Numerous manufacturers and retailers are up to their necks in water due to full warehouses and sluggish demand. The solution in many places: Not just price reductions, but genuine discount orgies. When you buy a bike, you get a second one too, according to the motto: buy one, get two. Or the manufacturer is offering its bikes at a discount of more than 50 percent, mind you at the start of the season in April. Or the online store sells off its inventory at up to 80 percent off. 

These promotions can take the pressure off the warehouse and make customers happy. Such discounts can be granted in the short term, but in the long term they are a sure shot in the foot: nobody earns any more money here. But a bicycle manufacturer definitely needs this to pay wages, pay bills for container transportation and finance development, testing and marketing departments. And reserves for warranty services and crash replacements, storage space for spare parts and so on. 

And bike dealers are just as reliant on income. This is because they pay for employees, training, rent, taxes and insurance, ensure beautiful stores and lively city centers or even neighborhood meeting places and stores are often the pillar of the local scene. 

Now it is up to manufacturers and stores to pay for the order orgy of recent years. There are far too many parts and bikes available. And they have to go because massive amounts of capital are tied up, liquidity is miserable and warehouses are full to the brim. 

However, the halving of sales prices gives buyers the impression of very high margins in the bike business. If an average bike store is constantly selling bikes at half the recommended retail price, it will soon be in the red and bankruptcy is within reach. This much can be said: the margins on bicycles in specialist shops are significantly lower than the discounts currently being offered. In the long run, the current discount orgy is simply ruinous. Some market participants are letting their pants down unpleasantly far, damaging the industry and will disappear from the scene despite short-term business boosts via discounts. 

The smartest reaction to the situation would have been: Enjoy the peak in demand with restraint. Keep a cool head and come to the realization that a pandemic has come to an end and the money is going back into vacations abroad and not into a new mountain bike for tours on the doorstep. Sure, that's a bit much to ask because of the intense coronavirus situation. But there were people in the Swiss bike industry who already had a clever and experienced nose for the fact that demand cannot remain at such a high level in the fall of 2020. And these manufacturers are doing quite well now because they didn't order à discretionary material. No price reductions are necessary here either.

Another - somewhat unspectacular but forward-looking - response to the abundance of material would be to sit out the situation. Of course, you have to be able to afford it, the keywords such as capital commitment and interest rates are set. But industry experts are already warning. Because many machines for bicycle material have been at a standstill for some time, the next material bottleneck is already imminent. And then some manufacturers might be glad they hadn't emptied their warehouses at ruinous prices.