How Covid-19 is Affecting the Bike Industry
Hey guys, Dustin here, CEO of Sixthreezero. It's been a while since I've done one of these videos. Lots have been going on in the world, so today I wanted to talk about COVID-19 and bicycling or the bicycle industry. It's had a huge effect on the cycling industry, in particular, as other many industries, both good and bad. But today I'll just give you a little more insight into what's going on in the bike industry.
COVID-19 started to kind of have a major effect on the US in early to mid-March. Things started shutting down, Disneyland, the NBA. A lot of closures happening around March 16th, at which point sales in the bike industry started to increase drastically. I think, as a lot of you know, as there have been limited opportunities to do things indoors, and there are no sports, there are no movies, cycling has become now a popular way of getting out and enjoying the outdoors, I think, as have a lot of outdoor activities. In particular, I know other activities for children, trampolines, things like that are also experiencing a surge.
To give you guys some idea of what this looks like in the context of how big of a surge has it been, this is the largest recorded bicycle sales year in the last 50 years. We, as a company, are experiencing somewhere around 100 to 150% increase in units. The other thing is that this is not just happening in the US. Obviously, this is a global pandemic. So this is affecting countries all across the world in terms of what activities are available to be done.
Now, the other thing that's happened. In March, a lot of bike companies had enough stock leading up until March, April, May, and a lot of that inventory got sold in March and April. And I think you found heading into the backside of April and May, most, if not all, bike companies in the US were on very limited stock or completely out of stock. I look around right now on different companies' websites or through word of mouth and still seem like major players in the industry are low on inventory, as are we. And now, when a lot of bikes come in, they sell very quickly or we've already got back orders and pre-orders lined up for much of the inventory. So, for us, it's been quite a challenge to try to get additional production.
The other thing that's been a challenge is now there's additional pressure on the factories. And interestingly enough, it's not just the bike industry, but as this whole pandemic hit, people were stocking up on all sorts of supplies, toilet, paper, hand sanitizer, food. In general, the importing and the production of goods across the US increased drastically, so this also put pressure just on raw materials and getting things here from overseas on ocean freight. So it's not just been the delay at the factories, it's been the delay in the shipping, delay in FedEx. We're experiencing now overfilled FedEx facilities. Packages will go to their warehouses and sit for one to two to three days before they even start moving.
So it's been a really interesting journey. We've come out sort of on the other side of it. It's still very much increased demand over last year. We feel like we're doing a better job of managing. I know we're not perfect, but it's been a real challenge to, number one, sort of understand the demand and, number two, manage the business really on a whole pre-order system, which we weren't used to doing, especially at this kind of volume. But again, this is happening industry-wide. I think if you go to bike shops, you're going to see much less production.
Now, from what I've heard, a lot of bike companies are going to have more inventory as we head into August and September. The one interesting thing also now is lead times for the bicycle industry are pushing back all the way into March of next year. So as the demand is increasing, all the suppliers' lead times are getting longer and longer and longer. In particular, a brand or company many of you know, Shimano, is getting lots of supply chain pressure. They've been affected by some port closures in Japan, Malaysia, where a lot of their production is done in addition to factory closures for different precautions and things like that. So Shimano's lead times are getting longer and longer and longer to the tune of seven to nine months.
I wouldn't be surprised if we continue to see a bicycle shortage into next year into March. At this point, into the foreseeable future, I don't see COVID going away, at least until after the new year, and I think we're all hoping sooner, but we don't know. In any event, it's been a challenge to find a bike. It's been a challenge to find the bike you like, the colors, and to have it not sell out. Again, it's something in the bike industry we haven't experienced in 50 years. I hope for those of you that have got back into biking because of this, you have reconnected with it and you love it more than ever.
So that's it. I hope that explains a little bit. If you guys have any questions, comments, put them down below. I'll try to answer them and get back to you. And don't forget, if you are in the market for a bike, check out our body fit quiz. It's at the top of our website. That'll help fit you according to your size and your riding types. You can also customize it, although our customizer is down right now. We hope to have that back up in a few weeks once we can get the processes a little bit more streamlined.
We also have a 365-day return policy. So if you buy a bike, you don't love it, you have 365 days to return it and try it out. A lot of our bikes are on pre-order now, but if you do want something, I suggest jump on it. Things are arriving anytime between now and October-ish, and we're going to keep trying to get more and more inventory in. Thanks for listening. Enjoy the ride.
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