Bike Industry goal for 2024: Less is More
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- Опубліковано 4 сер 2024
- After the biggest 2 years of sales the cycling industry has ever seen in 2020 and 2021, the industry is now trying to figure out how to handle a sudden downturn and flatlining of consumer demand. Who is to blame? Geopolitics? Economics? Or was it simply a handful of greedy industry leaders overreaching and exceeding the realistic long term growth rate that this industry has steadily seen for decades? Let's dive in and discuss some simple business fundamentals that could maybe help bring this amazing sport and its industry back into the focus of global citizens.
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I'm no business person but you made a lot of sense. Frank Lloyd Wright said "Form follows function." Charles F. Kettering said "Parts left out cost nothing and never need repair." My dad gave me the following financial advice, "Buy what you need." Bicycles are devices with two wheels. I think some of these big bike companies are trying to reinvent both of them. Then there's the KISS principle. (Keep it Simple Stupid.) Thanks.
I use the "K.I.S" principle:
Keep It Simple.
Your dad is wise
@@BikeVanDadThanks - He's gone for quite some time. Your sentiment was very nice.
Just buy 4 old bikes and love em.
Like with any decent product. Durability, cheap and available replacement parts and limited warranty will mean customer satisfaction .The other thing is bicycle manufacturers should lobby and pressure our governments to build more bicycle infrastructure the same way the automobile industry did .
Where are all these surplus inventory? I can't find a TCR in stock anywhere...
I have dozens of bikes, including some pretty fancy road bikes. I damn sure can't afford a new mountain bike or road bike of any quality.
Great Advice 👍
Their target margins are not reasonable - the Chinese bike industry will eat them alive with a 5% ROI. Cutting costs to preserve market share is just strangling yourself. Better for them to specialize in whatever their specialty is and defend their value prop with quality - the big general manufacturers deserve to go under.
Too many model choices also creates the Paradox of Choice. If you are presented with too many options, the likelihood of making a choice goes down.
Was looking at a gravel bike from one brand and they had over seven different versions of the same bike with overall minor changes to each version with very little change in the price point.
People like to have a price anchor for making buying decisions as well.
Choice is always presented as an advantage. It hardly ever is. When I was selling very high-end custom bikes, where every little bit was subject to choices, almost every one was a disappointment to the customer. That's because there was too much choice, and by the time the bike arrived the customer had always changed his or her mind about various aspects.
Im sure the pandemic got alot of people on bikes fresh air and exercise without having to be couped up indoors plus alot of people had much more free time being on unemployment also they sent what was it 1400 to everyone plus the extra couple hundred added to the unemployment check
But, fixie road bikes and singlespeed, rigid mountain bikes with steel frames were simple - and nobody could make any money from them. Bikes that don't break, don't go out of fashion (because they already are!), don't cost much, and can be worked on at home by anyone, aren't good for revenue generation. Marketing ensures that consumers now demand a tech arms race, which presents the potential for high returns in a stable economy. Fixies and singlespeeds are great fun, and make sense for many riders, but simplicity has been done and won't be coming back.
Complexity and high prices don't attract new riders. The market is too small. We need more people riding, for their own health, for the planet, and for the bicycle business. I have all kinds of bikes, but now mostly ride coaster brake cruisers. You'd be amazed at what's possible with a 36-tooth chainwheel. I'm 65, and I don't have a car or truck any more. I rent a van if I have to move something big.
I think you have it right about simplifying. Look at the biggest volume companies with the highest margins like Apple and Tesla.
“The barrier to entry to this sport right now is just insane.” This is a straight-up lie. The bicycle industry has never been more competitive, meaning your money goes further than ever before.
If so, the accessible/affordable models (sub $1000) should be a primary focus in their marketing plans imho to get new fresh people into the sport. Mostly to secure future long term customers by continuing the recruitment of new users into the sport.
@@BikeVanDadThe bike industry is no different to any other. Do car adverts show the poverty-spec models most people buy? Are the people modelling clothes fat slobs like most consumers? Brands will put their best foot forward in their marketing while offering cheaper alternatives to maintain market share (at the expense of margin). I acknowledge that your view of the bike industry is the prevailing view. But just because most cyclists would agree with you, that doesn't mean you are correct. Finally, we should be careful not to conflate monetary and tax policy with the industry behavior. The bicycle industry is more efficient and more competitive than ever; Western tax and monetary policy is absolutely unhinged and acts as a furious economic headwind for consumers.
I guess my anti capitalist agenda won’t fly in this argument. I’ll do better next time!
Sorry Ben, you're objectively wrong, and I have the data just to prove it:
Check this fact: the median sales price for a road bike in 2014 (that's 10 years ago) was less than $2,000. And that was for a decent groupset (Ultegra 10 speed).
If we plug in 2,000 into the BLS online inflation calculator, you'll see that $2000 in 2014 equal $2643 in today's 2024 dollars. I would challenge you to find a comparably equipped mid-tier road bike in 2024 for under $2600. Quite the contrary: even the "cheaper" direct to consumer brands like Canyon have priced their mid tier bikes north of $5,000. That's literally **DOUBLE** what those bikes should be priced at, according to simple central banking inflation adjusted economics. Have those bikes similarly doubled in quality? No. There's an extra 12th gear and the rim brakes have been largely replaces by disc brakes (which, btw, should make wheels cheaper, due to the simpler manufacturing process by decoupling the carbon wheel from the braking surface).
So what to conclude? The bike prices have gotten OUT OF CONTROL. The entire bike industry prices are insane and totally out of line. If bike manufacturers won't lower their prices, people won't buy, and those companies will collapse, causing all of us to laugh at their corporate greed. Good riddance.
@@RedShipsofSpainAgain Ultegra sits directly underneath the top of the range Dura Ace: the median road bike never had Ultegra. Furthermore, claiming that "prices are insane and totally out of line" betrays a complete and utter failure to understand market economics. If a company has prices that people won't pay, that company then goes out of business. So the prices end up being what people are willing to pay. If you think that behavior is "out of line" you should take it up with the consumers. But let's assume you are correct that the median road bike in 2014 had Ultegra (it didn't, but let's pretend). There is no law of physics that the median road bike ten years later should have Ultegra. Ultegra is just a label. Consumers purchase based on value, which is distinct. For example, the 2014 bike will have had decades-old rim-brake technology that totally failed to work when it rained. Consumers value stopping in the wet. It may be labelled 105, but it offers more value than 2014 Ultegra.