Variation of prices at local model shops
 

I run a laser zx5 fs2 and recently I needed to change my slipper pads so I went to my local model shop which is Je spares the price of a set of pads £12.87 my next local shop is Ross mods which do the same parts for £8.99 that's a £3.88 difference why could this be? so upon checking further I found the spur gear for my laser is £1 cheaper at Ross mods than at Je spares it dos'nt sound a lot but on £5 part it's 20% I have spent well over £1000 at Je spares and if I could have saved an average of 20 % I would be £200+ richer in one year
Springs for my laser £5.75 at Ross mods at Je £6.90
£7 difference in a pair of drive shafts seems the price difference is across the board

Why the huge difference in price ? Any ideas

Buds

Why don't you ask JE spares :confused:

I raised the issue with stu wood and he said that the price Ross mods was charging for the slipper pads was about 60p above the cost to Je spares

Do you think Ross mods have a better deal with kyosho?

Do you think Ross mods are just aggressively pricing to get more custom?

Not in to retail so just trying to work out why the huge price difference
:confused::confused::confused:

pricing
 

Everyone has margins and everyone has costs. Costs covers everything from suppliers to rent to wages to other overheads. Dependent on those costs and dependent on what profit people want to/can make will set the margin i.e. cost of part from supplier plus other costs plus what profit can be made.

This applies across a business as a whole. What you are seeing at RossMods may not be the case across the whole of thier product line - it may be that they are pricing hard on 1/10th spare to get into a market which they havnt been as active in as JE - but they may be maintaining thier overall profitabilty across the whole business by upping/maintaining costs on other lines.

With a renewed RossMods clubs focus, new(ish) ecommerce website and social media presence, 1/10th "team" and trackside support at regionals/nationals and increased oople presence - I would say that the pricing is part of an overall expansion strategy into 1/10th off road. If sucessful you may see a flattening off on the 1/10th costs as they build a loyal base - but then its a very competative market!

For my money, JE Spares has the best ecommerce site in the market and the best social media strategy (discount codes via fb, twitter etc). That being said, RossMods overall strategy seems broader and more agressive.

Sorry for length of post - but I like this sort of stuff (its sort of my job!:p)

To be fair to both the shops you mention, Kyosho stuff is the hardest to price up by far of any of the trade suppliers, for one "FDL" have no "RRP" prices to go by, for two, being based in France, when their orders arrive they have "NO VAT" on them included in our invoices. "Some" shops just add their mark up and go from there, but you do have to allow for the VAT also, since when you "sell" the parts you then pay VAT to HMRC so you still pay 20% on these type of goods.

Other huge factors are that since the 4th of Jan this year VAT rose from 17.5% to 20% this led to at least 2.5% going on top of all old prices, plus also FDL issued a new "2011" price list at this time and due to many reasons (including a very poor exchange rate with the Japanese Yen at present) many, many Kyosho parts have gone up by between 15 and 30% on prices we had in late 2010 (trhis is not juts Kyosho some other companies have had rises too, but the Kyosho ones were amongst the steepest to be honest). Any shop with stock they had from pre-2011 will be at much cheaper prices........

I am sure that JE wont be ripping you (or anyone else) off, they probably have just done their sums right and have "fresh" stock brought in at 2011 prices. You could probably find 20 items they are cheaper on than most and vice versa between any shops that you compare......

As an example we still have the slipper pads in stock from late last year, our price "at present" on them is just £8.75, but they will go up when new stock is required.............

i bought and ran a kyosho st-rr truggy from custom built racing Tony is a brill guy but when it came to spares other shops in the south of the UK had much better prices on spares

i asked the same question and it boiled down to the fact the shops in the south of the UK for some reason had a much better deal when buying there spares in to the point he could not compete as they were selling there spares cheaper than Tony could buy them

sucks but there ya go

So what your saying is that someone buying a helicopter at Ross mods is likely to be subsidising the cost of my laser spares by the margin on the price of the helicopter being larger than the margin in the laser parts that Ross mods is currently applying??

Or

Ross mods is a shop that has been there ages and most proberbly own the building there for keeping monthly cost down which can increase profitability
So if one shop owns the building and the other pays £1000 a month rent the shop that owns their building is a grand infront before the doors even open
I'm getting it now mate commen sense really but I hadn't thought of it

So on the flipside with the inflamed prices on my laser bits I could be subsidising some new Market Je spares is trying to get into?
I.e team Durango parts or what ever

Buds

Hi Darren i could understand that if Ross mods had been doing laser parts for ages but it's all new stock I think they might be just trying to get a presence on the 1/10 Market well it's working for me anyway I'll obviously go to my cheapest part supplier
Is a 50% Mark up the norm? If Je buy the pads at £8.34 which I know they do then sell for £12.87 that's a 50% Mark up f**king scandalous if you ask me it makes their 10% loyalty discount for spending over £1500 in a year an absolute insult!!!:mad:

This is an expensive hobby, and everyone has to make a profit, although we do get ripped off when it comes to certain rebranded products such a grease's, diff balls, activator, wire, glue to mention a few products.

It is not my place to discuss on an open forum what mark up certian shops do or dont apply to their pricing, but bare in mind that £8.34 will be probably be plus VAT (making it £10.01) plus then they will offer FREE shipping I guess (which all costs with postage and jiffy bag etc possibly another 50p - £1) then they offer 10% loyalty discount as you say.........

There is not a lot left of the profit on that £12.87 sale to pay the bills, the staff, all other over heads AND still make a living in this industry when you work it all out.........

business is business
 

Any or all or none of the above is applicable to any wholesale or retail business in terms of costs, profits, product lines and sectors etc etc.

Just to add that I don't know anyone at either JE or RossMods - my comments are all based at looking at the way they go to market externally.

and dont forget..
 

ebay, China and Hong Kong.

50% mark up may be a shock to you but it's pretty much like that in most businesses. Food in pubs and restaurants can have as much as a 75% mark up on cost prices. Chefs don't come cheap and people do want nice food after all.

It's not just about the product, it's about the whole business.

from my veiw atm rosmod for me :-) live stock levels, i know je have but on almost every order i have made with je something has been out of stock when says it is instock witch can be frustrating when need a part quick for next meet but u cant be to sure if they actually are in stock :-( so for me rosmod wins, plus they are cheaper on most parts and had more 22 spares in :-)

margin
 

If the markup from eight to twelve pounds is scandalous you have absolutely no idea about business at all. In almost any enterprise, to include shipping and handling for that profit margin would be rare to say the least.
You must realise this is a small niche industry. How many parts that are stocked by the shops will actually be sold? They dont know and neither do you! Many model shops/online model stores have gone bankrupt recently, overstocked trying to cater for everyone, or charging too low a price for business to continue.
Maybe you should look at the margins/turnover at your place of work, unless you work for the state or a charity (possibly they are the same!!!!!).
Unfortunately you seem to think that someone making a quite reasonable level of profit is wrong?

Also consider a couple of points,

Shop a buys 10 kits for £50 and puts on sale for £100 when the shop sells 5 kits they have broken even and can pay the supplier when they sell the 6th they have made some profit so can pay a few bills. If they only sell 5 they make nothing regardless of the level of mark up. Thats why business does not call this gap between cost of purchase and sale price PROFIT because it isn't, its actually MARGIN. Also consider that so many people expect stock to be available so how much of that money then gets used to restock the kits.

I would guess the margin on spares is a little bigger mostly to cover for the fact that so much of that stock is dead and sits there costing money and generating no profit yet we all want them in 24 hours.....

Suppliers in the UK often offer volume discounts which helps margin but means you need to sell more. This is one reason why shops have differant prices.

I have a product in my shop that i sell for £85 if i order 100 they cost me £25. If i order 1 at a time they cost me £67. So if you have ever wondered why your local shop takes time to order from a supplier it may be so they can hit a discount threshold so they can actually make some money from you.

Retail is far more complex than many people believe

So you want,

Live stock
Full stock availability
Lowest Price for goods
Rapid dispatch

I would assume quick response to correspondance as well

You really do need to understand how expensive this is, also i have yet to find a shop that can do it. Although some are very good but mostly because they are family run businesses where the guys work far too long.

I love the way people who have not the slightest clue what they are talking about know everything about this subject.

When was the last time you saw a model shop owner driving around in a huge car, spending all their time on the golf course (or race track) and taking long expensive holidays twice a year - or whatever they would choose to do with a lot of money. No, I've never seem one either. If they were ripping you off, you would surely notice that.

Toyota are the second most profitable car manufacturer in the world, after Porsche. They work on 'double'. Build a car for £5k, wholesale it for £10k, put it in the showroom for £20k. They manage to make a profit of only 7% on sales. Retail, manufacturing, service industry, whatever - profit is small because admin and overheads eat into margins. If your margins don't cover your costs, and generate enough profit to invest in the future of the business, you won't be around for long!

DMS clearly know how to do that, because they've been around for ages. Only time will tell if JE or Rossmod stay around for as long as that. It's called a free market economy, the basic rule of which is 'caveat emptor' - let the buyer beware!

I mentioned local shops ie I drive to both Je spares and Ross mods are 10 min drive from my house 4 mins from my place of work !
So what you are all saying now is that my custom generates more profit because my orders do not involve shipping cost for the shop but cost me money useing my 2.5t car???

To Just let you know as DMS as said all kyosho prices went up in the early part of 2011.
So once this current stock sells you will see prices rise as they are everywhere.:thumbdown:
So you know I don’t work at the shop Im just a good friend of the family.
I hope this helps
Mark

In my opinion, from a life in retail, you must keep a margin of 100% or double up.

This enables all the other niceties people have come to expect like free delivery, returns procedure etc etc. It also pays the bills eg rent, overheads, tax, VAT, staff, admin blah blah.

After all these costs it also keeps the smile from a grimace when folk want showing how to use their new purchase and get it set up.

This was from a different industry but i am certain any shop owners reading this will agree :thumbsup:

The price of something isnt the be all and end all of everything. Personally I would rather pay retail and have it on my door step when I need it than have it a £1 or so cheaper and take a week. This industry like many others moves so fast and when stock ages and doesnt sell because its no longer the latest thing the shop owner has to pay for it. Go shop at Asda then at Waitrose and there's your answer. Asda is cheap but Waitrose gives a much better service and they have invested money training their staff how to pack bags etc.

If model shop owners did this a TLR 22 would be on the shelf at £280 and a TC6 would set you back £600. Markup only turns into profit if you actually sell the stuff... at 100% markup shops wouldn't sell anything.

The markup on RC racing stuff is tiny. It's never been good, and with shops now competing with Hong Kong, eBay and each other via the internet it's now even worse.

I used to know a model shop owner who drove posh cars and went on nice holidays, but that was back in the 90s when there wasn't all this price competition. These days it's hard to see how anyone makes a decent living from it!

I used to work in a model shop, a lot of the RRP only had a mark up of between 24 & 33%. I've worked in other industries where the mark ups are between 100 & 500%. We wouldn't be able to afford our hobby if that was the case.

Personally I use my local shop for everything, if they haven't got it they can get it, I can walk in their and have a friendly chat with them. All this competition in price is killing it for most shops. People should try and support their local shops where they can, if they don't you won't have a local shop.

i agree but when the local model shop sells i.e. a novak gtb2 @ £120 and i can get it from hongkong for £65 inside a week what are you going to do

its not the shops its the TAX TAX TAX they have to pay look a little closer to westminster .............................

What the tax that the shops pay and you break the law by not paying?

Its easy to make an 'its the government' comment but its more complex than tax.
Shops in the UK are more expensive to run, ALL of the overheads aer higher than Hong Kong and we also have the problem of buying stock through distributers in the Uk which adds to the cost think of it like this.

In the US a model shop buys a B4 from associated and then sells it to the customer.

In the Uk the shop buys from a distributer who buys from associated before they can sell to the customer. This middle man approach is where a lot of margin is lost.

Oh dear,

The perception of People in the RC world in relation to Sales of goods never seizes to Depress me.

If anyone does not like thier local model shop then F@~* and move to Hong Kong.

Or just stay in the uk and place orders in HK instead??

Tbh I shop where I get the best overall experience, factors include:

1. Live stock levels
2. Speed of communications
3. Price
4. Do they stock lots of bits & pieces
5. I built up a loyalty to them.

5 is an interesting one to me, I started buying kits from Stellamodels when exchange rate was more like 180yen/£, no-one in the uk brought kits in from Tamiya, and when they got 501's first...now people stock bits/kits here in the uk, the yen is 130 etc....but I still feel loyalty to Stella, I don't want them losing their jobs either...and I'm not sure why I should dump them!?

What I tend to do now is split a lot of my buying, I like supporting JTmodels with orders as I want them to succeed, I use Demon/PBM as I always have depending on what I am buying, same with JE, but I still tend to use Stella to buy actual kits, even though it doesn't save much these days, is that really bad, wanting Japanese guys to keep their jobs too??

Oh, and I think in the uk it would be better to focus on positively attracting customers rather than complaining, a universal maxim in business is long term you can't beat the "bigger guy", you have to differentiate to survive!

Some shops do this well and generate lots of customer loyalty regardless of price (or at least seem to!!), examples for me would be:

1. DMS probably through a variety of methods ultimately, but for example public support of their products on this forum, wide range of brands etc

2. Modelsport, great starter "bundles" in terms of it ring easy to understand what you need on their website, plus offering motor/battery build services, soldering services etc

3. People like JT doing their own hopup parts for the 502

4. Insideline good service, aligning closely to specific brands

5. JE/Nuclear, by racers for racers (probably true of everyone to an extent I guess in this trade!)

In my view, long term, to stay alive against people like Amain/Tower/Stella/Champ/Mushroom/rcmart, it's this differentiation that will prove key!

FYI, as an example of how hard foreign businesses try for our custom, rcmart us a London customer service number despite being a fareast business! No idea if it works mind!!!

Great thread!

RC has one of the smallest profit margins I've known, and if we're honest, no-one's getting rich out of RC, they're doing it cos it's what they love.

Try running a pub. Main complaints are always why do tesco/asda/sainsburys sell there beer for x yet I have to pay 3x as much in a pub?

Thats really unfair competition. In the pub I have to pay bills,tax,vat etc yet supermarkets sell at a loss and then pubs get blamed for a binge drinking culture! Wish people would take there heads out of the backsides at times :)

Retail is a dying breed. Careful what you wish for in prices or soon you'll only be buying on the internet.

[QUOTE=pro4nut;495590]What the tax that the shops pay and you break the law by not paying?


i havent broken any laws i paid my import duty so i have broken NO laws !!!!:mad:

[QUOTE=truggy lover;495728]So if customs don't charge enough tax you declare the true value of the items and pay the outstanding tax? All credit to you if you do, but I know many that don't
However I did not intend that as a personal remark, so i will retrack that and rephrase.

What the tax that the shops pay and many break the law by not paying.

I have no interest in winding people up, sorry if that was how that came across.

fair play accepted;)

What Dave and others have to understand is that most Model shops and Distributors in the UK have been running at a loss for over a year now.
That can only last so long before things go wrong.

If you are an experinced modeller then you will be quite ok to know what to buy online either from UK or Online. those guys do provide a good service.

But how will the next generation of would be Racers and modellers even get a chance to start without a local shop for help and advice.

How will the nitro boys get fuel if if they have to travel 100 miles to the nearest shop?

Everyone in the hobby has to know That in the UK we pay a lot of import taxes. We pay a lot of overheads to run a business.

We cant compete with some of the overseas countries as they simply dont have same overheads so its unfair competition.

Please dont Call me when you have a problem with something you bought from HK as i will tell you to get lost.

Every shop in the uk has the right to charge what they want which makes it an open and competitive market which in same european countries does not exisit, a fixed retail pricing stops that. So although we have some issues with far east compared to parts of Europe and Africa Australia we are actually not the highest market.

What I worry about here is that the natural conclusion to this is further price rises...I'm not sure anyone will want to take up the hobby if that's the case, the barriers to getting into are already high cost wise...it's between a rock and a hard place!

However, I'm not aware of any industry that's successfully survived by guilt tripping people into "buying British". I just genuinely think you need to give people positive reasons to buy from uk shops, not say you'll refuse to help them unless they do! There are positive reasons to support the shops, many mentioned in the thread..even more so in the States where a lot of shops are attached to tracks!

This isn't aimed at a particular source, but it does surprise me that no-one supports foreign bought goods in rc, distributor wise. I assume it comes from the manufacturers refusing to fund it, but it seems to me that a more sensible approach would be for the manufacturer to financially support the distributor providing good customer service (eg warranty repairs etc) regardless where the item was bought, after all the manufacturer has still made his money from the sale, and it's in his interest to support the product!? Plus that then becomes an income stream for the distributor...

Like I say, don't know the details of why that doesn't happen in rc, but has been a successful way of keeping distributors alive in other industries (and that I DO know from experience). Wouldn't help the shops though sadly..

All overheads are not less in Hong Kong. I'm willing to bet that no shop in Hong Kong owns it's own premises and due to the lack of space in HK rent is astronomically high, even more so for retail. Wages are indeed cheaper, but for the majority of stores it is the shop owner that is sat behind the counter.

RC shops are open everyday of the week until at least 9pm. Most of the shops will be quite full in an evening and you'll find people from all over the world shopping there. A street stuffed full of RC shops, static models and replica guns draws a reasonable crowd. Because of the large foot fall the retail shops actually sell quite a large volume of goods, which I believe allows them to negotiate good prices from distributors.

Even after all of this the model shop owners are still not the ones driving the fancy cars......

I after agree with you there, Sadly i think it doesn't matter if it's RC car's or the price of a paper clip and Petrol the UK will always be at the extreme end of the price market due to the fact we are all soft touches, We don't say nothing or do nothing about it so nothing will change and things will just keep getting more expensive.

I was reading somewhere that some things that a manufactured here in the UK are cheaper to by in the US and other parts of the world and that's when they have been shipped there. :mad: Just another case of rip of Britain.

I do support Model Shops here in the UK but i also buy from HK. Wonder how many people from abroad buy RC kit from the UK:(

The UK is the soft touch capital of the World and i can't see it changing anytime soon.

I sometimes buy my Schumacher spares from the UK, if the HK distributor does not have stock, the UK and HK prices are the same when you take off the VAT. So you can be sure that at least one manufacturer is not exaggerating their UK pricing :thumbsup:

However, I have to admit that is the exception to the rule in regards pricing.

HK pricing can be quite odd, some products are lots cheaper than the UK, however other products are roughly the same as the UK without VAT. Also HK and quite a lot of asia are mainly focused towards on road racing, so there tends to be less competitive pricing for off road gear.

Paul.

When I got into RC when I was about 8 ( 30 years ago ) there were a lot more local shops than there are now. Walking past and seeing stuff in the window got me and my dad walking in and having a chat with the guys in there, then for Christmas lucky me got my first kit, a Tamiya Fox.

Now the price of kits alone for the shop doesn't let them carry as much stock unless they're a huge outfit. The high street local shop is fading and without your support they will all disappear. Without them people won't find the stuff so easy, if less people join the hobby and they sell less the prices will go up to reflect this even further.

Using your local shop and keeping it going isn't just about buying in the UK it's about keeping the shop on the high street so the next excited 8 year old can walk past and his dad can say I used to do this when I was your age shall we go in a have a look...

Maybe the video game generation has taken hold but at the same time I'd be gutted to see any more local hobby shops close !