This article was written in 2001 after noticing a sudden change in the model car market.
It will probably be of most interest to the supplier end of the market, but the possible implications to the model car racer should be carefully considered.
The rate at which the internet affects our normal day to day life is for the most part over-hyped. The changes it is bringing about in the model car industry, however, have far reaching implications that may lead to problems in the future. If alternative sources exist that are convenient and economic - what is the downside - just what is lost?
The speed at which racers have taken to ordering cars from outside their national boundaries is catching many suppliers off-guard as they have failed to make preparations to represent their company on the internet. This is understandable from the buyers perspective because for many years there has been a price inequality between different countries, sometimes by an alarming amount.
The internet is a great leveller in that only a virtual representation is all potential customers have to judge any particular company on. This is great for small businesses as a ‘one-man band’ operation can appear to be ‘bigger’ than a multi-national corporation. The virtual shop owner does not need to have premises to operate from and so the only costs he/she has to consider are those of running a web site. If he/she designs and implements the web site themselves, the operating costs are very low.
The usual or traditional supply chain for cars and parts has been for many years that the car and parts are supplied locally. The importer/distributor usually has one operating base (with its associate costs) to which he/she has supplied cars and/or parts to either shops around his/her country or region, or more usually with some scales, a track-side supplier. This track-side supplier and/or local shop, is of great convenience for the racer, as he/she does not have to carry any spares for their car.
Consider the scenario below, where a racer wants to buy a new car; (Sorry to all you female drivers out there - putting in he/she makes it hard to read).
He phones the supplier in his country and gets the engaged tone as the supplier only has one phone line. He rings again later and orders his car. The car may or may not be in stock, but the supplier calls him back (for which he has to be in the house for) and informs him that the car will arrive in a few days. Alternatively the racer tells his track-side supplier that he wants a car, who has to ring the importer and arrange for the car to be shipped to him so that he can supply the customer.
The racer goes on-line, has a look at all the various sites and finds the same car for hundreds of pounds (or dollars, etc.) cheaper. He picks the best price and uses their on-line shop to order the car. This can be at any time of day or night. The shop processes the order and sends an email confirmation. The car is then delivered within a couple of days.
In either of the above the same specification of car gets to the racer in a similar amount of time, although in some cases the internet purchase could be quicker.
The net result (no pun intended) is that the racer saves a substantial percentage on his purchase at the convenience of having not left the house. He is so happy that he tells all his friends who then do the same and buy their new cars on-line.
This is all fine and well, but the importer/distributor and track-side supplier is unable to sell new cars and is pressured to sell the cars and parts at a reduced rate. The on-line seller gets more and more sales and can then reduce his/her prices even more. This starts a downward spiralling of prices that could lead to a point where there is insufficient profit in model cars and parts for the importer/distributor to supply the track-side supplier and/or the shops he/she was dealing with. The importer/distributor has to move on-line to compete and the track-side supplier is left without a source of income that, in part, compensated for the time he spent in helping the racers he was supplying.
This is the main point of this article, the various track-side suppliers around the globe have been, for years, amassing a great deal of knowledge that helps other racers. This source of help is invaluable, especially to the newcomers to the sport of model car racing. Yes, there are many people track-side who will freely give their help, but there are even more that won’t.
If there are no track-side suppliers, then each racer will have to carry his own spares, the convenience of the on-line buying could be at the expense of the convenience of track-side buying.
I will offer no solutions, but will say that you can’t have your cake and eat it, and where the middle ground of this potential situation is I don’t know.