WHERE’S WALDO: A sunny outlook on the changing RC industry landscape

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By Aaron Waldron
LiveRC.com 

For the last decade, I’ve worried aloud that the transformation of how RC manufacturers and tracks could eventually cause the entire racing scene to implode on itself. As more equipment is sold directly to consumers, facilities leaning on retail sales to keep their doors open would start to disappear, leaving those consumers with fewer places to use that equipment — and eventually we end up with neither consumers nor racetracks. There’s no doubt that an increase in the number of manufacturers producing everything from kits to tires, as well as the major shift to online commerce, has dramatically altered the status quo of this industry. But while change means that something becomes different, it doesn’t necessarily mean that change is bad. Maybe everything is all sunshine and rainbows after all. How much water is in your drinking glass?

We know now, after watching some of the biggest RC companies in North America go through periods of severe financial distress, that the previous wholesale distribution model is not as foolproof as it used to be; though we knew that was coming a long time ago, when the distributors started relying more heavily on acquiring and operating their own brands. When brick-and-mortar hobby shops were the only outlet for hobby goods, having those shops order items from 20 different brands on the same order form through a single wholesale distributor made sense. But even then, the largest and most well-organized hobby shops couldn’t stock everything that every hobbyist might want, which is why they would often place special orders — and why hobbyists called in orders for items they saw in catalogs. Online superstores like AMain Hobbies and Absolute Hobbyz didn’t invent the wheel; they just utilized emerging technology to refine what companies like Tower Hobbies had been doing since the 1970s. And, just like Tower but also like what emerging warehouse sellers in other industries did, those online stores started focusing on specialized consumer support as well as purchasing directly from manufacturers (or, as in Tower’s case, being the manufacturer’s distributor) to both lower prices and maximize profit.

As a result, hobbyists now can choose from a wider range of new-age retailers with a greater focus on customer service that carry a more diverse selection of products, while making a more efficient use of overhead costs. So far, so good.

Of course, all of this puts the traditional brick-and-mortar hobby shop in an increasingly-difficult spot. Many of those relying on old-school balance between shop sales and track income have had to diversify their portfolio and invest more time to selling items online. There’s increased pressure to do away with the stereotypical young, rude, inexperienced cash register jockeys in favor of those who can assist customers with a greater assortment of novice and high-level inquiries. Sure, it’s not just the bad hobby shops that got hit by this change, but the better businesses will have a higher chance of survival. Besides, it’s not like racers have been frequenting their local hobby shops out of deeply ingrained loyalty: in a July 2015 poll titled "Where do you buy your RC equipment?” nearly 57% indicated they shop around to different stores to find the best deals and service, while less than 8% said they get all of their gear directly from manufacturers, including sponsors. Those that shop predominantly shop from one online retailer (18.1%) was nearly identical to those who only shop at their local hobby store (17.6%). 

So we might end up with fewer hobby shops overall, but the ones that stick around will be of higher quality. Got it.

Among those businesses that reevaluate the sustainability of their existing business practices (or go out of business), there’s no doubt some of them will operate racetracks. Again — the strong ones will survive, and perhaps even become stronger without weaker competition. As carpet and turf off-road continues to catch on across the country, the operating costs and site requirements for tracks has dropped for hobby shops — and made it more reasonable for not-for-profit clubs to operate their own facilities, which is the norm almost everywhere else in the world. I think that, in a couple of years, we’ll have more artificial indoor tracks — which will provide the clean, consistent, high-grip racing that remaining clay holdouts crave — and dirt racing will take place increasingly outdoors, bringing the U.S. scene further in line with racing around the world.

Now we’re talking about more, and more variety, of racetracks? This keeps getting better and better.

But if there are no local hobby shops, how will new people get introduced to the hobby? This is perhaps my favorite foolish argument — because so few of today’s RC racers decided to invest thousands of dollars and hours of personal time into something they just stumbled across. I’ve asked over 100 racers in Talk It Up Tuesday interviews how they got into RC racing, and I can count on one hand the number of them that said anything like “I noticed a hobby shop with a racetrack in a nearby town or shopping center I hadn’t paid much attention to before.” In a September 2014 LiveRC poll titled “How did you get introduced to RC racing?” more than 70% of respondents got started in the hobby through a friend or parent, or after seeing RC racing-related media, and in an April 2016 LiveRC poll titled “How many people have you introduced to RC racing?” a total of 40% said they’ve invited more than a half-dozen people to participate, while just 6% of those that answered the poll said they haven’t brought anyone else into the hobby.

Instead, it would seem that it’s overall industry health and participation — and not just the sheer number of local hobby stores — that’s responsible for getting new drivers onto drivers’ stands.

The proliferation of sponsored drivers is supposed to be the final death knell of RC racing, but the bubble continues to grow with each passing year and each new manufacturer. We’ve already covered how the migration from local hobby shops to online sales may not have the impact on the club racing scene that we’ve feared, and I don’t think you’ll find many who feel bad for the major Internet retailers when a manufacturer plucks away a coupon-conscious customer. In fact, I think most of the “sponsored drivers are bad for RC!” comes from those who want to protect the prestige of being part of that formerly-exclusive clique for themselves. Do any amount of light searching on RCTech, and you’ll find complaints about too many sponsored drivers from over a decade ago. I remember reading an interview with Gil Losi Sr. from the early-90s in which he worried about the growing size of race teams, and he was the one who started paying Brian Kinwald to get him away from Team Associated.

When you have a bunch of B-teamers, contracted customers, and company employees complaining about the trend they themselves are perpetuating, and they’re not doing anything about it, you have to wonder if their motives are really for the overall health of the hobby or more personal. Perhaps more drivers, and thus more customer outreach, is better for all involved?

In an August 2016 blog titled “The RC Racing Market Is Broken — And It’s My Fault” (you can read it by clicking here) Joseph Quagraine talked about why he participates in the trends of sponsoring more drivers and selling at low prices: because if he didn’t, he might be out of business. And he goes on to debate that his passion to succeed and change the RC world means his brand deserves market share more than others whose motives are less wholesome. JQ’s argument that he’s trying to make an impact on the industry — and, therefore, deserves to be here — is the perfect defense of anyone trying to get, or stay, sponsored. Whether you’re in RC to win a world championship, score a few regional trophies, get sponsored, stake your claim as the fastest guy at the local track, or just be “somebody,” there are opportunities available in RC racing — and if you think what you’re doing is right, isn’t that all that matters? Even if there was something inherently wrong with this business model, it may be too late to do anything about it; in a November 2014 LiveRC poll titled "Are you a sponsored RC racer?" nearly 60% of those who responded to the poll indicated they had a sponsorship of some sort.

Those contracts can make racers feel good about being acknowledged and accomplishing something, and fund more people’s dreams of running their own RC companies, creating more variety and choice for consumers. Is that bad?

Of course, the RC market itself will have the last word as to whether or not these trends will contribute to its long-term sustainability. Have these changes been for the better? Or worse? Or neither? There’s a great chance that I’ve been wrong all along. Now excuse me, while I go back to the tap for another 8 ounces of water for my 16-ounce tumbler.