The Pro’s Closet?

[iriponsnow]

I sold several bikes to them & was shocked what they paid.

[toast2266]

My forecast: Next spring is going to be a great time to buy a used bike.

[smmokan]

I think they're running into the same problem that most industry companies did: Lack of proper forecasting.

I agree 100%... but that's what's crazy to me. If the commenters on Pinkbike can foresee an industry slowdown coming, why can't big bike companies? My guess is that it's greed (and investor demands) more than anything- they started getting a taste of crazy demand and huge sales, and wanted it to last forever so they doubled-down instead of thinking practically and realistically.

[Dee Hubbs]

I had a really good offer from the Pros Closet in June 2021 and thought I could sell it on the open market for a bit better. I think they offered 4500, and I thought I could get $5000 on the open market so I held onto it (but got lazy and didn’t try to sell it)
I tried again in Sept 2021 and they weren’t taking bikes at the time because they were overstocked/overwhelmed.
Finally got a notification in Oct 2021 that they were accepting bikes again, and I resubmitted the same bike/same condition/same photos and got an offer for $2900.

[schuss]

I agree 100%... but that's what's crazy to me. If the commenters on Pinkbike can foresee an industry slowdown coming, why can't big bike companies? My guess is that it's greed (and investor demands) more than anything- they started getting a taste of crazy demand and huge sales, and wanted it to last forever so they doubled-down instead of thinking practically and realistically.

Investors historically reward double down yolo plays more as the expected payoff is so much bigger than steady, conservative growth. Especially if they had venture funding, I'm sure they were getting pushed to go big.

[Eluder]

Yeah, they're hurting pretty bad. The last two years they offered me crazy deals on our demo fleet (I sold all of my bikes to them in 2020), but this year it's an entirely different situation. They offered me $1700/bike for my Revel and GG demos, and those are all $6500-7500 retail. They have so much inventory they can't sell, it'll be interesting to see what happens to them over the coming months and years.

I had a similar experience with a near new $6500 bike. They didn't even want it though I know they could sell it as I got 4100 out of it with little effort. "Check back in 2-3 months and we can likely give you $1800-2200..."

[XtrPickels]

I agree 100%... but that's what's crazy to me. If the commenters on Pinkbike can foresee an industry slowdown coming, why can't big bike companies? My guess is that it's greed (and investor demands) more than anything- they started getting a taste of crazy demand and huge sales, and wanted it to last forever so they doubled-down instead of thinking practically and realistically.

The manufacturer is really caught between a rock and a hard place.

1. You want to report a strong outlook because that's what the people above you want to see. There is a collective benefit from the product line managers, to the sales team, to finance; all the way up. No one wants to be the one to go against the grain. I've raised my hand and asked the question and was shot down immediately.

2. Factories were / are running at limited capacity, which means they are only going to take the biggest orders because they do not have time to waste for the smaller orders. So, you may have accurately forecasted 5,000 units for product, but you have to place an order for 20k units or it won't get made. This thinking is justified by #1 of the above.

3. Retailers are begging for product, but they're begging for it now. It might not seem like much, but a factory gets their bulk materials 2 weeks late, ships a month late, and there are delays on the water. Suddenly the product shows up to the retailer 2 months late and they don't want it anymore. If the manufacturer hit the original date they'd be in the black, but now that order is refused and they're in the red as it sits in their warehouse just waiting for close out.

Being outside of the manufacturer, in this instance, allows you to look at the big picture with less bias. Strip that away and everything seems pretty obvious.

[phatty]

We are going to see a glut of product in the market next year and much it will be at reduced pricing. Companies cannot afford to pay to store their overstock.

If you had some cash, 2008-2009 was an amazing time to buy second hand stuff. I suspect we're going to see something pretty similar after this upcoming season.

[WaistDeepGroomers]

Investors historically reward double down yolo plays more as the expected payoff is so much bigger than steady, conservative growth. Especially if they had venture funding, I'm sure they were getting pushed to go big.

And mindful that with the pandemic and all these bullwhip effects hitting supply chains (bike shops not getting their orders in in time, so order 2X next time, that multiplying up the supply chain as you get to the factory), undoubtedly some companies overbuilt supply chains to meet what ultimately will have proven to be a temporary bump in demand. And it takes a big capital investment to increase supply correspondingly.

I imagine there was a ton of pressure/fervor to invest and increase capacity, since it was unclear how long the pandemic would last, if the outdoor boom was permanent, etc. And yeah, not a popular position to be the guy in the c suite saying the fun times aren't going to last and to let all this excess demand go unmet in the name of caution

[Spats]

Data point, since this is now about the bike market in general:

From what I'm seeing, lower end used bikes (under $2700 new, under $1200 used) still sell for more than they did pre-Covid, though they're way down from their peak. It's the dentist bikes that people paid $4500+ for new that are getting crushed. The stimmy checks have long since run out, and the consequent inflation is biting deep into everyone's disposable income. People still want to ride bikes -- even more so now that travel is so expensive -- but they don't have dentist budgets anymore.

As with the 08-11 recession, sellers are in denial and still asking Covid prices for a lot of gear. That stuff isn't moving, because new bikes are getting discounted again. For instance, there are a couple online sellers blowing out complete Ripmo AFs for $3K (their pre-Covid price, not counting the 30% of real inflation that's occurred since then), and they're moving a lot of them at that price...but people are still trying to sell used ones for more. Meanwhile, local shops are still asking full retail for 2021 and 2022 bikes, and I can already tell that they're going to have a LOT of unsold inventory that will crush the order volume for next year, since bike-selling season up here is over.

It'll take a while for used sellers to give up and lower their prices...but eventually they will, and we'll see a lot of dentist bikes for short money. That'll only happen after the shops lower their prices, though, because shops have to sell product or they have to close, whereas people can just leave their bike sitting in their garage.

My prediction: massive new bike discounts next fall/winter, including a lot of "manufacturer direct" sales that piss off retail shops, and used prices finally falling along with it.

[smmokan]

My prediction: massive new bike discounts next fall/winter, including a lot of "manufacturer direct" sales that piss off retail shops, and used prices finally falling along with it.

This is already happening with some of the bike companies that have hybrid models, selling DTC but also in "select" shops and online retailers. And yeah, it's definitely pissing off their retail partners since it essentially eliminates any/all margin on their inventory.

[J. Barron DeJong]

This is already happening with some of the bike companies that have hybrid models, selling DTC but also in "select" shops and online retailers. And yeah, it's definitely pissing off their retail partners since it essentially eliminates any/all margin on their inventory.

New for 2023 Norco Fluid A2 original MSRP was $3999 when announced in the summer, can now order direct on their website for $3149. Still found dealers listing them at the original higher price on their websites and Pinkbike.

[XtrPickels]

New for 2023 Norco Fluid A2 original MSRP was $3999 when announced in the summer, can now order direct on their website for $3149. Still found dealers listing them at the original higher price on their websites and Pinkbike.

Could part of this be that the USD is much stronger than the CAD compared to a year or even 6 months ago?

[J. Barron DeJong]

Could part of this be that the USD is much stronger than the CAD compared to a year or even 6 months ago?

Maybe, but I think it would be a small part. Canadian dollar is down about 6% from summer, and this is a 22% price cut.

FWIW, when I was working/purchasing for a shop 20 years ago in Canada, the pricing on US companies bikes didn’t really fluctuate in time with the exchange rate. If Canadian dollar was weak, generally bikes were better value in Canada, if strong Canadian dollar, worse value.

But that was 20 years ago, and going in the opposite direction, and different companies, so not sure how meaningful it is.

[panchosdad]

FWIW, I've been doing some looking and LBS's have been offering 10-20% off on 2022 stock.

Edit to add: Browsing through the Pro's Closet listings I'm seeing much better pricing locally on new bikes.

[simple]

Pro's Closet has to pay for their Boulder employees to live in the very expensive and posh bubble. They do have good connections for bikes from reps that are hardly used.

[XtrPickels]

This is already happening with some of the bike companies that have hybrid models, selling DTC but also in "select" shops and online retailers. And yeah, it's definitely pissing off their retail partners since it essentially eliminates any/all margin on their inventory.

My wallet is one Stumpy Evo lighter because of it....

[smmokan]

FWIW, I've been doing some looking and LBS's have been offering 10-20% off on 2022 stock.

Edit to add: Browsing through the Pro's Closet listings I'm seeing much better pricing locally on new bikes.

It's interesting to see that they have a bunch of brand new bikes from RM, Orbea, etc. I wonder if those are shops ditching inventory they can't sell? I can't imagine those bikes are coming straight from the manufacturers.

[jamal]

I managed to get myself a new hardtail xc bike recently but I'm still a little pissed that TPC has/had an orbea alma in the size/spec/color I wanted despite our rep apparently being unable to get me one for like two years, not even a frame. I'm curious how they got all those.

[toast2266]

Pro's Closet has to pay for their Boulder employees to live in the very expensive and posh bubble. They do have good connections for bikes from reps that are hardly used.

Didn't they move to Louisville?

[joetron]

Louisville is more or less part of the bubble these days, I’d wager. Most of the Boulder IBD refugees probably still live there


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[Danno]

Yeah, Louisville is only slightly cheaper than Boulder, still crazy expensive compared to most other places.

[bamboocoreONLY]

They wanted to give my buddy only 3000 for his XTR build 2022 Pivot Firebird. Funny stuff but yeah, the market is saturated.

[rudy]

They wanted to give my buddy only 3000 for his XTR build 2022 Pivot Firebird. Funny stuff but yeah, the market is saturated.

If its a medium tell your buddy I'll give him $3,100 for it

[panchosdad]

Got a blanket 10% off offer from them today.