ICYMI on The Paceline last week.
I am not an economist. You know that, but I’m saying it now, because I’m going to remind you I said it in just a minute. This is what is known, in the rhetorical game, as a set up.
So, it’s shaping up to be a tough year in the bike business. The explanation for this isn’t very convoluted or complex, I think. In 2020, as the pandemic sent everyone home, the demand for bikes and bike stuff exploded. Due to factory shutdowns pretty much everywhere, that demand could not be supplied. In 2021 and 2022, as things eased, the industry boomed. Money flooded in, All the products sold. It was a dream scenario that many shop owners had never seen before.
As an aside, the ones I know didn’t all the way love it, because it meant working non-stop to keep up. Too much of a good thing, etc.
Meanwhile headwinds in the larger economy were developing. All that demand drove inflation. The prices of bikes and bike things went up (that’s what inflation is) and consumers began to feel ambivalent about both their free time, because we were all heading back to work, and their spending, because the media wrote endless stories about inflation and what it might mean for the near future.
Now, I said at the beginning that I am not an economist, and so my reading of what has happened in the bike industry might just be the ranting of a guy with a philosophy degree and too much time on his hands.
The media also contains precious few economists, and from my vantage point, there is a sort of self-fulfilling prophecy to economic journalism. If you write enough articles about a coming recession, consumers alter their behavior and trigger a recession. If you are paying attention, you will know that we are not currently in a recession despite the fervent prognostications thereof.
I have my own ideas about why we are where we are, but once again I’ll say, I am not an economist.
The upshot of all this, and the reason I’m talking about it today, is that the bike industry is experiencing a supply chain overload. Many companies forecast continued demand where none materialized, and so shops are full of stuff and low on cash. A cursory glance around the market will tell you that a whole lot of stuff is on sale, and this is the WRONG time of year to be discounting new gear. Usually that happens AFTER the spring demand spike.
That makes this an excellent time to shop for a new bike and any other bike-related thing you might need. I make this point, not to drive the grinding wheel of capitalism ever faster, but because I know a lot of small business owners who would really appreciate your patronage right now.
As I’ve said four times now, I’m no economist, but I’d wager little of the economic analysis you’re paying attention to is very prescient. Our economy is a complex, massively interdependent system. A new bike, by contrast, is a pure and simple joy.
If you want a thoroughly informative and highly prescient analysis of the industry check out all of Rick Vosper’s columns at bicycleretailer.com. He’s seen every boom bust cycle coming and going and he’s a good writer.
@alan – Full marks for Rick, yes. He’s the go-to guy on this topic.
As another one with a philosophy degree, but who worked on the dark side for almost four years ( financial markets) , I think you’re right on point.
Plenty of opportunities if you know where to find then, or if you know how to deal with your favorite independent store( forget the big chains, pun intended) and what the hell, bycicles are made for summer, aren’t they!
Full disclaimer, I ride all year long.
I am currently working in a shop and I can tell you what is happening. Runaway inflation has caused people to have recession fears so people are saving more and limiting nonessential expenses. For most people in the US, a bike is a non-essential expense. What is happening is that people are more inclined to buy a used bike or are getting an older bikes serviced. The shop I work at deals almost exclusively with used bikes and service. There is another shop not that far away that only deals in new bikes and has an abundance of inventory despite having steep discounts. They are also inundated with bikes in for service.
All this is to say that while it might be a good time to buy a new bike for an excellent price, those prices are still too steep for most people. Regardless of how steep discounts are people are still opting for used or servicing older bikes. And it makes sense. You can get a quality used bike for under $400 if you forgo all the bells and whistles of a new bike (note: most of the new stuff isn’t necessary to have.) You can also get an older bikes tunes up and ready to ride for less than $400 easily. Most of the time it is less than $200.
I race in triathlons and never have bought a new bike. Best way to do it is to get used and rebuild. New bikes these days are just too much when I’m down with a good TT bike from 2012 that’s been rebuilt.
I got my Felt z100 that’s got 500o miles on it from FB marketplace and built that one up. There’s nothing like getting to know your bike and finding a good deal while you’re at it. Honestly, New bikes are just too much when you can buy used thats cheaper and better.