Like a lot of my pieces, this one came about as the result of a question. A member of the cycling industry Facebook group was pointing out how hard it is to find a new position in the bike business and asked, where have all the bike jobs gone?
I should point out this was not the form this question usually comes in, which is from a person outside the business who wants to get into the industry for the first time. I still hear that version a lot (and I bet you do too, if you've been in the business awhile). I even published an answer to it a few years ago with the help of industry recruiter Terry Malouf. But this question came from a long term industry professional with solid credentials and a stable history who is currently between jobs for what seems like an unreasonably long time.
So I started thinking about it, and came to three tentative conclusions. See if you agree.
1. Traditional industry sales are down
Make no mistake. Bicycle sales in units have been essentially flat for the past 20 years; increases in average selling price have not kept pace with the changing value of the U.S. dollar. Net effect is that an industry traditionally run on lean margins makes less money on bikes than ever. And of course, more and more of those sales are channeled outside the traditional bike shop channel, often to consumer-direct brands.
A couple months ago I mentioned “It’s the same pair of pants; we’re just shuffling the money around to different pockets.” What I failed to mention is that those pants now have not just fewer, but smaller, pockets as well.
As I mentioned in this space a couple months ago, "The fundamental truth is that across all channels, adult bikes aren't putting any more real dollars into the industry today than they were at the end of the Clinton administration. It's the same pair of pants; we're just shuffling the money around to different supplier and retailer pockets." What I failed to mention at the time is that those pants now have not just fewer, but smaller pockets as well.
Traditional equipment categories (PA&R, and variations thereof) have had their profitability gutted by the effects of internet discounting; on the other hand, price increases, particularly on top-end equipment, have outpaced the rising cost of money, unlike bikes. But more of that money is leaving the traditional retail channel — orders of magnitude more than with bicycles — and all too often, the country itself. Overall, my feeling is that fewer consumer dollars are entering the traditional equipment market, and this impact is felt across all segments in the supply chain.
Point of all this being, fewer dollars coming into the channel means fewer jobs available.
2. The industry is consolidating, and so are the jobs
Further to my point about pockets and pants, as companies consolidate, so do the overall number of available positions. At both the retail and supplier levels, fewer employees cover more lines or locations to generate the same number of dollars, and fewer total employees are needed.
The most notable exception is mechanics. While the total number of shop locations stays relatively constant (although they may be consolidating under fewer owners), new bikes and equipment are becoming increasingly labor (and therefore time) intensive to service. Think electronic shifting, suspension systems or e-bikes and their various complex subsystems. Now think about all the different proprietary formats for all these categories. As the installed base of sophisticated products grows while the overall labor pool shrinks, what happens to the value of highly skilled mechanics? Demand begins to exceed supply, that's what. In fact, being a high-end mechanic might just be the best form of job security in an increasingly insecure industry.
3. Growth comes from new product categories ... and new job descriptions.
As the industry consolidates, the middle always tends to fall out. Companies at the bottom just don't have the resources to hire new folks. And increasingly, we see the ones at the top — larger and often more agile players — are sourcing talent from outside the traditional industry recruiting pool.
The current generation of industry-leading brands were all founded by entrepreneurs working with landlines and fax machines. The mountain bike was born before the desktop computer and a full decade before the web browser.
There are relatively few sharp young people working the supplier help desk or retail sales floor nowadays who have formal training in digital marketing, for instance. It was the same with back end social media skills ten years ago. And ten years from now, young people will be bringing those and other skills with them when they enter the bike business. But for the time being, there are a lot of industry folks — often smart, hardworking and ambitious lower and midlevel people — getting caught in the middle. And that's a shame. But it's also the reality in which we find ourselves.
It's sometimes hard to remember that the current generation of industry-leading companies were all founded by entrepreneurs working with landlines and handwritten orders, sent over those landlines via fax machine. The mountain bike was born before the desktop computer and a full decade before the World Wide Web. The guys at the top don't have to keep abreast of the latest technology. But to stay on top, they have to hire people who do. And that's the way it's always been.
So, here's the bottom line. The bike industry job market is shrinking. But more importantly, it's changing, just as it always has. And hopefully, always will.
