Hi Crockers, most retailers pay for most of their stock up front or 30 days from receiving th bike.
There are three ways in which a shop orders their bikes.
With some mass produced bikes, retailers have to place big orders at the beginning of the year. The manufacturer then knows exactly how many of each model and size they need to make for the season. This is great for the manufacturer and minimises their risk. It also means they will have been able to purchase parts, most of which as Col says come from Asia. The manufacturer is pretty safe when it comes to a sudden increase in costs as they will have bought the parts (or bikes) from Asia earlier in the season. Of course if the Bikes are constructed in Europe the UK distributor will have to pay for any bikes not already in stock in the UK in € at the post £ crash prices immediately putting prices up.
Other mass produced bike manufacturers, like Wisper, place monthly manufacturing orders three months in advance and usually have a month's worth of stock in the warehouse. This means retailers don't need to take the risk of holding stock or pre ordering. They hold demo bikes and order from stock as they sell. Companies like Wisper pay for the stock as it arrives at the port of entry, that is why we don't need to increase the prices of the bikes in our warehouse, they were paid for pre £ crash. However the stock due to arrive in July will cost us about 12% more than the last delivery, hence the need for an increase once our existing stock sells out.
The third type of company, like Riese and Müller, individual hand build their bikes to order. This means apart from a few demo bikes the crash in the £ will have an immediate effect on the cost to UK retailers. Worse still, all the bikes currently in the pipeline will cost the distributor, in this case Amps, the new post crash price. So to protect the retailer and customer, we will actually be making a loss on all last month's sales. Hence the need for an immediate price increase.
It really isn't as easy and lucrative as some people may believe. In fact what has just happened will inevitably push prices of everything up. Let me assure you, most manufacturers and distributors are doing everything they can to minimise the impact on people wanting to buy new electric bikes, clothes, TVs, phones, washing machines, cars, food, energy, etc, etc. In the UK. But unless the £ comes back to its pre crash levels PDQ, we will all need to accept the cost of living is simply is going to be more expensive.
I can also assure you that as the £ gets stronger again, and I hope it will, we will all reduce prices and yes it will be to a fanfare. We all want our products to be affordable to as many people as possible.
All the best, David
