How Aftersales Services Are Driving Margins for Automotive OEMs – And What Cycling Can Learn From It

Aftersales services are the profit engines for automotive manufacturers. Parts, repairs, maintenance plans, and financial services drive revenue and, more importantly, margins. Car sales are often loss leaders, with tight margins at best. But once a vehicle leaves the lot, the money starts flowing—thanks to high-margin aftersales services that can keep customers tied to the brand for years. In some cases, aftersales can account for almost 50% of an OEM’s profits​. 

In the cycling world, this potential is largely untapped. Bicycle manufacturers are struggling to stay profitable. Why? Thinning margins, fragmented customer relationships, and few recurring revenue streams. It’s time the bike industry learned a lesson from the automotive world. Aftersales services can drive real value—if manufacturers are equipped to handle the data, the services, and the customer engagement.

Aftersales is a Goldmine for Automotive OEMs

The auto industry mastered aftersales because it drives repeat business. Here’s how:

• Steady Revenue. New car sales are volatile. Aftersales, like maintenance and parts, are consistent, often providing 40% margins.
• Customer Retention. After buying a car, customers need service, insurance, and upgrades, giving the brand multiple touchpoints for future sales.
• Upselling Opportunities. Need a part? Buy the manufacturer's high-margin version. Extended warranties? They can be worth thousands over the lifecycle of the car.

Key metrics like Average Repair Order Value and Service Retention Rate are watched like hawks in the automotive industry. It’s how brands ensure they aren’t just making a one-time sale but nurturing a multi-year profit stream.

Bicycle Manufacturers Are Struggling

Most bicycle manufacturers face shrinking margins due to overstocking and oversupply of bicycles. They also suffer from limited aftersales engagement. They are selling bikes, then losing the connection with their customers. With e-bikes on the rise, the industry is shifting, and the opportunity for aftersales services—maintenance, parts, warranties—is bigger than ever. However, without a structured system to manage this, manufacturers are losing potential profits. Manufacturers also face:

• Thin margins. Most of the revenue goes into materials, production costs and finance.
• Customer drop-off. Once a bike is sold, the customer is often lost, with little follow-up or retention.
• Limited recurring revenue. Unlike the auto industry, the bike world hasn’t yet capitalised on recurring services like maintenance plans or upgrades.

Aftersales in Cycling: The Untapped Opportunity

Bicycle manufacturers are leaving money on the table. Many rely too heavily on initial bike sales and aren’t engaging customers post-purchase. There’s no streamlined aftersales system, no standardized warranty process, and barely any ongoing connection with customers once the bike leaves the store. And let’s face it—thin margins make this model unsustainable.

Here’s where BIN - Bicycle Identification Number comes in. BIN uses RFID/NFC and blockchain tech to create a unique, tamper-proof digital ID for every bike. This system enables manufacturers to build an aftersales ecosystem around data.

How a Digital Bicycle Identification System Can Drive New Revenue for Bike Manufacturers?

1. Data-Driven Service Reminders

Like how cars get service reminders, bikes can do the same. If you know when a customer’s bike hits 1,000 km, you can offer a tune-up. With BIN, manufacturers can track usage and prompt customers to book services at the right time.‍

Example: A customer gets a push notification suggesting new tires based on mileage, with a direct link to the manufacturer’s service shop.

2. Extended Warranties and Service Plans

Post-sale services are gold for revenue generation, allowing manufacturers to offer extended warranties and service plans based on real-world bike usage.

‍Example: E-bikes, with their complex electronics, could come with a multi-year warranty that also includes software updates and maintenance checks.

3. Spare Parts and Accessories

Tracking the lifecycle of parts can lead to more sales. BIN platform can notify manufacturers (and customers) when certain parts are wearing out, automatically offering genuine replacements.

‍Example: After two years, BIN flags that a customer’s e-bike battery might be nearing its end-of-life. The manufacturer offers a discount on a replacement battery—before the customer even notices a drop in performance.

4. Insurance and Financing

As e-bikes get more expensive, customers need financing options. A blockchain based bicycle registration system can integrate with financial services to offer leases, insurance, and theft protection.

‍Example: A customer signs up for an insurance package covering theft, which is linked to BIN’s blockchain. If a bike gets stolen, its unique ID allows for easy recovery or claim processing.

5. Regulatory Compliance

The EU’s Right to Repair, Digital Product Passport and Battery Passport laws mean manufacturers need to provide lifecycle transparency. BIN’s blockchain ledger tracks everything from parts usage to repairs, ensuring compliance and avoiding penalties.

‍Example: An e-bike manufacturer integrates BIN to track the recycling of old batteries, meeting EU regulations on environmental sustainability.

The Window of Opportunity is Wide Open

The cycling industry is at a tipping point, much like the automotive industry was years ago. The digital bicycle identification can be the system that brings aftersales to the forefront, driving revenue, customer retention, and even compliance. By following the blueprint of the automotive world, bike manufacturers can create profitable, scalable aftersales models. The opportunity is there—it just takes a little innovation to unlock it.

With bicycle manufacturing and post-manufacturing data standards, the bike industry doesn’t just sell bikes—it sells a lifecycle. And that’s where the real money is.

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