The Cycling Industry And The Economy 2020-2021 Part 2
In January, I wrote an article on how COVID has affected the cycling industry. A lot can change in a few months. Our goal was to be able to keep inventory throughout the year, but that is getting difficult to do. We are currently backordered on several items. Below you will find information on the latest news about how the cycling industry has responded to COVID and how it’s affecting FLO.
How Are Lead Times Affecting The Cycling Industry
Lead times have significantly increased. For FLO, this has become more apparent in the last few weeks.
In the 10 years of running FLO, each component we make—spokes, hubs, rims, etc.—has about a 60 day lead time. Add in build and shipping time, from the date of initial ordering at our factories it takes about 4 months to be able to ship a product.
Currently, the most recent lead times are 150 days or more. This means the total time from ordering to shipping a complete wheel is now about 9 months.
We proactively took into account increased lead times by increasing orders, however, they have changed even more than expected. Additionally, customer demands have also changed. Disc brakes are becoming more popular, but predicting this change so far in advance has been an interesting dance for us. We are continuing to work on that balance.
If the world is getting back to “normal,” then why are there still effects from COVID? Good question. There is a shortage of raw materials and massive demand in cycling. We are ecstatic for the increased demand in cycling (#KeepRiding), but that in combination with the raw materials shortage, has had an impact on getting the goods.
In other words, factories are trying to produce to current demand all while working to make make up the backlog with less manpower/distribution, etc. It’s kind of like swimming against the tide. I know our triathletes can understand that!
Our factories are expecting lead times to resume to normal by 2025. Yes, 2025, that’s not a typo!
How Are Lead Times Affecting Pricing In Cycling
Another change we have experienced is increased pricing from our factories. The combination of increased supply and demand, plus the decreased value of the US dollar is contributing to these changes. To date, we have been able to absorb these for our customers, and we hope to be able to keep our prices the same.
How Are FLO Shipments Being Affected
As of May 2021, we are receiving two shipments before we have a prolonged delay. The first shipment is coming in late May; expect wheels to be shipping May/June. The second shipment is coming in June; expect wheels to be shipped June/July.
Currently, we have very little stock but we will be adding rim brake and small amounts of disc brake stock once the May container arrives wheels.
Once the wheels from the June shipment are sold out, we will not receive more inventory until October/November.
Please keep an eye on the top of the wheel shop pages for the most up to date shipping/pre-order information. This information updates as wheels sell. Don’t be alarmed if you ordered wheels and see that the date is pushed further after you order.
We have continuous conversations with our factories and are working on getting as much inventory as possible as quickly as possible throughout these times, but please reference the expected timing just mentioned.
If you intend to get FLO wheels this year, the sooner you order the better. We honestly cannot control the speed of sales vs the production rate.
How Is FLO Preparing For Long Lead Times
Hearing that lead times are only expected to increase, we made the decision to order a year’s worth of inventory. This is not typical and is a crunch on cash flow, but it should bring our lead times back to something more reasonable. We hope to be able to resume normal lead times once we receive our October/November shipment.
Pre-Orders and Special Orders
If you are interested in a certain wheel and we are out of stock, you can always reach out and we will be happy to help you with a pre-order. We can give you an estimate on lead time and as long as you don’t mind waiting, we will make sure we take care of you.
Business is a funny thing. Each day presents new successes and new challenges. I’ve always said, if you make more good decisions than bad decisions, your odds of being successful are pretty good. In a time when the industry is seeing unprecedented changes, we can only hope our instincts today lead to the FLO of tomorrow we are planning for.
While this year will bring unexpected challenges on the tail end of a tough 2020, we love what we do each day. Thank you for your patience, support, and understanding.