Back in February, I wrote, “For the past twenty-or-so years, suppliers pushed dealers to order most of their season's bicycle inventory preseason. "Better order it preseason," reps told dealers, "or you won't be able to get any in-season." And for 20 years, with only two exceptions (the Great Recession of 2009 and the anomalous 2019), this has been a lie.”
The problem, I pointed out, was 20-odd years of continuous bicycle oversupply, forcing brands to begin discounting inventory in March and continuing throughout the selling season. Well, I’m pleased to announce that 2026 has been a happy break from this trend. With the exception of held-over models from the Covid bike bubble, supplier inventories (and prices) have been relatively stable in 2026.
What I’m concerned about for 2027 is that there may not be enough bikes to meet demand. Or that the amount might be just about right. So why would this be a concern? I could be wrong about this, but let’s look at some possibilities.
Building for 2027
Note that the sky is not falling here. One data point about weak sales does not mean there’s going to be a shortage of bikes.
An Oct. 27 BRAIN article, Shimano bike-division sales up 5% year-to-date, included this interesting quote: “Shimano said North American sales of complete bikes “remained weak” due to an uncertain economic outlook and “stubbornly” high prices due to tariffs. However the company said market inventories remained at appropriate levels in North America.”
When Shimano says sales of complete bikes are weak, they’re not talking about sales in retailers’ stores or suppliers’ warehouses; they’re talking about what’s happening in Asian bike factories where the 2027 model year bikes are currently being built.
I put the question to Peter Woolery, head of PeopleForBikes’ data suite project. He responded via email: “In the PFB data suite, we are currently seeing relatively flat to slightly down year-over-year bicycle unit sales, supporting the notion of sales 'remaining weak.' Inventory per location has been trending down, as well as at wholesale. These combined put pressure on upstream manufacturing where Shimano would likely see it most (italics mine).”
Note that the sky is not falling here. One datapoint about weak sales does not mean there’s going to be a shortage of bikes. But it was enough to get me thinking, what if there was an inventory shortfall in 2027, and what would it mean for the dynamics of the specialty retail supply chain? Or, for that matter, what if the number of bikes ordered was just about right? It’d be a reality the industry hasn’t had to deal with in over a quarter century, and as an industry, we’re not sure how to handle it.
Welcome to the allocation conundrum
If supplies run short, which virtual warehouses get allocated what inventory can make a crucial difference to the supply chain.
The question of how inventory gets apportioned in times of shortfall or adequate supply is who gets access to it, a process known as allocation.
In the past, it was simple. Inventory was allocated to dealers based on preseason commitment and in-season orders. But that was before Bike 4.0 and the channel-agnostic marketplace.
Nowadays, brands will be forced to allocate limited inventory among D2C and C&C accounts, company-owned stores, and dealers. And if supplies run short, which virtual warehouses get allocated what inventory can make a crucial difference to the supply chain as a whole.
Will brands keep the lion’s share of limited inventory to themselves, where they earn the greatest number of profit dollars per unit? Or will they prefer to place it with dealers, who make up the vast majority of their business? We’ve never had this problem before and it’s difficult to predict which way that cookie will crumble.
Assuming consumer interest remains constant, we can expect prices to stabilize as demand matches supply for the first time since at least 2000. That’s a very healthy thing for an industry long accustomed to in-season discounting that wipes out profit margins for everyone. But even adequate supplies are only a good thing for dealers if they can get access to limited-availability products.
All of which means it may be time for suppliers to go public with their allocation strategies as a way of boosting dealer confidence, both now and in the coming season. For an industry raised on oversupply, it’s a new idea whose time may be coming.
Note: No AI was used in the creation of this piece.
