The sky isn’t falling
View From HQ by Dave Mathewson, AMA Executive Director
Email: davem@modelaircraft.org
As I was trying to decide on a topic for this month’s column, my telephone rang. It was a flying buddy from New York calling to catch up. The discussion soon shifted to the state of the aeromodeling industry during the past year and where we thought the hobby was heading.
By anyone’s standards, 2016 appears to have been challenging for the industry—however, from anecdotal conversations, maybe not quite as much a challenge for smaller companies as for larger manufacturers and distributors. This actually might make some sense.
Smaller companies, with a limited product line, typically target certain markets and might not need to carry the significant inventory that larger companies do. And in most of these niche markets, word of mouth is the best and most economical form of marketing. If a company offers a top-notch product, it doesn’t take long for word to filter its way through the community.
Larger companies, on the other hand, have significant inventory requirements and compete with a number of other companies that might carry the same or similar products. Competition has become more challenging for these larger companies. Merely a decade or two ago, if you needed a radio system for your RC model, you were limited to only a few choices.
Today there are myriad choices of good-quality RC systems on the market. The same is true for internal combustion engines. More manufacturers have entered the market today, competing for the same modeling dollar. So while the dollars, for the most part, may still be being spent on the hobby, a pie that was once divided into a few pieces is now divided into a far greater number of pieces.
It is true, however, that the dollars
coming into the hobby industry are declining somewhat. A Hobby Manufacturer’s Association survey from 2011 shows that this trend has been occurring for some time and is not something with which the industry is only now being faced. To remain relevant and viable, companies have to evolve to meet consumers’ needs. This is no different from in any other industry.
Brick and mortar hobby shops have also seen a significant decline. A longtime friend of mine and his wife built their hobby business into one of the premier shops in the Northeast. Although they are now retired and living the good life, it is the result of investing 12-hour days into their business. More importantly, the success of this shop was the result of the owners knowing the market and knowing their customer base. Evolving as the hobby evolved kept this hobby shop strong.
We had a discussion about the biggest challenges that are facing hobby shops today. Of course, online websites have become a significant source of competition, but there is another change in the hobby that has resulted in even a greater challenge.
Years ago, a customer could walk into a hobby shop and purchase a kit and all the items to go with it—adhesives, covering, engines, radios, etc. The sale was significant and profits were good.
Today many new and even longtime modelers lean toward the small, micro-type models, take them out of the box, and go fly. There’s no need for all of the other items that were supplementary sales as in days gone by. The margins on buying inventory from distributors remains nearly the same, but because the total sales price is significantly lower, profits suffer.
So, although a shop might have a greater number of sales because more people are entering the hobby through smaller, electric-powered models, profits are significantly lower.
What does all of this mean for the hobby? AMA membership continues to grow, telling us that there is still a strong interest in model aviation. We also know that the hobby industry, as in all other industries, is cyclic and has its ebbs and flows. It’s evident that the hobby industry might be in a slight downturn right now, but history tells us this won’t last.
The hobby is still strong and the sky isn’t falling. What we, as modelers, need to do is to continue to enjoy the hobby and support it as much as we can. Better days are ahead!
See you next time …
