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Old 10-31-2008, 06:14 PM   #1
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Default What are the margins of most RC retailers

Not sure where to post this question.. but I am very curious as I'm sure a lot of other are to. What are the margins of RC cars etc for RC retailers? I'm sure some of you either own or work for RC retailers.

what are the margins of cars, parts, electronics..


Thanks!!

J
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Old 10-31-2008, 06:24 PM   #2
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Not sure where to post this question.. but I am very curious as I'm sure a lot of other are to. What are the margins of RC cars etc for RC retailers? I'm sure some of you either own or work for RC retailers.

what are the margins of cars, parts, electronics..


Thanks!!

J
Not enough to support themselves. Support your LHS!
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Old 10-31-2008, 06:33 PM   #3
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Old 10-31-2008, 06:36 PM   #4
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Old 10-31-2008, 06:52 PM   #5
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Not sure where to post this question.. but I am very curious as I'm sure a lot of other are to. What are the margins of RC cars etc for RC retailers? I'm sure some of you either own or work for RC retailers.

what are the margins of cars, parts, electronics..


Thanks!!

J
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Old 10-31-2008, 06:55 PM   #6
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Not enough to support themselves. Support your LHS!
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Old 10-31-2008, 10:33 PM   #7
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It is all depends. Some retailers buy direct from manufactures, the profit margin can be 70%. If buy from distributor then profit is around 40%-50%. Hobby shop owner can easily make $10000 - $30000 net income per month easy. In fact, they will tell you it is bad business always as they don't want more competition. hahahaha
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Old 10-31-2008, 10:40 PM   #8
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It is all depends. Some retailers buy direct from manufactures, the profit margin can be 70%. If buy from distributor then profit is around 40%-50%. Hobby shop owner can easily make $10000 - $30000 net income per month easy. In fact, they will tell you it is bad business always as they don't want more competition. hahahaha
I don't know about that, if that were true I don't think they would ever have to close a shop.
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Old 10-31-2008, 10:46 PM   #9
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It is all depends. Some retailers buy direct from manufactures, the profit margin can be 70%. If buy from distributor then profit is around 40%-50%. Hobby shop owner can easily make $10000 - $30000 net income per month easy. In fact, they will tell you it is bad business always as they don't want more competition. hahahaha
lol I'm letting you know right now there are not many items in RC that come out to those margins.
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Old 10-31-2008, 10:48 PM   #10
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It is all depends. Some retailers buy direct from manufactures, the profit margin can be 70%. If buy from distributor then profit is around 40%-50%.
I am sure you are talking Tower Hobbies.
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Old 10-31-2008, 10:50 PM   #11
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I wouldn't be surprised if they get 60%+ mark-up on some hop-ups, accessories etc..

But hey, thats what it takes to run a business. Rent, labor, inventory, utilities.. it goes on and on.

Im in business and I am curious as to these things. It does seem to me that if there were 50 point mark-ups, we could find things on the internet for waaaay cheaper than what we do.

I do know it is important to support the LHS's because they are the center of the local RC community. It does become difficult however, when they refuse to price match and are 20% more than internet retailers..

Jon
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Old 10-31-2008, 10:54 PM   #12
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Originally Posted by jman37 View Post
Not sure where to post this question.. but I am very curious as I'm sure a lot of other are to. What are the margins of RC cars etc for RC retailers? I'm sure some of you either own or work for RC retailers.

what are the margins of cars, parts, electronics..


Thanks!!

J

Trust me the margins are not high at all. I love the sport and the hobby so I love running my shop and of course I race myself so the discount is nice and adds to the worth it all factor

I'm a online hobby shop and you probably won't hear this from any other online shop, but yes support your local hobby shop and especially the tracks. If they cant get some things or don't have them in stock, then please venture your way toward the online guys One of the reason I say this is High Velocity has goals of opening a track and a local hobby shop at some point and time. I can only hope to make it as we see so many tracks and shops close down, But this is still a goal that High Velocity wants to take a chance at for the love of the hobby.

but trust me the margins are not high and I deal with some of the biggest distributors

were talking around 10-15% on kits, electronics etc.

If the proof of all of the shops that close down is not enough then I don't know how to convince you guys that margins are lower than what people think
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Old 10-31-2008, 11:07 PM   #13
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Trust me the margins are not high at all.
but trust me the margins are not high and I deal with some of the biggest distributors

were talking around 10-15% on kits, electronics etc.

If the proof of all of the shops that close down is not enough then I don't know how to convince you guys that margins are lower than what people think
yes

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It is all depends. Some retailers buy direct from manufactures, the profit margin can be 70%. If buy from distributor then profit is around 40%-50%. Hobby shop owner can easily make $10000 - $30000 net income per month easy. In fact, they will tell you it is bad business always as they don't want more competition. hahahaha
no
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Old 10-31-2008, 11:24 PM   #14
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Oh I dont doubt the margins are very low on the cars themselves..
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Old 11-01-2008, 12:13 AM   #15
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Markup varies from 10% for a kit to 100% for some parts. For a hobby shop/track, though, they give up so much square footage to the track/pit that the sales/sq. ft. figure for the whole facility can be crushing. (Don't be the guy who plugs in his twin 25A power supplies, cracks open an 1/8th scale pit bag full of spare parts ordered online, and then complains about a $15 race fee and the markup on tires: "$32 for a set? I can get them for $28 through Tower!" Priceless.) That is, net margin is not great as a rule, and is often outright awful. Try finding a space within an hour's transit in a metro area that you can pay for with business from racers...not easy.

To even have a chance, it is just hugely important to serve up the high margin consumables: tires, bodies, batteries, front arms and knuckles, etc. While the more you can buy at the track or LHS is always better, for sure buy the regularly replaced items where you race. Cash flow is the blood flow.
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