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Old 01-18-2006, 07:50 AM   #46
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Default Now your attacking our US work ethic

end of the day, the people in HK and japan open 7 days a week, work 15 hour days, reach greater number of customers than just locals.

they would rather work harder (and smarter) by selling 100units and make $10per unit, then sell 5 units at $50margin.

and to say if you don't support your LHS then the hobby will die. that is BS! the growth of the internet stores has seen the RC industry boom. the thousands of RTR kits they have sold (at a affordable price) has given this industry a huge kick along. A few years ago RTR kits would go for $1000![/QUOTE]

Boy you really must have a low opinion of Americans. In essence your implying that that we don't work hard over here, and that we are stupid. I find your remarks both extremely distateful and insulting. On your comments about internet selling. Yes it has caused a tremendous growth in our industry. If it wouldn't have been for the local hobby store to start this off, there would be NO hobby at all. Please don't call Americans lazy and stupid. You don't say it directly, but you imply it with a third party reference. Be glad you have a market to sell to. Your arrogance isn't going to make you to many friends.
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Old 01-18-2006, 09:39 AM   #47
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My friend used to run a hobby shop, I actually saw his whole sell price, selling price and full retail price.

OMG, what I have seen is that his whole sell price is so close to the retail price of those HK online store price depend on what product it is .

I don't know about other shop, but if that is case with all the dealer in America, unless they have low rent and big sell, which is unlikely in town that has less RC guys, they are not gonna do good regardless the effort they put.

plus some distributor selling their product online with low price and coupon and what so ever promotion, there will be less people buying in shop.

I don't know the policy and reasoning of pricing of distributor and I don't mean all distributor are bad, but usually they get bigger, they get bulkier and greadier. that is my 2 cents


btw, where is edwintam? isn't he suppose to contribute to the thread he open?
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Old 01-18-2006, 10:25 AM   #48
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Originally Posted by XingXing
coz they are smart, they work on volume not by large margins and are also efficient!

at one stage rc-mushroom was selling xray parts for very cheap, then xray told them not to, can't blame HK shops for being efficient!
I know..... FK05 $300 bux right ?
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Old 01-18-2006, 11:06 AM   #49
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Originally Posted by Car Breaker
My friend used to run a hobby shop, I actually saw his whole sell price, selling price and full retail price.

OMG, what I have seen is that his whole sell price is so close to the retail price of those HK online store price depend on what product it is .

I don't know about other shop, but if that is case with all the dealer in America, unless they have low rent and big sell, which is unlikely in town that has less RC guys, they are not gonna do good regardless the effort they put.

plus some distributor selling their product online with low price and coupon and what so ever promotion, there will be less people buying in shop.

I don't know the policy and reasoning of pricing of distributor and I don't mean all distributor are bad, but usually they get bigger, they get bulkier and greadier. that is my 2 cents


btw, where is edwintam? isn't he suppose to contribute to the thread he open?
This is what was confirmed to me as well by my local hobby shop owner. I told him of there sale price and he confirmed this was there cost for the item. I wonder if it has something to do with american dollar vs foreign dollars cause otherwise it doesnt make sense. Even if they are buying in massive bulk.
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Old 01-18-2006, 11:41 AM   #50
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I wonder if it has something to do with american dollar vs foreign dollars cause otherwise it doesnt make sense. Even if they are buying in massive bulk.
more like the distributors want to make the 40% margin first before the dealers make theirs. i wonder who is screwing the LHS, the distrubutors or the guys who like to buy on-line for a more resonable price ?
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Old 01-18-2006, 12:19 PM   #51
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let me give you an example of one of the issues. If I am on the mainland and a distributor dealer I go down to the factory and pick my stuff with a truck. No cost incurred. If I am a US distributor (giving you a real world hypothetical example. I order 100 items which are large.(say 28 lbs) They must be shipped in a container. The container costs 1000 dollars and when it hits the port another 50 dollar expediting fee occurs. Then the distributor wire transfers funds to the manufacturer and another 35 dollar wire transfer fee occurs.Then it is trucked to the distributer here which may incur another 200 dollars So 12.85 is added to the cost of the item even before it gets shipped to a dealer. If the item is 100 dollars add 12.85 and generally about 21.00 more for reshipping before it gets on the dealers shelf. This 100 dollar item is now 134.00 before the dealer sees it. A good margin on that item may be 60 dollars split between the distributor and the dealer. The dealer ain't gonna handle it for less than 30 or 40 markup. So unless the country distributor wants to just go through the exercise and give the dealer the product for 5 bucks so the dealer can sell it for 135-140 the dealer in the country the product was not manufactured in cannot be competitve.

So if you wonder what the desparity is its the shipping. Heck UPS makes more markup than everyone involved.
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Old 01-18-2006, 12:22 PM   #52
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distributor markup is quite low.

On a part that sells for retail price (for example a set of Losi XXX front a-arms) the hobby shop profit percentage and dollar amount is a lot more than the distributor. I am not saying this to blast hobby shops, just to say that the distributors have to do a volume business to make money.
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Old 01-18-2006, 01:09 PM   #53
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Originally Posted by Data
more like the distributors want to make the 40% margin first before the dealers make theirs. i wonder who is screwing the LHS, the distrubutors or the guys who like to buy on-line for a more resonable price ?
Well just think about it, you almost answered it with your question. Why is the lhs price high , the distributor. Therefore screwing the lhs , the user wouldnt have to go out and find cheaper price if the lhs could offer for a good price. So the distributor if you ask me is also causing the problem , cause they make price high , the lhs wont get sales and the lhs wont order as much from the distributor. I think the distributors sole purpose is to make the least amount of profit in hope of mass sales.

If the user bought from the lhs soley , that would accomplish just more sales at the exspense of the user , no change in how the distributor already profits.
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Old 01-18-2006, 01:42 PM   #54
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Quote:
Originally Posted by Motorman2
Data
let me give you an example of one of the issues. If I am on the mainland and a distributor dealer I go down to the factory and pick my stuff with a truck. No cost incurred. If I am a US distributor (giving you a real world hypothetical example. I order 100 items which are large.(say 28 lbs) They must be shipped in a container. The container costs 1000 dollars and when it hits the port another 50 dollar expediting fee occurs. Then the distributor wire transfers funds to the manufacturer and another 35 dollar wire transfer fee occurs.Then it is trucked to the distributer here which may incur another 200 dollars So 12.85 is added to the cost of the item even before it gets shipped to a dealer. If the item is 100 dollars add 12.85 and generally about 21.00 more for reshipping before it gets on the dealers shelf. This 100 dollar item is now 134.00 before the dealer sees it. A good margin on that item may be 60 dollars split between the distributor and the dealer. The dealer ain't gonna handle it for less than 30 or 40 markup. So unless the country distributor wants to just go through the exercise and give the dealer the product for 5 bucks so the dealer can sell it for 135-140 the dealer in the country the product was not manufactured in cannot be competitve.

So if you wonder what the desparity is its the shipping. Heck UPS makes more markup than everyone involved.
Maybe they should learn from wallmart. The cost out of factory is about $40.00 to $60.00 for a kit. That kit is being sold here for $450.00. The bottom line is RC market is small & they have to charge you arm & a legs in order to make it. The other reason the cost is so high is because of all the newbi want to be distributors (they like to see more profit so they set the price high).

Last edited by xrcbuggy; 01-18-2006 at 04:05 PM.
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Old 01-18-2006, 02:28 PM   #55
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Quote:
Originally Posted by Motorman2
So unless the country distributor wants to just go through the exercise and give the dealer the product for 5 bucks so the dealer can sell it for 135-140 the dealer in the country the product was not manufactured in cannot be competitive.
distributors send hundreds of kit to different dealers at a time, while each dealer selling whatever they can, probably one or two kits each week. giving the dealers the product for 5 bucks may not be so bad for the distributors. i donít know how the distributors split the margin with the dealers, but i think the profit margin for the distributors are pretty high when i look at the wholesale pricing.

Quote:
So if you wonder what the desparity is its the shipping. Heck UPS makes more markup than everyone involved.
yes shipping cost could be expensive and will maintain this way especially when the distributors donít look for ways to reduce shipping cost, just passing the cost to the consumer. when i can get a kit from oversea, pay premium (not bulk, in a container) shipping and still cheaper (if the different is significant) then what i have to pay for at LHS, guess where i am going to get the kit from.

i donít mind distributors and the dealers making money (they are suppose to), as long as the pricing are reasonable, i will support them.
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Old 01-18-2006, 02:54 PM   #56
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Quote:
distributors donít look for ways to reduce shipping cost
If you know a cheaper way to ship please share it. maybe we can strap the stuff to a seagulls leg!


Quote:
The cost out of factory is about $40.00 to $60.00 for a kit.
you really believe that?? a car kit has 50 times more parts that have to be precision in it than an engine.

If that was the case then why is a competition 21 on road engine with 16 parts 750.00 it oughta be 15 bucks using that thought process. Now how dumb does that thought process actually sound.

Its odd everyone whines about car prices when a couple good comp 12's cost what a kit does. Let me see 36 parts/100 parts. people buy JP's 12's like popcorn and they buy a car once a year and their roughly the same price what gives. I guess its just a matter of priorities.

Someone please tell me why a friend of mine who had to replace a crank on a 21+35 novarossi 21 had to give 175.00 for a chunk of metal. and if you think its the distributors I'll tell you thats BS

Come on guys I actually have more respect for your intelligence than to believe that you actually buy in to what you guys actually wrote up there.
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Last edited by Motorman; 01-18-2006 at 03:05 PM.
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Old 01-18-2006, 03:11 PM   #57
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Originally Posted by Motorman
If you know a cheaper way to ship please share it. maybe we can strap the stuff to a seagulls leg!
you are the distributor, earn your money. use of a seagull is a very good idea, just don't get mad when other people start using it.
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Old 01-18-2006, 03:11 PM   #58
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Originally Posted by RayJ

Boy you really must have a low opinion of Americans. In essence your implying that that we don't work hard over here, and that we are stupid. I find your remarks both extremely distateful and insulting. On your comments about internet selling. Yes it has caused a tremendous growth in our industry. If it wouldn't have been for the local hobby store to start this off, there would be NO hobby at all. Please don't call Americans lazy and stupid. You don't say it directly, but you imply it with a third party reference. Be glad you have a market to sell to. Your arrogance isn't going to make you to many friends.

if you read properly i said.... selling 100units at $10 prifit margin, vs 5 kits at say $100margin you WOULD have to work alot harder, answering emails, packing, shipping etc.... and it seems they are making more money by selling by a volume based style, so they are then also ultimatly working smarter.


just a simple business philosophy they have, if you think they dont work harder and smarter, then you won't be having this argument would you now, coz the low volume high mark up approach is working over here

oh yeah and i give you an example of how those internet stores have made rc a bigger than it ever was. my friends about 4 of them all saw those crappy helipcopters from ebay for like $200, yeah they are crap, but a newbie dont know better, they bought them and had fun with them, soon enough they will realise what they bought is crap and if they do get hooked onto it they would then ultimately spend thousands on a proper kit. this reach the internet has is just not possible with the LHS...

i also find it amusing that most the people who say "support your LHS" are the same ones who don't have a proper job or hang around the LHS 24/7 like a bad smell and get a few freebies.
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Old 01-18-2006, 03:15 PM   #59
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Quote:
Originally Posted by Motorman
If you know a cheaper way to ship please share it. maybe we can strap the stuff to a seagulls leg!
you really believe that?? a car kit has 50 times more parts that have to be precision in it than an engine.

If that was the case then why is a competition 21 on road engine with 16 parts 750.00

Its odd everyone whines about car prices when a couple good comp 12's cost what a kit does. Let me see 36 parts/100 parts.

Someone please tell me why a friend of mine who had to replace a crank on a 21+35 novarossi 21 had to give 175.00 for a chunk of metal. and if you think its the distributors I'll tell you thats BS

Come on guys I actually have more respect for your intelligence than to believe that you actually buy in to what you guys actually wrote up there.

agree with you, motorman, buying product isn't just about the material.
R&D cost money, worker cost money, defactive item cost money, operate a factory cost money, QC cost money. regardless cast or CNC, error occurs. item price has to cover this too.
I am not saying that distributor or factory can use this as excuse but this add up does make quite some $$.
I agree some manufacturor does make quite a profit but not all do the same.
people here get into RC much longer time then I do, definately you guys can see which manufacturer mark up more and which do the opposite. and all of you can also see which distributor do their job and which don't.

PS: this thread is growing large, we have 58 reply and 989 view in just 2 day
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Old 01-18-2006, 05:41 PM   #60
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Everybody here is forgetting about import taxes and duties, which vary from country to country. And if you are a legal operated company you have to pay them, even if you are working some kind of ilegal dumping prices with supplier.

Example for an import here to Peru, South America.

Fob price to distributor of sampleitem U$D 200.00
EMS Freight U$D 45.00
Insurance (0.5% over CIF) U$D 1.30
Wire Transfer Charges U$D 5.00
Customs Duties & Taxes(31% over CIF) U$D 76.35
Custom Agent Fees (15% over duties) U$D 11.45
Freight Charges from port to warehouse U$D 5.00

Total cost of kit to distributor U$D 344.41

Now, distributor has to put his margin....then the hobby shop, considering their operating costs..... So if you are asked U$D 450.00 retail price, you are lucky and getting a fair deal.

So if Hong Kong oulets sell cheap,(FOB prices beeing equal and not faked), it has to be because they pay less freight (shorter distance), less duties and taxes, etc.etc. And that is out the hands of distributors in your countries.
Or maybe they get better prices from supplier, or they are doing double invoicing, one for customs and the other on a side ilegal account.

In the USA or any other country it has to be the same give or take, you must pay taxes, so you are not only supporting your LHS's but you are contributing to your country.

My 2 cents

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