Changing the Annual Ordering Cycle

Is it time to change the structure of the bike business in Europe? Is it time to make the current system more flexible? In particular to avoid the build up of stock? Of course this question relates to the dramatic summer that a big part of the major bike markets in Europe had this year and the drop in sales it caused. But there are other factors that come in play for raising this question?

For instance what ZEG CEO Georg Honkomp said in the interview this trade journal had with him in the August issue. Here he said: “The annual ordering cycle has to change.” He further commented that one ordering moment in September is not enough. He said that the industry can’t wait any longer for that single introduction moment.

Next to Georg Honkomp also Accell Group CEO René Takens recently pointed at reasons for why the system has to change. Commenting on the 2010 financial results of the holding company for many bike companies in and outside Europe, he said: “As in 2009, the bicycle markets in 2010 were affected by further shifts in the types of bicycles sold. This made consumer demand more difficult to predict. Dealers were therefore more cautious in placing advance orders and building up stocks in the winter period. The generally less positive financing opportunities for dealers continued to play a role as well.”

To present another example for the reason of raising the question on the annual ordering cycle; click to the market report Europe we present on this site (see button Market Reports). Here it is concluded that a big rise in imports versus a drop in sales took place in 2010. At the same time production dropped only slightly. This leads to the conclusion that the bike sector’s supply chain isn’t adapting to the general market trend.

Taking all these factor into account; a second ordering moment seems the logical solution. In the Netherlands this has been put in place already with the FietsVAK trade show, again taking place end of January, 2012. Since the start of this trade show five years ago, it became more and more the second ordering moment for the dealers based in the Netherlands and Belgium.

Would the same work on a bigger, more international scale. Would the same work with Eurobike? Would an early spring and fall Eurobike make the system more flexible and provide in the need for a second ordering moment? One could think of organizing it in February and in October. We have asked Messe Friedrichshafen CEO Klaus Wellmann about the possibilities of having two Eurobike’s per year. He answered positively. A broad discussion on the subject is needed. In case you want to contribute to this discussion; please comment on this article. See below.