One of the main parts of my job reviewing bikes is to keep an eye on the prices in the marketplace, following trends and keeping tabs on competition and value between the brands. After some huge bike price increases we have since seen these prices (and the world in general) return to some kind of normality after the Covid years, and I haven’t been surprised by the dramatic downturn in bike sales or their prices, especially for the larger brands like Giant, Specialized and Trek.
> What the hell is going on in the bike industry?
I think big brands possibly struggle to have the flexibility to be able to adjust to the changing marketplace like smaller ones do, due to things like component shortages (a situation that has now changed to what some in the trade have now called a ‘flood of supplies’), world events, and the way that the world’s economy has changed for consumers, which has seen brands, manufacturers and distributors caught out and overstocked in some areas.
What we’ve ended up with is a surplus of bikes in the marketplace, including new ones from the manufacturers, second-hand ones from those people who bought new bikes during Covid lockdowns who no longer want to ride on busy roads, plus the huge amount of stock that was dumped cheaply into the market via the large number of distributors and retailers going under such as Moore Large and Wiggle/CRC.
Plus, due to the cost of everything going up, people who took up cycling during Covid or have done recently don’t feel the need to upgrade yet; or at least, it’s probably not a priority for them at the moment.
Many brands also release their new year models in September, so there is also the need to shift 2024 stock to make way for the new paintjobs arriving in a few months’ time.
Obviously, from a consumer perspective if you do want or need a new bike then any drop in price can only be a good thing. Seeing bikes like Giant’s Contend SL Disc 2 being offered at under £1,200 with a Shimano Tiagra groupset and hydraulic disc brakes is a welcome return to some kind of normality. The rim brake version of the Contend 2 at just over £700 is also a more realistic price for an entry-level road bike, compared to the original asking price of £879.
It’s not only the entry-level that is seeing a realignment either, with top-end bikes like the TCR Advanced SL Disc 0 seeing a £2,200 drop from RRP.
Personally, I don’t think we are seeing any kind of crash in the cycle trade. It’s more of a realignment to pre-Covid pricing levels, the like of which we’re also seeing in the new and used car trade and the technology market.
7 thoughts on “The current price slashing on bikes doesn’t necessarily point to a crash — it’s a return to normality”
I think the market is letting
I think the market is letting consumers decide. The overstock of the bikes and clothing and components have to be sold to keep the companies cashflow alive and the workers in jobs both production and retail. So the consumer wins until the market corrects itself. Giant selling direct at 50% off, is just the retailler margin evaporated. Rapha’s eternal sale of 50% off, they are still making a profit on their Chinease made garments. Shimano’s margins must be tighter selling OEM to the bike brands, but we are all still burning through chains and tyres so the industry is alive.
Bike margins aren’t actually
Bike margins aren’t actually that good. Giant is still making money selling at 50% of MSRP, but that’s less than the money they make from wholesale prices
@Freddy56 Rapha has never
@Freddy56 Rapha has never turned a profit.
The bike industry really had
The bike industry really had prices that were too low for too long to sustain retail stores. The pandemic accelerated inflation to really where bike prices should have crawled up to in the last 20yrs.
*You get a lot more for your money today. When I worked in shops regularly, I bought quite a few +$12000 bikes from 2005-2015. Pretty much every $5000 bike is better than those $12k bikes I had in the past. And when I started, a cheap road bike was $700-800. All the major brands have a $1000 bike and they’re significantly better than those $700-800 bikes with thumb shift Sora and basic aluminum tubing with little to no hydroforming.
Veganpotter wrote:
with bikes selling for £5,000 without even being some top of the range world tour level machine, I don’t accept prices are too low. The margin for the retailer may be too low.
Retail stores can more easily make money from servicing than sales (probably the same as car dealerships)
“Obviously, from a consumer
“Obviously, from a consumer perspective if you do want or need a new bike then any drop in price can only be a good thing.” – This is only true in the short term, in the longer term though big brands pushing big sales puts pressure on innovative smaller brands to the point that many are starting to go under. This is bad for consumers as only having a few choices of very similar big brands with no smaller players to do things differently is not a good thing.
In the USA, the new Giant
In the USA, the new Giant Defy prices have had 2 increases (each 5%, total 10%) since being listed on their website and they are NOW only starting to be availible. 2 year old Defy=0% discount, 2 year old TCR maybe 10% off.