R/C Tech Forums

Go Back   R/C Tech Forums > General Forums > Electric On-Road

Reply
 
Thread Tools Search this Thread
Old 01-17-2009, 10:15 AM   #1
Tech Fanatic
 
cartix's Avatar
 
Join Date: Sep 2001
Location: NY
Posts: 937
Trader Rating: 33 (100%+)
Default LHS and the economic crisis

Are LHS's going to survive this crisis? Are soon going to be totally dependant on Tower Hobbies etc.

How's your LHS doing?
__________________
Cars and boats, lots!
cartix is offline   Reply With Quote
Old 01-17-2009, 11:06 AM   #2
Tech Elite
 
SWTour's Avatar
 
Join Date: Sep 2003
Location: Central Coast...CALIF.
Posts: 2,873
Trader Rating: 9 (100%+)
Default

Our LHS closed it's doors just before THANKSGIVING, and a NEW Store opened with a new owner (former manager of the old store) a week before Christmas in a new location.

The OLD Store closed on what should have been the start of the HOLIDAY Shopping Season (which had to hurt sales) and the new stored opened late enough to miss a lot of the holiday shopping.

He's already struggling, and he's only been open a month. I hope and wish him success, but trying to compete with the TOWER's and STORMER's and so on is a tough business. They are solid companies with a strong customer base and GREAT prices.
__________________
Joe Myers
R/C Racing since 1985 ~ Santa Maria, CA (Central Coast)
2001-2012 - South-West Tour R/C Oval Series...will the SWT be revived?
Things are headed towards a return of the SWT Series, but for
2017 the focus will be on the Encino Velodrome (and dirt oval racing)
SWTour is offline   Reply With Quote
Old 01-17-2009, 11:11 AM   #3
Tech Fanatic
 
trailranger's Avatar
 
Join Date: Feb 2007
Location: Springfield, MO
Posts: 946
Default

The short answer is NO, many hobby shops will fail.

The reason is caused by a positive feedback cycle in economics. A feedback cycle is where one action causes another action which in turn escalates the first action repeating the process.

Local Hobby Shops are in direct competition with Mail Order shops like TowerHobbies. I like shopping online for large purchases because I save alot in taxes. Shipping is $7 and if I were to pay taxes it would be $20, so I am saving $13. Every purchase made at TH is less local revenue in the form of taxes for cities and states. In turn since the City and State governments have really big budgets, they will raise taxes when tax revenue begins to drop to cover those big budgets. With higher taxes this lowers the threshold for hobbyist to use a mail order vs. a local hobby shop.

To further complicate the issue of lost sales to local hobby shops is the recession. During a recession many people have to take pay cuts or lose their job to others willing to work for less. With less money to spend, the fun things are the first to get shorted while the bills get the attention.

There are so many other factors involved, but the main key for LHS is to start limiting inventory and build a cash reserve. It is hard enough for a LHS to compete with TowerHobbies because of the Economies of Scale. When LHS have to charge taxes and Tower does not, it becomes really hard to compete. This may violate some peoples thinking, but I feel taxes should be placed on mail orders at the facility location of shipment.
__________________
"If everything seems under control, you're just not going fast enough." - Mario Andretti
trailranger is offline   Reply With Quote
Old 01-17-2009, 11:16 AM   #4
Tech Master
 
TwoTone's Avatar
 
Join Date: Jun 2008
Location: Maryland
Posts: 1,002
Trader Rating: 12 (100%+)
Default

I may be an optimist and not exactly business savvy, but I think this needs to get thrown at the manufacturers and distributors.

Yes the largest portion of RC is bashers and they could care less about local tracks.

However, the high end, race manufacturers or distributors should be selling directly to the LHS that have tracks so they can compete with Tower.

Bashers arent buying XRays, etc If tracks close, they are losing customers if people have no where to go. Race Fees wont keep a track open.
TwoTone is offline   Reply With Quote
Old 01-17-2009, 11:22 AM   #5
Tech Master
 
TwoTone's Avatar
 
Join Date: Jun 2008
Location: Maryland
Posts: 1,002
Trader Rating: 12 (100%+)
Default

Quote:
Originally Posted by trailranger View Post
.....

Local Hobby Shops are in direct competition with Mail Order shops like TowerHobbies. I like shopping online for large purchases because I save alot in taxes. Shipping is $7 and if I were to pay taxes it would be $20, so I am saving $13. ....
Technically what we all are doing is illegal. If Im not mistaken, most states have laws that were all supposed to report that and pay the taxes, but the states have no way to enforce it.

It wont be long until laws catch up with the internet and Online retailers will be required to collect the state taxes.
TwoTone is offline   Reply With Quote
Old 01-17-2009, 11:25 AM   #6
Tech Champion
 
Join Date: Oct 2005
Location: Cincinnati, OH
Posts: 5,360
Trader Rating: 38 (100%+)
Default

Quote:
Originally Posted by trailranger View Post
I like shopping online for large purchases because I save alot in taxes. Shipping is $7 and if I were to pay taxes it would be $20, so I am saving $13. t.
So are you admitting on the internet you dont pay your states use tax for online purchases?
or8ital is offline   Reply With Quote
Old 01-17-2009, 11:26 AM   #7
Tech Champion
 
Join Date: Oct 2005
Location: Cincinnati, OH
Posts: 5,360
Trader Rating: 38 (100%+)
Default

Ha ha, TwoTone and I were thinking the same thing.
or8ital is offline   Reply With Quote
Old 01-17-2009, 11:34 AM   #8
Tech Champion
 
oXYnary's Avatar
 
Join Date: Dec 2003
Posts: 6,301
Trader Rating: 4 (100%+)
Send a message via AIM to oXYnary Send a message via Yahoo to oXYnary
Default

Quote:
Originally Posted by trailranger View Post
Local Hobby Shops are in direct competition with Mail Order shops like TowerHobbies. I like shopping online for large purchases because I save alot in taxes. Shipping is $7 and if I were to pay taxes it would be $20, so I am saving $13. Every purchase made at TH is less local revenue in the form of taxes for cities and states.nt.
On the other hand, some people are just cheap selfish jerks, who want things as low as possible no matter the effect beyond their immediate benefit. I help a LHS once in awhile. Guy came in wanting to see what we could do on a futuba radio. We matched Tower. Wasnt good enough. We then would PAY his sales tax. Still wasnt good enough as he got free shipping from Tower since he was on their club. So we went 5% below tower and again would pay his tax. I dont know if he accepted it or not. The point is no money would have been made on that sale, and the cheap [email protected][email protected] coming in again expecting more unrealistic "bargains".
__________________
www.3drcracing.com <<RC Video Game.
Kyosho Mini-Z Buggy, Moto Racer | Losi Micro SCT, 8ight Mini
oXYnary is offline   Reply With Quote
Old 01-17-2009, 12:40 PM   #9
Tech Master
 
J.Filipow's Avatar
 
Join Date: Mar 2003
Location: Los Angeles, CA
Posts: 1,692
Trader Rating: 15 (100%+)
Default

Hobby shops do more than provide products, they also provide SERVICE. Very important difference. Sure, an internet retailer might be able to answer a question or two via email, but when you're just getting started in the hobby, and have a million questions, who can you rely upon? The LHS.

I believe very strongly in supporting the local hobby shops, even if their prices are a few dollars more. Why? Not only because of the customer service they provid, but also because of the convenience. What if you need a certain part 'right now' in order to finish a practice day or a race day? Are you gonna wait 3-5 business days to save $2 on a part that the shop already has in stock (rhetorical question)?!

I also believe in supporting the local hobby shop b/c they can be the backbone of a local racing scene. And that's important, too. Support your local scene and it will grow!
__________________
P1 Brand - "Victory is Black and White" ◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤◢◤

RC America / XRayUSA / Hudy / Motiv / Avid / Vannen Watches
J.Filipow is offline   Reply With Quote
Old 01-17-2009, 01:19 PM   #10
sac
Tech Regular
 
Join Date: Dec 2001
Location: USA
Posts: 333
Default

I think that once there is a set internet TAX ,either by the goverment or by state or both .things are going to change.The bigger internet companies will feel the effect first,they will have to pay to each state and/or goverment.This means man hours paid out to fill out paper work etc. That in turn will start raising prices to cover the cost.The local hobby shop will benifit in the long run .
I have been reading that such a tax could range from 5% to as much as 10%that would need to be paid again to the goverment and or each state.That means if you go by that, you would be adding between 5-20% to your online purchase.You $100 purchase will be $105 to $120 depending on the tax and if it has to be paid to both state and goverment.
Again there is nothing set yet but a internet TAX in coming ,and i think it will be here sooner than later!


sac

Last edited by sac; 01-17-2009 at 01:36 PM.
sac is offline   Reply With Quote
Old 01-17-2009, 04:27 PM   #11
Tech Apprentice
 
OvalDude99's Avatar
 
Join Date: Mar 2008
Location: Watertown SD
Posts: 79
Trader Rating: 3 (100%+)
Default

Quote:
Originally Posted by J.Filipow View Post

I also believe in supporting the local hobby shop b/c they can be the backbone of a local racing scene. And that's important, too. Support your local scene and it will grow!
I agree, but in a case like mine, I really don't have much of a choice but to order off the net.The closest hobby shop to me is 95 miles away and he doesn't carry much in the way of car stuff. So it would be an hour and a half trip just to order then do it all over again to pick up.Can't call and order because he insist on payment when the stuff is ordered, people have screwed him to many times by ordering and never picking their stuff up.
If possible, support your local hobby shop.
OvalDude99 is offline   Reply With Quote
Old 01-17-2009, 07:51 PM   #12
Tech Master
 
ChristopherKee's Avatar
 
Join Date: Feb 2002
Location: Northern Virginia
Posts: 1,005
Trader Rating: 28 (100%+)
Default

I really don't want mine to close down so I have been buying 90% of all items from my LHS. Without a track to race at I wouldn't have anything to do with my RC stuff =/.

Buying a lot of little things from your LHS is always good since they make the most money (percentage wise) on some of the smaller items. Screws, washers, odd tools.
ChristopherKee is offline   Reply With Quote
Old 01-17-2009, 08:05 PM   #13
Tech Regular
 
Join Date: Aug 2008
Location: Camarillo, CA
Posts: 262
Trader Rating: 1 (100%+)
Default

I try to buy from my LHS when I can but sometimes it just doesn't make sense if they don't carry the stuff you're looking for. I have special ordered from one of the shops when it made sense. Luckily one of the shops will match internet prices but I don't abuse it as I do understand it's hard to compete with high volume internet stores.
__________________
DM1-S Tekin 2650Kv
MTX-3 MR .12
TA05 IFS-R Tekin 17.5
TA03R Cirtix 17.5 club spec
F109 Tekin 21.5
danketchpel is offline   Reply With Quote
Old 01-17-2009, 08:13 PM   #14
Tech Regular
 
Join Date: Jul 2003
Posts: 498
Trader Rating: 4 (100%+)
Default

We hear this all the time and they always seem to close down. They do compete with the same vendors that sell them the product so it is a win win situation for the big dogs on the block. But when I hear alot of the folks around here say they want to help the shops out then I always wonder why the shops do not help the customers as well. The way I see it is that there are 2 points that will make someone shop elsewhere then there local shop. 1 being that they do not have or simply will not get the parts or product the customer wants. I have seen this time and time again. And 2nd they can get it 5 dollars cheaper online then at the shop. But then they pay 10 dollars in freight. Makes no sense. Really is a bad situation and to make it worse the economy holds a large part in it as well.
xspower is offline   Reply With Quote
Old 01-17-2009, 11:34 PM   #15
Tech Adept
 
timmyboy's Avatar
 
Join Date: Jan 2009
Location: boise, idaho
Posts: 125
Trader Rating: 2 (100%+)
Default

here in boise idaho we have but one lhs. the other two died before the econemy did. so we have h.t,usa which is good and i shop there more often than not (because it is local) however. the prices are a tad steep and fluctuate with regularity. the parts that alot of us local racers need (we dont all run the same car) the lhs doesnt carry (ihave to order them anyway) and the lhs support of our local track is minimal at best (they are not the same).

that said if you need a part for a traxxas (any part) they have it.

if you need a part for a losi 8ight they probably have a stock part (better than nothing)

but if you run anything else (hyper 7 / x1crt / h.b. d8 / or?) yer pretty much s.o.l.

still i hope they make it i dont mind paying a little more for my fuel and glow plugs if it means i can get one at 7 on a saturday night. but i think when i get my new ride for the year it will be online with the support equipment to go with it. and i know right off the bat just on the buggy i will save $300----- thats alot of support equipment!
timmyboy is offline   Reply With Quote
Reply

Similar Threads
Thread Thread Starter Forum Replies Last Post
what has losi become.... mel_russ615 Electric Off-Road 92 11-25-2008 12:09 PM



Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are Off



All times are GMT -7. It is currently 12:05 AM.


We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to Amazon.com and affiliated sites.
Powered By: vBulletin v3.9.2.1
Privacy Policy | Terms of Use | Advertise Content © 2001-2011 RCTech.net