I went to Rockler Hardware a few weeks ago to get some help with an eggbeater drill which needed a new handle. Two guys there spent half an hour with me helping get the last bits of the old handle off. One of them told me about "Hinge Guy," who came in asking for a hinge for his RV. It turned out that he needed a specialty part but didn't want to go to the RV store because they're too expensive. When they finally got him something that worked, he was all ticked off that it didn't cost $4 like the hinges at Home Depot.
Don't be Hinge Guy! I'll shop at HD when I need commodity items, but am prepared to pay for unusual bits and pieces.
I love this thread because it's controversial yet relevant, and there's no good reason to lock it because the topic sits square in the middle of the hobby
There's a few principles at work in this discussion:
1. The general retail industry has trained us to watch for discounts (to the point of hurting their own interests at times), and the same force applies in hobbies.
2. Competition between retailers is not really about price; it's about
value. There is more than one way for retailers to show value:
a. Superior quality, as with kits that offer a lot of nice extras (lots of laser-cut parts, better materials and hardware, super-detailed instructions and user support) fall into this category
b. Unique/scarce products. If it's cool and I can't get it anywhere else, I may be willing to pay above suggested retail for it.
c. Premiums (bonus kits, materials, etc. thrown in for free with full-price purchase)
d. Loyalty rewards--new customers are hard to find so try to hang onto the old ones by rewarding them.
e. Superior service (expert advice, easy or cheap/free parts replacement, on-site delivery at launches, etc.) so the customer feels better about the purchase even though he paid up for it.
f. Convenience---If I'm already selling kits, customers may pay more for motors and accessories just for one-stop shopping.
g. And of course discounts. The tradeoff, though, is you need very low overhead and/or are buying enough from your suppliers to get price concessions that you can pass on to the customer. Which means you're not going to be able to offer anything unique or to keep rolling out new products all the time.
3. Given all of those ways to deliver value, the retailer has to decide what kind of value proposition he wants to offer. This means he will be leaving money on the table somewhere, as he can't make every customer happy.
4. And related to #3, the retailer needs to decide why he's in business as there are other (possibly better) ways to make money.
A guy who wants to offer high-quality, super service, and/or unique products wants to make enough margin on each sale to allow him to keep developing new products...even if it means he's selling to fewer people. His customers may be few, but he may be enjoying running the business more as he'll have more time and money to invest in what he really likes about rocketry.
A guy who wants to discount and "make it up in volume" will have to run pretty lean to give customers the discounts they want. And he'll have to try to match the big-box retailers on price, even though he doesn't have the same negotiating leverage with his suppliers. Some guys may be excited by the challenge...but probably not the guy who'd rather drive his trailer from launch to launch every weekend.
And of course the "big box" stores (I'll include big online discounters like HobbyLinc) want to drive more total traffic to the store as they are selling much broader product lines. They will offer big discounts on some things and make up the margin on other items in the customer's cart. These are corporate types with revenue and profit goals to meet for their owners.
As noted elsewhere, guys who aren't happy with the business model they've chosen can burn out, close up or sell out and get regular jobs.
5. And finally, all of the above means that the retailer needs to ask him/herself what kinds of customers he/she wants. It's a touchy subject, and maybe they won't say this to your face, but maybe you're not their dream customer. And maybe at some point they will change their minds about who they want to sell to.
Retail is brutal, even if it's not your own business (I'm a marketing analyst and have met many retailers)...my hat's off to anyone going into that business for themselves.