Bicycle Retailer and Industry News - Opinion/Analysis

Vosper: What’s happening with dealer inventories, and why is it such a big deal?

Steve Frothingham — Mon, 15 Dec 2025 20:08:30 +0000

The industry is currently in an era I’ve labeled Bike 4.0. (For more on the three preceding eras, click here). Unlike the 3.0 era, approximately 1998-2020, in which suppliers attempted to control floor space in dealers’ shops through inventory-intensive ordering programs, the 4.0 era is fundamentally different in three important ways:

Replacement of the traditional bike shop distribution system by an omnichannel sales "ecosystem" where buyers can purchase bikes through any channel they choose — consumer-direct, click and collect, or through a traditional bike shop.
The rise of powerful consumer-direct brands like Canyon, Rad Power (well, until recently), Aventon, and others. I further note that many of these brands are also trying to integrate themselves into the traditional dealer channel as well.
Vertical integration of the channel by large suppliers (primarily Trek, but also Specialized and Pon), buying and running local bike shops.

To this list, I now propose adding two more separate but inextricably linked items:

Record-low dealer margins versus MAP/SRP.
Reduced inventory by independent bicycle dealers. Dealers are starting to carry less of everything, especially bikes.

Why are these two new items so important, and fundamentally characteristic of the Bike 4.0 era? I think they represent a coming seismic shift in how the industry does business.

Making the best of a bad situation

But what about all those bikes sitting on the dealer’s floor? They’re no longer a money-making proposition, that’s what.

To be sure, retail margins have been shrinking throughout the 3.0 era. Partly this is in response to brands trying to maintain, if not parity, then at least proximity to consumer-direct brands’ prices. Partly it’s in response to post-COVID consumer lethargy and resultant discounting. And partly it’s just because one of the effects of the internet’s property of disintermediation is to drive prices to rock bottom. If you won’t sell it cheaper, finding someone who will is just a click away.

Be all that as it may, lower margins are here, and if history is any indicator, they’re here to stay.

Profitability-wise, bicycles have long been a borderline proposition for bike shops. For at least ten years, according to the NBDA’s Cost Of Doing Business studies, retailers have barely broken even on selling bikes after overhead and expenses are figured in. And at today’s eroded margins, that’s more true than ever.

But that was OK, they told us. Sell the bike, the logic went, and you can bring the customer back into the shop for higher-margin equipment and service purchases.

But that logic doesn’t hold up in the face of current reality. Customers increasingly buy equipment online, often enough at prices lower than the dealer’s wholesale. Even if the customer buys in the shop, margins on equipment aren’t what they once were. And when consumers do come into the store, they do so with phone in hand, expecting dealers to match the lowest price available online.

Oh well. At least service is still profitable.

But what about all those bikes sitting on the dealer’s floor? They’re no longer a money-making proposition, that’s what. And increasingly, dealers are doing something about it.

In response to a question in the cycling industry Facebook group, dealers overwhelmingly told me they were cutting back on in-store inventory, some by as much as 40%. When asked why, they told me the bikes didn’t make enough profit to justify keeping so many them on the shop floor. Easier to just stock a representative selection and if necessary, order in a particular size or color. And brands are now maintaining inventories year-round to accommodate their D2C/C&C customers, so why shouldn’t dealers take advantage of that inventory too?

Makes sense, right? Absolutely. But only on two conditions: the absence of tiered preseason ordering programs and the presence of year-round stock availability.

Playing the preseason game

Will bike shops eventually become “catalog showrooms” with just a few representative floor models on display?

As cleverly foreshadowed way back at the beginning of this piece, in the Bike 3.0 era, suppliers focused on controlling floor space in dealers’ shops. This was done through the then-ubiquitous preseason ordering program. Order a bunch of bikes up front, dealers were told, and lock in your pricing level for the year. And besides, if you don’t order all or most of your bikes preseason, you may not get any at all when demand is high.

Preseason programs did a lot of good things for suppliers. For one thing, they could use the resulting orders as security when negotiating credit with their banks. For another, early deliveries — which started long before the actual selling season — shifted inventory risk onto dealers. But the most important thing preseason ordering programs did, at least in theory, was lock down dealers’ floor space, denying entry to competitors because the dealers had already committed all their open-to-buy dollars to a single, dominant brand.

Trouble is, that strategy didn’t work, especially with the larger, more successful shops that brands envisioned as their anchor stores in hotly contested markets.

Successful dealers didn’t get that way by being dumb. They used their market pull to bring in additional brands to supplement their primary lines. In 2020, according to Georger Data Services, fully 30% of dealers selling one of the Quadrumvirate brands — Trek, Specialized, Giant and Cannondale/Pon — also sold at least one other Quadrumvirate brand as well.

Big stores did enough business to lock in top-tier pricing and still have buying power left over to bring in other, competing, brands. In fact, this is one of the things that led to the essential Bike 4.0 feature of bike brands buying retail shops and running them themselves ... as single-brand outlets, of course. By 2025, that GDS number of shops carrying multiple Quadrumvirate brands had shrunk to 26% as hundreds of brand-owned stores popped up in major markets.

And more and more dealers are placing reduced preseason orders, or none at all. Trek has no mention of a preseason plan in its 2026 dealer book, and I’m told this has been the case for the past three or four years. Instead, dealer are required to give estimates for their total sales for the year and then receive price incentives and rebates for meeting them. Each season’s order is expected to show at least a 10% increase from the previous year, a prospect that seems dubious at best in our present flat-to-down market, but we’ll deal with that another time.

Giant has a preseason program, but I’m told it’s more of a suggestion than a requirement. Specialized and Cannondale both have preseason ordering, but Cannondale’s is not mandatory, according to Nick Hage, the company’s SVP and general manager for North America & Japan.

Also, there’s no word how many dealers are actually pre-booking into the plans, and, if so, for how much. “They were less pushy for big growth,” one dealer told me about the Specialized program. “I think they are aware dealers need a bit more room to breathe this year.”

But at the end of the stock-fewer-products road lies a troubling question: for more than a century, bike shops have prided themselves in being able to provide riders with ready-to-ride bicycles the same day the customer comes into the store. Will bike shops eventually become “catalog showrooms” with just a few representative floor models on display and actual purchases primarily available after a 1–2 day wait for shipment from the distributor?

It's not a simple question and, as usual, there are no easy answers. But between the erosion of dealer margins and resultant reduced profitability on bikes on the one hand and the availability of year-long inventory from distributors on the other, it’s clear that something’s gotta give.

Let’s just hope it’s not the traditional bike shop.

Guest editorial by Pat Cunnane: It’s time to break the cycle of uncertainty

Steve Frothingham — Tue, 09 Dec 2025 19:16:30 +0000

The U.S. Bicycle Production and Assembly Act is the Answer.

By Pat Cunnane

Business thrives on certainty. It is a prerequisite for investment, hiring, and long-term planning. Yet for the American bicycle industry, the last three decades — and especially the last five years — have been characterized by anything but. Over time this instability has led to a total collapse of domestic bicycle manufacturing. That is why Congress should pass the U.S. Bicycle Production and Assembly Act (H.R. 3904) to halt this cycle of uncertainty and weakness and forge a strategy to bring bicycle assembly and manufacturing back to the United States.

The U.S. Bicycle Production and Assembly Act (H.R. 3904) is bipartisan legislation designed to eliminate the primary cost barrier that prevents large-scale bicycle assembly and manufacturing from returning to the United States. Its central mechanism is the creation of a temporary, 10-year duty-free window for specific imported bicycle components, provided those components are used exclusively for final assembly or manufacturing of complete bicycles (including e-bikes) in the U.S.

Today’s statistics tell the sobering story: more than 97% of all bicycles sold in the United States are imported. The existing Section 301 Tariffs (imposed during the first Trump administration and extended by the Biden administration) and the new reciprocal tariffs imposed this year — which are subject to a Supreme Court ruling — alone will not bring production back to the U.S. But passing H.R. 3904 can help us get where we need to be.

The Cost of Uncertainty

The current trade environment, marked by the sudden imposition of the International Emergency Economic Powers Act (IEEPA) tariff, the ongoing application of Section 301 tariffs, and the threat of Section 232 steel and aluminum tariffs, forces companies into constant, reactive tactical supply chain maneuvers rather than strategic domestic investment. Instability does not encourage reshoring; it simply leaves businesses guessing where the next bicycle or component will be built, resulting in inventory chaos and supply chain whiplash.

The contrast with the past is stark. In 1992, according to Bicycle Retailer and Industry News, almost 9 million bicycles were manufactured in America. By 1999, when Huffy closed its last U.S. manufacturing facility, the era of U.S. bicycle production was dead, with fewer than 200,000 bikes being made domestically.

In the mid-1990s, the U.S. bicycle industry — led by major manufacturers like Huffy, Murray, and Roadmaster — attempted to fight back against unfair Chinese competition by lobbying the government to impose anti-dumping duties on China-made bicycles. When those efforts failed, the economic foundation of these legacy American brands, and the supply chain that supported them crumbled. At the same time, most other countries — including the EU, Mexico, and Canada — imposed anti-dumping duties on China, while the U.S. did not.

In 1996, the U.S. International Trade Commission (ITC) issued its final ruling on the anti-dumping case finding that imports of low-cost, mass-market bicycles from China did not pose a “material threat” to the three major U.S. bicycle manufacturers: Huffy, Murray and Roadmaster. This decision not to protect the U.S. bicycle manufacturing base led directly to its demise.

During the first Trump administration, Section 301 tariffs were imposed on most bicycles and bicycle parts from China. At that time, 95% of all bikes sold in the U.S. were made in China. It is important to note that these tariffs have had a significant cost to consumers. Comparing prices from 2016 to November 2025 illustrates the result:

Time Period	Item Type	Normal Walmart Price (MSRP/Everyday)	Approximate Price Increase
2016	Mid-Range 16" Kids' Bike	$80.00 to $98.00	N/A
Nov 2025	Mid-Range 16" Kids' Bike	$108.00 to $148.00	$30.00 to $50.00
Percentage Change			~ 35% - 50%

With bicycles, we know who pays the tariffs: Consumers. Consumers are paying as much as 50% more for the same bicycle at Walmart in 2025 as they paid in 2016, before Section 301 and other tariffs were imposed — an increase significantly higher than general inflation for the same period of 26%.

We Need an Incentive — Not a Penalty — to Act

The cycle of dependency on imported bicycles continued through the first Trump administration’s trade actions (then continued by the Biden Administration), which imposed 25% Section 301 tariffs on Chinese-manufactured bicycles and many parts. While this theoretically created an incentive for domestic production, that didn’t happen.

The industry instead devoted resources to lobbying for tariff exclusions and simultaneously began a mass relocation of manufacturing — not back to the U.S., but to other low-cost countries, such as Cambodia, Malaysia, India and Vietnam, to escape the China tariffs. This merely created new supply chains that are just as fragile and geographically distant as the ones they replaced. Tariff policy, in its current form, only moves manufacturing out of China; it does not bring it back to the U.S.

This failure of trade policy is directly hurting current U.S. bicycle businesses. Increased landed costs for bicycles and components due to the tariffs are dragging down bicycle sales across all sectors. As sales and profits decline in our industry, the direct result is that companies are not hiring, not investing, and in some cases, closing or filing for bankruptcy.

And this is happening now: when the use of bicycles in the United States is on the rise.

The consequence of this trade policy is grimly demonstrated by its structural flaw: the system actively punishes American companies seeking to reshore production. Any domestic operation committed to U.S. assembly – such as those supported by the 2013 Walmart "U.S. Manufacturing Initiative’ – faces an insurmountable barrier because of the costs imposed by the government on the very inputs needed to make bicycles here.

This illustrates the central economic paradox: It is drastically less expensive to import a fully assembled bicycle — constructed with the exact same Chinese-made components (so long as the frame is not made in China) — from a third-party country like Vietnam, Malaysia, or Cambodia (where the duty is 11% before reciprocal tariffs) than it is to import the necessary parts from the established China supply base (subject to the combined Section 301, reciprocal, and fentanyl tariffs) for final assembly in the U.S. The U.S. government is inadvertently penalizing domestic assembly operations.

One tragic outcome of this flawed structure was demonstrated when the Bicycle Corporation of America (BCA) established in 2014 stopped its U.S. assembly operations in 2025.

The Path Forward: Stability Through H.R. 3904

The path forward to revitalizing bicycle manufacturing requires the unified, long-term industrial strategy embodied in the U.S. Bicycle Production and Assembly Act, introduced in a bipartisan effort by Reps Vern Buchanan (R-FL) and Mike Thompson (D-CA) in June.

The bill is attracting co-sponsors from both parties who recognize this bill will both protect existing businesses in their districts and allow them to grow and add more jobs. One example of this is true for Worksman Cycle, when visiting their factory in Conway, S.C., their congressman agreed to support HR 3904. He understands the negative impacts of the current tariffs on Worksman Cycles' efforts to maintain its current business and to grow. Worksman is the oldest continuously operating bicycle manufacturer in the USA. Worksman is also a leading exporter of American-made bicycles. These tariffs are making their export business more difficult, because of the higher costs for parts not manufactured in the USA by anyone, they now must pay higher tariffs. These tariffs provide an advantage for their competitors manufacturing in other countries.

This legislation is a smart, targeted solution that addresses economic imbalances directly. It suspends tariffs, including Section 301 duties, and reciprocal tariffs, on imported bicycle components if those components are used specifically for final assembly in the United States.

This bill will also support U.S. parts manufacturers. According to Nicole Johnson at Boyd Cycling, HR 3904 “gives American manufacturers like us more local customers and the stability and cost structure needed to expand production, hire more U.S. workers, and strengthen the domestic cycling supply chain.”

Crucially, the bill offers a 10-year period of stability. This is the durable, predictable framework that businesses need to commit major capital investments — the kind required for assembly automation, specialized facilities, and the resurrection of a domestic supply chain. The bill even sets clear, measurable goals: assembling 2 million bicycles annually in the U.S. within five years and a goal of 5 million within 10 years.

Overtime, the reshoring of critical parts used in the assembly of bicycles will return to the United States. Our market is large and can support a robust supply chain. We see this all around the world — when bicycle assembly moves from one country to another, the parts suppliers follow. We can simply look at the development of the supply chain in different regions of China — and new supply chains in Vietnam, Cambodia and India.

A Blueprint for American Renewal

Passage of H.R. 3904 will also create a critical workforce dividend by meeting the need for employment among less-skilled workers in specific regions. The initial assembly jobs offer an accessible entry point to the industrial sector, serving as essential, on-the-job trade training grounds for the next generation of American manufacturing workers. These plants, located in communities hungry for industrial investment, will provide a foundational workforce for the next phase: the higher-skilled component manufacturing (frames, wheels, complex parts) that will follow the assembly operations back to the U.S. One can look to Europe, which protected its bicycle industry in the 1990s by imposing anti-dumping duties on China, Europe continues to produce most of the bicycles sold there domestically, supported by well-established component and frame suppliers.

The U.S. Bicycle Production and Assembly Act is more than just a bike bill. It is a model for bipartisan, stable trade policy that uses targeted, long-term certainty — rather than short-term punitive actions — to incentivize reshoring. By establishing this predictable framework, we can secure jobs, shorten supply chains, and reignite a proud piece of American industrial heritage. The time to change the cycle of uncertainty to one of collaboration, stability, and opportunity.

Patrick J. Cunnane is the founder of Stoker Strategies, a consulting business helping business leaders with their businesses. He has decades of experience as a CEO and has been active on trade issues for the past 35 years, including testifying to the USTR on the 301 Tariffs and de minimis.

Vosper: In search of authenticity, part 2

Steve Frothingham — Mon, 10 Nov 2025 21:17:43 +0000

In last month's piece, I brought up the subject of authenticity: what it is, why it's important, and why there's so little of it in the cycling industry. I talked with Authenticity.co founder Mark Sperling about these and other topics and came away with the conclusion that, with a few notable exceptions, authenticity is a commodity sorely lacking amongst cycling brands.

I still feel that way. Authenticity, after all is a set of values and practices developed by a company founder — Sperling calls it "the company's DNA" — and manifested in literally everything the company does, from product development and marketing to how the brand conducts itself within the community at large.

You can't successfully fake it. Brands have to walk the walk in everything they do. If authentic brands they slip up (and sometimes they do, nobody's perfect), they own their mistakes, communicate them openly and honestly, and strive to do better.

Sound like most bike industry brands you know? Me neither.

However, it has occurred to me that there is a segment of the cycling industry where authenticity can still be found. Not in the majority of businesses, to be sure, but in enough of them to make a difference that bears talking about.

I refer, of course, to a select number of independent bike shops.

Authenticity is where you find it

It isn't something you can buy. It's something you earn over time.

Many communities still have one or more authentic bike shops, and these are treasures beyond price. Often, the founder is still active. Where they are not, the tradition is carried on with unwavering intent. Core values and principles are clearly articulated and communicated by management to everyone on the staff.

Customers can see it the minute they set foot inside. It shows up not just within the retail environment, but on group rides, in community outreach, communications, and literally everything the company does, from the storefront windows and signage up front to the condition of dumpster out back.

It isn't something you can buy. It's something you earn over time. But the shops that practice true authenticity have something that slick marketing and corporatespeak can never duplicate. And it shows.

By their very nature, independent bike shops are local (or sometimes regional) enterprises. They don't have the national or international footprint to earn votes in the Authenticity 500. But that doesn't make them any less important — or any less genuine.

'A perfect match'

"I think it's a perfect match. These dealers are working really hard and committed to the community. [They're] the real heartbeat at the core of our retailer network."—Heather Mason, NBDA executive director

How many truly authentic bike shops are there in the USA? Frankly, I have no idea. But for purposes of discussion, let's guess it's 1% of the overall dealer population. That would make the total somewhat less than a hundred, and if Georger Data Services' numbers are correct as of early November, right about 85.

I put the question to NBDA executive director Heather Mason. While the NBDA doesn't have tools to measure authenticity directly, she says, she hypothesizes that those qualities map pretty closely to what they found in the NBDA Retailer Excellence Awards.

"I think it's a perfect match," she told me in a phone conversation. "These dealers are working really hard and committed to the community. [They're] the real heartbeat at the core of our retailer network, based on feedback from the dealers, their employees and their communities."

Additional criteria for inclusion in the Retailer Excellence Awards include dealer financials, business benchmarking, performance against KPIs, hosting events covered by the local press, and a series of collaborative virtual meetings.

In 2025 the NBDA awarded just 89 REAs, probably pure coincidence for being so close to my 1% estimate for authenticity, but certainly an elite cadre of USA retailers in any case.

Applications for 2026 REAs open on November 15th. Retailers do not need to be NBDA members to participate. Details will be published in BRAIN at that time.

Meanwhile, if you know of bike shops that meet the threefold criteria for authenticity — founder-led, clear mission and values, and their presence put into practice in everything the shop does — drop me a line at rick@rvms.com. Your input could spark more pieces like this one.

Authentic bike shops are the true industry leaders. Not necessarily the biggest, but in many ways the best among us, leading the way forward, showing the rest the industry how it's done.

And I think it's time for the rest of us to start paying attention to them.

Guest Editorial: 'Fix it, don’t ditch it!' celebrates International Repair Day

Steve Frothingham — Tue, 14 Oct 2025 16:08:42 +0000

By Wendy Booher

International Repair Day takes place each year on the third Saturday in October, which is this coming Saturday, October 18, 2025. Since 2017, the day has been intended to highlight the value and importance of repairing things — oftentimes in a community setting at events held around the world. Perhaps this year more than ever before, International Repair Day has vital significance — given current economic uncertainty — for consumers worldwide who rebel against planned obsolescence, who want to show respect for their possessions, and who are determined to save items from premature dumping in landfills.

“There’s a lot of value in being able to repair your own bike,” said Simon Beatson, general manager of Ritchey Design. “The money saved in fixing your bike is one thing, but the skills earned by learning how to do it yourself are yours for life.”

Why care about repair?

While it might be unusual to celebrate International Repair Day for any brand in the business of selling products, there’s more to the repair theme than just fixing stuff. Like most bike brands, Ritchey sustains itself by achieving certain revenue targets throughout the year. In contrast to a “sell at all cost” objective, founder and sole owner, Tom Ritchey, believes that everyone should be able to fix their own bike, no matter where they are, in order to get oneself back home safely. This belief guides the design process for all the products that bear his name.

DIY repair, however, isn’t without its obstacles, which mainly include proprietary product design by brands looking to control their product maintenance, and lack of mechanical aptitude on the part of the product owner. Why care about repair is a chance for Ritchey to inform and educate customers and to foster brand loyalty. It’s also a strategy for building and/or fortifying a reputation. International Repair Day provides an opportunity to achieve all three.

Community bicycle repair

“Bike repair collectives aim to do more than keep people on working bicycles, we aim to show an alternative way that communities can be self-reliant and share resources and skills,” said Vincenzo Loconte, a member of Bikerowave community bicycle repair collective in Los Angeles. “Additionally we hope they will see broken things as things that need repair instead of being added to our waste stream. We hope that folks who visit us are inspired to spread this ethos to other needs in their community.”

According to this Wiki, there are more than 200 bicycle repair collectives worldwide. This global cycling community helps explain how some brands, like Ritchey, have outlasted others — sometimes by decades. Community bicycle repair collectives, like Bikerowave, provide workspace, tools, and equipment to teach people how to build, repair, upgrade, and maintain their bicycles. These collectives depend on volunteers with loads of mechanical experience and expertise, who donate their time to help empower cyclists with basic bike care knowledge. Repair collectives, which can be found throughout the world, also serve as hubs to connect the local cycling community and when people get together, they talk … about bikes, components, and what they like or dislike about different brands.

Control the message: engage, inform, inspire

The digital “rabbit hole” can become deep and wide very quickly for anyone who’s not super focused when searching online for repair advice. YouTube, Reddit, forums, and other platforms are both fountains of useful advice and information black holes all at once. That’s less of a problem if a brand owns the source. In some instances, Ritchey has preempted Frequently Asked Questions by providing answers in advance. Ritchey has concluded that when there’s an issue for one person, there may be issues for others, and the solution would probably be useful to everyone. Examples of how Ritchey controls the message can be found in each of these tech videos:

How to Service a Ritchey WCS Bicycle Wheel

How to Install a WCS C220 Bicycle Stem

How to Wrap Ritchey Handlebars

In the ultimate nod to International Repair Day, which isn’t limited to just one day, framebuilder Paul Brodie produced a video about repairing a Ritchey frame. More than anything, it demonstrates how a steel frame can be repaired and can go on being a bicycle for many years to come.

Celebrating International Repair Day is a reaffirmation of Ritchey’s rider-first philosophy, no matter what the project is, like reviving a pre-loved bike, starting a winter project, or learning from community repair collectives. While this may be an odd way to get ahead in business, other brands may benefit from encouraging users to “Fix it, don’t ditch it!” in honor of International Repair Day because every repair is a chance to reconnect with their community and the people who place a premium on brand values.

Wendy Boohar is Ritchey's international marketing and media coordinator.

Vosper: Authenticity, and why the bike biz has so little of it

Steve Frothingham — Mon, 13 Oct 2025 22:05:56 +0000

I first met Mark Sperling, founder and head of Authenticity.co, at the Cycle Of Influence conference in 2024. Sperling was one of the panelists in a discussion I moderated, and two things about his company struck me right away.

The first was the sheer importance of authenticity as a measure of brand quality (much more about that later), something I had never considered as a lifelong marketing and advertising professional. But the second was, in looking over his list The Authenticity 500 Index (although it’s more like 700 now), why were there so few cycling brands represented?

Of the top 700, Rapha is listed at #34. Shimano is #185. But where are the bike brands? The most authentic bicycle brand, according to the survey, is Canyon, at #227. Specialized is #279, Pedego is #357, Murf Electric Bikes (primarily beach cruisers) is #367, and Cervélo is #532.

Trek, Giant, Cannondale, and every other bike brand you can think of is not listed.

Other cycling brands that made the list are saddle maker Sella SMP (#403), Profile Racing (#460), and BRAIN's sister publication, Pinkbike (#490). That’s a total of 10, in case you were counting.

If we stretch our definition to include what I might call “cycling-adjacent” brands, the list yields another ten: REI (#8), Fox Racing, which sells helmets and accessories (#59), bag maker Chrome Industries (#68), Alpinestars (#137), Oakley (#169); Peloton (#207), Troy Lee Designs (#219), skateboard and bike maker Santa Cruz (#261), Bell Helmets (#512), and Woodward, the bike park company (#523).

Still I was mystified as to why more cycling brands weren’t included in the index and what the big deal about authenticity was in the first place. So I went right to the source.

Interview with Mark Sperling of Authenticity.co

“Some bike brands, especially larger bike brands, may have internal mission statements and values, but you just don’t see it in their marketing. They all play by the same playbook.”—Mark Sperling

RV: What’s your definition of authenticity?

MS: Authenticity basically describes someone’s or something’s DNA. It describes their values in all phases of life and it guides their actions.

Examples include Patagonia. Everything stems from the company’s founder being very clear what he sees the brand being about. Environmental stewardship is always job #1, even ahead of profitability. And that message goes through all their branding to their marketing, their POP, and to the products themselves. Patagonia outnumbers all other brands in our (authenticity) survey, by more than five to one.

Ben & Jerry’s is another example. One of the founders (Jerry Greenfield) recently resigned rather than go against his beliefs.

Vans, Nike, and Apple and In-N-Out Burger are all examples of the same thing. Together, they form our top six most authentic brands. Everything goes back to the same thing. Each started with one founder who set the standard for the brand’s beliefs and values and no matter how old they get, they adhere to these gold standard values.

RV: Why is authenticity so important in 2025?

MS: A lot of it because we are so inundated with brands and marketing, both on the commerce side and the brand and marketing side. We are inundated with thousands of messages daily and a lot of times there’s a very strong consumption bias. And to a lot of consumers, they want to give their business to companies that align with their own values. All these different factors — from how they advertise to their packaging and sponsorships.

A lot of brands pivot constantly to stay on trend with whatever’s recently gone viral, but people see right through that. It’s seen as cynical.

It also seems to be rooted in age groups. For older consumers, there are certain brands they stick with, but the younger generations pivot. Something rubs them the wrong way, they’re done with it. And they move on. They are brand agnostic and they move and shift with whatever trends are going on. But there are still brands they will gravitate to. But there are third-tier brands they are constantly pivoting to. “I wear Doc Martens, but they’re not the only shoes I wear.” “I love Levi’s, but I love American Eagle too.”

And if a brand deviates from these values, consumers turn on them. That happened just this week with Disney (Note: the original interview was done on September 22^nd; since then Disney has reversed itself). Disney bills itself as “The Happiest Place On Earth,” and to then turn around and make decisions for purely political reasons. That’s going to take them months or even years to make up.

Arc’teryx is another example that got into trouble with their recent series of ads (featuring spectacular graphics including a fireworks “dragon” on a Himalayan mountainside), which flopped with consumers because they weren’t seen as true to the brand and its values.

RV: What are so few bike cycling brands represented in authenticity.co?

MS: It’s an interesting question. Maybe cycling brands aren’t considered top of mind when people think of their top authentic brands. Probably if we asked something more category-specific, we’d start to see cycling brands. And of course, many of these are huge companies, orders of magnitude bigger than even the largest bike companies. But there are other brands on the list that are under 100 million dollars, even under 50 million, too.

Our respondents come from all over. When I first started this list, I had a vast network on LinkedIn. A lot of them were in marketing but they were also in like a hundred different industries. Then I started expanding and now we’re starting to get international responses.

All these defunct cycling and other outdoors brands are being bought up and brought back for a new generation, but they don’t have the authenticity they once did. There’s no founder, there’s no values, there’s no authenticity. They’re just a name.

Some bike brands, especially larger bike brands, may have internal mission statements and values, but you just don’t see it in their marketing. They all play by the same playbook. There’s not a lot of differentiation. From a technical standpoint, they definitely have their differences, and each rider has their own preferences. But that’s one thing the bike brands need to do, which is to look at those top 100 brands and see where they have commonalities and how they can develop those.

How cycling brands can become more authentic

“When words, actions, and values align, the result is credibility that no competitor can replicate.”—Mark Sperling

First things first: you can’t fake it. In order to be seen as authentic, brands actually have to walk the walk. That means deep soul-searching, a carefully crafted set of values, and long and sustained effort to build those values into everything the company does, from products to marketing to press and corporate relations.

As far as how to implement authenticity, brands could do a lot worse than to learn from Authenticity.co’s September newsletter, which is reproduced here with Sperling’s permission:

In a recent Forbes Agency Council feature, 20 agency leaders tackled one of branding’s biggest questions: what does authenticity really mean today?

The answers reveal a powerful shift—authenticity isn’t about slogans or aesthetics, but about alignment between what a brand says and what it does. Consumers are watching more closely than ever, and they reward brands that live their values, even when it’s inconvenient.

At its core, authenticity builds trust, loyalty, and meaning. It happens when brands show up consistently—across actions, messaging, and experiences. Instead of relying on polish, the most resonant companies lean into truth, vulnerability, and clarity. From owning mistakes to highlighting founder stories, these leaders agree that authenticity is proven through behavior, not just branding.

Some of the most powerful takeaways include:

Proof over persuasion: Show your values through consistent action, not slogans.

Personalize with purpose: Speak to what your audience truly cares about.

Stay rooted in values: Don’t chase trends—lead with your brand’s core beliefs.

Embrace imperfection: Transparency about mistakes builds more trust than perfection.

Align inside and out: Internal culture must match external messaging.

For today’s brands, the challenge isn’t talking about authenticity—it’s living it, daily. When words, actions, and values align, the result is credibility that no competitor can replicate.

Rick here again. All of this becomes critically important to us as an industry, not just because of some sort of online popularity contest, but because in addition to other challenges I’ve written about for years, the cycling industry in North America (and probably the rest of the world as well), is in the midst of an identity crisis.

We currently have something like a thousand brands, all selling more or less interchangeable stuff, and nothing to distinguish between the true brands and a bunch of companies with a bunch of lookalike products. And the market for those products is shrinking. Which ultimately means that some of those companies will survive, and others will fail. It’s literally an existential problem.

Now consider the difference between, say, Patagonia and Columbia and the hundreds of lesser outdoor apparel makers. What sets those great brands apart from their competition — and ultimately, what helps them survive and prosper — is not just great products and retailers and customer service, but brand identity. And the identity for those leading companies comes down to just one word: authenticity.

Main image from the Arc’teryx ad.

How are steel and aluminum tariffs calculated on bikes?

Steve Frothingham — Thu, 09 Oct 2025 20:50:03 +0000

TL;DR: They would add a ton of costs (Also: Get a good customs broker).

(BRAIN) — There are as many ways to calculate Section 232 tariffs on imported steel and aluminum as there are companies importing products containing those common materials. But most bike importers tell BRAIN that if bikes and e-bikes become subject to the tariffs, it will add hundreds of dollars to the cost of bikes at wholesale, and even more at retail.

Some bike products, including e-bikes, chains, exercise bikes/trainers and some hand tools are already subject to Section 232 tariffs. The chains and tools were added in March; e-bikes and trainers were added in August.

Now, Guardian Bikes and an aluminum extruder trade group have requested that all bikes, bike frames and some e-bikes be added to the derivative lists for both Section 232 steel and aluminum tariffs. If added, these new tariffs would apply to imports from all countries.

PeopleForBikes said such a move would be “crushing” to the industry and is urging industry members to leave comments in opposition on a Department of Commerce website.

Since the first list of derivatives was released this spring, importers have struggled to understand how to apply them.

An aggressive approach, which some importers have taken, is to assume that the Section 232 tariffs were intended to apply to the raw value of the materials in the product. That makes the cost relatively small because even an e-bike with an import value of $1,000 might contain only 40 pounds of raw steel, valued at perhaps 50 cents per pound, for a Section 232 tariff cost of less than $10 (not counting other tariffs — more on that lower down).

Wouldn't it be pretty to think so? But most companies take a far more conservative approach, which is why the requested tariff increases this week have importers extremely concerned.

The more conservative approach is to apply the 50% tariff to the importer’s price paid for each of a bike's steel or aluminum components.

Other than bikes with carbon or titanium frames, more than 90% of the value of most bikes and e-bikes is steel or aluminum — just about everything except the tires, inner tubes, saddles and grips.

The conservative approach is to add up the cost of each component — say a steel cassette that cost the bike brand $11. A frame that cost $100. A handlebar that cost $4. In the end, a bike valued at $1,000 at import might contain steel and aluminum components worth over $900. So a 50% Section 232 tariff would add $450 to the tariffs on that bike.

“I was told second-hand by a supplier that there's one or two brands in the industry that are saying, 'oh, yeah, we hired a lawyer and they looked into it, and we're only adding about five bucks a bike.’ I would caution brands to be very careful about making that kind of claim,” said one importer who takes the more conservative approach.

“I'm going with the understanding I have and avoiding risk to my company as best I can,” the importer said. (He said his company doesn't count tiny steel parts like water bottle bolts and reflector brackets. "There's a limit," he said.)

PeopleForBikes policy counsel Matt Moore told BRAIN that the “valuation of merchandise for customs purposes is a complicated area.”

But Moore said a Customs and Border Protection FAQ page is clear about how to value steel products.

“It’s the ‘price paid’ for the steel content in the form purchased," Moore told BRAIN, paraphrasing the FAQ. "Not the price of the raw material farther up the supply chain.”

Stacking costs.

Since the first Trump administration imposed Section 301 tariffs of up to 25% on Chinese imports, industry experts have been quick to note that these tariffs “stack” on top of pre-existing tariffs, instead of substituting for them.

The second Trump administration has added more varieties of tariffs and most continue to stack, but there are some exceptions. Importers say the exceptions are subject to change and often hard to determine. The differences can amount to hundreds of dollars on the landed costs of even a modest bike, or hundreds of thousands of dollars on a container load of them.

It’s fairly certain that, if imposed, the steel and aluminum tariffs requested this week would stack on top of most existing tariffs, including the long-standing MFN duties of 5.5-11% on bikes, Section 301 tariffs on Chinese imports of up to 25%, and the so-called fentanyl tariff on Chinese goods of 20%.

But there is some uncertainty about whether the new Section 232 tariffs, if imposed, would stack on the administration’s “reciprocal” tariffs, which range from 10-50% depending on the country of origin (Reciprocal and fentanyl tariffs are each imposed under the International Emergency Economic Powers Act (IEEPA)).

According to another CBP FAQ, reciprocal tariffs do NOT stack on top of Section 232 steel and aluminum tariffs. Instead, the FAQ suggests that a product's steel and aluminum content would be subject to the Section 232 tariff while only the product’s non-steel or aluminum content would get hit with the reciprocal.

Other industry sources interpret the stacking rules differently and believe both the reciprocal and Section 232 steel and aluminum tariffs would apply fully.

The differences add up.

In the example of a non-electric bike from China valued at $1,000, the total tariff burden might be:

$450 Section 232 on steel or aluminum content (50% of $900 value)
$10 Reciprocal (10% IEEPA) on the non-steel or aluminum content
$250 Section 301 (25% applied to $1,000)
$200 fentanyl (20% IEEPA applied to $1,000)
$110 MFN (duty of 11% applied to $1,000).

For a total tariff of $1,020 in tariffs, or an effective rate of 102%.

If the reciprocal tariff stacked on the 232, the total on a Chinese non-electric bike would look like this:

$450 Section 232 steel or aluminum content (50% of the $900 value).
$100 Reciprocal (10% IEEPA applied to $1,000).
$250 Section 301 (25% applied to $1,000).
$200 fentanyl (20% IEEPA applied to $1,000).
$110 MFN (duty of 11% applied to $1,000).

For a total of $1,120, or an effective tariff rate of 112%

The same bike from Taiwan is not subject the Section 301 or fentanyl tariffs. So the non-stacking costs would be:

$450 Section 232 steel or aluminum content (50% applied to the $900 value).
$20 Reciprocal (IEEPA) rate applied to the remaining $100 of non-steel or aluminum content.
$110 MFN duty of 11% applied to the $1,000 value.

For a total of $570, or an effective tariff of 57%.

If the Section 301 and reciprocal tariffs stack, the Taiwanese bike's tariffs would be:

$450 Section 232 steel or aluminum (50% of the $900 value).
$200 Reciprocal (IEEPA) 20% applied to $1,000.
$110 MFN duty of 11% applied to $1,000.

The total: $760, or 76% effective tariff.

Bottom line: Whether the Section 232 tariffs stack or not, they add up to hundreds of additional dollars on the importer’s landed costs, which equates to even more added to wholesale and retail costs.

No drawbacks.

In another twist, the Section 232 tariffs paid are not eligible for drawback, meaning if an importer re-ships a product to another nation, they would not be able to recover the Section 232 tariffs paid, the way they can recover other tariffs paid. This adds costs for importers who service other countries from a U.S. warehouse.

Vosper: Another fine mess, Part Three

Steve Frothingham — Mon, 08 Sep 2025 17:45:52 +0000

Welcome to the final installation in this series about the industry's current and ongoing oversupply situation.

In Part One, we looked at some of the immediate causes (hint: Suppliers over-ordered, egged on by dealers doing the same, with the two combining to cause an unprecedented Bullwhip Effect). Part Two looked at some of the industry response, including an interview with Wayne Stetina about the thinking going on at both Shimano and SRAM at the time.

Now in Part Three, we'll go back to some of the root causes of a quarter-century of virtually uninterrupted industry oversupply, featuring an interview with an anonymous senior executive as to what was going on with suppliers during the COVID-ordering frenzy and what the fallout was, and finish up with some suggestions about what we as an industry can do about all this.

Let's start with how things got this way in the very largest sense.

The plain fact is that bike and equipment brands in general and the Quadrumvirate in particular are still operating under the basic business principle of perpetually increasing their market share, and this has been the case for ever since the Bike 2.0 era (end of the bike boom and introduction of the mountain bike through the late 1990s/early 2000s). Win enough market share, the theory goes, and your brand will become dominant and we can worry about the profits then.

Here's a newsflash: It didn't work then and it doesn't work now. So there's that.

During 2.0 era, brands attempted to increase market share by the simple expedient of adding more and more dealers. But it didn't work. Dealers — especially large dealers — responded by simply adding more brands, thus diluting the market share per brand at that dealer's business. So brands were trying to increase market share by controlling more dealers; dealers were trying to increase market share by controlling more brands. As I said, it didn't work, for either of them.

In the Bike 3.0 era (roughly 2000-2020), brands realized the 2.0 model had failed and began to focus on increasing market share by controlling more of the floor space (and thus sales) within individual retail businesses. Starting in about 2015, suppliers also began opening company-owned stores, largely ditching the never-very-successful Concept Store model.

Both these moves were successful for a time. But they didn't effectively increase market share among any of the Quadrumvirate brands (with the possible and relatively short-term exception of Trek's acquisition of Electra); they just took market share away from previously nonaligned brands and retailers ... who, as often pointed out in this space, control a lot of retail businesses (some 45%) but at comparatively low sales volumes.

So what does all this have to do with oversupply? Simple: One way to take sales away from your competition is to discount your product, thus sacrificing profits but hopefully gaining market share by stimulating sales versus competitors. And it works, short-term, particularly for the first player to drop prices (See also "Prisoner's Dilemma"). At the risk of pointing out the obvious, there's ultimately no net change in market share from this tactic because everyone ends up selling at the same reduced prices. All you're doing is forcing more product into the market than it wants through the mechanism of profit-destroying discounts.

And this is exactly what'd been happening, all season long, year after year, since 2000.

Combined with this is the absurd notion that brands, especially large brands, can continuously increase sales in a market where, for years, there has been flat to declining demand. Well, here's a newsflash: There are simply fewer Americans riding bikes in the past 25 years than has been the case in the 1.0–2.0 eras.

The Bike Boom was 50 years ago, guys, and it's not coming back anytime soon.

Hence the over-ordering of product every year, the forcing of that unwanted product onto dealers' floors, and my conclusion that the oversupply practice is not merely deliberate, but an essential part of the Quadrumvirate business model.

But here's the larger point. The oversupply merry-go-round has to stop if this industry is ever going to get out of the clutches of Perfect Competition and start making decent profits for a change.

The alternative is positively dystopian. It's the long-ballyhooed Race To The Bottom, and it's not just coming. It's actually been here, literally for decades now. But like the famous frog in the gradually heating pot of water, we just haven't been collectively smart enough to realize what's happening to us. But more about that in a bit.

What were they thinking?

"Brands like Specialized and Trek thought the brand would trump other products on the market and win customers and floor space. They were wrong." — Anonymous Industry Executive

To get the inside story on the current oversupply catastrophe, I talked via text message with a senior executive at a major industry supplier who agreed to speak very bluntly about the whole situation on condition of anonymity, for reasons that will soon become manifestly evident. This is a person who knows firsthand "what they were thinking" because they were one of the people thinking it.

You were in a unique position to observe the industry's over-ordering process firsthand. What happened from your point of view?

Yes, there was euphoria and brands did place lots of orders. Lead times on high-barrier-to-entry components extended to 730 days with several (factories) implementing contracts which stipulated orders were not cancelable. The lack of understanding by the brands on the supplier limitations and placing more and more orders in a very short (6–8 month) period of time was the downfall.

You had to be boots on the ground to understand the dynamics.

Products with low barriers to entry were flowing smoothly, while assemblers awaited key components from the more difficult suppliers. No one was ready to take responsibility for the components for a bike (that was) 95% complete. They waited until the bike was complete then shipped. This was often well after the surge, and not necessarily what the rider wanted.

(Brands) proceeded to place orders with multiple suppliers for comparable components, hoping to get something, then cancel everything else. This really created a mess with suppliers and compromised trust and respect.

Brands like Specialized & Trek thought the brand would trump other products on the market and win customers and floor space. They were wrong.

With bikes not available, consumers choose other recreational and social activities.

Ultimately, I don't think anyone is responsible. We never experienced it before, brands and companies made assumptions without truly understanding the limitations, and this resulted in the oversupply. The suppliers and assemblers are always ready to take orders. They ship and collect cash and close the transaction.

We've talked a lot about the industry's oversupply situation with respect to bikes, but what's happening on the equipment side of the business?

People talk about the supply chain issues with bikes, but few people talk about all the parts, accessories and rubber (PA&R) inventory on hand everywhere. There were few capacity restraints (on these factories) and makers shipped whatever was ordered throughout the pandemic. (Now) some of these products have months if not years of inventory on hand at both wholesale and retail.

My view (is that) this is a serious issue with less floor traffic and so much product available.

And what's happening to all this inventory, both on the supplier and retailer sides?

My observation of the bikes in stock at both retail and wholesale is the majority are unsalable. Wrong sizes, wrong colors, wrong experience, wrong models, etc. Few (in the channel) want to write down this inventory because it contributes to their asset base, which they are leveraging for credit with banks and suppliers.

So all that inventory is just sitting there, unsold, and probably unsalable, too, since consumers are not responding to months of ongoing discounts. Where does this leave us as an industry?

I am aligned on the supply challenges. Here are the reasons:

Brands are only purchasing and shipping exactly what they need. There is less than three months on hand at brands. My guess is that 40–50% of what is on hand is outdated, mixed colors/sizes, and product that is otherwise not desirable. Orders (if any) are tiny for future shipments. No one is certain what will happen after July 9 with reciprocal tariffs. (Note this interview was in late June. Since then, the tariff situation has remained unstable and in fact become even more complex.)

Moreover, no one has equity to place big orders and hold inventory for future sales. At the same time, the NT$, Euro, Yen, and CHF have strengthened by 7–12% over the past 90 days. And ocean freight rates have about doubled since April 2nd. And remember lead times are 90+ days and 30 days on the water!

That's troubling. What's happening on the retail side of the business?

From the retail side, inventory on hand is as bad as wholesale. Maybe 60% is what customers want. Many dealers have reached their credit limits with high value bikes. (And currently) there is about 3–3.5 months on hand at retail (if that inventory is perfect). This is true for both wholesale and retail inventory, and includes the old stuff they can't move at any price.

My own prediction is (that this is) different from Covid. We are in for a supply vacuum now. And the brands will be servicing (their) D2C and owned-retail (businesses, often at the expense of their traditional retailer base).

I talked to one retailer who said they are now actively pursuing used bikes and will be aggressively repairing, refurbishing, renewing and reusing them to stay relevant.

I agree about the brands servicing their own outlets. Retailers aren't dumb, and they see this too. I talk about it in my July BRAIN piece. And they are all over the Circular Economy aspect of things. Anything else?

Well, we are in for a rough 6 months. And the administration is not making things easier or certain.

So now what?

Instead of chasing perpetual growth, companies now need to focus on their bottom line, on improving the profitability for the limited amount of products they are actually able to sell.

As described in the previous section, the reality for us as an industry right now is that we simply have too much inventory. We've had too much inventory for years. And we're still going to continue having too much inventory for the foreseeable future because — also for reasons discussed previously — suppliers are unwilling or unable to write it off. They are pretending all this stuff will eventually become sellable somehow. And guess what: it won't.

So the situation will continue. And it won't be easy. Or comfortable. But there is a light at the end of the tunnel.

When I was director of marketing at Specialized in the early 2000s, Mike Sinyard would often say something that has always stuck with me: "Every problem is an opportunity." And he was generally right about that.

In this case the opportunity is simple: Stop making so darned much stuff. Sounds easy, right? But, as I implied almost 2,000 words ago at the beginning of this piece, breaking our oversupply addiction will require an entirely different business approach, particularly from the industry's largest and most deeply entrenched players.

Instead of chasing perpetual growth and the failed goal of increased market share relative to competitors, companies now need to focus on their bottom lines, on improving profitability for the limited amount of products they are actually able to sell, and improving those profits throughout the distribution channel.

That means changes that will be felt throughout the supply chain. If suppliers, particularly on the bicycle side of the business, no longer have the cash/credit reserves to acquire more product than the market wants to buy, preseason order quantities and stocking requirements for dealers should necessarily go down, although the need to spread inventory risk throughout all players in the supply chain will always be with us. Lower order/inventory requirements, in turn, will have a deep impact on physical retail space.

With less inventory on the floor, shops can allocate some of the retail space saved to more profitable categories, like used bikes or expanded service offerings. As buy-in requirements ease, some dealers may opt to close less profitable locations or relocate operations to smaller quarters, reducing rent costs and overall OpEx (operating expenses), which goes directly to bottom-line profits. At the same time, dealers' realized margins will grow overall as in-season discounting becomes rarer or nonexistent.

But don't mistake this for a utopian solution. This potential change in focus will also bring its own set of challenges, and there will still be plenty of pain to go around.

For one thing, we've been training consumers for a quarter century that bikes and equipment are always available at a lower price, either via advertised sales events, online closeouts or simply by dickering with a compliant retailer. Even assuming suppliers have the collective willpower to move away from their current doomed business model, it will take years for consumer expectations to readjust to the new reality.

In the Bike 4.0 era, the economics of product scarcity (another name for what might be more appropriately termed "supply that's actually consistent with demand") may take on a new and troubling dimension. As dealer inventories shrink, the temptation for suppliers to allocate the most desirable product to their own virtual warehouses will grow, making it more difficult than ever for dealers to gain access to in-demand product.

It's a no-brainer that every D2C sale is more profitable to suppliers than any sale made through a dealer, and as profits throughout the industry grow while the total volume of product shrinks, the temptation will become greater than ever for brands to goose their D2C sales by simply denying dealers access to their most desirable models.

We may well end up with a two-tiered distribution system where lower-margin, bread-and-butter products are readily available in bike shops, but premium (or merely popular) models are effectively only available via the D2C channel.

For all this, the move away from perpetual oversupply and eternal discounts is not merely the best but is literally the only healthy solution for an industry that is metaphorically drowning in its own products. The alternative, as we've been seeing for decades, is simply not sustainable.

As author Alex Haley famously said, "Either you deal with what is the reality, or you can be sure that the reality is going to deal with you." We are now at an inflection point, and the choice is ours to make. But either way, the choice will be made. We can either make it ourselves, collectively, or let the market make it for us.

Choose wisely.

Vosper: Another fine mess, Part Two

Steve Frothingham — Mon, 11 Aug 2025 20:45:57 +0000

In the first part of this series, I took the measure of who is to blame for the industry’s current oversupply crisis and its aftereffects (short-sighted suppliers, abetted by short-sided orders from short-sided dealers and the equally short-sighted factories that blindly accepted those suppliers’ orders).

As one longtime dealer friend and industry legend, who asked to remain anonymous, put it to me in an email: “Bike biz people with our years of experience — 1971, 1973, MTB & road booms, etc. — easily predicted the dealer over-ordering, brand get-rich-quick euphoria, and related stupidity to avoid getting stuck.”

Well, maybe. But plenty of people in all phases of the supply chain got stuck, big time. And the industry is certainly hurting as a result. Both dealers and suppliers are closing businesses and consumers seem in short supply, even at the height of summer.

According to Circana data through May of this year, trailing-12-month (TTM) sales in the specialty retail channel were down 11% for bikes, down 8% for accessories, down 9% for parts, down 4% for helmets, footwear and gloves, and down 8% overall. And remember, that’s in comparison to the 12 month period of June 2023-May 2024, which was hardly something to write home about, profits-wise. (Editor's note: By the way, this Circana data (and more) is shared in the Dashboard feature in every issue of Bicycle Retailer & Industry News. Industry members can sign up for your free print or digital subscription here. And thanks for the leadout, Rick - SF)

But like the phoenix, a new cycling industry is arising from the ashes of the old, and in Part Three, I’ll provide some suggestions to prevent the current supply disaster — both short- and long-term — from happening again.

We’ll begin our examination of the long-term causes of our industry’s pitiable overall profitability, plus an interview with Wayne Stetina for some added insight into factory responses to the order deluge.

Fair Warning: This will be a long piece, almost 3,000 words, but I hope you’ll find it worth reading the whole thing. For the TL;DR crowd, it’s all about Perfect Competition; SRAM and Shimano had very different responses to the order frenzy; and Prisoner’s Dilemma explains why there’s always that one brand or dealer who’s willing to cut prices, stifling competition and destroying industry profits for all of us.

The root cause of all this

“At the Taipei bike show we place our orders for the year, and there’s a guy standing behind us at the booth who plunks down a Gold Card and says, ‘I’ll have what he’s having.’” —Industry Legend Skip Hess

It is literally a textbook case that the bicycle business is in a state of Perfect Competition. First proposed by longtime industry member Chris Allen in 2001, Allen was then an MBA candidate taking a Managerial Economics class from Dr. Maurice Rahimi at San Diego State University when he suggested the U.S. bicycle business as an example of Perfect Competition. Rahimi researched it and decided Allen was right. Now Perfect Competition in the bike business is an accepted bit of economic theory and taught as an example in colleges in universities across the USA and probably worldwide as well.

I’ve written extensively about Perfect Competition as far back as 2010, but the basic idea is pretty simple, and consists of eight (sometimes nine) basic parts. You can read the piece linked above for the full story.

Here’s the bottom line on all this, particularly with respect to low barriers to entry. As industry legend Skip Hess told me back when he was president of Electra bikes, low barriers to entry means that “My product managers and I bust our asses all year long designing the very best bikes we can, and at the Taipei bike show we place our orders for the year, and there’s a guy standing behind us at the booth who plunks down a gold card and says, ‘I’ll have what he’s having.’”

So there’s this thing called Perfect Competition, the cycling industry has it, and it’s the main thing keeping our industry’s prices and profits so darned low. To put it another way, no one brand can achieve a sufficiently strong market position to command significantly higher price points and profits. It’s literally a race to the bottom, and we’ve been in it for years.

The good news is, there are also things we as an industry can (legally) do to lessen the effects of Perfect Competition, and I’ll be talking about them next month in Part Three of this series.

What happened with Shimano and SRAM

“One key to profitability for Shimano has always been accurately forecasting demand to avoid overinvesting in factory capacity.”—Wayne Stetina

Wayne Stetina is a 13-time U.S. national road and time trial champion. He was inducted into the U.S. Bicycle Hall of Fame in 1999. More importantly for purposes of the present piece, he’s held senior management positions at Shimano and special projects reporting directly to senior management at SRAM during the COVID and post-COVID eras, which makes him uniquely qualified to take us inside both these industry powerhouses.

Following is part (!) of an interview I did with Stetina regarding the role of both companies in the industry oversupply fiasco and their current respective positions in the industry. The interview has been edited for clarity.

I’ve referred to Shimano as “the adult in the room” during the COVID product debacle. You were VP and Road Product Specialist at Shimano when the COVID-fueled ordering frenzy hit. What ultimately led to Shimano’s strategic decision to stick to its existing production schedule and effectively turn its back on what must have been hundreds of millions of dollars in orders?

Wayne Stetina: Shimano did have backorders up to two years and more for our most popular component groups. Since we were not able to increase capacity during the pandemic to reduce these backorders, my analysis is that all the factories were already running multiple shifts at maximum capacity (i.e., maximum profitability), plus Shimano supplier capacity must also have been a factor.

Shimano never believed (the) consumer demand everyone was reporting was sustainable at the peak pandemic level, so they were unwilling to invest to break ground on new factories that would take three to four years to come fully online. I believe this was based on rational self-interest to maximize Shimano profits. One key to profitability for Shimano has always been accurately forecasting demand to avoid overinvesting in factory capacity.

Over the decades Shimano has often been forced to play the role of the adult in the room every time we launched an extremely popular new group. Some of the biggest OEs frequently tried to corner the market by gaming the order system, trying to place initial orders for far more than their previous market share in each category. Initial demand to fill the pipeline for new bike models is always greater than long-term demand. As a responsible partner for every OE customer, Shimano always made sure every brand had a chance to place orders for initial delivery with allocations based on previous market share orders.

Usually it takes several months of factory production to ship enough product to every OE customer, ensuring every brand has bikes for new component/bike model launches. Shimano also paused all new group introductions (during the COVID ordering frenzy) to avoid any production slowdowns for new-model tooling to maximize production of existing product.

The Bullwhip Effect on inventory was common during every new model launch as dealers also inflate orders with multiple OE brands trying to get allocated the bikes they believe they can sell through to maximize their profits. The pandemic increased consumer demand for several years while the supply chain was simultaneously disrupted. Dealers logically ordered far more than they needed, desperate to get allocated the bikes they had consumers trying to purchase. Consumers began playing the same game with multiple dealers. It was a never before seen multi-year Bullwhip Effect on steroids. For most of that time the largest warehouse for every bike brand was on container ships waiting to unload at port.

Q: In the absence of short-term availability of product from Shimano, bike brands shifted their spec to microSHIFT and other formerly down-market brands, especially for their lower-end and mid-priced models. How did this move impact Shimano’s sales picture in the long term?

WS: It gave all those second and third tier price point component brands credibility with an established business relationship. Consumers bought those bikes and generally found they worked OK. Certainly “good enough,” considering the price points. I believe that had to cost Shimano, especially below the $800-$1,200 price points where they had always been dominant. So now we are seeing Shimano fight back aggressively with added value of better technology trickled down from higher-end product. Shimano has always been committed to sell a better cycling experience, and refuses to be trapped in a commodity price war that erodes margins.

For the last two decades, SRAM and Shimano have been fighting to become the dominant brand for premium components. SRAM basically doesn’t play in bikes below $2,000 retail. Now Shimano is fighting a rear-guard action against Taiwanese and Chinese brands with products that the market has yet to decide if they are good enough for $800–$1,200 bikes. For e-bikes that translates roughly to $1,600–$2,000. These “budget” component brands aren’t standing still. They all continue to rapidly upgrade quality and performance.

Q: After 37 years with Shimano, you made the move to SRAM in January 2022 to become its Senior Field Guide. What was the situation on the ground for SRAM, both with respect to the initial wave of orders and the subsequent wave of cancellations?

WS: SRAM was able to ramp up production dramatically. Nobody was ever disappointed with a SRAM bike and said “Wow. I wish I had waited for a new Shimano-equipped bike.” Especially with AXS versus Di2. This marked a permanent shift in the road market for dealer and consumer brand perception. Based on what I saw in bike shops during the pandemic, I believe market share was around 50/50 for premium road/gravel Di2 versus AXS. It remains to be seen how that will shake out after the inventory glut finally clears.

For MTB, even before the pandemic, I believe Shimano recognized they (SRAM) were the market challenger. I believe this was in large part because Shimano initially failed to embrace 1X and was playing catchup ever since. Shimano’s latest XTR wireless Di2 is really good. Underestimate Shimano engineers at your peril. Game on for premium MTB now as well.

When the wave of order cancellation requests finally hit, it's my understanding that SRAM was flexible to allow cancellations. If true, this was extremely bad for short-term profitability, but extremely strategic long term for OE customer relationships.

Shimano didn’t ramp up production nearly as much as SRAM, but they still had years of backorders secured with deposits, work in progress, and product ready to ship. I can’t comment on (what they have now), and that’s all I’m going to say about that.<

Q: What’s the Big Picture here?

WS: SRAM permanently established itself as an equal player to Shimano in the road and gravel markets.

Now Shimano is fighting back. Each subsequent generation from both companies is significantly better functionally and ergonomically. So much better that each time I ride the latest group from either company, I have zero interest to continue ride the previous group. Personally, as a long-retired racer, I prefer SRAM ergonomics and gearing flexibility for all my riding in every condition. But anyone looking for the winning Tour de France edge from a shifting or braking advantage based on SRAM v. Shimano components is looking in the wrong place.

Shimano and SRAM are battling to be the dominant premium component brand, but no OE bike brand wants to become over-dependent on a single supplier. It's far better for our industry to have two very strong component brands. We used to call it sympathy spec when OEs would spec a few models from a struggling supplier. Now we see OE brands offering SRAM and Shimano on the same frame, or alternating groups at different price points. Retailers can be very strategic again, deciding what they actually prefer to stock for their market. Because they no longer need to preorder to guarantee they will have enough bikes to sell.

The biggest unanswered question for me is how good for performance/durability/value will the new Chinese electronic shifting systems be at half the cost of Shimano or SRAM? Only the market can decide when they are good enough to eliminate mechanical shifting at lower price points. Because I am confident they will rapidly get better.

It all becomes part of the product performance/value equation that was the focus of my 39-year bike industry career. But the bottom line is, nobody’s ever going to ride any new bike and say “Shit, that sucks.”

Welcome to the Prisoner’s Dilemma

“The validation of their existence and the dopamine hit of volume sales outweighs the desire to build something where the whole team can prosper.” —Gary Bird, director, Hoops Velo (UK)

We’ve seen now how Perfect Competition imposes low profits on the entire industry and how Shimano and SRAM responded in completely different ways to the oversupply orders, each with its own advantages and disadvantages.

But I’d like to turn now to the long-term picture. What happens months or perhaps years from now when the current glut of product finally sells through and business finally returns to normal? I’m afraid the answer is, we go back to doing what we’ve always done, which is to say, “doing what we’ve always done.”

First, as I’ve said before, there’s no “returning” to anything. This, unless we decide to do something very significant about it, is the new (ab)normal, whether we like it or not. Remember, we’ve had excess inventory and pervasive in-season discounting in 18 of the past 20 years leading up to the COVID and post-COVID eras. And all the other principles of the Bike 4.0 era are still very much at work, both now and for the foreseeable future.

But even given all the above, why do brands and retailers continuously put perfectly good product on heavy discount even at the height of the selling season?

Two reasons. The first is pretty simple: year after year we make way too much stuff relative to actual market demand. And year after year, we do this because we have an industry that values sales volume over profits.

Gary Bird is the director of Hoops Velo, a single-location bike shop in Farnham, Surrey, in the U.K. When I put the question about product oversupply and resultant in-season discounting a LinkedIn discussion thread, he responded as follows:

“It's … that there are a number of 'players' in the bike industry where success is product out-the-door (volume) (turnover) and not profit. The validation of their existence and the dopamine hit of volume sales outweighs the desire to build something where the whole team can prosper.”

Amen to that, Brother Bird. We have an industry that measures its success in sales volume rather than bottom-line profitability, and this inevitably leads to inflated forecasts and concomitant oversupply. Now compare and contrast with Wayne Stetina’s interview and notice how many of Shimano’s strategic moves are made to either maintain or increase profits. Can you imagine any of the Quadrumvirate members doing that?

Me neither.

Combined with this is the second reason I promised to address earlier: In an industry dominated by the principle of Perfect Competition, there is always someone willing to sell stuff at discount, often a significant (or in the post-COVID years, a below-cost) discount. This is because being the first to discount product yields large (if short-term) benefits. In Game Theory, this is called the Prisoner’s Dilemma, and I wrote about it back in 2020. The formal version is more complex, but here’s how I applied Prisoner’s Dilemma to the bike business at the time:

“Logic would normally suggest that if everyone holds prices, everyone benefits,” I said. “But when there's an opportunity to drop prices, whoever sells out first gets the most benefit, which is to say, the most sales volume. Then everyone else drops their prices too, (to avoid losing even more sales) and all we end up doing is transferring the difference into the consumers' pockets who likely would have bought (many of) those same bikes, and at full margin, too, anyway.”

And guess what: that’s exactly what the bike business does, year after year. And it’s time for it to stop.

If you’ve read this far, thanks for your patience. Stay tuned for Part Three of this series, which is scheduled to go live Sept. 8. In it, I’ll interview a major industry player for their insights into the supplier thought process in over-ordering the current product tsunami, and offer some suggestions as to how we might extricate ourselves from the larger Perfect Competition/Prisoner’s Dilemma mess we’ve been in for the last quarter century.

Adventure Cycling's board: We're facing a crossroads

Steve Frothingham — Mon, 07 Jul 2025 14:18:27 +0000

In a guest editorial, the board of the Adventure Cycling Association responds to Diane Jenks' recent post about its Montana headquarters and its financial situation.

Editor's note: The board of the Adventure Cycling Association submitted the following response to Diane Jenk's guest editorial, which posted last week.

For nearly five decades, Adventure Cycling Association has been the heartbeat of long-distance bicycle travel in America. Born from the audacious dream of 1976's Bikecentennial — when 4,000 cyclists pedaled coast-to-coast to celebrate the nation's 200th birthday — we grew into the country's premier resource for bicycle touring and advocacy, transforming hundreds of thousands of lives through our three pillars of nonprofit programming: building high-quality routes, connecting cyclists through unforgettable experiences, and inspiring with incredible storytelling.

However, like many in the nonprofit and bicycle sectors, we're facing a crossroads that demands we reimagine how we fulfill that mission. As a nonprofit board coming from diverse sectors and spanning geography and age, we are united in grappling with these challenges by our shared love for bike travel and for Adventure Cycling.

After many months of collaboration, analysis, and discussion between staff and board, Adventure Cycling has made a difficult decision — we’re selling our headquarters and moving to a smaller space in Missoula.

This is just the latest in a series of challenging decisions we've had to make to ensure the financial future of our organizations: staff restructuring in early 2023 and in the first quarter of 2025, reductions in magazine production, price increases across membership and guided tours, and ending new life memberships as the cost of their benefits outweigh their investment over time.

Since 2020, we’ve also experienced three executive irectors in five years, impacts of the pandemic and inflation, and a decline in membership and guided tour participation. Without further major strategic decisions and changes, we will not overcome the challenges.

What started as a moment in time as Bikecentennial transformed over the next few decades into a national movement called, eventually, Adventure Cycling. For decades, we curated long-distance bike routes and sold print maps. We mailed publications, catalogs, and renewal reminders. We guided cyclists on tours based around the philosophy that sleeping under the stars and collectively sharing camp duties could connect us to one another on a deeper level than an all-inclusive model that held each rider’s hand. We created the resources and inspiration for cyclists to travel by bike in the U.S. long before anyone else.

In 1991, we bought a building in Missoula, Montana, and transformed it into a communal space for staff and a place of respite where traveling cyclists could share their stories. And that model worked. Until it didn’t.

With the move to crowdsourcing information on the internet, everything changed, and the ways people travel and plan their trips has been transformed. Of course, we made some adaptations: a website, Bike Bits newsletter, Companions Wanted, and a Bicycle Route Navigator app.

But there were many signals and trends we didn’t, or couldn’t, address, such as an increasing desire for low-traffic gravel and off-road routes, an aging membership, changes in media consumption, and for-profit competitors finding niches we weren’t serving.

Perhaps most importantly, considering digital and paper maps sales are a key part of our model, is the proliferation of digital navigation apps and websites that allow users to post cycling routes online for others to download for free. Sometimes those routes are ones Adventure Cycling has developed such as the Great Divide Mountain Bike Route.

That means that cyclists today can plan a trip from end to end using nothing but a computer or a phone without paying a dime. Ultimately, this is a good thing because it makes the bike travel world larger, so we must evolve with the market.

As our traditional demographic has matured, demand for higher-end tour experiences has increased: Once you reach a certain age, sleeping in a bed in a nice hotel begins to outweigh the community- and friendship-building benefits of camping out. That’s put our lo-fi guided tours in direct competition with luxury bike operators, and despite being competitively priced, we've seen a decline in tour participation for years. We’ve had to cancel many tours to the point that we can no longer cover the costs of operations.

Adventure Cycling discussed these shifts for over a decade, without making meaningful changes, and now we're facing a rapidly declining membership, many having aged out of the sport or needing to tighten their financial belts in a world facing rapid inflation and economic uncertainty. Those memberships and additional donations are a key funding source for covering the cost of our beloved magazine, the development of new, curated routes, and our advocacy work promoting safe bicycle travel.

Taken together, it means that we spent $1.8 million in reserves last year to fund operating losses. We cannot, and should not, continue down this road. And while we have 17 employees — thanks to the proliferation of remote work and our goal to hire the best employees wherever they are — this beautiful, 9,966-square-foot building in downtown Missoula currently hosts only eight Missoula-based staff members and a fraction of the visiting cyclists we greeted at our height between 2010-2016.

We love our building — it holds so many stories and memories, making it spiritually significant to many staff, members, and allies. The bikes, photos, and memorabilia covering its walls all talk. But there are fewer and fewer visitors and staff present to listen.

Despite this decline, we believe more people are participating in bike travel than ever before. We can see it in our website traffic, social media followers, and e-newsletter subscribers. We can see it in the excitement generated across the internet when we announce new routes like the 50th Anniversary Gravel Epic route we’re building now. This tells us that bike travel wasn’t a moment in time but a movement that spans generations, and that Adventure Cycling should be, too.

It’s the board’s fiscal responsibility to ensure that the spirit of Bikecentennial — that collective inspiration to ride across the country, changing the lives of all who participated — is passed along to today’s cyclists. Adventure Cycling can’t remain relevant in a changing world unless it, too, changes. We must preserve the resources we have to protect and perpetuate this important mission.

Although we plan to maintain a space in Missoula for staff and visiting cyclists, as a nationwide organization, the physical location in Missoula should not be conflated with the full breadth of our mission. Selling the building will allow us to use the investment that life members and donors gave the organization — an investment that has grown in property value — to help us adapt to our reality, giving us the runway to reshape our programs and resources to continue inspiring transformative bike travel experiences.

Changes to the organization and how we serve bicycle travelers are coming, as we’re committed to addressing brutal truths while maintaining faith in the mission. We look to the support of cyclists to help us now to make the big moves. You can support us with a donation here.

Noel Kegel, President of Wheel & Sprocket and Adventure Cycling Board Treasurer

Lael Wilcox, Ultra-endurance Bike Rider and Racer and Adventure Cycling Board Member

With support from the entire Adventure Cycling Board of Directors

Diane Jenks: The industry needs Adventure Cycling

Steve Frothingham — Mon, 30 Jun 2025 22:38:54 +0000

In a guest editorial, Jenks notes the touring organization is looking to sell its headquarters building.

By Diane Jenks

Diane Jenks is the host of the Outspoken Cyclist podcast. This guest editorial originally posted on Jenks' Substack newsletter.

For over 30 years, I have been a committed supporter of the Adventure Cycling Association. My particular support has come in the form of advertising for my business as well as referring many cyclists to the outstanding resources offered for the bicycle adventurer – from maps to apps. For many others, support has come in the form of membership and/or donations.

For those who aren’t familiar with Adventure Cycling, it began in 1973 and rolled into the broader bicycle consciousness in 1976 with a cross-country bike event called “BikeCentennial.” (You can read more about the history of the ACA here)

Recently, there have been rumblings that are shaking the underpinnings of the organization — declining membership, fewer monthly issues of the magazine, cuts in staff, and a revolving door of executive directors.

Of course, the issue is always about money in the end though; and all of these troubling concerns have led the board of directors to take what some are claiming is a draconian measure — putting the ACA headquarters building in Missoula up for sale.

In their most recent update, the board lays out its reasoning. But, I think it may be putting the cart in front of the proverbial horse.

In my mind, and I believe in the minds of staff, past, present, and future visitors, as well as thousands of members, this isn’t “just any building.” Over the decades, cyclists traveling cross-country as well as from all over the world have had the singular goal to stop in Missoula to “touch” this legendary place.

As one person put it, it’s a “bucket-list destination” housing the map makers, magazine editors, artists, writers, tour guides, and other service folks who were “in some way responsible for their journey.”

In addition to its extensive archives and working spaces, the building holds so many memories and dreams.

Traveling by bike is the type of adventure that, once begun, takes hold of you and doesn’t let you go until you experience the kindness of strangers, the beauty of the country, and that sense of satisfaction and excitement that comes with the final mile.

From a practical perspective, I am well aware of the changing demographic of the adventure cyclist. S/he may no longer ride a steel bike with loaded panniers for a self-supported 3-month cross-country journey. Younger folks don’t necessarily have that kind of time or even the desire for such a trip.

Today’s cyclist might prefer a trail over an open road and use gps instead of a paper map, but the adventure is still in the journey, and Missoula is still THE destination.

Next year marks the 50th anniversary of BikeCentennial and while I’m not certain what it will take to ride through the fire and come out the other side, I don’t believe that sacrificing what was and is the foundation of the organization – 150 East Pine Street in Missoula, Montana – is the answer.

Some things do need to change, and a new generation of cyclists need to be cultivated so that Adventure Cycling can once again thrive. In my opinion, THAT should be the goal.

Please contact the board of directors to let them know that the building, made possible through member supported funds, should NOT be sold. Write to: board@adventurecycling.org.