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I'm not sure the doom and gloom is called for or that prices are out of line with inflation; however after years of retail I know that price is related to gross margin/realized net profit, and prices are adjusted to maintain gross margins. As an example let's say Walthers sets their net profit for the company at a target of 5 to 7%. Each profit center including their retail,wholesale, Life Like and other manufacturing sectors are expected to deliver that percentage. One problem arises in the plan when you acquire an obligation to deliver a large commitment of product to a "retailer" that will only yield 1 to 1.5% net profit. Granted the cash flow is attractive when the product is finally paid for, which may not be for six to twelve months. The "lost profit" has to be made up somewhere to finance the production and delivery of future revenue.(Could this be the traditional hobby end of the business... the "cash cow"?) <br />So lets hope that the Life Like slot car experience with Walmart works to Walthers favor, and that we don't have another Rocco disaster in Milwaukee. Until the "new business plan" plays out I suspect high prices will be the norm. It may well be a contiued rocky road in this new manufacturing expedition. Lets hope it works out or we will be looking at a very different hobby structure in the future. <br />Will
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