If it's true that all of this is more because of product liability insurance then I can see that being mainly a US concern. We are so lawsuit happy over here, even suing for coffee being HOT, that this might be a valid case of the manufacturers trying to protect themselves. Sad but true. So far all that has been mentioned is automobile and aircraft makers. I hope that means that tanks and ships aren't going to be as affected. After all who except an expert knows who made the Sherman, or the USS Lexington? I truly hope they can resolve this issue. I loved building planes as a kid and I have hopes someday to teach my grandkids, when and if I have any, to make them.

So here is what I have found out in a nutshell, as far ANY military equipment is concerned in the model manufacturing genre you cannot recieve royalties for the reproduction of said items, reason? Almost all military hardware is made as part of bid contract services and these are paid for by taxpayers WITH public money!! As such the sole owner of this property is the contracting agency UNCLE SAM!! He says if the Manufacturer can sell them to the allies or not and he retains control until such time as the contract is cancelled or expired, If uncle sam says "build me a tank with two turrets!" then the contractor does so because that is what the customer ordered! WE paid for ALL those nice toys! they are not the Intellectual property of the Contractor as they would not exist without Uncle Sam saying "I Want" Practically nobody in thier corporate right mind is going to invest millions upon millions of dollars on the off chance they MAYBE can sell it to the Goverment and selling weapons outside the US takes US approval. So I have no problem with what the Knotheads are trying to do. but if you like cars/ airliners and non military stuff Weellllll?????

I know all the Nascar models have a Royalty, but as one pointed out it is probably a penny or less. If you demand too much, it won't fly. Ithink Rodger hit the nail on the head.....this is just a tempest in a tea-cup, but I do have a large stash built up, and will order from China if need be.

Hi all,

Funny that the subject " product liability insurance" is mentioned. I was having a meeting with some insurance agents regarding product liability insurance yesterday.

I was told that you can easily obtain a "product liability insurance" with a reasonable premium for most countries except for USA & Canada. If there's any company who's willing to cover USA & Canada, you have to pay a very hefty premium.

One way to go about it is for the distributor in USA or Canada to actually purchase the insurance themselves rather than having the manufacturer to do so. If this is the case, then maybe the prices will still remain affordable for countries where the insurance is minimal? Could this mean better business for online shops located outside of USA or Canada? I am not sure.

I used to call this my "cheap" hobby. I still have a 1/2 dozen $4.00 monogram kits that Shep Paine did the dioramas of. Scratching is cheaper but I don't want to scatch EVERYTHING. A 1/2 dozen kits now will almost pay for that .243 varmit rifle I've been lusting after. What's a boy to do?

If there is a market for this hobby, it wont ever die. Im not expert in economics but if there is a demand, someone will surely capitalise on it and provide the supply. If the price goes up, demand will drop so companies as a collective will surely do what it can to find the equilibrium aka the right point that satisfies both supplier and consumer.

To completely abandon this market would mean people are passing on the opportunity to make money....and how many people you know would do that?

Well I've read horror stories like this before. There does seem to be a link with the American fetish with litigation somewhere here. All I can say is I'm not going to worry too much. Why? I only make WW2 German vehicles, not aeroplanes of any nationality, so i don't think there's anyone left around to sue. I do feel sorry for "modern" modellers, but I've just got to say it only confirms my belief in having as little as possible to do with modern society.
My bikes are all at least 25 years old, so I don't need to worry about Euro-legislation, nothing applies (don't even have to buy tax for 2 of them!). If I could just persuade the missus to buy an old car we'd be well fixed!
I almost never make anything by Airfix or Revell now, why would I with Dragon, AFV Club & Tamiya around?

I agree with what alot of people are saying. I think that companies are squeezing everyone for everything. I dont understand why companies whos products are being modelled dont just advertise on the model boxes. For instance Boeing....let people know that this is your jet and a brief history insert...perhaps even what companies around the world use your jets and maybe some stats. And for other vehicles do the same thing like Porsche, Volkswagen, etc. Perhaps they are blind to how many people are into this hobby. There has to be some sort of a compromise here.

Oh no, this royalty nonsense will be the end of me. Let's face it, with the model shops already making a profit of 60-80%, what will kits cost now?

And how much profit should a hobby shop make?
What would you suggest?

Wouldnt it be great for an owner of a hobby store to informally declare how much he typically get certain products at cost price and how much their profit margins are? We can only speculate so much about it but it would be nice to hear it straight from the retailers.

Why, do you get that information from all other retailers you purchase from ??

John

Can you validate these numbers ?? I've never been in a hobby shop that is charging, and actually selling, that much (or more) above what the online average is ...

John

I have tried but retailers often either refuse to disclose this information or give you a rough estimate. This is mainly due to the retailers not wanting to explicitly give out the impression to customers on how much they are actually inflating the price of the product.

They will always try to play it down so it appears as if they arent earning alot out of you, which we all know isnt true.

I've purchased revell products directly from the shipment warehouse at about 30% of the price but i would really like to know if the cost price for Tamiya products are indeed higher than the rest.

Id say from own experience that 100% profit is more or less the norm for a shop with this kind of products.

Some like groceries are lower due to the quantity sold.

Sometimes when reading messages here I get the impression that some of us thinks the hobbyshops should do it for free or close to?

I honestly think Model shops should be allowed to charge what they want. Triple or even quadruple the cost of the kit to themselves. It's called free enterprise, and if they go out of business......we'll find elswhere, or somebody else will open a shop and charge less. :-)

Vinnie

You obviously have little understanding as to how the system works. A hobby shop will buy (wholesale) at prices between 20 - 25% LESS than the r.r.p. from that, they will have to pay the costs of their shop, (staff. local taxes etc.) The people who are pushing the costs up are (especially here in Europe) the importers. We even have the case here in Spain, where the importer is selling direct - work out the percentage on that one ... So please don't publish nonsense like this as ultimatelly, rumors like this damage people's livelihood...Jim

Just to be sure we are speaking of the same concept ...

"PROFIT" means what the shop owner puts in his pocket AFTER he has paid:
-- the wholesaler for the kit,
-- the landlord for the rent,
-- the insurance to cover the shop, the stocks, health, liability, and etc,
-- the various levels of government for business licenses,
-- the uitlity companies for power, phones, internet connection, etc,
-- the tax men (income, property, sales -- at city, state, national),
-- the salaries of the help, and any employer contribution to social/tax/health benefits,
-- the advertising for the shop, including papers, magazines, and a web-guru to keep his site,
-- the freebie trophies/prizes local clubs want him to sponsor,
-- the goods lost to shop-lifting, damage,
-- the postage/shipping for returns to wholesaler/manufacturer, to include unsellable kits returned by modelers who had no clue what they wanted or were doing,
-- the bad checks, credit accounts, and counterfeit money received
-- and etc ....

Right ? And it's still 60-80% or more PROFIT ?
I'm coming out of retirement to open a hobby shop !!!

John

There is a big difference between MARK UP and PROFIT.

I know a hobby shop here in Australia that MARKS UP incoming supplies by 100% and then adds the 10%GST on. This becomes his Retail selling price but he hardly ever sells at this price as he discounts the price to most folk.

Out of this MARKUP he pays staff, taxes, rent etc. so his PROFIT margin is more like 20% on average and 30% in a good year.

Cheers
Cliff

That makes me feel disgusted, I mean what can an entry level person get thats cheap if they do collect royalties. Nothing, and then hes turned off by the hobby because everything is so expensive, and then he gets out of it.

Its terrible that even within an event that is supposed to lower blood pressure and reduce stroke ( #:-) ) people still manage to raise blood pressure.

Thats where I come out.

~Chip

Oops......I think Ive made the slip of mixing profit and avance.

It would be so much better if all of you understood Swedish. :-)

And perhaps someday your will.

This topic must be getting hot. CBS News did a story on it during tonight's news. They interviewed a couple of model builders (aircraft), showed a contest and interviewed Revell. Basically, they said what's been posted:
How can companies be charging royalty fees for aircraft and tanks that they manufacture and develop on the backs of tax payers?
It was a good piece. Check back on the CBS News web site over the next two days and it'll probably be linked there.

Here's the link to the story already:


http://www.cbsnews.com/stories/2005/09/27/eveningnews/main887340.shtml