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Kona's Jake Heilbron and Dan Gerhard: 'This boom will have a longer trajectory than the 10-speed boom'

Published October 14, 2020
Part 5 of BRAIN's Crystal Ball series.

Editor's note: For a feature in Bicycle Retailer & Industry News, Retail Editor Ray Keener spoke with 14 leaders on the supplier side of the industry. Ray spoke with leaders of major bike brands, component suppliers, e-bike startups, accessory makers and more. We will be running sections of that article online this month.

BOULDER, Colo. (BRAIN) — It’s been a hectic and unprecedented several months for our industry and many others. Fortunately for our companies and retailers, hectic has meant managing demand rather than fighting for survival.

Now that the season is waning, inventories are catching up (in some cases) and suppliers are catching their collective breaths, we reached out to a cross-section of suppliers and service providers to get their take on the future.

Jake Heilbron and Dan Gerhard, Partners, Kona Bikes

When the pandemic hit North America and Europe, we were convinced that bike shops and bicycling were essential to the health and well-being of everyone. We ramped up our production plans to anticipate growing demand.

Retailers are extremely hungry for product as their inventories are severely depleted. Strong government, advocacy and industry support indicate this bike boom will have a much longer trajectory than the 10-speed boom of the '70s and the mountain bike boom of the '80s.

In the U.S., we've decided to allocate bikes as they arrive, so that dealers know what's truly on the way. European and Canadian dealers demanded to place booking orders, so some allocation will be needed in those markets through the spring of 2021.

Most retailers are cash-rich and looking for early payment discounts, so cash flow stopped being an issue several months ago. The unrealistic nine-to-12 month payment terms that big players in the industry brought in 10 years ago have abated. In our opinion it will create a healthier financial situation for everyone in the bicycle business.

Kona's supply strategy has always been to develop long-term relationships with frame, component and OE factories. As a result, our on-time production numbers are very similar to our historical averages.

We haven't produced any complete bicycles in China, so tariffs and supply from that country haven't been an issue. Working closely with our factories and sub-contractors has been our focus over the years rather than jumping ship for a slightly better price, lower duty rates or promise of better service.

Jake Heilbron and Dan Gerhard, Partners, Kona Bikes
Topics associated with this article: Crystal Ball

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