Tamiya price jump...

archelon wrote:

Before we lament the demise of the LHS and the subsequent collapse of this hobby,. perhaps a little perspective is in order. What do we really need a LHS for when practically everything about the hobby can be addressed via internet resources? Product selection? Price? Tutorials? Advice?. Discussions? Galleries? It's all here and it's all good. But just like horses didn't go extinct when cars came around, we'll still see the LHS.  Maybe not many of them, but there will still be a need to have paint/glue and a rudimentary selection of kits on hand for "convenience"  purposes.

The LHS that stick around will be those with both an internet shop and an inviting place where people will go to and hang out.  When I lived in Seattle, there was a place like that in Renton.  It had started in the late 90s and they had expanded once already when I moved away in 2003.  They were talking about another expansion when I was last there.  On the weekends, the place was always busy.

The people who worked there were chatty and friendly and encouraged people to hang out and talk about modeling.

Here is their site Skyway

Bill

warshipbuilder wrote:

So just to gain a sense of perspesctive - Let's say that the price of the new Trumpeter Hood kit to we consumers is $149US. from our LHS. How much is the LHS being charged for each kit by the likes of Stevens International for example?   And how much is Trumpeter selling each kit to Stevens International for?  I'm intrigued..............

I don't know what the mark up is from manufacturer to distributor, but the distrubutor price is almost always around 60% of retail.  So the LHS would be getting it for about $90, maybe a little less.  Out of the $60 the LHS makes from selling the kit, they need to pay utilities, rent, possibly employees, and have something to take home at the end of the day to live on.

The online retailers and especially the Ebat retailers have an advantage.  Many of them are working out of their garage.  They have very low overhead.  If they make $10 on the kit, they might actually be putting more money in their pocket than the LHS who made $60 before expenses on the deal. 

Some of those Ebay retailers are, I'm almost certain, buying the kits gray market.  That is they are directly importing them via non-traditional channels and cutting out the distributor.   Including shipping from Asia, these people are probably getting the same kit for $60 or $70, so if they sell for $90, they are making a decent profit.

Bill

Archelon raises a good, perfectly legitimate question.  There's no way that, except in a big metropolitan area, any local hobby shop could hope to stock even a fair fraction of what's available to modelers today - in any branch of the hobby.  Just take a look at a model railroad magazine.  In any given month, half a dozen new locomotives get released.  Each of them is available in six or eight road names, and costs several hundred dollars.  A hobby dealer would have to invest thousands of dollars to maintain such an inventory - and if he stocks a diesel engine in seven road names, it's a safe bet that the eighth one will be the one the customer wants.

In many ways the web is a better source of merchandise than the local hobby shop ever was.  I think what I miss most about the Goode Olde Dayes is an aspect of the picture that wasn't directly related to money.  The shop where I worked was a social institution.  On any summer evening it would be full of people from lots of different professions, income levels, and parts of the community - people who never would have had any interest in each other had it not been for their common interest in model railroading, aircraft, or whatever.  I made friends that way whom I never otherwise would have met.  In few other environments would one see a bank officer listening intently to the wisdom of a Conrail engineer or a retired aviator.

The other thing the hobby shop offered was a way for kids to break into the hobby.  I bet most of us remember studying, goggle-eyed, the models in the display cases or hanging from the ceiling at the hobby shop.  And kids got their "training," such as it was, from the clerks and the other customers. 

Times change, and archelon is right:  serious scale modelers can survive perfectly well without local hobby shops.  But I'll miss them.

Before we lament the demise of the LHS and the subsequent collapse of this hobby,. perhaps a little perspective is in order. What do we really need a LHS for when practically everything about the hobby can be addressed via internet resources? Product selection? Price? Tutorials? Advice?. Discussions? Galleries? It's all here and it's all good.

But just like horses didn't go extinct when cars came around, we'll still see the LHS.  Maybe not many of them, but there will still be a need to have paint/glue and a rudimentary selection of kits on hand for "convenience"  purposes.

I don't know how the business operates nowadays.  When I was working my way through grad school in a hobby shop, the standard retail markup was 40% - that is, the hobby shop would pay about $89.40 for a kit with a retail price of $149.00.  The wholesaler in those days got, I think, somewhere between 20% and 30% - say $35.00.  So the manufacturer would get $54 or $55 for the kit.

Maybe somebody who's currently in the business can give us some more up-to-date figures, but that's about how it worked in my day (back in the Garfield administration).   The markup in the hobby business has always been higher than in some others.  Book dealers, for instance, get a markup of about 20%, as I understand it.

Remember that the hobby dealer doesn't get to keep anything like the total amount of the his markup.  His landlord probably determines his rent by taking a percentage of his profits.  (In my day I believe it was in the neighborhood of 10% to 15%.)  Then the employees of the shop have to be paid (albeit probably not much), and the shop probably will have to pay some ridiculously high amount for the shipping of the merchandise.

Local hobby shop owners don't get rich.  Most of them, in fact, don't stay in business long.  I mourn the demise of the local hobby shop like everybody else does, but nothing on this earth could pursuade me to make a career out of the hobby business.

So just to gain a sense of perspesctive - Let's say that the price of the new Trumpeter Hood kit to we consumers is $149US. from our LHS.

How much is the LHS being charged for each kit by the likes of Stevens International for example?

 

And how much is Trumpeter selling each kit to Stevens International for?

 

I'm intrigued..............

I too cringe when I go into my local hobby shop and look at some of those "big" kits, which I will never buy for two reason: 1) SPACE. This is my first and oftentimes only consideration when looking at kits. I live in a small apartment. A 1/720 aircraft carrier takes up, for me, a huge amount of room, and 2) Price. Once you see what aftermarket goodies can do for a mediocre kit, you're hooked. It's like crack cocaine, do it once or twice and there's no going back (or so I have been told.)

That said, I am trying to get my kids interested in modeling, and my 13-year-old daughter already has a ship kit we picked out at the LHS waiting on her arrival for summer vacation. Will she stick with the hobby? Who knows? But I wouldn't trade the memories for anything.

Ssssshh. We do not what them to know. Otherwise those rare OOP kits they have will suddenly triple in price. I travel a lot on business in the U.S. and always leave half a day to do the mom/pop model shop hunt.Still yields an occasional rare kit. Emden, Oriana(revell), Dunkerque, etc.

No Calypso though, been searching for a reasonably priced one for six years.

 

 

 

Well, there's a good chance that if you shop at your local shop, they'll stay open. One of the things that amazes me is that the owners seem to ignore the online building sites completely...not one that I've talked to has ever been on FSM, MM, Hyperscale, or any of the others...makes me wonder how they are supposed to be keeping a "pulse" of the hobby?

jtilley wrote:

4.  Near-complete reliance on the internet as a source of merchandise, as the local hobby shop becomes extinct, due to inability to compete with internet sources - and inability to stock more than a tiny fraction of the available merchandise.

 

I agree completely with all your points, but I believe this one needs an addendum.  The internet will be the predominate place to get models, but I don't think all local hobby shops will disappear completely.  The stores that are exclusively model stores will fade away but the general ones won't, at least I don't think so.  While they certainly can't carry the massive variety of an online store or Ebay has, I think there will always be a craft store or general hobby store that has a small and rudimentary selection of models.

At least, I hope so.  I wish I would have been born 30 years earlier so I could have experienced the mythical LHS atmosphere....

I don't think things are quite this bleak. The unjustifiably high prices problems is more-or-less confined to Tamiya. Trumpeter's new 1/350 ships are worth the money, and if you can't afford them there are still ships in 1/700, at much more reaonable prices. Also, if you import directly from Japan yourself, Tamiya's prices are, again, more reasonable.

There may be a particular problem with 1/350 ships. The market here, I would suggest, is almost entirely affluent middle-aged men, who can afford not only to pay $100 for the kit, but also $40 for the etch and, sometimes, another $40 for the full air group. This is not the case in other subjects and scales, although it's getting that way in 1/48 and 1/24 aircraft. You can still get state-of-the-art 1/72 military vehicles and aircraft for less than $20, and more-than-basically OK ones for less than half the price.

This may well be beyond what kids can afford with their pocket money, but I think that this market was lost to their Playstations some years back. I can't remember when I last saw a kid in eihter of my LHSs, and I go in on Saturday mornings, whey you might expect to see them there if they were going to be.

Cheers,

Chris.

Scary, isn't it?  I agree...almost no new modelers cropping up, while the rest of us are going gray . Without some serious help, the trade could go underground quickly, hence the need for all of us to try to promote the hobby as much as possible.  At an IPMS show a few years ago, I was disgusted by the treatment younger modelers recieved from the "pros"...they were heckled about every detail and colour, and many just left...probably never to return.

   Tamiya could care less about the cost of their kits...it's not where they make the profit anyway. The r/c section is much larger for them. I think the speculation of incredibly high priced model kits is correct, for those older modelers who are willing to pay the high bucks so they can win a five dollar ribbon at a show.

      sigh.

            greg

My crystal ball is no more reliable than anybody else's but here are some things I see happening during hte next few years.

1.  A continuing rise in the overall quality and accuracy of plastic kits.  I agree with Mr. Hall:  Dragon has given us some clear hints of just what the possibilities are - not only in armor but in warships  as well.  We're now getting tanks with rifled gun barrels, figures with "slide molded" hollow rifle barrels, and aircraft carriers with transparent flight decks and aircraft.  Just what will the next generation of kits look like? 

2.  A corresponding rise in prices.  I can see it now:  "New, 1/72-scale P-51 Mustang.  Details on the 1,687 parts include individually-molded fuselage and wing panels, landing gear with functioning hydraulic system, and cockpit instruments with separately molded, moving dials.  Price - $349.95."

3.  Continued expansion of the aftermarket and "cottage industry" fields.  It seems like half a dozen new companies are appearing every year, and I see no reason to think that won't continue.

4.  Near-complete reliance on the internet as a source of merchandise, as the local hobby shop becomes extinct, due to inability to compete with internet sources - and inability to stock more than a tiny fraction of the available merchandise.

5.  Near-complete disappearance of kids from the hobby, due to competition from other leisure-time activities and high prices.

I occasionally buy model railroading magazines - which, incidentally, are a source of lots of valuable modeling techniques.  The range of stuff available to model railroaders nowadays is almost literally mind-blowing; that hobby, as has always been the case, has more support from the manufacturers than any other form of modeling.  But the prices - good gawd!  A thousand dollars won't buy much of an HO railroad any more.  I imagine we'll see aircraft, armor, and ship modeling move in the same direction during the next decade.  It will be a great time to be a hobbyist - if one can afford it.  I'm not sure I can.

It'll be interesting to see what happens to Tamiya 1/350 prices when Trumpeter produce their own New Jerseys, Bismarcks, and KGVs, usig 21st-Century technology, to 21st-Century standards. When Dragon started to blow Tamiya out of the water in 1/35, starting a couple of years ago, for 2/3 the price, rather than raise their own game, Tamiya went into 1/48 military vehicles. I somehow don't see Tamiya doing a range of 1/600 ships...

Cheers,

Chris.

 

Very interesting discussion!  I have a question for jtilley, you say there are changes in the hobby that you see happening in the next few years,some you like and others you don't, if you have time would you care to elaborate??? anyone else care to comment? 

I really can't blame Tamiya for wanting to sell their kits at Trumpeter prices.  I mean, even for being twenty year old kits, they are still a par with the newest of Trumpeter.  I'd do the same thing if I was Tamiya.  Oncethe giltz wears off, they will lower them back down to more realistic pricing.  They don't have much to lose since all the tooling has been paid off years ago.

We are driving these prices.  Trumpeters marketing strategy is to mark the prices of new releases about 50% to 80% of what they plan to retail for knowing that we, who are patient enough to put a bowtie on a 1/350 crewman, are impatient enough to go and buy it the second it comes off the container ship.

The market has changed since 1986.  The average modeler is in his late forties, with more time and money, so the market is willing to pay the higher prices and is in line with rising production and transportation costs.

Now we need to expect prices overall to increase by maybe 3% due to oil, inflation, and the hight of ladies skirts, but everything will rise, not just the price of the kits.

Geez, macro/micro economics gives me a headache.

Scott

Colin you should see the price of single malt over here! I drink Lagavulin 16yr, but not as much as I would like to!

I work with an expat brit who is laughing at us complaining about gas (currently $1.17/litre here in Canada). I don't care so much. I used to have a Barracuda that drank $5 worth of gas at $0.35/gallon (and not that little US gallon either, a big honking IMPERIAL gallon!) every day. It used to take me two hours a day to drive that beast (and OH what a beast!), now I drive a little Honda Civic sedan, and it takes me two hours per week to drive, so gas has gone really gone down in cost, if risen horrifically in price.

What I find real funny are people who will line up to complain about gas at $3US and they don't balk at paying Starbucks $5 for a frickin' coffee!

3$ a GALLON,  Jeff....???  Good grief!  Here in Scotland we're paying 2$ a LITRE.....  That works out at around 8$ a gallon, for heavens sake!  They do say that if you are worried about the cost of fuel, load your car with the family and a week's luggage, drive it along the road for - say - 20 miles.  Then stop, switch off the engine and PUSH it for the next 20.... Still worried about the cost of fuel?

Here in the UK we pay much more for kits than your equivalent, even calculating the exchange rate.  I reckon it's about double over here.  Many builders now shop on line and can get models direct from the manufacturer's country including post and packing and tax for less than they can get the kit in the LHS.  And we wonder why LHS stores in the UK are closing down?  Rip-off Britain!

Now I can feel myself getting annoyed..... it's time to pour a small 10 year old malt and r...e...l...a...x.

This has been a long-standing debate...and I think everyone involved shares the blame...

I'll try to be brief...

In the good old days, we played baseball, rode bikes, built forts, went fishing, and built models.
Then we grew up (at least physically), and we demanded more detail, better castings, and more subjects. Kids started getting involved in other things and instant gratification became the word of the day. The internet (thanks to Al Gore, who invented it ) and video games took over, and the pressures that society has placed on our kids - soccer, baseball, band, computer camp, etc... relegated models to the back shelf for most kids and many adults.

The industry simply grew up with us...as we got older and demanded more, they obliged and the cost of the kits matched our incomes (remember when $4 for mowing a lawn would have you in kits for two weeks???). Today, $4 is a small bottle of super glue or a single bottle of Tamiya paint (with taxes).

In the ship world, Tamiya is getting whipped by Trumpeter and as of today, Hasegawa. Their molds are old and tired. But, they're seeing Trumpeter retail their large ship kits for $100-$150, so why not join the fray? For those of us who've been in the hobby and built all these Tamiya kits, it's a shock. Ok, we can deal with cost of production increases of 10-15% across the board, but raising their prices that much without updating the molds or re-tooling isn't going to cut it.

But they're not producing those kits for us, because we've already been there, done that. They're producing those kits to sit on the shelves and compete with Trumpeter. Tamiya's 1/350 line is still impressive even by today's standards, Missouri & NJ, Bismarck and Tirpitz, Yamato and Musashi, KGV and PoW. They are still the most popular ships and will continue to sell to the first-time ship modeler.

It's a simple matter of supply and demand. I can remember when my grandfather used to complain that gas had reached $.50 a gallon, and I remember when it was $.35. Today, I paid $3.00.

As long as there's no direct competition for these particular ships, the prices will remain where they are, or higher.

Jeff

archelon wrote:

More likely, though, is that it's just applying Economics 101. Sell your product at the highest possible price in order to maximize profits.

Bingo! I haven't seen the price increase at the LHS yet, but I will let the owner know that when it happens I will be sourcing kits from other means, which will mean EvilBay! Let's face it, most of us have more kits than we can build in the next year already, and can go without buying a kit for quite a while. Let's vote with our wallets and see what the pricing does...

In North America, at least, Tamiya has always seemed like a "Luxury" product. They've consistently put out excellent products of interesting subjects and serious modellers were willing to pay a premium for them. They have always been higher priced than the competition and it's doubtful if very many modellers started out with these kits.

That said, the industry has caught up with them in both quality and asking price. The downside of all those great models is that while they can't be considered 'toys", they don't have to be priced like them, either. And like a golfer that is willing to spend hundreds of dollars for a new set of "composite" woods (which actually does wonders to advance material science), a serious modeller (which is about the only kind left) is going to spend $$ for a good kit.

Tamiya may be trying to redefine its "Luxury" image. More likely, though, is that it's just applying Economics 101. Sell your product at the higfhest possible price in order to maximize profits.

I'm sorry, but I just don't swallow the notion that rising oil prices justify or explain major rises in the prices of plastic kits.  The truth is that materials make up only a tiny percentage of the price of a plastic kit.  For that matter, the cost of production is only a small part of the price we pay for the products. 

I'm not sure how things are now, but when I was working in a hobby shop (quite a few years ago) the standard retail markup was 40%.  That is, when a customer bought a kit for $100, $40 went to the shop.  The wholesaler took another chunk (I don't remember exactly what it was, but I think it was something in the neighborhood of 25% of what the retailer paid the wholesaler - in other words another $15 in the case of a $100 kit).  So maybe - maybe - $45 of the $100 price of the kit made its way to the manufacturer.  Deduct from that the price of the box, the instruction, the decals, and all the other non-plastic stuff that's in the box.  Then deduct what the manufacturer pays its employees - from the designers to the folks who load the boxes onto the trucks.  Then deduct the enormous prices of the molds.  I don't have figures on any of those expenses, but my guess is that the actual plastic that goes into a $100 warship kit costs the manufacturer less than a dollar.

We went through something almost exactly like this back in the early 1970s, with the Nixon/Carter era energy crisis.  At that time, as is the case now, the hobby was going through some big changes.  Companies (e.g., Aurora and Frog) were going bankrupt, and the survivors were giving up on serious scale models (except cars).  For several years during that period Revell and Monogram didn't produce any scale airplane, ship, or armor kits; they devoted their efforts to products like "Snoopy and His Sopwith Camel" and the Goodyear Blimp (complete with electified signs to be colored with felt-tip markers).  The factory reps who showed up at the trade shows and IPMS conventions tried to claim the reason was the price of oil.  The truth was that the traditional markets for plastic kits were changing.  Young kids weren't buying airplane, ship, and tank kits any more.  They were watching videos, playing games on their new-fangled Commodore computers - and smoking pot. 

The eventual result, though I suspect lots of adult modelers didn't see it happening, was a fundamental change in the hobby - and its pricing structure.  Plastic modeling nowadays is almost completely an adult hobby.  At least half of the clientele of the shop where I worked, back in the mid- to late seventies, consisted of kids.  A few months ago I asked a friend who runs a fine shop in Tidewater Virginia how many of his customers were under the age of 20.  He laughed bitterly and said, "zero."  

Why don't kids build models any more?  I guess there are lots of reasons:  competition from computers and play-stations, athletics, cable tv, sports, and various illegal activities undoubtedly is a big factor.  But another one is money.  I can remember when a dollar would buy a model, a tube of glue, a couple of jars of paint, a brush, and a Coke at the soda fountain in the same drugstore.  Take a look at the stock in your local hobby shop.  You'll find it difficult to find a kit - even a 1/72-scale fighter - that costs less than $10.  The prices of plastic kits have risen considerably faster than inflation.  The typical kid, even in the twenty-first century, doesn't think of $10 as pocket money.

The flip side of the coin, of course, is that the average level of quality has risen along with the prices.  I can remember when 1/48-scale aircraft kits with countersunk detail were hard to find - and the only Japanese warship kit for sale in the U.S. was that awful old Aurora Yamato.  The vast range of kits, paints, tools, and aftermarket parts (virtually unheard of when I was getting into the hobby) testifies to the fact that it's an adult hobby, supported by knowledgeable enthusiasts who are willing to spend considerable amounts of money on quality merchandise.  It's really a different hobby than it was in the fifties - or the seventies.

I suspect we're going to see some more big changes during the next few years.  I see some signs I don't like - and others that I do.  There are all sorts of legitimate reasons for the nature of the hobby to evolve.  But rising oil prices isn't one of them.

There's nothing new with these kits...except the shiny chromed boxes. If you can score an older release at a local model contest or swap meet, you'll be getting the exact same kit for half the cost of the new ones.

Jeff

Petroleum prices affect the making and transporstation of plastics.