no wonder the model shop is a dying breed

[Willyuk]

It's not just hobbyking that cause our lms problems. As an example I wanted a new futaba 14sg, not a small purchase so I shopped around. I found that I could get one from Austria from swieghofer complete with lipo battery etc for £300 and that was at a much worse exchange rate than now. So I dutifully phoned a number of UK shops including my local one to see if they could get near that price, even with the UK spec nimh. Not one of them would consider even a small discount. So I saved over £80, it arrived withi. 3 days. It is as easy to send to Austria should I need to, as to post in the UK. I cannot believe that there is no profit margin in a new transmitter and surely eating into it would have been preferable to no sale?

[Former Member]

[This posting has been removed]

[ken anderson.]

I've no doubt that the LMS is no different to other retail business in our high street- struggling to get people to get out of their homes and go and buy their stuff etc.... more so with the new generation that has been brought up c/w the internet to buy something with the click of a mouse..... i'll fly the flag for the one's I use in the north east ...for without them I think that the hobby may struggle slightly ...long may they be there...

ken Anderson...ne...1 LMS forever dept.

[GrahamC]

 

 

 

Posted by john melia 1 on 29/01/2015 19:22:43:

just been to hobbyking to buy their 30cc msx-r for £132 but unfortunately as usual its on backorder , so thought i'd have a look around and see if i could source one here ,

well i found the exact same model with exactly the same blurb at tjshobbies.co.uk but the price is £200 !!!

**LINK**

no wonder people complain about our model shops

I'm a little surprised that no-one has pointed out that a major component of the difference in price is VAT. [I am assuming that the shop in question is VAT rated] but if that is the case then £40 of the difference is explained. You are not paying VAT when you buy from HK [Legally and above board] because you are not entering into a transaction in the UK.

This annoys owners of LMS's no end [as you might expect] The price quoted in the link is a more realistic guide to what it costs to see the item through UK retail and pay VAT. Same goes for Rapid RC. Are they selling HK stuff? Yep. Are they charging more Yep. Why? because they are a UK retailer and they have to pay VAT!

I love Hobbyking... but lets be straight about how they are able to be so much cheaper. 1] Volume 2] You are doing business abroad.

Oh... and as I understand it you could be charged import duty for a purchase from the UK warehouse.... I doesn't tend to happen..... Yet!

Edited By GrahamC on 30/01/2015 10:22:23

[Andy Green]

This isn't a new phenomena, go back 15 years, I believe the buy 1000's from the manufacturer and undercut every one is what Als Hobbies were doing.

And we loved it.

Andy

[Erfolg]

I do believe that it can be stated as an uncontested fact, tat the number of MS be they local or not has reduced. You can choose your own time scale, be it 10 years or a year. As far as I can see nothing has generally happened that will change the trend.

There are some model outlets which appear to thrive or at least apparently hold its own, my principle not so local model shop is one of this kind. It is a walk in and also trades as a separate Internet presence. The staff cover a spectrum of ages and sexes, all customer orientated in their individual ways. Its prices are generally better or as good as any other shop in the region. My Parkzone Albatross was £16 cheaper than another LMS that had the opportunity to match this price. I suspect that this retailer has all the attributes to survive.

Where a LMS fails compared with an Internet trader, if they do not have the item in stock, they have to order it, then you go and collect it. The above shop, sends it on at a charge, which for me is still at a lower cost than returning.

I would be surprised if any modeller does not regret, in principal the passing of the LMS on every street corner. Claims are made about the services of the LMS, the reality of most LMS is that any problem, is often no more likely to be resolved by the retailer, than a modeller going through an Internet site dispute process. Then there is the advice, not all MS sellers are knowledgeable, often advice is tailored to suit the stock held, with an eye to making a sale. After all, it is a business.

I would also point out that Internet traders have increased access to budget as well as branded label goods at attractive prices. In the case of budget items, the quality has been pushed up by the likes of HK, as they increase producer awareness and demand certain standards, that the small home trader could never achieve. As small traders, they got what they got.

The significantly lower prices and access to budget equipment from traders such as HK, have increased paradoxically my modelling spend. Due to increased activity in all aspects of my modelling from building to flying. I wonder if this is true for others?

David would do all of us, the trade, the magazine, we modellers a favour, with a few surveys, that linked our current spend, on what, where it is spent etc. Which in some cases could be compared with past similar surveys.

Just plucking figures out of the air such as there are 1m of us modellers and we spend on average £300 a year, would suggest a total spend £300m, guessing how much is Internet related and how much is LMS related, could be used in building up some indication of how much profit is taken where in the supply chain, leading to indications of the threats and opportunities. You can play with the values to your hearts content and no doubt reveal a lot of where modelling is and where it may be going.

The one real issue in my mind is that most modellers are pretty old, even the younger ones, once were modellers. In the case of the youth of today, they have never modelled, so they will not return, but will they be inclined to become modellers. And yes I know not all modellers who started in their mid life are returnees, so are new, yet I guess they are the exception.

[Erfolg]

Graham

You state with great confidence that no VAT is paid with HK. How do you know this is true?

Just to point out to you my LMS does not give me a vat receipt. nor does my local petrol station unless I ask for it.

The assertion that the transaction took place outside the UK and therefore is not liable to VAT is just not true. Any import which is subject to VAT, must pay VAT, be it a private individual or Business (unless a personal import of less than £15 etc). Vat must be paid, other wise EU and UK laws are being broken.

I hope you are not suggesting this,if you have no proof, as some traders may take you to court, as we know, that loosing such an action can be very costly, particularly if deemed to have damaged trade and standing I am just pointing out that care is needed when stating such things, if not true..

Edited By Erfolg on 30/01/2015 11:47:53

[Former Member]

[This posting has been removed]

[Prop Nut]

For LMS to survive, they need to adapt to changing market conditions. I know that's more easily said than done, but it applies to all areas of business. Our major supermarkets have had things their own way for decades and have thrived on it. Now, in a changing market where many customers prefer to shop every day, as we did sixty years ago, and with the arrival of discounters like Aldi and Lidl, the likes of Tesco, Asda, Sainsbury etc have to respond to those new conditions, too. They won't just roll over, they are already fighting back, and so are many LMS. I use a handful who are characterised by selling from retail premises and online, have very competitive prices and P&P, and an extremely efficient service. For me, it beats the cost of driving to a shop and finding parking, and I really don't miss the so-called personal contact, which has always been greatly over-rated, in my opinion. Change or die!

[Frank Skilbeck]

Posted by Erfolg on 30/01/2015 11:47:35:

Graham

You state with great confidence that no VAT is paid with HK. How do you know this is true?

Just to point out to you my LMS does not give me a vat receipt. nor does my local petrol station unless I ask for it.

The assertion that the transaction took place outside the UK and therefore is not liable to VAT is just not true. Any import which is subject to VAT, must pay VAT, be it a private individual or Business (unless a personal import of less than £15 etc). Vat must be paid, other wise EU and UK laws are being broken.

I hope you are not suggesting this,if you have no proof, as some traders may take you to court, as we know, that loosing such an action can be very costly, particularly if deemed to have damaged trade and standing I am just pointing out that care is needed when stating such things, if not true..

Edited By Erfolg on 30/01/2015 11:47:53

Have you asked HK for a VAT receipt? just looked at my last diesel receipt and VAT was broken out. If you go on companies house Lucky Stuff are registered as a freight forwarder not a retail outlet. Yes they will pay tax on the declared value as it's brought into the country, but that might not be what you pay HK for it.

It's a loophole, that is only available to an overseas company, my last order from HK (UK warehouse) clearly states taxes (0.00US$)

[GrahamC]

 

Right... just to clarify. I am in no way suggesting that HK operates outside the law. I'm not accusing them of wrong doing or deceit at all. I'm also not suggesting that they don't pay any tax. But I am suggesting that they are not subject to the same taxation rules as an LMS turning over more than £81K a year. And that's OK... but no wonder the LMS is more expensive.

Wonderful though they are... HK is not a UK retail organisation. You cannot pay them in pounds Sterling no matter which warehouse you order from, and you do business not with a UK wing of the company, but with "Hextronic Ltd" which is registered in Hong Kong.

Any transaction you make with them simply isn't treated the same as any transaction you make with my LMS.

Ever wondered why HK turn up with their big blue tent at the shows and then don't sell anything from it. It's just a show room. They won't sell you anything.

Mind you if you go to the Rapid RC tent at the NATS you can buy most of the catalog. Its about 20% more expensive than HK though..... Hmmm

Frank... cross posted.

 

 

 

 

 

Edited By GrahamC on 30/01/2015 13:28:51

[Steve T]

This thread started out as to 'why our model shops are dying out' correct? Now it seems to have drifted to vat, financing and accounts! I don't have a model shop anywhere that could be called close, so it's a fair old drive to the nearest. And yes, when I get there they have no useable balsa stock, that I would buy anyway. I don't want an ARTF so they are not really keen to even talk to me, No I do not want a quad (I have 2) and the part I ordered for one of my heli's still hasn't turned up, only 4 months now! This is a shop that was traditional 'scratch build' heaven just 5 years ago, now they are less than helpful to say the least. There are still good and even great model shops out there, but they are a dying breed and I am saddened at this demise. I don't care how easy it is to get what I need from the Internet, it will never compare with talking to the old guy on the counter who had built that model, or knew more about building and flying than I ever will, he was so helpful and keen for me to carry on the good work, bless him, sadly no longer with us. Times they are a changing,.....unfortunately! And that is it, we do not live in the world of model shops any more!

[john melia 1]

and i'm still not gonna pay an extra 68 english pounds for a hk model sold in a uk model shop , so we're back at the start again

[john stones 1 - Moderator]

So on a different tack I remember you building your Sbach and you had a few issues, but I see you still fly it, so it's been money well spent then ?

John

[Frank Skilbeck]

Posted by john melia 1 on 30/01/2015 15:24:22:

and i'm still not gonna pay an extra 68 english pounds for a hk model sold in a uk model shop , so we're back at the start again

and that's fine, but you were suggesting that the LMS was either trying to rip you off or were inefficient, when the issue is that they are a UK registered retail outlet trading in the UK. You could always buy the model from the global warehouse in HK.

[Erfolg]

Graham

I think we can guess what is going on in this case. HK are ensuring that any of their operations which are taking place outside of the UK cannot be deemed to actually be UK events.

Why would you do this, as can be seen with many multi-national companies, operations are undertaken in countries where they are most efficient from a business point of view. On the other hand, the UK authorities want as many operations where taxes could be claimed to be deemed to take place in their jurisdiction, even if it means operations outside the borders of the UK. The idea that this is confined to shady operators is misplaced, from reports all large and multinational businesses do this. A reported example was HSBC considering moving their head quarters to China. Many have decamped to Ireland to reduce corporation taxes. Other campaniles manufacture outside the EU under the umbrella of separate divisions, then import assemblies into the EU, again to their advantage.

Our basic problem is we are no longer manufacturers to the world as we were. More often than not we are just a retail destination for products manufactured outside the UK. On that basis, it is only taxes related to the sale that takes place in the UK that is taxable. If you have a lot of steps and organisations in this process within the UK, you attract potentially a lot of VAT. Supermarkets minimise this chain, because it costs money, which has to be paid for. Perhaps the modelling trade needs to take a leaf out of the Supermarkets book?

I can imagine that the UK warehouse, in itself is operated to be most tax efficient. Just a warehouse, that is operated on behalf of HK China, just an overhead, as with any business.

[bert baker]

My now no longer LMS said you had to treat it as a form of local tax. you can pay petrol and have to drive to get it or walk around the corner for free but pay more at the till.

It's was pre internet days.

The nearest shop is now 12 miles away,

Perkins distributor is 1 mile away. they will not deal with me because I am not a shop, so the so called local shops don't miss out.

Fair play they are looking after the model shops.

It would not be so bad if I could phone and pay the order to the LMS and collect from Perkins, but no.

I once ordered a part for a plane through the LMS I collected it at a show, when I got it home I found it was bent.I thought I would return it direct for exchange at Perkins, It was a £3.00 item, I was told to send it back to the LMS they would send it back to Perkins for exchange and the replacement would be sent to the LMS for collection.

Got hump and I ordered a new item from another shop and binned the original part.

[Paul Marsh]

Barnstormers rc in Winsford are closing down. He just wants more time to do other things, and although does ok has no internet presence as such and time to do the web page requires time. there is 20% off everything.

[Frank Skilbeck]

Posted by Erfolg on 30/01/2015 16:09:51:

If you have a lot of steps and organisations in this process within the UK, you attract potentially a lot of VAT. Supermarkets minimise this chain, because it costs money, which has to be paid for. Perhaps the modelling trade needs to take a leaf out of the Supermarkets book?

Although VAT is paid on every transaction if you are a VAT registered business you can claim back the VAT you have paid, you just have to pay the VAT on the sale you've made. So in the end the only VAT that applies is the 20% on the final transaction.

BTW my LMS closed down at the end of last year, the shop rent and overheads were over £1,000 per month.

[john melia 1]

Posted by john stones 1 on 30/01/2015 15:35:12:

So on a different tack I remember you building your Sbach and you had a few issues, but I see you still fly it, so it's been money well spent then ?

John

yep still fly it , and yes the airframe is as good as any of the well known makes , other than the cowling issue which i overcome , money well spent ? yes , and so is the yak 30cc as well , cant fault it

[john melia 1]

Posted by Frank Skilbeck on 30/01/2015 15:40:46:

Posted by john melia 1 on 30/01/2015 15:24:22:

and i'm still not gonna pay an extra 68 english pounds for a hk model sold in a uk model shop , so we're back at the start again

and that's fine, but you were suggesting that the LMS was either trying to rip you off or were inefficient, when the issue is that they are a UK registered retail outlet trading in the UK. You could always buy the model from the global warehouse in HK.

so whats to stop a uk "lms" buying a hk airframe and sticking it up in their "shop" at a silly inflated price , of course our "lms" wouldnt stoop that low and do such a thing now would they

[Erfolg]

Yes the final transaction is at 20%, although there has been a compounding effect at each transaction, as extra costs are added, such as the overheads and profit. So the final VAT is not 20% of the initial selling price.

Non registered VAT traders are perhaps a little interesting. Not being Vat registered the Vat is still there with any materials consumed in the service up to the final transaction. It is here where we perhaps should get a little more excited if the trader bills us, but does not put the transaction through their books, such as small builders etc. That person avoids income tax etc. The government has still received most of the VAT.

When we consider the Perkins example, no doubt they will have an agent to pay at the country of purchase, possibly an import agent if there volume of business warrants the service, then there is their costs of accounting, contract management, sales team, warehousing, distribution, plus standard business overheads, profits, then the LMS adds on there bit. Does that look or sound efficient?

Where as HK does all of those roles in one organisation, with one set of overheads and being local to the point of manufacture has potentially better working relationship, and sales are handled via the Internet, although there are web site management costs, are they as ret as a sales team and their transport costs etc.

[Biggles' Elder Brother - Moderator]

I don't understand why you think that is "stooping so low" John - its business. That's what businesses do; they buy at one price and sell at another, higher, price. Now most LMS's buy at a lower price from a distributor that you can't even buy from you're not allowed to - e.g. Ripmax, Horizon, MacGregor or Perkins. Then they "inflate" the price and sell it to you. The only difference here is this guy is buying from someone you can actually buy from - surely that's even fairer to you?

Remember - he's a shop - he's not holding a gun to your head - you don't have to buy. He offers the goods at that price - as he is the only one with the goods if you want it now you have to pay that price! If you don't want to pay that, well that's fair enough - but you can't have it - at least from him.

He has every right to charge what he wants - its called a "free market economy" and they tell me its a really good thing to have. Well, I don't know about that but I do know that it seems to work a lot better than any of the alternatives I've seen! Get used to it - it's been with us a long time and it isn't going to go away anytime soon. Whether its the LMS, the corner sweet shop or the local pub - they all do it. You know those bags of peanuts your local boozer sells - well he pays less for them than he charges you - shock horror!

BEB

[Dave Bran]

On a lighter note I went to a nearby MS and bought several things, including thread lock, at a full retail price. Yes, I could have driven half a mile and got it cheaper from Halfords (Dontcha just love their silly mixed font style title!), but at the time I was trying to support my local retailes.

As I picked it up, I noticed that the vacuum bubble packing had been knifed and sellotaped. Closer inspection showed the seal on the container was broken.

On mentioning this I was told that "we probably hadn't used much".

A short while before that I had seen them selling to others £1 shop AA NIMH (4 batteries per pack for a £1, a unique name and colouring not seen elsewhere).........for £2.99.

Yes, REALLY!!!!!

Surprise surprise, I don't go there any more.

[Dave Hopkin]

Yep a local (railway and plastic) model shop I buy some bits from has those yellow tubes of Superglue you pay a quid for a card of 6 in poundshops he sells them singly at a quid a pop......