What’s Going on with the Bike Industry?

Have you stopped in here for a clown circus bike? Perhaps you landed on our pages looking for a new unicycle or even some unicycle or bike tools or parts.

If that’s the case, you are no stranger to what’s going on in our industry - well, the bike industry, but we don’t exist in a bubble. A lot of what affects the bike industry affects us.

After all, we share suppliers and manufacturers, some unicycle and bike parts are effectively interchangeable, and to bring it even closer to home, those interested in unicycling are usually interested in “regular” cycling too.

So what’s going on? It’s like 2023 and 2024 were the two worst years on record for the bike industry, like, ever. And that’s no exaggeration.

We’re seeing stockouts, price crunches that are driving some retailers and manufacturers to the point of bankruptcy, and other issues.

But why?

The Big Balloon

It all started (sort of) with the artificial spike in demand caused by the “pandemic.” People suddenly had money to spend that they didn’t really have, and manufacturers struggled to keep up with demand.

On top of that, remote work schedules and layoffs gave people time to play with (that they also didn’t really have) and lots of people suddenly became cyclists.

That didn’t last long, though, as is the case with any artificially created economic sensation.

During the “pandemic,” demand ballooned, and shops were either closed or already maxed out. Inventory fell, and prices rose. Manufacturers could not meet demand.

Shops were selling bikes, parts, tools and everything in between at retail prices, or above. It was a boom the likes of which we’ve never seen before.

This brings up one of the main issues in this industry.

It’s Difficult to Forecast

When the demand surged, some manufacturers failed to realize that the bike industry is really not all that seasonal - and by the time all the buyers in 2020 and 2021 had gotten new bikes, they weren’t going to be looking for bikes once again when the retailers and manufacturers had caught up.

For whatever reason, producers and retailers over-forecasted demand and bought, or contracted to buy, way more than they needed. What happened was that, come the end of 2021, and into 2022 and then 2023, the stockout issue reversed in ridiculous fashion.

Which brings us to the next issue.

Overstocks Are Screwing Up Pricing, Which Hurts Manufacturers and Sellers

Now, the issue is mostly one of too much inventory. That’s not necessarily the case with us specifically, but in general, other players in our industry overcompensated their forecasts as a result of what happened in 2020 and 2021.

Now, they have way, way too much inventory. Some retailers are simply drowning in bikes, tools and parts and no one is buying them.

You know what happens when there’s too much supply and not enough demand? Prices fall, and in some cases, they have fallen through the floor.

This is pushing bike brands, retailers, shops, and manufacturers to the brink. They spent too much to get product back in stock, now they’re paying to warehouse it and no one is buying it, and even when they are, lower prices are not enabling them to recoup their losses.

The impact has been severe, and several large bike brands have recently declared bankruptcy, including Doppio and Cannondale. Stages Cycling, Rapha, and Kona are all in trouble. Even Shimano, the world’s largest manufacturer of bicycle transmission systems, has seen substantial decreases in revenue.

Supply Chain Issues: Lead Time Problems and the Bullwhip Effect

So there we have the basic issue that’s been plaguing the bike industry for a few years now. Granted, this is a slightly over-simplified explanation, but it’s what we’re dealing with.

Also, there’s the issue of lead time problems and the bullwhip effect that results.

Bike shops need to order their inventory a long time in advance because it almost always comes from overseas and it could take months to rectify a stockout.

When the forecast itself is inaccurate, it gets magnified by the long lead times, resulting in a bullwhip effect that is much larger than it would be if it only took a few days to fix the stockout.

And so, what we’re looking at is a market in which prices are low, inventory is too high, great brands are going out of business, and there’s no end in sight - at least not for the time being.

But, what can we say? We’ve been doing this for a long time and for our part, we’re still going to be a reliable supplier of unicycle parts, penny farthing and clown circus bikes, tools, parts, and safety gear.

Here for a Clown Circus Bike, Tools, or Bike Parts?

Whether you’re here for a penny farthing bike, tools, parts or a new mountain unicycle, we can help you out. Just get in touch with us - and if you still have questions about the state of the bike industry, give us a shout. We’d be more than happy to shed some more light on what’s going on since we’re seeing it firsthand.