1/18 items new price point concern

[warhawker]

I am excited about all of the news coming from the Toy Fair about new items that are coming out. I am just as equally excited about the 1/18 Phantom coming out sometime late this year, but on the other hand I do have some concerns to think about. The main one being the price point and what affects it will have in the market.
First off let me start by saying this scenario can also play out to other manufactures as well besides the one that I mention here. We know that in order to produce such a large bird that tooling and re-tooling of manufacturing equipment, molds, etc. takes money and time on AT part that translates down to us in the end cost of the product, hence the $140.00 for the aircraft. Knowing that AT is setting a higher standard in this 1/18 space that we as comsumers are and will expect other manufactures in the market to do the same. My concern is if we expect the same quality we may start paying a higher cost and are we as comsumers willing to do so?
For example, if this new aircraft at this size with this new price generates alot of demand to the point that other manufactures/retailers notice the buzz and begin to start questioning whether they should be charging more for a 1/18 where the cost is passed down to us? So could we start seeing future new releases instead of $39.99 at our local WM/on-line retailers slowly becoming $49.99, $59.99, $99.99+ as the norm for us? We all know the old saying 'you get what you paid for' but at what cost are we willing to pay?
I for one love AT products and have everyone of their aircraft. I too will be buying a F-4 when it comes out. But what will also happen is, just like the rest of you maybe, I will need to trim back on other hobby spending just for this one aircraft. What ultimately I do not want to happen is for this to become the norm for us all. I appreciate knowing that there is 1/18 item out there that I want but do not want to start paying anywhere near that amount for any other future 1/18 item! Does anyone share the same concern?
(Let my apologies be know if this is not the proper thread to post this)

[toyktdlgh]

No worries here. I think the price fits the aircraft’s size and hopefully its detail level. You will never see regular aircraft at Wal Mart for that much money. Not even $20 bucks more a plane. I think the most money we can expect to pay at Wally worlds is the Avenger pricing and I think that bird was worth every penny. The Wal Mart customer in general will not spend that much for a toy airplane. They will just sit. Online retailers however can ask more for them and even more if the plane will not be available else ware. That’s just the way it is. I think the price will go up on larger, harder to manufacture planes that will be produced in smaller numbers. Remember, Wal Mart gets a bazillion of these things in so they can put them out a lot cheaper.

[FieroDude]

I can understand and appreciate your concerns, but I think the market, in the end, will ensure that prices don't skyrocket across the board. All three manufacturers count on the larger volume of sales that a lower price point generate, and they don't want to price themselves out of existence. It would be like General Motors scrapping all models and lines except Cadillac, simply because some people are willing to pay $70,000 for a car. The profit may be better on the Cadillac (which I doubt is the case for the F-4--I suspect the margin on it is less than for most $40-50 aircraft, at least as a percentage), but the lost entry level and mid-level sales would be disastrous.

This industry, simply put, is finally starting to grow more diverse. There are some people that will never be willing to spend more than $40 for a 1:18 airplane. And there will always be enough of those people out there that it will be profitable to make planes for those people. They will never own an F-4, F/A-18, or B-25, or even an Avenger (if Walmart could keep their distribution straight), but there will always be P-40s, P-51s, and Me-109s for them. And there are those out there who have no problem with dropping thousands of dollars on hand-built museum pieces like HPH. And there are those of us in between.

If this hobby stays constrained by a price point of $40-$50, however, it will likely stagnate and die within a few years--there are only so many recognizable aircraft that can be made at that price. But as long as there is that price point to satisfy the entry level or casual collector, and something bigger and better to look forward to or aspire to for more serious collectors, then it will continue to grow and thrive. And sometimes it takes that "wow" factor of an F-4 to get a new collector's attention. But once you have it, odds are good that they will start filling in the gaps.

Just my 2 Pfennige...

[Jericoeagle1]

I don't see it causing a great impact. My gut feeling is that these larger items will only come out perhaps once per year per company there will be more of a reliance on repaints as well. I think manufacturers will have to avoid repeating another companies effort to be profitable. This actually may help them finally work together as duplication leads to less profit. Look at whats been happening with Admiral and 21st. I'm sure 21st was going to release their ME-262 in the base configuration until they saw that Admiral was going beat them to the punch. They had to change the product to make it more desirable. The same with the Sabre 21st had to make changes to thiers based on the weaknesses they saw in the Admiral Sabre with items as big as an F-14, F-15 or A-10 (Plug Plug) they won't be able to do this and survive financially.

I also feel that if the large birds are successful the smaller ones won't be affected to much. I do see price increases due to inflation and the price of oil going up (need oil to make polystyrene plastics). But I don't think it would be a radical shift. People are always going to pay for quality and we may have to adjust our budgets. I planned on buying another Avenger but probly won't for now because I want the new Admiral Products. In time I'll buy another. In my case variety is better then quantity. I see the same happening with the F-4 in my future as well as the Skyraider I'll buy multiples but over time.

In the long run I feel these larger jets may actually breath some new life into the hobby. I can see every Squadron in the Navy and Air Force buying a few of these to display in there briefing rooms, not to mention the pilots then and now wanting them as well. In my old briefing room we had a KC-135 in appoximately 1/18 hanging from our cieling many of us thought it would be great if we could have had a few F-4's in about the same scale to fly in formation with it.

Overall I see reason to be optimistic about the hobby, lets keep it that way. Things always tend to balance out in the end.

[thetatau87]

I like the direction that AT is going with the Skyraider and F-4. AT is catering to the collector or aircraft enthusiast that wants big scale and lots of detail and is willing to pay for it. The F-4 will truely test the market for these expensive birds to see if they can fly (pun intended .)

$140 is not a huge amount of money for the casual collector or someone who will only have one 1:18 aircraft. These types of buyers make up the majority of the market. The real problem is for the collector that wants multiples or one of every paint scheme. The F-4 is exactly what we as collectors have been asking for. We made our bed now we have to sleep in it. With increasing prices collectors will need to have more disipline and pick and choose which aircraft they want to spend their hard earned cash to buy.

$140 is very reasonable when compared to the current cost of a BBI F/A-18 Hornet. Badcat currently has them for $104. IMO the level of detail on that bird is a bit of a disappointment for the cost. In contrast the AT F-4 will be bigger and MUCH more detailed. The 50% increase in cost is well worth it from what I've seen of the prototype. I'd say that this price point is at the upper end of the spectrum of what the market will bear. About $200 is the max I would be willing to pay for any aircraft in 1:18 even if it is a must have favorite. I don't think that there are any aircraft that would be of reasonable size in 1:18 that could not be produced for $200 or under. A 1:18 B-17 would be awesome, but I would not pay $300 or more for it and park my car in the driveway so I could convert my garage into a hanger to house the huge bomber.

Also, as manufactures improve the processes used to mold, assemble and paint these aircraft the price will fall relative to the amount of detail. For example the typical $40 WM price point will most likely stay the same (or rise slightly with inflation) for single engine aircraft, but future releases will have detailed gun bays, engines, etc. Larger aircraft will naturally cost more as seen with the Avenger.

[Morian Miner]

I had the same concern until I started thinking about the Avenger. Judging from how many ended up going for $25 or $40 around here (and I even heard rumors of them hitting $15), and considering how many were piled up, I think the market has shown what it will pay. And the market meaning the average Walmart buyer.

So, if 21C's main market is Walmart, I think the price will stay somewhat stable, with the ripple effect keeping BBI at the similar price in TRU, with the $100+ planes being the realm of the serious collectors only.

[Spudkopf]

As FieroDude well knows (and is doing his best to rectify) these high price points that you have mentioned are already the norm in places like Australia for example the F-104G and the FA-18 have starting prices of AU$226 (US$177) and the 21stCT Mustang is sold here for AU$165 (US$129) but even at these prices the items still tend to sell.

Unfortunately there is a Catch 22 situation down here, where low sales volumes are brought about by the high margins which are further compounded by import costs which directly effects to volumes, it a vicious cycle that prevents these products from taking off (no pun intended) and restricts sales to diehards like myself. Yet when Target sold the PTE vehicles and figures under their own brand label at a reasonable price a couple of years back the shelves did not stay full for long, so it proves that there is a potential market for higher volume sales down here.

So Warhawker take some comfort in the fact that even at US$140 (AU$180) you are far better off than us poor Colonials.

[STUKA]

I dont think it a big concern - these high price points will sell ok at first - with all of the collectors etc....I think the repaints will be a problem with the low sales volumes. Each new scheme will sell less and less..

I think one outcome could be 21st and BBI as well as AT pumping out tons of repaints on earlier hot sellers for the good olde $39.99 - 69.99 range.

The other long term problem is most people who buy one or two planes are only going to buy one or two planes due to space etc - not many people out there who will hang 15+ planes - most of them are here on this forum.

We have a good idea on what size planes will sell at what price - if suddenly a spitfire comes out from 21st at $59.99 at WM and $99 at the online retailers - I believe that will be the begining of the end of the 1:18 companies. Be like turning the $1.00 menu at McDonalds into a $5.00 menue and wondering where all the customers went?

[Plane Nuts]

From the way I understand it, the price that you will be paying for these planes at WalMart has very little to do with their overall value in the market or how much they cost 21st to produce. We all are hoping that someday the prices outside of WalMart would converge with what WalMart is charging, but there is little chance of that happening without a second (or even third) mass retailer taking a stab at keeping WalMart honest.

Keep in mind that I have no actual information on 21st's negotiations with WalMart, but it should be fairly close to what other companies have to go through.

1) 21st makes the pitch to WalMart: We have these neat toys that have a certain market. We can supply so many units at $X in a certain number of assortments.
2) WalMart gives 21st its idea of what they can sell: That's a great concept. But we want this many units for $Y and these number of assortments on this delivery schedule.
3) 21st agrees (now I'm sure they may be able to counter propose): We can do that, but we will have to make this compromise.
4) WalMart gives the go ahead for a test.

As that has clearly happened, 21st can and does meet WalMart's demands, and we have a market. It obviously hasn't hurt 21st to do, so regardless of what we all might be willing to spend, the value for most 1:18 scale planes is now $39.99. And it is not likely to change.

[Threetoughtrucks]

The questions are simple:

Will we as collectors be willing to pay for an aircraft in the price range of $140 (or more)??

I think the answer is yes, if the ac is larger than normal (for 1/18 ) and as long as the detail is there. My hopes would be for twin engine planes in the vien of the various models of the B-25, the B-26, Black Widow, Mosquito, C-47 et al. $140-160 is not too much to pay for these large super detailed planes.

I know I'd certinally be willing to pay $100 or up for a vehicle set up like a Pacific Dragon Wagon with a tank towing trailer, or a 1/18 M-4 High Speed Tractor pulling a Long Tom or a 90mm AA gun. This all assumes we will already have a German 8 ton half-track to pill our 1/18 88mm

More money? Yes, but we as collectors should be willing to pay for quality. I think we have all out grown the clunky GI Joe type products to move into the 1/18 scale.

I don't have to tell you what 1/6 accurate and detailed stuff is going for now. 1/6 guys are now waiting for an in process metal M-3 White Half-track which we hope will stay uinder $500.......but even if it's more a lot of us will be in line, breathing heavy with our wallets open pleading for one and some guys like me will get two or more at that price. Now we're talking about guys here with paid off mortgages and grown kids AND wifeys that just shake their heads but don't have fits every time the UPS guy rings the bell.

Prices go up, rarely stay level or go down.

TTT

[Rowsdower]

Black Widow

Yes!! Oh God please give us a P-61 Black Widow and while your at it throw in an F-105 Thud and a MH-53 Pave Low!!:mrgreen:

[Jason of Admiral Toys]

Dear Warhawker,

Remember also that competitors produce for mass-markets. When you produce upwards of 50,000 units of one aircraft with multiple paint schemes, you can afford to list the models at a much lower price. Quantity is directly related to production cost.

Admiral Toys produces in the tens of thousands less then the competition of any one aircraft, with multiple paint schemes. This is directly related to our cost of production. We must charge more to realize any form of profit. Our margin of profit is much lower then the competitions based on production numbers.

The only time I would see pricing being an issue is if the mass-retailers get cold feat with the 1:18 lines (which they are known to do) and drop the competition from their limited shelve space. The competition will not be able to sell the numbers they are capable of selling in mass-markets to the specialty markets. The specialty markets will not support the distribution of 50,000 units. So the competition will have to lower their production numbers and in turn raise their prices to the retailers and public.

Just my two cents,
Regards,
Jason

[Plane Nuts]

Dear Warhawker,

The only time I would see pricing being an issue is if the mass-retailers get cold feat with the 1:18 lines (which they are known to do) and drop the competition from their limited shelve space. The competition will not be able to sell the numbers they are capable of selling in mass-markets to the specialty markets. The specialty markets will not support the distribution of 50,000 units. So the competition will have to lower their production numbers and in turn raise their prices to the retailers and public.

Just my two cents,
Regards,
Jason

Exactly!!!