How’s Business? – October 2020

Welcome to our monthly chat with bike shop owners across Australia and New Zealand.

Unfortunately, stock shortages continued to dominate the dealers’ concerns and comments. This month our follow up question was, “How do you see this new season going and have you made any changes to your usual new model year bike orders?”

Steve Kanscal of East End Cycles in the inner southern Adelaide suburb of Unley, South Australia said:

It’s still pretty reasonable considering what we’ve gone through with the coronavirus. We had a massive April, May, June, with double sales even triple sales in some months, but obviously we exhausted all the bike stock around Australia with all the brands that I deal with.

We’ve had some balance bikes and electric bikes arrive in the past couple of weeks but we’ve got no mountain bikes in stock, no retro style bikes and maybe two hybrids. I usually have 145 bikes on the floor and now I might have 40, almost all of them kids’ bikes.

The issue now is waiting for all my wholesale suppliers to get the stock to me. My orders are in. I’ve never more looked forward to bikes arriving in my life mate! I’ve been in the industry 43 years. You normally don’t get excited when bikes come in. You go, ‘here’s more work…’ But I’m looking forward to more stock coming in now.

Malvern Star is probably my biggest brand. I do the full range of Apollo including Radius and Neo’s, Jamis, Electra and ByK. I’m very much retro, family, kids and commuting. I don’t do high end road or high end dual suspension MTB. I do gravel bikes.

Over the years, the way the business has gone and what consumers demand of me as a shop, that’s the road I’ve gone down, which I believe is the right way to go. We go to just under $2,000 in MTB hard tails. But family and commuter bikes is where we do well.

Being only 173 square metres, I had to narrow down my range. When I sell to families they come back to me. The children grow up and they want more bikes so I’ve got continual business.

I used to do road bikes but with road guys you tend to sell them a bike, give them their first free service and then you never see them again.

Re new season and orders:

I’ve tried to increase my orders slightly, but not stupidly over the top, because the wholesalers won’t supply the bikes. They’ve told me that. They can only do what they can do.

I presume it’s going to be strong, that it’s going to continue on. What started in April hopefully is going to flow through into the summer season and beyond.

I think the issue will be when people are looking at your website they’ll pick one bike and one colour. That’s going to be difficult, if we can’t get it and we won’t be able to tell them a time when it’s coming in. That will be the issue this year. People won’t get exactly what they want. They’ll have to get a different model or colour choice. But I do believe we’ll be strong here.

Nicholas Garland of South Perth Cycles, an upmarket suburb well served by riverfront bike paths, just across the Swan River from the centre of Perth said:

It’s frustratingly busy, I think! Lots of people, massive interest, lots of interest in ebikes, but lots of people surprised when bikes are four to six months until delivery.

We fend off probably 20 calls a day, people asking for a $600 mountain bike or a $5,000 ebikes. Most of those people are shocked when the bikes are not coming until Jan, Feb or March.

We’ve got a few brands: Specialized, Trek and access to a few others, but they’re all in similar boat with almost nothing in the warehouse and long lead times, as you’d expect.

It’s frustrating. People are just not happy putting a deposit down and waiting.

If I spent 20 minutes with every person who called, that’s five hours a day gone telling people the same story.

Service is the other side of it. We’re seeing people we’ve never seen before, so service is good. But a lot of parts are a bit harder to get so it takes longer to order everything.

I don’t want to be ungrateful that it’s busy, but it’s not ‘easy busy’.

We were doing both Specialized and Trek for years and then seven or eight years ago we were forced to chose one or the other. We went with Specialized and stayed almost exclusively Specialized for years. But now all of that ‘chose a brand one or the other’ is over now and they’re happy for you to do a bit of this and a bit of that. So Trek came back to us about six months ago. We’re not do a lot of Trek but they have some good ebikes.

We used to be Garland Cycleworks in Perth, before that Garland Cycles in Bristol, UK. We started in 1980 back in the UK. We’ve been in this location for a bit over 18 months. We moved about three kilometres into a little boutique shopping centre with about 15 shops near where the Perth ferry comes in.

We pay more rent here but we do a lot of nice stuff. We’re not competing with volume sellers like 99 Bikes or TBE in Perth anymore. We’re trying to differentiate. We do very well with Specialized ebikes. I think we were their best seller in Australia and NZ last year with their Como and Vado, their city types of ebikes, which is pretty good because we don’t discount anything and we don’t keep a lot of stock.

In the past two years the business has changed more than in the previous 20 years. I’m trying to not be so old fashioned that I can’t adapt, even though I’m 55!

Re new season and orders:

We haven’t got a lot of space here and we’re not in that volume $600 bike market. So we haven’t gone super deep with our ordering. We’re trying to do more of the stuff they’ve got in stock and adapt models so that they sell.

We’re three or four months into not having many bikes in stock anyway. It’s always a guessing game with pre-ordering. Trek and Specialized have got 2,000 SKU’s each (Stock Keeping Units) with different sizes and colours.

We’re doing more higher price ticket and ebike stuff and the cheaper stuff we’ll sell anyway so I haven’t gone deep with the lower end. And of course, higher end bikes are always tricky to go deep with anyway, unless you’ve got deep pockets or no sense!

Leigh Egan of Leigh Egan Cycles in Shepparton, a regional city in northern Victoria said:

Business was excellent until this week – we’re just waiting to see what stock levels will arrive this week, as far as bikes are concerned.

The past few months have been good. But we’d normally like to see 150 plus bikes on the floor and right now I’ve probably got 30.

We’re taking back orders. But the majority of people who are coming in are not cycling enthusiasts. They’ve had an influx of government money. They’re not working so they’re thinking, ‘Wow! We’ll exercise.’

But when we hit normality, if we ever do, whether they still want to ride bikes… I doubt it very much. The suppliers won’t say that, but I’m a retailer. I think people are going to start finding… job payments start to back off and we’re going to be last cab off the rank.

Road’s dead up here. It has been for a while. Originally I was a massive road store. And because Shepparton is so flat, mountain biking is a hard sell as well, but mountain bikes are selling, so I can’t pick it!

Re new season and orders:

We can’t order at the moment. You can’t get on a B2B site and order a bike because everything’s delegated. I’m an independent but even the shops that are associated with brands, I think they’re all delegated as well.

So we’re limited with stock levels. How they (bike wholesalers) determine who gets what is up to them I guess. I’m just getting told, ‘This is it.’ No input.

We do Giant, Advance Traders (Merida and Norco), Focus. Giant has received some. Advance Traders have small amounts, but they’re going to look after their affiliated shops first before they come to an independent.

Aimee Lai from Cycle World in Dunedin on the south east side of the South Island of New Zealand said:

Business is fantastic at the moment. We are booming at the moment. It’s been a very successful winter for us, probably due to the Covid.

We are a Specialized concept store. We also do some Haro, Cube and Sinch Bikes (a new New Zealand Ebike brand founded last year by Kim Struthers and Stephen James formerly of Avanti / Sheppard Cycles).

We’ve just revamped our entire floor display so we’re now displaying less bikes on our floor. But now we have 50 plus bikes on our floor which is maybe 10 to 20 bikes less than we’d usually have.

Re new season and orders:

Probably more of the unknown, but we are definitely looking on the positive side and hopefully this boom will continue through the new season. That’s how we’ve looked at ordering. We’ve definitely ordered a lot more than we would usually order for a season, just because of demand and obviously a little more of the unknown in terms of being able to supply.

Darren Derrico of Giant Devonport, on the north coast of Tasmania said:

We’ve been pretty lucky. We’ve dodged the bullet I recon down here.

They had a few cases in the North West Hospital in Burnie. That closed the whole north west coast for a couple of weeks that were pretty much shut down. But other than that, we’re all good.

We’re a GS store now (exclusively Giant) and have been for a few years now, maybe longer.

A few years ago we were predominantly a road bike store as far as our high end stuff. Our bread and butter has always been your $500 to $700 mountain bike.

But in the past few years we’ve done way more high end dual suspension mountain bikes. That’s changed, because there’s so many trails been built in Tassie. It’s really popular now. That declined our road bike sales a bit but they’re starting to pick up again now.

Last year we sold quite a few dual suspension high end ebikes. At the minute we can’t get the new models but we’ve gone out on a limb a little bit and we’ve got more recreational stuff (ebikes).

We’ve done a little bit but we’re trying a broader range and see how we go with it. One reason is that’s all you can get a the moment but I think there’s a market there for it too. If you haven’t got it, you can’t sell it, so you’ve got to try.

We’ve got a handful of them (recreational ebikes) in now and we’ve got some more on the water as we speak.

Already we’ve sold a few, so I reckon it’s going to go ok.

I heard a statistic a week or so ago that postcode 7310 which is where we are, the money that’s circulating through the banks is amongst the best in Australia at the moment. Our local economy is pretty good. There’s plenty of building and construction going on and when that’s happening it’s usually busy. We’re pretty lucky at the moment, everything’s positive.

Re new season and orders:

I see the year going pretty well. I reckon we’re going to have a ripper year. I reckon that once the (interstate) borders open it’s probably going to go silly here because people will want to get out and about and ride the trails.

As far as our order goes. At the moment we aren’t ordering. Giant are just allocating bikes to each shop. We actually can’t order specific bikes. They’re trying to be pretty fair about it, going off what we had last year, and we can put a wish list in. They do their best to get them for us, but ordering is a bit different to last year.

Our floor is still pretty full, because we fill it up with whatever we can get. We probably keep 60 to 70 bikes on the floor and we’ve still got that now, but just in a different range.

Things are changing anyway. It’s one of those industries where you need a crystal ball to know what to order year to year, and I’ve never had one of those! It’s trial and error.

Craig Saunders of River City Cycles in the south western Brisbane, Qld, suburb of Yeronga said:

In Queensland we’ve been allowed to stay open. That was the main thing. At times we were glued to TV listening to Sco Mo talk, at least for a few weeks. But we were allowed to keep our doors open so business has been going pretty strong.

I’m lucky because I’m an independent shop. I’m not aligned to one brand, so I’ve got a few different brands in here. My supply has been a bit depleted, but it’s going a lot better now.

Bike sales were going very strong earlier in the piece. And a lot of people were looking at getting their bikes serviced because they were actually riding as a family because there was really nothing else to do.

During that time a lot of the bread and butter, under $1,000 bikes were selling pretty well. So a lot of those bikes have been selling out, which is quite extraordinary for the bike industry.

Once those bikes sold out there’s been no more bikes coming through. So suppliers have had to push their new season bikes through quicker than normal and we’ve seen new season bikes coming through earlier than we ever have. I think that might be a global problem.

I wouldn’t say that I’m really crying out for bikes. I think people have been prepared to wait as well, which has been great. Everyone knows there’s been a problem with freight and that sort of thing.

We’ve got bikes coming through now that people have put deposits on 8-10 weeks ago.

My shop is 25 years old so we have a really good database and clients coming into the shop are often repeat customers. They might be up to their fifth to eighth bike that they’ve bought over the years, so we’re very lucky in that way.

Generally, because we don’t have a lot of Covid cases in Queensland it’s pretty strong at the moment. A lot of people can’t go on their overseas holiday so they’re sitting put and they’re quite happy to spend quite a bit of money on a bike or a new indoor trainer, just to get out and spend some money.

I feel there’s still a bit of good cash around with my clients. We’ve sold some pretty expensive bikes over the past few months. I can’t really see it changing that much, for my shop anyway.

We’re a Stages dealer. They do an indoor bike that sells for five grand. We’ve sold three of those already and we’re having an indoor trainer Stages night in conjunction with Groupe Sportif (the distributor). We’ve sold a lot of trainers but if you need one next week you can’t get one, you’ve got to join a queue.

I did hear that there’s 2,000 back orders for a certain trainer, all waiting until they come in. So we’re two months away before we can get a certain brand of trainer.

We’ve also found expensive kids’ bikes selling. For example we’ve had a 24 inch $1,100 Cannondale kids mountain bike that we couldn’t get enough of. It had a plus sized wheel with nearly a three inch tyre, hydraulic brakes. It was a really good little bike for $1,100.

I didn’t think we’d sell a kids’ bike that expensive. That’s for a seven or eight year old.

Cannondale has been very strong over the past six months or so.

Cervélo gravel bikes have been going well for us but time trial bikes have been very quiet because the whole triathlon scene has just not been happening up here. Noosa Triathlon is off already. So triathlon bikes have been very quiet. But service has been strong.

Re new season and orders:

I feel that bike sales are going to be fairly strong for the next year, but freight and getting the bikes will be an issue. For the next year it’s going to be hard to get bikes into the country.

I have pre-ordered a lot more bikes than I ever have. Now I’m ordering, probably not double but certainly 30% to 40% more than I normally would order.

But that’s guaranteed to come as well. But they’re never the right ones!

At the moment I’ve got a good floorplan, except for a certain price point of road bikes but they’ll be coming in the next few months.