Zoom out far enough and anything can look simple. Here in the bike business, our supply chain is pretty basic.
It’s a product-focused model. Suppliers design products they think people might want to ride or own, sometimes with market research, but usually the kind of products they’d want to ride or own themselves. Factories produce, aggregate and finish those products. They’re shipped to the supplier, who distributes them via a network of independent retailers. Retailers sell those products to consumers who hopefully enjoy them and come back for more.
So, factories and suppliers make and distribute products, retailers sell them and customers buy them. Sounds simple, right? And it is, until you look at the fact that the model is not as successful as it might be.
Here’s proof: Bike units have been essentially flat since the turn of the millennium.
The chart below (click to enlarge) comes from Jay Townley’s Human Powered Solutions company. In it, the spiky blue lines are the annual numbers we usually see. The smooth orange line is a rolling five-year average. And that flat-as-a-skillet dotted orange line? That’s the linear trend over 18 years. It’s actually up about 10% since 2000, but as you can see, the …read more