Cubby- To start things off this week, here’s a letter from one of our industry friends concerning this weeks Cub Report. While we get a lot of mail from industry types, we typically don’t post’em, but here’s one for ya. Make sure to hit the MORE button, to read the whole post.
Hope all is well!
I do not know ‘Cubby’ from your news staff, but I read his ‘THE Cub Report, 04.24.2011- Version- Aeropostale vs RC’ that is on the homepage today: Direct Link Here.
While I totally understand his thought about sales at Aeropostale, I wish to help put a little perspective on this, because at the end of the day, it just felt a little like ‘Consumers VS R/C retailers.’
Again, I totally understand his tone and thought about his post, so I am not looking to poke at him, just want to lend a little insight and help see things a little differently as I too am passionate about our R/C industry! I am sure you have a great relationship with your retailers as well.
It’s kinda’ not a fair comparison as Aeropostale has 900+ retail locations. The largest chain within our R/C segment is 165+ with HobbyTown.
source: Aeropostale http://en.wikipedia.org/wiki/Aéropostale_(clothing). Also look closer at who started Aeropastale yes, Macy¹s back in 1987! Aeropostale info: http://en.wikipedia.org/wiki/Aéropostale_(clothing) .
Something else to think about of which is not spoken, is how much of the product from Aeropostale is actually manufacture by them or parent / partner companies.
So lets look at different perspective:
Think about these Retailing-manufactures: No Fear & Oakley with their Boutique stores…
They are the Manufacture, the distributor and the retailer.
Now if Traxxas, HPI or even HobbyKing was to start retail locations, then yes, their could possible be room for that margin you are looking for.
But, end of the day, if it’s on sale like that… Was it worth it in the first place? T-shirts are way cheaper in materials and workmanship than an R/C vehicle.
So, their big sale is the result of the fast changing fashion. They have 4-5 seasons per year, meaning new lines [not just one truck, but whole lines of clothes]. These lines come with quantity minimums while attempting at predicting what you kid will be wearing the next four months. Good luck with that, hu?!
Now for another perspective!
The Hobby industry has been on sale for the last 20+ years!!! Go back and look at how much you paid for that AE RC10 back in 1988! [That is when I bought my first R/C]
6000 Basic kit, less all electrical, less bearings $188.00
6010 Full kit, less battery, less bearings $225.00
6012 Full kit, less battery, body, wing, bearings $215.00
6016 Full kit, ball bearings, less battery $290.00
6020 Full kit, with battery pack, less bearings $265.00
How much is that relatively same vehicle today?
2011 April, 25th:
LXWVF8 Associated SC10 2WD Race Truck Kit 181.98 27-years later and $6.02 cheaper!!!
LXZTJ4 Associated SC10 Factory Team Kit 259.98
LXAXLK Associated SC10 4X4 Short Course Team Kit 269.97
LXGZW7 Associated 1/10 RC10B4 Factory Team Buggy Kit 199.98
LXSLD1 Associated 1/10 B44 Factory Team Buggy Kit 253.98
LXAMWX Associated B44.1 Factory Team Kit 369.99
Another way to think about this… Look at when this Crawling segment of R/C began… To get in was a minimum of $400 plus 100-hours of labor to get one built! That was just a short 4-5 years ago!
Now Axial has RTR solutions starting at $279.99 and are VERY capable crawlers!
Hope this gives a different perspective!”
Cubby- After talking with Brian The Editor Type he helped me see I wasn’t very clear in THE Cub Report (nor am I ever I guess… LOL). The point I was really trying to get across had nothing to do with raw prices of rc cars, or the ability of a clothing retailer to blow out inventory, what it did have to do with was this- the word “sale” brings in more consumers. Doesn’t matter if the place has 600+ stores and grosses over 2 billion a year, or if it’s a single mom and pop rc shop that grosses 200k, the word “sale” generates excitement from the buying public.
There is no bigger proponent of local hobby shops than myself. Each and every Cub Report ends with a plea for my readers to visit theirs. So why would I write a column about why LHS’s should put on a sale? Because at this point I feel they have to if they want to keep their doors open.