The bike industry is screwed... Bikes are 50% off everywhere... What happens next?

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!  

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BMX, action sports, and the 2023 recession...

Here's a really good look at where the bike industry is, as things slow down going into 2023.  Recession?  We're probably in one.  Maybe.  But this guy from Top to Bottom MTB channel does a really solid job of explaining the wild ride of the whole bike industry since the beginning of 2020, how it got to where it is today, and where things seems to be heading.  It's a 7 minute video, well worth checking out if you ride any bike on a regular basis.  

As a Generation X, middle-aged geezer now, I remember being part of the BMX/skate industry in early 1989.  I was working at Unreel Productions, the video arm of the Vision Skateboards and Vision Street Wear empire.  Yep, kids, "street wear" happened about 35 years ago.  Anyhow, I was basically a production assistant at a company that sponsored skateboarders, snowboarders, and BMXers.  I used my business card to get into the big bicycle industry trade show in Long Beach, in January of 1989.  At that time, BMX freestyle had peaked in its first big wave of popularity, BMX racing was peaking in its 2nd big wave, and skateboarding was peaking in its 3rd wave of popularity.  

As I walked around, I literally heard the same mantra over and over, in several booths, and in small talk between industry people.  "BMX is DEAD!  Mountain bikes are the new thing."  I was a hardcore, if not that great, BMX freestyler, riding every night, just for the fun of it, at that point.  I kept thinking, "What are all of you talking about?  BMX IS NOT DEAD!"  It wasn't dead to all the hardcore riders around the U.S., and some parts of the world.  But it was dead to the major bike companies, and to the corporate sponsors form outside the sport.  They declared BMX dead, and money drained away from the sport.  The fad was over as far as they were concerned.  Almost every BMX freestyle brand dropped their teams that summer.  Top pro riders were left without sponsors.  All of the hardcore riders, regardless of what level our riding was at, went, "What the fuck, dudes?"  

The bad news was that it was really hard to get paid to ride a freestyle bike, even for many top pros.  GT and Haro kept their teams going, and toured their guys all the time, to sell bikes where they could.  This is what causes the waves (roughly ten year cycles) in BMX and skateboarding.  The major bicycle corporations that ride fads pulled their money out, along with corporations that sponsor from outside the bike and skate industries.  They are about profit only, and they ride the "fads" like surfers ride waves.  When one wave is over, they're on to the next one.  In 1989-1990, that meant money flowing out of BMX and skateboarding, and into the new things, mountain bikes (BMX bikes for "adults") snowboarding, and inline skating.  

The good thing about these downturns in the waves, only the hardcore people are left, in the sport aspect, and in the indsutry.  Vert skating was still ruling skateboarding in 1989, but street skating had been slowly rising in popularity.  In the down years, the long economic recession of the early 1990's, World Industries rose up, sponsoring street skaters only.  Many skater-owned companies popped up, like New Deal, Black Label, Blind, Birdhouse, Plan B, 101, and others.  In the BMX world, S&M Bikes was just really getting going as the downturn hit.  Soon after came Standard, Hoffman, Eastern, FBM, Kink, and other rider-owned companies.  In both BMX and skateboarding, the riders and skaters took over their industries.  

Riding and progression didn't slow down, it sped up.  Contests became local events, the big glam events ended.  The main sponsors of BMX and skateboarding in the early 1990's were ramen (23 cents a pack), Del Taco (49 cent tacos), Taco Bell (59 cent tacos), and in the Huntington Beach area, What-a-Lotta Pizza, with $4 cheese pizzas and $5 pepperoni pizzas.  We ate so many of those pizzas at the P.O.W. House, that when no one ordered a pizza for three days, the manager of the local What-a-Lotta Pizza called us up to see if we were alright.  Seriously, that actually happened.  We promptly ordered 4 or 5 pizzas.

If you read my blog on any regular basis, you know I'm an amateur futurist, I write posts about economics, recessions, and shit like that.  (Thank you to the 7 people who read each of those posts).  I think we are now going into a Big World recession, and it will last a while.  A lot of action sports companies will downsize, some good riders and skaters will lose sponsorships, some will get smaller deals, and some industry people will be laid off.  This is already happening in the high tech world.  

But these sports are like a fungus, they never really go away.  They go underground.  Events like Steve Crandall's DIY comps, and Trey Jones' Swampfest will probably be the norm for two or three years.  All the sports will continue to evolve, and a lot of the idiots will wash out of these sports (sorry, not me, I keep blogging from way outside the industry).  The people who really love action sports, athletes and industry people, will stick around.  A lot of crazy ideas will be tried, and really cool new shit will emerge on multiple fronts.  But you might have to get a day job.  Or flip stuff on eBay to  help survive.  When you run out of food, ask one of us geezers who survived the 90's, we all have at least 7 different recipes for ramen meals, most that can be made for under a $1 each.  

In a surfing metaphor, the big set of waves has passed, in the business world.  Now we wait, and try new ideas using very little money.  In a year or two, things pick up some, in 3-4 years, big money will probably flow back in, much more than before.  That's a rough timeline, The Fed is pumping and dumping the economy these days, and they set the time schedule.  Generally, every wave of these sports gets bigger than the last.  Except inline skating, fruitbooting just kind of fizzled. 

This is a BIG recession in the Big World, like nearly all of the world, the big shots who run political parts of the world, and the financial world, are battling it out, and all of us regular people get sloshed around in the meantime.  The world will look quite a bit different in 5 years.  Those of you who try out new ideas, and build some good new shit, will be rewarded down the road, most likely.  All of these sports are much, MUCH larger than they were in the 1990's, so BMX, skateboarding, and other action sports can't totally die, like they nearly did back then.  But things are slowing down.  This happens about once a decade.  Now is when it gets fun.  Learn to live cheap, and think about where you would like to see things at in 5 years.  Then do some DIYing and make something cool happen.  Ride on!

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Bike industry slow down in 2023?

Too much inventory?  Slow down in demand?  How will the recession affect the bike industry (including BMX)?  Rob here give you his thoughts.

I'm way outside the actual bike industry, totally out of the loop on traditional industry insider news.  But I'm an amateur futurist, among other things, who's been blogging about a "the next Great Recession" since 2017 or early 2018.  I just geek out on economic and future trends.  Covid should have been the start of a LONG major recession, but The Fed (Federal Reserve), created $5 to $6 TRILLION dollars in 2020, and threw it at the economy.  Bailouts, "Quantitative Easing", super low interest rates, stimmy checks, PUA, PPP, and all sorts of other programs tossed loads of money at Wall Street, big banks ,businesses, city, state, and county governments, and most of us individuals.  Yep, even I got some.  We were all hood rich for about a year, when this current recession should have been happening.  All that money is why we have the current high inflation.  Big influxes of new money devalue a currency, and in 12 to 18 months, prices rise to adjust to the lower value of the currency.  Hey, the party was fun... while it lasted.  That's the nature of parties.  

But now The Fed (and other central banks around the world) is stuck.  They've been raising interest rates to fight the 40 year high inflation.  But that has caused a major drops in the inflated prices of stocks, crypto, and the downturn of the real estate market in many areas.  If they back off and create more new money, inflation takes off and goes even higher.  So they're driving us into a major recession, intentionally, to fight the inflation they caused by bailing us all out of the pandemic business shutdown crash.  So things are all out of whack, in nearly every business category, in nearly every investment category, in ost of the world.  Uh... bummer.  

The bike industry is small, pidly compared to the really big industries, like food, oil, chemicals, telecommunications, cars, and of course, high tech.  But it's still a decent sized industry, and employs (and sponsors) a lot of people.  It looks like we're in for a slowdown.  From my vantage point, this reminds me of heading into the early 1990's, which became a loooong recession/stagnant period.  BMX "died" in 1989.  Sponsors dropped nearly every freestyle team, except Haro and GT, as I recall.  

I know nothing of this youTube channel above, but Rob in the video makes a lot of sense, and does it in under 5 minutes.  If you ride, work in the industry, or are sponsored by anyone in the BMX, MTB, or other parts of the bike/action sports world, watch this video.  Then do some research with the industry people you deal with.  See how things are in your part of the industry, and if you need to make some changes in what you do.

I just found another video on this subject, recorded on Black Friday, November 25, 2022:

GC Performance- "The Bike Industry has a Big Problem Coming!"

Here's a written article in Bicycle Retailer, by Rick Vosper, from October 2022- "2023 may be new, but it definitely ain't normal"  

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