Originally Posted by astrohog

We might have started off a bit on the wrong foot, but I think it may be because we think so much alike! HAHA!

No doubt!

Originally Posted by lizzardman

Just be glad you don't live in Maryland. Our douche bag governor wants to get rid of capitol punishment and give child molesters plea bargains. Plus, any gun with a pistol grip is "scary" and therefore illegal to own.

Apparently you can take out more people because a gun has a certain shape.

Sorry for getting off topic.

No forgiveness needed. Call it like you see them. Besides I'm pretty sure the 2nd amendment, the Pennsylvania Constitution of 1776 and the Bill of Rights never mention that the bearing of arms excludes pistol grip guns or clips with more than 10 rounds. Shame on governor O'Malley.

Originally Posted by Phil Griffin

Hey OP,
Thanks for starting this thread. I've enjoyed the heck out of it so far.
And Chris, I'd like to thank you for both chiming in, and answering the phone when I call. :-)

Your welcome and X1000. Great customer service is easy. Great customer service over a long period of time is much more difficult! Thanks EF for proving your longevity.

what he said

Anytime you are comparing our toys and toasters you are going to draw some terrible conclusions. I am not on the selling side, so I don't have actual sales figures, but I am sure that total sales are tiny by industrial standards. I live in a metro area with a population of about a million people. There are only about 400 registered AMA flyers in that area. Double that number to get non-AMA guys, and divide by two or three to get rid of the FOGs and other guys who haven't bought or flown a plane for years and you get a about 300 people per million in the US who are in the market for any kind of plane. Less than a quarter of them giant scale (probably far less). So a total potential market of about 100,000 in the US. That seems like about the number registered on Flying Giants, so is probably in the ball park. Doubt if that market averages one new plane a year, even though there are quite a few who get more. In the clubs I am around, the guys who go big average a little less than one a year, with some big spenders balancing out the guys who carefully fly a plane for several years. So roughly 100,000 planes at most to spread around all of the vendors and models. I suspect the real number is closer to a tenth of that.

It is no wonder that continuous flow is not established in this supply chain. We owe real thanks to the people who dream of making their living in this hobby. I am sure they could make more money with less work elsewhere. Fortunately for all of us, it wouldn't be as much fun.

Catalina...don't forget about the rest of the world that might be buying arfs from the popular vendors

Originally Posted by CatalinaWOW

Anytime you are comparing our toys and toasters you are going to draw some terrible conclusions. .

I'm not saying I'm an economist, but I'd have to disagree with that. First, in your example you point out that there isn't enough demand? Second, the laws of supply and the associated problems are universal. At least the main ones are. RC Airplanes are not so unique that they fall outside the laws of supply and demand. Below are some common supply problems that companies face. If you'll notice, some of these problems were brought up by several people in this thread (not by me) as factors that contribute to the supply of arf's.

The price of goods/unit
The prices of other goods/substitutes
The price of factors of production
Tastes of consumers
The state of technology
The goals / objectives of the company
Demand of raw materials
Factors the company can't control

They all look the same anymore..... same ol same ol edge, extra, yak, ........Nothing truly new.

I honestly dont see much too often that I absolutely "have to have". Grab some plans, and some sticks, enjoy the hobby.

Originally Posted by EXTREME FLIGHT

I could write a novel on what we face as ARF manufacturers to bring these aircraft to the masses, and at some point I may. I promise you it would be an entertaining and enlightening read!

Chris,

We could make it a whole series!!!

As for this thread the best way to learn about the hobby business is put up your own money and try it.!!! Then tell the world about the hugh profits you make and how easy it is to run a business in this hobby and how easy it is to please everyone out there.

EF makes great ARF as well as several other companies. The ARF market is very fickle. As one said whats hot today is old inventory tomorrow. I have seen people buy ARF because of color, not quality or performance.

We made a decision to get out of the ARF business after 13 ys and go back to basics. We now cut all our own kits in house using our own machines and local labor and USA suppliers. We decided to go to a different direction. We can control our own inventory and production. We don't have to worry about Storing,Weather the shipment left China on time, or did it get held up in custome or how long that container takes to get here. ( in our case its 6 weeks plus customs) weather we put the right color on a plane and weather we have the right design to please the market.

Now its up to the customer to build whatever plane he decides to purchase. we will go over to the laser and cut it out. Then the customer has the fun of building it, making it his own.

Like I said before the best way to learn about this business is to put your money up and jump in. Then all your questions will be answered.

Al Young

Originally Posted by jtec/radiowave

As for this thread the best way to learn about the hobby business is put up your own money and try it.!!! Then tell the world about the hugh profits you make and how easy it is to run a business in this hobby and how easy it is to please everyone out there.

Thank you for posting. I'm not so sure that anyone suggested that it was easy to run a business in this hobby or that is was easy to please people. In fact, the contrary seems true. I think we've come to a bit of a concensus that 2 of the factors that affect the supply of rc aircraft most are low profit margins(low cost of the unit itself which leads to low profit margins which prohibits the company from expanding production) and consumer tastes(which makes the mfg afraid to order larger quantity) At least that's what I'm getting out of this so far.

It does bring up another questions however. Why are unit prices so low? I suppose that the price of competitors products, ones with little support and stolen designs, have something to do with it. I guess in the end that's another whole thread.

The rest of the world buys toasters too. The ratio of the market size is probably 1000:1 and I still say the size of the market matters a lot. Read your manufacturing books, you will find a concept called learning curve. It is basically a rule of thumb that describes the benefits of investment, and the detailed wisdom of how much investment makes sense at any production level. Basically will tell you a lot of things work 10-20 times better in the toaster market than in the airplane market.

Another thing you might want to look up while you think about supply and demand is elasticity in a market. I am sure that if you paid 2-3 times as much for the airframe you would find people trying harder to meet your service demands. But only if they could find enough other people willing to buy at that price point.

Finally you might want to look at Gresham's law. It says that cheap junk drives out quality because people often prioritize price over quality.

I could not help but think about when I was coming up it was not the almighty dollar that influenced me to go into business. It was the love for what I was doing and the desire to serve people no matter the size of the need. No one would every argue that it takes money, however why is it always money that drives business?

It is a sad world now that greed is one of the main driving factors for many. For many it is basic survival in an extremely competitive market place. I bet most of the RC dealers fall into the latter group. I miss the days when you would go do something for someone out of concern and care for them.

Does anyone remember the times when we actually visited our customers and gave special things to them like hats, t-shirts, etc.? I do. We would have never dreamed of charging a customer for those things as it is done today!

Originally Posted by Luchnia

Does anyone remember the times when we actually visited our customers and gave special things to them like hats, t-shirts, etc.? I do. We would have never dreamed of charging a customer for those things as it is done today!

I have a thing about sticking brand names on my stuff, Other than a couple off freebie baseball hats I have no clothes or planes with them on, at least by me, I find the idea that companies make a profit on selling merchandise like T shirts or stickers that are nothing more than advertising very strange.

If I was back in the RC business, which I have no intention of doing, the first thing would be to offer stickers and t shirts with our names on at at least cost, and given away for purchases above a certain size.

if they are third parties making and selling them that is slightly different.

Get as many people as possible advertising your products for no cost to you, it seems a no brainer.

I used to be in the retail RC trade, loooong time ago, only way we ever stayed in business was by diversifying into hobbies and crafts, the retail RC margins are too low, the stock value too high for the turnover and sales were very labour intensive due to the amount of advice and help that came as part of the service. and this was long before the internet, and we still lost 75% of local sales going to mail order discounters who rarely if ever were able to stay in business longer than 2 or 3 years. Turnover isn't profit.

Then we used to loose sales to McGregor, the local UK JR importer, when the importers are quietly direct selling and undercutting the local retailers, you know all sense of integrity is lost.

Just for clarification, this question is for JTEC = Al Young:
Are your kits made in USA and everything is cut to order? Nothing comes from China if i were to order one of your planes?
My spring project is to (have my contractor friend) build a workshop for me in my back yard (20 x 12 feet). Once this is complete, then i would love to build one of the big aerobatic kits.

JTEC cuts their own kits.

I support my LHS as much as I can even though they do very little giant scale RC. With the Internet options available and no sales tax I can't see how these guys make a living especially with these tough economic times.

Hey Doc...I have a short kit 100cc size Katana in my garage under construction for almost 2 years now. LOL. Hopefully you are tenacious enough to see it through. My hats off to these guys that build that way and can make em look good. You did have to do more than average on that 3W and it looks fantastic198

Just a question, but does anyone know if there are often shortages for the European planes like Comp-ARF and Krill?