Bicycles and bicycle parts likely to be in very short supply into 2022 due to large increase in demand and supply disruption caused by pandemic; what bike shops can do to survive and thrive

Australian bicycle industry reporter Phil Latz recently published an article in Bicycle Retailer and Industry News with his candid assessment of what has happened to the worldwide bicycle industry since the pandemic began, and what is likely ahead for the bicycle industry and local bike shops over the next year or so as the pandemic plays out.

Bicycle Retailer and Industry News published this article with predictions of increased demand and supply shortages through 2022. What can local bike shops do to survive and thrive?

His assessment of the next year for the bicycle industry is not very rosy--in part precisely because of the significant increase in demand for bicycles that the pandemic has instigated. 

If Latz is right, his suggestions are a must-read for anyone involved in the bicycle industry or owning, running, or working at a bike shop.  And his observations are both interesting and helpful for bicycle industry consumers as well:

If you own or work in a bike shop I would urge you to read this article. It might not make for happy reading, but I hope it will help you get through 2021 ... at least a little better than those dealers who don't read it. . . .

To summarize ... hours of comments into a single paragraph: "If you thought supply was tight in the second half of 2020 then you ain't seen nothin' yet! 2021 will be tighter still, possibly for the entire year." . . .

As we all know, our collective bike industry COVID-19 story to date has been that after some initial uncertainty, demand for our products took off in March and stayed at full throttle, at least until about June or July for most dealers. Then a combination of winter and supply constraints started to bite, and things leveled off, but still at a much higher altitude than where we normally fly for each respective month.

This leads to the first problem for 2021. Virtually all of the reserve stock that wholesalers usually hold so that retailers can order on demand, has been sold. During my road trips I've walked down empty aisles of warehouses that might normally hold 10,000 bikes with barely a few hundred. One company reported 107 bikes in stock compared to a usual holding of 18,000 bikes. Other smaller warehouses were completely empty with the next two or three shipments already fully pre-sold.

The full article is well worth a read. It is a detailed report and analysis of the current bicycle and parts supply situation in Australia, by a reporter who covers the bicycle industry there and knows it in detail from bottom to top.  Since Australia is at the peak of its summer season now, they are on a somewhat different cycle than we are in the northern hemisphere.  But Latz suggests that the northern hemisphere suppliers and retailers are likely facing a very similar situation, particularly once the spring and summer seasons hit here.

Prediction: Supply chain and freighting issues combined with significantly higher consumer demand will lead to bicycle and parts shortages through 2022

Latz believes that the supply chain issues and and significantly higher costs and delays in freighting will last at least into 2022.

Big Shark Bicycle Company - one of many Missouri bike shops that may be affected by the supply chain issues

In addition he (along with many others worldwide) believes that the higher demand for bicycles, parts, and supplies that has appeared worldwide during the pandemic will continue, at least to a degree.  Demand going forward will be higher than it was in the past, because so many more people are cycling, and so many new cyclists have joined the sport. The typical trajectory for new cyclists is to upgrade their bicycle and equipment after a year or two.

Latz's practical suggestions for keeping your bike shop afloat through 2022 in this unusual environment

Latz makes a number of practical suggestions for local bike shops to survive in this new environment.  This is a must-read for anyone in the bicycle industry and those who own, run, or work in a bike shop.

Among Latz's suggestions for bike shops:

Pedego Bikes - another group of Missouri bike shops that may be affected by the changing environment. The e-bike industry has come of age since the pandemic began, with greatly increased demand and increasing acceptance of e-bikes by consumers.

• Scramble to get your hands on every bike and bike part you can.  Don't just sit back and wait.
   
• Quickly reduce overhead to match any decrease in sales you experience due to supply issues.
   
• Manage your cashflow carefully.  If you currently have something of a windfall due to increased sales and service during the first portion of the pandemic, manage it carefully to survive the next phase, which may be more difficult.
• Create or increase alternative income streams, such as bike rentals, repair, parts and accessories, sell second-hand bikes, do bike rentals, run guided tours or events, increase cycle fitting service, or open a secondary/complementary product line.

Read the full article here.

Two of the primary goals of MoBikeFed's Vision for Bicycling and Walking in Missouri are to build a statewide movement around bicycling and walking and increase the number of people who regularly bicycle and walk.  We can't do that without a healthy bicycle industry in Missouri!

Your ongoing membership and generous financial support help turn our Vision into reality.