HomeNewsHow’s BusinessHow’s Business? – May 2022

How’s Business? – May 2022

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Welcome to our monthly chat with dealers from across Australia and New Zealand. From a range of previous conversations we’ve been having with wholesalers and retailers over recent months, it seems the pendulum has been swinging in relation to which categories of bikes are now in shortest supply due to covid.

The initial surge of demand in family level bikes has abated. Meanwhile, supply of these bikes had more than caught up with demand, so in the case of some brands, not all, there is now even overstock and discounting.

But it’s a different story with mid to high-end bikes where there are still shortages across many brands and models of mid to high-end road, mtb, gravel and e-bikes. To try to get a better idea of the specific shortages within these sectors, this month’s follow-up question was: ‘If you could instantly get as much supply as you wanted of just one bike model, what would it be?’

Some dealers found it hard to single out just one model, but others knew without hesitation exactly which bike they wanted most.

Luke Baker at Lakes Bikes in the outer southern suburbs of Perth, WA said:

It’s going well. There’s challenges with stock, obviously. But we’re managing that and ticking through day by day.

We’re located in Cockburn, Perth. The main brands that we stock are Specialized, Cannondale, Scott and we just brought on Colnago. It’s very exciting. They’ve just launched a new C68 and there’s very exciting things to come with that brand. A couple of us in the store own Colnagos ourselves.

We tick all the boxes. We’re predominantly road. Gravel is a big thing for us as well. Through the wetter season (which is winter in Perth) mountain bikes really kick off for us as well.

Gravel in particular, at this point in time, would be one of our biggest growing categories. There’s quite a few big gravel events here now in WA. Seven Gravel Race has just become a UCI (International Cyclists Union) event.

It’s about three hours south of Perth in Nannup. All of my staff and myself will be riding that event. It’s our main event of the calendar at the moment. (It attracts about 1,000 riders). It will be on 15th May – training’s all done – we’ll see how we go!

Instant supply of which bike model?

A Specialized Tarmac at pro level – about $10,000 to $12,000. I haven’t seen one in months.

Pete Naughton from Hey Bikes, a relatively new shop in the Adelaide suburb of Plympton, halfway between the city centre and the oceanside of Glenelg said:

It’s pretty good. We’re a little bit different in the sense that we’re a service focused bike shop. Most shops in Adelaide are your more traditional retail focused with servicing but we’re still relatively busy which, coming into May, is a nice thing.

We do pretty much anything under the bicycle banner, with the exception of e-bike electrical repairs. Anything else, we’ll have a go.

Spare parts have not been too bad. We can still get you stuff. It might not be your first choice but it will still be something that will meet your requirements.

We do have a few bikes that we sell. We do Lekker, we’ve got some Jamis, we’ve just taken on Tokyo Bike. Our range of customers is all over the place; everything from your economical, cash-strapped family to top-end BMC and Pinarello riders, to everything in between.

We try to find bike brands that meet those bills. We’re still not in that entry level world. We’re leaving that to Reid Cycles and 99 Bikes with their Pedal brand. We’re looking at the boutique end, such as Tokyo Bike – a little bit different. Nice and comfy to ride. Steel frames, which is my personal preference. Lekker – a little bit more robust, a bit beefier. We also do TEBCO as our e-bike brands.

Instant supply of which bike model?

We’ve recently been given an open door to sell Norco. The Norco Scene is my go-to bike. It’s a nice low step-through. It comes in a nice colour range and it’s just great for the people in our area. We’ve got lots of bike tracks around. You can still ride it on the roads, it can hit the rough stuff fine. It’s a nice robust bike.

Tony Wilkinson of My Ride Takapuna and Botany, two stores in the suburbs of Auckland, New Zealand said:

Business is pretty good. Like many others in the cycle trade in Australia and New Zealand, we’ve been blessed by huge growth from covid. There’s a lot of external influences out of our control with regards to when stock arrives and how much it is compared to allocations we were normally used to getting.

But even so, we seem to have maintained our covid growth from the last financial year. So far so good. How we’ve achieved that growth has changed. When we were in the heart of covid with heavy lockdowns, we were seeing lots of families riding together and people getting into riding for the first time – huge growth in kids bikes and huge growth in low-cost adult bikes. That’s dropped right off now that the world’s going back to normal. But what we’re left with is a lot of high-end e-bike sales.

When we can get stock, a lot of couples are coming in and buying two nice e-bikes, a bike rack and kitting themselves out fully. Whilst the world is not fully opened up yet, we’re blessed with a lot of e-bike sales. So we’re seeing sustained sales numbers, almost exactly the same as the previous financial year, but we’re doing it through e-bikes, not that family market.

Parts and accessories have been down too. Whereas last year we were selling a huge amount of bikes and the associated add-ons, that’s dropped right off. But with the people buying e-bikes and the subsequent add-ons with those, we’re maintaining good numbers.

Like everyone, our workshop is still busy, which is good.

Our main store, which we’ve had since 2018, is in Botany Downs in South East Auckland. We’re lucky to have a huge pool of loyal, great customers. We’ve done a really good job, I’m not afraid to say it. We’ve created a really great bike shop there that is truly customer-centric. They get great customer service and we’ve got a huge amount of bikes in store and parts and accessories in their ready to go.

Although our website is probably not where it needs to be, if you stumble into our front door, it’s quite hard not to leave having bought something or having thought, ‘Wow, this is now my bike shop. This place is awesome!’.

Takapuna we purchased in December last year. It’s a premium, well known bike store location on the North Shore of Auckland (across Auckland Harbour from the city centre, one of a cluster of four bike shops). It’s been head office owned for a while. During covid while stock was really limited, that shop was starved of stock to support the independents.

Sheppard Cycles, who owned that store, did what they needed to keep the mum and dad bike shops going. But now that I have purchased it off them, we’ve got much more stock. We’ve put a lot of effort into recruiting high-quality staff and more staff, we’re slowly fixing that shop, one customer at a time, which is exciting.

Instant supply of which bike model?

I would re-mortgage the house to buy as many full suspension e-mountain bikes that I could that were mid-drive Bosch powered and under NZ$8,500. That’s what we’re excited by, but they just don’t last (in stock) at the moment unfortunately.

Most of those people buying those bikes are rail trail riders. They’re buying them for comfort and control, rather than speed. We can’t get enough of them.

I think our market is a bit different to Australia. We’ve got first mover advantage but I know it’s growing at a huge rate in Australia now as well.

John Michell of Ashfield Cycles in the inner western suburbs of Sydney, NSW said:

It’s up and down. The first couple of months of this financial year I was up each month. Then all of a sudden it dropped for some reason in October. Then it went up by huge amounts in November and December, dropped 50% in January, then up and down. Overall, we’re up a little bit. I just can’t work it out. I know we’ve had a lot of wet weather which probably hasn’t helped. Stock problems always of course – we can’t get any high-end bikes, which is a big problem. Our workshop is pretty steady. We were booked out for two or three weeks in advance when covid was really impacting and everyone was stuck at home. That has settled down a little bit now. People are back at work and doing other things. But it’s been a funny two years.

I’ve always had other brands but I’m mainly Specialized. When Covid first hit two years ago, they had no stock left in the end. I was selling a few Avanti just before covid.

Specialized is still my main brand when I can get them. We’ve just started getting a few Specialized mountain bikes and kids bikes in. No road bikes virtually at all.

I put Scott in last year. They went alright for a little while. The bikes are good, prices are good, but again, getting bikes from them is almost impossible.

I was getting a few XDS. I had Jamis for a little while – just trying to get any bikes I could. Specialized is definitely still my main brand. I’m trying to stay loyal to them. Avanti would be my second choice of bikes.

Instant supply of which bike model?

Any road bikes really! Anything from $2,000 up to $5,000 in an entry level alloy or a carbon frame. We just can’t get anything at the moment. If I could get a Specialized Tarmac around $5,000 before August or September this year, I’d probably be a happier person.

Giancarlo Zanol of Dolomiti Electric Bicycles which occupies the original Ivanhoe Cycles store site on Heidelberg Road, Ivanhoe, in Melbourne’s north-eastern suburbs said:

It hasn’t impacted us very much, the corona virus. We seem to be selling as normal, or a bit more at times. Of course we’re waiting to see if this winter brings any changes but based on previous experience, last winter we were closed for three months (physical shop closure due to Melbourne’s covid lockdown but business still allowed to trade) and it still did not make too much difference. In fact there was a slight increase in turnover.

The number of bikes that we sell is the same, but the unit value of the bikes we sell has increased. We sell Kalkhoff, Focus and Riese & Muller. We only sell bikes with Bosch motors and batteries. No other makes. No Shimano, Yamaha or whatever.

We also have a shipment of Gocycle coming in this week. They’re a fairly specialised type of item. We bring them in direct.

We fortunately bought a considerable amount of bikes (across all their brands) and we keep on doing that. We’ve got a storage facility which is pretty good. We’ve got five containers of stock, one 40 footer and four 20 footers – quite a lot. Otherwise we would have been in trouble.

A lot of people come here because we have the stock and other places don’t. Of course the Bosch name makes a difference too. Bosch are the only company with an electric bike division. In 24 hours we get a replacement battery if it doesn’t work.

I used to be a mechanic engineer, then I had an engineering company. I saw an electric bike in Italy. When I came back I asked Giampaolo (Giancarlo’s son) what he thought. He said, ‘Good idea!’ So here I am – there goes retirement!

I sold my engineering company after 25 years. I thought it was time for me to retire. I’m helping my son anyhow and I’m quite happy.

We only sell electric bikes and just a few accessories like helmets, not many. We don’t sell any shoes, clothing or anything like that. We are totally out of the city. Only people who are really interested come in. People who walk into this shop come here because they’re interested in an electric bike.

Now I always say, ‘We don’t sell electric bikes anymore!’ We did 10 years ago have to sell electric bikes. But now people buy electric bikes from us. It has changed completely, the mentality. There are many more customers out there now. People just come in and say ‘A friend of mine has an electric bike, now I’d like one’.

Instant supply of which bike model?

The Kalkhoff step through, $4,800.

Oliver Wacek of Trinity Cycle Works in Cairns, Far North Queensland said:

For us business has been phenomenal, literally starting with the pandemic and still is until today. The locals had nothing else to do when travel was restricted but jump on bikes and off they went.

The increase started to come along with the overseas travel restriction announcement. The intensity just went bang, with e-bike sales.

Our best e-bike sellers are the dual suspension e-mountain bikes, the Focus Jam and the Focus Sam. The Jam is the 150mm all-mountain bike and the Sam is the Enduro bike with 170 mm travel. In e-bike best sellers you also have to mention Kalkhoff, which is more your city / touring bike. They also go like hot cakes out the door.

E-bike sales, also triathlon bikes are still very strong. Bianchi road racing bikes still go well.

But it’s 70% e-bike sales for me now. Focus and Kalkhoff are my e-bike brands which go ‘strong as’.

As like everybody else, it’s no secret that we’ve got shortage of supply and that’s what we have to live with. But so far I’m lucky that the bikes I manage to get walk out the door again, so that’s what has kept us alive.

We’re right in the city centre and the other bike shops are all within less than a kilometre of each other.

But also I’m selling gravel bikes now. They’re on the floor and selling. It takes time for the public to get into them, but already requests are high.

Instant supply of which bike model?

I also sell heaps of the Cervelo P series triathlon bikes.

It would be three: the P Series triathlon bikes. And in the beginning I was selling more of the Focus Jams, but now I’m selling more of the Sams. To pick one of them now…

If I had to pick one, I would pick the Focus Jam.

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