Grand Junction, Colorado
Bicycle racks and accessories
RockyMounts is facing back orders as it struggles to meet demand for bike racks in 2020 and potentially beyond. "Every time we get a container," says Noyes, "we have to go through the orders and figure out how we can spread it around as ethically as possible. We sell a lot of stuff to car rack stores, and all they sell are car racks, so we've been trying to prioritize them because it's their only source of revenue."
When the company launched, it made a name for itself by developing bike mounts that could work with multiple types of roof racks. Things have changed significantly in the bike rack business since then.
"We're seeing the most growth in the hitch racks, then the truck racks -- there are a lot of people that are buying trucks, and the roof category is slowly cratering," Noyes says. "Once people use one of the new hitch racks with modern features, people don't want to put the bikes on the roof anymore."
Those features include allowing the rack to fold up, tilt outward with bikes on them, or even swing out of the way of a trunk or rear door of a car. Such racks make it easier to access the bikes and the vehicles, while also making the vehicles less unwieldy to park while the racks are attached.
Like much of the bike industry, RockyMounts has seen significant sales growth during the COVID-19 pandemic. "I almost have some survivor's guilt because our business has benefited from this," says Noyes. "A lot of businesses that are suffering are the retailers and restaurants. Obviously those industries are in turmoil."
However, the pandemic has made it an interesting year for Rocky Mounts with two distinct periods. "Up through April, which was pretty dark, and then since May 1, which I'm considering the COVID bike boom," Noyes says. "Since May 1, we're up about 68 percent over the prior year. . . . We were shooting for 20 percent. So we're obviously way up over that."
Noyes anticipates that the growth in sales will continue into 2021. "We're having some supply chain problems, but with the bike boom, I think this thing's going to go on through at least July, which is the bulk of our selling season. So I would wager if we don't have any supply chain problems we'll be up 15 to 20 percent over 2020."
The company is experiencing issues with getting enough product shipped over from China and Taiwan, according to Noyes. After the first wave of shutdowns, including the initial halt of shipping from Asia, there was a huge boom in consumer demand and all the containers in China were shipped.
"We're having delays because there are not physically enough empty containers in China," Noyes says. "It costs us $5,000 to bring in containers from China. If you want to ship to China, it's only $500 to fill that container and ship."
Meanwhile, the bicycle-manufacturing hub of Taiwan is facing its own issues. "Eighty percent of the parts in the bike industry are made in Taiwan and they have no natural resources. They have to bring in all the aluminum and steel," Noyes says. "In Taiwan, right now steel went up 8 percent and labor went up 5 percent with this COVID bike boom. The factories can't get enough workers. . . . We used to have 55-day lead times in Taiwan. We're now up to five months and it's hard to forecast for this kind of seasonal business based on five months."
The company began moving production overseas around 2005, as it became harder to coordinate everything in the states. "We started running into a lot of efficiency problems as the business grew. "We would ship in a truckload of aluminum from one guy, bring it in, ship it out to Greeley to get it powder-coated. We'd have to ship the steel parts we've made in house to Denver to get plated," says Noyes. "The freight and the time, and moving the stuff all around was really killing us. So we started gradually shifting over to Asia and I think normally we make 2 percent of our stuff in America now."
More recently Rocky Mounts made another significant change, moving west from Boulder to Grand Junction, Colorado. "The problem with Boulder is everything," Noyes says of the move. "All the warehouses are getting torn down and they're putting up luxury condos because that's where all the money is."
In Boulder, the company had to lease a storage yard in addition to its headquarters on the north side of town. The high cost of living also meant that most of his employees had to live outside of town. Now, in Grand Junction, they can live closer to town and work.
The company moved in August 2019 to an old welding school building in Grand Junction while their new building at the Riverfront at Las Colonias Park development was under construction. "It'd be too difficult to move during the height of our season so we moved in the fall just so we could at least get here and get established and learn Grand Junction," Noyes says. "It was easier than Boulder but still hard. And then we moved into the new building and got established. Everything's great because our facilities were purpose-built for us now."
Challenges: Forecasting, says Noyes. "Our biggest challenge is bringing inventory in because you don't want to get into a situation where if sales go back to two years ago, and then we have all this inventory showing up and the demand has been greatly reduced."
Opportunities: "I think the biggest opportunity is going to be the new riders from this," says Noyes. "Obviously people are going out and buying bikes and obviously that's going to stick, it's going to resonate with a lot of these people."
Needs: Capital. "Since we're growing, we may have expanded outside of our line of credit with the bank," says Noyes. "The trouble we run into, since this is a seasonal business, is we bring in all this inventory in January and February, typically to kind of start the season and then the dealers . . . don't pay us for like 60 to 90 days. So it's that balancing act of working within our lines of credit, and balancing when the dealers are paying off versus when we have to pay our vendors."