I just had this interesting email exchange with a seller I had been planning to buy some HPI Safari Rally models from. It seems that HPI is (unfortunately) learning from AUTOart. The seller was kind enough to allow me to post the exchange. I won't elaborate any more but will let the emails speak for themselves.
xx - Do you have the Safari Rally Stratos models in stock yet?
It's not a stretch to assume that the seller in California is Wholesale Diecast Models who is selling the Safari Rally Stratos models for $49.99.Douglas,
It only became definite last week, but we will not be getting any further HPI models so we will not be able to help you with the model you asked about or any others from HPI.
I spoke at length over the past couple of weeks with the supplier from whom we have been buying HPI pieces and he finally said he's told them he has finished doing business with them - which he described to me in pretty raw language. He explained they now have a Manufacturer's List Price for their latest releases of $70.00 and they base their unit price to him as a percentage of this figure - which I think he mentioned to me as 60% but I failed to write it down so this is just based on my memory. Regardless, his price to us to allow him a reasonable markup would result in our having to sell the models for at least a figure in the mid-$60s to cover our ebay and PayPal costs and still make a little money.
Beyond this is the problem of a seller in Hawaii buying from Hong Kong at a lower price than anyone else can pay and a seller in California who also sells at retail prices in the low-$50s - which both our supplier and another distributor with whom he's spoken believe is a front for HPI.
In short, he feels their business practices have gone to hell and he sees no benefit to him and those of us who buy from him to continue to carry the HPI line.
I really am sorry about the situation and think it's only fair that you have a full understanding of what's happened. I have really liked HPI's models but it doesn't make sense to carry them if there's not a reasonable profit margin involved.
No worries on not carrying them. I can understand that you can't compete with that.
I think the Hawaii seller you are referring to is buburacing. It seems that HPI is going down the road that AUTOart went down a few years ago and that just stinks.
It's impossible to compete with the manufacturer selling direct and it's going to drive everyone to the wholesalers putting folks trying to make a living selling diecast out of business.
Would you mind if I posted your email on some forums I frequent? I will remove you name but I think other collectors would like to hear this.
Our HPI supplier was the first distributor in the US for their diecast product and he has given them a lot of advice regarding specific cars to model and how to do business in the diecast field - with a lot of emphasis of keeping their prices stable and not letting people whore the product. This has happened not only with AutoArt, as you mention, but also more recently with Ebbro. I think some of the same players in Hong Kong and here in the US have been responsible for the problems selling those brands have been now been experiencing.
No problem with you publishing a sanitized version of my remarks in any of the forums you have in mind. Don't hesitate to elaborate on what I said if you have additional information that might be pertinent.