Bike boom - is it over?

[Danger Dassie]

On 7/21/2022 at 7:13 AM, PhilipV said:

Going back to topic. 

I think the 2nd hand market might be a good indicator of the bike boom. 

I haven't been following it lately, but there was some bikes selling for shockingly high prices. Is this still going on, or has it slowed down. 

Another indicator is events. Once the euphoria of being allowed to go to events again wears off, if times are tight, I think event entries WI take a dip as well. 

This, the smart ones in the industry will be keeping an eye on the second hand market pricing. As this is a pretty accurate indicator of demand. Gravel bikes seem to be a good example.

[BigDL]

Over here, the bike shops are saying that they cannot fulfil the demand at the higher end. I was chatting to a shop owner the other day who says that custom builds are most affected, often because of not being able to get one or two components.  A mate of mine took delivery of his new bike on the weekend from Ribble. It was supposed to be delivered in March, but was delayed because they couldn't get some of the Ultegra parts to build the bike. At the same time, it seems that the biggest growing industry in the UK is Charity Food banks 

[Shebeen]

On 7/20/2022 at 1:05 PM, madmarc said:

Ye i really feel for the younger generation trying to get into the system - Buying a house - starting a family

I remember as a youngster buying my first house when the interest rate was 23% 

 

The lessons I learnt were passed onto both my kids who both live debt free today.

so many people talk about buying a house during this 24% repo rate period. Must have been like a train station at the deeds office July 98.

 

 

Debt is not all bad.

Borrowing money is one thing, what you do with it is another sport entirely.

*buy a house, install pv on the roof, start a business with long term profits - generally good.

*take out a personal loan to go on holiday, have a huge wedding, a car that is fancier than your budget - debatable

*invest in stocks - risky as hell

 

If you're scared of debt at all costs, you're less likely to be either poor or rich.

 

[BigDL]

1 hour ago, Shebeen said:

so many people talk about buying a house during this 24% repo rate period. Must have been like a train station at the deeds office July 98.

 

 

Debt is not all bad.

Borrowing money is one thing, what you do with it is another sport entirely.

*buy a house, install pv on the roof, start a business with long term profits - generally good.

*take out a personal loan to go on holiday, have a huge wedding, a car that is fancier than your budget - debatable

*invest in stocks - risky as hell

 

If you're scared of debt at all costs, you're less likely to be either poor or rich.

 

Lol - I didn't buy a house, but I bought a BMW 320 just before the rate went through the roof. Was paying prime + 2% if I remember correctly and the payments went through the roof. Cured my 25 year old self of any desire for fancy cars after that. 

[dave303e]

1 hour ago, Shebeen said:

so many people talk about buying a house during this 24% repo rate period. Must have been like a train station at the deeds office July 98.

 

 

Debt is not all bad.

Borrowing money is one thing, what you do with it is another sport entirely.

*buy a house, install pv on the roof, start a business with long term profits - generally good.

*take out a personal loan to go on holiday, have a huge wedding, a car that is fancier than your budget - debatable

*invest in stocks - risky as hell

 

If you're scared of debt at all costs, you're less likely to be either poor or rich.

 

ya I think the tough thing today is the relative income to housing price ratio.

https://businesstech.co.za/news/wealth/219897/this-one-graph-shows-how-the-average-salary-has-changed-in-south-africa-over-the-past-70-years/

https://businesstech.co.za/news/trending/120187/average-house-prices-in-south-africa-1995-2015/

Average sallary in 2000 ± R95k/year, Average Sallary in 2016 R108k/year

Average house in 2000 R250k. Average house in 2015 is R1,35mil

Fun and games trying enter the housing market as an average South African now. Even with Repo at 25% years ago, it was still more affordable. 

[Paul Ruinaard]

I keep reading about all this stuff and like everything that goes up it has to come down as the demand drops off for whatever reason. Hindsight and experience is a great teacher of the long game in all things, bikes included. Even the chip shortages are easing and in fact there is predicted to be a glut. Watch and wait until oil hits $ 30 per barrel again. Cycles happen. Anyway theres going to be a lot of very expensive bikes that are going to have a very large depreciation when the owners realize they have paid top dollar for something which is essentially the same as the cheap option functionally. Bike ate the high end are laughable in terms of the justification for the prices. Time to reap the whirlwind.

 

[BigDL]

47 minutes ago, Paul Ruinaard said:

I keep reading about all this stuff and like everything that goes up it has to come down as the demand drops off for whatever reason. Hindsight and experience is a great teacher of the long game in all things, bikes included. Even the chip shortages are easing and in fact there is predicted to be a glut. Watch and wait until oil hits $ 30 per barrel again. Cycles happen. Anyway theres going to be a lot of very expensive bikes that are going to have a very large depreciation when the owners realize they have paid top dollar for something which is essentially the same as the cheap option functionally. Bike ate the high end are laughable in terms of the justification for the prices. Time to reap the whirlwind.

 

What luxury products have dropped in price after a rise before? Other than houses and fuel of course? 

[Paul Ruinaard]

Hmm many things - i remember the PC going under $ 1k which was a massive revelation. Tech in general and Moores law etc - the power has steadily increased and the price dropped of all your home goods when compared to what was seen as a luxury. Accessibility to air travel etc etc etc. People commute on aircraft like they used to catch a bus.

Macro trends always dictate that luxury goods also have no inherent value so are really just marketing - diamonds, gold, high end cars, watches etc. All of them tell the time, provide transport or some functionality that can be achieved much cheaper. Same with bicycles, which the Europeans get. the same steel or ally framed road bikes that are a third of the price even nicely specced do 99% of the job for the same task. Its us who is easily conned in to believing there is extra value in luxury. You dont need it.

[throttles]

4 minutes ago, Paul Ruinaard said:

Hmm many things - i remember the PC going under $ 1k which was a massive revelation. Tech in general and Moores law etc - the power has steadily increased and the price dropped of all your home goods when compared to what was seen as a luxury. Accessibility to air travel etc etc etc. People commute on aircraft like they used to catch a bus.

Macro trends always dictate that luxury goods also have no inherent value so are really just marketing - diamonds, gold, high end cars, watches etc. All of them tell the time, provide transport or some functionality that can be achieved much cheaper. Same with bicycles, which the Europeans get. the same steel or ally framed road bikes that are a third of the price even nicely specced do 99% of the job for the same task. Its us who is easily conned in to believing there is extra value in luxury. You dont need it.

So True.. Sadly it's the Retailers and Manufacturers that capitalize on demand and the willingness of us to part with cash.. 

[HgR]

I believe this is only the beginning. 
in my opinion, the industry needs a few new innovation. 
something that makes high-end components and bikes, more specifically e-bikes, available to the masses and not only high-income population groups.

 

[throttles]

7 minutes ago, HgR said:

I believe this is only the beginning. 
in my opinion, the industry needs a few new innovation. 
something that makes high-end components and bikes, more specifically e-bikes, available to the masses and not only high-income population groups.

 

There are more affordable options.. WE choose the “Premium Brand” and are willing to pay the premium that comes with it.

Darkhorse ebike as an example..

Titan Racing bikes another example, same components as the “Premium Brands” Ultegra/AXS/RockShox Ultimate etc etc..

Titan and Darkhorse are local brands and mostly have stock available. But the waiting lists for SWORKS bikes for double the price 😬🫣 

 

[_David_]

42 minutes ago, throttles said:

There are more affordable options.. WE choose the “Premium Brand” and are willing to pay the premium that comes with it.

Darkhorse ebike as an example..

Titan Racing bikes another example, same components as the “Premium Brands” Ultegra/AXS/RockShox Ultimate etc etc..

Titan and Darkhorse are local brands and mostly have stock available. But the waiting lists for SWORKS bikes for double the price 😬🫣 

 

Guess it boils down to social status.

Edited July 27, 2022 by _David_

[117]

33 minutes ago, throttles said:

There are more affordable options.. WE choose the “Premium Brand” and are willing to pay the premium that comes with it.

Darkhorse ebike as an example..

Titan Racing bikes another example, same components as the “Premium Brands” Ultegra/AXS/RockShox Ultimate etc etc..

Titan and Darkhorse are local brands and mostly have stock available. But the waiting lists for SWORKS bikes for double the price 😬🫣 

 

When last did you ask for a price on a Titan? Sorry to knock them but they aint cheap either and are also enjoying the high price bracket into 6 figures. I can share a quote with you if you like? 

The 'premium' brands only bring in limited stock so they are not left with too many on the shelves at the end of a season - its us that blame a short supply. And Sworks, in my opinion, is above the premium level (crazy) so you have to be prepared to part with a lot more ronts just to have that sticker on the frame just to be cooler than the kid next door. 

I think if you compare apples for apples on the high end price bracket, you'd find you get many similar spec bikes. The only differece is some have a higher re-sale value than others

The other side of the boom comes in with the 2nd hand market being driven by coin hungry dealers that are riding the wave. Ive seen a friend recently pay about 18k more for a 2nd hand bike than what it was actually worth.. and thats from a well know dealer off this hub. 

The point is that to eclipse the boom it needs to have a hair cut first, and with credit being so readily handed out to any Tom, Brett and Mary - it tends to exacerbate the situation into keeping it boomed. Its crazy, you can get finance for a 2nd hand frame these days... and people take it!

Go watch a movie on Netflix called The Big Short - that'll give you a very good perspective on the boom (its a dark comedy too, so it does have some humour in it), but you'll be able to substitute the characters for brands/suppliers/ dealers to get a better perspective 

[stringbean]

On 7/20/2022 at 3:36 PM, ouzo said:

next week my wife's company have a meeting about new working structures. We are very worried they are going to want her to come back to work at the office. Its not just the fuel, its also the cost of the day care for the kids.

It’s a really really tough situation.My worry is that there is very little between “work from home twice a week “ and stay at home permanently.

At my wife’s work most of the staff that are coming in only a few days a week have been retrenched.The downside of working from home is that someone else can also do your job remotely and perhaps at less pay

[Jewbacca]

Paul is not wrong.

A number of luxury items are exorbitantly priced when released and decrease as the market floods. 

Tech is a big one. New tech is ridiculous but equivalents can be purchased soon after release, which drives down the original prices. 

Metals, gems, bikes, cars.... We are suckers.

What makes diamonds valuable other than the fact that we believe them to be valuable? The industry NEEDS you to believe in it's value. Built on the backs of slaves, death, theft, land appropriation etc... In this woke day and age, diamonds should be shunned super hard.

We dictate what we need a lot of the time and growing up 'affluent' in SA, we are pretty used to excess. 

[throttles]

7 minutes ago, 117 said:

When last did you ask for a price on a Titan? Sorry to knock them but they aint cheap either and are also enjoying the high price bracket into 6 figures. I can share a quote with you if you like? 

Yes, but the same spec'd SWORKS or Trek how much more would that be.. With only a different frameset/Wheelset? Yes this would be the "sticker" on the frame as you say.

9 minutes ago, 117 said:

The 'premium' brands only bring in limited stock so they are not left with too many on the shelves at the end of a season - its us that blame a short supply. And Sworks, in my opinion, is above the premium level (crazy) so you have to be prepared to part with a lot more ronts just to have that sticker on the frame just to be cooler than the kid next door. 

I don't agree here wrt limited stock, They order as much as is available to them. They typically have a season end clearance at the end of season @Cost plus a smaller margin. There has been a shortage over the past 2 years or so, new stock coming in but I've seen retailers reselling a second hand frameset for very close to the price of a new one.

13 minutes ago, 117 said:

When last did you ask for a price on a Titan? Sorry to knock them but they aint cheap either and are also enjoying the high price bracket into 6 figures. I can share a quote with you if you like? 

The 'premium' brands only bring in limited stock so they are not left with too many on the shelves at the end of a season - its us that blame a short supply. And Sworks, in my opinion, is above the premium level (crazy) so you have to be prepared to part with a lot more ronts just to have that sticker on the frame just to be cooler than the kid next door. 

I think if you compare apples for apples on the high end price bracket, you'd find you get many similar spec bikes. The only differece is some have a higher re-sale value than others

The other side of the boom comes in with the 2nd hand market being driven by coin hungry dealers that are riding the wave. Ive seen a friend recently pay about 18k more for a 2nd hand bike than what it was actually worth.. and thats from a well know dealer off this hub. 

The point is that to eclipse the boom it needs to have a hair cut first, and with credit being so readily handed out to any Tom, Brett and Mary - it tends to exacerbate the situation into keeping it boomed. Its crazy, you can get finance for a 2nd hand frame these days... and people take it!

Go watch a movie on Netflix called The Big Short - that'll give you a very good perspective on the boom (its a dark comedy too, so it does have some humour in it), but you'll be able to substitute the characters for brands/suppliers/ dealers to get a better perspective