More Secret Layoffs In The Bike Industry
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- Опубліковано 5 лип 2024
- The Pro's Closet Is the biggest bike resale company in the world and has already made two huge rounds of layoffs. Join me as I discuss how they're trying to keep it under wraps and what it means for the rest of the bike industry!
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Timestamps:
0:00 Intro
0:30 The Pro’s Closet Cuts 15% Of It’s Staff
3:29 More Layoffs This Month
5:04 Final Thoughts
#TheProsCloset #BikeIndustry #DailyMTBRider - Спорт
The Pro's Closet reminds me of GameStop in a sense of mechanics.... It is hard to try and make a decent profit while essentially flipping someone else's item. Hope the ones laid off can bounce back quickly!
Pros Closet made very good profit during bike boom after Covid. They were selling used bikes close to MSRP.
@@rajeshkannan_s But sadly most good things come to an end.
I work in a shop for a major bike brand. It's been scary watching all this happening around me and knowing my store is low volume
Thanks for these regular updates. Sorry for those that lost their jobs, but there are probably very few people losing sleep over TPC having to drop the price of their insanely marked-up used bikes.
Yeah screw them. Companies like that need to fade away. Bunch of scam artists from my experience
Seen some 7 year old trek bikes on there that were more expensive than the new ones at my local dealership
They actually have great prices on their components. Last year i needed a shimano ulegra disc 8000 caliper which every bike shop in the US did not have in stock including shimano. The Pro Closet had some in stock and their customer support of great.
Word is this "price reduction" will be 20%. Which still isn't less than before the markup... I'm tired of being finessed by the industry
When a brand new KTM 390 Adventure motorcycle for $6500 dollars is sitting in the same shop that has Specialized MTBs for $6700 you know the industry has gone insane. If KTM can put a six speed gearbox 40HP Real Brakes Real suspension Traction Control machine together for that price, Specialized should be able to do a simple in comparison bike for half of that, bikes are so overpriced
It is crazy to think about this, but supply and demand is massive in pricing, and the fact that 3/4 of KTM bikes are all made off the same chassis. I doubt there are millions of units of carbon specialized mtb bikes. Price per unit changes dramatically for 10000 pieces vs a million. And GE doesn’t throw lines of credit at the bike industry for financing new buyers, like they do for motorcycles. On top of all of this MTBers hold a stigma about model year on bikes, makes absolutely no sense, ends up putting a higher value on new things and driving down the value of used items.
@dick mac the frames on carbon fiber bikes also have to be layered by hand, meanwhile the vast majority of component manufacturing on motorcycles are relatively automated.
Exactly!
You ever buy a carbon motorcycle?
@@Mrod24_7 they're not $6100 🤣
here in uk, the minute covid struck and bike riding grew in popularity prices for bikes,parts,service etc doubled! in some cases tripled the industry had this coming for their sheer greed.
Amen! 100% truth, common folk vote with their wallet.
I received an email from Specialized yesterday targeted to it's Canadian customers titled "We heard you" and message boiled down to "we made the important decision to adjust the pricing structure of our bikes in your favor". I cleaned up the embedded link URL and it says "campaign=CACampaignENBikepriceadjustments" Weirdly enough there are no advertised price cuts. I confirmed this using Wayback Machine screenshop from 6 Dec 2022 and indeed no price decreases. They continue to screw us Canadians by first sending super low stock across the border, not offering sworks framesets through local bike shops and now saying "WE ADJUSTED PRICES" but in reality they haven't done jack.
I've seen bikes on Pros Closet priced higher than new. Just saying.
I have a 2019 Trek Madone that I was possibly interested in selling last year. Checked their website and selling price for the same bike was the msrp of that bike which was $6400 !
I actually really like the daily or weekly bike new from you. This should definitely be a series
i am indeed LOVING these! I used to mtb a little back 2018-2020, now im a big time BMXer looking to go back into mtb, was gonna get one last fall on pinkbike, but i was told to wait cuz the economy and youre my evidence. youre my news, keep it up please!!!!!!!!!!!
These bike sale videos are #1 on my UA-cam list! Thanks bro!
Thanks for the info Josh! ...love the new bike industry content. ...no one else is doing this and it's needed.
Very interesting pivot with the channel recently. No one is touching up on this topic so good on you Josh for being the one. Really thought this channel was going under but glad to see you back. Maybe even back on a bike soon too?
Outstanding job!! Love your style and sense of humor!!
I love these videos to hype me up to jump on a deal or hold my bike sales.
Thanks for the content and the updates. Please keep doing these videos if you can
I love these types of videos you are doing right now. I hope you got more content!
“Why would you buy and e-bike” 😆
He lost me on that one 🤣
I really love the Videos man, thanks for your efforts
enjoy your videos, keep them coming. Very informative 👏
When you're over 50 and have a new knee and waiting for another, you'll know why ebikes are so attractive and relevant. I ride an Orbea with torque sensor. It's wonderful and allows me to enjoy the single-track through the woods again. Thanks for the sometimes informed and usually interesting content
I'm only 27 but I see the appeal of high performance e-MTBs, they're sick
I'm about to turn 59, am currently going through chemotherapy, and love my Orbea Rise M10! This is coming from a former road and mountain bike racer.
@@Sharpie37377 Great to hear. Get well!
I'm almost 50 no ebike for me yet. I see the appeal, but like purity having no electronics on my my bike.
However, I honestly think class 1 ebikes are healthier and safer than non ebikes. MTB can be too much cardio at times and has too much stress on joints and knees. Ebikes relieve this a little bit.
@@hammertime7740 Exactly my point, well said
"Why would you buy an E-bike". Just what Rock have you been under?
If you can't be bothered to pedal, find another sport.
@@bartmullin8018 ,....Yes, absolutely correct!
He was clowning ebike i just unsubscribed
Completely agree, my best friend that has spent 30 years in the industry as a mechanic and a machinist has transitioned to motor sports and working at a company that sells and repairs motor cycles, quads and e-bikes. As for the Pros Closet, once I checked out what was thier biggest surplus and it was e-bikes lol. I guess that makes sense.
Josh, I thought you left youtube for good around that time you got the ripley AF.. I'm glad your back at it!
I'm currently employed in the industry, part time. I work as a Mechanic/technician. I won't state the company name for privacy but, I see a massive drop in demand and I am very interested to see what spring will bring in terms of demand and sales for bikes. Our sales in snowsports gear are fairly stable as we are located in Montreal, Quebec, Canada so a winter sport center, but for bikes I can't say what we will see....
Thanks for doing what you are doing! Keep up!
It's also quite sad that huge companies can just lay off staff without any reasoning... In Europe (Germany) they need massive reasoning to lay off not only 1 employee but 15%!! is insane
They do have a reason. The company sees an economic downturn and is preparing for the worst
And in a way it actually is nicer on the employees since it give them more time to find a job when everything is still chugging along. Not laying off everyone in one big lay off but doing it in small increments, and with my past experiences they often help the employees find new work.
@DaiIyMTBRider.. huh?
Bike shop tech here. eBikes make biking accessible to people who otherwise wouldn’t be able to bike, so I wouldn’t knock them. I also have no qualms with climbing, but doing it on an eBike is also silly fun. It’s also great for recovery riding. There’s certainly a place for them in the sport.
I agree, I was thinking the same thing about his anti e-bike comment. Such a narrow minded attitude also I guarantee e-bike are the future.
Thanks Josh, great video 🤘🔥
Thanks for doing these really INFORMATIVE videos....I am in the market for 2 bikes one for me and one for my son so these videos very helpful to me....
I agree with the fact that TPC over priced their used bikes. Although everyone has the last couple of years. I still see used prices on bikes that are more expensive than brand new from store ridiculous. Just waiting to buy an Ebike in the next couple of months if prices really do go down.
This is good information, but I disagree with the conspiracy-theory approach to calling the layoffs "secret" like there's some hidden agenda out there. No company advertises proudly that they're laying off employees. This is normal economic cycle stuff that happens all the time.
Gotta work the algorithm
Agree. Daily MTB is knowledgeable about bikes, but not so much about business. There is nothing nefarious out confidentiality or NDAs, either. In our business, every single project is protected by an NDA. It is how business works. It takes nothing away from the facts that Daily MTB is discussing about prices, but his discussions about secrecy just show he is not particularly knowledgeable about business
@@user-sj7rp1wl4t Name one company that advertises that they're experiencing layoffs. No conspiracy. Not sure what else you're talking about, but I'm talking about bikes.
Hopefully, bike prices will fall back to pre-2018 bike markets and stay that way for the forceiable future.
Great videos,,very informative. I am working with a local dealer, but the estimate for the trike came in a lot higher than I thought it would. His listing of a trike was $300 more than it was listed online(thats why I went to him in the first place). Then He said he would get prices from a huge online retailer to match prices. But between taxes($300) and his estimate, it is over 1k more.
TPC has been a great place to nerd out on bikes/the industry the past couple years. I'm continually shocked at the prices they put on bikes that are 4-5 years old and thoroughly dinged up. I sold them a frame and, as is typical in retail, they marked it up 50%. Makes sense, not complaining, just was interesting to see how the whole process worked. I submitted another bike a last week, and they were only offering store credit, and a rediculously low amount at that. Like the big boys, they are sitting on a giant pile of inventory and it's gotta go.
Yeah I tried to sell a bike to them a couple months ago, they also offered only store credit and it was less than half of what I was expecting. The bike is almost brand new too.
Fortunately the bike industry goes up this year, I am currently applying as a seller on my local Mexican Scott bike shop, good luck to me.
The Pros Closet was charging way too much for used bikes. I get it, the market was up on used bikes during the pandemic. That said, their high prices is why they have too much inventory. I feel bike shops and companies took advantage of hard times. Shame on losing jobs. Terrible.
Pleaseee, keep making these
Love this guy, watched his recent videos and got a hold of some race face arc 31 carbon wheels with i9 torch hubs 850$! Wouldn’t have done that with these videos
I’ll be honest I was interested in about a half a dozen bikes offered at pros closet and they were the same price as new. I call that taking advantage of supply shortages to jack up prices on the used market. I’m very glad to see this business model start to die.
The Pro's Closet is a business that is based on selling high end used bikes. They prospered temporarily from the demand created by COVID. But the idea that a business is based on selling bikes up to $13k is insane. None the less the idiots that make up the investment world invested $60 million into TPC. That is so stupid that it boggles the mind.
I have sold a few bikes to Pros Closet over the years. I get a bid from them on every bike I sale. Most of the time there bid is to low. Interesting responses to my last three submittals to them. Two where e-bikes and declined. The third was a Evo. They offered to buy for over thousand under what it sold for on PB. But it was not a cash offer it was a in store credit. I called them to discus the store credit and was told at this time they are doing no cash purchases for bikes. Guy on phone sounded bummed about his job……
No cash offers, only store credit? Sure sign that they're buried in inventory, and know their margins on that inventory are going to get squeezed hard by plummeting new bike transaction prices.
Never really was a fan of their business model, which kind of seemed like the bike equivalent of Carvana. They both tried to corner the used market by outbidding everyone, then driving up the retail prices. I won't shed a tear for the financial losses of either now that their inventory values are deflating rapidly.
Oh the poor bike industry. Eventually the gravy train runs out of gravy.
Do you think Trek bikes will go on sale? Seems like they're holding out at this time. Please let me know boss!
HEY!! I just saw an add for marin bogof deal on a few bikes. Is this real? Good deal ? Have you reviewed any of these? Time sensitive.
My closest Trek bike shop closed a few months ago! Chino Hills
Something is wrong with the industry. Got some insanely cheap prices on parts.
Will Fezzarri also start to discount their bikes ??
What is your views on e-mtb ??? My friend Turn to emtb and wanted me to buy one but My issue with them you cannot get fit with a ebike
Obviously he hates ebikes time 1:05 look his comment and facial expression that said it all, he lost me after that
I knew prices were going to crash as soon as I saw shops and stores selling the GX AXS groupset at below MSRP a couple of months ago.
Yup. I bought an upgrade kit for $380 shipped. Still stupid money to spend , but I wanted electronic shifting so here we are. Two weeks before I purchased it, the same shop was selling it for $633.
You think it’s a good time to sell and upgrade? Or just buy parts for current bike?
I had the same question and decided to upgrade components. Now where are the deals for shocks carbon wheel sets tires brakes?
I was talking to my local bike shop manager last week and he said he canceled his bike orders because of old stock he could not sell and his main distributors said they have so many bikes it would not be a problem to just order bikes as needed. I brought up did the industry get greedy during Covid and he said yes! In every aspect of it. From components to full bikes were vastly over priced. But he say he thinks right now it’s just the winter phase of the industry and once spring and summer comes bikes will move but as you said probably at precovid prices.
I can promise you they didn’t buy used bikes at a high price. They have never offered me more than half of what I ended up selling my used bike for privately. I sold a used Devinci AC for $3500. The offer I got from pros closet was $1500.
And that's exactly how they're so big with tons of employees (or ex now). Before all the prices cuts, when I looked at their prices, I was astonished at how much they go for. I couldn't justify buying a used when I could have dumped just a few hundred more and get a brand new model.
I ordered two, moto mini bike style e-bikes from My Bike Shop last summer. Last week I got an email that they were going out of business after 12 years. Something is definitely going on.
What don't you like about e-bikes?
He clowning ebikes, gotta hit the unsubscribe button for me lol
Give it 5 years and all your favorite bike brands will be owned by 3-4 mega companies (think car manufacturers, media companies). I'm actually amazed it hasn't happened already!
They mostly already are, and are mostly all manufactured I think by Giant.
Just bought a brand new 2022 stumpjumper evo aluminum comp for $3,300 total out the door and shipped. Specialized has it for $4,400 plus Tax and Shipping which would bring the price up to approx $4,900. Thats a $1,600 discount on a new bike
Loving me information news updates , Do you believe Prices might come up a little bit during tax refund season Since people will have a little extra money to spend?
During the peak of Covid price hikes I decided to see what pros closet would buy my bike for. They offered like 2600 for it. Well here we are and about a month ago decided to do same thing and now they only offering 1500 for it
Layoffs @ Trek too
On the same note Nordic skiiing did the same thing in 2021 but on a much smaller scale. People in snow country were buying equipment that was 35 years old and bleaming the shops for not having more.
I feel like this is the cycling industries Carvana.
Took the words right out my mouth!
Carvana is using venture capital funding to buy market share through loss leaders. Unsustainable.
Oh and they're a predatory lender preying on the poor. Profiteering off of those struggling to survive. Deplorable. Avoid Carvana like the plague.
This is going to be the norm for the next few months as many businesses across different industries settle back to "normal" size.
When Covid hit 3 years ago everyone wanted a new bike (amongst other things...) So businesses ramped up their head counts, and now Covid is becoming normalized the demand for bikes is falling, so sensibly businesses need to re-size to remain profitable or even at break-even. Sad for those made redundant, no doubt about that, but we are seeing huge layoffs in other sectors (Big Tech) too for the same reasons.
For a while there, they were selling used bikes for more than new ones.
Im waiting for bike part prices to fall too
Same here. I got a list of things I want but not at these bloated prices.
The new bike market appears to be adjusting after Covid price hikes - major brands are offering serious discounts to maintain cash flow/reduce stock. The problem is that the used bike market is lagging - used stock was acquired against the hiked prices and are now competing with discounted new(er) models. Whilst this cannot last, the more downstream retailers are going to experience signifcant challenges until the market stabilizes again.
Nice info Mate,.. I really love it Thx so much
The couple time i went to the pros closet it seemed like the bikes were so close to new in price it didn’t make sense to buy used.
So when used prices start falling…
Hey Josh, G'day from downunder.
I'm going to preface this by saying I'm not sure about the Pro's Closets shipping policy is but if they could find cheap shipping to the southern hemisphere they could possibly move more inventory as it's currently summer when more people are riding. I know Aussies would love to get their hands on some bikes that manufacturers normally put a premium on when they're sold downunder
No such hing as cheap shipping. Fuel costs preventing that
Tpc not buying and offering only in-store credit for trade ?
btw, in Ontario over the past week, I seen some enduro starting to drop the price. Will not know for sure until after the riding season.
Pro's closet have super high prices on used and beat-up bikes. They have the bikes in stock for months.
When you just resell in the retail space... It's expected for this outcome.
Let the Retired Employees start/form a cooperative society, & start doing business all over world , with minimum profit. Approach the UNO ,& other world-wide organisation, to do retail business alongwith servicing facility + replacing parts also, whenever / wherever - required by customers.Bike-price also should be competitive."God help those- who help themselves" .-always true.= senior citizen.
their business model will not make it through a downturn
Pros closet is fundamentally in trouble because they bought bikes while prices were high and now prices are coming down. Additionally, pros closet did real damage to their brand image by selling bikes in worse condition than stated or that were poorly repaired with lower grade parts at still premium prices. Now they are stuck.
I feel no sorrow for TheProsCloset having financial issues. They use the Gamestop model of giving the seller bottom dollar then selling that same bike or part for equal to or barely less than a new one. The cycling world is better off without them.
Waiting for the bike industry crash so I can buy a dirt jumper
They paid too much for used bikes and now are suffering. Hopefully they can recover some of the money invested in them.
Sales going down compared to what though?
Covid times were highly unusual. I’m sure sales will drop as a comparison to pre-Covid times and take a while to recover. Factor in that MTB geometry has hit the sweet spot, there’s no wonder all the big brands are focussing on pushing their e-bike offerings.
I suspected this was coming. I sold two higher end Evils to them and got what I thought was a pretty amazing deal. Then I saw what they put the bikes up for sale at which was shocking! And they sold too. I knew it wasn't sustainable and at some point they'd be left hold the bag.... or bikes in this case. Hope they can bounce back as they seem to be a legit business.
Bicycles and E-Bikes have become way too expensive. $ 6'000,-, 7'000,-......10'000,-....15'000,- for a bicycle is extremely overpriced. These are prices for cars. A car is tons of material, a bicycle is 60 lbs, maybe less. Of course expensive high-end bikes are good, but they must be good, because they are expensive. On the other hand there are inexpensive bikes that are good and good enough for most of the people. Losing weight, getting in shape this one can do with many bicycles. It must fit riders, but it doesn't have to be expensive. The bike industry took/take advantage of customers. The advantages are that high prices offer good work and jobs. But this doesn't work if the customers don't buy. Who is actually cycling everyday? Who has the energy? In relation to the entire world just a few people do that. So a lot of bicycles are bought and not moved after a short time. Buy a bicycle and lose a lot of money. Also before Covid the market was full with bikes. We have millions of bicycles too much on our planet. Africans for example are looking for them desperately, but don't have access to it. USA, Europe, Asia and so on have mountains of bicycles. Average people can buy new used bicycles everyday, if they want to. Riding this model today and another tomorrow. Our world is completely insane. It is good to calm down, ride your bicycle and think about it.
A lot of those "original prices" on TPC are NOT what the prices were originally. They are amounts that were increased from where they were, initially, so that the "sale prices" seem that much better.
Aren't they just listing MSRP?
Pros closet has never made a decent offer from my experience.I put 2 different bikes out there and got very low offers. One bike was a 2021 switchblade in excellent/mint condition. The cash offer was stupid low and trade in offer was not much better. I also put my current bike on PC to see what kind of offer they would make. Pretty much the same type of offer as the SB. I checked thier stock for similar bikes and are selling for nearly retail. I also seen older bikes on PC that are selling for nearly retail, as in current market retail prices. Needless to say, I never took thier offer. Buy new if you can or from a private party.
It’s crazy how many bikes they have. That’s a ton of money sitting there. Imagine if they go under and a flood of bikes hits the market for dirt cheap! It’ll be like The Great Bike Recession. 😂
Thanks for sharing this with us Josh.
nothing against pros closet, interesting idea for a business, but the used bike market was bound to come back to earth.
Have 3 mountain bikes, newest 2017, oldest 2012, should have sold one of them during the run up in demand (and used the money to buy a meme stock), would, coulda, shoulda…But, I started riding all 3 regularly again reduce the frequency of drive train wear, as it became harder to get cassettes.
The pro's closet is way over priced. Also they do not buy bikes close to retail...at most 50 percent or lower is what they will offer
Great info. Thanks. The dramatics are distracting at best.
Funny thing, I just literally got an extended offer for my 2021 switchblade. They offered $2300 cash...lol. I sold the bike last summer and got a pretty good price for it. If you are buying or selling a bike, Stay away from PC if you can
I met the owners when they were just staring out (I was working at a shop in Boulder) and thought...how the hell are you going to make money? At the time I just sold my old bikes myself. I didn't think there would be enough people willing to let them take a cut of the sales price...I was wrong. They are (or at least were) making bank. Seems reasonable that they have to let a few people they hired during the Covid craze go. This is more of a reduction of staff back to their normal levels.
@2.48. I doubt TPC is trying to sell them “close to what they paid for them”. I’ll bet it’s more accurate to say are trying to recover the entire cost of the bike AND cover their operating costs AND make a decent profit driven by the value of the service they provide to the customer.
Great to be doing industry news … but you gotta make like you understand fundamental business concepts.
The problem is the pricing oh my gosh for what they want you can buy a new one for a couple hundred dollars more
Man I used to roll by the pros closet in Boulder at their old location and score some really sweet tires they would leave by the dumpster....douchebags in Boulder are really easy to find
They offered me 900 for a frame. I sold on my own for 1500. Tough business model
I looked into selling them a virgin full sus frame. I wasn't thinking much but the offer I got was so low that I'd hang it on the wall as art before accepting it.
The Pro's Closet was able to eek a niche out of the resale business because of high prices at the mid to high end of bicycle models. Even though margins are roughly the same, there's more meat on the bone. 35% margin is actually decent cash when a bike's $8k. Not so much when it's a $500 bike.
But they have to forecast carefully and purchase by offering below perceived market value to make their model work. And they have to demand a premium, which is ok. And right now, a downturn in the market will obviously hurt them.
They're putting a "CPO" stamp of approval on a nice bike so the consumer can purchase with confidence. Most people have no clue what's involved purchasing a used bike. Buying stolen is the biggest risk.
But knowing what to look for? It can take quite a while to assess the condition of a used bike.
I took over an hour inspecting a used tandem to determine its quality. I lucked out and picked a diamond in the rough. But I didn't TRULY know the condition of the bike (and its value) until well after I paid for it. Six weeks later after a complete overhaul did I realize how nice the bike was and is, despite it being 14 years old.
Obviously The Pro's Closet cannot do this, but they can do about 80% of it and stand behind the product they're selling with a guarantee.
(On the flip side, before this, I found a similar used tandem over 10 years old. The seller was asking WAY too much for it. Then they mentioned that they bought it at the end of the model year on closeout. Oops! So that meant they were asking basically what they paid for it - after ten years! I told them they were high as a kite to feel they should recover their initial cost. After ten years of use?!!! People can be so totally unrealistic. BTW, I was amazed to see used tandem prices throughout Covid to remain really really good for buyers. Now? It's gonna be even better. Perhaps I'll pick up that coveted Ventana ECDM now!)
I think they have a tough business model…they have a huge inventory and paid too much for their bikes…then they have to include shipping the bikes to whoever purchases the bike.
Anyone else try selling a bike to pro’s closet and they only offer you site credit.
They just did another layoff this week
Isn't this just a correction to the mean from before the government shut down?
Pros closet , why not buy from the guy selling his bike directly ?,