landeck

My Feedback: (1)

FlyboyFred, two points:

1. It is not illegal to be a monopoly. It is illegal to use your monopolistic powers to drive others from business. But then Hobbico is far from being a monopoly with the likes of Hanger 9, Hobby People, and others around.

2. There are hobby store owners on the forum. I have yet to hear any of them substantiate your claim that Tower sells items directly to the consumer for less than Hobbico sells wholesale to hobbie stores. Hobbico does try to maintain a minimum retail price for their products which Tower meets. This is legal and a common pratice for distributors.

Bruce

Sport_Pilot

National Hobby near me went out of business in part because Hobico stopped selling to them because they were underselling Tower Hobbies.  The other reasons were that the people renting the store space wanted them out and they could not find a place with rent low enough, and they had recently bought out too much train stock.  But I know for a fact that they stopped recieving orders from Hobbico and had to refund many sales.  If Hobbico is trying to create a monopoly they are doing a very poor job.  Horizon was smart to buy out Hobby Town.  Now Tower needs to put up some brick and morter if they want to create a monopoly.

topspin

I don't think Tower is going to be doing that any time soon. They seem to be doing well with internet mail order sales even in this lousy economy. I still don't believe any one distributor can gain a monopoly on the hobby industry because of the sheer diversity of interests and products. No single company could afford to stock everything they would need to hold a monopoly. Companies will come and go like they always have but several will remain, none with a monopoly.

w0mbat

My Feedback: (1)

Actually, Tower sells products direct at or near wholesale cost all the time as long as people take advantage of their deals. Many times GP will drop the MAP or charge excessive shipping to dealers on items which puts the Tower selling price at much less than dealer costs. When we, as a dealer, question them about their pricing, they state that Hobbico and Tower are totally separate companies, not related in any way! Somehow they always have the sale prices listed on the Tower website before we, as dealers, even get them!

Profit margin is decent on props, some servos, glue and some building items (that we can usually buy direct from the manufacturer anyway) but there is really no profit margin in planes, engines, covering, lower priced radio systems, etc. if you compete with Tower pricing. We are forced to stock those items as a service to the customer. Considering inventory costs, we actually lose money on just about everything we sell in those categories.

ira d

When you do a search on Tower Hobbies you will find that Tower is a division of Hobbico basically one and the same.

Sport_Pilot

How would you know?  Why is everything at the field E-Flight, Parkzone, or Hanger 9?

Sport_Pilot

Hobbico doesn't hide the fact that they own Tower Hobbies.  I don' t know why you would claim they say otherwise.

http://en.wikipedia.org/wiki/Hobbico

w0mbat

My Feedback: (1)

ORIGINAL: Sport_Pilot

I think everyone knows they are the same company. I haven't received an official letter from Hobbico denying the correlation or anything. I was just repeating what my GP sales rep tries to tell me when I ask about Tower pricing!

FlyboyFred

Sport Pilot; Why do you keep defending the evil empire? Hobbico's past actions reflect nothing but greed and their desire to bully their way into a monopoly in which they can set prices at whatever the market will bear. They have already achieved this goal with certain products for which they have exclusive distribution rights in U. S., and the prices reflect this.

If you intend to stay in this hobby, I hope you will avoid purchasing from Tower or any of the brands that Hobbico has bought out or represents. They tried to buy Sig, but Hazel refused when she was still there, and recently new owners have stepped in, and Sig is once more a reliable, independent distributor of many brands besides their own. They started in the hobby business selling balsa, and if you're a scratch or plan builder Sig is still the place to go for quality balsa. Much higher quality than some of their competitors.

Sig and Global, the distribution arm of Hobby People, are viable alternatives for local hobby shops, although Global's line is mostly imports. They pioneered the sale of ARFs back in the '80s, with their ModelTech "Dragon Lady," and their ARFs are still superior to many others. ModelTech still supplies their P-51 "Old Crow" ARF.

When you have a choice, buy American!