Curious about the second hand market for bicycles? Along with our partnership with People for Bikes to release data on the US market in Q1/Q2 2024, we are pleased to announce the availability of our Australian Q4 2023 Second Hand Market report. You can purchase the report directly from our website, which will get you a data breakdown of inventory and sales in the quarter by subcategory, as well as a PDF summary and analysis from our perspective. Included in your purchase of this report is one year of updates to the data based on revisions of our categorization model.
Side by Side pie charts of unit and dollar share, excluding bikes with Unknown categorization
Second hand or Used bicycles have long been a guessing game. We have approached this methodologically by monitoring major second hand marketplace platforms for bicycle listings, we are able to gather an aggregate view of the scope of these platforms. The next step was to develop an algorithm for systematically categorizing products into standardized structures. Our most advanced model is currently based on the People For Bikes standard from the United States.
Australia provides a unique case study because there is very little market data available, and it has often been considered too small of a market for major players to follow. Our expertise is in automating the meticulous processes used in the past, thereby producing a viable report, even for small markets.
With just over 40,000 sales units observed in Q4 2023, the Australian Second hand market is quite strong given their 25 million population. This strong sales volume is in spite of a fairly low 7% being electric among all units observed. As electric bikes continue to grow globally, we are likely to see this level creep up in the second hand markets.
As we enter the fifth month of 2023, it’s evident that this year continues to be far from ordinary due to the ongoing pandemic-induced challenges. While wholesale inventories continued to climb into 2023 , traditional retail inventories have remained stagnant. Analyzing the import data from Bills of Lading, we have observed a slowdown in bicycle imports since late 2022, but unfortunately, it hasn’t been sufficient to prevent the accumulation of wholesale inventories mentioned earlier.
Taking all this into account, we now have a reasonably clear picture of how inventory moves into the US market before purchase. However, there appears to be a bottleneck in the flow of inventory from retail to consumers. Several factors are likely contributing to this bottleneck:
Broad economic pressures, such as high interest rates, debates over the government debt ceiling, and a record-high consumer credit card debt.
The pandemic has caused a surge in buying, resulting in accelerated purchases from 2023 being pushed back to 2020-2022.
Intense competition and low purchasing power are leading to a constricted market for used bike sales. Consequently, consumers who prioritize selling their existing bikes before buying new ones are facing reduced liquidity.
There is also a surplus of second-hand trade-in partners, such as Pro’s Closet and Bicycle Blue Book, which further adds to the inventory buildup.
By addressing these factors, we can gain a better understanding of the challenges impacting the inventory flow from retail to consumers in the current market.
Used Bike Listings
For quite some time, we have been diligently monitoring used bicycle marketplaces. Recently, we have redoubled our efforts to assess the exact extent to which these sales channels contribute to the overall bicycle sales system. However, our findings have been inconsistent across various marketplaces.
Craigslist
Craigslist has established itself as a longstanding and relatively informal marketplace for the sale of used products. When comparing the first half of 2022 to the year-to-date figures of 2023, we can observe a similar trend. There has been a consistently noticeable decrease of approximately 16% in the average number of daily listings on the platform.
This decline in average daily listings on Craigslist implies a potential shift in consumer behavior or market dynamics. It could indicate a decreased supply of used bicycles available for sale on the platform, which might be attributed to various factors. One possibility is that more people are holding onto their bicycles due to the ongoing pandemic, limiting the availability of second-hand options. Another factor could be the rise of alternative platforms or channels that offer a more streamlined and user-friendly experience for buying and selling used bicycles.
These findings on Craigslist underscore the need for a comprehensive analysis across multiple marketplaces to gain a comprehensive understanding of the current state of the used bicycle market. By exploring different platforms and their respective trends, we can paint a clearer picture of how consumer behavior and market dynamics are evolving in the realm of used bicycle sales.
Pinkbike
A striking departure from the gradual decline observed on Craigslist is the remarkable surge in listings on Pinkbike, a popular platform renowned for its focus on enthusiast mountain bikes. Beginning in early 2023, the volume of listings on Pinkbike experienced a substantial explosion, showcasing a significant deviation from the trend seen on other marketplaces.
The surge in Pinkbike listings can likely be attributed to two distinct parties vying for attention within the platform. Firstly, there are the passionate enthusiasts who are eager to sell their existing bikes, possibly to take advantage of retail discounts or upgrade to newer models. These individuals recognize the appeal of Pinkbike’s target audience, consisting of fellow enthusiasts who share their passion for mountain biking.
Secondly, retailers have also recognized the potential of Pinkbike as an effective advertising channel to address their stagnant inventory concerns. By leveraging Pinkbike’s dedicated user base, these retailers hope to generate increased interest and sales for their stock. Utilizing the platform as a promotional outlet allows them to target a niche market segment that aligns with their offerings, thereby maximizing their chances of finding motivated buyers.
The contrast between the decline witnessed on Craigslist and the surge observed on Pinkbike highlights the nuanced dynamics at play in the used bicycle marketplace. It underscores the importance of understanding the unique characteristics and preferences of different platforms to gain a comprehensive overview of the overall market landscape. By considering the motivations and strategies of both individual sellers and retailers, we can better grasp the evolving trends within the Pinkbike marketplace and the impact it has on the wider used bicycle sales ecosystem.
“Trade-In” Aggregators
In the past decade, there has been a notable rise in bicycle liquidity facilitated by enterprises such as The Pro’s Closet and Bicycle Blue Book. These organizations play a crucial role in the ecosystem by purchasing used bikes through trade-in partner retailers. The liquidity generated from these transactions helps consumers in acquiring new bikes from retail establishments. However, it’s important to recognize that these businesses are not impervious to the economic challenges faced by the wider market.
Taking a closer look at the chart provided, we can observe the inventory trends of both The Pro’s Closet and Bicycle Blue Book. Interestingly, neither of these entities is experiencing a significant increase in their inventories. In fact, The Pro’s Closet seems to be actively focused on reducing their stock. This could be indicative of several factors at play, such as the impact of market conditions and the need to manage their inventory levels efficiently.
The chart provides insights into the average daily inventory listed on various public-facing platforms. It allows us to gauge the overall availability of bikes through these key market players. By examining this data, we can gain a better understanding of the current state of inventory in the used bicycle market and how it is being managed by prominent businesses like The Pro’s Closet and Bicycle Blue Book.
Considering the role these organizations play in facilitating the trade of used bicycles and the implications of their inventory trends, it becomes increasingly important to monitor their activities and assess their influence on the broader market. By doing so, we can make informed decisions and predictions about the availability and liquidity of used bicycles in the industry.
The disparities found in the datasets mentioned above are indicative of the variability in the availability of underlying data. Addressing this issue could be a potential area of focus for future development, as it would enhance the accuracy and reliability of our analyses.
Upway, a relatively new player in the trade-in market, has recently emerged with a distinct emphasis on low mileage electric bikes. As a consequence, their current inventory in the United States is somewhat constrained. However, this unique market positioning presents an opportunity for Upway to leverage the existing market conditions to their advantage. With the current state of the market, they may capitalize on the opportunity to acquire lightly used bikes at more favorable valuations. This strategic move allows them to build up their inventory of desirable electric bikes, catering to the growing demand in this particular segment.
Conclusion
Examining the dynamics of the used bicycle market reveals a complex landscape influenced by various factors. The analysis of different platforms and marketplaces provides valuable insights into the trends and challenges impacting the industry.
While traditional platforms like Craigslist have experienced a consistent decline in daily listings, Pinkbike has witnessed a surge in volume, likely driven by both passionate enthusiasts and retailers aiming to capitalize on the platform’s dedicated user base. This divergence emphasizes the importance of understanding platform-specific dynamics when assessing the overall market.
Furthermore, the role of businesses like The Pro’s Closet and Bicycle Blue Book in enhancing bicycle liquidity cannot be understated. These entities have played a significant role in facilitating the trade of used bikes, offering consumers an avenue to acquire new bikes while reducing inventory levels. However, their inventory trends, as seen in the provided chart, indicate the need for effective inventory management amid the market’s economic challenges.
Moreover, emerging players like Upway, focusing on low mileage electric bikes, have entered the trade-in market. Although their current US inventory is relatively limited, they can leverage the market conditions to acquire lightly used bikes at favorable valuations, positioning themselves strategically within the growing demand for electric bikes.
Overall, analyzing these various aspects of the used bicycle market highlights the importance of comprehensive data analysis, platform-specific insights, and adaptability to navigate the evolving landscape. By understanding the interplay between consumer behavior, market dynamics, and the strategies of key market players, industry stakeholders can make informed decisions to address challenges and capitalize on emerging opportunities. As the market continues to evolve, it remains crucial to monitor and adapt to the changing trends and developments in order to thrive in the dynamic world of used bicycle sales.
Last week, I posted about a marketplace which saw tremendous growth in 2022 relative to the past decade. After digging into it, it seems to correlate with an oversupply of product in the traditional bicycle retail channel, resulting from a pandemic induced bullwhip effect.
The surge in sales for this marketplace led me to wonder if this was happening on other marketplaces that we are monitoring. The chart below plots the rolling trend line for two marketplaces against one another over the past 6 months. The blue line represents a more established marketplace whose primary revenue stream comes from fees charged for completed listings (10-20%). In stark contrast is the marketplace we looked at last week, represented in red. This second marketplace charges a flat fee for monthly access to list product.
Clearly, sellers prefer to list on the lower fee marketplaces. However, as this applies more pressure to their servers, I would expect the fees to increase. Currently, they do not have a mechanism for transacting from within the marketplace, so it is unlikely they would pivot immediately to a percentage fee structure right away.
Similarly, as this strategy becomes more popular, we will likely see brands monitor the marketplaces in order to restrict any dealers who may be moving product through sales channels which are restricted by their dealer agreements. Most brands’ dealer agreements explicitly list certain sales channels as approved and requiring explicit approval for adding additional channels.
Our goal at Bicycle Market Research is to build out real time monitoring systems for the various market channels that have alluded traditional market analysis techniques. In doing so, we will be able to better understand the behaviors of consumers, brands, and other stakeholders.
One gap in our understanding of the bicycle market has been in regards to used bicycles. To close this gap, Bicycle Market Research has begun building out the infrastructure to monitor this market segment via online channels. We began by identifying 10 major used markeplace resellers or platforms. Progress has been pretty swift, with half of these being deployed into production on our monitoring infrastructure.
With this most recently deployed monitored, we were able to look back over more than a decade. In plotting this data of bikes listed as SOLD, a dramatic graph is produced:
Clearly, something is going on with this marketplace over the past few months. Looking at macro factors, there has been a tremendous amount of pricing pressure and inventory accumulated at retail. This likely has led some retailers to list product on third party marketplaces to try and increase sell through.
The above graph obfuscates the longer term trend, which we can illustrate by graphing on a log scale for the vertical axis. The following graph shows both the trend of $1,000-$5,000 per day sales, with much more frequent trading over the past year. Some of this market activity will also be the result of pandemic induced buyers wanting to change bikes or leave the market.
Finally, we look at the average selling price of bicycles on this platform. This shows a much less dramatic long term trend, with gradually increasing selling prices.
It should be noted that this is a sample size of one platform focused on one primary category of bicycle, and does not represent an overall trend in the used market segment. Nonetheless, it demonstrates that as we build out this dataset, there will be plenty of interesting case studies to dissect.
