We have just received the following information from Biante Model Cars regarding an increase in pricing. Please read the below to get a better understanding of why pricing is continually rising in this industry.
Dear Biante Dealers,
In the current market environment, Biante has decided to review its pricing and operational procedures to remain profitable in what is a very difficult market.
You would be aware that all of the business we do in China is in USD, and you would have noticed the changes in the USD recently. If you haven't been following the USD vs the AUD, below is a little reminder:
This drop since early 2013 has meant that a 1:18th model now costs us about $25/unit more just in exchange rate fluctuation. There has also been an average 10-15% increase in the average USD cost/product from our Chinese suppliers, due to increasing labour costs. The exchange rate fluctuation and the increased labour costs also affect our tooling and mould costs which on a new model development have risen about A$75,000.
In July 2013 our Retail Price was under the $200.00/unit incl GST mark.
Biante's latest announcements are at a Recommended Retail Price of $240.00/unit incl GST.
As you can see, the increases have not offset the exchange rate change, let alone taking into account fixed increases and increases in tooling costs.
So, why haven't we simply increased our price? As the price has increased, we have also seen a decrease in wholesale ordering, which then increases our unit price as factories increase their pricing to offset the lower production.
We have done everything in our power to try and hold the price as low as we can, for as long as we can.
Why? Because, I can see the correlation between the price and the order quantities. Simply raising the price will mean both Biante and the retailer will sell less. Biante are in a position where we have minimum order quantities set by the factories. If we don't make any cars because they don't reach the minimums, then Biante doesn't make a dollar, but neither do you as retailers (particularly those of you who rely on Biante, Classic and Apex models for a large share of your yearly turnover). Please note that currently Biante are the only Diecast Manufacturer operating in Australia, fully licenced, particularly in relation to Holden product, ensuring continued supply moving forward.
With all that said, clearly something needs to change.
We have done some maths, and for everyone to make the margins they did three years ago, the Recommended Retail Price of the product would need to be $300.00/unit incl GST.
I don't think I would be alone in thinking that this would be unrealistic. Personally, I think the highest RRP we can go to is about the $250.00/unit incl GST with everyone still making some money.
We are therefore going to move our pricing model for Australian Autoart and Biante 1:18 scale models as follows:
Retail Price: $250.00/unit incl GST
Again, this increase will only affect Australian Autoart and Biante 1:18th scale models. It does not affect Biante's 1:18 V8 Supercar program nor does it affect our recently announced Biante 1:18th Resin product.
ALL PRICING WILL BE UPDATED ON OUR WEBSITE ASAP