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Old 2011.12.29, 12:38 PM   #1
kyoshosan
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Economics of RC shops, markets, online sales

Hi Guys!

Not wanting to add to the off-topic discussion, maybe we should open a thread to discuss this, but I love this topic. I wonder if sales for the Mini-Z Buggy are disappointing in the US or all over ? I often buy my Mini-Z stuff out of HK and Japan because it is cheaper, even w/ shipping costs included, than buying from my favorite stores in the US. Could that be a major factor that is hurting sales in the US? Let me know what you guys think.

Mini-Z Buggy from an online store in HK:

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Old 2011.12.29, 01:01 PM   #2
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does purchasing from HK hurt domestic shops, absolutely. some of the old timers here like myself will recall the ancient debates that raged about buying online vs. brick and mortar. the general argument is still the same, the details have just changed. the old time stores refused online sales and as a result, most simply aren't here anymore. you either adapt or get eaten. now, with a global economy (more so now than 10 years ago) your debate is domestic shop with markup to remain profitable or more direct asian shops with less markup and pay for shipping. it's pretty clear that hurts domestic shops which are forced to pay higher prices for the same goods (they pay for the shipping too).
we all know the economic reality in which we live though, being you either buy at the price you can afford or not at all, which means some sales are going to go foreign. to think otherwise is ignoring the truth and you cannot fault those needing to do so. all the rhetoric in the world isn't going to change the financial facts for them (you used to get a lot of beating of breat, patriotic name calling, etc.). for many, they simply wouldn't be able to shop unless they bought at the cheapest price they can. just the way it is. we know the domestic market is tough and truth is, not every shop will survive. simple economics. everyone wants to hold on for the rebound and hope they can make it. the shop here is good, i'm sure kenon has enough local support alone to keep it doing well. yes, they notice when sales continue to go foreign vs. domestic but in reality, all you can do is continue to serve your market at the right balance of making a profit to continue and providing a fair market price. it's a tight rope to walk these days and i think all the domestic shops do a good job at keeping a steady market price, even delaying manuf. mark ups as much as possible when they can.

there are VERY good discussions on this already and when the time is available, a moderator will move these replies to the appropriate thread. lets please not go back to the rhetoric of the past though. some were not always respectful in their replies. you can disagree without insulting someone else.
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Old 2011.12.29, 01:57 PM   #3
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When I was in HK I paid a "premium" for a Losi vehicle and I had shipped LOSI kits out from USA to HK because prices were lower. I think both sides are even.

The rents in HK or Japan(warehouse or storefront) are comparable or even higher than NYC which is not cheap at all. Wages are not low in these countries either. Canadians often pay 15% or more in sales tax so it makes sense to do online ordering; not sure if customs add tariffs to the packages though.

The bonus with buying from your local stores is that it comes with warranty; which may or may not be important to some people.
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Old 2011.12.29, 02:01 PM   #4
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yeah, the canucks get hammered. it's not cheap to ship anything their and they pay taxes on everything they get shipped as well. kinda taking it from both ends

weird how sometimes it becomes cheaper to import FROM the u.s.
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Old 2011.12.29, 02:10 PM   #5
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Don't be surprised! European cars are much cheaper in USA than Europe; a Chinese made Iphone costs a lot more in China than in the US. People export back the above goods back to where they were made and still make profits.

Does anyone know how much the Moto Racer would cost?
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Old 2011.12.29, 02:12 PM   #6
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i have an east german co-worker who's told me many of the stories where it's often cheaper to import from the u.s., cheaper to buy a mercedes in the u.s. than germany... stuff like that. the issue works both ways at times.
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Old 2011.12.29, 02:20 PM   #7
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Your German co-worker was hurting his own domestic shops

Does the Moto-Racer have reverse?

The previous Kyosho Hanging-on racer didn't.
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Old 2011.12.29, 02:35 PM   #8
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i didn't say he was doing it... german economics were not kind to the average east german after the wall fell. i can't speak on authority but only on recounts of stories from east germans whom have very strong opinions on the mater. it's complicated over there as expected when reintegrating a large population. i've heard lots of amazing stories about life behind the wall.
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Old 2011.12.29, 08:51 PM   #9
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Quote:
Originally Posted by SaiTam View Post
Does anyone know how much the Moto Racer would cost?
I say somewhere that it would cost $199.00
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Old 2011.12.30, 12:31 AM   #10
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With coupon you can get it a little cheaper from A-Main hobbies. If you live in U.S. the shipping is free. Which puts it right around $217 delivered. I don't think a hobby store can can compete with online stores without a track or tracks and a solid race program. I think in the U.S. the "bigger is better" mentality may by why the MB-010 sales aren't what was expected.
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Last edited by Eman; 2011.12.30 at 12:35 AM.
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Old 2011.12.30, 02:27 AM   #11
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Another key point in my opinion is the Lack of an organized factory racing series like the Mini-Z CUP in Japan. Kyosho should promote Mini-Z stock races all across America/Canada, encouraging beginners, and sponsoring "Modified" Competitions like PN Racing Series for the hobby enthusiasts.

I miss the time when Kyosho was distributed, in North America, by Tower Hobbies, it was so much easier to get parts than it is today. Although I love the brand, every time I go into a Hobby Shop and ask for Kyosho products, I get the same story from the owner on how difficult it is to deal w/ Kyosho America...

Availability is also important, new Autoscale bodies become available on online shops in the far east long before the do in North America.

I also think that Mini-Zs should not cost over 150 bucks, the MR-02EX would be a killer if it cost $99! ASCs should also be on the $30 range... Mini-Zs are getting more and more expensive and this is not helping our cause...
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Old 2011.12.30, 06:12 AM   #12
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If Americans only wanted toast for dinner and relied on bicycles for transportation then everything would be cheaper. The price is driven by supply and demand. Technology doesn't move forward without it and and price will always be directly proportional to it's advances.

I think PN is the only manufacturer racing in the US and abroad. I know Atomic holds a large share of the market but from what I remember reading it's mostly abroad.

We need to do another focus group. I have some ideas going around in my head. Mabye a "think tank".

Kris
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Old 2011.12.30, 09:56 AM   #13
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You know when it comes to ordering online vs store bought an online forum will always be biased. Most of us onliners who frequent forums etc are online savvy and most likely buy a lot online. I know I do. I think Sai mentioned a reason to buy from a shop is warranty. Today that doesnt fly. I bought from shops and when I had issues I had to do it all myself.
For me the best reason to buy from a real shop and not online would be customer service. Now Im gonna ask you guys what do you feel is customer service for 2012....Here is my list.....
1. Hours of operation.....
2. amount of items in stock....(clearly labeled and priced)
3.knowledge of items
4. added services (free)...soldering motor leads, programing tx, etc...
5. added services (fee)...FETs, rewiring, complex assembly
6. custom orders (as needed, weekly, or do they forget)
7. rentals (cars, battery chargers, tire truers, wtc....)

The only way a real brick and mortar shop can compete with cheaper prices is customer service..... If you do not need customer service then you dont need the shop. Now if the shop is also your racetrack......
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Old 2011.12.30, 10:51 AM   #14
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Locally the shops near me have very little or no Mini Z and most won't even deal with Kyosho due to minimum order requirements. I order from the U.S. and pay taxes on anything above $60 but, I order from HK and pay no taxes regardless of the cost. I've ordered parts from the U.S. and HK on the same day, free shipping from HK gets to me in Canada faster than paid shipping from the U.S. and this has happened on a regular basis for me.
In the end it's a hobby and expensive like most hobbies and my money goes where I get the best bang for my buck and that seems to be HK.

In Canada Mini Z is a small market and I don't think a series here will do well, there just isn't enough people interested. We have 1/10th the population of the U.S. and it is spread out over a bigger area. I know of only one permanent Mini Z track (yes, in all of Canada) and it is only open once a week. That doesn't make for much of a series.
I know of a half dozen basement/garage tracks within 20 miles of me and I think that is where Mini Z will stay in Canada.
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Old 2011.12.30, 11:29 AM   #15
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in my experience, i've been to maybe 1 store that had customer service that i felt was worth coming back to. every other shop simply didn't care or was too busy to deal with what they consider a toy. nothing more annoying than getting the stink eye from a shop worked because your looking for 1/28 mini-z stuff. retail stores don't take mini-z seriously thus wont take you seriously. you need to go to one of a handful of shops that cater to mini-z scene and those are far and few between.
my idea of customer service;
1. in general, some level of competent staffing, with knowledge that extends beyond 1/18 and above. (this ofcourse does not apply to stores that focus on mini-z)
the lhs we race at only carried mini-z after we setup our track and run hfay out of the store. the store manager has since joined in the racing which puts some focus in the store on mini-z. i have to mention that none of the other stores in the chain carry mini-z, it was a one shot type deal. it's not always been easy and i've sunk a lot of my own money into it to keep it going and working.

i don't know anyone that would want to go back to the great planes days. shops hated them as much as they are frustrated with kusa. they sold everything online, undercutting their distributor cost to shops as well. most shops i know didn't carry mini-z just because it mean dealing with great planes. kusa has a real brand problem in retail stores due to experience with the brand and distribution. i wish i could say it's gotten better but they still have issues such as order fulfillment. my lhs hardly gets what he orders. i believe kusa is trying to rebuild their brand, thus the creation of kusa. they still have a lot of work to do to overcome the stigma of dealing with kyosho in many instances.

we've been asking for a return of the kyosho mini-z cup. maybe the money isn't there? since 2004, it's been left to us (mini-z fans and aftermarket manuf.) we have yet to get a national stock class series going so i dont' think we are doing well either. it's all gt type classes and modified, both of which are not friendly to the first timer or a tight budget. as a collective, i think we need to do better as well.

eman hit on something that has often come up in these discussions, that the american market is more focused on size than quality. it's a common theme expressed, 'bigger is better'.

from 2000 on, price has always been an issue. it will always be an issue. kjp has made clear what they think of the american market and necessity for cost increases which get passed onto the consumer. were at the bottom of the ladder people. always have been and likely always will be. the pricing will only rise. kyosho DID listen and offered a cheaper kit, the i-series, as a lower cost kit. unfortunately the product contained electronics that were roundly disliked so it naturally died. kusa may still be trying to unload those and the cost may be lower than autoscale prices at this point. i respect them for trying. it didn't work out but they at least tried, which always leaves the door open for the future.
autoscale prices are bananas plain and simple. it's only going to drive down production numbers as costs rise due to fewer sales. lets hope that doesn't progress into fewer new autsocales as well... at that point, they will be dead.
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