By Ely Khakshouri, CEO

If you’re troubled by how expensive bicycles have become in the United States since the start of the Covid-19 pandemic, I get it. I am too. I founded Retrospec in 2009 with one goal: to make beautiful, high-quality, fun-to-ride fixie bikes for college students they could actually afford.

Some things have changed since 2009 here at Retrospec; we now have a full range of outdoor products and intersect with every age group and demographic. Our mission has broadened, but not wavered: we are still an outdoor company that is committed to the intersectionality of the outdoors.

Our first bike, the Alpha, launched in 2009 for $350, and 11 years later in 2020 the same bike, now called Harper Plus, was being sold for $325, with many improvements made to it along the way. We’ve done everything we can to make the outdoor active lifestyle accessible to all. However, today, most bicycles on the market, including some of our own, have been priced at 20-50% higher (or even more) than they have been in the last two years. Why?

Are bicycles more expensive simply due to retail price increases during the covid-era bike demand boom and supply chain shortage? No, they’re not and I would like to clear up that misconception. Here is the reason bicycle price ranges have surged as much as they have:

Tariffs:

In 2018 the Trump administration enacted its Articles of China tariff program, which placed a 25% tariff on bicycles, among other items. The bicycle industry quickly applied for exemptions from those tariffs, which were granted by the government (on many bicycles) for two reasons.

First, bicycle tariffs do nothing to bring jobs back to the US because we don’t have bicycle manufacturing at scale here—over 97% of bicycles sold in the US are made in Asia. Second, because bicycle manufacturing would still largely remain in China where bicycle components are made, the Chinese economy would not be the ones having to pay for these tariffs—the American consumer would have to when the price of the bicycle increased by 25%.

The Trump administration approved tariff exemptions for many types of bicycles and renewed those exemptions several times within a period of a few months from 2018-2020, but on 12/31/2020 when the exemptions were up for renewal again, the administration let them expire. For bike companies like us that already had many bicycles in production or in transit in China when the exemptions expired, and without warning that exemptions would be discontinued, we had no choice but to pay the extra 25% at the border and pass most of that on to consumers in order to absorb the balance.

Ocean Freight: 

From 2011 through March 2020, the average cost of an ocean container was $1,800. We load about 280 bicycles in a container representing an ocean freight cost of $6.42 for those years. In September 2021, ocean container prices to the west coast peaked at over $20,000. Our ocean freight cost per bike increased more than 10 fold to over $60 per bike!

 In addition, the average waiting time it took for us to receive a container increased from less than 30 days pre-pandemic to over 110 days.

Material Costs: 

The pandemic brought with it an increased demand in outdoor gear and bicycle consumption which impacted raw material costs by 20-400%. Labor shortages and Covid-19 outbreaks caused labor prices to surge more than any other period pre-pandemic. 

Together, the covid-era cost increases have more than doubled our cost of product for many items, and at a minimum have had a double-digit impact on costs.

Retrospec has done everything in its power to bring accessibility to the outdoors for almost 13 years. It’s never been easy, but we’ve never faced any of the inflationary headwinds we face now to this degree, let alone all at the same time

Will prices come down soon? I spent the first year of the pandemic thinking they would. However, costs have only increased since then, and our manufacturing partners have indicated more increases for 2022 and beyond. We have aggressively stocked up on product knowing that locking in today’s prices will help us put off inevitable price increases for as long as possible.

What can we all do? Write your local congressperson and let them know that you would like to see the bicycle tariff exemptions, and others, that expired on 12/31/2020 restored. I’ve long believed that the single biggest contributor to today’s bicycle inflation is tariffs. The tariffs have not resulted in fewer bikes coming out of China, nor are we materially closer to making bicycles here in the states that are not composed of imported components.

The reason bicycles have surged in price so drastically is variable and largely resides in the hands of the government, but we're not at a total loss here. Now that I’ve cleared any misguided assumptions, I want you to know that we’re doing everything we can to get our prices down to where Retrospec wants them to be for you. If we work together to contact local officials and appeal these tariffs, we’ll be back to making the natural world accessible to more people.