Horizon Hobby sold!
12-15-2013, 07:02 AM
#101
My Feedback: (3)
These numbers are a bit off. While I agree with box and printing costs, you have included $36 as a cost per box to pay Joe for putting it on the shelf. $36 is his hourly rate. Thats high for a stock boy. Besides it wouldn't take someone an hour to put a box on a shelf, nor one hour to put all the components of a kit into a box. Those costs should be pennies. If an employee takes more than 5 minutes to pack a box, something is wrong, and that person would be fired.
All in all, the final manufacturer's cost sould be less than 25% of market price. While not great, it is certainly profitable. Many manufacturers enjoy an 800 to 1000+% markup. That's not the case in the hobby business.
All in all, the final manufacturer's cost sould be less than 25% of market price. While not great, it is certainly profitable. Many manufacturers enjoy an 800 to 1000+% markup. That's not the case in the hobby business.
The numbers were ALL made up as an example, and I think I stated that and apologize if that was not clear enough for you. However the hourly rate I used was a LOADED rate, not what his family sees in the take home paycheck. In general if Joe is paid $20 an hour he actually costs between $34 and $38 per hour when all benefits (sick leave, vacation, retirement package contribution, and health care costs) are rolled in. The generally accepted values for most business planning purposes are between 160% and 175% of base pay largely dependent on industry and type of pay with unionized jobs higher. Yeah, it makes the numbers look really whacked, but that is what the business WILL pay for as per various agencies in our wonderful government. The other part that is missed is that Joe stocks this kit we have assumed an hour of his time for. Were does the money for the other 39 hours he works this week come from? Most folks want full time employment which means the larger the operation the better the use of resources. And that brings us back to the biggest part of the discussion which is that this is usually BORROWED money with a repayment schedule and if the kit, or ARF sales are not brisk enough to make those payments the money has to come from elsewhere in the business.
I got this education from some big name vendors at Toledo, though not in all the very specific details I mentioned, when I asked why some airframes I enjoyed building/flying were discontinued. I admit this was 5 or more years ago, but the age of the logic does not change its validity.
12-15-2013, 08:53 AM
#102
Yes, I know you were providing an example. Didn't think I had to mention that. However, the numbers/education you were given by some big named vendors is incorrect. No manufacturer, distributer, or business wants to make the public aware of their actual profit, so they skew the numbers to make it appear as though their margins are low. They did not tell you the truth.
I have two business degrees that tell me so.
Vacation & Holidays amount to 3-5% depending on longevity
Unemployment Insurance costs = 4% (varied)
Health Cost = 2% or less because of employee contributions
Sick leave = less than 0.5%
Retirement packages = 3%
That totals 13.5%
Based on $20 an hour, the employers cost is actually $22.70
I have two business degrees that tell me so.
Vacation & Holidays amount to 3-5% depending on longevity
Unemployment Insurance costs = 4% (varied)
Health Cost = 2% or less because of employee contributions
Sick leave = less than 0.5%
Retirement packages = 3%
That totals 13.5%
Based on $20 an hour, the employers cost is actually $22.70
Last edited by Airplanes400; 12-15-2013 at 09:21 AM. Reason: typo
12-15-2013, 09:52 AM
#104
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Yes, I know you were providing an example. Didn't think I had to mention that. However, the numbers/education you were given by some big named vendors is incorrect. No manufacturer, distributer, or business wants to make the public aware of their actual profit, so they skew the numbers to make it appear as though their margins are low. They did not tell you the truth.
I have two business degrees that tell me so.
Vacation amounts to 3-5% depending on longevity
Unemployment Insurance costs = 4% (varied)
Health Cost = 2% or less because of employee contributions
Sick leave = less than 0.5%
Retirement packages = 3%
That totals 13.5%
Based on $20 an hour, the employers cost is actually $22.70
I have two business degrees that tell me so.
Vacation amounts to 3-5% depending on longevity
Unemployment Insurance costs = 4% (varied)
Health Cost = 2% or less because of employee contributions
Sick leave = less than 0.5%
Retirement packages = 3%
That totals 13.5%
Based on $20 an hour, the employers cost is actually $22.70
Last edited by DISCUS54; 12-15-2013 at 09:54 AM.
12-15-2013, 10:06 AM
#105
In my haste, I missed that. So now we are at 20% employer cost. Keep in mind, this is still an example. But the numbers are close. Plus, this is also a write-off for the employer against the gross profit.
Employer cost will never become $34~$38 based on an employee earning $20 an hour. That would amount to 170% to 190% of an employee's salary! That's just wrong information.
Unlike George Zimmer, of the MEN'S WAREHOUSE, who believes, "An educated consumer is our best customer," Companies and corporations believe that, "A misinformed customer is our best customer." For that, I'm referring to the profit and product cost of the company. That is ALWAYS a closely guarded secret.
Last edited by Airplanes400; 12-15-2013 at 10:11 AM.
12-15-2013, 10:32 AM
#106
I should point out that YOU are complaining about a health insurance cost that is lower than mine and complaining about all the freeloaders and it is clear that you and your friends told someone we need more of that kind sucking on the public teat. So I don't really understand your complaint...it is almost as bogus as your excuses.
I guess the entire point of all this is that it had little to nothing to do with the subject, so why did you shovel that horse manure?
Gerry
12-15-2013, 07:27 PM
#110
My Feedback: (3)
Yes, I know you were providing an example. Didn't think I had to mention that. However, the numbers/education you were given by some big named vendors is incorrect. No manufacturer, distributer, or business wants to make the public aware of their actual profit, so they skew the numbers to make it appear as though their margins are low. They did not tell you the truth.
I have two business degrees that tell me so.
Vacation & Holidays amount to 3-5% depending on longevity
Unemployment Insurance costs = 4% (varied)
Health Cost = 2% or less because of employee contributions
Sick leave = less than 0.5%
Retirement packages = 3%
That totals 13.5%
Based on $20 an hour, the employers cost is actually $22.70
I have two business degrees that tell me so.
Vacation & Holidays amount to 3-5% depending on longevity
Unemployment Insurance costs = 4% (varied)
Health Cost = 2% or less because of employee contributions
Sick leave = less than 0.5%
Retirement packages = 3%
That totals 13.5%
Based on $20 an hour, the employers cost is actually $22.70
None of my degrees are in business, but I started my own company in 1980 and brought in a partner to help with some significant expansions (2 new divisions) in 1983 and employed several until I sold the major spin off of the company to my partner in 1987 because he wanted to go a different direction. It was easier to sell than fight all the time and I had other interests in the other 2 divisions. Unfortunately for the employees fighting would have been better for them because the operation folded less than a year after we parted.
With all your business degrees and knowledge I am curious about how many companies have you owned? How many employees have you been directly responsible for which means having interest in the feeding and care of their families and their continued employment so you could make a profit? OOPS! I just noticed your signature! Check with one of your local contracting officers for more explicit details if you doubt what I am telling you.
Now as for HH, I stand by all my previous remarks.
12-16-2013, 03:06 AM
#111
I am very glad that you have numbers like those, but I think there is something missing. When you bid on government contracts there are all sorts of pieces and parts to the cost of an employee. You seem to have missed a substantial portion of them. A nationally known (top 100) company bids numbers in the > 150% of base salary range all the time and wins more often than not.
None of my degrees are in business, but I started my own company in 1980 and brought in a partner to help with some significant expansions (2 new divisions) in 1983 and employed several until I sold the major spin off of the company to my partner in 1987 because he wanted to go a different direction. It was easier to sell than fight all the time and I had other interests in the other 2 divisions. Unfortunately for the employees fighting would have been better for them because the operation folded less than a year after we parted.
With all your business degrees and knowledge I am curious about how many companies have you owned? How many employees have you been directly responsible for which means having interest in the feeding and care of their families and their continued employment so you could make a profit? OOPS! I just noticed your signature! Check with one of your local contracting officers for more explicit details if you doubt what I am telling you.
Now as for HH, I stand by all my previous remarks.
None of my degrees are in business, but I started my own company in 1980 and brought in a partner to help with some significant expansions (2 new divisions) in 1983 and employed several until I sold the major spin off of the company to my partner in 1987 because he wanted to go a different direction. It was easier to sell than fight all the time and I had other interests in the other 2 divisions. Unfortunately for the employees fighting would have been better for them because the operation folded less than a year after we parted.
With all your business degrees and knowledge I am curious about how many companies have you owned? How many employees have you been directly responsible for which means having interest in the feeding and care of their families and their continued employment so you could make a profit? OOPS! I just noticed your signature! Check with one of your local contracting officers for more explicit details if you doubt what I am telling you.
Now as for HH, I stand by all my previous remarks.
I worked over the years with many individuals that had business degrees and also many that ran businesses. I would not trade ten with a business degree for ONE that went through it and knows the road of business. I work every day with business analyst and many that hold degrees and find they rarely have a clue. That is my experience of over 30 years in and around business.
There is something to be said for going to the school of hard knocks. At any rate, as in all buyouts, mergers, etc. there will be change, like it or not. HH is no different.
12-16-2013, 04:44 AM
#112
I am very glad that you have numbers like those, but I think there is something missing. When you bid on government contracts there are all sorts of pieces and parts to the cost of an employee. You seem to have missed a substantial portion of them. A nationally known (top 100) company bids numbers in the > 150% of base salary range all the time and wins more often than not.
None of my degrees are in business, but I started my own company in 1980 and brought in a partner to help with some significant expansions (2 new divisions) in 1983 and employed several until I sold the major spin off of the company to my partner in 1987 because he wanted to go a different direction. It was easier to sell than fight all the time and I had other interests in the other 2 divisions. Unfortunately for the employees fighting would have been better for them because the operation folded less than a year after we parted.
With all your business degrees and knowledge I am curious about how many companies have you owned? How many employees have you been directly responsible for which means having interest in the feeding and care of their families and their continued employment so you could make a profit? OOPS! I just noticed your signature! Check with one of your local contracting officers for more explicit details if you doubt what I am telling you.
Now as for HH, I stand by all my previous remarks.
None of my degrees are in business, but I started my own company in 1980 and brought in a partner to help with some significant expansions (2 new divisions) in 1983 and employed several until I sold the major spin off of the company to my partner in 1987 because he wanted to go a different direction. It was easier to sell than fight all the time and I had other interests in the other 2 divisions. Unfortunately for the employees fighting would have been better for them because the operation folded less than a year after we parted.
With all your business degrees and knowledge I am curious about how many companies have you owned? How many employees have you been directly responsible for which means having interest in the feeding and care of their families and their continued employment so you could make a profit? OOPS! I just noticed your signature! Check with one of your local contracting officers for more explicit details if you doubt what I am telling you.
Now as for HH, I stand by all my previous remarks.
And now I won't waste any more time debating this with people making unqualified statements.
Last edited by Airplanes400; 12-16-2013 at 04:51 AM. Reason: typo
12-16-2013, 04:46 AM
#113
I saw many things missing in airplanes post that drives employee costs. This is not the thread to discuss because it is dealing with HH and is only somewhat relative to the discussion. Going through business teaches one much more than a dozen business degrees.
I worked over the years with many individuals that had business degrees and also many that ran businesses. I would not trade ten with a business degree for ONE that went through it and knows the road of business. I work every day with business analyst and many that hold degrees and find they rarely have a clue. That is my experience of over 30 years in and around business.
There is something to be said for going to the school of hard knocks. At any rate, as in all buyouts, mergers, etc. there will be change, like it or not. HH is no different.
I worked over the years with many individuals that had business degrees and also many that ran businesses. I would not trade ten with a business degree for ONE that went through it and knows the road of business. I work every day with business analyst and many that hold degrees and find they rarely have a clue. That is my experience of over 30 years in and around business.
There is something to be said for going to the school of hard knocks. At any rate, as in all buyouts, mergers, etc. there will be change, like it or not. HH is no different.
I asked him where he got his background for business - he said he studied it . ( he had never run a business of any type.)
he really didn't have a clue.
Trying to analyze why HH made their recent move -with no involvement - is quite simply impossible.
12-16-2013, 11:14 AM
#114
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Since HH is an ESOP, I am surprised that there have no comments from current or past employees regarding this transaction. Did they get generous buyouts for their shares in exchange for silence? Are they afraid for their jobs? I have seen this movie several times and had a starring role twice. Sat in a boardroom and heard the COTB and CEO say "Nothing is gonna change".
I remarked to our owner on the plane home, "You know, when they own you, they OWN you!" He said he trusted them. Two days after closing, their HR showed up and the whole place got turned upside down. Of course he cashed out and the rest drifted away gradually. Twenty four months later it had been eroded and the parent was on the ropes.
Just saying like others, it is about money, and some are better at it than others
. Never seen venture capital put customers or employees at the top of their list for ROI!
I remarked to our owner on the plane home, "You know, when they own you, they OWN you!" He said he trusted them. Two days after closing, their HR showed up and the whole place got turned upside down. Of course he cashed out and the rest drifted away gradually. Twenty four months later it had been eroded and the parent was on the ropes.
Just saying like others, it is about money, and some are better at it than others
. Never seen venture capital put customers or employees at the top of their list for ROI!
12-16-2013, 03:44 PM
#115
My Feedback: (1)
Is there really that much money in our hobby so that an "investor Group" can expect to squeeze out any significant profit out of this type of company?
We all know who is going to pay for profit hungry Investors, and it is nothing wrong with a Company trying to making as much money as possible, like most other companies try to. But it is just a hobby for us and we pay with our own hard earned money. I wish Horizon hobby good luck and we will see soon I guess in what direction this Company will go in reality. I do not buy much things from Horizon hobby so I have no reason really to follow how things goes for this Company in the future.
/Bo
We all know who is going to pay for profit hungry Investors, and it is nothing wrong with a Company trying to making as much money as possible, like most other companies try to. But it is just a hobby for us and we pay with our own hard earned money. I wish Horizon hobby good luck and we will see soon I guess in what direction this Company will go in reality. I do not buy much things from Horizon hobby so I have no reason really to follow how things goes for this Company in the future.
/Bo
01-03-2014, 10:33 AM
#116
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It wasn't too long ago when modelers were complaining about there being too many arfs, not enough kits. The phenomena that you are describing is not unique to HH. You can see the same thing going on with Tower and the smaller guys like Extreme Flight...they get inventory...it sells out....they get inventory...it sells out. You save your coins and jump in before it sells out. Good luck with the world conformed to what might be optimal for you. We might be close to modelers Utopia here and now in 2013....never so many products available...electrics, gas, glow, radials (glow and gas), contra-rotating, inline, horizontally opposed, arfs, plans, kits, balsa, fiberglass, and composite, 72mhz, 2.4ghz, synthesized, DSMx, DMSS, FASSTest, ect, ect, ect. Amazing stuff coming out every year. What did we have for products 20 years ago. We have had a revolution in products and yet there are those who insist the cup is half empty and getting smaller all the time.....hilarious!
01-03-2014, 10:38 AM
#117
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Seems like the eliminations are occurring at a greater rate than the additions. If part of their strategy going forward is a reduction in the Hangar 9 line, so be it.
01-03-2014, 10:42 AM
#118
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I'm not really certain that their product line isn't larger than ever but I haven't exactly taken inventory. All I know is that it seems to me that every product that goes "end of life", seems to be replaced with at least 1, or more new products. They've had a long history of moving out product that I liked and I never understood why. I simply assumed they knew their business and not everyone thought as highly of some of these product as I did. Also, product inventory is a huge expense so I guess they have say, out with the old to make room for the new.
As for being out of everything, an equally valid explanation could be that they simply sold a ton of stuff for the Holidays and haven't had a chance to restock yet. As far as I'm concerned, anything beyond them providing me with great service is not my concern. Hopefully they will continue to provide great service. I'm willing to wait and see
As for being out of everything, an equally valid explanation could be that they simply sold a ton of stuff for the Holidays and haven't had a chance to restock yet. As far as I'm concerned, anything beyond them providing me with great service is not my concern. Hopefully they will continue to provide great service. I'm willing to wait and see
It seems to me that they've eliminated many more products in the last four months then they have historically. They routinely take stuff out of the line and added new stuff. But they've gotten rid of a lot. With that said, they've also added a ton of fomies and small planes. That falls outside my interest. We'll just have to see what direction things take.
Last edited by fly24-7; 01-03-2014 at 11:14 AM.
01-03-2014, 10:48 AM
#119
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Hangar 9 products are carried by other hobby retailers. However, if you can't get it from Horizon directly, you'll have trouble finding it in the market. LHS are carrying less and less ARF inventory because they, understandably, don't want to tie up so much cash in inventory. Most LHS can get product from Horizon in 1 or 2 days so they're not inclined to have the product on the shelf when they can order it and have it in your hands tomorrow or the next day.
Last edited by fly24-7; 01-03-2014 at 11:05 AM.
01-03-2014, 11:15 AM
#120
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I ran into trouble on the rudder and tail wheel installation, I cant figure the springs cable and hooks out.The instructions are to vague. I think Im going to put straight springs on it like the regular cub, much simpler and easier.
01-03-2014, 12:38 PM
#121
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Interesting.i was suprised when horizon took several good planes and d/c'd them.i like the writers comment about so much product available.yes there are some kits.and the foam planes like nitro etc are readily available but try getting parts.understandably lhs are fighting to stay afloat so inventory is very limited, ithink it will interesting to see what happens to horizon hobby.extreme flight was mentioned.they are a very good company with a great product line for 3d fans.3dhobby is okay but its just not the same with ben and the formrr gang gone.
02-07-2014, 03:25 PM
#122
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Horizon Hobby Service is still Top Notch! I had sent a dozen servos in for service and here they are two weeks later ready to install in the next project. Horizon replaced one servo, no charge...serviced and repaired the rest back up to standards and even threw in a couple of bags of servo grommets and brass eyelets free of charge. Service is better than it ever was.
02-07-2014, 11:47 PM
#123
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Yes, I know you were providing an example. Didn't think I had to mention that. However, the numbers/education you were given by some big named vendors is incorrect. No manufacturer, distributer, or business wants to make the public aware of their actual profit, so they skew the numbers to make it appear as though their margins are low. They did not tell you the truth.
I have two business degrees that tell me so.
Vacation & Holidays amount to 3-5% depending on longevity
Unemployment Insurance costs = 4% (varied)
Health Cost = 2% or less because of employee contributions
Sick leave = less than 0.5%
Retirement packages = 3%
That totals 13.5%
Based on $20 an hour, the employers cost is actually $22.70
I have two business degrees that tell me so.
Vacation & Holidays amount to 3-5% depending on longevity
Unemployment Insurance costs = 4% (varied)
Health Cost = 2% or less because of employee contributions
Sick leave = less than 0.5%
Retirement packages = 3%
That totals 13.5%
Based on $20 an hour, the employers cost is actually $22.70
You need to speak to some people who actually employ people
02-08-2014, 02:33 AM
#124
My Feedback: (15)
Horizon Hobby Service is still Top Notch! I had sent a dozen servos in for service and here they are two weeks later ready to install in the next project. Horizon replaced one servo, no charge...serviced and repaired the rest back up to standards and even threw in a couple of bags of servo grommets and brass eyelets free of charge. Service is better than it ever was.
Crank
02-08-2014, 05:04 AM
#125
For one thing, they just came out with 2 giant scale models one is the Beaver, the other is the Spitfire and they are coming out with a fuel injected power plant...
I hope that the guy that believes that the actual hourly cost of an employee that gets paid $20 per hour is $2.27 is retired. Because he is in dire need of some updating. Like checking with people in the real world, running real business. Or maybe doing some reading of CURRENT instruction material used in real business schools.
Millions of Americans live in a country that only exists in their minds. Come out to reality, we have cookies!
Gerry
I hope that the guy that believes that the actual hourly cost of an employee that gets paid $20 per hour is $2.27 is retired. Because he is in dire need of some updating. Like checking with people in the real world, running real business. Or maybe doing some reading of CURRENT instruction material used in real business schools.
Millions of Americans live in a country that only exists in their minds. Come out to reality, we have cookies!
Gerry