the Continental GP5000 TR tires?
12 Speed chains?
I see the same shortages in bike parts as I do with other consumer goods. If bike shops overordered, then, they will have to sell at fire sale prices or go out of business. Big mistake if true. Trek to the rescue.
Last time I checked, there is not a single SRAM D1 blip box anywhere. This is not an OEM new bike kind of part. SRAM grouppos are like hen's teeth.
Where are the Continental GP5000 TR tires?
12 Speed chains?
I see the same shortages in bike parts as I do with other consumer goods. If bike shops overordered, then, they will have to sell at fire sale prices or go out of business. Big mistake if true. Trek to the rescue.
*Manufacturing capacity/output is its own can of worms: the SRAM CEO mentioned adding a shift at some of their factories, which obviously increases overall capacity, but it's nowhere near enough to reach parity with recent demand. And while manufacturers may be shipping as much product as they ever have, it doesn't mean the product mix is the same now as it was in 2019. IE, if SRAM has a factory capable of turning out both groupsets that go to OE customers as well as turning out accessories like blip boxes, they're devoting more capacity to the higher volume, higher demand products. Many wrinkles to all of this
The bicycle industry in the US has seen many booms and busts over the years. A pandemic and some e-bikes does not redirect an entire country's car centric culture. We will hold on to "some" of the new riders that came to cycling during the pandemic but what is clear is that the demand has already dropped - which was expected. We in the industry just argued about when it was going to drop and how many we will retain.
01-22-22, 04:35 AM
#146
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…last year during COVID. He said the supply chain would be jacked for years and repairs were keeping the shop alive. There were barely any new bikes. Recently I went to the same store and it was packed with new bikes - most with SRAM drivetrains (they said because Shimano is so hard to get)
sure are weird times
im waiting for the COVID bikes that people bought and don’t ride to drop in price on the used market - hasn’t happened yet
sure are weird times
im waiting for the COVID bikes that people bought and don’t ride to drop in price on the used market - hasn’t happened yet
01-22-22, 04:56 AM
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…last year during COVID. He said the supply chain would be jacked for years and repairs were keeping the shop alive. There were barely any new bikes. Recently I went to the same store and it was packed with new bikes - most with SRAM drivetrains (they said because Shimano is so hard to get)
sure are weird times
im waiting for the COVID bikes that people bought and don’t ride to drop in price on the used market - hasn’t happened yet
sure are weird times
im waiting for the COVID bikes that people bought and don’t ride to drop in price on the used market - hasn’t happened yet
01-22-22, 08:48 AM
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As messed up as the entire supply chain is..it may well get worse. I've been working on personal finances for the last week. Covid-induced issues aside, the markets have been on a rather heady expansion for 12 years. Expansions typically don't last that long(in fact I think the current one is the longest in history) and we're either overdue or long overdue for a correction. The Covid dip of March '20 was more of a special-cause flash crash than the typical market correction. While some younger folks might think "..this is a new economy and this time it's different", we said that back in 1999..and then the bubble burst in 2000.
Jeremy Grantham published an article a couple days ago that takes a deep dive into were we are at the moment...one man's opinion, but, no pun intended, at least the data shows we're in pretty much uncharted waters.
Folks predict dire events daily and 99.9% of it is all noise. I've experienced several economic "issues". Things in the economy, markets, and real estate are too weird for me at the moment...everything is smokin hot. We'll see what happens. If the markets do head south(they've been wandering that direction since the first of the year), the current supply chain issues, as discussed above, will get even more interesting. Such is life..
...and now back to our regularly scheduled program..
Jeremy Grantham published an article a couple days ago that takes a deep dive into were we are at the moment...one man's opinion, but, no pun intended, at least the data shows we're in pretty much uncharted waters.
Folks predict dire events daily and 99.9% of it is all noise. I've experienced several economic "issues". Things in the economy, markets, and real estate are too weird for me at the moment...everything is smokin hot. We'll see what happens. If the markets do head south(they've been wandering that direction since the first of the year), the current supply chain issues, as discussed above, will get even more interesting. Such is life..
...and now back to our regularly scheduled program..
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01-22-22, 12:29 PM
#149
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As messed up as the entire supply chain is..it may well get worse. I've been working on personal finances for the last week. Covid-induced issues aside, the markets have been on a rather heady expansion for 12 years. Expansions typically don't last that long(in fact I think the current one is the longest in history) and we're either overdue or long overdue for a correction. The Covid dip of March '20 was more of a special-cause flash crash than the typical market correction. While some younger folks might think "..this is a new economy and this time it's different", we said that back in 1999..and then the bubble burst in 2000.
Jeremy Grantham published an article a couple days ago that takes a deep dive into were we are at the moment...one man's opinion, but, no pun intended, at least the data shows we're in pretty much uncharted waters.
Folks predict dire events daily and 99.9% of it is all noise. I've experienced several economic "issues". Things in the economy, markets, and real estate are too weird for me at the moment...everything is smokin hot. We'll see what happens. If the markets do head south(they've been wandering that direction since the first of the year), the current supply chain issues, as discussed above, will get even more interesting. Such is life..
...and now back to our regularly scheduled program..
Jeremy Grantham published an article a couple days ago that takes a deep dive into were we are at the moment...one man's opinion, but, no pun intended, at least the data shows we're in pretty much uncharted waters.
Folks predict dire events daily and 99.9% of it is all noise. I've experienced several economic "issues". Things in the economy, markets, and real estate are too weird for me at the moment...everything is smokin hot. We'll see what happens. If the markets do head south(they've been wandering that direction since the first of the year), the current supply chain issues, as discussed above, will get even more interesting. Such is life..
...and now back to our regularly scheduled program..
01-22-22, 03:56 PM
#150
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Did you somehow miss this past week?
My point was..the OP laid out a scenario of how things seem to be panning out assuming no significant (additional) upsets in the economy/markets. The economy/markets are in a rather rare place at the moment and there's a reasonable chance things may not go as hoped. Just an fyi..something to consider while making other plans. Someone once said something like " ..life happens while you're making other plans"
(I'm not going to derail this thread with a debate)