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I just had a huge duh moment!

For years I have wondered why the model prices at Michaels are so expensive. Just last weekend I was looking at the Revell 1968 Charger with a price tag of $34.99. I know most of the local hobby shops are selling them for $10 less.

Reading through this forum I saw mention of a Micheals coupon. I went online and discovered they have 50% off coupons.

Needless to say, I am printing one as we speak and getting ready for a little trip.

Rob

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$34.99????!!! That seems outrageous even for Michaels "list" price! Isn't the MSRP about $25? It's a shame they make you do the coupon thing - think of buyers that actually pay that full price or don't buy a model because they think it's too expensive. I'm not a fan of that business model, but it must work somehow because Hobby Lobby pulls the same thing.

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I never understood the concept of charging twice as much as the competition and offering a 50% discount, but it has arrived in this country too.

Let me explain it to you. As a small business accountant for many years and a college grad with a B S in Business Admin it's very obvious. 50% of $34.99 is $17.50. MSRP is around $25.00. Do you think they are losing money? What they are doing is bringing you into their store in hopes that your will see something else to buy with a bigger markup and make them more money. Some stores will sell things at a loss in or to get you into the store in order to get you to buy more once there. It's called lost leader sales or in some cases bait and switch. You, as a smart consumer, need to make yourself aware of these tactics and learn how to take advantage of them.

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Let me explain it to you. As a small business accountant for many years and a college grad with a B S in Business Admin it's very obvious. 50% of $34.99 is $17.50. MSRP is around $25.00. Do you think they are losing money? What they are doing is bringing you into their store in hopes that your will see something else to buy with a bigger markup and make them more money. Some stores will sell things at a loss in or to get you into the store in order to get you to buy more once there. It's called lost leader sales or in some cases bait and switch. You, as a smart consumer, need to make yourself aware of these tactics and learn how to take advantage of them.

Not to argue, but I know for a fact the re-seller wholesale price (the price Hobbytown USA offers it to smaller hobby shops and vendors) of that kit is about $15, so at $17.50 "discount" they're still making money. Since HTUSA is making a profit on that re-sale, it's costing Michael's even less per unit at direct sale from Hobbico, so at $35 they're just hosing you down and kicking you out of the store laughing the entire time.

Edited by niteowl7710
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Not to argue, but I know for a fact the re-seller wholesale price (the price Hobbytown USA offers it to smaller hobby shops and vendors) of that kit is about $15, so at $17.50 "discount" they're still making money. Since HTUSA is making a profit on that re-sale, it's costing Michael's even less per unit at direct sale from Hobbico, so at $35 they're just hosing you down and kicking you out of the store laughing the entire time.

Thanks, you proved

my point.

Edited by my66s55
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Not to argue, but I know for a fact the re-seller wholesale price (the price Hobbytown USA offers it to smaller hobby shops and vendors) of that kit is about $15, so at $17.50 "discount" they're still making money. Since HTUSA is making a profit on that re-sale, it's costing Michael's even less per unit at direct sale from Hobbico, so at $35 they're just hosing you down and kicking you out of the store laughing the entire time.

I see what you are saying but I have to say I don't agree with the business model they are using. My daughter loves crafts so I would take her to Michaels to buy supplies. Being a plastic junky, I would always check out the model selection but was blown away by the high prices. I wondered why they bothered to carry models at such a crazy price.

I'm sure they sell many of them at the higher price to unsuspecting people who are perhaps buying a kit for a child. This is wrong and could keep people away from the hobby thinking it is to rich for their blood.

Anyway, I did print my coupon and did get the 68 Charger for $17.49. And to prove the point My66s55 made, I bought some paint pens at regular price. Duh!

rob

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" I don't agree with the business model they are using" me either. Bait & switch ? shame on them.Coupons? Remember the good old days? When you could go into a store and see the price and know it was the only price you'd pay anywhere in town? Today everything is about greed and money.Bought a car lately? a house? Talk about tricks of the trade.

Edited by Greg Myers
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It's called lost leader sales ...

FYI, probably just a typo, but it's actually "loss leader" not "lost leader."

Otherwise your info is dead-on.

Lost leader is what our economy has ... a leader who is totally lost.

:blink:

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Lost leader is what our economy has ... a leader who is totally lost.

:blink:

It would nice if the economy were up to just "one" leader - it would make life pretty simple. Unfortunately, it's way beyond one person, or even one party, to influence the economy. It's driven, in the US, by a few hundred million consumers.

Business models are successful based not on ethics or morals, but on how many people pay them for services or goods. It takes buyers to build and, ultimately, to kill a selling process.

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It would nice if the economy were up to just "one" leader - it would make life pretty simple. Unfortunately, it's way beyond one person, or even one party, to influence the economy. It's driven, in the US, by a few hundred million consumers.

Business models are successful based not on ethics or morals, but on how many people pay them for services or goods. It takes buyers to build and, ultimately, to kill a selling process.

Well, if you want to get literal, it's a good point. Let me rephrase my pithy observation:

Lost leader is what our ecomony has too many of ... leadership and leaders that are totally lost.

:)

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I see what you are saying but I have to say I don't agree with the business model they are using.

Oh Rob I never said I agreed with it, or even think it's vaguely a good idea. Even down here in the states were we aren't getting shanghaied on the prices, their shelf "MSRP" is usually $2-4 more than my LHS sells the same kits for...and other than supplies for a project my kid had to do for Science class before school ended I never shop there unless I have a coupon. The selection of kits at my store is pathetic, and hasn't seemed to turn over in almost a year, but I've slowly been accumulating kits I otherwise wouldn't pay full retail at my LHS (there are so many other kits I'd rather buy to support my guy), because with the coupon it's $10.71 out the door with tax. THAT is a loss leader as Doug was explaining it.

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Just a note.. this is one of those threads without anything resembling a decent topic description, which has been strongly discussed in current posts. Can we at least add more description in the subheading? It's really a waste of time to open a blind topic to find that it's of no interest. Here's one from a locked post below (It's called: "What's this post about? I'd bet you'd like to know":

http://www.modelcarsmag.com/forums/index.php?showtopic=45362

Edited by sjordan2
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Why do you suppose it was locked ?:D

I don't know, and I don't agree with locking it. This has been brought up several times before, but many people seem to miss it. Everyone has two chances at a title for their post: A cute main title that draws interest, and a subtitle that explains it. A cute title by itself can draw curiosity, but I think it's disrespectful of our members' time if they open it and it turns out to be something they're not be interested in.

But I guess there must be a pony somewhere.

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Just a note.. this is one of those threads without anything resembling a decent topic description, which has been strongly discussed in current posts. Can we at least add more description in the subheading? It's really a waste of time to open a blind topic to find that it's of no interest. Here's one from a locked post below (It's called: "What's this post about? I'd bet you'd like to know":

http://www.modelcarsmag.com/forums/index.php?showtopic=45362

I couldn't agree more.

Let me plead my case:

1. I am a new guy here. :rolleyes:

2. I was lost in the moment of my embarrasment. ;)

Anyway, I do agree. I am a member of another modelling forum and feel the same way when I open a topic which is poorly titled.

Geeze my wrist is soar!

Rob

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