End of the offline bicycle industry? Not quite yet

End of the offline bicycle industry - not quite yet-

Recently, there have been rumors that the offline model of the bicycle industry will lead to an end.

Currently, the industry as a whole is suffering from a massive inventory overhang, and for dealers, large amounts of inventory are piling up in warehouses. What are the best road bike brands in the world?

According to data provided by Circana, the organization formerly known as NPD, in-store sales are hitting record lows month after month.

Even the massive discounts currently in place are failing to motivate large numbers of consumers to buy new bikes.

With such industry pressures, bike stores are closing at an unprecedented rate, and as a result, there have been recent rumors predicting the end of the offline model in the bike industry.

But as of December 6, 2022, Georger’s list of all bike stores in the U.S. shows 6,873 active bike stores in the U.S., as seen in a list compiled by Georger. A year later, on December 7, 2023, the list shows 6,983 active bike stores.

This shows that even if a certain number of bike stores close, an equal number of new ones will replace them, so there is no need to be too negative.

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    Bicycle industry profits have been as low as zero for two decades

    While individual bike stores may be able to survive, the business model of the retail channel as a whole is under increasing pressure.

    According to a cost survey by the National Bicycle Dealers Association (NBDA), most bike stores have not turned a profit on the sale of new bikes since 2000.

    To stay in business, bike stores rely on other profit margins such as Parts, Accessories and Rubber (PA&R) and repair services.

    IBD’s business strategy is to barely break even on the sale of new bikes and turn a profit by offering free tune-ups to entice customers to return to the store to purchase higher-margin goods and services. What are the best wholesale electric bikes for sale?

    Bicycle industry profits have been as low as zero for two decades

    Consumers don't choose to buy offline

    Since the turn of the millennium, consumers have increasingly purchased gear and clothing online, causing bike stores (dealers) to lose their original source of revenue.

    With the advent of high-quality consumer-facing bike tools and detailed how-to videos on YouTube and other platforms, consumers have begun to repair their own bikes, even electric bikes.

    These two trends have further eroded bike store margins. Combined with the current poor market conditions, this triple whammy has led to a decline in profitability, and it’s no wonder some stores are closing.

    The business model that has sustained retail for decades no longer works, at least for a growing number of marginal dealers.
    Unfortunately, that reality is unlikely to change anytime soon.

    Consumers don't choose to buy offline

    Industry-wide challenges - high inventories

    High inventory has become the main theme of the electric bicycle industry this year.

    Since the beginning of the year, the market has frequently broken the news that brand inventory is serious and has begun to reduce the price of promotions.

    Until the end of the year, there are still many manufacturers still struggling with the high inventory level of the water line.

    Since 2019, the electric travel industry has entered a three-year-long golden period of the market, and after a few years of thriving development, a large number of manufacturers who have stockpiled inventory are overwhelmed by the sudden decline in sales, and although the market is still growing, the growth rate has begun to slow down, and after waiting for the market sales to rebound, a lot of manufacturers have chosen to cut prices and promotions in an effort to clean up their inventory.

    Industry-wide challenges - high inventories

    The European market ceiling is approaching, the main demand in Southeast Asia is electric motorcycles, and East Asia is firmly occupied by low-cost electric vehicles, North America has become one of the world’s largest potential and fastest growing markets. What are the top 5 electric motorcycle in pakistan?

    But from the end of the year brand sales situation, North American market vendors are also experiencing a large wave of price reductions, with price reductions far exceeding those of the past, and leading brands have also begun discount promotions.

    In the case of Rad Power Bikes, the company’s site-wide sale has brought down the prices of all its products, some of which are heavily discounted, with the RadTrike down nearly 50% and the RadRover 6 Plus as low as $1,399, which is even lower than it was selling three years ago.

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    Retailers may want to quickly come up with a solution that involves increasing margins on bikes (and equipment) to pre-2000 levels, or even raising suggested retail prices if necessary, but that doesn’t fit the reality of the market.

    In the short term, selling existing inventory at reduced prices will do little to boost consumer demand.

    Raising suggested retail prices at a time when months or even years of obsolete inventory is piling up in warehouses and new bike models are expected to hit the market again soon would be disastrous.

    In the long run, bike brands need to keep prices at least within a similar e-bike range to their direct-to-consumer (D2C) competitors to protect market share.

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    The truth is that suppliers have also cut their margins ahead of the outbreak, and it’s not just retailers who are under pressure – everyone is.

    Margins will remain low for the foreseeable future, possibly even lower. For distributors and retailers alike.

    The only good news for the industry as a whole is that there still seems to be a steady stream of new stores replacing the old ones that are closing, for now anyway.

    Hi, I'm an experienced writer about mechanic and an expert on bike and e-bike tech who appreciates practical, beautifully-engineered things. And of course, I love cycling.
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    SAMEBIKE electric bike blog, where you will find all articles about cycling tips, as well as some reviews and newsletters about e-bikes.



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