Variation of prices at local model shops

[budfish]

I run a laser zx5 fs2 and recently I needed to change my slipper pads so I went to my local model shop which is Je spares the price of a set of pads £12.87 my next local shop is Ross mods which do the same parts for £8.99 that's a £3.88 difference why could this be? so upon checking further I found the spur gear for my laser is £1 cheaper at Ross mods than at Je spares it dos'nt sound a lot but on £5 part it's 20% I have spent well over £1000 at Je spares and if I could have saved an average of 20 % I would be £200+ richer in one year
Springs for my laser £5.75 at Ross mods at Je £6.90
£7 difference in a pair of drive shafts seems the price difference is across the board

Why the huge difference in price ? Any ideas

Buds

[Chrislong]

Why don't you ask JE spares

[budfish]

Originally Posted by Chrislong

Why don't you ask JE spares

I raised the issue with stu wood and he said that the price Ross mods was charging for the slipper pads was about 60p above the cost to Je spares

Do you think Ross mods have a better deal with kyosho?

Do you think Ross mods are just aggressively pricing to get more custom?

Not in to retail so just trying to work out why the huge price difference

[Jnunu1]

Everyone has margins and everyone has costs. Costs covers everything from suppliers to rent to wages to other overheads. Dependent on those costs and dependent on what profit people want to/can make will set the margin i.e. cost of part from supplier plus other costs plus what profit can be made.

This applies across a business as a whole. What you are seeing at RossMods may not be the case across the whole of thier product line - it may be that they are pricing hard on 1/10th spare to get into a market which they havnt been as active in as JE - but they may be maintaining thier overall profitabilty across the whole business by upping/maintaining costs on other lines.

With a renewed RossMods clubs focus, new(ish) ecommerce website and social media presence, 1/10th "team" and trackside support at regionals/nationals and increased oople presence - I would say that the pricing is part of an overall expansion strategy into 1/10th off road. If sucessful you may see a flattening off on the 1/10th costs as they build a loyal base - but then its a very competative market!

For my money, JE Spares has the best ecommerce site in the market and the best social media strategy (discount codes via fb, twitter etc). That being said, RossMods overall strategy seems broader and more agressive.

Sorry for length of post - but I like this sort of stuff (its sort of my job!)

[Darren Boyle]

To be fair to both the shops you mention, Kyosho stuff is the hardest to price up by far of any of the trade suppliers, for one "FDL" have no "RRP" prices to go by, for two, being based in France, when their orders arrive they have "NO VAT" on them included in our invoices. "Some" shops just add their mark up and go from there, but you do have to allow for the VAT also, since when you "sell" the parts you then pay VAT to HMRC so you still pay 20% on these type of goods.

Other huge factors are that since the 4th of Jan this year VAT rose from 17.5% to 20% this led to at least 2.5% going on top of all old prices, plus also FDL issued a new "2011" price list at this time and due to many reasons (including a very poor exchange rate with the Japanese Yen at present) many, many Kyosho parts have gone up by between 15 and 30% on prices we had in late 2010 (trhis is not juts Kyosho some other companies have had rises too, but the Kyosho ones were amongst the steepest to be honest). Any shop with stock they had from pre-2011 will be at much cheaper prices........

I am sure that JE wont be ripping you (or anyone else) off, they probably have just done their sums right and have "fresh" stock brought in at 2011 prices. You could probably find 20 items they are cheaper on than most and vice versa between any shops that you compare......

As an example we still have the slipper pads in stock from late last year, our price "at present" on them is just £8.75, but they will go up when new stock is required.............

[truggy lover]

i bought and ran a kyosho st-rr truggy from custom built racing Tony is a brill guy but when it came to spares other shops in the south of the UK had much better prices on spares

i asked the same question and it boiled down to the fact the shops in the south of the UK for some reason had a much better deal when buying there spares in to the point he could not compete as they were selling there spares cheaper than Tony could buy them

sucks but there ya go

[budfish]

So what your saying is that someone buying a helicopter at Ross mods is likely to be subsidising the cost of my laser spares by the margin on the price of the helicopter being larger than the margin in the laser parts that Ross mods is currently applying??

Or

Ross mods is a shop that has been there ages and most proberbly own the building there for keeping monthly cost down which can increase profitability
So if one shop owns the building and the other pays £1000 a month rent the shop that owns their building is a grand infront before the doors even open
I'm getting it now mate commen sense really but I hadn't thought of it

So on the flipside with the inflamed prices on my laser bits I could be subsidising some new Market Je spares is trying to get into?
I.e team Durango parts or what ever

Buds

[budfish]

Originally Posted by DMS Racing

To be fair to both the shops you mention, Kyosho stuff is the hardest to price up by far of any of the trade suppliers, for one "FDL" have no "RRP" prices to go by, for two, being based in France, when their orders arrive they have "NO VAT" on them included in our invoices. "Some" shops just add their mark up and go from there, but you do have to allow for the VAT also, since when you "sell" the parts you then pay VAT to HMRC so you still pay 20% on these type of goods.

Other huge factors are that since the 4th of Jan this year VAT rose from 17.5% to 20% this led to at least 2.5% going on top of all old prices, plus also FDL issued a new "2011" price list at this time and due to many reasons (including a very poor exchange rate with the Japanese Yen at present) many, many Kyosho parts have gone up by between 15 and 30% on prices we had in late 2010 (trhis is not juts Kyosho some other companies have had rises too, but the Kyosho ones were amongst the steepest to be honest). Any shop with stock they had from pre-2011 will be at much cheaper prices........

I am sure that JE wont be ripping you (or anyone else) off, they probably have just done their sums right and have "fresh" stock brought in at 2011 prices. You could probably find 20 items they are cheaper on than most and vice versa between any shops that you compare......

As an example we still have the slipper pads in stock from late last year, our price "at present" on them is just £8.75, but they will go up when new stock is required.............

Hi Darren i could understand that if Ross mods had been doing laser parts for ages but it's all new stock I think they might be just trying to get a presence on the 1/10 Market well it's working for me anyway I'll obviously go to my cheapest part supplier
Is a 50% Mark up the norm? If Je buy the pads at £8.34 which I know they do then sell for £12.87 that's a 50% Mark up f**king scandalous if you ask me it makes their 10% loyalty discount for spending over £1500 in a year an absolute insult!!!

[mattybucks]

Originally Posted by budfish

Is a 50% Mark up the norm? If Je buy the pads at £8.34 which I know they do then sell for £12.87 that's a 50% Mark up f**king scandalous if you ask me it makes their 10% loyalty discount for spending over £1500 in a year an absolute insult!!!

This is an expensive hobby, and everyone has to make a profit, although we do get ripped off when it comes to certain rebranded products such a grease's, diff balls, activator, wire, glue to mention a few products.

[Darren Boyle]

Originally Posted by budfish

Hi Darren i could understand that if Ross mods had been doing laser parts for ages but it's all new stock I think they might be just trying to get a presence on the 1/10 Market well it's working for me anyway I'll obviously go to my cheapest part supplier
Is a 50% Mark up the norm? If Je buy the pads at £8.34 which I know they do then sell for £12.87 that's a 50% Mark up f**king scandalous if you ask me it makes their 10% loyalty discount for spending over £1500 in a year an absolute insult!!!

It is not my place to discuss on an open forum what mark up certian shops do or dont apply to their pricing, but bare in mind that £8.34 will be probably be plus VAT (making it £10.01) plus then they will offer FREE shipping I guess (which all costs with postage and jiffy bag etc possibly another 50p - £1) then they offer 10% loyalty discount as you say.........

There is not a lot left of the profit on that £12.87 sale to pay the bills, the staff, all other over heads AND still make a living in this industry when you work it all out.........

[Jnunu1]

Any or all or none of the above is applicable to any wholesale or retail business in terms of costs, profits, product lines and sectors etc etc.

Just to add that I don't know anyone at either JE or RossMods - my comments are all based at looking at the way they go to market externally.

[Jnunu1]

ebay, China and Hong Kong.

[Tezcat]

50% mark up may be a shock to you but it's pretty much like that in most businesses. Food in pubs and restaurants can have as much as a 75% mark up on cost prices. Chefs don't come cheap and people do want nice food after all.

It's not just about the product, it's about the whole business.

[ianhaye]

from my veiw atm rosmod for me :-) live stock levels, i know je have but on almost every order i have made with je something has been out of stock when says it is instock witch can be frustrating when need a part quick for next meet but u cant be to sure if they actually are in stock :-( so for me rosmod wins, plus they are cheaper on most parts and had more 22 spares in :-)

[davidmog99]

If the markup from eight to twelve pounds is scandalous you have absolutely no idea about business at all. In almost any enterprise, to include shipping and handling for that profit margin would be rare to say the least.
You must realise this is a small niche industry. How many parts that are stocked by the shops will actually be sold? They dont know and neither do you! Many model shops/online model stores have gone bankrupt recently, overstocked trying to cater for everyone, or charging too low a price for business to continue.
Maybe you should look at the margins/turnover at your place of work, unless you work for the state or a charity (possibly they are the same!!!!!).
Unfortunately you seem to think that someone making a quite reasonable level of profit is wrong?

[pro4nut]

Also consider a couple of points,

Shop a buys 10 kits for £50 and puts on sale for £100 when the shop sells 5 kits they have broken even and can pay the supplier when they sell the 6th they have made some profit so can pay a few bills. If they only sell 5 they make nothing regardless of the level of mark up. Thats why business does not call this gap between cost of purchase and sale price PROFIT because it isn't, its actually MARGIN. Also consider that so many people expect stock to be available so how much of that money then gets used to restock the kits.

I would guess the margin on spares is a little bigger mostly to cover for the fact that so much of that stock is dead and sits there costing money and generating no profit yet we all want them in 24 hours.....

Suppliers in the UK often offer volume discounts which helps margin but means you need to sell more. This is one reason why shops have differant prices.

I have a product in my shop that i sell for £85 if i order 100 they cost me £25. If i order 1 at a time they cost me £67. So if you have ever wondered why your local shop takes time to order from a supplier it may be so they can hit a discount threshold so they can actually make some money from you.

Retail is far more complex than many people believe

[pro4nut]

Originally Posted by ianhaye

from my veiw atm rosmod for me :-) live stock levels, i know je have but on almost every order i have made with je something has been out of stock when says it is instock witch can be frustrating when need a part quick for next meet but u cant be to sure if they actually are in stock :-( so for me rosmod wins, plus they are cheaper on most parts and had more 22 spares in :-)

So you want,

Live stock
Full stock availability
Lowest Price for goods
Rapid dispatch

I would assume quick response to correspondance as well

You really do need to understand how expensive this is, also i have yet to find a shop that can do it. Although some are very good but mostly because they are family run businesses where the guys work far too long.

[SlowOne]

I love the way people who have not the slightest clue what they are talking about know everything about this subject.

When was the last time you saw a model shop owner driving around in a huge car, spending all their time on the golf course (or race track) and taking long expensive holidays twice a year - or whatever they would choose to do with a lot of money. No, I've never seem one either. If they were ripping you off, you would surely notice that.

Toyota are the second most profitable car manufacturer in the world, after Porsche. They work on 'double'. Build a car for £5k, wholesale it for £10k, put it in the showroom for £20k. They manage to make a profit of only 7% on sales. Retail, manufacturing, service industry, whatever - profit is small because admin and overheads eat into margins. If your margins don't cover your costs, and generate enough profit to invest in the future of the business, you won't be around for long!

DMS clearly know how to do that, because they've been around for ages. Only time will tell if JE or Rossmod stay around for as long as that. It's called a free market economy, the basic rule of which is 'caveat emptor' - let the buyer beware!

[budfish]

Originally Posted by davidmog99

If the markup from eight to twelve pounds is scandalous you have absolutely no idea about business at all. In almost any enterprise, to include shipping and handling for that profit margin would be rare to say the least.
You must realise this is a small niche industry. How many parts that are stocked by the shops will actually be sold? They dont know and neither do you! Many model shops/online model stores have gone bankrupt recently, overstocked trying to cater for everyone, or charging too low a price for business to continue.
Maybe you should look at the margins/turnover at your place of work, unless you work for the state or a charity (possibly they are the same!!!!!).
Unfortunately you seem to think that someone making a quite reasonable level of profit is wrong?

I mentioned local shops ie I drive to both Je spares and Ross mods are 10 min drive from my house 4 mins from my place of work !
So what you are all saying now is that my custom generates more profit because my orders do not involve shipping cost for the shop but cost me money useing my 2.5t car???

[cwp]

To Just let you know as DMS as said all kyosho prices went up in the early part of 2011.
So once this current stock sells you will see prices rise as they are everywhere.
So you know I don’t work at the shop Im just a good friend of the family.
I hope this helps
Mark