INFLATION?

[bsadonkill]

Last Febuary i bought a 400 series kit, BF-109 for 28.00 dollars. It was an older kit, it had the older art work on the box, but had the new material bell crank bed, lead out guide, and fire wall.They had new kits with the new art work for 32.00 dollars at that time. Yesterday i went into the same store and the 400 series kits were 38.00 dollars! Thats almost a 20% incease in about 6 months, whats up with that?

[svaughn]

I hate to see the prices go up like that, but I'm not surprised really. There are just a lot of things that seem to be pushing prices upward:

1) the economic stimulus put about a trillion newly printed $'s into the economy. As the economy recovers, prices will natural go up to reflect the dilution caused by these dollars.

2) apparently blades of wind powered turbines are often made with a balsa wood core. These things are 30 or 40 feet long and one of them would use enough balsa to make thousands of model airplane kits.

3) ATF and RTF seem to be the trend which may mean less builders and less demand for building kits.

I have some old Guillow kits. I love them, especially the 100 series. I have a Folker DVII (#103) in an unopened box that has the figure $2.50 printed on it.

So maybe if you keep the 400 kit for 50 years you will be able to look back and be amazed that it was only $38 while a kit you buy then might be marked $578.

The real questions is what else can you get that is more enjoyable for $38?

[BillParker]

Thank you Steve. dollar to entertainment ratio is still good, even at 38 bucks...

[SteveM]

The $32 price probably reflected the cost of the kit several years ago when the hobby shop purchased it. After you bought it they had to replace it and adjusted the price accordingly to $38 (MSRP is $37.29). There will be a price increase in 8 days, but your LHS will likely keep the kit at $38 till they have to order its replacement at the new price.

Be grateful you get to pay yesteryear's prices today, at my LHS the prices reflect the latest prices and the 400 series kits have been about $38 for a long time now. So go buy your LHS owner lunch and thank him/her for their generosity.

[BillParker]

ac supply already raised their prices...

[cliffm]

I feel more than lucky to be able to purchase these kits for the price offered. In 40yrs. my earnings have increased at least 10 fold plus annuities, retirement and other benefits we have managed to accrue. Hopefully the people that made these kits deserve to keep up with inflation, storage and marketing costs and still make a profit. This hobby is one of the most enjoyable therapeutic activities available for the costs involved and it's year round.

[Xanadu]

With the business I work in, I regularly have to deal with everyday freight cost increases.
The cost of fuel is a huge factor, and it is not getting any better. At one point last year, one of our carriers were trying to charge us a 57% fuel surcharge, on top of the freight cost.

Fuel, fuel, fuel...................is the worlds biggest commodity thats effects costs of everything............and I mean everything.
When fuel goes up, the cost of freight goes up, the freight goes up, I have to charge more to recoup that loss.

No different than you or I needing a raise since the price of fuel has doubled in the last 3 years, and our wages have not increased in proportion. if we got that raise, than chances are, our employer would need to start charging more since their costs have now gone up.
And so on, and so on, etc..............

You would be shocked if you sat back and thought of everything that fuel costs touch, whether directly, or indirectly. Its staggering when one thinks of it.
Food prices especially.......due to freight costs.

I remember when gas in Canada was 69 cents per GALLON........now we pay $5 per gallon.
Smokes were 60 cents a pack, now they are $11.
Beer draft was .25 cents, now is $3 at happy hour.

Actually, lets go back 12 years..........
Gas was about $2>67 a gallon, smokes were $6 a pack, and a draft was $1............now here is the kicker...........
My wages are almost the same now as they were then...........

[dbcisco]

The market right now is strange. Some are dropping prices and others are raising them. Depends on what they think will maintain their business. If you have market loyalty and/or large market share you can raise prices as a general rule but you can end up loosing market share to competitors that are dropping prices enough to lure customers away from you. In a really bad economy companies will usually drop prices as low as possible to assure survival as opposed to maximizing profits. However, there are lots of companies trying to make as much profit as possible before falling apart. It all depends on the mind set of the owners or board of directors.

[SteveM]

I have a 1970 Guillow's catalog that lists 400 series kits as $6 and a 1972 catalog that lists them as $7, any catalog much more recent then that doesn't have prices.

Based on inflation alone, $6 in 1970 is equal to $32.92 in 2008 and $7 in 1972 is equal to $35.64 in 2008. [1]

Based on that I'd say the current $37.29 price is pretty reasonable and having to raise prices given the current economy not unreasonable.

[1] http://www.westegg.com/inflation/

[dbcisco]

Based upon that calculator, minimum wage should be at $10/hr and gas should be $1/gal. I just bought a new car and house at half price and my PC should have cost me $20,000.
To bad the formulas are pretty meaning less in the real world.

[SteveM]

That is inflation only, many items are influenced by other factors such as the cost of crude oil or advancements in integrated circuits. It is not a hard and fast rule and only serves to show that Guillow's pricing is not out of line.

[dbcisco]

Even if it was "out of line" by that calculator it would be meaningless. Things are always sold at the highest cost the market will bear (or allowed by law). Any bisinuss that doesn;t follow that rule quickly goes out of business. Too high a price and you loose sales, too low a price and you loose profits. Inflation is about as meaningless as cost of living indexes when you get down to specific items, locals or sectors of the market.

[Bill Gaylord]

I just hope they simply don't raise prices unrealistically. If you look at what Dumas, Herr (Sig div.), Rocky Top, Easy Built, Manzano, and others charge, Guillows has often been lower in cost, granted there are a number of factors with each type of kit.

My largest beef is with hobby shops that raise prices on kits that they paid less for, before price increases. I recently bought a Skyhawk for $35. I argued that they should have changed the price tag, as this place is notorious for charging MSRP, but not keeping up with retagging inventory. I got the plane for $35, versus the $45 they showed on their system. Well worth it, as it is an excellent flyer which made for a good e-conversion.

[dbcisco]

Are you going to sell your house at the price it was selling for 10 years ago? There are laws in many states that say if an item has a price sticker on it, they have to sell it at that price. However, there is nothing illegal or unethical about raising prices.

[scigs30]

I hope Guillows does not over price there kits to the point that they are close to Dumas or other competitors. The best thing about Guillows has always been the price. I would never have a problem of paying more for a Guillows kit if they supplied better quality balsa, even if it was printed on contest wood. My last few kits have come with die crunched oak. Still, after replacing the wood they are still fun builds.