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Thread: 2021 Supply

  1. #1
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    2021 Supply

    Not like this is news anymore but an interesting article regardless that came out in the industry a couple weeks ago. I worked at a bike shop all season before switching to a ski shop a couple months ago and really interesting to experience both similar and different supply/demand issues.

    ——————————————————————-

    Why Are Lead Times So Long? Covid19's Impact On The Bike Shop

    As the first waves of COVID-19 hit, governments responded by imposing restrictions on social events, entertainment and hospitality, as well as travel and mobility. However before these measures could be implemented, a surge in consumer buying began, creating shortages. It started with the toilet paper. Then tinned goods, computer monitors, home gym equipment and crucially, bicycles.

    Fast-forward to November and the shelves of toilet paper rolls are full. The limits on canned goods are gone and computer monitors are back in stock. Even dumbbells are back for sale on Amazon. But not bicycles. Why?

    The cycling spike began in April. Millions of people were keen to maintain their physical and mental health 1 in spite of gym, pool, and sporting closures. Others saw bicycles as an alternate, safer method of travel to buses, subways, and public transport2. Whatever the reason, people wanted bikes and shops happily obliged.

    April’s boom produced the largest sales month ever recorded in the cycling industry 3. A 75% increase of traditional bike, indoor bike, parts, helmets, and accessory sales, resulted in a never-before-reached $1 billion dollars in a single month. Basically, shops sold 7 months of products in 7 weeks. By early June, most were empty, waiting for new arrivals that would sell out before they arrived.

    At the same time, factories in China and Taiwan were forced to temporarily close or drastically reduce their output as COVID-19 swept across Asia.

    Now, it’s November and bike shops are still empty and lead times have only lengthened, well into 2021. But factories in Europe and Asia have been opened for months. Other industries that rely on Asian factories have recovered, to some extent. So what’s going on with cycling?

    I spoke with an industry insider to get some answers.

    It starts with a complex supply chain. An assembled bicycle, or simply a component, requires getting lots of smaller parts to the factory at the right time so it can be assembled. When a single part is late, it causes a bottleneck. And when many parts are very late, well, you get the idea.

    These pieces, such as the kevlar bead that goes into a folding tire, or the fabric bonded onto a saddle, come from small companies that have operated for decades with a deep understanding of their demand. Given that there is typically very little volatility, they run their factories very lean. These companies have the capacity to cope with a 10% variation in demand, but not >40%!

    Imagine the following scenario. Let's say that the kevlar bead company forecasts 10,000 units a month. Now, they are making 11,000 per month, while receiving orders for 15,0000. This difference of 3,000 units (or the difference between 10% and 40%) doesn’t seem like much, but the problem is cumulative. After 6 months, the backlog isn’t 3,000 units, it’s 20,000. That puts this company, in this scenario, two months behind and no orders will be remotely on time.

    Another issue is that there is little flexibility. Many components are made in one factory only. No one else has the skills, material, and infrastructure required to effortlessly switch production. For example, when Shimano had factory shutdowns in Malaysia and Singapore at the beginning of the boom, they were unable to divert production elsewhere. The global production of entry level cranks came to a stop for a couple of months 4.

    Flexibility is also hampered by the use of molds. Bespoke parts, like frames, wheels, stems, etc require them. Molds create a manufacturing capacity. There is a maximum throughput that can’t be increased by throwing more people at it. An increase in production requires more molds, which is expensive and time consuming. Furthermore, most products and their molds have a relatively short life cycle before getting replaced. If there is a new part or design coming in, let’s say, 9 months time, then any extra molds would be better used for the new product. This, however, doesn’t help supply catch up.

    Finally, and this might be surprising to some, but another factor is the cycling industry’s lower margins, especially on lower priced goods. I’ve used IT as an example of an industry that has been built around speed and flexibility to market 5. Here, their smaller sized products and higher margins allows the use of air freight and couriers if they are running behind schedule. This can save a few weeks in getting the raw materials to the secondary suppliers. And another few weeks in getting the components to the primary supplier. And even more time getting the finished product to the warehouse. But it's nearly impossible for cycling companies to do this with bicycles and still maintain a profit.

    Given that most bicycles and bicycle part manufacturers must rely on ocean freight, this presents another area subject to delays 6. From port closures, to restricting the number of workers allowed to work at a dock, to seafarers refusing to work due to government's denial to allow them to repatriate, coronavirus is affecting every step. Even once the goods are in the United States, the unprecedented surge in packages has caused further shipping delays with UPS, FedEx, and the USPS7.

    It’s not that every cycling company is facing all of these obstacles at once. They might only be facing one or two. Rather, it's a deluge of delays throughout the industry that are responsible for the long lead times we are facing and will continue to confront into 2021.

    These lead times are frustrating. But they are beyond our control. Like other bike shops around the world, we will continue to patiently wait. Why? Because at the end of the day, we know that the wait is worth it.

    The good news is that even as you read this, lots of product is on it’s way while even more is being assembled. The COVID boom’s strain on the market is forcing companies to reevaluate their systems. And as people bring home their new bikes and governments work to reopen, studies are showing that many new riders plan to keep riding their bikes in the future . Silver linings.

  2. #2
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    Someone should remind the author that most of the manufactured products we buy rely on the combining of small parts, injection molds, and ocean freight. The bicycle industry is not unique in that regard.


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  3. #3
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    P&A orders are now out to the end of 2022 at best and a lot of things are into the summer of 2023. All sortsa shit is going to be a big pain in the ass to get. Tires? Forget it, if you can find similar to what you want buy it now and don't complain that they're 50% more expensive than they were last year because they could be 100% more soon. If you're going to need brake pads next year order them over the winter when you find them especially if you need Shimano pads. You think you're going to need tubes for the family bikes? Find them now. And so on...

  4. #4
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    Seriously, bikes aren't some unique and vastly more complicated thing compared to any other widget.

    This really just screams to me that the outdoor industry as a whole is reaping what they sowed by cheaping out on talent. From ski industry to bikes, literally everyone pays non-competitive wages and as a result, you aren't getting the best talent in terms of running the business. They love bikes, and are good people, but in terms of maximizing efficiency performance, yeah, probably not the best.
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  5. #5
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    Quote Originally Posted by gravitylover View Post
    P&A orders are now out to the end of 2022 at best and a lot of things are into the summer of 2023. All sortsa shit is going to be a big pain in the ass to get. Tires? Forget it, if you can find similar to what you want buy it now and don't complain that they're 50% more expensive than they were last year because they could be 100% more soon. If you're going to need brake pads next year order them over the winter when you find them especially if you need Shimano pads. You think you're going to need tubes for the family bikes? Find them now. And so on...
    So your saying keep the TP shelves cleared? Great way to prolong this issue.

  6. #6
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    So what’s the longterm affect of this? With demand at an all time high and lead times out 300-400 days I imagine manufacturers are building as much as they can... but are people going to cancel and go a different direction before their order is fulfilled? (I did). Is there going to be surplus in 2022? If there is a market downturn prior to all these bikes becoming available and people cancel their orders and these manufacturers will be left with massive stock and massive bills and that could submarine the bike industry...


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  7. #7
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    the country is getting turned up side down right now
    the denver post just listed out that alcohol consumption has skyrocketed based on sales tax revenue
    some people are digging a deep hole snuggled up with their internet
    on the flip side many people have re discovered the outdoors and the high you get from riding a bike
    so my guess is there will be no surplus of anything these days the idea that most people are going to buy and let it collect dust isn't necessarly true people have lots more time now that they don't have to commute to the office

  8. #8
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    Quote Originally Posted by nickwm21 View Post
    So what’s the longterm affect of this? With demand at an all time high and lead times out 300-400 days I imagine manufacturers are building as much as they can... but are people going to cancel and go a different direction before their order is fulfilled? (I did). Is there going to be surplus in 2022? If there is a market downturn prior to all these bikes becoming available and people cancel their orders and these manufacturers will be left with massive stock and massive bills and that could submarine the bike industry...


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    Long term effect is that, in a few years, we'll reminisce about 2019, when bikes were still cheap.

  9. #9
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    Kind of like we do already? The prices have been steadily rising for a while now... I remember when folks used to complain about shitty wheels and GX drivetrains on $4000 bikes. Now you see those same components on $5500+ builds, and NX shit on $4-5k bikes.

    I can't pretend I know what's going to happen with the supply and demand of the bike industry, but I do think that the overall shift of people spending more time outside isn't going to change. People don't want to be in big cities anymore, and for the foreseeable future humans want to be outside and not in crowded indoor spaces for obvious reasons. I believe once we're allowed to travel more and spend money doing other things, that the market will slowly come back down to earth- but I don't think it's going to do a 180 and fuck over manufacturers or anything drastic like that.

    I'm curious to see what happens with new bike launches in 2021. It still makes sense for smaller companies that can be more nimble and aren't dealing with huge volumes... but for the big guys, I don't see many new models coming out since they won't have anything available for a long time.

  10. #10
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    Quote Originally Posted by toast2266 View Post
    Long term effect is that, in a few years, we'll reminisce about 2019, when bikes were still cheap.
    And trails were empty(ier). As I shake my fist at the cloud, I can't help but think: why does every article end with something like: and more people are riding bikes...and that's a good thing!

    Fuck that! Go back to your lazy boy. Take up skeet shooting. Buy a long board. IDGAF...just find something else to do. I liked riding bikes before everyone started liking riding bikes.
    It makes perfect sense...until you think about it.

    I suspect there's logic behind the madness, but I'm too dumb to see it.

  11. #11
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    I tried to order some things on my Shimano Pro form before Dec 31, before my 2020 allocation amount ran ran out. I was blown away on how depleted the stock level was and how far in future the ETA restock was. I can see the live warehouse inventory and ETA of restocking.
    The worst part of the ETA restock is that all of those parts are most likely spoken for, and will be shipped to retailers to fulfill orders for the shops that have placed these parts on backorder.

  12. #12
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    I think come 2022 there will be a big drop in demand. Experienced users have mostly all upgraded and those waiting have finally got their gear. The new-from-the-pandemic users, or return-to-my-old-hobby types have gotten over the novelty and many will on as life gets back to normal. Lots will sell gear to free up cash both because of time but also because the cost of the sport. The realignment of normal timing from manufacturing to for-sale new inventory in shops will coincide with a growing over supply in the used market and the whole bike realm will calm back down.

  13. #13
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    Just ordered a new bike today from my local shop. No date on when it will arrive. They promised I would have it sometime between now and June. I ordered it now in hopes I have it for May when the riding gets good......fingers crossed.

  14. #14
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    Got a call from the shop where I ordered AC's EVO. Someone there tried to refund my deposit but for unknown reasons it didn't go through so they called me. Told they guy emphatically that I don't want to cancel the reservation. Sounds like delivery could be March.

  15. #15
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    I hear normaly it was 60-90 day delivery on shimano part is now 200-400 days,

    Santa Cruz was completley sold out for 2021 sometime last fall

    The LBS that used to like to count on 3 deliveries of bikes in a season will probably only get one shipment

    I think i got ever thing I need
    Last edited by XXX-er; 01-07-2021 at 12:36 PM.
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  16. #16
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    Quote Originally Posted by smartyiak View Post
    And trails were empty(ier). As I shake my fist at the cloud, I can't help but think: why does every article end with something like: and more people are riding bikes...and that's a good thing!

    Fuck that! Go back to your lazy boy. Take up skeet shooting. Buy a long board. IDGAF...just find something else to do. I liked riding bikes before everyone started liking riding bikes.
    I'm going to start pushing the bikeathalon, where you enduro your favorite trails then have to shoot clays every couple miles.
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    I recall reading an interview with some industry insider (I think the owner of BikeComponents.de) a few months back. In it, he said that the suppliers basically weren't ramping up production capacity because they believe that demand will eventually go down, and that they don't want to have a bunch of idle people/equipment then.

    The shitty thing is that a lot of the lower tier suppliers are doing shady things and fucking over the consumer-end companies. I bought a great new light from Outbound Lighting, the Trail EVO, but their lower tier suppliers for the mounting bracket have repeatedly fucked up (first by putting too much loctite on screws so you can't remove them, and second by not installing the bar clamp hinge pin correctly so that it snaps). OL has rushed me replacements both times, but I'm sure that's got to be incredibly frustrating. Likewise, I inquired at GG about getting a replacement chainstay protector since mine started peeling off from day one. They apologized and explained that the vendor for that switched the adhesive without telling GG, and that the one used doesn't stick to the powder coat. They're working on getting replacement protectors out now.

    The good thing is that companies with good warranty programs / CS will still try and make things right, it will just take a while. Besides my experiences above, a buddy just had a linkage bolt insert debond on his 2014 Nomad 3, and SC said they'd send him a new N5 frame if he could wait until May. He's got another bike he can ride in the meantime, so he's ecstatic.

  18. #18
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    2021 Supply

    I’m planning on riding my 2017 bike until at least next winter unless I can find a cheapish used shop demo. But I’m not one of you dentists that needs a $10k bike in your heated garage to get it up.

  19. #19
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    Quote Originally Posted by AdironRider View Post
    I'm going to start pushing the bikeathalon, where you enduro your favorite trails then have to shoot clays every couple miles.
    No no no. Road bikes only...there are plenty of roads for everyone. Guns + bikes + pavement = where it's at.
    It makes perfect sense...until you think about it.

    I suspect there's logic behind the madness, but I'm too dumb to see it.

  20. #20
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    Quote Originally Posted by AdironRider View Post
    I'm going to start pushing the bikeathalon, where you enduro your favorite trails then have to shoot clays every couple miles.
    Democrats now have the presidency and both chambers. The nut jobs will be going full hoarder status. You're not gonna be able to buy ammo until roughly 2060.

  21. #21
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    Quote Originally Posted by easyrdr View Post
    Just ordered a new bike today from my local shop. No date on when it will arrive. They promised I would have it sometime between now and June. I ordered it now in hopes I have it for May when the riding gets good......fingers crossed.
    Ordered my new bike from the LBS in Feb. Supposed to be in May, June, Aug, we don't know. I had given up. Assumed I'd be on my current bike for at least another season. Got a call after Thanksgiving that my bike was in. Sweet! Hopefully, you get lucky as well.

  22. #22
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    Quote Originally Posted by alpinevibes View Post
    I think come 2022 there will be a big drop in demand. Experienced users have mostly all upgraded and those waiting have finally got their gear. The new-from-the-pandemic users, or return-to-my-old-hobby types have gotten over the novelty and many will on as life gets back to normal. Lots will sell gear to free up cash both because of time but also because the cost of the sport. The realignment of normal timing from manufacturing to for-sale new inventory in shops will coincide with a growing over supply in the used market and the whole bike realm will calm back down.
    This is what I'm banking on. Balked on ordering a 2021 with my local shop when they were placing their preorders and now I'm in limbo. I sure hope folks who bought during this time but just don't care all that much for biking start selling around 2022 ish.

  23. #23
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    I ordered a bike in August, and the Bike Brand still has not done a press release for this new model. I'm kinda nervous this model may not even happen.

  24. #24
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    Yesterday was the first day in a long time that the trails were empty on a weekday afternoon (Hall Ranch, outside of Lyons, which has been absolutely slammed for the last several months regardless of day/time/weather). Granted, it was just after an extended holiday and the temperature was in the high 30's, but it still gave me a little hope that things may go back towards "normal" at some point.

  25. #25
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    Quote Originally Posted by smartyiak View Post
    And trails were empty(ier). As I shake my fist at the cloud, I can't help but think: why does every article end with something like: and more people are riding bikes...and that's a good thing!

    Fuck that! Go back to your lazy boy. Take up skeet shooting. Buy a long board. IDGAF...just find something else to do. I liked riding bikes before everyone started liking riding bikes.
    Spent an awful lot more time this year riding off the beaten track spots, compared to my out the door ride (Marsh Creek since you're semi local) which has been a relative mess w/ freeze/thaw in full effect.

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