Might be a legal requirement. Still customer service suicide, but IDK maybe they had no choice.
Ya the e-mail is at least honest and up front and doesn't try too hard to hide from how they fucked up.
The bigger CS suicide, in some regards, is popping their biggest 'flash' sale right before this happened, potentially trapping many buyers with the allure of insane prices right before they (maybe knowingly) went into insolvency.
Again, with their wording... People who got their bikes before are obviously fine, and people could order now under 'normal business' and get a bike... But anybody who ordered a bike that was waiting to be delivered by the time they went insolvent are fcuked... I'd love to understand further how that works. This 'creditor' issue of insolvency proceedings.
Felt this wasn't a terrible time to post a screenshot of my little dashboard I built a few months back. Obviously, this only pertains to equity valuation of publicly traded companies but its still pretty dang rough in our corner of the economic universe. www.otherhours.com
Yt has to be the least German German company I can think of. Stop looking to America for influence. Y’all got it right when it comes to business over there.
YT TLDR; They took on PE at the peak of the bubble, struggles ensued when the good times stopped rolling. Founder guy in the vid probably cashed...
YT TLDR; They took on PE at the peak of the bubble, struggles ensued when the good times stopped rolling. Founder guy in the vid probably cashed out (uninformed speculation). Maybe they'll pull a Kona.
I'd go with:
"I'm amazing and built this incredible brand so that everyone could afford high performance bikes - basically just like feeding the hungry.
I sold it for the good of everyone.
External things happened. Plus, I wasn't around
I came back. Other people had made mistakes. I was going to fix, but external things happened"
That was an insincere, arrogant pile of shit and PR malpractice. It's so f'ing simple: say you could have done better and say you're SORRY for unavoidable negative effects, even if temporary, to your customers (and employees).
Felt this wasn't a terrible time to post a screenshot of my little dashboard I built a few months back. Obviously, this only pertains to equity...
Felt this wasn't a terrible time to post a screenshot of my little dashboard I built a few months back. Obviously, this only pertains to equity valuation of publicly traded companies but its still pretty dang rough in our corner of the economic universe. www.otherhours.com
OOF, well that makes me feel good by comparison about powersports. Is the only reason we don't hear more about it just the scale of their industry? I know there was a bunch of KTM mumblings but I feel like I don't hear much about it in MX/SX/enduro circles. Whereas I can hardly get online without seeing a million doomer articles about the cycling industry.
I'm guessing being huge companies tied into other sectors (cars, etc.) with less reliance on 3rd party stuff (a la shimano/sram) helps them recover from losses...
A buddy at work just bought a full carbon Jeffsy with ultimate level RS suspension and GX level components for $2600 during a flash sale. No...
A buddy at work just bought a full carbon Jeffsy with ultimate level RS suspension and GX level components for $2600 during a flash sale.
No way YT is making any profit on stuff like that… guess it’s the only way to move the inventory. Makes sense now
Actually I'd say they might be, the margins on some bike stuff we buy in shops are way higher than what you might think.
There exists a funny webstore which sells a lot of stuff with OEM terms which can give a lot of information about the actual OEM prices. For example last year I managed to order a current version of SuperDeluxe Ultimate RC2T 205/65 trunnion for... 79€. I also remember deals for Zeb Ultimate 360€, GX AXS groupset (derailleur, shifter, crank, chain) about 400€, X01 AXS about 500€ and cable actuated GX groupset being about 200€... DT 1900 series set of wheels also come under 150€.
Also about the YT starting the discount wars, I wouldnt really say they did that, they were just one of the early companies who went direct to customer and therefore lowered the prices by cutting the middlemen (traditionally that would be a company that imports the bike and bikeshop that sells it)
I find it very ironical and super hypocritical for somebody like the YT main guy to whine about ”discount wars”, when they basically were the ones...
I find it very ironical and super hypocritical for somebody like the YT main guy to whine about ”discount wars”, when they basically were the ones who brought this aggressive pricing strategy to the market. Dude, are you for real???
I honestly hope everybody will be OK after this, but I can't remember all the direct-to-consumer brands being too sympathetic towards the bike shops who, at the end of the day, stay at the core of our sport. And the problem is that people really believe that they are entitled to that discounted ”high end bike” with top parts, even if most of them don't really NEED that stuff and a lot of them buy it for the ”good deal” and/or to show off.
Live and let live, Mx
that‘s what you get for having a marketing major and not a business major on the helm of the company! i was always a bit suspicious about YT and their founder (don‘t know him personally), always gave me shady vibes (how they dealt with gwin reinforced my opinion). for the teamriders and employees i hope everything works out! would be something new if the founder would put some of his own money into the company instead of just cashing out.
I'd go with:"I'm amazing and built this incredible brand so that everyone could afford high performance bikes - basically just like feeding the hungry.I sold it...
I'd go with:
"I'm amazing and built this incredible brand so that everyone could afford high performance bikes - basically just like feeding the hungry.
I sold it for the good of everyone.
External things happened. Plus, I wasn't around
I came back. Other people had made mistakes. I was going to fix, but external things happened"
That was an insincere, arrogant pile of shit and PR malpractice. It's so f'ing simple: say you could have done better and say you're SORRY for unavoidable negative effects, even if temporary, to your customers (and employees).
Actually I'd say they might be, the margins on some bike stuff we buy in shops are way higher than what you might think.There exists a...
Actually I'd say they might be, the margins on some bike stuff we buy in shops are way higher than what you might think.
There exists a funny webstore which sells a lot of stuff with OEM terms which can give a lot of information about the actual OEM prices. For example last year I managed to order a current version of SuperDeluxe Ultimate RC2T 205/65 trunnion for... 79€. I also remember deals for Zeb Ultimate 360€, GX AXS groupset (derailleur, shifter, crank, chain) about 400€, X01 AXS about 500€ and cable actuated GX groupset being about 200€... DT 1900 series set of wheels also come under 150€.
Also about the YT starting the discount wars, I wouldnt really say they did that, they were just one of the early companies who went direct to customer and therefore lowered the prices by cutting the middlemen (traditionally that would be a company that imports the bike and bikeshop that sells it)
It seems like the chaotic variable pricing from many bike industry companies is not really helping the industry and only causes confusion and often resentment from...
It seems like the chaotic variable pricing from many bike industry companies is not really helping the industry and only causes confusion and often resentment from customers. Dumping massive overstock or a big end of the year sale is one thing, but pricing that jumps around month to month is not the same.
For example, when PUSH released the 9.1 it was $2600. Earlier this year it was "on sale" for 2-3 months at $2000, currently the price is $2250. If a customer had bought one for $2600, only to see it for $2000 a week later, I imagine they would not be very happy. Not to mention it makes it more difficult for dealers/distributors.
Transition bikes is similar, their website sale prices will often see $100-$400 shifts from week to week.
As a publicly traded company Fox Factory is more predictable as they often cut prices (for dealers) near the end of the financial quarter if the "numbers" are not looking good. Some end of the quarter product dump to bump the numbers and appease investors, then the price goes back up and they start all over again. The prices are not advertised or announced as a sale, they simply change. I have seen this many times over the past 3 years.
I can't imagine how hard it must be for bike shops having to deal with this. "Sorry, we can't adjust the price of this bike even though you can currently get it direct from the Mfg for $500 less". Or a Fox shock that has a MAP, but a wildly variable dealer cost.
Pricing in the bike industry has always been chaotic for us average joes. Sometimes the bike shop will give me 10% off because they know me, sometimes not. Some people know some other industry people and get stuff cheap for seemingly no reason other than the know them. "Hey my buddy has a QBP login", etc.
At times it feels like the enormous retail prices are subsidizing all this "it's all about who you know" pricing. Again, this is from a non-industry person who hangs out with bike shop employees but doesn't actually know anything about how the industry runs.
I don't think anybody should be "gutted" by the reorg unless you're an effected employee, creditor or sponsored athlete impacted by this. If you're a bike...
I don't think anybody should be "gutted" by the reorg unless you're an effected employee, creditor or sponsored athlete impacted by this. If you're a bike fan/enthusiast, it should be relatively business as usual . Its not like the company is going away or even pausing operations, launches, etc.
(unless they gut the race team, then we can all be sad)
Sorry but have to respond to this.
Who would spend thousands of dollars on a bike from a company in self-administration? You are taking a massive gamble on warranty and even spare parts. As far as I am concerned, they are no longer a viable bike brand.
I don't think anybody should be "gutted" by the reorg unless you're an effected employee, creditor or sponsored athlete impacted by this. If you're a bike...
I don't think anybody should be "gutted" by the reorg unless you're an effected employee, creditor or sponsored athlete impacted by this. If you're a bike fan/enthusiast, it should be relatively business as usual . Its not like the company is going away or even pausing operations, launches, etc.
(unless they gut the race team, then we can all be sad)
Sorry but have to respond to this.Who would spend thousands of dollars on a bike from a company in self-administration? You are taking a massive gamble...
Sorry but have to respond to this.
Who would spend thousands of dollars on a bike from a company in self-administration? You are taking a massive gamble on warranty and even spare parts. As far as I am concerned, they are no longer a viable bike brand.
Especially if they have told all customers outside of America they will not fulfill their order, nor issue a refund. You don’t do that if your planning on continuing to do business in the future
Actually I'd say they might be, the margins on some bike stuff we buy in shops are way higher than what you might think.There exists a...
Actually I'd say they might be, the margins on some bike stuff we buy in shops are way higher than what you might think.
There exists a funny webstore which sells a lot of stuff with OEM terms which can give a lot of information about the actual OEM prices. For example last year I managed to order a current version of SuperDeluxe Ultimate RC2T 205/65 trunnion for... 79€. I also remember deals for Zeb Ultimate 360€, GX AXS groupset (derailleur, shifter, crank, chain) about 400€, X01 AXS about 500€ and cable actuated GX groupset being about 200€... DT 1900 series set of wheels also come under 150€.
Also about the YT starting the discount wars, I wouldnt really say they did that, they were just one of the early companies who went direct to customer and therefore lowered the prices by cutting the middlemen (traditionally that would be a company that imports the bike and bikeshop that sells it)
I promise you- a SuperDeluxe Ultimate costs a lot more than $79 USD/Euro to make... That was my product line for a long time- I have been to the factory and suppliers where they come from.
Actually I'd say they might be, the margins on some bike stuff we buy in shops are way higher than what you might think.There exists a...
Actually I'd say they might be, the margins on some bike stuff we buy in shops are way higher than what you might think.
There exists a funny webstore which sells a lot of stuff with OEM terms which can give a lot of information about the actual OEM prices. For example last year I managed to order a current version of SuperDeluxe Ultimate RC2T 205/65 trunnion for... 79€. I also remember deals for Zeb Ultimate 360€, GX AXS groupset (derailleur, shifter, crank, chain) about 400€, X01 AXS about 500€ and cable actuated GX groupset being about 200€... DT 1900 series set of wheels also come under 150€.
Also about the YT starting the discount wars, I wouldnt really say they did that, they were just one of the early companies who went direct to customer and therefore lowered the prices by cutting the middlemen (traditionally that would be a company that imports the bike and bikeshop that sells it)
The purchase price of a product in no way reflects the margin to the manufacturer, especially in times like this. While @Dave_Camp has inside knowledge from the engineering side, I have the same sort of insights from the finance side. I can tell you with high amounts of confidence a lot of the pricing we are (still) seeing is not sustainable
When your margins don't support your baseline cost to run your company + cost of capital, you will end up in bankruptcy. The only question is when, which is based on how strong your balance sheet is and how leveraged you are.
Again, just because we see a product being sold at "X" (Ie, guide brakes for $39) does not mean there is actually margin here.
Sometimes you just need to flip something to cash for your next production cycle, or because you've got some nerd in your ear like me telling you to turn inventory because its only going to be worth less when you finally do take your medicine and get rid of it.
Having seen what happened with Rocky and knowing the pricing on the back end of what some of their higher end bike were going for even in the worst of it, people getting a GX level Capra or Jeffsey for $2600 at the consumer level is absolutely insane. That's someone trying to free up cash flow as fast as possible. That's a two for one Kona process level fire sale.
Not going under, but in completely opposite news, Also is pulling in some big investments. It won't be just bicycles or regular ebikes, I'm sure, but does anyone want to put a future date out there when this all falls apart?
Also. Inc. valued at $1 billion as new $200 million funding announced
Not going under, but in completely opposite news, Also is pulling in some big investments. It won't be just bicycles or regular ebikes, I'm sure, but...
Not going under, but in completely opposite news, Also is pulling in some big investments. It won't be just bicycles or regular ebikes, I'm sure, but does anyone want to put a future date out there when this all falls apart?
Also. Inc. valued at $1 billion as new $200 million funding announced
Not going under, but in completely opposite news, Also is pulling in some big investments. It won't be just bicycles or regular ebikes, I'm sure, but...
Not going under, but in completely opposite news, Also is pulling in some big investments. It won't be just bicycles or regular ebikes, I'm sure, but does anyone want to put a future date out there when this all falls apart?
Also. Inc. valued at $1 billion as new $200 million funding announced
Not going under, but in completely opposite news, Also is pulling in some big investments. It won't be just bicycles or regular ebikes, I'm sure, but...
Not going under, but in completely opposite news, Also is pulling in some big investments. It won't be just bicycles or regular ebikes, I'm sure, but does anyone want to put a future date out there when this all falls apart?
Also. Inc. valued at $1 billion as new $200 million funding announced
Actually I'd say they might be, the margins on some bike stuff we buy in shops are way higher than what you might think.There exists a...
Actually I'd say they might be, the margins on some bike stuff we buy in shops are way higher than what you might think.
There exists a funny webstore which sells a lot of stuff with OEM terms which can give a lot of information about the actual OEM prices. For example last year I managed to order a current version of SuperDeluxe Ultimate RC2T 205/65 trunnion for... 79€. I also remember deals for Zeb Ultimate 360€, GX AXS groupset (derailleur, shifter, crank, chain) about 400€, X01 AXS about 500€ and cable actuated GX groupset being about 200€... DT 1900 series set of wheels also come under 150€.
Also about the YT starting the discount wars, I wouldnt really say they did that, they were just one of the early companies who went direct to customer and therefore lowered the prices by cutting the middlemen (traditionally that would be a company that imports the bike and bikeshop that sells it)
The purchase price of a product in no way reflects the margin to the manufacturer, especially in times like this. While @Dave_Camp has inside knowledge from...
The purchase price of a product in no way reflects the margin to the manufacturer, especially in times like this. While @Dave_Camp has inside knowledge from the engineering side, I have the same sort of insights from the finance side. I can tell you with high amounts of confidence a lot of the pricing we are (still) seeing is not sustainable
When your margins don't support your baseline cost to run your company + cost of capital, you will end up in bankruptcy. The only question is when, which is based on how strong your balance sheet is and how leveraged you are.
Again, just because we see a product being sold at "X" (Ie, guide brakes for $39) does not mean there is actually margin here.
Sometimes you just need to flip something to cash for your next production cycle, or because you've got some nerd in your ear like me telling you to turn inventory because its only going to be worth less when you finally do take your medicine and get rid of it.
YMMV.
As someone who has worked with and for some online retailers, those Guide brakes are not an indication of anything cost wise. They are most likely take-off parts as they don't have retail packaging.. Some bikes are easier to sell off as parts.. And a low price like that gets attention and maybe spurs additional sales. Buy the Guide with a short line, add a brake line, you now have a fairly cheap rear brake.
I don’t mean to make light of a bad situation, but this felt inevitable. Anyone with any level of inside knowledge of the bike industry could...
I don’t mean to make light of a bad situation, but this felt inevitable. Anyone with any level of inside knowledge of the bike industry could look at YT from 30,000 feet and perhaps wonder if they have long had a money tree or maybe the operation was a money laundering front for the cartel.\
Some head scratchers, in no particular order:
-Aggressively low prices (like...how is this possible low pricing) -Bloated SKU count (for them, its mostly the number of builds they have per model of bike) -Complex global supplier web (true for everyone, but their vendor count is very high) -Selling into a complicated international market (they were very international) -Chronic out-of-stock issues (volume always felt off or low) -Usually had some variant of a pricey World Cup team -Big-name Hollywood ad (remember?) -Zero signs of financial discipline
When rates went up and they didn’t blink, I was baffled. Their EBITDA margin, which is frankly a softish metric, had to be scraping their cost of capital. Add in capex, poor inventory turns etc and it’s no surprise what happened.
The business model might have sort of made sense in a zero-interest world...especially when they had a smaller product line, aggressive growth, win on volume. But once:
-Rates spiked -Product mix complexity increased -COVID locked up the supply chain/forced them to deal with lumpy cash flows & "old" product -Demand (really) cooled off (meaning they couldn't play this "small margin high volume" game) -No real innovation was happening
...they were toast.
Pretentious side rant - What is frustrating is in many ways I keep getting tapped on the shoulder to help at some of these companies, but when push comes to shove nobody really wants to hear what I have to say until they’re flatlining on the table (and its too late). Like a doctor saying "hey maybe exercise" to the high risk man in his late 50s and being ignored in lieu of the ER. Prevention’s a lot easier than resuscitation. But here we are.
Also, brand new YT Mill in Bentonville. I've been there, it's massive and certainly expensive
Agreed. I moved to Bentonville from Denver 5 years ago. While the Specialized experience center made sense because of Specialized scale, YT's popping up a few years back right next door with a VERY nice builiding right downtown had me raising an eyebrow.
For those that aren't Porsche savvy, that's ~3-4m pictured in the two cars there. 918 Spyders go for ~1.5-2.9m (depending on package), Carrera GTs are in...
For those that aren't Porsche savvy, that's ~3-4m pictured in the two cars there. 918 Spyders go for ~1.5-2.9m (depending on package), Carrera GTs are in the 1.2-1.4m range. Admittedly, GTs have gone WAY up in value the past 4-5 years.
The purchase price of a product in no way reflects the margin to the manufacturer, especially in times like this. While @Dave_Camp has inside knowledge from...
The purchase price of a product in no way reflects the margin to the manufacturer, especially in times like this. While @Dave_Camp has inside knowledge from the engineering side, I have the same sort of insights from the finance side. I can tell you with high amounts of confidence a lot of the pricing we are (still) seeing is not sustainable
When your margins don't support your baseline cost to run your company + cost of capital, you will end up in bankruptcy. The only question is when, which is based on how strong your balance sheet is and how leveraged you are.
Again, just because we see a product being sold at "X" (Ie, guide brakes for $39) does not mean there is actually margin here.
Sometimes you just need to flip something to cash for your next production cycle, or because you've got some nerd in your ear like me telling you to turn inventory because its only going to be worth less when you finally do take your medicine and get rid of it.
YMMV.
To be fair, if modern guide brakes are anything like the ones I had back in the day, they are overpriced at $39....
Not going under, but in completely opposite news, Also is pulling in some big investments. It won't be just bicycles or regular ebikes, I'm sure, but...
Not going under, but in completely opposite news, Also is pulling in some big investments. It won't be just bicycles or regular ebikes, I'm sure, but does anyone want to put a future date out there when this all falls apart?
Also. Inc. valued at $1 billion as new $200 million funding announced
I don't know much about finance or investing. Jeff Brines can you shed some light on this for us? Do these founder guys who started this thing walk away with a big wad of cash right away when this type of deal happens or do they actually have to perform before they get more than a salary?
Also "bikes" valued at a billion dollars. Seriously? that seems mind boggling! Company dudes: "we're thrilled!" I bet you are!I don't know much about finance or investing. Jeff Brines can...
Also "bikes" valued at a billion dollars.
Seriously?
that seems mind boggling!
Company dudes: "we're thrilled!"
I bet you are!
I don't know much about finance or investing. Jeff Brines can you shed some light on this for us? Do these founder guys who started this thing walk away with a big wad of cash right away when this type of deal happens or do they actually have to perform before they get more than a salary?
I think the primary compensation mechanism for tech bro execs is when they get to imitate Steve Jobs walking around a visually minimal stage design in jeans talking about a powerpoint:
Also "bikes" valued at a billion dollars. Seriously? that seems mind boggling! Company dudes: "we're thrilled!" I bet you are!I don't know much about finance or investing. Jeff Brines can...
Also "bikes" valued at a billion dollars.
Seriously?
that seems mind boggling!
Company dudes: "we're thrilled!"
I bet you are!
I don't know much about finance or investing. Jeff Brines can you shed some light on this for us? Do these founder guys who started this thing walk away with a big wad of cash right away when this type of deal happens or do they actually have to perform before they get more than a salary?
I think the primary compensation mechanism for tech bro execs is when they get to imitate Steve Jobs walking around a visually minimal stage design in...
I think the primary compensation mechanism for tech bro execs is when they get to imitate Steve Jobs walking around a visually minimal stage design in jeans talking about a powerpoint:
Actually I'd say they might be, the margins on some bike stuff we buy in shops are way higher than what you might think.There exists a...
Actually I'd say they might be, the margins on some bike stuff we buy in shops are way higher than what you might think.
There exists a funny webstore which sells a lot of stuff with OEM terms which can give a lot of information about the actual OEM prices. For example last year I managed to order a current version of SuperDeluxe Ultimate RC2T 205/65 trunnion for... 79€. I also remember deals for Zeb Ultimate 360€, GX AXS groupset (derailleur, shifter, crank, chain) about 400€, X01 AXS about 500€ and cable actuated GX groupset being about 200€... DT 1900 series set of wheels also come under 150€.
Also about the YT starting the discount wars, I wouldnt really say they did that, they were just one of the early companies who went direct to customer and therefore lowered the prices by cutting the middlemen (traditionally that would be a company that imports the bike and bikeshop that sells it)
The purchase price of a product in no way reflects the margin to the manufacturer, especially in times like this. While @Dave_Camp has inside knowledge from...
The purchase price of a product in no way reflects the margin to the manufacturer, especially in times like this. While @Dave_Camp has inside knowledge from the engineering side, I have the same sort of insights from the finance side. I can tell you with high amounts of confidence a lot of the pricing we are (still) seeing is not sustainable
When your margins don't support your baseline cost to run your company + cost of capital, you will end up in bankruptcy. The only question is when, which is based on how strong your balance sheet is and how leveraged you are.
Again, just because we see a product being sold at "X" (Ie, guide brakes for $39) does not mean there is actually margin here.
Sometimes you just need to flip something to cash for your next production cycle, or because you've got some nerd in your ear like me telling you to turn inventory because its only going to be worth less when you finally do take your medicine and get rid of it.
As someone who has worked with and for some online retailers, those Guide brakes are not an indication of anything cost wise. They are most likely...
As someone who has worked with and for some online retailers, those Guide brakes are not an indication of anything cost wise. They are most likely take-off parts as they don't have retail packaging.. Some bikes are easier to sell off as parts.. And a low price like that gets attention and maybe spurs additional sales. Buy the Guide with a short line, add a brake line, you now have a fairly cheap rear brake.
There is a certain company here in Australia that you used to get components in a plastic bag, no documentation, sort of warranty (maybe) The prices were absurd.
So the way I understand it is this certain company get OEM prices for bike "builds" that exist in a shipping container somewhere, the bikes never actually get built up (I heard they were road bikes from the early 2000's) but rather the components are put in a bag and priced at heavily discounted rates.
It's either genius or totally illegal, I'm not sure which one. But I got some cheap Di2 mechs when I kept breaking them lol
Ya the e-mail is at least honest and up front and doesn't try too hard to hide from how they fucked up.
The bigger CS suicide, in some regards, is popping their biggest 'flash' sale right before this happened, potentially trapping many buyers with the allure of insane prices right before they (maybe knowingly) went into insolvency.
Again, with their wording... People who got their bikes before are obviously fine, and people could order now under 'normal business' and get a bike... But anybody who ordered a bike that was waiting to be delivered by the time they went insolvent are fcuked... I'd love to understand further how that works. This 'creditor' issue of insolvency proceedings.
Felt this wasn't a terrible time to post a screenshot of my little dashboard I built a few months back. Obviously, this only pertains to equity valuation of publicly traded companies but its still pretty dang rough in our corner of the economic universe. www.otherhours.com
Yt has to be the least German German company I can think of. Stop looking to America for influence. Y’all got it right when it comes to business over there.
I'd go with:
"I'm amazing and built this incredible brand so that everyone could afford high performance bikes - basically just like feeding the hungry.
I sold it for the good of everyone.
External things happened. Plus, I wasn't around
I came back. Other people had made mistakes. I was going to fix, but external things happened"
That was an insincere, arrogant pile of shit and PR malpractice. It's so f'ing simple: say you could have done better and say you're SORRY for unavoidable negative effects, even if temporary, to your customers (and employees).
OOF, well that makes me feel good by comparison about powersports. Is the only reason we don't hear more about it just the scale of their industry? I know there was a bunch of KTM mumblings but I feel like I don't hear much about it in MX/SX/enduro circles. Whereas I can hardly get online without seeing a million doomer articles about the cycling industry.
I'm guessing being huge companies tied into other sectors (cars, etc.) with less reliance on 3rd party stuff (a la shimano/sram) helps them recover from losses...
Actually I'd say they might be, the margins on some bike stuff we buy in shops are way higher than what you might think.
There exists a funny webstore which sells a lot of stuff with OEM terms which can give a lot of information about the actual OEM prices. For example last year I managed to order a current version of SuperDeluxe Ultimate RC2T 205/65 trunnion for... 79€. I also remember deals for Zeb Ultimate 360€, GX AXS groupset (derailleur, shifter, crank, chain) about 400€, X01 AXS about 500€ and cable actuated GX groupset being about 200€... DT 1900 series set of wheels also come under 150€.
Also about the YT starting the discount wars, I wouldnt really say they did that, they were just one of the early companies who went direct to customer and therefore lowered the prices by cutting the middlemen (traditionally that would be a company that imports the bike and bikeshop that sells it)
that‘s what you get for having a marketing major and not a business major on the helm of the company! i was always a bit suspicious about YT and their founder (don‘t know him personally), always gave me shady vibes (how they dealt with gwin reinforced my opinion). for the teamriders and employees i hope everything works out! would be something new if the founder would put some of his own money into the company instead of just cashing out.
proper way:
Care to share this website with the crowd?
Pricing in the bike industry has always been chaotic for us average joes. Sometimes the bike shop will give me 10% off because they know me, sometimes not. Some people know some other industry people and get stuff cheap for seemingly no reason other than the know them. "Hey my buddy has a QBP login", etc.
At times it feels like the enormous retail prices are subsidizing all this "it's all about who you know" pricing. Again, this is from a non-industry person who hangs out with bike shop employees but doesn't actually know anything about how the industry runs.
Sorry but have to respond to this.
Who would spend thousands of dollars on a bike from a company in self-administration? You are taking a massive gamble on warranty and even spare parts. As far as I am concerned, they are no longer a viable bike brand.
Especially if they have told all customers outside of America they will not fulfill their order, nor issue a refund. You don’t do that if your planning on continuing to do business in the future
I promise you- a SuperDeluxe Ultimate costs a lot more than $79 USD/Euro to make... That was my product line for a long time- I have been to the factory and suppliers where they come from.
The purchase price of a product in no way reflects the margin to the manufacturer, especially in times like this. While @Dave_Camp has inside knowledge from the engineering side, I have the same sort of insights from the finance side. I can tell you with high amounts of confidence a lot of the pricing we are (still) seeing is not sustainable
When your margins don't support your baseline cost to run your company + cost of capital, you will end up in bankruptcy. The only question is when, which is based on how strong your balance sheet is and how leveraged you are.
Again, just because we see a product being sold at "X" (Ie, guide brakes for $39) does not mean there is actually margin here.
Sometimes you just need to flip something to cash for your next production cycle, or because you've got some nerd in your ear like me telling you to turn inventory because its only going to be worth less when you finally do take your medicine and get rid of it.
YMMV.
Having seen what happened with Rocky and knowing the pricing on the back end of what some of their higher end bike were going for even in the worst of it, people getting a GX level Capra or Jeffsey for $2600 at the consumer level is absolutely insane. That's someone trying to free up cash flow as fast as possible. That's a two for one Kona process level fire sale.
Not going under, but in completely opposite news, Also is pulling in some big investments. It won't be just bicycles or regular ebikes, I'm sure, but does anyone want to put a future date out there when this all falls apart?
Also. Inc. valued at $1 billion as new $200 million funding announced
https://bikebiz.com/also-inc-valued-at-1-billion-as-new-200-million-funding-announced/
Also spun out of Rivian back in March if you didn't catch it (https://ridealso.com/news)
Chris Yu from Specalized is at Also, which is interesting. He was a staple of Big S for awhile, but Big S could never keep the best employees...
I interviewed with a guy from rivian when they were setting that up…
Figured they’d run for a few years, make some stupid $10k e bike like Harley tried and then go belly up.
Also sounds like something good for Pon to buy someday. As an aside, I wonder how much longer Pon can justify making meat powered Cannondales?
So many thoughts come to mind when going through their website…
I just don’t get it, but I’m probably just too horizontally integrated, and not vertically integrated like them.
1 billion... Is that a long or short billion?
As someone who has worked with and for some online retailers, those Guide brakes are not an indication of anything cost wise. They are most likely take-off parts as they don't have retail packaging.. Some bikes are easier to sell off as parts.. And a low price like that gets attention and maybe spurs additional sales. Buy the Guide with a short line, add a brake line, you now have a fairly cheap rear brake.
Agreed. I moved to Bentonville from Denver 5 years ago. While the Specialized experience center made sense because of Specialized scale, YT's popping up a few years back right next door with a VERY nice builiding right downtown had me raising an eyebrow.
Back to YT for a second. What kind of multiple do you think this type of revenue and earnings would have garnered in 2021?
I’m no expert but that looks like a thin margin… 2m profit off of 70m sales on your best year ever??
To be fair, if modern guide brakes are anything like the ones I had back in the day, they are overpriced at $39....
Yeah this has "upcoming financial disaster" written all over it.
Also "bikes" valued at a billion dollars.
Seriously?
that seems mind boggling!
Company dudes: "we're thrilled!"
I bet you are!
I don't know much about finance or investing. Jeff Brines can you shed some light on this for us? Do these founder guys who started this thing walk away with a big wad of cash right away when this type of deal happens or do they actually have to perform before they get more than a salary?
I think the primary compensation mechanism for tech bro execs is when they get to imitate Steve Jobs walking around a visually minimal stage design in jeans talking about a powerpoint:
https://www.forbes.com/sites/billroberson/2025/03/31/rivians-micromobil…
(painfully normal slogans in lower case arial font INTENSIFIES)
There is a certain company here in Australia that you used to get components in a plastic bag, no documentation, sort of warranty (maybe) The prices were absurd.
So the way I understand it is this certain company get OEM prices for bike "builds" that exist in a shipping container somewhere, the bikes never actually get built up (I heard they were road bikes from the early 2000's) but rather the components are put in a bag and priced at heavily discounted rates.
It's either genius or totally illegal, I'm not sure which one. But I got some cheap Di2 mechs when I kept breaking them lol
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