Below is a link to one of several articles I've seen that indicate the major component companies are finally catching up with demand. Or perhaps it's more a case that demand is finally going down? Maybe a bit of both?
In one article from a business/investing paper, they listed a brokerage house putting a "SELL" recommendation on Shimano stock and also highlighted the fact that SRAM is allowing retailers to discount their components. This is something that SRAM has seldom done.
Ideally prices come down, but "deflation" is rare. Bikes will always be far too expensive for what they are. Bike tires will always be far too expensive, etc.
It will take a massive recession to drop prices back down to where they would be if the governments didn't print money without regard for consequence.
Not to rain on this parade but bikes in general are pretty low margin so I wouldn't hope for significant decreases in their prices.. Given that consumers have shown the willingness to spend big money for bikes, what would you do if you were in that business? I think discount levels may return to what they were by category, but past prices are history. Wage increases and the other factors driving inflation are not going to allow prices to decrease.
I think a more reaching change is going to involve an increase in the amount of online bike sales as Canyon etc. have clearly been able to make it work and overcome the building/set-up challenges. In general, folks have become fully adapted to buying higher priced and/or complicated items online. I think the number of LBS's will shrink dramatically in the next few years; they will mostly become service centers, potentially most being owned by big bike brands where you can go pick up the bike you purchased online and you can return for service. Maybe a model along the lines of car manufacturers where you get 1-2 years of "service" included so you become accustomed to taking your bike there. It has long been a fact that service is the most lucrative aspect of an LBS when you look at revenue/sq ft. in large part because bikes take up a lot of space when assembled and displayed. IMHO, at this point bikes don't require much and most of what they do is probably beyond the vast majority of home mechanics. Proprietary tools and knowledge are just making it unrealistic to do it at home and the mfr's are going to make that work for them; they are in business to make money.
What may be out there is a glut of lightly used bikes being sold by the hoards who bought bikes and now will move back to whatever they did or didn't do before the pandemic made the outdoors the Insta place to be (seen).
As my father used to say, "that, and $.25, will buy you a cup of coffee".
Seems like prices have been hovering down with some aggressive sales, or at least not going up on some of the big DTC brands like Canyon, bikesonline, bikesdirect, etc. A functioning market economy usually sorts itself out correctly, but I do kinda worry that the "old" bike industry is going to concede a big chunk of the lower cost / lower margin market over time to lower quality Chinese stuff.
zen_ wrote:Seems like prices have been hovering down with some aggressive sales, or at least not going up on some of the big DTC brands like Canyon, bikesonline, bikesdirect, etc. A functioning market economy usually sorts itself out correctly, but I do kinda worry that the "old" bike industry is going to concede a big chunk of the lower cost / lower margin market over time to lower quality Chinese stuff.
I had a chance to chat with a couple of friends who are still working in the bike biz and they think some real change is coming. Apparently, sales are down "double digits" compared to last year and huge volumes of inventory have arrived or are showing up soon. Pretty much inline with a few financial journal articles. Whether or not prices will roll back is hard to say but discounts will be getting pretty serious, pretty quickly; apparently Specialized is already dropping dealer prices on a lot of bikes. That said, some categories, one of which is helmets, remain tight, probably for a supply chain issue ostensibly. High end, products and some items, especially road and gravel, may not be too discounted due to strong demand.
Nothing to shocking but at least availability should be better; hopefully the days of scrounging for a chain are behind us!
