Adam McDermott - LINUS BIKE Founder & President joined Yahoo Finance to discuss how Linus Bike is keeping up with spike in demand amid covid.
- Our small business segment is part of our Road to Recovery. This is brought to you by Mastercard. And for that, we want to bring in our next guest. We have Adam McDermott. He's a co-CEO of Linus Bike. And Adam, it's great to have you on the program.
We've talked about this a couple of times over the past month, where bikes have been the must-have item, it seems like, during the pandemic. I was on your site earlier today, and right at the top of the website, you have a popup that says, due to high demand, you have to pre-order your bike. Now, how does the pandemic, do you think, just change the energy and the conversation around the bike industry?
ADAM MCDERMOTT: Drastically. Coming into 2000-- well, 2019 was one of our worst years as an industry, the bicycle industry as a whole. So it was completely unexpected. We plan our inventory, our projections, about six months out. So rolling into 2020, the expectation was quite low.
And then all of a sudden, with COVID and how people are kind of changing how they spend their time, how they get around, we've seen-- I mean, we're like 80% up over the previous year. So actually no way to accommodate for that increase in demand to ramp up inventory. As I said, normally, we're about six-- we're ordering inventory about six months prior to when we receive it. Now we're planning 12, 18 months ahead. So we're already ordering for 2022.
ADAM SHAPIRO: I ask you this question with fond memories of my 1970s-era Schwinn Huffy with a banana seat. But I got to ask you, where are you seeing the greatest demand for the bikes? Is it the urban centers, like New York, or are you seeing it nationwide in rural areas as well?
ADAM MCDERMOTT: It's mostly urban areas for us. I mean, that's primarily where our customer is, in sort of dense or urban areas, kind of towns and cities over 200,000 people. But it's pretty much-- and it's nationwide. We're seeing it Northeast, South, in the middle, everywhere.
- Adam, have the preferences of your consumers changed at all, just in terms of what they're looking for because of the pandemic?
ADAM MCDERMOTT: I think the sweet spot is between, like, $400 to $1,000 bike. It is kind of what in the industry is middle to lower in terms of price range. I think it's a lot of people that-- I think the interest is recreational. There's just a limit in what's available to them, you know.
You can't go to a gym. You can't take your kid to soccer practice. Even, like, your work schedule and meetings and social life is all reduced. Biking is one of the few things you can do that doesn't require an outside business, an outside service, something that is limited. You can just get on your bike and go and experience it. I think a lot of the demand is coming from that, and as well as people just changing the way they commute that are avoiding their traditional public transportation, or buses, or subways.
ADAM SHAPIRO: What about the electric bike, you know, that whole market? In a place like New York, which has a license for everything, you've actually got to get a license for one of these things. But what kind of growth do you see in that side of all of this?
ADAM MCDERMOTT: We just launched electric bikes ourselves. The demand parallels what we're seeing in our conventional bikes. We had one container just arrive, and it was halfway sold before it arrived, which, for us, is kind of a big deal because it's a much more expensive item. You know, these bikes average between $2,000 and $3,000, compared to our regular bike, which is about $500.
- All right, Adam Linus, great to-- or, sorry, Adam McDermott, co-CEO of Linus Bike, great to talk to you. Thanks so much for taking the time.
ADAM MCDERMOTT: Thanks, Adam.