2018: A Look Back at an Interesting Year

At the beginning of a new year, I like to look ahead at all the stories I think could be the ones to watch for the hobby industry. It’s a way to focus on the big picture and not let the small, day-to-day stuff obscure the more important long-term issues. Last January, I took a look at four stories I was interested in following for 2018, and now it’s time to look back at that article and see how the year progressed on each subject, and identify other stories that I missed.

Hobbico’s Demise

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The obvious place to start is the biggest story of 2018 for our industry: the slow-motion train wreck that was Hobbico’s fall, bankruptcy, and finally, demise. Though the story began much earlier, back in 2016 by my account, the situation came to a head when on January 10th, Hobbico filled for Chapter 11 bankruptcy. This began a process that largely ended on April 6th, when it was announced that Horizon Hobby cast the winning — and only — bid for the majority of Hobbico’s assets, including all of their radio control assets as well as the building Hobbico occupied in Champaign, Illinois. This is where, one would think, the story would end.

But this just isn’t that kind of story.

With the slow-motion Hobbico train wreck behind them, Horizon settled on a course of action that brought a lot of instability into the hobby industry. All of the well-liked policies Great Planes (Hobbico’s hobby shop distribution arm) had disappeared. Instead of cherry-picking only the best parts of Hobbico’s products and brands, Horizon decided to just keep them all. Instead of compete with the likes of Traxxas by, you know, producing and supporting high-quality products, Horizon opted to use their new-found status as the largest hobby distributor to “gently suggest” their hobby network forgo Traxxas’ superior surface products… by dropping Traxxas products altogether.

I will go over this again in our 2018 Hits & Misses article, so I won’t continue here, but suffice to say that Hobbico’s downfall paved the way for Horizon’s rise. 2019 will surely be interesting if only to see where we end up after a year of Horizon’s reign.

Traxxas Direct-to-Dealer

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It’s the end of 2018, and there are still a few national distributors left selling Traxxas — something I would have lost money betting on. In fact, the biggest news about Traxxas distribution, as I mentioned above, came when Horizon Hobby decided to stop carrying Traxxas, instead of Traxxas deciding to stop selling to Horizon — another thing I would have lost money betting on. Despite an increase in Traxxas-Direct exclusives (like the new E-Revo VXL and Ford Bronco TRX-4, to name a couple), Traxxas continues to be sold through third-party distributors. That doesn’t mean Traxxas isn’t plotting a post-distribution world, though.

Traxxas now offers its dealers the option of carrying Traxxas products exclusively for a discount on demo models, first-delivery options, and more. The details are largely not important for the sake of this article, but suffice to say Traxxas is certainly encouraging their dealer base to support them and only them. It is, however, a choice and not a requirement, so for now, this is just Traxxas being competitive and not domineering.

Furthermore, in contrast to my earlier suspicions, we have in fact seen a decrease in Traxxas’ battery prices, and the downside of their elimination of case quantities is countered by them dropping vehicles’ pricing to the previous case quantity price. Basically, Traxxas, either intentionally or accidentally, reacted to the negative image around their connector debacle and started making moves to placate some of their critics.

While I’d like to see a redesign of Traxxas’ archaic looking-and-feeling dealer website, and I’d be over the moon for a warehouse closer than Texas, I haven’t many complaints about how Traxxas has conducted themselves this year. I still think they will be a solo act sooner rather than later, but it didn’t happen this year.

Amazon

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It didn’t get any easier to compete with Amazon this year, and in fact we’ve seen a significant drop in the amount of special orders we’ve gotten. The majority of our customer base is seemingly only interested in purchasing from us if we have the item in stock. If we are out, or simply don’t stock that product, we lose the sale.

We are a small store, and while we always carried parts and products that were lucrative enough to justify keeping on hand, we still relied heavily on special orders to make ends meet. The loss of the special order segment of our business will be tough to take, but we’ve been adjusting as best we can and it finally feels like we’re stabilizing again, but I’m not sure we’ve seen the end of Amazon’s influence on our business.

 

Quick Hits

  • R/C Aircraft Sales Lag: We’ve seen R/C aircraft demand plummet. Check out our article A Critical Look: Not With a Bang, But a Whimper for more on this.

  • RedCat R/C: Redcat didn’t appear to make any real gains in our market this year. We’re still keeping an eye on them, but it seems whatever momentum they had at the beginning of the year evaporated.

  • Toledo Show: The Toledo Show this year was one of the most disappointing ones yet. Read our post-mortem, and also check out how I think the show could be better.

  • Tariffs Raise Prices: The hobby industry has been impacted by the U.S. tariff on Chinese imports. Check out our Critical Look piece on this topic.

In a few weeks time, I’ll write a piece about what I think 2019 will bring, so if you think there’s a segment of the market poised for a huge surge in popularity, or maybe a trainwreck waiting to happen, sound off on our Facebook page, where a link to this article will be posted. Comment on that post anything we should be paying attention to in 2019, and it may show up in a future article.