2020 was a testing year for the cycle industry & 2021 is shaping up to be the same. Why is it so hard to buy a bike? What is causing delays on bikes? What are the manufacturers doing about it? Here's an industry inside view at what is & isn't happening in the global cycle industry right now.
2020 started like any normal year for the cycle industry but before the last of the winter rain had fallen news of a global health pandemic was spreading and much like the rest of the world, the entire industry found itself wholly unprepared for what was to come next.
Here's How It Started
The first lockdown came to the UK on 23rd March and along with it, a list of reasons people could be excused for leaving their homes. One of them was "One form of exercise".
Millions of people, many of whom hadn't cycled since they were children, suddenly found that owning a cycle was a great way to enjoy the now quieter world outside.
While the western hemisphere watched the news of the spread of Covid-19 from a considered safe distance, the problems had already started. With the bulk of small components like gears, brakes and some motor brands being built in the Far East & their factories closing, the backlogs were starting to build for component manufacturers long before even the first UK lockdown.
Let's break down the following months to briefly outline the timeline:-
February - April
As the UK's biggest independent supplier of exclusively European manufactured eBikes, we've always sought to maintain a very large "in-house" level of stock and initially, this was a great buffer for the rapidly increasing demand we experienced. Our aim is to supply a new bike on the spot for showroom appointments, and for it to ship within 24 hours for the rest of the world.
May - July
Through May and into the middle of summer, the pressure really mounted. With in house stock dwindling, we relied heavily on our carefully curated manufacturer relationships to pick up the slack. Lead times slipped to a couple of days, but stock was running out quickly around the world. By the end of July, Cube and Orbea had sold the last of the 2020 model year and could deliver us nothing more.
Bike Industry Insight - Most manufacturers, factoring in/forecasting from previous year demand, normally only plan to build a set number of each model, each year. When they run out of frames, motors & other components, they're gone. With motor suppliers like Bosch and Yamaha working to a 12 month (or longer!) lead time and the same for component manufacturers like Shimano, they can't simply "make more" when a model runs out. This translates to bike frames 'ready to go' but with no components to match.
Ordering for Model Year 2021
In the very final weeks of July, both Cube and Orbea approached us with a model year '21 outline, and the offer to place pre-orders several months earlier than usual. Model year 2020 was over as quickly as it started!
Normally, bike shops place pre-orders for the first few months of the model year, along with a forecast of what they expect to sell. This helps manufacturers forecast production, but without commitment. This year, we were all told "either place your order for the entire year or expect that you might get nothing". All manufacturers were seeing a sharp increase in order volumes.
We considered, deliberated and ultimately took heed, eventually tripling our 2020 model year order. Going back to Cube just 8 days after their order books opened to consider some models we don't normally take, we were told they had sold their entire production capacity for 2021. Clearly then, they weren't joking!
Sadly, this also meant that many smaller retailers who couldn't forecast or offer the cashflow to commit to an annual order have in some cases been completely cut out of the loop.
August - October
During August, facing a slowdown from almost all manufacturers, Cube began shipping Reaction and Kathmandu models. Being two highly popular models, this was a huge help for us and as we headed into September, more and more of our increased order was arriving each day. Much of them were even arriving ahead of their ETA.
September saw a slowdown of deliveries from Cube and lead times slipping. Bikes had gone from 2 weeks early, to on time, to now arriving up to a week late and this trend continued into October. By the end of October, many of the Kathmandu and Reaction models from late September were still outstanding.
Along with these delays, Cube's previously steadfast reporting and forecasting of arrivals had gone out of the window and they were now unable to tell us anything about when our customers' pre-ordered bikes were going to arrive. Other manufacturers were still updating, but lead times increased by months.
This was the first point where we really started to see the impact of the Far East based factory closures earlier in the year, on end product assembly.
November - December
With our frustration mounting while leaning heavily on manufacturers who had previously made up a lesser figure in our turnover to ensure we had enough bikes to cover demand. Many of our customers were rightly upset about bikes ordered for Christmas becoming increasingly unlikely to arrive in time - we finally managed to pressure a response with just a few weeks to go.
The information from Cube in particular was scant at best. "We are working as fast as we can and these are the new dates for the hundreds of bikes already delayed". Many of them had moved from September/October '20, to as far out as July '21 but were promised a large number of high volume deliveries in the new year. We immediately communicated this to hundreds of affected customers.
January to Date
January arrived and departed almost in a blink. So quickly in fact, that we barely noticed until reflecting earlier this month that Haibike had been the ones to shine through, shipping more bikes than initially expected and keeping the workshop and warehouse train moving.
Being a dealer of "exclusively European manufactured eBikes" is great for reliability of quality and servicing/spares, but the recent changes to the virtual and physical customs border with the EU left the manufacturers logistics for the UK in a state of complete disarray. It was a full 6 weeks into 2021 before they got their ducks in a line and any reasonable number of bikes started to make their way to us.
Production - Many manufacturers have added extra production lines to their factories. Not only does this allow for the social distancing measures to be adhered to much more easily, but it also allows them the capacity to build more bikes than ever before. The issue remains of course, that components are still slow to arrive.
Shipping - Bikes are now starting to arrive in the UK, and in quite large numbers but things are far from perfect. With the borders issues resolved, bikes leaving the EU are taking a couple of days longer than usual in transit, but are finally making it through to us however the industry continues to be affected by a global shipping crisis.
Pricing - The availability of containers from the Far East is far lower than normal and so the costs of these containers is ever increasing - as much at 8x the normal cost, raising the cost of a single container of frames or components from $1,500 to in excess of $20,000! There are also new duty rates on bikes. This has a big knock on effect on the cost of the end bike and all of our manufacturers have increased prices on bikes globally, by anywhere between 5 and 10%.
Bicycle Model Year 2022
All of these issues aren't unique to us, any particular manufacturer, nor the UK - they impact the entire industry from top to bottom and we fully expect them to continue throughout the next model year. In discussions with some of the manufacturers, its widely believed that the effects of CV19 on the cycle industry could ripple out as far as model year 2025.
As has been the case for model year '20 and '21, it's highly likely that for at least the next few years, dealers like e-Bikeshop will have to continue to place a year's order up front almost entirely blind but with good faith. Customers in turn will need to place a pre-order and wait for the arrival of their new bike in order to have any guarantee in themselves getting one.
Is there anything customers can do to help shops?
Right now, our biggest time consumer is administration of the huge volume of orders outstanding. Normally, these would be serviced inside 24 hours, but with anywhere up to 1000 customers at any one time waiting on a bike, while we completely understand both the excitement of getting a new bike along with the frustration of delays, repeated requests for updates currently take up a very large part of our working day, cutting into the level of service we can provide to everyone.
During the peak period of April to September 2020, our building was staffed for as much as 15 hours a day, 6 days a week just to keep up with paperwork and enquiries!
While we can't speak for all bike shops, we provide any updates (good or bad) from manufacturers inside 24 hours, normally taking only some time in due diligence to ensure the information is accurate, and relaying it to those it's relevant to.
Unfortunately, time spent responding to customer requests for information in January about the bike on which they placed a pre-order with an ETA of April is time not spent getting bikes out of the door.
If you imagine that a member of staff on the phone updating a customer with no new information isn't relaying information on the day's bikes arrived to the workshop - The workshop receives their information later, the bike leaves later, and the next bike in the queue for assembly starts later, which also leaves us later and this will continue to have a knock-on effect down the line.
Ultimately, the time it takes to update someone with no new information because they're excited only adds to the delay of their own bike, days, weeks, or months down the line! For much smaller businesses where the person who answers the phone is the same person building bikes, this is even more profound.
Here are a few things you can do to help bike shops handle this unprecedented load:
Only place an order if you are fully committed to a bike, even if there might be a delay on its arrival. The bike shops have no control of this but refunding cancelled orders costs the bike shop further time and physical money (card processing fees of around 2% of your order for example, are not refunded to the shop if they refund you). If you're in a rush for a bike, you can normally find up to date information on the website, or you can contact the shop directly for an up to the minute availability on stock models.
Try and get everything done in one hit. We'll always be happy to discuss accessories / parts / custom options on bikes but chopping and changing orders multiple times while waiting for a bike to arrive can add a lot of admin into the mix with shops already overstretched. Mistakes are often generated here on both sides and we only want you to be nothing but over the moon with your new bike!
Trust your bike shop! Bike shops are some of the most friendly retailers you will deal with - something common in businesses where everyone shares a common passion. As mentioned previously, if we have information to provide, we will always provide it - even when it means us all sitting in the office until midnight to send a tailored email to every single affected customer. If, when you placed an order, the lead time was several weeks or months in the future, if there is a delay or if the bike arrives earlier than expect, we will be in touch immediately to let you know.
Calling or emailing every few days/weeks will only add to our admin times, ultimately delaying your bike. Rest assured that any radio silence from us, even for weeks is not in any part complacency. We're here for a minimum of 10 hours a day, 6 days a week, to ensure that everyone gets their new bike just as fast as we too, can get our hands on it.
It's not all doom and gloom; bikes are coming through, just not as fast as originally anticipated. The sun is shining and 2021 is set to be the year that everyone tries to reach a conclusion on the Global Epidemic. It's also an exciting time for eBiker's with innovations year on year.
Thinking about buying an eBike in 2021? Here's a link to In Stock 2021 Models.