This is a follow up to something mentioned in another thread, where a complaint was made about the markups on models. How many hands does a model typically pass through on it's way to ours? Obviously there is the manufacturer, who sets an initial price. Somewhere along the line there is a distributer, who either marks it up, or offers a discount off "list" price to those shops that buy from them. For many of us there is also the LHS, local hobby shop, that gets it from somewhere, and who has to make a profit to stay in business. So where is all the money going? Who is to blame for the high prices we pay in a LHS compared to buying from somebody like Lucky Models or Hobby Link Japan? Is it that there are too many people with there hands in the pie, or that the manufacture, Tamiya to blame one, is asking too much to begin with?

I think a lot of hobby shops tend to charge what "the market will bear" as they consider themselves specility stores and can be few and far between... my area is lucky that there is about 6 hobbystores and so I can find a lot of "sales"....

an example of large markeup on tools is you can buy a 12" steel ruler straight edge at a hobby store for between $7 and $10 but if you shop around you can find almost the same thing at a dollor store for.. well $1.....

as for kits.. well some hobby stores seem to focus on the big ticket items such as RC cars and planes and feel that models should be pricy too...

Do model companies sell straight to a stateside (or your local country) distributor as in:
1. Manufacturer
2. Distributor
3. Store (online or actual)

Or is it more like this:
1. Manufacturer
2. Exporter/shipping agent
3. Importer
4. Distributor (who could be the importer)
3. Store (online or actual)

I'd venture a guess it is more like the second example with even more hands in between. I would imagine the kits would be in a large container and probably broken down at the port and sent to various distributors.

In a country like Japan, there is probably a model exporter who gets orders from the States. That entity in turn gets merchandise from Hasegawa, Fujimi, Tamiya, et al and assembles the order into the container in Japan. He probably has an importer stateside who receives this shipment, breaks it down to the various distributors' orders and sends it via a common carrier.

Pricing is most likely based on the manufacturer suggested retail price. Some places sell the kits at MSRP. Serious hobby shops with a more informed clientele have a standard markdown with which they set their prices at.

The price charged could also be based on what the distributor charges. In a country like the UK, there may be a very limited amount of distributors. They would have a near monopoly and could charge more for the kits.

The US probably has a large number of distributors and they in turn would have to charge a more competitive rate for the kits.