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Hobby People going out of Business

Old 01-14-2017, 03:33 PM
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acdii
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Default Hobby People going out of Business

Got an email today that kind of surprised me, and on the other hand, sort of expected. It explains why they weren't at Toledo last year.

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Old 01-14-2017, 05:10 PM
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Wow, just received an order from them today. Too bad. Fast service and better pricing than I'd found anywhere else. It's always bad to see a good company closing the doors. That seems to happen all too often these days.

Tom
Old 01-14-2017, 06:03 PM
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Thanks acdii, most unfortunate indeed.

John
Old 01-15-2017, 06:46 AM
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With more and more modelers buying their supplies from sources outside of the USA, you can expect to see more of this.
Old 01-15-2017, 06:47 AM
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Us shopping on the internet kills another one.
Old 01-15-2017, 07:37 AM
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Whats really strange is they are a US Online retailer with stores, and have really decent prices. They have their own brand products as well, so seeing it was a bit of a surprise, but OTOH, when they weren't at Toledo last year, I had a feeling they were hitting hard times. Their holiday flyers were listing servos for sale that were until supplies last, another indicator.
Old 01-15-2017, 08:30 AM
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I don't think any hobby retailers are doing all that great lately , the economy being what it is I'll bet most of em are working on slimmer margins than in years past ...
Old 01-15-2017, 09:51 AM
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Doesnt help with retailers like Hobby King selling parts and engines for near or at wholesale either.


From what I gather from their FB postings, the owner died last year? Nothing was actually posted other than a RIP picture of apparently the owner. In fact there is no mention of going out of business on either the FB page or their web page, but there were comments on some store closings by customers.
Old 01-15-2017, 10:10 AM
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Aeroworks, Hobby People. I wonder who will be next?
Old 01-15-2017, 11:38 AM
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Originally Posted by fliers1
Aeroworks, Hobby People. I wonder who will be next?
Hi fliers1 ,

When I read Hobby People's "about us" on their webpage it appears they are (were ?) 4 retail stores + internet sales . Aeroworks was even smaller , a tiny company competing for folk's hobby dollars amidst the already mentioned Hobby King and other high volume/bottom dollar establishments . It's been said 10 billion times that folks will buy something they are looking for the absolute cheapest way possible and there is just no way a small company can compete in that environment . It seems the strongest hobby suppliers are the ones who have a different larger business , with the making of hobby products for us as a side business . Futaba with their industrial automation and DuBro with their fishing equipment come to mind here . If I recall didn't Aeroworks specialize in 3D type of model airplanes ? I do recall just before the drone fad hit that it was 3D that was the latest & greatest and I recall just about everyone was selling 3D planes with Aeroworks being said to have been among the best designed/built . But then along came the drone thing and suddenly 3D wasn't the financial darling it had been and so the demise of Aeroworks , a small company supplying a segment of a hobby that changes with each new development in technology .

I think in the future there will be even more company consolidation in the likes of Horizon & Hobbico because that will be the only way a company will stay afloat , be an "all things to all people" supplier for all things hobby related (RC trucks , boats , and etc along with the RC planes & drones) ....
Old 01-16-2017, 06:40 AM
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They had more like 14 stores in California and One at one time in AZ thought.
http://www.globalhobby.com/globalwhere2buy.asp

I think you couple internet sales with the terrible business climate in CA, and seeing the shift to drones, it's no surprise they couldn't sell the business.

The original Hobby Shack in Encino was my go to store for years when I flew at the Basin,
Old 01-16-2017, 07:44 AM
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And people wondered why we hate drones.
Old 01-16-2017, 01:11 PM
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I think that one thing that really hurt them badly was having Sanwa pulling Airtronics from the US market. Hobby People was the US distributor for Airtronics and I imagine it took a huge hit on their bottom line to see it go. Now many may say that Airtronics wasn't a huge part of airplane radios, and it might not be. But when it comes to ground radios Airtronics is a leader and a lot of the bigger named drivers used Airtronics radios. So I think that may be a good contributor to this happening.

One thing I would like to know with HP going out is where will Magnum engines be sold? In this day and age OS and Saito engines are high priced and in my opinion you are paying partly for the names. Magnum engines have always been a lower cost good engine that represented an alternative to the higher priced engines out there. I hope that there will still be somebody out there that will be distributing them in the US now that HP is gone belly up.

It is a sad day to see another hobby company go down the drain.

Ken
Old 01-16-2017, 01:42 PM
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Well Tower sell/sold magnums, and the last I checked they show the Magnum 91 as being discontinued. You can still get the ASP which is the Magnum counterpart from Hobby King. I do know that when you buy a Saito you do get a high quality engine, all of mine that were taken care of are good strong runners, all but one I bought used, all but one were taken care of, and the one just needed bearings. The one I did buy new is the FG-11 and it is a very good engine, but is it worth the cost? Finding a good reliable four stroke gas engine is not easy. I do feel the OS engines are over priced, the ones I have don't run as reliably as the Saitos do and are a bit under powered when compared.
Old 01-16-2017, 02:08 PM
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Originally Posted by scale only 4 me

The original Hobby Shack in Encino was my go to store for years when I flew at the Basin,

I remember that particular store well and I believe it was about 70 or 71 and although I am just an airplane guy it would be fascinating to stare at all the pretty (and expensive) brass/bronze live steam marine engines by some upstart Japanese company called Saito.

John
Old 01-16-2017, 03:51 PM
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Originally Posted by RCKen
I think that one thing that really hurt them badly was having Sanwa pulling Airtronics from the US market. Hobby People was the US distributor for Airtronics and I imagine it took a huge hit on their bottom line to see it go. Now many may say that Airtronics wasn't a huge part of airplane radios, and it might not be. But when it comes to ground radios Airtronics is a leader and a lot of the bigger named drivers used Airtronics radios. So I think that may be a good contributor to this happening.

One thing I would like to know with HP going out is where will Magnum engines be sold? In this day and age OS and Saito engines are high priced and in my opinion you are paying partly for the names. Magnum engines have always been a lower cost good engine that represented an alternative to the higher priced engines out there. I hope that there will still be somebody out there that will be distributing them in the US now that HP is gone belly up.

It is a sad day to see another hobby company go down the drain.

Ken

Global is the distributor,, not Hobby People... you think Global Distributing is going under too?
Old 01-16-2017, 05:28 PM
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Originally Posted by scale only 4 me
Global is the distributor,, not Hobby People... you think Global Distributing is going under too?

Global and Hobby People are one and the same.
Old 01-16-2017, 05:32 PM
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Originally Posted by RCKen
I think that one thing that really hurt them badly was having Sanwa pulling Airtronics from the US market. Hobby People was the US distributor for Airtronics and I imagine it took a huge hit on their bottom line to see it go. Now many may say that Airtronics wasn't a huge part of airplane radios, and it might not be. But when it comes to ground radios Airtronics is a leader and a lot of the bigger named drivers used Airtronics radios. So I think that may be a good contributor to this happening.

One thing I would like to know with HP going out is where will Magnum engines be sold? In this day and age OS and Saito engines are high priced and in my opinion you are paying partly for the names. Magnum engines have always been a lower cost good engine that represented an alternative to the higher priced engines out there. I hope that there will still be somebody out there that will be distributing them in the US now that HP is gone belly up.

It is a sad day to see another hobby company go down the drain.

Ken
Serpent RC in Florida is the new Airtronics dist the radio are now known as Sanwa.
Old 01-16-2017, 05:45 PM
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Sanwa, now theres a name I havent heard since......
Old 01-16-2017, 06:01 PM
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Hobby People did a great job in virtual salesbut they lost their marketing edge with unique products, exciting stores andmodels that people had to have.
If you read the book Marketing Warfare, it’sabout the ability of the small guy to compete with the large guy. Wendy’s vsMcDonalds /Burger king when Dave was trying to simply compete. A brilliantstrategy on how to be different but be relevant!

Being a consultant in the CPG industry I wouldgive free advice to shops that I knew needed help, some listen and some just continuethe same path of destruction.
I have had the luxury of seeing what worksin this industry and what has failed by simply visiting enough stores.

Hobby stores fail from too much inventoryand too little inventory. The old “I can get that for you” in a “must have itnow world “does not cut it in 2017!
They also fail from a lack of a detailedcompetitive virtual network and the last point of failure is simply poorownership /customer service.

So, in simple terms this is some of theaspects that I have seen or suggested to successful hobby shops.
  1. Carry, display and hang—sell - used quality functional models for sale from the local community. All the money stays in the shop for the purchase of new merchandise back to the owner of the model. Why? Its all EYE candy and the experience you have in the shop. Empty shops are no fun, and people love bargain shopping. Hobby shops need to be a constant source of a clean controlled swap meet. This also allows the owner to have inventory at no cost !
  2. Carry parts, parts can be sold at higher margins then your typical ARF, Kit ect that are so price sensitive and price identifiable.
  3. Have a friendly knowledgeable staff that knows (despite who owns the store,) you are there to service the customer, not to simply let them know you are the big boss Hoss.
  4. Study trends, know the difference between Fad, Trend and Evergreen. This way you know when to invest in inventory and what type. A great example of this is the huge miss of Great Planes/Tower in EPO foam models. The segment of epo planes moved from Fad to trend and it was 4 years before Great Planes jumped into the segment. Now imagine the local hobby shops, most just entered the segment the last two years when its been flourishing for the past 6 years.
  5. Eliminate your own personal interest as the reason to buy a segment. If you’re into cars, then your customer better be into cars if that is all you carry. You must know your local area and your ability to reach the virtual market when buying inventory.
  6. Last and the most controversial of what I am about to say is you need to be a competitive virtual seller and know how to beat the MAP pricing regulations. Many shops can be very competitive online but are restricted by the parent distributor on MAP prices. However, some shops simply and constantly sell online under different names, different sellers and many have a huge export business. Trust me this is how the not only survive but they flourish.
  7. Events at your shop for free PR, model building, contest, club discounts ect, and you must attend events.
  8. Direct import -attend the Nuremberg show, look for line opportunities , minimum runs, exclusive brands. This is how VQ, ESM, CMP and Model Tech and other brands made it to the USA.
Add it all up and this is the formula for some of the bestshops in the USA that really perform! Please this is in the simplest terms for the sake of this thread but on the surface, these aspects are from some of the best shops in the USA.

Old 01-16-2017, 07:57 PM
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LDM you are right on! +1
Old 01-17-2017, 04:18 AM
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Sorry for the words running together, I typed it in word and simply copied and pasted over to RCU, no reason for the glitch ??
One more point , the health food industry "sport supplements " is undergoing the same challenges. Retailers like GNC have boring stores, all private label , no real advantage vs the net and rotating part time staff with no real interest in the segment. Soon you will see less Better for you brick and mortar stores from the big guys unless they change and change fast. Obviously the challenges are different by segment but none the less it shows that with a trend in society to be healthier, its not a simple gold path to cash ! .
If the Hobby Industry was trending up , you still have to figure out how to capture the most foot traffic.

In the RC world we all know and many of us hate Drones , but marketing people know they have moved past fad to trend. Will they be evergreen ?? I doubt it , I would bet that the toyetic drones we see everywhere continue to decline and the only market that stays is high end and few toys. The key for the hobby shop is "how do I capture and keep that drone customer" how do I get them into cars, planes ect.
Old 01-17-2017, 06:59 AM
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Now that drone sales are dropping and no new uptrend in anything now, I expect a lot of companies to close. Maybe if people get off of unemployment or don't have to pay a fortune for health care we can get the economy working before too many close.
Old 01-17-2017, 06:59 AM
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Can't sell a company in Cali outside Cali. Drone sales are down now so what to do? Close is all.
Old 01-17-2017, 09:34 AM
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Originally Posted by ira d
Serpent RC in Florida is the new Airtronics dist the radio are now known as Sanwa.
This is great news. But being from Missouri you have to Show-me, and being the Forum Manager for way too long I don't trust rumors here in the forums until I can verify them myself. So I gave Serpent RC a call to verify this info first hand. Yes, they are indeed the new distributor for Sanwa branded radios in the US. They will no longer be branded Airtronics but will simply carry the Sanwa label that the rest of the world gets. Right now they are not a licensed repair facility for Sanwa but they are working towards becoming one. So for the time being what happens if you need repair on your Airtronics radio is that you send it to Serpent and they will ship it to Sanwa for repair. Not a perfect solution by any means, but at least it is a solution. Hopefully it won't be too long until they can be set up as a full Sanwa repair center and the radios can stay in the states for repair.

For anybody looking for their website here is the address:

http://www.serpentamerica.com

Also, if you want to give them a call their number is 1-305-677-3253. I spoke to Ricardo there about all of this and he was pretty excited about getting Sanwa in their stable.

Ken

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