I know what the Towers and Horizons make on the products they sell. It is not double digit margins.......it's triple digit in many instances. I know a flyer that wrote for one of the major RC magazines. He had what was called a "B" account. This allowed him to buy from the big boys at cost. Of course the items were to be used and promoted in magazine articles that encourage us to buy the stuff. Just for example; something I would buy for $100 dollars he could get for less than $25 dollars. Big dollar items like 1/4 scale and larger airframes could be had for less than 40% of what I would pay. Some as low as 25%. Of course, many of the projects he did cost him nothing. The point being, I got a look into what the margin structure of the big distributor looks like. Understand that their whole business isn't all rainbows and sunshine. There is defective merchandise they eat, dead inventory they have to liquidate, probably some shipping damage they take care of out of their pocket etc. But, all in all, they enjoy what would be considered in most circles, very healthy margins.
What I find interesting is the big, eyebrow raising jumps in margins these guys make. I mean they cram it down your throat all at once. $30 dollars on a $279 dollar plane makes you take notice. Most other industries make gradual raises over time. Something in the 2 - 3% range. They eventually get their 10% increase but, in a more subtle manner.
As the prices increase, I shop around more and often decide I don't really need to buy the item at all. I think with a shrinking economy, this move will cost Tower more than it will make them in added revenue. Time will tell.
3 years ago I spent over $2000 dollars on RC stuff
2 years ago I spent probably $1500 dollars on RC stuff.
Last year I spent around $900 dollars.
This year I bet it will be more like $600.
I'm not sure I can stay very active in the hobby for less than $500 dollars a year. I like new stuff and of course there are always repairs. It's just a matter of money. Fun is not cheap.