5 Reasons Bike Prices Will Probably Keep Rising in 2022
Planning to buy a new bike next year? Well, bad news, the way current trends are going, you might have to save a bit longer. The world is in a pretty extraordinary state at the moment and that probably means the cash you've been saving won't go as far as it should. Read on to find out how everything from a coup in Guinea to congestion in ports is going to affect the price of bikes.
1. Labour Costs in Taiwan are Continuing to Increase
Labour costs for bike construction are set to rise as Taiwan has announced a minimum wage increase of 5.21%. The minimum wage in Taiwan has increased annually for the past six years but this is an especially large hike, the biggest in the past 15 years. The minimum wage will jump from NT$24,000 a month to NT$25,250 ($899.42USD), while hourly pay is set to grow from NT$160 up to NT$168 ($5.98USD), with the increases set to take effect starting Jan. 1, 2022. Around 2.1 million households are expected to benefit from the policy, taiwannews.com reports.
It's worth noting that most, if not all, workers in a bike factory probably won't be on minimum wage, but as the wage floor rises there will be pressure to maintain wage competitiveness. We're definitely glad to hear that the workers that build our bikes are being paid more fairly but it does mean that cost is almost certainly going to be passed along to the end customer of bikes. Of course, labour is a small part of the total cost of a bike but that price has to be reflected somewhere.
2. Raw material costs are increasing
So the labour to build the bikes is costing more but so is the price of the materials to make them too, specifically aluminium. The above chart shows the cost of aluminium over the past 12 months rising up to a 13 year high - you have to go back to the 2008 financial crash to find the last time it cost as much.
So why is it so high? Well, the price is being hammered on both ends. On the supply side, the unrest in Guinea, one of the world's largest producers of bauxite, as well as disruption to refineries in Jamaica and Brazil have made it harder to source the metal. On top of this, China, currently responsible for 57% of the global production of the metal, is slowing down its production growth following stricter environmental policies. There is also increasing demand as aluminium is used in electric vehicles and renewable energy, two rapidly growing sectors at the moment, which further elevates the price.
It's not just aluminium prices that are affected. Cardboard prices hit a record high in 2021 after skyrocketing 1000 per cent in the pandemic in what has been called the 'Amazon Effect' and there are similar stories for steel, magnesium and more. Bike brands face consumer and retailer pressure to keep prices stable, but they will only swallow so many cost increases. If the raw materials price spikes continue, we expect that they will adjust the bottom line of their bikes too.
3. Shipping Rates are Still High
Screenshot:the Financial Times
We've spoken fairly extensively about how rising shipping costs are affecting the industry at the moment. Everything from the grounding of the EverGiven to a shortage of containers have led to record prices for ocean freight and brands have been open about how that is affecting the price of their bikes. We've even heard that brands have had to start hiring warehouses in the Far East to hold their stock until a shipping slot is available.
Thankfully, it does seem like the cost of bulk shipping is starting to come down. Bloomberg reports that on the Shanghai-to-Los Angeles trade route, the rate for a 40-foot container fell by almost $1,000 last week to $11,173, an 8.2% drop from the prior week and the steepest weekly fall since March 2020. However, the price is still magnitudes higher than it has been previously as the above graph from the Financial Times shows.
However, we're probably not out of the woods yet and it's worth saying that there's still a lot of uncertainty around these numbers. It could be that prices only slumped temporarily due to a fall in productivity over China's Golden Week holiday and there are also fears that Black Friday / Holiday demand toward the end of the year could spark another increase in costs.
4. Lead Times are Still Huge
One of the big talking points in the bike industry this year has been lead times and you probably won't be surprised to learn that they are still gargantuan. Noel Buckley, Knolly CEO and Head Engineer, said in a recent statement, "current lead times in the bike industry are over 600 days for most mainstream components. Raw materials purchasing for many of our OEM suppliers and specialty manufacturers is over 350-400 days which further complicates the situation. It is common in today’s climate that purchase orders have to be placed up to 24 months in advance with all vendors; Knolly's purchasing team has us well-positioned for 2022 and 2023. We've begun placing 2024 orders, which frankly seems insane, but that’s the game that we're all playing now."
If a brand is waiting almost two years to receive a product, that means it has a lot of cash tied up in inventory - cash that could be used to get more sales or to price its products more competitively. Some brands are also reportedly double and triple sourcing to secure as much inventory as possible or to insure against a vendor who can't actually ship on time. If a brand ties ots money up buying stock for a long time in the future, it has to find money from elsewhere to continue funding R&D, marketing and more. One way to do that is to rack up prices on the stock it currently has.
5. There's a Lot of Pent Up Demand
This one is pretty self-explanatory. A lot of people haven't been able to get what they want this year. If people are still buying, prices will keep going up.
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"You think people should use less oil? ARE YOU WILLING TO LIVE IN A CAVE AND NEVER USE ANYTHING PLASTIC, EVER AGAIN IN YOUR ENTIRE LIFE?"
"You're concerned about CEO's receiving multi-million dollar bonuses, even when their companies aren't doing very well? GUESS YOU WANT TO EARN MINIMUM WAGE FOR THE REST OF YOUR LIFE THEN!"
Yep. All or nothing. All of nothing.
simply put is if you are willing to limit someone elses earning potential, by default you are accepting limitations on your earning potential. i want no limits on my earning potential because i want to dictate the lifestyle i have. are we only limiting the earnings of CEOs or should we include doctors? dentists? are you angry there are anesthesiologist out there making a million dollars a year? professional athletes?
i like the convivences and enjoyment natural resources bring me. my income (in the western world, because there is that whole cast thing in the rest of the world) is solely based on my ability to add value. i dont think im making enough, i go find another job. if i keep pointing the finger at my employers for my low wages, either i slave away and die poor OR realize i should spend some of my free time developing a skillset to increase my wages.
@kokofosho: without question, high level execs have a developed a decision making skillset that a limited number of people have. if theyd didnt, theyd be paid less because theyre would be a large pool of people to select for the job.
@Tim2: common topic of discussion on weekly rides. walk away from it all and spin wrenches at a bike shop.
Also here's an interesting read for you because "iT's ScIeNcE" and you need an education on gender roles in nature
allthatsinteresting.com/sequential-hermaphrodotism-sex-changing-animals
1. We are a different species
2. You're claiming an absolute set of traits define a human and everything else is subhuman. I say curly hair is a defect. You have curly hair so let's kill you off because it's a defect. See how stupid that sounds?
3. "defects" are literally how species evolve. A bright orange rabbit isn't going to last long in a snow environment but might thrive in an area full of orange plant life. Those defects become the norm when everything else gets killed off because they're easy to spot.
There's so much wrong with your comment that it's hard to unpack it all. I take it you have also never had sex purely for fun? It was always to guarantee continuation of our species? If not then it sounds like a defect based on your comment
"The evolution intended for humans to be either male or a female, with sexual attraction to each other so that we can guarantee continuation of our specie. Anything else is just a defect."
You're implying that it's wrong to be different in this sentence here. Evolution does not have an intention and is a series of randomized mutations that determine how well a species survives or does not survive in their environment. Imagine that same scenario where a small section of a rabbit population is orange in a snow environment. For whatever environmental reasons the snow disappears in a matter of days by a fire or any other reason. The "correct" way for a species to thrive is now the biggest threat to it's survival.
Let's take it a step further. Over a month, a virus, bacteria, or fast acting cancer specifically targets humans with XX chromosomes causing rapid death and irreversible damage to the XX chromosome population with no cure. Well that's bad right? A very rare mutation, Persistent Müllerian duct syndrome, causes humans with XY chromosomes to develop a uterus/fallopian tubes. Let's say a quick procedure to make these organs completely functional is the most cost effective way to repopulate the earth vs trying to repopulate a now, at risk, population of XX humans. All of a sudden, gay men become the predominate way for our population to reproduce. Sure this is statistically unlikely but not completely science fiction.
The point I'm getting at is every human in any aspect of life deserves a basic quality of life regardless of their born deformities, perceived deformities, or accidental deformities. Relating back to the article, it goes the same that every human deserves basic economic qualities of life; no one should starve, no one should lack shelter, and no one should be denied health care because of their economic/job situation. I don't know how your defects present themselves and it's not important either. Why discriminate against others on things out of their control or treat them any different. Who cares if it's a "choice" or if it's genetic. Just let other people live their best lives. There's always going to be situations where something is just physically impossible for someone with a defect to do (someone without a left hand can't snap their left fingers). There's also situations where people with perceived defects (economic, physical, or otherwise) are kept from living a basic quality of living because people are greedy. We're in a society where economically disadvantaged people are lumped into a lazy, illegal immigrants, welfare queen, or whatever other marginalized group. There's so many scenarios we can't possibly imagine that are unfair to these people and corporations take advantage of it giving pennies in return. Someone who can't afford healthcare, can't afford childcare, can't afford missing a paycheck, and doesn't have time to better their education shouldn't be at the mercy of their employer for things out of their control. The C suites of the world definitely shouldn't feel entitled to profit off of these people either
(Unfortunately I have to state that I’m obviously being sarcastic, thank you government education)
"...this, but unironic", he said ironically.
so apparently... 30% of all the USD ever minted and put into circulation was done in the last 18 months... can you say hyperinflation? i can.
It's crazy, but the covid aftermath does seem to somehow be giving workers power they didn't have before to demand higher wages and better treatment. If the Taiwanese want to raise their minimum wage, more power to them.
So because people would have shitty takes if a different president was in office I should ignore the reality that no one person can do anything of significance to change the global supply chain? What a terrible take.
Very, very much the President can affect the price of final goods by making it increasingly harder to do business. When its harder to do business, everyone makes less from the Business Owner to the workers on the floor. Despite the governments best efforts to force everyone to work for a megacorp, the USA economy is still primarily driven by small businesses, where the business owner is not a billionaire or even a millionaire.
You're right to say that no administration has total control but to say they have "no control" is demonstrative of your lack of understanding of basic supply/demand economics and fiscal policy.
@canuck-rider Of course warp speed and vaccines worked. The government through billions to cover R&D. The companies responded out of public pressure but more so, out of the shear amount of money thrown at them through guaranteed contracts. The most powerful thing government can do is throw around some of their money.
"A bully pulpit is about it" Disagree
The US department of Commerce is 100% overseen by the executive, and commerce in the USA is hardly free market. Its very much managed by the Department, and managed incredibly poorly.
If Biden's vaccine mandate for employers gets implemented, then suddenly we are going to see a lot more 1099 workers and companies reducing their W2 workers to just 99 (even now the "bully pulpit" effect of this can be seen, in SouthWest Airlines for example). Obamacare is another example where costs to employ someone were dramatically increased artificially. Whether or not those increases in costs and unemployment are worth the benefit are a different conversation, but its very hard to argue with the available evidence that regulations from the Department of Labor, Department of Commerce, and others don't increase business costs and final goods prices.
It's also important to remember 4.5m left the workforce because of our reaction to the pandemic. Yes, some of that would have naturally happened due to the pandemic itself, but not all of it.
Why not throw in every other ist, and phobe while you're at it? 2022 is gonna be a bloodbath. Keep going, you're doing great!
Sorry it's rain season dude, I know how you people get up there.
Fascist used to be synonymous with authoritarian or totalitarian, meaning it was a strong leader who wanted to implement tough controls over peoples lives using a police state. I would argue the Biden administration has as a goal more control over individual peoples lives than each of his predecessors going back several administrations.
firepowermoney.com
1) They passed a law that ONLY allows 2011 and newer trucks to pick up cargo from our ports
2) They passed a law that does not allow independent truckers from picking up cargo from the port. All truckers MUST be an employee of a California corporation.
3) The local government passed an ordinance that did not allow for stacking shipping containers higher than 2 (yes, that is "2" containers on top of each other...) when storing them on the ground.
So, please expound on how "private" businesses are screwing this up....
To the topic of the article. I’m certainly not qualified to be an economist but I see several factors pointing to pricing problems for years down the road assuming geopolitical tensions remain at current levels.
Do regulations increase the final cost? Sure they do but the regulations are, in many cases, needed in order to make sure that the product/ service is consistently supplied. Look at what cold weather did to the entire, unregulated, Texas power grid. The problem here is that the bureaucracy is being asked to do more than they are actually authorized to do. Congress passes laws and then the executive/ bureaucracy enforces them. The amount of vigor placed behind those is up to the executive. Here though, in the world with which we live, I do not see costs increasing artificially. None of what is happening right now is artificial. Cost of living has increased. Not due to anything any president in particular has done, but because the world has changed. We are entering a time of scarcity of resources that has been brought on by this feeling that everything is unlimited. The people in the global setting who have been taken advantage of for decades are no longer willing to take it anymore as their costs have increased. The ability to get things off of a boat has nothing to do with those facts.
Being the president is the worst job in the world. Regardless of what they do, they will be blamed for things that they have no control over. Sure, they can issue executive orders but those are temporary and extra Constitutional. Executive orders do not actually fix anything. They only exacerbate the problem. It leads to the endless death spiral of 'what aboutism'. Obama issued a bunch of EO's. Republicans screamed. Trump issued a bunch of EO's. Democrats screamed. Biden is not issuing EO's...Republicans scream. The problem is not that the executive is not moving. The problem is that the legislative, the ones that create and fund the policies and regulations, have zero interest in actually solving the issue. Political points need to be scored. The fact that this discussion is actually happening is evidence of exactly that honestly.
@canuck-rider Biden currently has only one branch: the executive. He has no friends in the judiciary and barely any in the legislative. As for pushing a socialist agenda, I hate to break it to you but America has a socialist agenda inherently. We all want the government to supply things for us, on both sides. The older Republicans will scream just as loudly to keep their Medicaid as the younger Democrats scream to expand it. The issue here though is that no one wants to actually pay for it. Everyone is for deregulation and hands off, until the electricity shuts off.
@scitrainer What you are describing is federalism and under the Constitution and the 10th Amendment, anything not reserved as a power of the federal government is reserved as a state power. Unless the state is violating federal law, the federal government can do nothing about it. They have the ability to regulate interstate trade but how things are unloaded and stacked, is not a power. Intrastate commerce is under the purview of the state and local government. Not the president. Again, the president gets the blame for things that they have no ability to influence, unless they want to overstep their Constitutional powers. Once they do that, everyone will yell and scream at them for doing it...or, yell and scream at them for doing nothing.
" the regulations are, in many cases, needed in order to make sure that the product/ service is consistently supplied" is not something that can be proven with facts. Texas being hit with a 100 year storm is not a good example. Its like blaming the 1989 power outages in Canada on their regulated electrical system (it was caused by a 100 year solar flare). Its absolutely crystal clear that history has proven that central planning gives worse economic outcomes than a distributed, competitive system.
Regulations do not help increase product/service consistency, they tend to do the opposite. Customer demand creates that. For my small business, some tubing arrived cracked. If I would have accepted that compromised material, maybe 10% of my product would have failed. That would put me out of business. It is in my financial best interest to do good QC. In a competitive market, those companies who don't are weeded out, increasing the quality of product. Regulations increase costs and usually don't have a good correlation with risk prevention. All they do is put extra cost on small companies and help big companies keep out competition.
This can be seen with hair stylists- in many states a Cosmology license requires more hours of training than being an EMT. An African immigrant in Utah started an African hair braiding business in her garage. Shock to no one, there aren't a lot of Black people in Utah, so its hard for Black people to find hair stylists who are experienced with their type of hair. Some Cosmology Schools sued this woman, and the State fined her thousands of dollars a day for not being properly licensed to style hair, and made her attend a hair school WHERE AFRICAN HAIR STYLING ISN'T EVEN TAUGHT. But without this regulation the schools couldn't charge $10,000 for an 18 month program.
Let's try this angle then. Biden shut down construction of multiple oil pipelines and he stopped federal leases to new oil drilling. This had the effect of making the US a net oil importer vs a net exporter (and energy independent), thereby driving up the price of oil. This makes it more expensive to transport EVERYTHING and more expensive to be a trucker. More expensive to be a trucker = less truckers, ergo less freight gets moved = supply chain backup.
you act like businesses can do what they want in the face of federal mandates after we just started to get out of a nationwide lockdown that crippled and killed thousands of small businesses.
in short, your argument doesn't track further than 2 points bro. go learn some basic labor and money economics.
1. When you have a global pandemic, people have to take sick days. This slows the economy, even though it turns out COVID19 isn't nearly as deadly or disruptive as we thought.
2. The CCP had authoritarian lockdowns, assassinations, cover ups, etc, that independent of people actually being sick really messed with supply and manufacturing in their country, and as a huge manufacturing economy for the rest of the world, it had cascading effects.
3. Trump preexisting tariffs increased import costs, but if anything this would reduce demand for imports and increase demand for domestically sourced products, and maybe even help the supply chain issues (I am very against these tariffs- but to give Trump a fair shake they were intended to be temporary to "punish" chinese officials and force them to stop doing shady stuff. That didn't work, and Biden has not rescinded the tariffs)
4. Trump banned all flights from China, which was pretty stupid because someone could just fly to Italy then to the USA and not be blocked. While this was ineffective at restricting movement from China to the US, it started the cascade of lockdowns across the country.
4. Lockdowns started in most states, making it illegal for people to work. This dramatically increased demand for preassembled, premanufactured, and mostly foreign goods, while transportation infrastructure was locked down (when health officials gave BLM protests a pass for social distancing, I knew it was all fake and there was no data supporting the effectiveness of lockdowns and social distancing).
5. Trump passed the first trillion dollar stimulus. Deficit spending makes us all poorer- its a hidden tax. People instinctively know this, so instead of saving or wisely spending income, they are forced by inflation to spend it immediately before its value goes down. This further inceases demand for foreign goods (since domestic manufacturing and services are locked down).
6. Biden enters office and passes even more stimulus. In 2008, the stimulus package was $800 billion, and that was unprecidented. The Trump stimulus was $1.2 trillion, and that was mind blowing. Well, now the cat is out of the bag and passing multi trillion dollar deficit spending plans is common. Rather than pumping the brakes on Trumps reckless spending, Biden doubled down and hit the gas. This is why inflation has passed 5% and will probably top out at nearly 10% in mid-2022. inflation causes chaos to the entire manufacturing supply chain. How can you place an order for 9 months from now if you have no idea what shipping will be? (my problem with my small business).
7. Biden has shut down the keystone XL pipeline, and has suggested he will shut down more (like the Line 5). You as a business have to guess what will and will not be available in the future, so if you suspect the Biden administration will revoke or not issue a permit for a pipeline, you have to hedge your bets and spend money elsewhere, even if the "ban" hasn't come yet or might not come. This dramatically increases oil prices in the present because people have to plan for the future.
8. Biden has threatened for months, and now actually executed, a vaccine mandate. Even before the mandate becomes binding, employers don't want to be targets so they start imposing mandates before they are mandated themselves.
9. Overly generous unemployment creates a labor shortage. Bidens continued "stimulus" and unemployment pays people to stay home, creating a labor shortage, which drives up prices. This is a positive feedback loop with the inflation created from stimulus, creating more inflation.
10. Biden Administration's continued denial of anything going wrong. In May, he trotted out Janet Yellen to say, "there is no inflation". After that lie, they said, "inflation will be transitory". After that lie, they started saying "inflation is good!" This makes it incredibly hard to plan for future investments, when the administration in charge of your regulatory body will not course correct.
11. Continued lockdowns. To quote Elon Musk, "if no one makes stuff, theres no stuff". Preventing people from making stuff means theres no new stuff, and the existing stuff becomes more in demand, raising its prices.
So only numbers 6 on are Bidens fault, but its the one thing that can be changed. Trump is gone. We can't pressure him into making different leadership choices. But Biden (or rather his handlers) can be with the threat of losing elections. His actions, while no where near 100% responsible for the mess we are in, are certianly responsible for a large portion of it.
Some sizes / grades of aluminum we use are coming back as 'non quoting'.....
OK some details - 6082 bar, supplied at approx £60 per bar- current offer price £132.00 - several suppliers all within pounds of the same, ordering significant QTY. Material suppler states this is largest increase since 2008.
Prices being gauged? This is bar stock, coming from a mill in mainland Europe and supplied to us in the UK.
Another price increase after the 1st
A once $60kish full built trailer is now $128k after the 1st
Bad times
A lot of raw material is priced to us a long time in the past, e.g. we agree 7-8 months ago a 6 month call off where we take stock monthly at a fixed price.
We came to an end of a call off a few months ago to an increase of around 65% - in the past few months this raised again to over 100% - totally astonishing but the worst is that some product is now ‘not quoting’ (directly from the mill in mainland Europe, one of the worlds largest) - they won’t even make it or if they can can’t say at what price, so this may just be getting started.
Let's just be clear here tho, with demand so high the manufacturers can hike prices. Why would they increase production and risk a crash ?
Just came across a guy asking 4k for a 2019 Stumjumper Comp. Like, mate, what are you trippin on? That wasn't even worth those 4k when it was brand new.
I mean what gives here? Simply put, one of these has a freaking ENGINE, and the other has pedals...which you have to buy.
+5% min wage labor of TW made parts ONLY, not total bike cost - low/little impact likely way less than 1%
Base frame price: +33% alu increase - Currently $2900/ton - 2900/2000*5=$7.25 vs $1800/ton typically before $1800/2000*5=$4.50 ===total frame increase of $2.75
Shipping: +$9,000/container divided by 500 bikes = +$18 per bike
Lead times / pent up demand - arbitrary numbers to help make the case for higher pricing.
Factored in the cost of power to produce the product? (Up a huge amount) How about increase of all other costs in the supply chain once in the destination country?
Then let’s add on the same increase to all parts that make up the bike, bars, stem, cranks etc etc… starts looking to be a little more than $18 doesn’t it?
Double the cost of material and our overall margin disappears in smoke, especially as our power costs, wages, transport and supporting products and services all cost more.
We are raising prices of course, and making less money in the end.
Without being harsh, you talk shit.
Add that minimum wage to the dozens and dozens that touch each bike, and each small part of each bike and components - $20-$30.
Materials costs - Where's the scrap, shipping costs, and add value of turning this raw material into something? Also most all components have alloy in them. 10-15% total upcharge because of raw materials
Shipping: $9k shipping is the shipping line direct rate. Most bike companies don't move enough containers to book direct with shipping lines. Also this doesn't include the "premium fee" to actually get space. $9k is for "flying" standby and maybe if a spot opens up thy will get your container on the boat, but pay $3-4k premium to get space to actually move the bikes. Also this is only port to port cost. The inland moves are anywhere from $3-7k depending on location. So total container costs are $20k plus. Oh and if it's E-bikes, add another $2-3K/container. Most bike brands can only fit 200-250 bikes per container. So $20,000/container divided by 250 = $80, Best case scenario. Also don't forget outbound shipping to retailers or direct to consumer. Fedex just added another $40 "surcharge" a couple weeks ago.
Lead Times/Demand - People are giving money to shops and makers for there bikes months before delivery just to keep a spot in line. Brands are placing orders into 2024 for components. This is reflected in aftermarket supply for spare parts, and quoted lead-times people are seeing at shops and online. People are not commuting 2 hours/day, so they now have time to ride bikes.
Total uncharge - $260-300/ bike, and that doesn't count component cost uncharges. Run the through a business model for costing plus and then add distributor/retailer margin/upcahrge, and you are 800-$1000 more at the retail level.
"Shipping: +$9,000/container divided by 500 bikes = +$18 per bike" - what are these bikes? for borrowers?
avg bike box is say 0.9cbm, now we put em in a 20' container (cus you ain't getting a 40' for $9k), which has a TOTAL capacity (liquid capacity, not usable, especially with awkward sized bike boxes) of 33.2cbm. That's 36 bikes.
Even if we get super generous with our estimations of a bike box and how many you can fit in a container, you're still not getting more than 60 bikes in a 20' container. That's $150 shipping PER BIKE, just to get it from the Far East to the US.
1. Walmart bikes are own brand, so they only need to worry about their margin, rather than their margin, distributor margin and then dealer margin.
2. The bikes are smaller, and don't ship them in a box = more in a container.
3. There's probably no-one in the USA bringing in more containers than Walmart - that means you get exponentially better shipping rates.
4. Walmart margins are much, much lower than your average D2C bike brand due to the sheer amount of turnover they do.
Its a separate argument as to if the domestic labour is a benefit but it sure will come at a cost.
I know of a few bike companies that do actually do this, but in the grand scheme of things they are very small - sub 10k sales per yr and are right at the premium end of the market.
You seem to be giving little respect to companies that likely employ logistics managers to tackle such tasks and assume you could solve the issue in a few mins on PB.
Also, so many just working to get a paycheck, so do I think I could do better? Who knows? Not really the point. And you're making this sound way harder than it is. Lots of industries assemble their goods in the US from foreign-made components and do just fine. New problems sometimes require new solutions. Thinking outside the container.
Think I’ll leave this one here - maybe you should call there companies up and offer consultancy, their logistics and accounting team clearly needs your out of the box thinking…… riiiiight.
Good job, buddy. Have a cookie.
Also, if you can book me a container right now for $9k, or fit 500 bikes into a can, I will hire you today. And I actually do own a bike company. FYI - Containers fit about 160-200 bikes, and currently are booking at $17k. That has added about an actual $80 to the cost to bring a bike in from Asia, but then add brand margin to that $80, and then add shop margin to that brand increase, and it gets big quickly. Financing things is not free.
www.wsj.com/articles/container-ship-prices-skyrocket-as-rush-to-move-goods-picks-up-11625482800#:~:text=Shipping%20experts%20say%20the%20rising,during%20the%20Covid%2D19%20pandemic.
www.maritime-executive.com/article/container-rates-continue-to-set-new-highs-in-2021
www.icis.com/explore/resources/news/2021/09/16/10685630/shipping-container-rates-continue-to-soar-despite-increased-attention
www.freightos.com/freight-resources/coronavirus-updates
Companies need to cost items based on reality at the point of costing that item, a bike can’t go up and down by $100 over the course of the year as varying costs fluctuate.
Out of interest, what do you do for a living? You seem to think this is all very simple yet it’s troubling many of the best companies in the world outside of the bike industry too.
I also watched that video on freightos. It makes me wonder why they'd send the ships to Long Beach, only to be anchored there for 2 weeks or more and lose/waste the use of the ship/containers/fuel/etc for that time and compound the problem when they already know there's a bottleneck. I'm sure there's more to it than that, but it really seems like there should be a better, more efficient solution.
You seen pretty full of shit and conspiracy though….
The driver shortage is likely a country wide issue and the events taken place over the past year or so are unprecedented - I am sure attempts are being made to rapidly resolve the situation but resources are finite.
www.npr.org/2021/10/14/1046140284/among-the-countrys-supply-chain-problems-bottlenecking-at-ports-like-long-beach
LA and Long Beach both going 24/7 - these two ports account for 40% of goods imported. They've done it before to speed things up. It still seems like a stop-gap measure, but at least it's feasible.
what makes you think a Ferrari(that $7k bike you ponied up for) should cost what a f*cking Honda does?
MTB industry is CRAZY for mark ups, I used to work in the BMX/Skate shop world an the mark ups are tiny but high volume sales aposed to MTB that used to be the oppsite until recently.........
governments have hugely inflated supply.....so what happens? everyone demands more of it for goods and services. GENIUS f*ckING MOVE!!!!
Brexit: government
power generation: government regulations
instability? wanna guess where that fault lies?
the answer, is freer markets, less regulation, Abolish the Federal Reserve(in the US. other countries have similar issues) and return to a secured monetary standard, Allow businesses no matter how big to fail.
Governments should have zero power in the economy. Economies are self sufficient, because at their root they are me buying a bike from you at a price we both agreed on.
How can you accuse me of 'not understanding' something that does not take place in practice anywhere in the world? - you are asking me to judge a fantasy of your own creation - a dream world of someone like yourself who thinks such a world would be a playground for your immense capability and prowess.
Do I think we should have regulation? - Absolutely, there are enough crimes committed against the planet and humanity by companies even in our current state of regulation that you claim is not required - I dont fancy living in a world where minimum wages dont exist, companies can dump what they like into the environment and treat their staff in whichever way they feel fit - is health and safety 'regulation'?
Should we regulate medical development? How about the inclusion of chemicals in food production? Pesticides in agriculture?
King Conoats wonderful world doesnt sound too wonderful to me, sounds like a stinking, corporate run cess-pit. - Thankfully your fantasies are just that.
I run a business, I am not anti capitalism, I employ people who are paid less than I am, I make a profit from labour and from product and some of my activities are made more difficult by regulation but overall I am happy with the situation and actual reality.
regulation is not the only mechanism by which companies do not dump toxic waste into your drinking water. I mean, if that is the upper limits of your critical thinking skills, I see no further point in discussing this with you.
Just go back to running justanotherusername burger flipping school or whatever, content in your knowledge that the government will wipe your ass and keep you from making mistakes, all for the low low price of your liberty.
Of course regulation is the only means by which things like that are prevented, history proves that as fact - unless you can indicate otherwise, how would you prevent a factory from disposing of waste into the water system for example?
Not all of us are ex barmen that can classify ourselves as men of leisure - we are not all as successful.
Just because some of us think sensible regulation (difficult to define I admit) is beneficial it doesn’t mean we want the government to ‘wipe our ass’ - sometimes it’s nice to know regulation will stop someone else from ruining our lives without us consenting you them doing so.
We are not all anachro-capitalists (you need to check your own spelling there) - critical thought? As someone so binary in their views how could you criticise others there?
good day, ya loony Canuck!
Im British by the way, born and live in England, I’m not a ‘Canuck’
Great response though, clear to see there is zero substance behind your bile.
Additionally, during Covid we had a boom of new people on the trails (most of them older dudes on eMTBs), and they've stopped riding, at least locally. Many have put up their bikes for sale. Trails that have seen new use are growing over again.
Might just be from my lens, of course. Maybe it'll go away and the bike I have ordered will arrive before I retire anyway.
Inflation already happened, boys! monetary inflation is when the supply of money is increased. that happened already. to the tune of TENS OF TRILLIONS(with a T). Now the chickens are home to roost. buckle up, buttercup! $20k non-ebike will be here by 2024.
I’d recommend ‘downgrading’ to 11sp if you want to have access to any drivetrain components in the next couple of riding seasons.
2. Bob cannot ride a double diamond without MORE travel
3. No one is buying the "you need three mountain bikes" thing
4. Supply chain issues because planning is hard guys
5. The price of living is getting so bad no one can afford a car
But ....
We may see quicker developments and not slower due to the current situation with supply chain, companies may be more aggressive than normal to fill a demanding market.
Due to their low to medium volume manufacture, I wouldn't want an e-bike just now, the market for parts is maybe a little competitive than its ever been.
Just a hunch/guess.
this where industry should be headed. a change in how global trade is managed. maybe even statndards will stay the same for awhile.
Is the price increase happening in other industries - motorcycles et al?
YES and I'll pay what ever I have to to do so until I can make my own. (Doubtful)
Bikings expensive. Work hard save money. Or work harder, smarter and save money or, get a second job, work hard save money.
There's no way around it. Think about your future, plan it out, don't complain when things seem expensive TO YOU. Make it so it's not.
Don't let yourself down in life and not be able to buy a sweet bike. You are the controller. Control it. Ride hard. Don't complain, just f*cking send it.
Take cars as a counter point: vastly more labour in manufacture, 2 orders of magnitude more raw and finished materials required, far higher transport costs per unit, and much longer and more intricate supply chains.
Despite this, a new small car like a Hyundai Venue (complete with active safety features, 8" touchscreen with wireless Carplay, 6 airbags and a 5-year unlimited km warranty etc etc) is only AUD$23990, yet a Santa Cruz Hightower in XO1 build would cost me AU$12249.
Even climate change is playing a part with parts of China on 3 day weeks to keep energy usage down from non recyclables.
It's a nightmare out there just now I'm so many industries.
The nightmare can make keeping lines going a challenge
I work in the medical sector and have never seen it like this is in 25 years in R&D!
Magnitude is a numerical quantitative measure expressed usually as a multiple of a standard unit. In the realm of decimal numbers, 'magnitudes higher' means tens, hundreds, thousand times the original value. I believe we are far from such a price increase. I may be wrong though as I am not a native EN speaker.
1) I wonder with multiple sourcing that companies are turning to, how will the quality assurance work across suppliers?
2) Which company will go under first, how can they put up money for products all the way to 2023/2024 without having money coming in from sales because there are no products to sell.
I did nearly buy a new bike early covid when everyone else was, but I thought, why do I ride?... To keep fit and have fun.... would spending $7-8k on a new bike make me fitter? No.... Would I have more fun?.... No... So I kept my current one
If you have a lead-time of 12 months and the factory is at capacity in order to deliver that, there are only two ways things improve: - The factory massively increases capacity, and fast or - People stop ordering entirely allowing the factory to catch up.
Factory expansion to the required level and speed just isnt going to happen and people are still ordering, so how are lead-times going to come down by any useful amount?
Another reason why prices for carbon frames will creep up: It got incrdibly hard for Chinese factories to purchase carbon fiber from Toray after some raw material was found on a ship from China to Iran: www.japantimes.co.jp/news/2014/06/14/national/japanese-carbon-fiber-bound-for-iran-seized-u-n-report
Money printer goes Brrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrr
FYP
#boycotbikepriceincrease
I would like to pay more people that actualy are doing something like people in factory than Paying Fee to Bike Shop ... For what we are actualy have to pay them? Ahh right we are paying them to order our bike from Bike Brand . I can do this by myself. There is already something like direct to consumer
I’m just glad that when I get my overpriced bike with subpar components it will be helping to support an entire ecosystem of YouTubers and social influencers with free bikes and free product.
its R&D..
we dont sell that many units..
we have sold out all our units...
its raw materials....
its shipping costs.....
The whole stock/housing market is one big bubble at the moment, when it pops, it will take everything along with it.
Can you call my aluminium supplier up and ask him to drop the price back down 65% too - tell him it isn’t real, I’m sure that will work.
All I'm saying is that there's more to pricing structures than just covering manufacturing costs and increasing raw material and labor prices aren't the only factors responsible for expensive bikes. It's always been this way.
Sure, some brands capitalise on their brand status, just like in any market but do you really think the whole industry is a cabal set to rip off the customer?
Odd way of singling out the bike industry, i assume you don’t own a phone, computer, car, any branded clothes, infant I assume you live in a grass mound and eat beetles?
But, big but. Most bosses in the bike industry up until recently started by getting their hands dirty, at least packing boxes and shipping, they aren’t the 500ft yacht bankers, hedge fund managers, speculators etc that you should really be pissed of about, the people worth hundreds of millions or billions.
I’m sure the big bike companies make decent profits and they are now owned by venture capitalists but that’s the reality of modern economics but if you think say the owner of Transition, Evil, Orange bikes etc are all 500ft boat owners you may want a reality check.
Yet again though - luxury product, not essential, sold to rich 30-60yr old men, our choice to keep buying, nobody is being exploited.
#thingsthatmakeyougohmmmmmm
#letsgobrandon
Also, at some point the brands need to start owning their channel. Too many independent dealers are able to move in and out of brands, carry several lines, etc. Creates too much confusion in the market in terms of who has what, who is selling what. The brands need to either own their own retail channel, or force independents to carry their line as the flagship with one two two secondary.
Another post in this thread pointed to the fact that you can get a 2022 YZ450F for less than one of the high end Specialized. MTB right now reminds me of the moto industry in the 60s and 70s. Lots of little and midsize manufacturers competing for marketshare. Consolidation happened and the 4 to 5 major factories are now able to sell dirt bikes for less $ than mountain bikes.
Rubber side down
Solution: Make more expensive bikes but in the USA.
Result: Bikes are getting more expensive.
People have a choice to support American made goodness, prices are becoming more and more comparable.
Stop giving your money to catalog bike sticker slapper brands!
Compare a BMW assembled in Germany to the stuff screwed together in South Carolina. (Which coincidentally is where Boeing is having all their problems)