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That's exactly what's been happening recently, a good analogy is that the port is like an airport, your passport doesn't get stamped until you leave, in this case the stamp being the tariff isn't applied until goods exit the port facility.
It's probably not the biggest deal for mountain bikes, but this strategy will increase prices regardless as it shortens supply on the market so the price will go up until the product clears the port and can be sold.
Trump has now definitely blinked in relation to Chinese tariffs seeing that Xi has a lot more stomach for pain than he does.
The interesting, but not bike related part is the commerce department have started their investigation so he can place tariffs under Section 232 of the the 1962 Trade Expansion Act, these will be on pharmaceuticals, silicon, rare earths etc. Essentially everything that was on the 37 page exemption list on the April 2nd announcement
I believe the majority of Fox sales in Europe are made by the companies assembling bikes here like Canyon, YT etc and these numbers are obviously not small...
When Fox setup an entity in the UK, the team from Germany were seemingly running that process and training the UK staff etc, so it seemed like the German team were quite integral to the wider European operation. Good people and unfortunate to see the layoffs.
something about the ari theft felt fishy from the get-go. not "insider job" fishy, but something just felt off. the BR article seems to confirm that, that it wasn't just a random trailer being grabbed, the thieves knew what they were after.
Silca is not releasing it;s newest product (mini-inflator) in the US due to tariffs: https://escapecollective.com/silca-elettrico-pumps/
Lots of good insight, and I thought this breakdown was really helpful
"Ideal world:
COGS: $42
Shipping: ~$2
Import Duties/Paperwork fees ~13%: $5.46
'Landed COGS': $49.46
Price to bike shop: $90/ Silca Gross Profit: $40.54 / 45%
Retail: $149 / Bike Shop Gross Profit: $59 / 40%
With Trump 45 Tariff on Chinese-made goods (2018):
COGS: $42
Shipping: ~$2
Import Duties/Paperwork fees ~13%: $5.46
25% Trump 45 Tariff: $10.50
'Landed COGS': $59.96
Price to bike shop: $98/ Silca Gross Profit: $40.05 / 38.8% (42-45% is ideal)
Retail: $149 / Bike Shop Gross Profit: $50 / 33.5% (again 42-45% is ideal)
Trump 47 tariff now at 145% (April 2025):
COGS: $42
Shipping: ~$2
Import Duties/Paperwork fees ~13%: $5.46
145% Trump 47 Tariff: $60.90
'Landed COGS': $110.36
Price to bike shop with 38% Gross Profit: ~$180
Bike shop price to customer 35% Gross Profit: ~$275
A gross profit margin of 40% or higher sounds ridiculous but it's not, said Poertner. That margin has to cover all of Silca's other business costs, for example over a year's salary for the engineer working on the Elettrico project (and said engineer's health insurance, employer share of FICA taxes, and costs like software subscriptions). "Just in engineering expenses and tooling directly related to this project, we're talking ~$174,000," said Poertner. "So if we're making ~$40 per unit, we need to sell 4,350 of them to pay off the project costs.""
Nice to see a business pull the curtain back and lay it out in clear terms.
40% GM on any physical goods should be a minimum at each stage of the value chain in any sector. Below that, there's then not enough margin to cover taxes, overheads, build in marketing budget respective of the stage in the journey so the whole ecosystem becomes precarious.
Hats of to Silca for showing the numbers and really contextualising it.
Uh oh every brand selling complete bikes in the industry except the most entry-est level of hardtail from the biggest brands at their A++ level stores.
I believe that Parts&Accessories and budget bicycles typically follow the 40% guidance, but with higher dollar margin items the % drops off significantly. Not hard rules, but P&A is the profit earners for shops.
Yup - I remember returning to tech industry last year after a decade in bikes and thinking "holy sh** people have budgets, forecasts and turn profits?!?"
Sorry KP, I should have specified in my somewhat facetious, off-the-cuff comment that I was talking about complete bikes! Fixed now!
I will also add that on the shop end we saw significant degradation in the 40-50% P&A margin across a lot of brands and categories over the last 10 years. Most things stayed in that range but a number of top seller products and brands saw those margins shrink across the board. We'd see stuff like our bread and butter basic pedal remain the same MSRP YOY but have the margin shrink to account for inflation. Same with our best aftermarket grips. That kind of thing. A little here, a little there, year over year, added up to quite a bit. I'm sure it wasn't just going to the internal margins either. KP is absolutely correct that higher margin items see margins collapse. Trainers and electronics are particularly bad - I recall not even wanting to carry certain GPS units and power meters - some brands were asking us to take at- or below- 20% margin and customers would expect us to do whatever Amazon did on Black Friday on the daily. Can I have a deal on this? No!
Don't ask a woman her age, a man his salary, or a Canadian bike shop manager the margin they're making on that XTR derailleur.
Can someone take a stab at explaining the tariff charge amounts on these products? The amounts aren’t very intuitive.
Silca just uploaded an excellent video on this very topic using their new electric pump as an example
The trainer is probably made in Taiwan, so it's currently at a 10% tariff. The HR monitor is almost certainly from China, so it's currently being tariffed at 145%. In both cases, there may be other earlier, category-specific tariffs already in place. But, if you're just looking at what's new, it's the 10% and 145%.
As explained earlier, tariffs apply to what Wahoo is paying their vendors for these products (not what Wahoo prices these items at). They may have inventory of a lot of these products in their domestic warehouses, so those aren't currently costing them any more. But when they reorder them, they will. Like I said in my earlier post, their newest product, the Trackr Radar thing, is getting a $50 tariff surcharge. They probably hadn't even taken delivery of those before the tariffs hit, so that's why the surcharge is so high relative to MSRP ($199).
Mons Royale is pausing sales to the US starting May 1.
Hope it's OK for me to stretch this thread a bit to something more like "the business side of mountain biking."
Question is re OneUp. They just announced a new flat pedal, but it doesn't seems like they had any pedals out to websites so that reviews would drop at the same time as the announcement. If I remember correctly, they also did this with the clip pedals.
Given the issues with the clip pedals and the novel 1/2 concave, 1/2 convex shape of the new flat pedal, it seems to me like they would have benefited from having some reviews drop concurrently with the announcement. I own three droppers and bars, so I like OneUp plenty and am not trying to criticize.
Can anyone with industry knowledge on these sorts of decisions share some of that knowledge?
Not in the bike industry, but in movies there is a correlation between how early reviews are released and eventual ratings on Rotten Tomatoes. The longer the gap is between the review release and theatrical debut, the higher the score is: Embargo dates and Rotten Tomatoes scores: What's the relationship? | Mashable
This probably doesn't relate 1:1 with MTB, especially as small companies likely do not have the means to ship tons of product or people around.
i certainly get where you're coming from - one thought I had however, is that maybe not every components needs a pre-launch review?
while i don't ride flats, this seems like a cool idea, and its nice to see them trying something different.
Hi DWM,
From an industry perspective, getting product out to media for early review is time intensive and not always doable based on product arrival dates. With the current Tariff disruptions making timing harder it might not have been something they could do?
It's usually a good move to have reviews come out at your product launch date, since that gets you clicks and hopefully dollars, but there's lots of reasons you might not want to drive a ton of traffic all at once.
OneUp has a massive loyal following and it's a flat pedal. No need to do anything but launch it. Also with Tariff issues they product launch could have been impacted by delayed shipping. It's also a race to get product out right now. If people know it's coming they may hold off on a different brand and wait. Either way. No rhyme or reason to anything. Right now it's no rules marketing and everyone is scrambling to get every dollar they can after a pretty sad Q1 for most brands and then tariff impacts on margins. Lastly every review is fake and bad reviews don't trend well unless it's against a big brand that has a large hater base.
A snippet from Bike-EU:
"WELS, Austria - For quite some time the sparrows have been whistling it from the rooftop: on April 29, Pierer Mobility AG confirmed it will withdraw completely from the bicycle and e-bike business in the current 2025 financial year. Pierer Mobility is seriously struggling with the insolvency of its motorcycle subsidiary KTM AG.
In 2025, Pierer Mobility will fully concentrate on the restructuring of its motorcycle business. This was reported as part of the first preliminary unaudited key figures presented for the financial year 2024. The motorcycle activities of Pierer Mobility should not be confused with the independent bicycle and e-bike brand KTM and its parent company KTM Fahrrad GmbH.
Husqvarna- and GasGas inventory
The current inventory of the Husqvarna- and GasGas-branded e-bikes will be sold off while the strategic options for Pierer’s 70% majority share in Felt Bicycles are still being evaluated. Last year Felt Bicycles’ minority shareholders Florian Burguet and Cesar Rojo relocated the brand’s headquarters to Barcelona, as Bike Europe reported. It moved into the former textile factory that is already home to Cesar Rojo’s design company Rojo Design as well as its premium MTB brand Unno. With this step, Felt Bicycles had already detached itself from the Pierer universe."
Cesar Rojo “owns” Felt now? I wonder if Perrier owed him money for ebike development or something and they traded him the brand?
Without Jim Felt, that brand is absolutely worthless.
More from Bike-EU article published in Oct '24 and updated Jan '25
"BARCELONA, Spain - The strategy to concentrate on 'Powered Two-Wheelers' by Pierer Mobility AG led to the announcement to part ways with its pure bicycle and e-bikes brands Felt Bicycles and R Raymon. The company wanted to focus on motorcycles and e-bikes including the brands Husqvarna and GasGas E-Bicycles. After the publication of this new strategy, it turned out that Felt Bicycles was still somehow part of Pierer Mobility. To shed some light on the situation, Bike Europe sat down with Felt Bicycles managing director Florian Burguet.
The first indication of a change in the bicycle and e-bike business at Pierer Industrie came with the report on the disinvestment of R Raymon in September 2023, quickly followed by the announcement on the reorganisation of Felt Bicycles. Felt Bicycles managing director Florian Burguet explains what happened since then.
Bike Europe: After Pierer Mobility took over Felt Bicycles from the Rossignol Group at the end of 2011, the US sport brand was sold to an unnamed consortium centered around you at the end of 2023. At the same time, it became known that Pierer Mobility parent company Pierer Industrie AG remained on board via another subsidiary or subsidiaries. Who are these?
Florian Burguet: The shareholding structure of Felt Bicycles is actually fairly simple and clear. The major shareholder is Pierer Mobility, a subsidiary of the Pierer Industrie. Both Cesar Rojo of Cero Design Studio and me are equal but minor shareholders. Cero Design Studio is also part of Pierer Mobility.
BE: This is the first official appearance of the name Cesar Rojo, who is well-known in the two-wheeler industry. As son of the former managing director of KTM Spain, he has made a name far beyond his home country of Spain with his Cero Design Studio. This company is well known for its design, engineering, simulation, composites, prototyping and testing of two-wheelers. Pierer Mobility was among his customers, but he also created his own premium MTB brand Unno Bikes. To what extent is he now involved in the brand Felt Bicycles?
Florian Burguet: Cesar Rojo takes care of product management and development and I handle sales, marketing, customer service. We share the position of managing director and important decisions for Felt are agreed by the two of us. His other long-time venture, Cero Design Studio is indeed an experienced and well-known bike design and engineering firm operating out of Barcelona, Spain. From now Cero Design Studio will also take care of the upcoming product development of Felt Bicycles."
This explains the tie-up between Cero and KTM motorcycles in the past...
Cesar could be the guy who brings Felt back from obscurity... This could get interesting..
Felt isn’t obscure in the track world. Here in the USA they sponsor, among other people, our best female track rider, and a handful of losers wasting their lives doing gravel races.
They support a women’s UCI continental road team here in the USA… but clearly that’s not very effective marketing when we have less than 10 days of UCI racing in this country.
The track world is itself quite an obscure cycling niche though.
Full disclosure: I designed the first Felt track bikes.
Rad! Were you also involved w/ the left-side drive bike at all?
I left Felt before that one was developed. I designed almost half of their bikes through 2010: the first AR, DA, Bayonet, and aluminum TK bikes were mine. BMX's, Beach Cruisers, MTB's all sorts.
Working on their 6-bar link suspension bike is probably what lead me to design my 3ish bar link bike because more links = more problems.
I doubt the sparkling water guys were that behind on their ebike development payments.
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