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Old 01-20-2011, 09:48 PM   #1
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Default What's a guess for the production cost of a race TC?

This may be a little extreme, but while surfing on the banzai online shop I came across a Yokomo BD5 worlds edition for 7xx USD. I begin wondering how much it actually costs to produce these kits that are selling on average $450 on the market?
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Old 01-20-2011, 11:17 PM   #2
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This may be a little extreme, but while surfing on the banzai online shop I came across a Yokomo BD5 worlds edition for 7xx USD. I begin wondering how much it actually costs to produce these kits that are selling on average $450 on the market?

You are about to open up a can of worms, bro. Something is worth only as much as someone is willing to pay for it. Unfortunately, in this hobby, we are willing to pay outrageous prices for anything that will give us an edge......
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Old 01-20-2011, 11:31 PM   #3
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Hard to say, but you have to factor in the cost of sending Ronald Volker and his mechanic Umino (who's from Japan) to the races, plus the rest of their Japanese team...That's not even getting into the actual cost of making the car
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Old 01-21-2011, 02:05 AM   #4
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About $6.50; the rest is spent on crack and hookers.
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Old 01-21-2011, 02:54 AM   #5
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About $6.50; the rest is spent on crack and hookers.
true true
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Old 01-21-2011, 02:58 AM   #6
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Billions if not trillions.
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Old 01-21-2011, 04:32 AM   #7
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The cost of materials isn't that much, but they need to amortize the cost of R&D, salaries, marketing, race teams, etc., plus the costs of the plastic molds over then expected number of items sold.

An individual mold for one part can cost more than $25K if they don't machine it in house. The cost of plastic used in an individual part may only be a few cents. Also, as mentioned above, they will also charge whatever the market will bear.
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Old 01-21-2011, 06:34 AM   #8
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From what I can tell the actual cost to make the kit is 66% less than the price of the car. That's labor, materials, and the print on the box. Where the money comes in is R&D. That adds another 33% to the price. So, basically they make on average 33% profit off each car. This is common for just about everything sold in any market. You have remember that some countries have extremely low labor cost.
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Old 01-21-2011, 08:26 AM   #9
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From what I can tell the actual cost to make the kit is 66% less than the price of the car. That's labor, materials, and the print on the box. Where the money comes in is R&D. That adds another 33% to the price. So, basically they make on average 33% profit off each car. This is common for just about everything sold in any market. You have remember that some countries have extremely low labor cost.
I am sure it is like prescription drugs. The pill is nothing, pennies, it is the r&d, testing, trial, design, etc etc. That is a ton of labor and you have to assign that labor to some sort of sales. I bet the actuall car materials cost about $10. It is all the other stuff that has to be paid for before the actual car is produced.
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Old 01-21-2011, 08:27 AM   #10
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33%! That's it!?!
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Old 01-21-2011, 08:45 AM   #11
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As others have said, it's mainly the cost of the machines, molds and r&d you are paying for. If companies could sell millions of kits, the prices would be substantially lower but when you only sell hundreds or a few thousand at most, all that expense has to be spread over a smaller amount of product.

That being said, there is more than $10 worth of materials too. The graphite alone is probably $40 or more. Plus $20 or more worth of bearings.

Remember the old gold tub RC10? The bushing model was like $80 or so less than the bearing version.
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Old 01-21-2011, 11:40 AM   #12
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Iv'e always wondered how many kits a manufacturer actually sells.
From business classes I have been in, the general profit margin should be 33% or more for a manufacturing facility, whether it's rc cars or condoms, that is where I got those numbers from.
As for the yokomo parts being expensive, I think they are a Japanese company, and labor in Japan is no where close to as cheap as China or Mexico's.
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Old 01-21-2011, 12:28 PM   #13
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Don't let the cost spoils our love for the hobby.

I work at a hobby store, just passed my 11th anniversary in early Jan. The markup on r/c kits, radio, engines, chargers, etc are much lower than replacement parts. Even hop-up parts are discounted pretty well where replacements are priced at full retail/msrp.

Hobby distributors get r/c products less than 50% of msrp. I think your 33% might apply for them.

I need to save up for the next kit > RC8SCE
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Old 01-21-2011, 04:19 PM   #14
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Don't let the cost spoils our love for the hobby.

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I work at a hobby store


Ok....got it.....
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Old 01-21-2011, 05:24 PM   #15
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^^ Funny stuff.

I think it's cheap when you consider what else you can buy for $350. That's about 20 cd's (if anyone uses them now), or 15 DVD's, or 4 bottles of good Single Malt, or a couple of hookers.
I get more enjoyment out of my car than a few those things.
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