PAINT CHIP

NOW THERE IS THE PROBLEM "IF THEY COULD COMPETE WITH ON LINE" SMALL HOBBY SHOPS CAN'T I TRIED AND I "WAS"IN FOR A RUDE AWAKANING IT IS GUYS LIKE YOU THAT DONT YHINK THAT ARE RAISING PRICES BECAUSE YOU ARE ALLOWING IT TO HAPPEN IF THIS MENTALITY PURSIST THEN THERE WILL BE NO LOCAL SHOPS THEN WERE ARE WE GOING TO BE? :stupid:

PAINT CHIP

bigbadbowtie

We have a local shop that sales his vehicles for 10% or cost(he says). I know he sales the xxx-nt RTR for 279.00. Online they are 339.00. Maybe that will give you an estimate in price increase. His parts a usually a little more than the ather place in town and im guessing thats where he makes hiss money. He sales eveything from Trains to plains to slots cars. His fuel is quite $$$ to. 27 for a gallon of odonnell 20%.

jamiels

LOL my brother just bought a WW body kit for his crx about 2months ago , that is very funny

Homebrewer

My Feedback: (8)

WHO CARES? If you don't like the price, don't buy it. Its that simple. Just because an item is marked up 50-100% doesn't mean it results in pure profit of the same percentage. Distributors and hobby stores have overhead that needs to be paid regardless of how much they sell.

Celly013

Your LHS Marks up.... Becuase they have to pay for
"Brick, Mortar, and Blood.."

AKA, A shop for the products, lights so you can see the products, and People to assist you with the products...

Just becuase they can get T-Maxx's at $200.00, doesn't mean that after shipping, being in inventory, etc. etc. They don't cost them $300 each... If they sell em at 380$ Thats less than a 20% markup!!!

My rule of thumb is... Subtract 10% from the lowest "Buy Me Now" price on ebay... This is usually what the wholesale cost is on products...

DSA.308

My Feedback: (6)

"Buy a TMAXX for 200.00 sell it for 380.00 less than 20% MARKUP??!" CELLY013 your calculator doesn't seem to work like mine...A item bought for 200, and sold for 400 is 100% markup by my calculations. Did you graduate from 4th grade only? I believe they went over percentages in the 6th grade here in Colorado. You need to brush up on you math buddy! NO WONDER YOU DON'T CARE WHAT YOU PAY, YOU CANT EVEN FIGURE OUT PROFIT MARGIN FROM THE COST OF A ITEM. TO THE HOBBY STORES ACROSS AMERICA: CRY ME A RIVER!

DSA.308

My Feedback: (6)

PAINT CHIP if you really think every hobby store from coast to coast is going to close because we all found out how much profit they make, you need to pull your head out of that dark and stinky hole you have it buried in!

As for your question as to where we all will be left, after all the LHS are out of business, is, with all the wonderful mail-order companies prices, thats where!

DSA.308

My Feedback: (6)

Anyone else want to stand up for the local hobby shops? I intend to shoot each and every one of you down, start your own thread about how great hobby shops are and stop trying to get involved in a thread thats purpose has nothing to do with deffending the LHS.!!!!!!!

I hope the next person who posts has something decent to say, and related to the topic of the THREAD which by the way is: "HOW MUCH PROFIT DO DISTRIBUTORS RELLY MAKE?"

PLEASE DISREGUARD MY PLEA FOR ANYONE ELSE WANTING TO DEFFEND LHS, ACTUALLY DONT STAND UP. JUST SIT DOWN. AND MAKE YOUR OWN THREAD ABOUT HOW FANTASTIC YOUR LOCAL LHS IS. I DONT THINK NITROMAN WAS LOOKING FOR PEOPLE TO DEFFEND LHS, HE WAS TRYING TO FIND OUT THE ACTUAL COST OF THE ITEMS WE ALL BUY AT THE LHS.

We aren't asking "WHY" we are asking "HOW MUCH!"

Nitromann, you really know how to put a headline on a thread my man! ahahhahahha, looks like more than one guy has his panties up in a wad over this thread!

Celly013

As I was pointing out...

LHS's have overhead that needs to be paid for... Rent, Electricity, Stock, Personell.. Just becuase they paid 100$ for an item, their cost is higher becuase you have to take a piece of the pie for everything they pay and add that on to the total also.

-- PRETEND --

I'm a LHS Owner.. I buy a Car for 200$ from my distro. Then there is a 10$ shipping fee (kits are heavy). This Box sits on my shelf for 2 - 3 months... During that Time...

1. I need to pay for electricity, to put light on the box so people can see it.

2. I needed to pay a clerk to pull it off the shelf and show people.

3. I needed to pay rent so that box has a place to sit.

4. I needed to pay insurance, to protect that box in case of theft / fire / etc.

5. I needed to pay somone to come in and clean so that box didn't look dusty and un representable...

6. I needed to pay taxes on it becuase it was instock Jan. 1.. And the tax man cometh...

7. etc. etc.

So now, this 200$ Kit... Didn't cost me 200$ did it? Much, Much more... I did indeed give a generous estimate of 300$.. But even then if I mark it up, around 20%.. It'll be 350 - 380$ +/- a few bucks....

People open LHS's to make money... I can't think of one business that is open who isn't out to make money...

The reason places online can sell for cheaper, is your Kit sits in a damn warehouse, until it needs to be shipped. Cuts overhead in half... Why do you think Amazon is cheaper than your local mom and pop book store... Same damn reason...

Also, next time your out racing.. and you pop a Ball Cup (Stupid $.29 piece!) And you have no extras... If there is no LHS you can call it a day.. Place an order at your "mail-order palace" on monday, and pay 10$ for shipping... WHAT A BARGAIN!

DSA.308

My Feedback: (6)

I dont mind buying mail order and waiting at all, it saved me over $500.00 on my FG. Celly your argument does NOTHING to change my position. I will continue buying On-Line, and really could care less about my LHS. They will be in business WITH or WITHOUT my patronage.

AR196

IT's like a big pyramid, guys.

The manufacturer deals with opne or two distrbutors. The distributors deal with a pile of shops. The shops individually deal with a pile of customers.

Each step up the line has more individual customers than the guy below. And each step up charges a greater mark up.

And usually each step up has a lower overall volume of whatever it is they sell. So the distrbutor, who sells to say 10 shops puts out more item "X" than just one shop.

The guys lower down ultimately made all the volume of sales since they produced it all. And they made their profits through volume.

And the reason it costs what it does is because of that volume. It's the only way to get the unit costs down.

If you want to "save a bundle" by getting rid of the dealer or distributor or whoever, that's easy. You just buy in his volumes and the dude who is selling to him now sells to you.

That's why a manufacturer deals with distributors. They move stuff for him so he can concentrate on manufacturing. He doesn't want to deal with onsies and twosies. Or all his profit would be consumed handling these piddly accounts. He need volume. And so it goes up the line until you get to the retailer, who deals with the individuals.

So what's his cut??

It depends. When I ran my mail order giant scale hobby supply, it varied with the particular dealer or manufacturer, what the specific product was, how much you bought, who paid the shipping and a ton of other stuff.

Generally, though, they provided a discount from suggested list of about 40%. Now, that's not a price plus mark up to the dealer. It's a reduction from suggested list. Different thing.

And out of that money, comes all the operating costs, which you, my friend, are paying.

As for the guy who thinks he can charge whatever he likes, that won't last forever. This hobby stuff is not something on which you depend for your life or living. So if you don't like what you're told, you can get on just fine without it. The gasoline you spoke of though, well, we've allowed ourselves to become dependent on it. So even if the price goes to $50 per gallon, we pay. We may buy less, mind you, but we pay. And gripe of course.

For all this model stuff, I set a limit that I'm willing to pay. And I remember everything is negotiable. So if the seller insists on negotiating for full price, he'd better be pretty good at it. He's about to lose quite a few negotiations. And if I can't get it at the price I'm willing to pay, I pass. The right dea;'s just around the corner. If you get emotionally tied to it, you've lost.

Enjoy your R/C truck!

Celly013

I don't care if I change your position... I order 90% of my stuff too online... But, that 10% is emergengy stuff, that I can only get from an LHS TODAY.. Tower Hobbies is Great, but if you have a race tomarrow, breaking something now is too late...

I'm just trying to show the people complaining that the markup isn't as black and white as they think it is..

AR196

Celly,

that warehouse where your R/C truck is sitting costs just as much to run as the LHS. Maybe more. There's more staff too.

Evertybody's got overhead. Some more than others, I will agree. And the end user pays for it.

crash_me_over

My Feedback: (16)

Hey....all you guys......send me your money....I'll invest it....."try and make a profit"....then buy you an RC rig.....and give you a good price to boot!

Of course....I get to keep the stock earnings so I can open up a hobby shop and then have you pay full retail for the rest of your needs.


OK....where's my wallet so I can go buy some parts at the highest prices available?

BUGGIES_R_US

Yo TODD.. nice rigs you got there! I especially like that truck! What is it?
-ram

dagass

Nitroman,

I dunno, I seem to remember reading another thread a month or so back where some guy tried starting up a hobby shop. He stated that in his experience, tahat even larger the hobby shops buy most of their product from 2 places. Tower hobbies was one and I don't recall the other.

That probably explains the difference in price between tower and the LHS.

As for all the other bantering with Mr. Marsh, I wonder why he has to jump all over everybody that doesn't share his point of view and make it personal. I don't believe that anyone said anything that warranted some of his stabs.

Once he did however, he left himself open to the same. For my part, I am done. You might try searching through the posts for the gentleman who tried to open his own store. I believe he can give you the information you are looking for without any bias.

Celly013

Most privately owned [even some public...] manufactures like to keep that info to themselves... It can probably compare to be as secret the 13 herbs and spices in KFC... your chasing ghosts if that is what you are looking for..

nitroman88

My Feedback: (5)

Ya, i thought maybe someone could reveal that since this is such a big forum. But thats why I asked the question. I got a awnser of "no" so ill accept the fact that i wont no the actaul cost and move on. I also figured that if no one knew the actual cost that someone wood tell me what they think as a estimate.

savagegerbil

does anyone know a distributor/wholesaler who will sell to someone w/o out a storefront? i have a tax id and i want to sell on ebay and the web...

puffer

AR196, well said in your post #37. Your well thought out and reasoned reply helps to explain the perceived "huge" discrepancy that consumers see from wholesale through to retail pricing.

Todd Marsh, you'd better watch or you're going to blow a gasket. Oh yeah, and I'm calling you on YOUR MATH after you so hacked CELLY013. Refer back to your post #22 How much is that mark-up again?? Let me see: If it costs 475 and sells for 1,000, then the mark-up is ... over 110%!!!

Now for some inside info from other retail consumer industries that I happen to know about. I would suggest that the standard mark-up on most items from the retailer to the consumer is somewhere around 100% at the retail level. I.E. the store owner pays $3 for it and sells it to you for $6.00 ... you follow? I do believe that the mark-up on r/c kits, complete cars, etc. is much, much smaller. This is the item that gets you into their store, for which you then have to buy parts, accessories, fuel, etc. to continue running. Rather than soak everyone with a really high initial cost, I believe that manufacturers try to keep the cost down so that they can nickel and dime you to death on all the supporting parts and items. Now I'm not saying that they give the kits and complete cars away, OH NO, but I believe it could be much worse.

Compare the above scenario to the 1:1 scale car industry. Read Consumer Reports and see what they have to say about what the dealers and manufacturers actually make off of each new unit that they sell (volume also plays a part here too, but I digress). The real money is in parts and service. That's why they always harp about using "Genuine GM replacement parts", etc, etc.

So with all of that being said, I will continue to support my LHS when prices, service and the delivery time are reasonable. If I have to wait 1 month for him to order parts in, them I might as well do it myself. I have resorted to ordering items on-line for some of these very reasons. Its still nice to be able to walk in my LHS and actually touch and feel the parts before I buy them, and to determine if they'll actually fit and work. That hands-on service is the extra that you pay for. My .02

Wicked!!

My Feedback: (5)

Hey puffer glad so see another Ontarion on the boards. I'm about 12 hours south east of you in North Bay. [8D]

gerwen

Exactly. You've made your choice and intend to stick with it.

Shopping at the lhs will cost you more. You also GET more at the lhs.

My lhs is a quality store. Knowledgeable staff always willing to help, and best of all, they are willing to let you put your hands on stuff you're interested in. That's a value you cannot get at tower.

Try asking tower what is a good replacement thrust bearing for a Nitro evader. I bet you they won't tell you that a losi hardened bearing is a better replacement than stock, or even their carbide version.

Tower doesn't have expertise or hands on shopping. They have .jpgs and a shipping delay.

I'm willing to pay extra for that. You're not. We're both right.



Oh ya, kudos to my lhs AVF Hobbies. If you're in the London Ontario area, you should know about them. If you don't, www.avfrc.com

Memopad

Some of you guys are a bit wrong about the markups. Actually the less expensive the item, the greater the markup. LHS's make their most profit off of parts and things like that. I work at my LHS in the summers, and if forgot the exact mark-up scale, but it goes down as the unit price goes up. $0-4.99 =75% , $5-9.99 = 65% mark-up, ect, just for example. So when you go and buy your tmaxx and other big monster trucks from the store, they really aren't making as large of a profit margin as they do on the little stuff. Our hobby store has been in our town for less than 2 years, and I assure you no-one is getting rich, they're still losing money i believe. We finally have some racing starting to organize nicely so we're all hopeing that brings in the business we need to keep our store open.

SportCrystals

The distributors are getting squeezed pretty hard for margins. At Performance Devices, we sell our R/C crystals to Great Planes and Horizon. They load the dealers with our inventory. I am suprised when talking to some shop owners at the costs that they pay for our products through distribution. When two large distributors compete against each other, the prices to the dealers gets lower and many dealers pass the savings to the customer. In parallel to distribution, we have a handful of customers that we sell direct to, because they have asked for it.

In defense of the shops, doing 2X markups off of cost is needed to cover soaring workmans comp insurance, saleries, theft and advertising. Where a shop is struggling to make $20 profit on a TMAXX truck, they need to make margin up on misc parts, glue, etc. When I go into a hobby shop, I want them to be profitable. A profitable shop can afford employees who are better at helping the specific needs of their customers. Case in point: Go to WalMart and ask specific questions to the clerk about a DVD player they sell. Other than 'It's on isle three', you will not get too much help. Pay ten dollars more at Circuit City and you get a sales professional that can actually answer your questions!

Support your local hobby shop. Without them and their expertise, you will spend more time and money before getting the best products so you can enjoy your hobby!