The LAYOFFS START - More bad news for the Mountain Biking Industry
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- Опубліковано 11 лип 2024
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The mountain biking industry is seeing more issues as we leave Q4 2023. Popular companies like REI, Fox Racing, Giro and others are having to close offices and have layoffs to react to the decreased demand and sales. Now that these companies are having to report their earnings from last year, we are going to see more of this consolidation and layoffs as the projections for the mountain biking and cycling industry look to continue to trend downward in 2024.
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Reduce pricing on items to create more purchases. The retail industry inflated prices to rip off the American consumer.
They are fighting high inventory pricing too to a point. While it is true that they increased margins during the COVID years...they also bought a lot of inventory that is much more expensive than current pricing. A good example is their raw materials of steel, aluminum, carbon, etc. The manufacturers bought record level inventory at at time that pricing on those raw materials were 150% more than usual.
@Bike 198
...which is what happens when you have more CEO/CFOs than market analysts at these companies.
And you know what... F 'em, good riddance.
Maybe, just maybe future (up & coming) bike manufacturers won't treat their customers like crap by charging 2,000% mark-up on their Chinese made products.
Bike prices have been simply getting too high for too long imho.. market forces are in play..
That is true as well. Pricing for this sport has made it unreachable for a lot of people that want to ride.
Wrong. Canard. So sick of hearing this baloney.
(Been hearing this hackneyed complaint for 40 years. So old.)
Plus, have you seen car and home prices lately? Cost of education? Health care?
Bike prices have gone up as a result of innovation. But no more than the tech and increase in CPI would demand.
Did mountain bikes up until about 2010 all have droppers? Nope. Add $300.
Did mountain bikes offer full carbon, full suspension frames? Nope. Add $1,000.
Did mountain bikes offer full carbon rims? Nope. Add $1,500.
Did mountain bikes offer WAY BETTER suspension? Nope. Add $500.
Hydraulic disc brakes? Nope. Add $200.
(Before Fox entered the market, forks were $350. Post-Fox, $800 was the new fork price standard.)
Did mountain bikes have electronic shifting? Nope. Add $200.
Did mountain bikes have electric motors? Nope. Add $1,500.
This list is all STANDARD EQUIPMENT used on bikes that are actually ridden off road today. The consumer has asked for and gotten a lot of valuable improvement over the last 40 years. I'm glad I've been here to enjoy it. Complain all you want, but let's see you go back to 1985 Dia Compe cantilever brakes so you can have a cheaper bike.
And did bicycles in general go through a global pandemic that shut factories across the face of the earth?
Nope.
Did container shipping costs go up 10X? Yes.
Did cardboard shortages prevent bikes being shipped? Yes.
Did parts shortages prevent bikes being shipped? Yes.
Did demand for bikes suddenly spike through the roof unexpectedly? Yes.
Gee, anyone with half a brain will quickly understand that a convergence of factors have led to circumstances that have driven bike prices up while also seeing product shortages. So yes, prices edged up. But it's no "big conspiracy" or "doubling of profits."
Be glad you're not a Porsche enthusiast who just HAS to have the latest GT3. Buyers are shelling out $100k to $150k OVER MSRP to get them. THAT is outrageous price gouging. But again, anyone who adores the "free market" should welcome these price spikes. The old "supply & demand" rule.
@@dudeonbike800 this is all true... I built up what was a pretty high specification bike back in 2001 and it cost me £2750 GBP or thereabouts (the equivalent of $5000 USD today), and that old 3x9 XT transmission, tiny diameter rotor Hope brakes and a Rockshox Psylo fork are woeful compared to even a mid-priced Deore specification today... Spend $5000 (or even appreciably less in the current sales climate) on a modern bike and every element is significantly better that you could have ever imagined back then.
@@jmo2752 thanks. I realize I didn't provide some personal context as well: my 1998 XTR Ti hardtail was $4k. V-brakes, no dropper, SID fork, no electronic shifting. Sweet bike, but so archaic compared to today's bikes.
@@Bike198 I just got into road cycling (commuting for work and fitness ) managed to get a trek fx2 here in the uk for 480, thought that was a pretty good price, entry level bikes seem to have massive discounts atm
i just got a sweet price on a salsa Blackthorne...and on the Salsa Rangefinder as well. Thanks to my bike shop CK Cycles. See you out there
How long have you worked at CK Cycles?
i don't work there....this has been my bike shop for at least 30 years
great but scary information! thank you
It is for sure. It is going to be a rough 2024 for the industry. I really hate it for the people that end up losing their jobs.
Bikes are over priced, I can’t afford 4000$ for a bike
The vast majority of people can't.
The downfall of these bike manufacturers was inevitable once people realised they were making bikes in Asia for $200, then shipping them to the US and charging $2,000.
Greed + mismanagement = bankruptcy✔
Good video. Unfortunately, this is not only a recent trend in the cycling industry, many major industries are going through similar challenging exercises.
Projections during the COVID panic drove prices exponentially based upon unrealistic revenue. Now many are sitting upon a surplus inventory volume. Long-range goals will have to include premium demand dips and reduce prices beyond these essential de facto differences. It is wiser to reduce prices by 40% and sell 85% of current total inventory volumes; than to sit on 90% of a depreciating total volume at current premium retail prices.
Making a bike in China for $200, then shipping it to the US and charging $2,000 is a good way to keep these company's CEOs & investors driving new Ferraris...but not so good for anything or anyone else.
"T'was greed that killed the monster, nothing more."
Wow, shame to see the likes of Giro, Blackburn, Fox and others simply get absorbed by a faceless, nameless corporate giant with zero skin in the game. CEO is from Hasbro. Nice CEO, BRO!
To think that I cycled past Blackburn back in the day to my first high school job in Campbell, CA. Ironic that Fox & Giro were also within spitting distance. American-made innovation parted out and sold to the highest bidder.
Eventually we'll learn that "running it like a business" and "shareholder value" are anathema to American prosperity. Worsening it all is global capitalism that will dissolve your job in a heartbeat so some Asian kid can lose an arm in a machine making your bicycle part.
One of the major problems in the Bike Industry, in my mind, is what appears to be a 'fixation' with bringing out something bigger and better every year. Rather than simply promoting the product that exists. Especially, when it fulfills the market niche it occupies.
Granted, that some products need refinement, but what is the point in trying to 'Reinvent the wheel' annually ?
There is a cost to this approach.. @Bike198
That is especially true of all of the new "standards". It seems like planned obsolescence in a lot of those cases.
Ask yourself what "shareholder value" means and why it's apropos here. That will give you the answer.
@@dudeonbike800 Where does it end though ? We will all end up with prices that look like the result of hyper-inflation.. I drive a car that has been serviced well and looked after. Up to 294,000 kms now, and there is no way that i would buy one of the new cars with their cheap looking fittings and crappy stereos. My Niner RIP is a 2016, and my Lynskey hardtail even older.. Everything works perfectly when it's looked after..
@@mattclarke3621 No, inflation is back under control. The economy didn't tank like everyone HOPED. Nope, things are getting back to a strong blue economy like usual.
If there were rampant profiteering in the bike industry, someone would swoop in and make money. Easy money.
Oh wait, that ALREADY happened! Thanks to Canyon and other DTC companies, that XT full suspension mountain bike is OVER A THOUSAND BUCKS CHEAPER than before. In fact, bottom-line thinking (to feed insatiable consumer demand to save a buck) is hurting the bike industry. It's just gonna be corporate stores across the land with the IBD becoming a distant memory.
Careful what you ask for.
Sorry, there's no conspiracy here.
Insanely accurate! Diminishing returns are a massive factor on brands up-fitting bikes with the highest end components, stick to the roots and support what's already tried and true.
We run a small local bike shop in New Zealand, distributors are giving us bikes, free til sold, or huge terms and discounts. Some aren't going to survive this year. There's an estimate that there's 3 to 4 years inventory here in New Zealand currently. That's hard to move when demand is dropping. Market will eventually sort itself out, but keep looking ahead, supply shortage might happen again if a decent world War kicks off. Creating demand is the trick. Oil prices rising could help a lot. People just can't afford to run their vehicles, in a small town like ours is only 5km anywhere. And its flat.. Bikes are perfect car replacement.
That is what I am basically hearing from everyone too. It is really easy for shops to get bikes now when you used to have to place huge dollar amount orders. It will be interesting to see what this all looks like in '25. They are going to have to reboot old models in new colors to make them look fresh or something. It reminds me of when a car model is reaching end of life so they create a bunch of "special editions" to move remaining inventory.
If world war kicks off, mtb prices won't be important.
Hopefully, part manufacturers won't suffer.
Due to extortionate pricing by bike manufacturers, people will be keeping their bikes longer. So we'll definitely be needing new parts...and let's hope the part manufacturers don't start inflating their prices because of this.
Why I bought new for the 5 year warranty
Just walk into your local bike shop and notice the massive price reduction.. steep discount signage everywhere
What's more: Prices on bike components & accessories (especially in Amazon) are seeing big dicounts.
Truth be told, they were already overpriced anyway.
So the discounted prices are just what they should've been charging in the first place.
It blows my mind that these companies didn’t see what would happen. Covid created an outdoors fad. Fads don’t last. I’ve been cycling since 2004. Most times people ride for 2-3 years and they move on to something else. Add in most of the Covid Cyclist had a false sense of fitness and realized “this ain’t easy!”
No, they saw it, they just didn’t care. Companies that already had ridiculous pricing (pivot) before Covid deserve what they get
@mikegeddie2263 Dude, I commented somewhere else to something you posted and yeah, while my comment still stands as the reality unfortunately, YES their prices are BEYOND ridiculous! I had no clue they were that outrageous now honestly.
@@hippiebits2071 even worse when I bought an enduro with a known manufacturing defect in the headtube. Specialized replaced it with an sworks warranty frame. (This is after a linkage bolt snapped well below the specified torque) I rode it briefly before discovering play in the seat stays and linkage on a brand new frame. Yet again another warranty claim. These companies need to pull their heads out of their butts and make a quality product at a reasonable price or they can just go out of business. But ya, Pivot is insane.
Lots of brands got over excited and gambled on how long the huge sales increases were going to last. As we have been seeing prices have been dropping. No more MTBs with alloy frames and Deore drivetrains going for over $5k. More consolidating of brands and closing of smaller manufacturers over the next year.
I think longer than anticipated production delays and ridiculous standards for minimum orders actually played a bigger role in creating this mess. While I am sure there were a few unrealistic bike shop owners out there who believed the high numbers might represent a new normal, I don't actually think most fell into that catagory.
@@hippiebits2071 I think most LBS owners managed things well. Everything I have seen indicates that the manufacturers/brands are the ones that were anticipating the increase in sales to continue at the same rate for years to come.
To put it bluntly: Greed was the cause of this.
Unabated, unwarranted greed.
This isn't only the bike industry. The company I work for is a large global electronics manufacturer. The last 2 quarterly finacial reports they have released demand has been down 10-15% compared to the previous year. They are a supplier to automotive, medical, consumer, housing, etc. almost every market. And none of the markets are performing well. The forecast for the next 3-4 quarters is more of the same. Recession is coming and it's going to effect everyone.
All outdoor sporting products are way over priced.
Industry ripped people off, and now is crying to these same people.
You mention that you were going to link to other UA-camrs (who mention rumors) but I don't see those links.
ua-cam.com/video/VNCRe0gu5-E/v-deo.htmlsi=Uy8PyAXnJOki30B4
Coming soon: Boutique, new in box 2022/23 MTBs on eBay for $200 (or best offer).
With free shipping from country of manufacture: China.
I suppose it's better than letting them rot on the shelves and cheaper than melting them down to make paper clips.
Waiiit a second here, is this the same guy who was in the ctsv groups all those years ago ? V2m6 here
Yes!!! How’s it been?
It’s in Powersports as well
Thousands of dollars for something that will likely be stolen, isn't as durable as the same item 30 yrs ago, and is not practical for everyday use. Imagine if every car company made mostly supercars, and the cheaper cars were hot garbage. Not just cheaper, but absolutely disposable garbage.
Not to sound like an old Fudd, but theres a reason old mtb's are a premium right now. Affordable, practical, and repairable. They don't require an $800 wheelset or $200 handlebars to be good. $2500 for a few hrs every weekend, and hundreds every few months for the things that inevitably break because "Muh, every gram counts."
Today's mountain bikes are FAR, FAR SUPERIOR to what we rode 30-40 years ago. (2024 is the 40th anniversary of my first mountain bike!) So much more user friendly. Tubeless 29" tires/wheels with modern geo makes a huge difference. Brakes are so much better, it's easy to forget. Anyone not 50 or older has no idea hos much better today's brakes are. And suspension? Wow, what a concept. But we loved what we had because it was novel and gave us access to stuff we couldn't ride before (I say this as someone who pushed his Mongoose up a LOT of hills back in the day). And today's suspension is head and shoulders above what was available for the first 20 years in the industry. And that Ritchey Commando I so lusted after was WAY TOO EXPENSIVE back in '86 when I wanted it anyway. Nothing new under the sun.
If you want a quality dropper that works, you're gonna be using one that's $300. Didn't exist on bikes 30 years ago (no, the HiteRite doesn't count. Used one; still have it somewhere) This isn't "gram counting," but evolutionary improvements that have really made the sport more fun, generally safer, and more accessible to the new rider.
I welcome the changes (mostly).
@dudeonbike800 That's the supercar
stuff I was referring to. I walk into an actual bike shop today, and all I see are bikes for thousands of dollars that don't translate into everyday machines. A problem that didn't really exist back in the day. You bought a bike that could do anything most mortals would demand of it, at a realistic price. Sure, there were high-end bikes, but there were also mid level bikes that you could huck down a trail, ride to school, and fix it yourself for low cost. Finally, I think it says a lot that the vast majority of bicycles I see in the streets are low-tech steel and aluminum get-around-town bikes.
@@erso3302 interestingly, we haven't touched on the department store bike phenomenon where bikes are unbelievably low-priced. You don't get much for your money, but you ARE getting a complete bike, produced in high volume, with low margins and a VERY inexpensive workforce and production costs. So there are very cheap bikes out there. The problem is they're very cheap.
Alot of cars ARE realistically hot garbage compared to early to mid 2000s models. Interiors have gotten super cheap, transmissions aren't as dialed and your forced into all kinds of options you may not even want pretty much doubling the price of the average vehicle.
Bidenomics, its Fantastic isnt it
How so? This is happening all over the world. Are you an idiot?