If you have been in the market for a new bicycle lately, you’ve probably run into this problem - you either cannot find one in-stock available to purchase, or you have pre-ordered the bicycle you’ve had your eye on for a while and it simply has not come in yet. Quite possibly both. Worse yet, there doesn’t seem to be a clear date of when your order will be delivered or available.
Well, you are not alone.
The entire bicycle industry is currently in unprecedented times. There is a perfect storm of a sudden surge in demand coupled with rattled supply chains amongst other factors that are affecting the ability to purchase a new bike or ebike. Simply put, the bicycle industry is experiencing a bike boom, amidst a worldwide pandemic.
We intend to walk through the key reasons why there have been massive delays in bike orders and/or you can’t seem to find one in stock.
Bicycle Factories Get Shutdown
A majority of bicycle manufacturers have bikes and their parts made in factories outside of the US. A primary country being China, where some of the first cases of the COVID-19 virus were reported. As the disease spread across the country it forced shutdowns of many manufacturing factories that were not limited to just bikes. Industries across the board that source materials in China were impacted and hit with shutdowns.
Subsequently, bicycle manufacturers are faced with a significant gap in their supply chain where they are not receiving any new products. This means that by the time the demand increases around April, shops, online stores and other retailers don’t have enough inventory available to meet the new demand.
This event is, essentially, the trigger that created the domino effect that the retail bicycle industry is currently struggling with.
COVID-19 Stay-At-Home Order Increases Demand of Bikes and Ebikes
As we all know, the novel coronavirus eventually begins to quickly spread across the US with various hotspots. Beginning in March, in an attempt to slow down the virus, several states began implementing a Stay-at-home order which included the shut-down of non-essential businesses such as fitness gyms, bars, movie theaters, and more.
These state mandates eventually created a sudden surge in demand for bikes and ebikes as a way for people to go outside and exercise. According to an NPD study, bicycles, and associated parts and accessories had an increase in sales starting in March and took off in April reaching $1 billion. Which is a 75% increase over last year. It was the first time that sales have reached $1 billion since NPD began tracking the market. The growth in demand can be attributed to several factors:
- Need for Physical Exercise:
With the gym closures in effect, many gym goers are now left without their usual form of exercise and have turned to cycling as a way to stay in-shape. It is a relatively inexpensive way that allows people to stay active during the pandemic.
- Commuting and/or Transportation:
Since the pandemic began in the US, officials have been advising people that staying at a safe distance from others is one of the most effective ways to slow the spread of COVID-19. To this effect, many have turned to cycling as a commuting alternative to public transportation (train, bus) which can be highly populated during rush hours and put them at higher risk for contracting the virus.
- New Family Activities:
The stay-at-home orders have led families to find new ways of spending time with each other that are safe and fun. Being hunkered down for long periods of time can lead to a bit of cabin fever thus and going outside on family bike rides can help alleviate it. It has been the solution for many parents to keep their kids active and burn off some pent up energy. Not only are families buying new bikes but are also purchasing all the accessories that come with riding. Most notably, helmets and bike trailers.
- Overall Mental Health:
One of the negative outcomes that has come with the novel coronavirus and the stay-at-home order has been its overall effect on mental health. Cycling is one of many activities that people have turned to in order to improve their mental health. It can relieve stress & anxiety, improve your mood, and can help with sleeping better.
These are just some of the key reasons why the demand for bikes have skyrocketed over the last few months. There are probably many more and most likely a combination of reasons that are listed above amongst others.
Re-opened Factories Struggle to Keep Up With Demand
As the spread of the virus slowed down in China, many factories reopened around the second half of March. However, not with their full capacity and not without measures to keep COVID-19 cases to a minimum. By the look of much of the news today, it might seem that factories in China are struggling with slowed demand from customers but in a few industries it is quite the opposite. Specifically, you guessed it, bicycles.
When the increasing cycling demand is put up against a Chinese manufacturing machine that isn’t performing at full capacity, it makes it even tougher for retailers to keep their inventories stocked for their customers. Not to mention that the factories where they assemble the bikes are also struggling to source parts and materials themselves further adding to the broken chain.
Rising Manufacturing and Shipping Costs
On top of all that, bidding wars are waged over parts amongst the largest bicycle manufacturers, further aggravating the situation. Bicycle manufacturers are now all sourcing parts to make more bikes to keep up with the increased demand, but similar to the issues China factories faced, many factories across the world were also facing them.
Sourcing parts from large suppliers like Shimano proved tough, as they saw their factories in China, Malaysia and Singapore impacted as well. This meant that bicycle manufacturers were not getting 100% of their orders filled, or they were having to go into a bidding war to prioritize getting the parts they needed. So now, the cost to manufacture a bike has gone up. As you will read below, the cost of ocean freight shipping has also nearly doubled, as well as the cost to ship bikes domestically, as large shipping carriers are impacted, such as UPS and FedEx.
The Fight for Containers and Ports
One of the last hurdles that bike manufacturers have to overcome is getting their bikes to the US from China. Due to the current state of the world, ports and freight shipping can be tough to predict. Shipping delays and changes are a common occurrence over the last couple months. Which has made it difficult to give customers who have pre-orders a proper estimate of when their purchases will be shipped, let alone arrive at their doorstep.
Much like the reopened factories in China, the ports and docks do not have their full workforce and have safety measures set in place to mitigate the spread of disease. Which has disrupted the process and slowed the amount of exported shipments coming out of China. Subsequently, it has created high amounts of competition for container space. Different companies and industries are now all fighting for container space which resulted in increasing freight shipping costs.
Many of the same logistical problems that are happening in China are also occurring stateside - Massive delays due to limited workforce and safety measures. In the US, trucks are waiting much longer at receiving sites that are creating delays and backups at the docks. Specifically, there are three main reasons for increased delays that related to COVID-19:
- High demand products causing backups & congestions (not just bikes)
- Shipping and receiving personnel health screenings
- Limited dock and warehouse workers
Bicycle Surge and Aventon
At Aventon, we certainly have not been immune to the current situation that the cycling industry is experiencing. Being that our headquarters is centered around a pandemic hotspot in Southern California, we are facing all the same challenges. However, we are taking drastic steps within our organization to mitigate the negative effects of this pandemic to our customers.
In order to keep up with the demand wave, we’ve doubled our workforce within the last month and tripled our customer service team to handle the number of inquiries coming in. Our entire organization, with the exception of our warehouse workers, are working remotely. We've scaled up a comprehensive remote onboarding and training process for our new team members in our continued commitment to keep our workforce safe while continuing to serve the needs of our exploding customer base. As you can imagine, onboarding new team members remotely has its own set of challenges that we are also working through.
Additionally, we’ve built new functionality into our systems to accept pre-orders so that our customers no longer need to constantly check back in to see if we have ebikes available to order. Being that product orders are at the mercy of the limited workforces at the local shipping ports and package delivery services, we want to make sure customers get the chance to reserve a bike as they become available, given the supply chain and inventory issues plaguing the industry as a whole.
Local bike shops have also been seeing an unprecedented rise in demand for not only their bikes but also for appointments to get bikes or ebikes serviced and we’ve been coordinating with our Elite Dealers to assist them as much as we can. Many have been seeing over 6 weeks in service backlogs so we understand how frustrating it may be for people who have been itching to start riding.
The cycling industry is currently in uncharted territory that has created many headaches for both manufacturers and customers. However, much like the narrative we’ve all been hearing lately, we will get through this and hopefully come out much stronger on the other end.
Looking at the brighter side of things, we hope that the increase in demand and interest for cycling will continue and grow our community of riders.