How do the handbuilders fit into the larger bicycle industry?
While it is clear to even a casual observer that the U.S.-made, hand built and/or custom bike segment is small, just how small is difficult to establish with any certainty. This is to some extent just a fact of the size - it is difficult to accurately measure something tiny when it is dwarfed by the surrounding context. But the measurement difficulties are also endemic to the bike industry as a whole, though here we at least have some routinized and systematic data collection that helps to frame the big picture. I will look first at this big picture to give a sense of the overall shape of the bike trade in the U.S., before working up some estimates of the size of the handbuilt segment in my next post.
Virtually all of the available information on the bike industry is published in reports drawn from data collected by the Gluskin Townley research and consulting group, either through their own reports or through the annual "U.S. Bicycle Market" report they produce under commission by the National Bicycle Dealers Association (NBDA). Unless otherwise noted, the figures below are drawn from the 2014 edition of that report.
How big is the U.S. bike market?
When measuring "size" of an industry, we must think of both value and physical output. The overall value of new bicycles, parts, accessories, shoes and clothing sold in the U.S. in 2014 is estimated at $6.15 billion. The large majority of this ($5.42 billion) derives from new bicycle sales, though the *used* bicycle trade is estimated at an additional $1.36 billion (this is in addition to that $6.15 billion total).(NBDA 2014: 37) In terms of the number of bicycles actually consumed (the physical output), the report estimates this at 18 million units in 2014. While a significant increase from the number of bikes sold in 2013, this is in line with more than a decade's average volume of 18 million units per year.(39) By the way, these figures are for new bicycles of any wheel size (meaning youth to adult size bikes) - which is an important distinction given that the youth segment is by far the biggest by unit volume of sales.(51)
Where are these bikes coming from?
The vast majority are produced outside of the U.S, for "U.S. bicycle imports started to increase in 1996 and domestic production started to dramatically decrease that same year, with imports capturing 87 percent of the U.S. market in 1998, increasing to 98 percent in 2000 and 2001."(40) Virtually all bikes purchased in the U.S. in recent years have been imported - across the 2004-2013 period, the largest percent of bikes produced domestically only once reached .7% and usually hovered around .2-.4% (42; Table 18). Interestingly, this trend showed small signs of reversal (or, it was a tiny, but potentially important, reversal) in 2014 with the arrival of Kent International's new production facility in South Carolina. Though the Kent facility was not yet fully online with frame production, the NBDA report that 1.1% of U.S. bikes were produced in the U.S. in 2014.(42) Taken together, Taiwan and China are the source for 98.6% of bike imports to the U.S.(56)
Where are these bikes being sold?
Again the distinction between the number of bikes being sold and the value of bikes being sold is important. Mass merchants (e.g. Walmart, Target, Kmart) capture 75% of unit sales, but only 31% of the dollar value of the new bike market, while "sporting chains" capture 7% of unit sales and 9% of dollar value.(60; Table 36) Although bike shops represent a relatively small portion of overall bike sales by volume with 14% of unit sales, they capture most of the monetary value produced in the industry with 50.5% of the total. "Outdoor Speciality" shops sell 2.5% of bikes but capture 7% of value.
Most every bike sold in the United States is an import and virtually all of those imports are sourced from China and Taiwan. Most all of these bikes are being sold by mass merchants - not "bike shops" - even though these mass merchants make far less money from the bikes sold.
But....I would emphasize that the aggregate summary statements - which make it seem like U.S.-made bikes as well as standard bike shops are totally irrelevant - can disguise lots of potentially important variation that a finer-grained analysis might highlight. In terms of total bikes sold per year, we are talking about a lot of bikes - about 18 million! So, to say bike shops "only" sell 14% of bikes in the U.S. still means 2.5 million of them each year. Likewise, the "other" category, which includes online retailers (and which I would guess is the fuzziest of all these estimates), at only 1.5% of total units sold still works out to 270,000 bikes in 2014. Likewise, looking at the value flowing through these different segments, bikes sold at bike shops represent $1.8 billion in 2014 (which does not mean big profits from selling bikes, of course; bike shops basically haven't made a profit from new bikes sales for well over a decade...but that's a different story), of which even a small portion is still a sizable dollar amount.
With the big picture in mind, I will turn next to the more inscrutable and nebulous issue of the handbuilt in the U.S. segment.