Regarding Frank's editorial in the august magazine

[Daveo]

I read the editorial in the August issue and have to say that I respectfully disagree with the premise of the essay. I am in full favor of supporting your local hobby shop. I have learned so much from the guys at venture Hobbies in Illinois and I will go to them before even looking on line. I trust and respect their judgment and would recommend that anyone wanting to get into the hobby first go to a hobby shop. I have heard many hobby shop horror stories, but I think for the most part the hobby shop owners are good people and would rather have a returning customer rather than an angry one. So I am willing to pay the extra money to keep them in business.

That being said however I think the cost of these and the margins being made are criminal. I understand the capitalist market, and I know we are all out to make money, but the manufacturers of these kits are getting away with murder. I work for a company that does manufacturing and we can build a product for around $200.00 and then we sell them on the street for $2000.00. That is insane. I am sure that the manufacturers of the kits are in the same boat. There is no way that the parts for these cars, even the ones that are made of exotic materials, are much more than pennies to produce. Margins are controlled by the manufacturers, and while the hobby shop is getting the short end of the stick, I would be willing to bet that the kit producers are making 10 times the true cost of the product. It is shameful.

You also state in your essay that you could not name another industry that is cheaper now than it was a decade ago. I can name several. Telecommunications, Computer hardware, video games, the list could go on. But the point I am making is that I don’t think that the consumer should be the one to take the brunt of the manufacturer’s greed. The manufacturers should be creating an environment where they make money and the also nurture small business so the industry can thrive. I am a total believer in the adage, “You get what you pay for,” but in the RC world I am not sure that it holds true.

Anyway that is just my opinion. I thought the essay was very good and really hit a chord with me.

Thanks Frank!

[FrankM]

Thanks for the thougthful comments, DaveO.

If I undertstand you correctly, you aren't disagreeing with what I wrote per se, you are adding another element to the discussion, that the manufacturers are making a killing. I cannot say with the utmost certainty whether this is true or not, but the evidence available suggests that most manufacturers are also running tight ships.

Although the actual cost to manufacturer may be low, when you factor in the cost of shipping (a lot from Asia) and warehousing, plus marketing (I know companies that spend high six figures each year just in print advertising), that "pad" gets eaten up pretty quickly.

I just don't think that the manufacturers are getting obcenely rich from making Mini-Ts.:D

[DaveC]

I see the wholesale costs dealers pay. I compare that to what HobbyShop XYZ charges. The LHS owners are working on thin margins for sure! Fighting against online retailers who sell for less (but YOU pay the shipping, don't forget). I think the LHS can charge more, because they are supportive and convenient.

If LHS prices are low on kits and RTR's it makes it easier to get buyers who will need parts, fuel, and accessories, which can carry higher margins.

Unfortunately, RC is expensive, and face this reality, it does not generally appeal to the top income bracket people, so the common Joe's seek out best value (read "lowest price") and are willing to wait for the UPS truck. After a few years most RC guys know more about their own models, and don't seek support at the LHS. Online sites (sorry..) also give access to info that used to be locked away in the hobby shop or the race track. This also keeps people out of the stores.

[Daveo]

...I just don't think that the manufacturers are getting obcenely rich from making Mini-Ts.:D


May be not Mini-ts, but I bet they are from Tmaxxes!!!:D

[Greg B]

I can see all companies trying to make a profit. Some companies are doing good to keep the doors open. Overhead makes it seem impossible to clear a profit across any board.
Consider inflation over the past few years versus the prices we are seeing in RC today and I dont think it's all that bad.
As an example of other hobbies, I went to the local hobby shop just yesterday to purchase some boxes of football cards. Here is my list of purchase.
2007 NFL Artifacts football.
2007 Aspire Football.
2007 Topps Draft Picks and Prospects Football.
2007 Donruss Elite Football.
2007 Press Pass Signature Edition Football.
2007 Playoff Prestige.
My Total was $525

Expense is everwhere and I belive inflation is a big part of the problem, not corperate greed.

Greg B.

[Daveo]

...Expense is everwhere and I belive inflation is a big part of the problem, not corperate greed.

Greg B.

I think I could buy that except for companies like Smartech and duratrax that create the same quality cars for hundereds of dollars less than the other companies!!

[Damage Inflictor]

Well I for one think prices have been declining and quality has gone way up, Jeez when I started in this hobby,20+ years ago cars were fragile and expensive to race competetitively, I sure tore up my share of equipment.
I will take the direction it is going and appreciate it too.

[FrankM]

You also state in your essay that you could not name another industry that is cheaper now than it was a decade ago. I can name several. Telecommunications, Computer hardware, video games, the list could go on.

I had to think about this for a while before rubuttal. I think you're partly correct on this, however, what you're not taking into consideration is that vast difference in volume. Let's say there are 14 million RAZRs out there, or Halo 3 discs. A company might sell 3000 units of a particular kit in a year. I think high numbers for most RC kits would be less than 10,000. Traxxas and its ilk are the exceptions, of course. I believe there are at least one million T-Maxxes sold, and that was a while ago. Of course, Traxxas has its own factory and employees in Taiwan, and you must also consider development costs for innovative companies. I can tell you that the tooling and development of the original XX-4's chassis -- just the chassis -- was around a quarter mil.

[Daveo]

I see your point, but don't you think the reason that there is no volume for the RC industry is the because of the cost of admission? I mean if someone put out a truely low cost RC car I would think it would be a much more popular hobby than it is. I mean look at the tyco and nikko RC cars. There has to millions of those sold, but because you can't get parts for them they break and the kids loose intrest. If however there were hobby class cars and planes at a more resaonable price I would think the hobby would truely boom.

[JasonC]

DaveO,

Hobby class cars, by nature, have more parts than the Tyco and Nikko cars you mentioned.

A higher parts count means more molds (tooling isn't cheap), more machines in operation, more employees to operate those machines. The materials on those Tyco and Nikko cars aren't anything fancy, either...just run-of-the-mill ABS. At least we get some nice composites with the the hobby grade rigs.

The hobby is getting cheaper, just look at the cost of a Clodbuster in '87 compared to what it is today.

Should the hobby get more expensive? In a way that has been happening. The prices of Nitro Monsters have continued to climb over the past few years. The T-Maxx, Savage, and Revo have all seen price increases as new models come in and the old ones disappear from the shelves. What did the original T-Maxx sell for? $299? They're now at $349 and $460 The price of a Revo is now over $500...

But there are other things to consider as factors in the pricing as well, like exchange rates and the declining value of the US dollar in the world economy. The dollar no longer has the spending power that it used to have.

[Greg B]

I have seen some increase in prices. The T-Maxx, HPI Savage and the Revo have seen little price gains BUT the overall product has seen many upgrades over the lifespan of each product.

Why dont we talk about the automotive business. Most own a car or truck simply because of our needs. Some folks will settle for a Ford Ranger while others choose the Ford F-350 with everything on it except for a back scratcher. Not everyone operates on the same budget so some can afford it and some can't.
Remember the stories that I am sure most fathers have told ? The story about our Dads first car that was new with a big V-8 engine for $2,400 and gas was only 24 cents a gallon.

I cant think of anything that hasn't went up in price over the years but at least in the RC world you can often see quality that matches the increase.

Greg B.

[5 Pack]

Actually I think it was Hasbro that was attempting to bring a hobby grade nitro out for noobs. Reviewed in the Feb 2007 issue of Driver wern't they? Did that idea flop??

And what about the AE18 series?? Take your pick, get an extra batt pack (maybe even 2) and a simple quick charger. Yet you can still get out the door for a shade over $200 after taxes. Budget hobby grade RC is out there. Of course you're going to have a hard time finding it if you only look for something to tangle with a Maxx, MGT or Savy.

[FrankM]

Actually I think it was Hasbro that was attempting to bring a hobby grade nitro out for noobs. Reviewed in the Feb 2007 issue of Driver wern't they? Did that idea flop?

From what I understand Hasbro's Nitro XRC is still on track; I believe they had some fuel pressure issues in high-altitude locations and have remedied the problem.

[Flamnpede]

Well here's my take on it.
I will support my LHS if they can say yes I have that part in stock. Otherwise what's the difference if they order it or I order it? Can't say it's support because most the time what I want I know more about than the hobby shop.
The problem we have here is nobody supports HPI they all sell traxxas. Well I have my fair share of traxxas trucks (4 in total)and now that I have my Savage the t-maxx gets very little use. But when the t-maxx does get used I break parts and the LHS makes money. I know there's a fair markup on certain things one of them being bearings. I saw the cost on a boca bearing and it was $2.00 but the retail was $8.00 at the store. It all depends on the supplier and the product. In the last 10 years we have only had two hobby shops worth a darn and both have closed. So once the others get off the traxxas gravy train I will support them again.:rolleyes:

[WrenchHead]

I have to agree with you all. I buy parts from all over the world.I usually offer my $$ to my LHS First.If they can't get the parts I will order from companies from all over the world to get what I want. As an example I tried to get my LHS to order me a Vantage C/F Pipe.After months of excusses about them not getting back to them I found out the truth from the manager.Alot of companies have Buy In Programs where you have to buy alot just to sell there products.The owner of the LHS didn't want to buy $2000 worth of product just to fill my $150 order.So I had to find a shop online who already had the product in stock.Then when I found it and installed in on my truck and took it to my LHS they got mad at me for not buying something else for my truck THEY had in stock or could get.It is MY money and I will spend it on what I want.They didn't go to my job and work for me that week. it has worked out that if I am ordering from somewhere I will tell them about it and offer to get them some also to sell in there store(for a small mark up).Thanks for listening,Gota Go To Work Now.Later,WrenchHead.

[RiZZa]

I hear you guys. Within a 30 minute drive from my house there is 6 hobbyshops. Most sell Tamiya and Traxxas. Only 1 sells HPI and never what I need but that's the price I pay for being different. If I can't find what I need locally, I go interstate but at least my money stays in Australia. Often I have to purchase OS because I can't get what I want.