When will the bottom fall out of the RC heli market?

[fourbie]

Originally Posted by sarpilot

Yep to that...

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Originally Posted by Cincinnatus

No, I suggest that since there have been few advances that imagined R&D costs cannot justify exorbitant prices.

Yes I wondered about that too.

Originally Posted by vteknical

In all fairness, there has never been a better time to get into this hobby. Decent entry level products are light years ahead of mid level stuff from 5-10years ago.

+1
This is sooooo true and a point I made.

Originally Posted by jharkin

Since you think so little r&d goes into a heli I suggest you design you own and buy the machine tools to build it. Then let us know what it will cost.

I am sure we see that point and totally agree. My thinking though is that the existing R&D should be enough to keep the vast majority of us flying on the cheap.

Originally Posted by rcnorth

Aha! I have hit on an important fact here, haven't I? If my original assumption was not correct, then why is it common knowledge that you are lucky to get even 50% for used heli stuff? LOL Uh, because it was NEVER worth what you gave for it!

I'm not that interested in buying used, I don't know the history of it, crash's, hidden problems, general wear, not to mention how fast things become out of date. Your taking a chance, so it's at a discounted price, this goes for many used things.[/QUOTE]

This will depend on a person's philosophy. For example why sell a heli?

I've bought used many times and it's been a great bargain.

I tend to see the OP's point and I think it is, as it always is, a question of balance.

[rchelijc]

Sorry I don't share the ops view. Sure they are pricey, but compared to what?

Take a step back to 20 years ago. Dang those heli kits were expensive. Compared to then, today's prices are commodity.

[fourbie]

Originally Posted by rchelijc

Take a step back to 20 years ago. Dang those heli kits were expensive. Compared to then, today's prices are commodity.

I'd have loved some of the stuff we have now to have been available 20 years back. Just think where today's much loved electric heli was back in 1994..................what's a LiPo????

[utrinque]

Originally Posted by rchelijc

Sorry I don't share the ops view. Sure they are pricey, but compared to what?

Comparing to manufacturing costs, ex-factory prices.

Did you hear about MAP agreements? Minimal Advertised Price Agreement. They are confidential. They are illegal in EU. They exist. I was banned from HF for few months for quoting them.

Kits are much less overpriced than parts!

[mkovalcson]

Originally Posted by Cincinnatus

Sure, you were doing what I am saying they are NOT! They are taking a design that has been known since the, what 50s, and including little tweaks here and there and charging these crazy markups.

You were trying to break into a new market...totally different.

So you think little tweaks are cheap?

For a large company here are a few things to deal with .

1. Design tweaked part.
2. Test tweaked part.
3. Go back to 1 until everything seems right.
4. Make initial test run
5. Have beta testers try it in the field, go back to 1 until everything seems right.
6. Make up tooling for new part.
7. Start production run of tweaked part.
8. Create new SKU number.
9. Create packaging for new part.
10. Get SKU into internal inventory and accounting system
11. Inform dealer network of new part and part #
12. Advertise new part
13. Support new part if it fails.

14. Eat cost for production of part that was replaced, packaging

Meanwhile you have overhead.

• Rent
• Salaries
• Team Pilots
• Taxes

[Cincinnatus]

Originally Posted by mkovalcson

So you think little tweaks are cheap?

For a large company here are a few things to deal with .

1. Design tweaked part.
2. Test tweaked part.
3. Go back to 1 until everything seems right.
4. Make initial test run
5. Have beta testers try it in the field, go back to 1 until everything seems right.
6. Make up tooling for new part.
7. Start production run of tweaked part.
8. Create new SKU number.
9. Create packaging for new part.
10. Get SKU into internal inventory and accounting system
11. Inform dealer network of new part and part #
12. Advertise new part
13. Support new part if it fails.
14. Eat cost for production of part that was replaced, packaging

Meanwhile you have overhead.

• Rent
• Salaries
• Team Pilots
• Taxes

True, but if this is a justification then every business needs huge markups and none can survive on 10%-15% margins. We know that is not the case, so it cannot be a justification.

[sarpilot]

Originally Posted by utrinque

"'Join the army,' they said."
"'See the world,' they said."
"I'd rather be sailing."

Actually I got my 1m yacht:

My favourite lake:

HobbyKing - Phantom Sail Boat - YouTube
http://www.hobbyking.com/hobbyking/s...arehouse_.html

Boat=break out another thousand...

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[Cincinnatus]

I'm the OP on this thread, but since it seems like all the salient points have been made and we are getting to the point of repeating ourselves, I think I will close my participation here--time for Super Bowl Sunday. I'll leave it open so anyone else can follow up it they didn't have a chance. Have a great day everyone!

In the end, I am totally surprised (more like flabbergasted!) that iirc there were only a couple people who agreed that prices are too high. Wow. So it seems my entire premise was wrong--the bottom will not fall out because the buyers think prices are fair. Some even fervently believe they are actually a bargain! Yep, flabbergasted.

[Cailid]

Originally Posted by wab223

I know. I was ready to finally buy a Skookum after humming and haring for about 6 weeks at least. But the Canadian buggas prices are in USD. Whats all that about? Now I can't make my mind up again.

You can order direct from Skookum. They list in Canadian dollars.

http://www.skookumrobotics.com/shop/index.php

[utrinque]

Actually Goblin 700 case is interesting.

Original kit price $999.

Christmass sale price $640

Current price $800.

Definitely they would make profit selling it for $500.

Probably it is worth $200.

After this video many Goblins will sell:

TAREQ ALSAADi Flying GOBLiN Expo 2020 Dubai (4 min 25 sec)

I respect Tareq for flying also other brands Align, GAUI, Alees, Compass etc.

In good hands all of them perform awesome.

[utrinque]

Originally Posted by sarpilot

Boat=break out another thousand...

This one is $107 from local EU warehouse plus $10 shipment.

Did you mean 1m competition sailing boat?

I know CF, kevlar, custom buil etc. can be pricy.

[Xrayted]

Originally Posted by Cincinnatus

I'm the OP on this thread, but since it seems like all the salient points have been made and we are getting to the point of repeating ourselves, I think I will close my participation here--time for Super Bowl Sunday. I'll leave it open so anyone else can follow up it they didn't have a chance. Have a great day everyone!

In the end, I am totally surprised (more like flabbergasted!) that iirc there were only a couple people who agreed that prices are too high. Wow. So it seems my entire premise was wrong--the bottom will not fall out because the buyers think prices are fair. Some even fervently believe they are actually a bargain! Yep, flabbergasted.

There are no set "fair" prices in a free market economy, and even if there was, which entity will determine what someone can charge for their items? The "fair" price of any item is dictated by what people are willing to pay for it.

Every company is in the business to make as much profit for their goods and services as they can, regardless of manufacturing cost. Its this way for every single item you purchase every day. Apple is so successful because they make a huge profit margin (nearly double their competitors in some cases) on their items, and people still continue to desire and buy them. That is the goal......sell for the highest profit margin the market will allow!

There is no monopoly or price fixing in this hobby, and there are a LOT of choices, so if one company is selling a similar item at too high a price compared to what you can get it for elsewhere, then they will get no customers and will be forced to lower their prices.

If three guys are selling at a similar price, and someone else sells the identical items lower, then the others will all have to lower their price to compete. Its the very premise of a free market economy, and there no set amount of profit margin one is allowed to make. There are plenty of other places in the World to live that will dictate these things for you though.

Clone always get pulled into these discussions, but once again people don't consider them to be of the same quality as the other manufacturers, or else the mainstream names would have already gone out of business from them or forced to lower their kit cost to the same as clones. Its hasn't happened, so there is no bottom and and nothing is going to fall out. Also consider that the clone guys invested nothing into R&D and simply stole the design from one of the other companies who did invest their time and money into developing and testing them. Use stolen development, poor quality metal, plastic and fit tolerances, along with some 10 cent and hour labor, and of course you can sell an item that appears on the outside to be the same as other higher cost items do, but the market will always weed them out once in the hands of the users and the flaws appear.

[mkovalcson]

Originally Posted by Cincinnatus

True, but if this is a justification then every business needs huge markups and none can survive on 10%-15% margins. We know that is not the case, so it cannot be a justification.

Is 10%-15% margins after all your costs are taking into account ????

This is not like cell phones where there are engineers designing lots of the parts of the phone for massive volumes and you can spend a lot more on the one time engineering costs.

This is a niche market. The products are changing relatively often and the volumes are just not there.

[raisinjack]

Xrayted thank you!!!!!!!!

sure is a lot of conspiracy theory displayed here by some. more of that socialist utopia crap if you ask me.

[utrinque]

Originally Posted by Cincinnatus

In the end, I am totally surprised (more like flabbergasted!) that iirc there were only a couple people who agreed that prices are too high. Wow. So it seems my entire premise was wrong--the bottom will not fall out because the buyers think prices are fair. Some even fervently believe they are actually a bargain! Yep, flabbergasted.

Same story here in Poland.

They call Goblin "Ferrari". It makes me laugh.

[mkovalcson]

Originally Posted by utrinque

Same story here in Poland.

They call Goblin "Ferrari". It makes me laugh.

That would get a good laugh out of me too!

[JasonJ]

It is not unreasonable to look to the past and what you got for the money as a comparison. To exclude that part is to exclude a vital part of the discussion because it isn't in support of the OPs point. I bought a plasma tv a few years ago and paid half as much as I did for a CRT tv in 2000 and got a vastly superior product. There are many examples of technology that are cheaper than their past counterpart and this is excluding inflation. This is simply comparing actual dollar amount. When you factor inflation a lot of things are even less expensive now. There are things that are much more expensive now though. You cannot buy an inexpensive useful vehicle brand new anymore. You do get much high quality and reliability however. Now back to RC. I agree that this stuff is priced higher than what it probably should be but the market is bearing it.

I was talking with my boss about the costs of RC stuff and he asked why it was so expensive. We as hobbyists come up with all sorts of reasons to justify what we spend on it but it really is overpriced. The only justification I can come up with is volume. They don't make a bazillion of them and a bazillion people don't buy them so the price is higher. This has nothing to do with fairness, that is victim mentality. This has to do with a company being created to produce a product and turn a profit. These businesses are not charity events, they are providing us with something we can't make ourselves. We pay $500 for a box of bolts and aluminum bits and carbon fibre because that is still a lot easier and cheaper than going out into your garage and trying to create it yourself. OP, let's try this another way. Your time has value right? Mine does. If You or I bought a pile of bulk material and tried to create a helicopter in our garage with home tools it would take hours upon hours of time, far exceeding the cost of a helicopter kit. Here, let's go yet another way. I am building a 1/4 scale Piper J-3 Cub. I got the kit which is a box of balsa, thin ply and plans from a friend for $150 including the covering. New that kit is about $250 and the covering is another $120 or so. I have had to buy epoxy and CA to build it. I have many many many hours into it and the build has been enjoyable. Placing the dollar value on my time however that puts this build in a place of being far more expensive than a Hanger 9 arf that costs over $600. For me the build was the reason for doing it. RC helicopters cost what they cost because we see the value in spending $500 for a box of bits vs wittling those bits ourselves from bulk material.

The OP is not correct on there being price fixing. Price fixing occurs with the gas stations in my little town. Whenever there is an event that will draw outsiders the price of gas goes up at all the stations. The smart station owner would keep his price lower to get more business but it doesn't happen. They all charge the same because they are all in colusion. RC helicopter companies are not in colusion, they just make products and charge what they charge. There is plenty of variation of price, you don't have to just pay one price regardless of brand.

So in closing, the OP is not being realistic about how business and economics works. It would be sparkly and awesome if we could only pay pennies on the dollars charged for rc gear but that isn't how it works. The bottom will fall out when the market tells it to.

[Cincinnatus]

Originally Posted by JasonJ

It is not unreasonable to look to the past and what you got for the money as a comparison. To exclude that part is to exclude a vital part of the discussion because it isn't in support of the OPs point. I bought a plasma tv a few years ago and paid half as much as I did for a CRT tv in 2000 and got a vastly superior product. There are many examples of technology that are cheaper than their past counterpart and this is excluding inflation. This is simply comparing actual dollar amount. When you factor inflation a lot of things are even less expensive now. There are things that are much more expensive now though. You cannot buy an inexpensive useful vehicle brand new anymore. You do get much high quality and reliability however. Now back to RC. I agree that this stuff is priced higher than what it probably should be but the market is bearing it.

I was talking with my boss about the costs of RC stuff and he asked why it was so expensive. We as hobbyists come up with all sorts of reasons to justify what we spend on it but it really is overpriced. The only justification I can come up with is volume. They don't make a bazillion of them and a bazillion people don't buy them so the price is higher. This has nothing to do with fairness, that is victim mentality. This has to do with a company being created to produce a product and turn a profit. These businesses are not charity events, they are providing us with something we can't make ourselves. We pay $500 for a box of bolts and aluminum bits and carbon fibre because that is still a lot easier and cheaper than going out into your garage and trying to create it yourself. OP, let's try this another way. Your time has value right? Mine does. If You or I bought a pile of bulk material and tried to create a helicopter in our garage with home tools it would take hours upon hours of time, far exceeding the cost of a helicopter kit. Here, let's go yet another way. I am building a 1/4 scale Piper J-3 Cub. I got the kit which is a box of balsa, thin ply and plans from a friend for $150 including the covering. New that kit is about $250 and the covering is another $120 or so. I have had to buy epoxy and CA to build it. I have many many many hours into it and the build has been enjoyable. Placing the dollar value on my time however that puts this build in a place of being far more expensive than a Hanger 9 arf that costs over $600. For me the build was the reason for doing it. RC helicopters cost what they cost because we see the value in spending $500 for a box of bits vs wittling those bits ourselves from bulk material.

The OP is not correct on there being price fixing. Price fixing occurs with the gas stations in my little town. Whenever there is an event that will draw outsiders the price of gas goes up at all the stations. The smart station owner would keep his price lower to get more business but it doesn't happen. They all charge the same because they are all in colusion. RC helicopter companies are not in colusion, they just make products and charge what they charge. There is plenty of variation of price, you don't have to just pay one price regardless of brand.

So in closing, the OP is not being realistic about how business and economics works. It would be sparkly and awesome if we could only pay pennies on the dollars charged for rc gear but that isn't how it works. The bottom will fall out when the market tells it to.

Well, I was done with this post, but I find your response very interesting. You start off and end by making my point (below), but bend over backwards in between to disagree.

" I agree that this stuff is priced higher than what it probably should be but the market is bearing it." and "The bottom will fall out when the market tells it to."

Umm, that is what I was saying...it is overpriced and how long will the market bear it? How did you miss that?

Oh, and no, comparisons to the past prices are not valid, and not only because they supposedly destroy my argument. In your opinion past prices are valid, that's cool. But I can state as a fact (not opinion) that just because something cost more in the past, it does not guarantee that it is a good value now. To say otherwise is to defy the laws of logic. There are several of you who have stated this fallacy and then had the gall to state that I ignore it because it doesn't support me. I ignore it because it is a illogical; you guys bring it up because you think it supports YOUR argument. That's like saying that anything that goes down in price over time is a good value. Do you see how silly that sounds when generalized? I can see how someone might use past price as part of their buying-decision process, but this was presented as proof that prices are not too high...which is just plain false.

[Xrayted]

I just don't get your point with any of this. This hobby along with any other is not a necessity of life. If you feel prices are too high, then demonstrate your lack of support by not participating in it. All hobbies are expensive and luxuries, and no one is forcing you to participate in any of them, so doing it knowing full well the cost and then complaining about it doesn't make sense to me.

[Sake]

Originally Posted by mkovalcson

That would get a good laugh out of me too!

Their frames make me laugh