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Old 04-04-2016, 05:35 AM   #1
Konrad
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Default FMS and their new importers

I have a concern with FMS appearing to constantly change importer into the USA.

Let me start by saying that is was FMS and Multiplex to a large extent that changed this die hard "Anti Foam ARF" guy into a flier that now has over half his flyable fleet made from foam.

I first learned of FMS when they were imported by some "fruit" company, later they they were imported directly by FMS's own "rock" firm. Now I see that they are imported by a "Champagne" firm. This lack of stability in their import business/structure give me great concern. This is because even though the models are foam I spend a lot of time setting them up. I'd hate to be left with an obsolete (no longer supported by the importer) model that is grounded because of a lack of a $20 dollar part.

If anybody really knows what is going on at/or with FMS please let us know. I know that when dealing with Horizon Hobbies all parties are under a gag order. I'm not looking for anybody to violate any non-disclosure agreement. I'm hoping somebody that is not bound by any non-disclosure agreement to enlighten us as to what is going on at the higher levels of FMS management and to explain/justify the high cost structure we the modeler must now pay for the great FMS products from Horizon Hobbies.

All the best,
Konrad
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Old 04-04-2016, 05:59 AM   #2
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Horizon is not the last word for FMS models in good price ranges and parts availability........

http://www.motionrc.com/fms/?gclid=C...FZNgfgodZwcP5Q

https://www.hobbyzone.com/fms/

http://www.bananahobby.com/rc-airpla...id_33_39=33|39

And there are over a dozen over-seas vendors that carry most, if not all FMS models........And of course, one could look into the Dynam and Art-Tech models which are damn near the same quality, size, price and performance (in many cases better)......!
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Old 04-04-2016, 06:59 AM   #3
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Well, in North America they (HH) are. And they enforce their MAP policies very aggressively. MotionRC and Hobby Zone are bound by HH MAP, as of the first of this month.

FMS has abandoned Diamond RC as the wholesaler for FMS to hobby shops. All North American retailers will have to comply with HH MAP as set by HH for FMS and ROC Hobbies products.

Having over a dozen ART-Tech and Dynam models I can unequivocally state that they are both two or three steps below FMS and Freewing when it comes to the quality and engineering of the end product! Dynam are a great value product. But out of the box the FMS and Freewing are a superior products all the way around, and their cost structure supports this.

All the best,
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Old 04-04-2016, 05:30 PM   #4
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Yes, it was a sad day when HH become the sole US distributor for FMS. MotionRC was forced to raise their prices in accordance with HH MAP.

Thank goodness MotionRC teamed up with Freewing to create a new product line called FlightLineRC. This line will compete directly with FMS. I just got their new 1600mm P-38 Lightning, and it is a beautiful plane! It has a few minor flaws, but nothing that a new line typically doesn't deal with.

I will continue to shop at MotionRC and refuse to cowtow to HH's ridiculous pricing schemes.

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Old 04-04-2016, 06:44 PM   #5
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Originally Posted by Konrad View Post
Well, in North America they (HH) are. And they enforce their MAP policies very aggressively. MotionRC and Hobby Zone are bound by HH MAP, as of the first of this month.

FMS has abandoned Diamond RC as the wholesaler for FMS to hobby shops. All North American retailers will have to comply with HH MAP as set by HH for FMS and ROC Hobbies products.

Having over a dozen ART-Tech and Dynam models I can unequivocally state that they are both two or three steps below FMS and Freewing when it comes to the quality and engineering of the end product! Dynam are a great value product. But out of the box the FMS and Freewing are a superior products all the way around, and their cost structure supports this.

All the best,
Konrad
Please feel free to correct me if I'm off track here....:

I was under the impression that MAP policies (there are various versions) are set by an agreement between the manufacture and the retailer. The POLICY is established by the manufacture......and if enforced, the enforcement is provided by a third party which is compensated by the manufacture.... and retailer (vendor) in the event of a legal challenge.

"This is the lowest price allowed to be publically displayed for a product on sale. Many manufacturers have enacted MAP as a way to maintain pricing integrity in the market, especially in online advertising, enabling their authorized resellers to compete for business outside of the price scenario. One of the primary justifications for MAP indicates the only way to properly represent the brand is to allow for a respectable margin so the resellers make enough money to support and represent the brand to the level expected by the manufacturer.
When manufacturers enact a MAP policy they typically require resellers to execute some type of agreement authorizing them to market and sell and represent their brand. Most manufacturers with a MAP policy have a system for reporting violations and some also use third party firms like Net Enforcers to shop the web and even purchase products and track back serial numbers to the source of the violation. When a reseller is found in violation of the MAP policy, they become at risk of losing their authorization to sell that product or brand.".......
At least that is what we researched while studying the processes a couple years ago while working on a Master's in Statistical Marketing Analysis.........MAP was just getting a head of steam then.
The legal enforcement and consumer rights of such differ (are not all the same) from agreement to agreement, State to State and International Trade Policies in effect by region.
Horizon Hobby may very well have instituted a "Hard MAP" on products they label and or manufacture. However, I'm more than certain that not all products they import from international (sources) manufactures (like FMS) are inclined to possess such agreements..... a case in point is what GWS (Grand Wing System's) was dealing with when it opened it's USA branch in Upland, CA..........they were having issues with several retailers that wanted a MAP agreement in-place. These were retailers who had a long history with GWS......it has been a long and complicated issue which GWS has since dropped (reduced) a few retailers inventory over the issue. We studied this case until GWS representatives ceased providing details to my buddy, (an owner) over at Hobby People, who was our go between.
If prices on products, other than what they manufacture and label, are increasing across the board (as assumed by the OP), most likely, (Horizon, which is very independent and not very transparent), has implemented an internal policy regulating such, not so much just an issue of a MAP regulation they have in place with other manufactures...........I'd be interested in hearing about a legal challenge if they have used a MAP regulation to justify prices outside of the products they do not manufacture or have agreements in-place with other manufactures.
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Old 04-04-2016, 07:00 PM   #6
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It might be a dual MAP thing. FMS may have one number, but HH set another for the US. Otherwise, why would prices suddenly go up? MotionRC said they were forced to increase prices when HH took over sole distributorship.

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Old 04-04-2016, 07:14 PM   #7
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Originally Posted by crxmanpat View Post
It might be a dual MAP thing. FMS may have one number, but HH set another for the US. Otherwise, why would prices suddenly go up? MotionRC said they were forced to increase prices when HH took over sole distributorship.
What you are assuming is that FMS has a MAP with Horizon, in order to justify the price increases on those FMS products. Horizon, more than certain, has MAP's in place with other vendors for the products they manufacture and distribute under their name, and more than likely has justified the price increases of FMS products due to a MAP with them........However, after learning what was being done over at GWS, "international" trade policies were the driving force behind preventing MAP's from being enforceable here in the U.S. with China manufactures....!

Now, to muddy the waters even more.......if it were the case where Horizon was installing equipment (manufactured by them) on FMS models that are being distributed to their vendors, just maybe a "dual MAP" comes into play.......?.......I hardly believe that would be the case......but, without full disclosure and justification from Horizon or FMS, we'll never know for sure........don't hold your breath.......
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Old 04-04-2016, 07:31 PM   #8
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Originally Posted by crxmanpat View Post
Yes, it was a sad day when HH become the sole US distributor for FMS. MotionRC was forced to raise their prices in accordance with HH MAP.

Thank goodness MotionRC teamed up with Freewing to create a new product line called FlightLineRC. This line will compete directly with FMS. I just got their new 1600mm P-38 Lightning, and it is a beautiful plane! It has a few minor flaws, but nothing that a new line typically doesn't deal with.

I will continue to shop at MotionRC and refuse to cowtow to HH's ridiculous pricing schemes.
Wow, I'm impressed that as an agent for IB (Internet Brands) you are allowed to speak so candidly about a perspective advertiser!

While I understand (don't necessarily agree with) the rational for MAP. I fail to understand the how raising the price of products 30% often more benefits us the end user of the products.

I too have seen the new FlightLine RC (FLRC) offerings. To my engineering eye I see nothing new in the offering, they look pretty much like what FMS and Freewing are offering. As FLRC is marketing themselves as a step up from the FW and FMS scale offerings I was hoping to see molded in skins (Graupner had this in the late 90's) maybe some internal structure (stiffeners) to allow for more scale interiors, landing gear etc.. But at the current price point (FLRC) offers far superior value than what FMS offers, and this was before the HH price increase. I too hope that FLRC forces HH to reevaluate their pricing structure. HH has some very nice products it is just that the value for our hobby dollar is not there at Horizon Hobbies.

Back to FMS and their business structure. Seeing them changing their business structure so many times gives me concern about the stability of the company and product line.

All the best,
Konrad
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Old 04-04-2016, 07:44 PM   #9
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Originally Posted by pizzano View Post
Please feel free to correct me if I'm off track here....:

I was under the impression that MAP policies (there are various versions) are set by an agreement between the manufacture and the retailer. The POLICY is established by the manufacture......and if enforced, the enforcement is provided by a third party which is compensated by the manufacture.... and retailer (vendor) in the event of a legal challenge.

"This is the lowest price allowed to be publically displayed for a product on sale. Many manufacturers have enacted MAP as a way to maintain pricing integrity in the market, especially in online advertising, enabling their authorized resellers to compete for business outside of the price scenario. One of the primary justifications for MAP indicates the only way to properly represent the brand is to allow for a respectable margin so the resellers make enough money to support and represent the brand to the level expected by the manufacturer.
When manufacturers enact a MAP policy they typically require resellers to execute some type of agreement authorizing them to market and sell and represent their brand. Most manufacturers with a MAP policy have a system for reporting violations and some also use third party firms like Net Enforcers to shop the web and even purchase products and track back serial numbers to the source of the violation. When a reseller is found in violation of the MAP policy, they become at risk of losing their authorization to sell that product or brand.".......
At least that is what we researched while studying the processes a couple years ago while working on a Master's in Statistical Marketing Analysis.........MAP was just getting a head of steam then.
The legal enforcement and consumer rights of such differ (are not all the same) from agreement to agreement, State to State and International Trade Policies in effect by region.
Horizon Hobby may very well have instituted a "Hard MAP" on products they label and or manufacture. However, I'm more than certain that not all products they import from international (sources) manufactures (like FMS) are inclined to possess such agreements..... a case in point is what GWS (Grand Wing System's) was dealing with when it opened it's USA branch in Upland, CA..........they were having issues with several retailers that wanted a MAP agreement in-place. These were retailers who had a long history with GWS......it has been a long and complicated issue which GWS has since dropped (reduced) a few retailers inventory over the issue. We studied this case until GWS representatives ceased providing details to my buddy, (an owner) over at Hobby People, who was our go between.
If prices on products, other than what they manufacture and label, are increasing across the board (as assumed by the OP), most likely, (Horizon, which is very independent and not very transparent), has implemented an internal policy regulating such, not so much just an issue of a MAP regulation they have in place with other manufactures...........I'd be interested in hearing about a legal challenge if they have used a MAP regulation to justify prices outside of the products they do not manufacture or have agreements in-place with other manufactures.
Nope MAP is not limited to an agreement between the Manufacture and retailer. Nor does a third party need to be involved to enforce the policy.

MAP is a marketing tool to support the price structure. It is used to try to force all parties to maintain the perceived value of the product. It is often justified as a way for all "all resellers" to pay for and gain value form the marketing of the product/brand that the manufacture and/or his agent has put into the marketing of the product/brand.
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Old 04-04-2016, 07:46 PM   #10
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Originally Posted by crxmanpat View Post
It might be a dual MAP thing. FMS may have one number, but HH set another for the US. Otherwise, why would prices suddenly go up? MotionRC said they were forced to increase prices when HH took over sole distributorship.
Where is this stated?

Thanks,

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Old 04-04-2016, 08:24 PM   #11
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Originally Posted by Konrad View Post
Nope MAP is not limited to an agreement between the Manufacture and retailer. Nor does a third party need to be involved to enforce the policy.

MAP is a marketing tool to support the price structure. It is used to try to force all parties to maintain the perceived value of the product. It is often justified as a way for all "all resellers" to pay for and gain value form the marketing of the product/brand that the manufacture and/or his agent has put into the marketing of the product/brand.
Not limited....in what way....?........since the MAP's are originated by the manufacture and bind the vendor to a compensation structure....!

If a third party is not used, how do the parties tied to the agreement (contract) expedite enforcement and track violations without the use of attorney's, which are certainly a third party member.......?

No disrespect intended, but could you please validate your opinion.........Myself and 10 other Master's alumni, spent over a year researching this and other topics related to national and international trade and marketing policies. Our research and findings are in the archives at the University of Redlands.........and were not/have not been challenged or disputed to this day.....our research sources can be and have been verified (not that I will go to that extent to prove a forum discussion)......but if what you imply can be verified and documented, we'd love to contribute that information to our research (it is a living document)...since our documents will be used as abstracts to be published within the next year by a couple of Professors who have a made ours and other researchers work part of their core study text..........wouldn't want them to be misinformed or take heat over our lack of diligence........
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Old 04-04-2016, 08:43 PM   #12
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With regard to your masters, the manufacture in this case has designated HH as the inclusive North American importer/distributor . This importer/distributor has implemented a MAP policy on all products they market (brand generator or holder of the Trademarked name). In this case the MAP maybe between the importer/distributor (NOT the manufacture or OEM) and the resale agent. No need to involve the manufacture/OEM with the retailer.

Should anybody import (bring in) a product from an outside source (Hobby King for example) HH can insist that FMS abide by the exclusivity agreement and have FMS force the agent selling to Hobby King to cease and desist.

Many firms have in house attorneys so the 'need' for a third party is not required. The "cease and desist order" can and often does come from an in-house attorney.

All the best,

Konrad

FYI; I'm not interested in the legalities of corporate law. What I'm interested in is the stability of the FMS business. Seeing so many changes has me concerned.
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Old 04-04-2016, 08:58 PM   #13
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Originally Posted by crxmanpat View Post
It might be a dual MAP thing. FMS may have one number, but HH set another for the US. Otherwise, why would prices suddenly go up? MotionRC said they were forced to increase prices when HH took over sole distributorship.
Found it!
http://www.hobbysquawk.com/forum/mot...rice-increases

I'm glad to see Tom is standing up the HH. I'm sure he can claim that most sales in the next 2 weeks will be as the result of marketing efforts put forward by MotionRC's own marketing. And as such are not as a result of HH/FMS and are free from the constraints of the MAP.

I now need to support Tom (MotionRC) and think about putting some money where my mouth is. Unfortunately, as has been noted, FMS/ROC Hobbies don't have too many models that are of great value or interest. The 980 P-39 Thompson racer and maybe the V-Tail Glider are on the short list. So was the 1400mm P-40 but for the same cost I can get the FLRC P-38 so that is dead as far as value is concerned.

All the best,
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Old 04-04-2016, 09:23 PM   #14
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Thanks Konrad........

"FYI; I'm not interested in the legalities of corporate law."

We weren't either, but were required to examine several States "Antitrust Laws" to verify the means by which MAP violations occurred, challenged and enforced........As an example what we needed to research:

"A notable recent decision by the US District Court for the Southern District of New York holds that enforcement of a Minimum Advertised Price (MAP) policy against Internet retailers does not amount to Minimum Resale Price Maintenance, notwithstanding the contention regularly made by such retailers that prices appearing on websites really amount to selling prices rather than advertised prices.1
In that case, Worldhomecenter.com, Inc. v. Franke Consumer Products, Inc., the district court also held, in accord with an earlier holding of a New York state court, that Minimum Resale Price Maintenance is not per seillegal under New York's antitrust law. The New York Attorney General had taken a public position to the contrary.".........."1. Worldhomecenter.com, Inc. v. Franke Consumer Products, Inc., No. 10 Civ. 3205 (S.D.N.Y. June 22, 2011)"
Sorry to take your time up..........and getting a little off topic here.........From what you have implied, seems little need to advance our research any further without diving into the "Trademark and Distribution" issues, which our research only covered to clarify trending MAP policies related to marketing implementation and compensation.
I too, have little concern over the FMS issue, only what seems to be the trend among manufacture/distributors like Horizon who seem to be inclined now to play both ends of the "Spektrum" and control what they believe to be the perceived "respectable margin and Brand Value" of the products they distribute.
Thanks..!
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Old 04-04-2016, 09:31 PM   #15
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Originally Posted by pizzano View Post
Thanks Konrad........

"FYI; I'm not interested in the legalities of corporate law."

We weren't either, but were required to examine several States "Antitrust Laws" to verify the means by which MAP violations occurred, challenged and enforced........As an example what we needed to research:

"A notable recent decision by the US District Court for the Southern District of New York holds that enforcement of a Minimum Advertised Price (MAP) policy against Internet retailers does not amount to Minimum Resale Price Maintenance, notwithstanding the contention regularly made by such retailers that prices appearing on websites really amount to selling prices rather than advertised prices.1
In that case, Worldhomecenter.com, Inc. v. Franke Consumer Products, Inc., the district court also held, in accord with an earlier holding of a New York state court, that Minimum Resale Price Maintenance is not per seillegal under New York's antitrust law. The New York Attorney General had taken a public position to the contrary.".........."1. Worldhomecenter.com, Inc. v. Franke Consumer Products, Inc., No. 10 Civ. 3205 (S.D.N.Y. June 22, 2011)"
Sorry to take your time up..........and getting a little off topic here.........From what you have implied, seems little need to advance our research any further without diving into the "Trademark and Distribution" issues, which our research only covered to clarify trending MAP policies related to marketing implementation and compensation.
I too, have little concern over the FMS issue, only what seems to be the trend among manufacture/distributors like Horizon who seem to be inclined now to play both ends of the "Spektrum" and control what they believe to be the perceived "respectable margin and Brand Value" of the products they distribute.
Thanks..!
"SPEKTRUM" love it!

And we are back to the marketing of fruit, Lemons and Oranges!

All the best,
Konrad
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Old 04-05-2016, 01:53 AM   #16
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The market will stabilize the pricing IMO. When they see a slow down due to a price increase, they will be forced to adjust accordingly.
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Old 04-05-2016, 02:50 AM   #17
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But is FMS strong enough (financially) to survive while this HH mis-step is going through the slow market driven reassessment of their pricing policies? Many times firms can't weather this kind of mis-step.
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Old 04-05-2016, 03:00 AM   #18
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Not 100% sure but chances are that HH had to sign up to "n" number of containers. Their track record has been somewhat sketchy with other importers such as BH. My understanding is they got stiffed a few times.

Perhaps they end up throwing in the towel and go with HK much like what happened with Art-tech. Who knows ?

For the retailer, there's not a lot of margin in arfs or pnp's. They make their margin on parts.

Who knows? I really like the brand right behind Freewing in most respects.

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Old 04-05-2016, 05:03 PM   #19
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This is direct from the mouth of the man who runs Diamond Hobby, which is now Force RC:

"Let me clear up the issue. FMS sold the exclusive distributorship in North America to HH, we at Diamond transferred all our inventory north to HH warehouse. By agreement with all, we renamed Diamond Hobby to Force RC and now have access to all the FMS line plus all of HH. HH will assist Force RC with both Customer and Product support as well as shipping. I will continue as the voice of Force RC and as I did with Diamond Hobby, willing and able to assist with questions and support, as well as taking you phone orders.

Jim"

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Old 04-05-2016, 08:11 PM   #20
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Interesting.......just went to both HH and Diamond picked a FMS warbird (same one, same price), carted it and proceeded to check shipping.

The shipping pull down page at both sites is identical........and the cost for such at both to CA was $0.00 for standard or $8.99 for FedX 2-4 day turn-a-round............no sense in shopping around between these two now that the MAP is in place.

Takes all the fun out of deal hunting......LOL.....and from what I can discern, the prices have escalated on many FMS and E-Flite models at least 20% from what they were in November of 2015.

My next task will be to chk other E-Commerce FMS distributors and make the same evaluations to determine (if any) discrepancies or handling/shipping cost inconsistencies are showing up..........of course in my spare time..........I'll bet Banana Hobby has a few tricks up their sleeves (they always do)......

Seems that, if all of the FMS models (or others under similar HH distribution MAP policies) here in North America, are going to cost the U.S. consumer the same regardless (taxes not included).........one's options at the "dance" are to get there early, pick the most attractive partner, or end up with "the last call" pickn's and take your chances........lol
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Old 04-05-2016, 08:43 PM   #21
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Nice trick as Diamond Models is gone. They are now a castrated version of themselves as they no longer import FMS, DBA Force RC.

But when dealing with HH marketed products they are all under MAPs. Should you find some prices that are below this just wait. The reseller will be getting a cease and desist letter, with a possible notice that they have lost their resale privileges! This is for all North American resellers.

All the best,
Konrad
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Old 04-05-2016, 09:02 PM   #22
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Originally Posted by Konrad View Post
Nice trick as Diamond Models is gone. They are now a castrated version of themselves as they no longer import FMS, DBA Force RC.

But when dealing with HH marketed products they are all under MAPs. Should you find some prices that are below this just wait. The reseller will be getting a cease and desist letter, with a possible notice that they have lost their resale privileges! This is for all North American resellers.

All the best,
Konrad
Trust me, if one finds a "legit" product being sold by a "legit" dealer which they are serious about purchasing, and it beats the HH or MAP distribution reseller prices (all costs considered) by a good margin, I doubt the "smart" consumer is going to blow any whistles (or shout-out on web forums or Facebook) about the find.....unless of course that consumer has an axe to grind and is willing to "bite the nose to spite the face"....there are do gooder's and watch dogs everywhere today, with consumer awareness at a peek, I'm sure the dealers are even watching each other to protect their livelihood...........
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Old 04-05-2016, 09:10 PM   #23
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Originally Posted by pizzano View Post
Trust me, if one finds a "legit" product being sold by a "legit" dealer which they are serious about purchasing, and it beats the HH or MAP distribution reseller prices (all costs considered) by a good margin, I doubt the "smart" consumer is going to blow any whistles (or shout-out on web forums or Facebook) about the find.....unless of course that consumer has an axe to grind and is willing to "bite the nose to spite the face"....there are do gooder's and watch dogs everywhere today, with consumer awareness at a peek, I'm sure the dealers are even watching each other to protect their livelihood...........
Your point?

By definition a "legit dealer" will not be a "legit dealer" if they are violating the MAP.

If as a reseller I'm loosing sales to a firm that is not abiding by the terms of HH contract. You bet I'll be calling HH to enforce the agreement I have with HH. And that would be to cut off the offending reseller of nullify the MAP agreements.
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Old 04-05-2016, 09:53 PM   #24
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Legit, as in one's past experiences with previous purchases and service from their source.........please, I understand the difference.

The point.........the cost's to the consumer (which we have seen increase substantially) are directly effected by the additional expenditures the "holding-hands" distributors/resellers are going to be required to cover...... oversight, enforcement and "cease & desist" legal challenges, ect. ect. Even if the big boys like HH have an "in-house" legal staff.........which is
un-likely (in-house), since it has been my experience, having been a past share holder/corporate board member, that most, if not many, large firms (particularly in retail) have found it to be far more cost effective (for them) to retain outside legal representation and pass on those marked up service cost's to the consumer.
Since, I personally no longer have anything to lose or gain, other than what effects me as a consumer, it's apparent that the driving force behind the MAP issues are less about protecting value and brand integrity, serviceability and standardization, and more about a "niche market" profitability portfolio........public or privately exchanged withstanding.
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Old 04-05-2016, 10:02 PM   #25
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Smith had railed against monopolistic policies in his book the "Wealth of Nation".
https://en.wikipedia.org/wiki/The_Wealth_of_Nations
So there really is nothing new other than the name.

Now while the discussion seems to be more about MAP. My concern for posting this thread was to ask about the robustness of FMS as I have concerns about a firm that seems to be constantly changing their importer or import policies.

All the best,
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