A Critical Look: The Crisis That Never Came

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A couple of years ago, I wrote an article examining a new policy from Traxxas: a complete lock-down of their high-current connectors. I warned of a coming crisis and feared how the hobby industry would react. There are many ways in which that article and I were wrong, and we’re going to talk about just how wrong I was and why my perceived future never came to pass.

The Initial Fear

When Traxxas told me they were no longer going to sell their connectors to dealers and other battery-makers, I was aghast. The industry I had grown up in for the past thirteen years was one of interoperability; a battery from Team Associated would, ostensibly, work in a Team Losi buggy equipped with a Futaba servo driven by a Hitec radio system. It was an industry that operated on the basis of standards that, so long as they were adhered to, allowed hobbyists to focus on getting the best parts and accessories, regardless of the manufacturer. It also allowed hobby shops to carry a slimmer selection of items that worked across the board.

Traxxas’ announcement threw a huge wrench in that intricate system of interoperability, forcing shops into carrying two categories of batteries — one for Traxxas products, and one for everything else. Operating costs would go up, and even worse, with a near monopoly on their connectors, I was certain Traxxas would raise prices on hobby shops and consumers alike. After all, that’s how monopolies work, right?

So why didn’t all of that happen?

Traxxas Rose Above

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First and foremost, Traxxas didn’t act like a monopoly. Prices on their LiPo batteries came down instead of going up. Supply was rarely, if ever limited, and Traxxas stepped up as a business partner, offering the same great customer service for LiPo battery replacement as they did for everything else. At the same time, the batteries we usually carried, Horizon’s Dynamite Reaction line, went up in price to the point where Traxxas’ offerings were cheaper than our traditional surface batteries. Finally, Traxxas standardized their LiPos’ capacities inline with other manufacturers, streamlining our ability to transition.

We ended up switching over almost completely to Traxxas’ iD battery system, partly because it was easier and partly because we stopped carrying most other brands for R/C surface vehicles. With all the trouble we’d had selling items from Losi and Axial (the last two non-Traxxas car brands to regularly grace our shelves), it didn’t make sense to continue to support vehicles that didn’t sell with batteries that didn’t sell either.

The Other Shoe: Hobbico’s Implosion

What I couldn’t have foreseen in mid-2017 was just how bad it would get for Hobbico. It wasn’t until later in the year we understood how bad things had gotten, and by early-April of 2018, Hobbico was gone and most of the company was purchased by their primary competitor, Horizon Hobby.

Horizon’s position as the sole big-time distributor in the hobby industry emboldened their leadership, and in the following months, they began a process to rid themselves of their new primary antagonist — Traxxas. The rivalry between the two companies continues to this day, as they are competing for the only thriving segment of the R/C world: cars and trucks. My concerns about a siloing effect from Traxxas’ connector policy were justified; Horizon’s Spektrum now has their own version of Traxxas’ iD technology, and in some ways, it’s more impressive (the self-storage feature is something special). I’d like to see some of these innovations replicated on within Traxxas’ iD system, but unless Horizon can pair their new SMART system with a reboot of their surface vehicles, they aren’t going to repeat Traxxas’ success.

Looking Ahead

In 2017, I was worried about Traxxas being a bad business partner and pulling the rug out from under us. Those concerns ended up being misplaced; from my perspective, Traxxas has been nothing but a help to our business in the past couple years. There will always be policies I disagree with — no matter how in sync our two companies are — but overall, Traxxas’ choice, instead of being a devastating blow to our business, turned out to be a boon for us and our customers. LiPo battery returns are down by an estimated 70% - 80% compared with Dynamite’s Reaction line, our revenue and margins have been largely unaffected, and making the sale is simpler on account of needing less adapters and dongles. As Traxxas continues to produce successful product release after successful product release, the future for Traxxas, its hobby shops, and the Traxxas user community looks bright.