Tuesday, January 27, 2009
Whither the custom bike industry?
Talking to friends (both pro and non) in the framebuilding world, it's clear that orders and interest are way, way down (and personally, I can report that I've never had a slower January for orders, given that I've had zero so far). This probably has something to do with stunning declines in house prices and massive layoffs and banner headlines reporting them, but I digress. People aren't as flush with easy cash as they were, and I understand that putting food on the table comes before bike purchases, let alone *custom* bike purchases.
The question then becomes - what will happen to the custom bike "industry" in a true economic downturn? There's no question that a custom bike is a frivolous item for most people (heck, any high end mountain bike is frivolous!) Probably 80-90% of the custom builders currently in business started building in the last 10 years or so (myself included) and have never experienced truly difficult economic times. I have a feeling that half, if not more, of these folks (many of them my good friends) will be out of of business in 2009.
Was there a "bubble" in the framebuilding world? Probably. An awful lot of people decided to do this for a living who probably shouldn't have (many of them refinancing houses or taking out loans to pay startup costs), and the market is pretty darn saturated. I'm guessing the folks who are living frame to frame and scrimping by (this is a LOT of framebuilders, including many who charge $2000+ for a frame) will be the first to go, but I wouldn't be surprised to see almost all the custom bike businesses in the US go belly up in the next 2 years or so.
There will be carnage among the big box bike manufacturers as well, I predict. Most people don't need a new Madone every year, but many of them have been buying one anyway. That's probably over for a while, even with Lance back to pump up sales.
For myself, even if I run out of work to do, I'll continue building as jobs pop up, simply because my overhead is essentially zero (I work out of a large garage/shop at my house) - so even a bike or so a month (rather than 4 or 5) is plenty to make it worthwhile. So all you WW owners out there - don't worry, I'm not going anywhere.
I'm also hopeful that people will start wanting to hang on to their bikes for longer, and hence will see it as worthwhile to have them repaired. I've done several repairs of what most folks would consider beater bikes lately (mid 90s vintage Rockhopper type bikes). But honestly, if you can pay $50 to replace a broken dropout and keep your nice commuting bike running for another decade, I think it's worthwhile. Of course, fancier bikes are worth fixing too, and people will keep riding (and breaking) stuff no matter how bad the economy gets, I think.
Long story short, I'm not too proud to go work at the bagel shop if I have to, but I think that 5 years down the road, I'll still be building custom bikes and hopefully putting big smiles on the faces of the riders. Only time will tell.