Sprue-ce Goose:
In theory, Hasegawa should lose sales as others stop buying.
In theory, Hasegawa will either lower prices, cease production or cease mainstream prioduction in favor of supplying a wealthy market niche.
You're thinking one dimensional.
<< No I don't believe so.....your folllowing comment
" Hasegawa doesn't have to do anything as long as they continue to
sell product. It may not sell well in one location but it does still
sell elsewhere which in part drives the pricing."
just means that Hasegawa is still profiabale and has not lost market share. I'm fully aware of changeover in a customer base. People are voting with their wallets.>>>
Another factor in the pricing we pay is how the distribution rules are setup. Mfrs typically insist that their distributors purchase in full case lots. This makes order fulfillment simple. Now when the distributor implements the same policy to the retailer, things get more expensive. The retailer is now forced to order in lots of 6, 12, 24 or 36 (what ever come in a case) when they may only sell three a year. If the are required to order 12, that's way more than they need. So they essentially have dead inventory which they will probably have to take a loss on by reducing the selling price to move. Lower the margins and you lower the profits. Lower profits means less capital to infuse back into new inventory, payroll, facility and the owners pocket.
<<Yes, I know about that.; in the plastic model hobby, I see it most often in the LHS. I
fully understand the economic reason underlining this. The economic model applies to all types of product..>>>
Mfr and Distributors do this to streamline operations and increase profits. Unfortunately it doesn't necessarily work the same way to the end user...you and me. If the retailer can't survive, they close. Hence the reason for every new hobby retailer opening, two close their doors. Things can not remain status quo if we expect the industry to survive.
Consumers at all levels of the chain need to adjust their business model to accommodate changes in the business climate. Consumers are keenly aware of the situation, though many don't know it. They wait to pounce on pricing deals instead of shopping during "normal" sale prices. We've become conditioned to only purchase sale items. This is part of the reason so many retailers fail, they operate under a false pricing structure.
In times past a hobby retailer could expect a margin of 30-40% on the goods they stocked and sold. Today as it is in many retail situations, if you hit anything above 20% you're doing well. In the retail hardware business, we typically found that one had to make on average at a minimum 28% margin to break even. The trick was finding the product mix that allowed us to maintain that average. Some items, usually expensive ones typically provided 5-15%, whereas some of the small cheap (junk!) netted 60% and turned multiple times.
<<<So how does a more expensive recently produced Trumpeter/Dragon/etc.. 1/32 kit fare vs., for example, a less expensive re-issue? >>
A "Turn" is when you sell and item and have to reorder to replace it. A product that turns 6 times is excellent. But on average we saw 4 or less for a majority of our inventory.
The longer an item sits on a shelf the more it costs the store. Real estate inside a store is valuable! Fill it with nothing that sells, your overhead remains the same, but your profitability goes down.
<<Something the consumer magazines comment on in the auto
market. Yes, I realize retailers borrow to acquire stock.>>