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Discussion Starter · #1 ·
HI GUYS



I was wondering how many guys actually buy parts/ rc products from
local hobby shops? Seems most are small time importers and I was
thinking how do the local shops actually make $$?



Today I went to my local hobby shop in Liverpool, Sydney, to get a
quote on a diff case for my Savage. First of all they dont stock that
item, which is sad, kind of puts you off as I would rather support an
aussie dude but then the sad thing was if they ordered it in it would
be $21. Now this thing costs $8au in the US. I was prepared to pay
double that but not nearly triple.



I then started to gauge at truck prices and all, looking at the
shocking markups, etc etc, then a lady walks in. She says she is new to
this "scene" and wants a car for her 13yo son. I am listening as the
rep talks big on the newbie models ($400 nitro models you buy for $200
on ebay...yes those ones). I am smiling pretending to browse the
shelves...still listening. Then she uttered, "well I will go on the
internet check this model out". You should had seen the look on the
reps face. Don't know why he became so off beat....he nodded then
frowned a little and said, he only has 1 in stock and it will be
probably sold this week. Don't know why the "I-N-T-E-R-N-E-T" word
spooked him. She then smiled, and walked out the door. I still cant get
the grin out of my face.



Man I am in the least, prepared to pay double what parts costs
internationally, no worries but not 3 - 5 times the amount. Plus
half the time they dont stock the parts, screws, etc thus there is down
time when they order parts therefore negating more the whole concept of
buying locally at higher prices. I would rather pay higher (double the
cost max) and get the parts/ products promptly off the shelf. They dont
even deliver on that anymore.



Will there be a day when all the consumers shell out their cash for the international hobby shop owner?



It is kinda sad but not.



milknbutter
 

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for the most part i shop locally. the thing is i dunno if the hobby shop i go to get all their stuff of aussie distributors. I shop on line for bits that I know I will never see in in oz, that take too long to come in or if I know if its hideously over priced. last I checked stanbridges here in perth still has 2 tamiya 414WCR for sale at 1100 bux a piece which is way over price considering I can get a tamiya 415 off ebay for 550 and that includes the expensive shipping as well.


The hobby shops here don't seem to be in a big hurry to win over business from me. I still have one way diff gears (for the evo3) on order from 2 different hobby shops here in perth. they were ordered in feb and and still havent seen them yet. I ended getting a couple off a guy selling them in sydney
 

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m&b,


Give MRC a call. Mark has loads of HPI(particularly Savage) parts and his prices are great. He gives us the opportunity to buy locally with removing our arms and legs.


OK, I have my soap box, and I am about to get on it. You have been warned.


Distributors in this country are not with the times. I think these are the guys that need a reality check. LHS's have some room to move, but these guys have them by the short and curlys. Mark at MRC imports the majority of his stuff directly from OS. There is probably a couple of reasons for this, and I am sure he will tune in if I have it wrong. Firstly, I think he would be getting a better price. Secondly, probably becuase local distributors won't sell to him as he has no physical "shop front".


DSI, distributors for HPI, Picco and Hot Bodies to name a few, will not supply to anyone that doesn't have a retail shop front. Many of the other distributors are the same. They effectively prevent you from having a dedicated online store as "they are afraid you will undercut their retail outlets that have overheads such as staffing and rent". This in turn will obviously apply pressure to their margins.I wonder if the ACCC should have something to say about this. Hands up who thinks this reduces competitiveness in the market place.


This is why I have always said "More Power to MRC". He is demonstrating to distributors that there are other ways to do business, that are more with the times. Quite frankly I would love to see Mark become the Tower Hobbies of Australia (don't know how he would feel about that) and blitz the industry with his online / telephone sales model. It might shake things up.


The internet provides a level playing field. You no longer have to spend the day going shop to shop to work out if you are getting a bargain. No wonder the Hobby Shop dude went pale at the word internet.


That said, go to a local club on the weekend and mention Tower Hobbies. I think that 50% of the people will look at you blankly. Where's that? When you tell them you buy stuff from the US, they go pale. There is still a large part of the community that needs to be able to walk into a shop to feel better about their purchase. They go pale again when you tell them you just bought a Picco .26 for $250 Aussie, brand new, delivered in 10 days. Particularly when they just paid $450 to $550 for the same engine. All of a sudden they get less concerned with shopping on line.


Ihave ranted enough - but you were warned.


Sermon over!


Regards,


Chris


Disclaimer:
Most of you know I have no business affiliation with MRC, for those that don't - you do now. The reason I speak highly of him, is because it is warranted. Many members of this forum will tell you the same.
 

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I agree 100 % with you chris, MRC would have to be the best hobby shop
I have ever delt with. Postage is alway spot on, and he will do what
ever he can to provide the customer with what he wants.



One of the brisbane LHS ( not hobby garage either) would have to be the
compete opposite of MRC. They guy who works the car section dosent
really seem that helpful and here is an example. I rang and asked if he
sold a set of clutch shoes for a 3 shoe clutch and his reply was " i
need the model of car and the part number so I can order it in " As far
as I am aware (and this was confirmed by hobby garage) any clutch shoes
(for a 3 shoe) will fit, as long as the springs are correct.



The clowns at the other hobbyshop have basically guarranteed that I will never step foot in that shop again.



I know we should try to support our LHS's but I gues at the end
of the day money talks, thats why mark is good. His prices may be a
small bit higher than the states but he is local, helpful and I will
say it again, helpful.



One LHS on the Gold Coast is selling the JR xs3 for 350, I can get a
new one shipped out of Hong Kong for 200 bucks, posted. He is upset
because the internet is screwing his buisness but I bet if u gave him
an option so save 150 (or a whopping 48%) from the price of any other
product I bet he would jump at it.



I guess like chris said, get with the times and its not impossible,
Radio Models are doing so, as is MRC and Model Flight down in Adelaide .
 

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Dan said:
I guess like chris said, get with the times and its not impossible, Radio Models are doing so, as is MRC and Model Flight down in Adelaide .

Dan,


Good call - these guys also seem to be doing the right thing. Realflight G2at the same unnamed Brisbane store is $499 - I bought it from Radio Models in Perth for $295 + $13 shipping. Ordered it at 5.15pm Brisbane time, had it 11.30am the next day. I got 6 x OS#8 plugs at the same time - $5.50 each - how good is that.


Since the chopper I have started taking alot more interest in Model Flight in SA. That said, Rod at Hobby Garage in Lawnton (an actual shop - not online) has been slightly cheaper than Model Flight on the majority of stuff for the Raptor.


Regards,


ChrisEdited by: AUSRC
 

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Discussion Starter · #6 ·
Some hobby shops have reduced their prices but it was a long time
coming. And for MRC, I am already an avid buyer. I reckon all he needs
is a quality online checkout code and he will be set. As an IT student
at uni, I could get my mates together and build an online system in
mere months (quality one with wish list and all based on the big "T").
It's the months and months of testing and security that is a pain. If
only we had the time to put a project together. AUSTOWER.com,
catchy don't u think? Probably get sued tho.....



But Mark as is, is good, gets a lot of "under dog" support.



As AUSRC mentioned the distrubutors here also need a shakeup. They
probably are the culprits but I still think hobby shops make huge
profit margins. If they are worried about losing sales and flat lining
in the past few years, they really need to investigate the whole
industries business model. It is much better to sell 5 items cheap and
make the same amount of profit then 1 item and make the same
profit. (repeat business will be better thus more sales from
demand...ie lower prices) Remember I am not asking for the same prices
as offered by the international stores....just more resonable.



I have also noticed that when I enter in a new hobby store, they ask me
where I got my car/ truck from? I usually say I bought it sec hand in
the newspaper to make them breathe better whilst serving me. Sad isn't
it?



I am all go for us supporting the local heroes but shop owners (yea I
reckon some are browing this thread), reduce your running costs thus
reduce you profit margin and you shall see the light. You business guys
should had done some break even analysis models. (supply demand) The
light may be dim first but stay put.



milknbutter

(business analyst wannabe, IT freak wannabe, half drunk wannabe, wait no, I am)



PS

Mark, u listening in? I need a cut in the free advertising, the diff case I just ordered yesterday, put in a sec pair




milknbutter
 

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On the most part my lhs is excellent price wise.One example is they where selling a kyosho mad force for 690 the cheapest i have seen at any other hobby shop in perth is 900+
.Also i ordered my tamiya tnx (not here yet
)for 790 the closes prices to that in perth is 899.Parts wise they are good and have excellent advice.So all hail Perth rc because there good guys with good prices.


BTW i no they ordereverything from a distribor in Syndey so i guess all the other hobby shops just mark there prices up to make lots of profit.








YAY I JUST REACHED 200 POSTSEdited by: mini-t
 

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its not the prices that turn me away from LHS, to put it in the most polite way, its the wanker behind the counter. i am yet to walk into a LHS and come out with a smile, knowing that i recieved CORRECT and quality advice. they are too buisy trying to tell me my savage(when i had it) was crap and that traxas was the only way to go. also they said they would never carry HPI cos it was of "Inferior" quality....maybe its just there driving
ive dealt with mark and he is an absolute legend, he bent over backwards for me to get me bashing the next day


before they prices come down a bit i think we need to invest some dosh into quality people


(i am judging my comments on LHS i have been to, i havent been to all so dont think all are bad"


jus my '02
 

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haha... running an LHS isn't as simple as it sounds. If only.


Many Fixed costs - all can't be reduced: staff, rent, taxes, rates, workcover & insurances, security, fittings for your shop, IT. Plus the cost of capital to keep all that inventory on hand.


Modern biz trys to minimise wage costs by either hiring young 'uns or run on minimal skeleton staff. You want good service? Need to employ good people... which costs too much money. The worst staff are "work experience" kiddies - they don't know anything PLUS they try to make things up just to sound like they do - sorry, that's just fact.





JoNo-vs-SAVAGE said:
its not the prices that turn me away from LHS, to put it in the most polite way, its the wanker behind the counter. i am yet to walk into a LHS and come out with a smile, knowing that i recieved CORRECT and quality advice. they are too buisy trying to tell me my savage(when i had it) was crap and that traxas was the only way to go. also they said they would never carry HPI cos it was of "Inferior" quality....maybe its just there driving

I too am a LHS-tourist... whenever I'm in another city, they are the first places I visit! Sad to say, same experiences are all too common - I like to lurk, just observe and eavesdrop.





LHSes' disdain for HPI certainly exists, and I don't blame them. The HPI products might be OK, but distributors' support in recent years is pretty dismal. Honestly I think the shops are doing you a favour by talking any newbies out of buying anything HPI in Australia.


Real sad, but I think we've all given HPI's importers enough chances to get things right, and they still haven't.
 

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I completely agree with the sentiments on MRC, he is excellent to deal with. I have gotten to the point with Mark that I hardly even ask the prices anymore... I just know he will look after me... 'nuff said.


I'm not completely in agreement with all the 'overpriced' hobby shop stuff. The fact is that if they were too steep then they would go out of business, it's obviously much more expensive to run & stock a 'bricks & mortar' hobby shop.


The thing that really irks me about them is their apparent lack of knowledge and honesty. I can't tell you how many times I've taken the advice of the blokes at Hobbyman just to find I was mis or il-informed. I know one bloke who was told by themthat HPI don't do a 3 shoe clutch for the savage!!


I've found a good LHS in Albury that has compedative prices and knowledgable staff. I make a habit of stopping in there whenever I'm going by that way (about every 6 weeks) and I always buy at least some little bit just to let them know I appreciate their help.
 

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Discussion Starter · #11 ·
zoomer said:
Many Fixed costs - all can't be reduced: staff, rent,
taxes, rates, workcover & insurances, security, fittings for your
shop, IT. Plus the cost of capital to keep all that inventory on hand.</font>



I took all those costs into consideration when I wrote the thread.
Staff - you dont need 3 - 5 staff working in a small suburb hobby shop
6 days a week. Pay is the biggest expense. Only have onhand staff that
is really needed eg. I dont think many consumers will come in on
Mondays, my estimate but statistics modelling will allow a better view,
explained later. Rent - you can't get away from, IT - can be minimised
using automated systems that pay for themselves, rates/ taxes/ work
cover and insurance - I know 3 of those things even online stores have
to pay. Inventory - use statistics over a period of time, usually 2 -
10 years. Studying the stats, a mathematical model can be applied
to what parts sell often thus reducing the chances of over stock. This
can also be used to know when to have more staff in store.




Other costs you have mentioned cannot be avoided but being smart
about expenses there are ways to minimise expenses. Plus remember that
reduced prices will make more sales thus a particular shop network may
acquire a larger bulk discount available to them from distributors.




There are other ways to save costs, gain more customers, make more
sales, etc etc. I think the current model of selling a small amount of
products periodically at extemely high prices won't survive in the new
"internet" society.




The market has changed, so should the local hobby shops.




milknbutter
 

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Mate I'm sort of on Zoomers side here...


Let's say I am a very experienced RC guru and you were looking to employ me... am I going to work for you if you only want me working your own peak periods? 4 hours on Tues, 6 on Wed, 10 on Thurs and 10on Fri... unusual rostered hours mean you will have to pay a premium in wages for those people.


I don't think you'll get 'decent' sales people for much under $35K per year then you've got the oncosts.... Payroll tax (online stores don't have staff so they done pay this) Holiday leave loading (not for the online ones), workcover (not for the online ones) and the list goes on.


I don't imagine that many LHS owners are building mansions on the Gold Coast... but that doesn't mean that some can't improve their current service levels.


Just my $0.02
 

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Discussion Starter · #14 ·
I anticipated this reply. If casual/ part time staff is more
detrimental then part time/ casual staff can be reduced by only having
the absolute minimum full time staff averaged out over 6 days a week
and still have good service.



But yea its a cost that cannot be avoided for the LHS but again, can be
reduced. But if all costs are taken into account and reduced,
together they will add up quite a bit thus allowing the LHS to lower
prices. I think thats not the trouble, the problem is lowering profit
margins......no one wants to do that but how do you make someone
understand that having a lower price will actually get more sales and
thus more profits.



LHS arent stupid, they know what they have to do, as some guys here
have mentioned like Perth hobby, some have made the move to a more
efficient operating environment, some are just errrm stubbourn plus a
change in any proven business model is also a very scary experience to
any establishment.



milknbutter


Edited by: milknbutter
 

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So perhaps you can tell me how to do this.....


Shoppers now expect to be able to get service in stores from 9am to 6pm Mon - Fri. 9am - 5pm Sat and some even want Sunday service.


Most people on Federal Awards are only supposed to work a 38 hour week some now pushing for 35!!


I have a store that sells RC cars (on road, off road nitro and elec), boats (nitro & elec), planes (etc) and helos (etc), parts, paints, bodies yada yada yadaand I need to be able to handle enquiries in all those areas with well skilled staff.


How do you propose I cover all the required hours with the requisite skilled staff and keep the staff numbers down?
 

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Discussion Starter · #16 ·
milknbutter said:
But yea its a cost that cannot be avoided</span> for the LHS but again, can be
reduced. But if all costs are taken into account</span> and reduced,
together they will add up quite a bit</span> thus allowing the LHS to lower
prices.



milknbutter


Read that again skidd.



When I mentioned reducing costs I also mentioned the other costs that
were mentioned previously by a member like running costs. If you try to
reduce ALL aspects of expenses from staff to the shelf fixture alot of
efficiency problems can be solved.



You mentioned to give an example of how do you support so many areas of
RC modelling "cars, trucks, helis, nitros, electrics", etc. I thought
about it for 20 seconds, to start off I would attempt to use staff that
are mutli skilled in various sections. If I could manage that then I
would reduce my employee number per "sector". But there is a fine line with this conception as you dont want to reduce the service speed/ quality: costs ratio too much.</span>
But if it means lower prices to a degree that allows more mainstream
markets to enter our hobby and buy and service their models, there will
be a bigger market ie more sales. With my concept it just means the new
generation staff members will need more varied experience, be multi
skilled. There is also a win win situation here, when
profits go up due to more sales, staff members can be increased to a
higher level. But again there is a fine line.



Anyone here can think of another model regarding reducing staff
expenses? Or if any other intelligent method of reducing other business
costs associated regarding a LHS would do well here too. Skidd,
you can think up of any other cost reducing measures? Any intelligent
brainstorming would help.



milknbutter





Edited by: milknbutter
 

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Let's just say I've had an insight into LHS-land for, oh, say last 22 yrs.



WAGES


Staffing costs are not brain surgery. The commonest & easiest way to have wage flexibility is to do everyone as casuals - cuts out some of the on-costs for staffing.


Workers aren't an electric lightbulb, you can't just turn them on whenever you like. As Skidd says, you'll need to guarantee your good workers a minimum number of hours every week, most likely daily 8 hr days say 5 days a week.


General ballpark in today's market, you're looking at ~$20/hr for a competent adult LHS worker. Time-&-half on Saturdays, Double-time on Sundays.


Worst of all is... there is no "training scheme" for workers either, the best way is for them to be RC enthusiasts too. Good LHS staff are very hard to find and the best ones have been working there forever.


STOCKING


You're dreaming if you think there's "sales data" for stuff going back 2-10 yrs. New models come out every year if not every few mths. Most new models need a totally new swag of parts too, most ain't recycled from kit-to-kit (Tamiya excluded).


Stocking kits is fine & extremely easy, but parts are the main hassle.


Plus some kits have parts that are not available as spareparts... go figure!



And whenever there's a new model come out, all your old parts are now obsolete. Bye bye capital investment!! There is just no parallel in the 1:1 world like that. eg a VT Commode would probably share a majority of parts with VX, its very rarely a total redesign.


Forget also about "JIT" stock ordering, all the suppliers & manufacturers aren't geared for it. Hobby items aren't life-or-death purchases, there's no urgency for suppliers to hurry up. You get stock when they have stock - might be a day, a week, 2 months... just be patient. Australia is at the end of a very long foodchain.


CUSTOMERS


Would be wonderful if customers just came in 1 at a time, a constant flow...


Dream on.


They come in drips, then all in one gush. You need enough staff to cover the lunchtime rush, you definitely need at least 2 for even the smallest store.


Plus you also need someone to keep an eye on stock walking out the door.


CYCLICAL SALES


As per time of day, there's also an annual cycle of sales throughout the year.


Usually LHSes do about 60% of their year's sales within the mths of Oct-Jan. Xmas is a huge period for all toy & leisure sales - this is what makes or breaks any store.


Could just about close shop in Feb-Apr. But you'll still have overheads and everyone still needs to eat.





Nope there's definitely no huge profits to be made in the Hobby world. If anybody had enough spare cash that they're considering opening an LHS... well, there's at least 101 things I'd suggest to provide better returns on your $$.


And there liesmy expertise: finance & business analysis.
 

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Discussion Starter · #18 ·
I think this thread is now a power struggle between Zoomer and Skidd.



It's ok. Keep brainstorming cost saving tips. I liked the vague
analyst tactics used by ZOOMER. I reckon there are ideas looming
around that may sound absurd but could work in reality to better allow
a local hobby shop minimise costs.



More ideas are welcome.



milknbutter
 

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Sorry,can't post up any specifics as that'll easily reveal whose back roon I am able to peek into... all that is "commercial in confidence".


Skidd definitely has more business experience in certain fields outside of RC, that's not hard to see.





You want to reduce costs? Simple -DON'T open a shop!



Just buy a white Hiace van, fit racks to the walls and fill it up with RC parts.


Do a deal with a club & park it at the track on a raceday.


Personally deliver everything to your clients. Do mailorder.


Bricks-n-mortar is a very old-fashioned cut on retailing and I'm not at all convinced its the "best" method for promoting RC. But that's always how its been historically.





As for your competition, there are a few shops that I keep track of because I respect how they are run -yes there are1 or 2 out there that's run pretty good.


Conversely I spent this morning snooping at one that's going down the gurgler. It is sad when a LHS is on its last legs but hey, that's the only way to confirm my thoughts on any outlet.
 

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Discussion Starter · #20 ·
I hope Local hobby shops are NOT on the last legs mate. I do support my
LHS once a while. If you read the initial posts, I mentioned the
consumers are more attentive to prices now, but as an individual I am
prepared to atleast pay double for the cost of products occasionally
but not 3 to 5 times the amount paid by the international market.
Isn't that why we all (probably 95%) are going out of our way to pay
absurd shipping costs and GST tax and still able to save quite a few
$$$?



Zoomer, I actually took heed of your comments, they do make sense and
also skidds comments. But is that it? Throw in the towel and say there
are no other way to save on costs other then sell Rc cars from white
mini vans? Cmon, there has to be ways, I mentioned some ideas, although
not perfect, can be worked on and I bet there are many more.



With that I think we have exhausted the initial post on this thread to
something umm, really not what I was going after. I actually think I
have offended Zoomer and Skidd, if I did, I apologise. I just wanted to
find out the current situation in this Forum as to how many of you guys
actually buy local and how many buy from international sellers thats
all. I for one being honest do buy most of my items from overseas, and
MRC for smaller items.



Hope I didn't offend anyone else with my individualised opinions and suggestions



milknbutter
 
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