Predicting the Top 10 Immediate Challenges for Bicycle Retailers

Predicting the Top 10 Immediate Challenges for Bicycle Retailers beyond the overwhelming sense of fatigue being felt by owners and staff. After sitting in on a call recently with a diverse group of retailers, and Bob Margevicius from Specialized Bicycles, who generously gave us a peek into the supply-side dynamics, here are some key takeaways.

1. Bicycle unit sales have fallen nearly 30% in the last five years. Of course, we are in the midst currently of a boom in sales, but the overall trend has been downward. Capitalizing on the current sales increases while attempting to forecast the future is challenging.

2. Tariffs. Currently, there are many exemptions in place set to expire over the next few months on Chinese made goods. About 94% of bicycles are currently made in China. The Tariffs are set to go back up to 25% in August.

3. Retailers are reporting some slowing in sales due to inventory shortages, but there are also some cancellations of pre-ordered bikes and returns happening as well.

4. E-bike sales are robust, but margins are not as high as retailers would like/need. This situation is tough because they are high dollar sales, which require top dollar inventory commitments that may siphon dollars from higher unit numbers and margins on lower priced bikes.

5. Very hard to forecast when it is hard to know what supply will be. Retailers are placing orders for bikes already for spring when a much more just in time model has been the preferred, and more profitable way of doing business in recent years, which has become impossible in light of current issues.

6. Even if sales stay high, it will be tough for the industries manufacturing partners to scale up quickly to meet this demand.

7. Finding a way to retain the new customers coming into stores. This situation is challenging, as there are so many things going on currently, and holding on to these new riders is a crucial way to build our future customer bases.

8. Margins are down for some, as it is much harder to sell P&A if you are running a curbside pickup operation.

9. Repair parts dwindling to nothing in key repair areas.

10. Lack of connection to new customers when sales spike to this level.

There are many things to consider moving forward, and no one seems to have a crystal ball. If inventory continues to be as challenging as it currently is, it may be tough to maintain sales, and develop relationships with customers by providing excellent service and selection if unable to meet their needs. The possibility of further lack of distractions for consumers such as sporting events, kids going back to school or not, an extra $600 in unemployment checks, personal fatigue, and anxieties for everyone and the potential for a very contentious political season all weigh heavy on everyone’s minds. It is an understatement that we are in uncharted waters. Some retailers will look for ways to exploit opportunities, and others will act with more caution.

The NBDA has been here since 1946, representing and empowering specialty bicycle dealers in the United States through education, communications, research, advocacy, member discount programs, and promotional opportunities. As shops are facing never-before-seen circumstances, these resources offer a lifeline. Together, we will weather this. We at the NBDA will not waver in our commitment to serving our members even during this challenging time—but we need your support.

Now is the time to become a member as we join together to make one another stronger. Whether you’re a retailer or an industry partner, your membership in the NBDA is one of the best investments you’ll make this year. 

Learn more about the benefits of being a member and join now.