Supply Chains are Kinked, Making it More Difficult to get a New Mountain Bike — Again

The great 2020 bike boom forced all enthusiasts to operate a little differently. Consumers had to wait longer to get a bike or to get into a shop. Brands sold out of their available bikes more quickly, and everyone realized this was going to be more than just a quick blip. Lead times across the industry grew by the quarter.

Going into 2021, it looks like the demand will sustain itself. Pandemic restrictions haven’t eased significantly enough for most to travel regularly again, or go into the office. Mass gatherings at games and concerts are still beyond eyesight too, which means that the bike industry is gearing up for another busy year — at home.

“If Alchemy can get bikes delivered, it will be a good year,” said Joel Smith of Alchemy Bikes, in an interview. He thinks the boom will keep expanding. “It’s a little bit more sustainable than I think most people are giving it credit for, and I think it will continue like that the foreseeable future.”

Alchemy sold out of its 2020 stock of bikes and anticipates that the same will happen long before 2021 is over. That’s good news for a bike brand, but it’s not that simple. Subsequently, they’ll let down customers who wanted an Alchemy, they’re already planning production for 2022 bikes because factory space is that competitive, they’ll likely have to delay the release of new bikes, and because of increased competition for factory space, raw materials, and shipping, they have to raise their prices.

For complete bikes, component manufacturers like Fox and Shimano are also facing their own supply issues, making it more challenging for bike brands to get components for complete builds. They’ve been quoted ten month lead times for hubs, drivetrains, and more. Smith has also heard that some of the biggest bike brands are buying up as much factory space as possible, further complicating the situation for smaller brands trying to catch up. A lot of competing brands share the same production factories overseas and have to book frame manufacturing time far in advance.

Most recently, they got charged an extra $2,000 on every shipping container. “From our level, we get charged whatever, because we desperately need bikes,” he says. “If we don’t have bikes, we’re not a bike company.” Unfortunately, these aren’t costs that they can eat. Alchemy has raised the prices on their bikes over the past year because of increased production costs.

“These costs are going to have to be passed on to consumers. Most of us in the bike industry operate on pretty tight margins and we determine our sale price based on a margin. So, when our costs go up, the cost for a consumer goes up.”

During lead times, they’re putting customers on a wait list, without a deposit, and informing them when bikes arrive. Smith says they don’t want to take anyone’s money if they don’t have bikes to sell. And, if a customer isn’t interested after the bikes arrive, “there are five other customers who do want them.”

“It’s crazier than any time I’ve experienced after 30 years in the bike industry. But what’s different than the previous time when there was a boom and bust, is that there was a boom, but the channel wasn’t so empty. Now, there’s a boom and there’s just no bikes out there.”

Commencal echoed these issues in a statement they released at the end of December. “Demand has exploded. People have realized the value of cycling and the joys of mountain biking in the great outdoors. And this is obviously very good news for our planet. But on the other hand, with this rapidly growing demand, several factors are now slowing momentum.”

Commencal says they have run into the same issues as Alchemy and other brands with components. “Finding the vast majority of components required to assemble a complete bike is extremely complicated today. Major component brands such as Shimano, SRAM, Fox, and Schwalbe, who produce mainly in Taiwan, give lead times of between 9 and 18 months. They are normally able to deliver within a maximum of 3 months.” They credited sourcing of raw materials as complicating the issue.

Commencal has also experience shipping issues. “A concrete example, it took us about 3 weeks to ship a container from Taiwan to Golden, Colorado, but now we need between 2 and 3 months. The ports are full.” Commencal is reviewing the prices on some of their bikes and doesn’t expect things to return to normal until the end of 2021.

We reached out to Shimano and SRAM. SRAM did not respond, but Shimano EU gave a little bit of insight to our tech editor Gerow in an email. Shimano has upped production 150% compared to their past capability and says they are working hard to address the demand.

“To respond to the sudden and very high increase in demand in the short term we are increasing supply through re-prioritizing production, increasing capacity within our current structures and working with customers to find solutions,” said Ben Hillsdon. “To scale up production, which we of course try to do, you have to bring in new machines too. But this takes almost a year before everything is implemented and you actually produce.”

Though brands are already feeling the pressure the first week of the new year, some bike shops have at least had a chance for a breather. Service manager Paul Denney at Big Ring Cycles in Golden, Colorado says that things have still been pretty steady for them through the winter, but it’s nothing compared to the summer.

As far as getting parts, it’s a mixed bag. “Stock is hit and miss, some things have become available in the past few weeks, some things have been out and it seems that it will remain like that for a couple of months.” They haven’t had to raise prices yet.

Big Ring anticipates another good year for sales and service at the shop, but that could again depend on if they can get what they need. They’ve put in pre-season orders and believe that inventory could be strong with bikes and components. Mostly though, they’ll have to wait and see how things shape up when spring and summer come around.

“It is hard to say how 2021 will be since we have not been through anything like this before.”

Earl Serafica, owner of Earl’s Bike Shop in Atlanta sat down with Jeff for an upcoming Singletracks podcast episode, and gave him a similar scoop.

For Earl’s shop, they are sold out of the 2021 Specialized model year, which runs through June. The amount of orders they’ve had have well surpassed what’s available. With bikes expected to sell quickly again, they’ll have to shift focus to service.

“We’re just sitting on a massive list of backorders. For me, hundreds of thousands of dollars of bikes in backorders, just hoping one or two trickle in.”

And like others have mentioned, component backorders are delaying complete bikes. Earl says he’s heard stories of containers of nearly complete bikes ready to go, but they are missing brake sets which are nowhere to be found. Every morning he gets email alerts of new bikes heading their way, one or two at a time. “I never thought I’d be so happy with two bikes, but that’s the story.”