This is Josh, from Daily MTB Rider channel, giving the lowdown on the crazy state of the massively overstocked bike industry right now. Long story short, pretty much everybody's got a ton of inventory they're trying to get rid of right now, and sales have dropped off dramatically from last year. And we're heading into a serious recession.
To begin, I've had nothing to do with the bike industry since the mid 1990's. In the 1980's, I worked at two magazines (BMX Action and FREESTYLIN') for few months. Then came the AFA for most of 1987. Then I worked at Unreel Productions, Vision Street Wear's video company, for 2 1/2 years, when VSW was the biggest clothing sponsor in BMX. In the early 1990's. I spent four years as a roommate to a guy who owned a little, upstart BMX company, which is now one of the BIG BMX companies, actually two BMX companies. So for about a decade, I was in or around the BMX industry, if not actively involved in a bike or component company. But that was a LONG time ago. I kept riding daily until 2003, but was out of touch with the industry.
I was there in January of 1989, at the big bike trade show in Long Beach. Walking around the show, I literally heard, over and over, in booth after booth, "BMX is dead, mountain bikes are the new thing." The big money pulled out of the BMX bike market, and BMX "died." It didn't die to us hardcore riders, but most of the industry and money walked away. At the Brooklyn Banks 2-Hip Meet the Street contest in the late summer of 1989, I had a room as a Vision/Unreel cameraman, with a pro rider. Dennis McCoy, Mat Hoffman, Steve Swope, Rick Thorne, and a couple other Kansas City riders wound up sleeping on the floor of our room, because they didn't have sponsors. That's how much money had been pulled out of the BMX world. The top vert rider and top overall rider, Mat and Dennis, didn't even have sponsors for a while.
Riding went underground, and first Ron Wilkerson with 2-Hip, and later, Mat and Swope with the B.S. contests, kept BMX freestyle comps alive. During those years, S&M Bikes, Hoffman Bikes, Standard Byke Company, FBM Bikes, Eastern Bikes, and several other BMX related companies, either started in business, or grew into the roots of BMX and freestyle. From 1990-1995, the riders took over the BMX industry.
Now in the early 2020's, I think we're going to see another huge breaking down and rebuilding of the BMX and overall bike industry. How can I say this, as a fat, ugly, Old School BMX industry Has Been who's outside the industry? Because I'm predicting this for EVERY industry. My geek side has been an amateur futurist, a guy looking at economics, future trends, and shit like that, for over 30 years now. I think we are in The Big Transition, as I call it. We are not totally out of the fading Industrial Age society, but we're not fully into a functional Information Age society yet. We're about 3/4 of the way through the transition period between the two. Click this link to learn more about The Big Transition.
In the spring of 2019, I did some online work for a kickass bike shop that wanted to open an online business. That ultimately didn't work out. But I was telling the owner the same thing back then. "There's a HUGE recession coming, and it's going to force a complete change to the bike shop and bike industry business model. At the time, April and May of 2019, that didn't make sense to him. I get that. My weird world view was based on reading all kinds of obscure books about trends (like Alvin Toffler's Revolutionary Wealth- 2006), 30 years of observing financial markets and trends, and what I had learned about internet marketing and internet businesses, as a long time blogger.
But there's no denying that there's some major change ahead for the BMX and over bike industry now. AND nearly every other industry. This didn't happen just because of Covid-19. It was going to happen anyhow. The pandemic just made this change happen much faster, by screwing up the supply lines, and the economy overall. A ten year transition got fast-forwarded into a 3 years of chaos, and now the afternath of figuring out new business models for the future.
Here's the takeaway from my perspective. Now, 23 years into the 21st century, we have a world where everyone has smartphones, and money can zoom around the world in seconds. A potential customer can test ride a $3,000 mountain bike, or a $1,200 BMX bike, in a bike shop. Then they can walk out to their car, in the parking lot of that bike shop, and order the exact bike for $100 cheaper online. In this changing world, what is the role of a bike shop? What is the role of a bike manufacturer? If kids don't all get $200 BMX bikes as 9-year-olds, will very many want to ride high end BMX bikes in their teens and 20's? Or will they do wheelies on big wheeled BMX cruisers or ride mountain bikes? I think bike shops will have to completely change their business model to survive. They won't make their money off of selling bikes in the future, as crazy as that sounds. So what will the main revenue source be? The same for manufacturers, I don't think they will make their money selling bikes in the future, I think some other aspect of the business (maybe media?) will turn into the primary revenue source.
I don't think this because I have some special insight into the bike world. I'm totally out of touch, and I admit that. I think this because it's happening in every other industry as well. So that's my basic thoughts, heading into Thanksgiving Weekend, Black Friday, Cyber Monday, and then a God-awful recession in the months afterwards. I think the bike industry, and many other industries, are heading "back into the early 1990's," or a time much like it. A time of TRANSITION.
What will the bike and BMX industries become? Hopefully a better version of the best that they have been. Time will tell. Feel free to dive into the comments about this post on my Facebook.
Happy Thanksgiving everyone!
I'm doing a lot of longer form writing on a platform called Substack now. check it out:
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