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Many stores opting for discounts this year, data shows

Published September 16, 2022

A version of this article ran in the September issue of Bicycle Retailer & Industry News.

As consumer demand tapered off (how could it not?) and pandemic back-orders came trickling (or flooding) onto shop floors, some discounting became inevitable.

We surveyed Georger Data Services’ Bike Shop List by e-mail on Aug. 2 to find out, first, the state of retailers’ inventories. And second, whether or not shops were planning a bike sale.

Whither the inventory situation? With the caveat that self-selecting surveys are hardly science, our 206 responses painted a credible picture, and shop stories offer deeper insights.

Hybrids, rare the past two years, were back at normal levels, with 41% of shops overstocked. Some retailers were making full margin marking down hybrids from current SRPs that they bought at earlier pricing.

E-bike supplies seemed healthy, with 81% reporting average or above inventory. This number was surely inflated by comparing 2022 inventory with 2019. Shops tell a less positive story and seem content to over-winter their e-bikes to avoid shortages in 2023.

Road bikes at all price points, gravel bikes and high-end mountain bikes remained in short supply. Enthusiast demand isn’t waning, inflation or no, and these bikes are usually sold before they show up.

Let’s look at nine retailer “What now?” plans: Four had a bike sale, three didn’t, two were on the fence. And while we didn’t survey them, REI led out in late July with the “The Big Bike Sale” through Aug. 14.

Here are their comments about their decisions to hold a sale.

“We had a sale”

Brad Burton, Cadence 120 Bicycles, Mobile, Ala.

Burton is relieved to get back to his typical pattern of promotions. “Our normal routine is to have a ‘bike of the month’ on sale,” Burton said. “We put that on hold during the pandemic, now with too much inventory we’re doing it again.”

Burton marked the Giant Talon 4 hardtail down from $630 to $570. “Since the pre-pandemic MSRP was $575, and we bought these bikes early on, we’re not suffering any margin loss,” he explained.

Burton added a destination charge of $30 per bike in 2020. “I have yet to have a negative conversation with a bike buyer,” he said. “Giant charges $45 when you buy online through WebLink, so why shouldn’t we get $30?”

Burton’s goal is to get back to just-in-time inventory management.  “We own all our inventory right now and my cash is completely tied up. I want my cash!,” he exclaimed.

Shawna Macan, Mojo Cycling, Bentonville, Ark.

The growing trail system around Bentonville has been a big plus for Mojo Wheels. “We have trails from family-friendly all the way up to double diamond,” Macan said. “Rental bikes are our highest revenue source.”

Which is fortunate, since Macan’s $1,000-and-under bikes, “are just sitting here,” she said. “The season started out pretty well. Now we’re seeing many of the COVID bikes showing up on Craigslist as people go back to work or back to the gym.”

“We tried a hardtail sale, 10% off any hardtail between $599 and $1000. We sell a lot of Marin Bobcats and Eldridges in that price range,” Macan said. “E-bikes are impossible to get. They sell as fast as we assemble them.”

Ryan Brown, Superfly Wheels, Pleasanton, Calif.

Brown was putting Shimano shoes on eBay when we called. “We’ve been blowing out heavy inventory on the web,” Brown said. “We only have a small number of bikes that are older than eight months, so our focus has been on soft goods.”

Brown utilizes all resources at his disposal. “Pinkbike, Craigslist, Facebook Marketplace, eBay, Cosmos, Sellbrite, we try everything and stick to low MAP pricing,” he said. “If we can get our inventory from Lightspeed direct to a web platform, we’re on it.”

“We’ve been doing in-store sales where we’re overstocked,” Brown continued. “We have 20% off on BMX bikes that we promote on Facebook and Instagram. It’s important to incorporate other items like helmets and locks that go along with the bike to shore up margins.”

Chris Li, The Bikeway Source, Bedford, Mass.

“We’re usually leaner this time of year,” Li said. “We probably have 100-plus more bikes than normal in the $1,000-and-under category. And after the past two years, we feel fortunate to have inventory again.”

Li is offering the Giant Talon 2 hardtail for $689, down from MSRP of $735. “We’re overstocked on the 2021 red clay color,” emphasized Li. “During the pandemic, no one cared about color, now they’re getting more choosy.”

“Maybe, maybe not”

Jim Summers, Human Electric Hybrids, Ann Arbor, Mich.

An e-bike-only store in business for 10 years, Summers has seen a mid-summer sag in sales at the high and low ends, with decent demand for Gazelle and Magnum e-bikes in middle price points. “Based on how the season finishes, we may do discounts on some slow-moving models,” Summers said.

“With our sales doubling every year, we projected 20% growth for 2022, and we’re actually 10% down,” Summers said. To move some of the high-end product, Summers tried a Riese & Müller, offering $,1000 off if SRP is below $10,000, $2,000 off for bikes above $10,000.

Craig Cooper, Menifee Bicycles, Menifee, Calif.

Cooper is sitting on “a lot of paid-for inventory.” He’s not yet ready to have a sale, although he does offer customers a discount to move them up to a more expensive model than they came looking for.

“I fear many bike shops and suppliers are in for a rough time,” Cooper said. ”If I have to, I’ll gladly sell key overstocked bikes at or below cost. I’ll take the money and buy food and water. At least bikes and women's shoes did OK in the Great Depression.”

“A sale? No way!”

Mac McCabe, Mac's Harpeth Bikes, Franklin, Tenn. 

McCabe’s response to our “Having a sale?” question: “You're shitting me right? I can't make a proper margin on bikes to start with so we'll just make it worse? WTF?”

Unlike overstocked shops, McCabe is still unable to get the bikes he wants. “Ten days ago, I got some Fuji Sportifs, the first new road bikes I’ve seen since 2020. Having a sale would be crazy. Shimano 105 road bikes are just as good as cash.”

Paul Tobio, Ryder Bikes, Bradenton, Fla. 

Tobio would rather hold onto his excess inventory than discount it. “We’re sitting on 1,000 bikes that we bought at a better price than I can get now,” Tobio said. “The three warehouse spaces I’m renting cost me way less than that price difference.”

“It is going to be tough getting the bikes you want if you’re planning on the suppliers being your warehouse,” he continued. “We’ve had Black Friday sales and such in the past, but now is sure not the time to discount.”

Andres Estevez, Collareta Cycling, Plantation, Fla.

Florida shops like Ryder Bikes and Collareta have steady year-round demand, which reduces their motivation to have a sale. “Discounting is not the answer for us,” said Estevez. “It will reduce or eliminate profits for everyone.”

“I get it, some shops have payments coming due and need the cash flow,” he surmised. “Since we can’t restock at the old prices, holding our current prices will be our discount as manufacturers raise their MSRPs in the fall.”

Topics associated with this article: From the Magazine

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