Bicycle Industry 2024 Collapse: Bike Shop Perspective

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  • Опубліковано 4 сер 2024
  • Timestamps listed below
    Weekly Update: Blues Ticket Giveaway and State of the Bicycle Industry 2024. Dont miss this episode…
    Enter to win a pair of STL Blues Tickets for Mon 1/15/24 against the Flyers. Shared pinned FB post publically to enter and be subscribed on UA-cam. / mtbshed subscribers will get an additional entry for commenting on any UA-cam video.
    NOW you can get AUTO entry into every giveaway in 2024 with a single purchase of an adult MTB, watch (any), or Trail Support Jersey. We’ll take a Polaroid of you with your new item so we know to add you to every drawing this year. Restriction apply and subject to change at anytime
    Lastly, we get into the importance of supporting your local bike shop and why that is important for you and your hobby. We discuss industry trends from 2023 and previous while giving some predictions for 2024. I, as always, give away way too much info so be sure to listen all the way through.
    Thanks for a great 2023 and joining us for 2024!!! You guys are amazing, we added 600+ subscribers and over 250,000 views thanks to you.
    Timeline:
    00:00 Intro and STL Blues Ticket Giveaway
    03:20 Recap 2023 UA-cam Stats / Plans for 2024
    06:03 How You Can Save Local Bike Shops in 2024
    08:20 Repercussions of Losing Local Bike Shops
    11:00 Bike Sale Margins and Declining Bicycle Sales
    14:30 Bicycle Industry Predictions for 2024 and the Fallout of Bike Shops and Manufacturers Closing
    17:40 How to grow MTB for your benefit
    19:18 Outro and What to Expect from MTB Shed Live
  • Розваги

КОМЕНТАРІ • 47

  • @JohnnyChonko
    @JohnnyChonko 7 місяців тому +9

    Local shops are overpriced and don't carry anything I want. They don't even have what is currently popular. If I used a shop for my recent build, I would have spent twice as much and got half of what I wanted. Yeah, they can order what I want, but so can I. Ill save myself the 20+% upcharge and get it way faster.

    • @glennsak
      @glennsak 7 місяців тому

      I agree 100%. In fact, my local shop doesn't seem to care about their customer - so where is the value?

    • @MTBShed
      @MTBShed  7 місяців тому +4

      Shops like ours are carrying less because manufacturers are dumping product direct to consumer at below industry pricing. It’s not an upcharge as shops typically make 2-8% profit at standard margins after expenses. Shops have to pay retail rent, employees, POS, local taxes, a higher rate for utilities, then accountants and other professionals needed to run business. Manufacturers and online retailers don’t have many of those added costs.
      The bike shop provides customers with one on one customized advice for your local riding and needs. They provide service for that squeak you can’t track down. These are all vital to keeping the sport going and why we charge markups from wholesale pricing.
      Shops provide an entry and knowledge needed to grow the sport. Who else is going to fund local races or push for access to trails if not for bike shops? With less interested parties in the hobby, there will be less interest and our already niche sport loses more market share meaning less dollars for manufacturers and new products.
      It’s the same principle as shopping on Amazon. While the price seems cheaper it is actually costing the consumer more in the long run causing manufacturers to raise MSRP to cover the costs of Amazon fees and shipping.
      Shop local. That stimulates your local riding community and grows the sport. When shop are gone in 10 yrs then you will really see how expensive things get online with fewer options available to you. Sad as I’ve seen this in many other industries.

  • @MrChadLedford
    @MrChadLedford 7 місяців тому

    It's very cool to hear this kind of transparent conversation from a bike shop owner.

  • @gregortega2767
    @gregortega2767 7 місяців тому +2

    Riding a bike, I find all my pens & bungee cords on the ground for free.

    • @MTBShed
      @MTBShed  7 місяців тому +2

      I made peace with losing a bracelet on a ride imagining how stoked someone will be to find it 🤣

  • @karbonbikes
    @karbonbikes 6 місяців тому

    Very refreshing and honest assessment of the current industry.. support your LBS to keep innovation from boutique brands.. otherwise riders will be limited to fewer choices from 3-4 giant companies either owned by conglomerates or private equity who will ultimately jack up prices across the board and provide fewer choices for consumers… this has happened in virtually every other industry. Let’s prevent this from happening in our industry.

    • @MTBShed
      @MTBShed  6 місяців тому +1

      You are absolutely spot on. People think I say this stuff bc of my shops vested interest. But the shop only exists bc my desire grow a sport I love. Takes a lot away from the hobby not having bike shops. People (and manufacturers) don’t realize the importance shops have to keep cycling momentum rolling in communities.

    • @karbonbikes
      @karbonbikes 6 місяців тому

      @@MTBShed Not all manufacturers think that way. We absolutely believe that independently owned LBSs are critical to growing the sport and foster innovation from new smaller brands.

    • @MTBShed
      @MTBShed  6 місяців тому +1

      @@karbonbikes You’re right and “manufacturers” was the wrong identifier to use. Most manufacturers especially MTB manufacturers are also passion driven and operating on tight margins. It’s the Treks, Specializeds, Pon, etc that lost the script. Smaller bike brands, component brands, and boutique brands are in it with the bike shop 100% and deal with the same struggles

  • @gkabulski
    @gkabulski 7 місяців тому +1

    Unfortunately, it's impossible to watch this video on headphones, because the audio is only in one channel.

    • @MTBShed
      @MTBShed  7 місяців тому

      Hhm. My DJI mic and Mevo cam are both set to stereo. I’ll have to look into solutions as I’ve not noticed this issue. Thanks for bringing it to my attention!

    • @MTBShed
      @MTBShed  7 місяців тому +1

      Got it solved. There’s stereo and mono stereo…all future videos are saved thanks to you!

  • @timh4016
    @timh4016 7 місяців тому

    Did you get in any xxxl cliff cave jerseys?

    • @MTBShed
      @MTBShed  7 місяців тому

      XXXL Chubb L/S, Zombie East S/S, and Deer Run S/S only.

  • @robertengstrom1183
    @robertengstrom1183 7 місяців тому +6

    Thbs down and i quit listening because 3 minutes in and you haven't even started on the ropic in the title.

    • @MTBShed
      @MTBShed  7 місяців тому +1

      Timestamps in description…I forget to mention that off the top.

    • @juanabreu9629
      @juanabreu9629 7 місяців тому +2

      Same as I; I didn't get get any useful information for this video.

    • @MTBShed
      @MTBShed  7 місяців тому

      Noted…will get to it quicker or make sure to mention timestamps off the top.

  • @davidhunternyc1
    @davidhunternyc1 7 місяців тому

    Wow, this video proves that bike manufacturers call all the shots. It takes 4 X the cost to stay in business to pay for rent, wages, utilities, taxes, insurance, etc etc. Just ask a landlord if they give a rat's ass about their tenant. Many owners blame their struggles on the "high cost" of labor but labor has to pay their bills too. Rent goes up for them every year also. The real culprit is greedy landlords, mandatory regulations, and the high costs of insurance, utilities, and taxes. Owners make money on one end. The government takes the money on the other end, leaving owners with very little at the end.

    • @MTBShed
      @MTBShed  7 місяців тому +1

      Thanks for adding context. It’s like having Stockholm Syndrome anytime I try to explain the bike industry to other business people 😂 The mountain bike segment specifically is fueled by passion not profit.

    • @davidhunternyc1
      @davidhunternyc1 7 місяців тому

      @@MTBShed A friend of mine owns a Harley Davidson motorcycle dealership. It's the same thing. The profit margins are thin and the amount of space it takes for the showroom and repair shop is enormous. He's a great guy too. He believes in paying his employees a living wage but he is losing money and may have to shut down, like so many others have.

  • @ztuber7763
    @ztuber7763 6 місяців тому

    I think bike shops are trying to make the money off high end 2k+ bikes but those are for the rich or money to burn which are few and far between plus its not as if they're buying a new bike every year. Beginners aren't going to spend that on something they may only use a couple times before losing interest. I think 50% of bikes at a shop should be good ol' steel bikes around $600 aimed at beginners just to get people through the door otherwise they're going to wally world. 40% would be aluminum then 10% carbon/titanium for the upper end enthusiast/pro crowd. I still use my trek 820 that i got in 97 for $350 which I converted to an ebike. I'm planning on getting a new bike this year to port it over to but any "decent" bike is 1200+ and they're all aluminum/carbon. I want steel that can take any abuse and last plus with more people adopting ebikes, people won't care about it being the heaviest option. I understand that basically everything has doubled in price since back then but I'm concerned with manufactuerers cutting corners and overcharging the dealers.

    • @MTBShed
      @MTBShed  6 місяців тому

      In theory, you’d be right and we hear that often. In 97 the average salary was 30k and today avg salary is 60k. You can get essential the same bike as an 820 for $600 today (which pre pandemic would have been $479) so it’s not as if bike prices are anymore crazy then the 90s when adjusting for the additional cost of doing business in 2024. We keep $600 bikes on the floor and those customers would rather by the $189/$249 bike from Walmart (box stores). The consumer doesn’t know the difference so they buy cheaper and think we are ripping them off because they look similar. They don’t see the misshaped forks, crunchy hubs, or subpar brakes. Unlike your 820, those won’t even make it through the year then they just collect dust. I’d much rather see a customer on a 97 820 then a modern $350 “high end” Walmart bike.
      When adding up the cost of doing business, bike shops lose money on bikes until we hit the 800-1000$ price point. Shipping, floor space, mechanics, professional services, etc. Walmart just eats the $250 bikes when customers return them broken. You won’t see them pushing those bikes as they know they are disposable at best. The customer on entry bikes rarely spends more on accessories then a bottle cage and if your lucky they buy a helmet…the $1k plus bikes require more accessories etc over the first 6 months of ownership. Typically once you sell a $600 bike you never see them again for subsequent sales.
      While I can sell a customer a $600 hybrid, a $600 mountain bike would get destroyed immediately by customers if they attempt to MTB with it so we have to upsell them to a 800-1000 or the bike will be right back. Consumers expect some sort of service agreement with bikes at shops so then we loose additional money paying mechanics to work on them.
      The real problem is perceived value. That has been destroyed by companies like Walmart and more recently by manufacturers discounting down their own products due to the surplus. It’s not that a $600 or $1000 is too much for a bike when everyone is walking around with a $1300 cell phone to text friends and check an app. I could go down a whole road of things below spend money on that won’t last as long as a quality bicycle.

    • @MTBShed
      @MTBShed  6 місяців тому +1

      I’ll also add that I do see people buying enough 3-5k bikes…but those purchases have all shifted online over the past couple years because of deals instead of taking that same money and spending it at a local shop that has the additional costs of retail space and training mechanics. The consumer, like free shipping on Amazon, doesn’t realize it’s actually costing them far more in the long term not supporting their local shop.
      Unseen to customers today is the lack of qualified mechanics which will be extinct in 10 yrs bc of the small margins and subsequent lower wages available for us to keep the lights on.
      Most bike shops are funded by passion and a spouse with a good job to cover living expenses 😢 that goes for shop owners and the employees that can afford to work there.

    • @ztuber7763
      @ztuber7763 6 місяців тому

      @@MTBShed Ya I hear you. Online purchasing is convenient but damages the local economy and people are becoming too lazy to show up in dedicated shops any more where the mechs there can inspect the bike first. I have no problem spending more for a quality bike; i just don't want the manufacturers taking advantage of me. I haven't really looked but maybe the bike industry as a whole needs better marketing to the general public to pique the interest of new people like regular broadcasting biking events or a role model that people can aspire to.

    • @MTBShed
      @MTBShed  6 місяців тому +1

      Another great point, advertising and education. Whether that’s events, races, how-tos, or just brands.
      We used to spend $5-6k a month in advertising locally on top of my all day social media assault lol. Brands never gave us any reimbursement for those ad dollars which was a shock to the marketing firms since that’s common in normal industry.
      The reason for that is margins are low for most brands while profits are hoarded by the conglomerates at the top of the chain. Most of which are in multiple industries and they don’t push bikes because of the low margins.
      I think Chain Reaction is a prime example of this. Loss leader for their multi industry investor group. So what happens is CRC steals 10s of millions of dollars from local shops by giving customers pricing below MAP and free shipping. It’s not profitable for them but they bank on quantity backed by investment of investor groups to squeak a margin. When disruptions happen those minuscule margins become huge losses and that money disappears.
      Now instead of spending your $100 at a local bike shop that reinvest it in your local community through events, races, and community involvement it’s goes to these investor groups.
      When investor groups start losing money they begin the process of streamlining product lines and producing products cheaper. This leads to less consumer options and higher cost for less quality products.
      Every purchase a consumer purchases online to save a buck today will cost them $2 on their next purchase 5 yrs from now becuase of the above stated reasons.
      As hidden in the video, I didn’t consider a bike that my local shop didn’t carry well before I thought about opening a shop because of this principle. I’ve never been rich and definitely wasn’t when I was scraping gas money together to get to the trails back then. Still I wasn’t considering products not at my local shop. We have to make a point of supporting niche hobbies or they won’t exist for us later.

  • @moonmuscle3332
    @moonmuscle3332 7 місяців тому

    I love you bro, please understand this.
    Re-frame EVERYTHING about your approach if you want to be successful in making money from *anything* cycling related. Expensive watches? Where were the dual crown forks or knowledge about anything cool. Front/rear center ratio frame sizing talk, wheel building secrets of how to tune spoke gauge for specific compliances,,,blah blah blah shit of value. Not you with motorcycles and dogs and all this off shit.
    Also watch Shane Gillis stand up, you'll appreciate it

    • @MTBShed
      @MTBShed  7 місяців тому

      There’s an old adage “if you want a million dollars in the bike industry, start with two”. I opened the shop knowing this and goal was to grow the sport as an outlet for people not get rich.
      People on the internet are so weird sometimes. I don’t create content on UA-cam to get rich in the cycling industry. It’s to garner a connection with people who share similar interest.
      I’m a gear head so watches, bicycles, and motos all satisfy that interest. Pens are quickly getting up there too.
      There’s plenty of great in depth cycling info out there but reality is none of that is relevant for 99.9% of riders. Get out there and ride my friend.

  • @tenrec
    @tenrec 7 місяців тому

    If you buy a bike for $700 and sell it for $1,000, your markup is 43 percent, not 30 percent.

    • @MTBShed
      @MTBShed  7 місяців тому +1

      I never said anything about markups 😅 The example was a 30% margin since we were discussing the COGS vs sale price. It was just to help explain costs to the shop in selling bikes.
      I just checked real numbers from a brand. $999 MSRP, $656 for bike, $40 shipping, one hour to build ($30), post purchase checkup ($45). It prob took a salesperson an hour to sell at $20. Credit cards fees on $1100 purchase is another $27.50.
      This leaves the shop with about $166 on a $1k bike. Of course rent, electric (higher than residential rates), taxes, accountants to file sales tax, and so on mean we are lucky to break even on a $1k purchase.

    • @MTBShed
      @MTBShed  7 місяців тому +1

      Now keep in mind bikes aren’t selling for MSRP for over 2 yrs now. So just a 10% discount takes that $160 “profit” and knocks it down to $70.
      I’d have to sell 57 bikes at $1000 in order to just cover rent every month and STL isn’t that high. Obv selling that many bikes would have a great increase to overhead as well not factored in and my small shop would need to expand footprint and employees.

    • @tenrec
      @tenrec 7 місяців тому

      @@MTBShed Right, and that's why services are more profitable. Also, I assume accessories and apparel have a larger markup than whole bikes.

    • @MTBShed
      @MTBShed  7 місяців тому

      Service is not profitable either. Parts from major brands are available online cheaper than I can get direct from manufacturer. That’s where the profit used to be. There’s no service only shops for bike shops for a reason. The mobile business is the only one and those are single operators in big cycling towns only.

    • @tenrec
      @tenrec 7 місяців тому

      @@MTBShed Wow, you have to wonder how any bike shops stay in business. I do notice that a number of shops are being taken over by manufacturers and being coverted to one-brand-only shops (e.g., Trek stores.) I have heard, though, that companies that acquire a lot of local bike stores are not doing too well with them -- they don't have a lot of brands to choose from, they enforce a corporate mindset on what used to be a friendly, family-owned local business, and they havea acquired a lot of debt in the process.

  • @IKnowAGuyBicycles
    @IKnowAGuyBicycles 7 місяців тому

    I love the experience idea. For example, a customer said, "I used to ride mountain bikes back in the day. Where do I start? It seems way overwhelming what is available today." Sell the journey for each type/style of riding and the community that locally supports it. Oh, by the way. I used to mountain bike race back in the 90's on a Ritchey tubing Mongoose Team/Amp Research Fork with all the custom-colored parts. (Kooka Cranks, Nuke Proof Hubs, Ti Bars, etc.) I'm a roadie now because hitting the trails in my area is more accessible. Keep cycling regardless of what type you are into!

    • @MTBShed
      @MTBShed  7 місяців тому +1

      It’s always so much fun when people come in that haven’t MTB’d or even ridden a bike since the 90s. Dropper post, hydraulic disc brakes, 1xs, tubeless, air forks, it’s all so mind blowing for them. Heck, even if someone stopped riding in 2010, it’s an entirely different ballgame today with all the crazy new tech….the haircut and style makes it obvious you were a MTBr back in the day 😅 thanks for all the great content in 2023 and congrats on the well deserved growth!

    • @IKnowAGuyBicycles
      @IKnowAGuyBicycles 7 місяців тому

      @@MTBShed Have you started to sell used? Even with the 34% down in sales, I was able to keep a 33.8% margin. I find most of my bikes on FB marketplace and Craigslist. I can totally see you picking up some of the same brands you sell at a very low price, fixing them up, and getting those margins. Plus, you give that customer a lower price option to get into the sport. Also, those newbies need all the stuff (Helmets, cages, packs, tools, gloves), you know, the stuff that has a little more margin. But you are probably already doing that. Heck, do what I do by making videos of those you refurbish. I have had a lot of views and sold a few... Go BLUES, even tho I'm a AV's fan. lol

  • @ellerybice3787
    @ellerybice3787 7 місяців тому +1

    Keep your giveaway junk, produce good content or move on.

    • @MTBShed
      @MTBShed  7 місяців тому

      I take it your not a Blues fan 😂😂😂

  • @laneromel5667
    @laneromel5667 7 місяців тому +1

    Bicycle sales are very strong, up 23% year over year. However sales have largely shifted to online sales. I have never had a good experience with bike shops, they are more interested in selling what they want to get rid of, vs what the customer needs. I went to online sales 20 years ago, the experience is vastly superior.
    What customers are telling brick and mortar retailers is they do not want to deal with you. Until that changes, good riddance to the bike shops.

    • @MTBShed
      @MTBShed  7 місяців тому +2

      I’m with you on bike shop attitudes. We opened our shop directly to combat that because I didn’t like the experience either. That said after 6 yrs in the business I understand where that comes from which is a whole other conversation.
      Bicycle sales aren’t very strong. Companies are dumping bikes online below cost. Units might be up but profits are down. Wiggle/CRC are in administration because their parent company says their bike distribution is hemorrhaging cash. Geurilla Gravity, Nukeproof, Vitus, etc are closing and they are online. Again Chain Reaction an online retailer losing money, Jenson did the same back in 2018 and disrupted the entire bicycle market.
      The online companies aren’t profitable either. Margins are even thinner online and ends up catching up to them after they pull money away from LBS and you lose your local advocates and supporters.
      I speak with customers, manufacturers, shop owners, pro riders, shippers, and host of people in other industries and the problem is far larger than crabby bike mechanics. Manufacturers aren’t holding MSRP and that’s a mistake.

    • @MTBShed
      @MTBShed  7 місяців тому +1

      Bicycle industry is down 17% in 2023 YoY from multiple sources. Your 23% is not correct.
      From Brain "(The 2023 numbers are the) lowest we have ever measured, going back to January and February of 2016." And I'm going to guess it's the slowest-ever rate of January-February sell-through since before the '70s Bike Boom.

    • @laneromel5667
      @laneromel5667 7 місяців тому

      That must be why Canyon, and the like have had record years.

    • @MTBShed
      @MTBShed  7 місяців тому +1

      Canyon recorded a net loss of $2.2million in 2023. Literally top of search results 🤦‍♂️

    • @MTBShed
      @MTBShed  7 місяців тому +1

      Thats down from 2022. Record losses yes.