Explanation - Time Tunnel Tamiya Price Rise - December 2019 / January 2020
As of 31st December 2019 for all RC kits, and 21st December 2019 for all RC Tractor Truck Kits*, almost all Tamiya RC items will have risen in price. The increase to us on a cost basis varies between 1% and 33%, each item rising a different amount. One kits has decreased in price by a fraction and a selection of very recent releases have remained unchanged.
These new prices are reflected on our site, as of the above dates, and are reflected on our eBay listings with the usual slightly higher price to part cover the exorbitant eBay fees that they charge.
In most cases, the rise is an average of 5% to 6%, only in exception cases (notably, the standard Lunch Box, Midnight Pumpkin and Subaru Brat being the really obvious ones) have prices risen further - we understand because these kits have previously been kept artificially low by Tamiya or the Tamiya importer themselves in order to maximise sales - a trend that has now changed.
Questions and Answers
Why the rise? There are two reasons for the rise - Tamiya themselves have increased the retail and cost prices (in Japanese Yen) for the truck series and a small number of RC kits. The rest of the kits rise around 6% which is largely a reflection of inflation since the last price change back in January 2017, and movement related to the strengthening of the Yen on the world markets vs other international currencies.
Is this because of Brexit? No. The Yen has strengthened, the pound has not weakened. The pound has actually improved massively since the return of the majority Boris Johnson goverment on 13th December 2019, to a level above that of January 2017, so it is unlikely other brands (purchased in US Dollars) will be subject to significant price rises.
Are you making a bigger cut / are you profiteering? No. We have used the same basic formula to calculate our heavily-discounted-from-RRP Tamiya prices since 2006. We make the same percentage. This percentage covers all manner of costs - selling fees, payment fees, economy carriage, packaging, staff costs and so on.
Why increase now? Surely you just increase when new stock comes in at a higher price? This is the fundamental cost / retail calculation that many of our competitors (and many in retail for that matter) simply do not understand. When selling one-off, or single batch / non replaceable stock, that is indeed what you would do - and which is why discontinued kits that we have in stock are not subject to any rise. However we stock (properly, likely being one of less than half a dozen dealers in the whole of the UK who actually stock the majority of the range) this range all year around. When an item sells, it must provide both the (minor) profit margin (which honestly is tiny, far far lower than you think) and the (major) cost of replacing that item with the next identical kit to restock it. If all stock is sold at the old price and then replaced at the new, two things happen - the business makes zero (or in some Tamiya products) less than zero profit on the item and the business then has to invest additional outside funds to purchase that same item back - net result, there was no point making the sale OR it actually cost money to make the sale.
Surely others will get the sales who have yet to increase their prices? Yes. And the sooner they do, they'll try to restock, find they've actually lost money (see above) and be back where they started having made a loss after paying their staff, rent, rates, heat, light and carriage costs. It's simple maths.
* Truck rise 21 Dec: Unfortunately most of these models we cannot replenish before the price rises due to supplier close down days, stock being unavailable until January and many being special order that we cannot be sure will be invoiced at the old rate. As a result it is necessary to increase this single range early.
I've been asked to explain the theory of the Why Increase Now paragraph, a calculation below based on the price of a bag of apples explains this - it is deliberately simplified and doesn't allow for things like VAT - note also, I've never traded in apples so haven't a clue as to the actual cost and retail prices - this is just to explain how things work:
A Green Grocer buys a bag of apples for 75p and sells them for £1.00
It costs the Green Grocer on average:
2p per bag as part of his diesel costs to collect the apples from the wholesale market.
5p per bag as part of his costs to rent his market stall.
5p per bag as part of his costs to pay his staff on the stall.
1p per bag for the paper bag he gives you with the apples.
(We won't worry about the cost of the huge marker pens he uses to draw those bulbous prices or write in additional unnecessary apostrophes before the 's' on apples.)
The cost to the Green Grocer to buy the apples is therefore 88p, and he sells them for £1.00, making 12p - a 12% profit.
On Monday he buys 100 bags of apples for Tuesday's market and pays 75p a bag to the wholesale apple supplier.
On Tuesday morning he learns that the cost of apples has risen as high winds in Kent have devastated the stock on the trees, meaning the Apple wholesaler is paying a higher price, and having to pass that on.
A bag of apples now costs 90p at the wholesalers.
The green grocer's fixed costs of diesel, rent, stall and paper bag are still 13p.
The apples he buys on Tuesday will therefore cost him £1.03 to buy and sell (90p plus his costs of 13p), so on Tuesday morning (as he still needs to make 12p) he increases his apples to £1.12 a bag. These are the apples he paid 75p for.
By selling them at £1.12, he can still pay his staff, still fuel his van, still give you a paper bag and still have enough to buy another 100 bags of apples at 90p each on Tuesday afternoon for Wednesday's market.
Unless he closes on Tuesday afternoon and never sells another apple in his life, HE HAS NOT MADE A SINGLE PENNY MORE - as the extra you've paid has entirely gone on the cost of his replacing the apples you bought with the bag he will sell tomorrow.
This is exactly why we have had to increase the prices on Tamiya kits. Albeit simplified.