Understanding the Bicycle Market: From Shortage to Overstock – What You Need to Know

2023-09-02 05:24:00

During the pandemic, you had to be patient if you wanted to buy a new bike. In question, the shortage of essential parts which caused delays in delivery and the strong demand linked to the arrival of new cyclists. Today, the trend is reversed. Bike shops are having trouble selling their stocks.

”It’s fine with us, reacts Patrick Marette, manager of the Km10 store in Genval. But many end up with an overstock.”

The explosion of the bicycle market over the past three years has pushed suppliers and sellers to place sometimes astronomical orders. Now that the market has stabilized, they are left with inventory to sell.

This is particularly the case for small stores that opened or expanded thinking that the market would continue to grow at the same speed. They placed large orders for the coming year and found themselves with little cash.

Some therefore went bankrupt because they did not have the shoulders to withstand the shock. “A Mustache bike costs around €2,000-2,500. If you order 60, you quickly end up with a bill of €150,000.”

A matter of supply and demand

For Patrick Marette, “the current situation results from the combination of two elements: concentration on the market and the poor economic situation linked to the war in Ukraine”. Purchasing power has decreased, so people are postponing their bike purchases or turning to big brands, which are cheaper than independent bike shops.

At Bike Square, same story, they end up with unsold bikes. “The season was staggered and the summer was very calm, probably due to bad weather,” says Thomas, a member of the team.

Another consequence, “relationships with certain brands have changed, explains Patrick Marette. Scott, for example, was very rigid: either you take the bikes you pre-ordered, or we keep them but you pay a 15% penalty, or you don’t take them and we stop the collaboration. For a small store, new on the market, the negotiation margin is almost nil.

So we see a lot of promotions. Some are selling off their prices and destocking (up to 10-15%), which would have been unthinkable two years ago.

“It also frees up space in the store,” we add at Bike Square.

But the two bikers are confident, because the number of cyclists continues to increase. “The weakest links in the sector have been eliminated but it will pick up once more. Some will want to buy a 2nd or a 3rd bike, to make a different use of it”, predicts Patrick Marette. At Bike Square, we bet a lot on the start of the school year – the months of September, October, November – a period conducive to the purchase of leased bicycles. Because company bikes represent between 30 and 40% of the sales of the Brussels store.

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