# The Future of the Battery Business?



## hankster (Jan 1, 1998)

Over the past few months I’ve seen, what I think, is an interesting trend. Since GP has entered the RC battery market and has now dominated it for close to year, we can start to see the effects of it.

It has, up to this point, helped the racer and the basher by giving them high quality low cost cells. The cells, for the most part, are equal in voltage and run time, fewer packs are required for a day of racing, and they last longer and cost less. Seems like a win-win situation all around… but will it be in the long run?

While I don’t have any real hard evidence of it yet, I think the new battery market will force many of the small professional matchers out of business. The first sign of this is the recent announcement that one of these small professional matchers have thrown in the towel. I think we’ll see many more to follow. Sure we’ll still have the big guys such as Trinity and SMC. We'll also have the local racer that buys a matcher thinking they can save money and get a leg up on everyone else only to give it up a few months later.

But it is small pro matcher that is in trouble. That is the company that has been around for quite awhile. They have decent names where when talked about, people have heard of them but they only do a few cases a month. This is the businesses that have helped keep prices low by offering good quality products and their low overhead helps them offer cells for less.

Why are they in trouble? The combination of high quality cells available to everyone combined with the need for racers to buy fewer cells (fewer needed for a day of racing plus they last longer) means their sales have been cut in half (or more). At some point it just isn’t worth for them to keep going. Sure, some will survive but overall your choices could decrease dramatically.

Now lets throw in the advent of brushless motors with lower battery requirements that can really toss this whole battery business into chaos and we have some big questions in the not too distant future.

If this happens, what does it mean to the RCer? Will prices go up? Will your choices really be limited? Will it be harder to find good cells? Will we go back to the way it was before where less then a handful control the market? Or won’t it make any difference or don’t you care what happens?

I like to throw out these different scenarios and see what others think. We no longer have the mass confusion that was prevalent a year ago but in the long run will it still be an asset for the end user?


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## bigdon18 (Oct 9, 2001)

supply and demand, 

the batteries have help the hobby for the racers and weekend bashers for they have batteries they can use more than once aday and the cost is less on the wallet.

but like you siad hank it has had its effects on the matchers, specially the weekend matchers they just dont get enuff to deal with the headache of processing batteries. i beleive with the prices of batteries and the avalbality of good cells have also had effects on some of the big matchers as well. it is time like this in the hobby that the people and companys that have made a concrete footing name for them selves that have good sells still. time will only tell ,, things change and will always be change it will be the smart matchers that change with the changes that will make it. 

BIGDON


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## bigdon18 (Oct 9, 2001)

the brushless is awhole nother can of worms,,,, i believe if they do fine a strong way to police the brushless motors and make it alittle cheaper , so the average rc beginner can get one.. man there goes all your motor tuners , the sells of brushes and motors. unless they figure out away to make more money off of them more often than just a kill on the first sell,, i dont see a company really wanting to push them over ,,,unless they figure out away to keep their pockets laced with green. you want to sell something that will have a high demand and continues follow of sells,, unless you wanting to make a big push and then get out while it begins to decline......sounds like stocks dont it,,lol.

BIGDON


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## tommckay (Sep 26, 2001)

Doom and despair......


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## glitcher (Aug 2, 2003)

I think once Sanyo and Panisonic get caught up and begin to compete with GP,everything will be back to normal,give it some time.As far as the matcher buisness is concerned,I would reduce overhead,offer volume deals,and perform more service related products,such as,rematching old packs for racers and battery biulding products and services(not free with purchase;5%-6% profit on labor and bars or connectors).
Their names and reputations are out there allready,keep them there,and try to ride it out.
I'd hate to see GP dominate and I'm sure the other manufacturers wouldn't like it either.
Would you like to pay $100 for a 4-cell because it's the only battery made?Neither would I.


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## HOOPD1 (Sep 25, 2001)

GPs are the best thing to happen to this hobby in a long time,gone are the days of over priced inferior cells.
To the small matcher that cant make it I say good riddens,they were the same vultures that had no problem over charging me for the last 10 years so I have no sympathy for any of them.
There are more new matchers since these cells came out than I ever remember before them and I have only heard of one closing there doors,maybe the ones concerned should follow Hilltops lead and open up there market to one a little less saturated.
I doubt you will ever see Panasonic back in the RC battery buisness,and the next RC Sanyo cell will probably be of the Lithium type,what do you 
think the small matcher will think of that? Or the large one for that matter.


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## katf1sh (Jan 17, 2002)

sanyo panasonic and roar allowing a new cell every 2 months killed me! i had to take a break from racing..every time i bought 4 packs a new damn cell came out..and you guessed it..roar made it legal in a days time! now we have a great product ..certainly the best cell we have had in a long time..and cheap also! those same battery matchers who were gouging us the last 5 years or so when the battery of the month came out..should have saved like a squirel for the soft times.. when i say gouge i kinda sound harsh but man every month it was a new cell..and every new cell was 5.00 more ..ouch! the trend i have seen the last few months has been the small companies lowering there pack prices even lower..packs that were 45.00 a 4 cell now sell for 29.00 a pack? crazy prices..but you know hank i see some of the larger battery companies coming on here and offerind advice and giving us all a inside look into the business end of the hobby..that is cool..

what you need to ask yourself is this????? 

what will happen to companies like KC racing and PUTNAM motors and KISBEY motors when or if brushless takes hold of the hobby? i am and have always been a fan of the small er more specialized companies like putnam or kisbey..guys you can call and talk to and guys who race with us at the snowbirds..i doubt they will have the money it would take to develope there own brushless system..so what would they offer the hobby after that? not alot of profit in batteries..no brushes being sold..no springs cans or end bells..what happens to those guys? i would hate to see that go...but i see it in the future..sucks is the only word that comes to mind for me..enjoy what we have today..peace


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## zxracing (Oct 5, 2003)

Speaking as a small battery matcher, I think the GP3300's are great for the hobby. Yes, the average selling price of a pack has decreased significantly, but that's a good thing for two reason.

First, a primary reason packs used to be so expensive were that not only were the high end Sanyo and Panasonic batteries more expensive than the GP3300's, but the vast majority of the cells passed through a few large distributors (i.e. Trinity) which also contributed to the prices being high. Since GP has entered the market, they've gone around Trinity and sell direct to matchers resulting in lower prices for everyone.

Second, lower prices increases the size of the market. I can't tell you how many $30 matched packs I've sold to racers in the novice class who are looking to move up from a stick pack. Those are the racers who either can't afford or aren't willing to pay $50+ for matched batteries, but are more than happy to pay $30.

Just my 2 cents...


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## dirtoval.com (Mar 17, 2002)

i would have to say that one thing that everyone is missing on this subject is the growing popularity of gas racing. i don't want to spark a gas versus electric argument; but, when speaking of a decrease in the battery business, it has to be mentioned.

i also agree that the growing capacities will soon put the smaller matchers out of business. soon, if not already, you will be able to run 2 heat races on the same pack. at one of the tracks that we were racing, the modified sprint cars would finish a race with anywhere between 3-6 minutes of runtime left.

fewer packs will be needed. it is just like the digital camera hurting the film camera industry. times are changing, so the small matchers must change their scope. 

my 2 cents.

craig


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## low10s (Jun 9, 2003)

about the brushless, not everyone races all the time. some including myself like to bash around, and not having the brushless was killing me. times will change, look at motocross. once dominated by two strokes is now on the verge of being over run by 4 strokes. which is good, you can spend a little more time racing, and not rebuilding a top en every two races. i beleive it will even out as far as the ones who like to tune there motors are concerned. i dont know about the batts. i think the low price is good for the ones who have to buy them. for every door that closes one will open. i dont have that many matched packs to begin with, and i still have fun, and stay competitive. you guy's have been around alot longer than me, but the future is near so be ready. later


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## tstickney1 (Apr 8, 2003)

I can't believe that anyone that's been into RC racing for any amount of time is actually going to think that cheaper cells, that last longer, and perform better are going to put people out of buisness! Has anyone ever given any thought to the prospect of parlaying this current dillemma into growing the customer base of the hobby, by building the value, and ultimately lowering the capital outlay in getting into the hobby? This current trend could possibly reignite the popularity that RC racing enjoyed in the late eighties, thus giving plenty of demand for all of the current suppliers.


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## Jack Rimer (Apr 4, 2002)

I am not sure I agree with your assesment Hank. I believe it is tougher to survive as a matcher because there are MORE people doing it than ever. Anyone can buy cases and match and it seems they are. We have seen a huge increase in OEM new customers in the last 6 months. Not to bash anyone here, but you cannot trap voltage and stay in business. The consumers are too smart these days and anyone who manipulates their numbers is on the way out. People feel betrayed if the numbers don't match the labels.


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## DynoMoHum (Sep 25, 2001)

I don't have access to sales data, but I tend to think what Jack is saying is most likely...

I am hearing that a ultra competitive racer will still need to obtain NEW cells perhaps every 3 months or less. That is, old cells will loose enough that they will not be truely competitive with someone who has NEW cells. So... racers will still buy new cells even if they 'technicaly' aren't and differnt then the ones they are replacing.


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## hankster (Jan 1, 1998)

Ah... but maybe the question is... "is more better?" With more small time matchers, does that really make it better or does it spread the limited customer base so thin between all matchers that it hurts all of them?
Could the now decreased business not only drive the small/part-time matcher out of business but the medium sized matcher too?

I think many of us have seen areas were there is a successful track. They have good racing and large turnouts. Because of these good turnouts, others decide to open tracks too. Now instead of one good track, you have 5 or 6 tracks in an area. Now everyone's turnout is small and, in some extreme cases I have seen, all of the track end up closing and now there is no place to race.


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## zxracing (Oct 5, 2003)

Hankster,

There's one flaw in this argument. The flaw is that the value of track to a customer increases based on the number of other customers. A track with 50 customers is far more valuable to a racer than one with 5 because the act of racing requires additional customers. The same is not true of battery matchers. I'm a small matcher, say I only sell 10 packs a year (which isn't the case, but hypothetically), and Trinity sells 100,000 packs a year. If your a customer and I can sell you a 1.170+ pack for less than Trinity, do you care that trinity sells 10,000x more packs than I do? 



hankster said:


> Ah... but maybe the question is... "is more better?" With more small time matchers, does that really make it better or does it spread the limited customer base so thin between all matchers that it hurts all of them?
> Could the now decreased business not only drive the small/part-time matcher out of business but the medium sized matcher too?
> 
> I think many of us have seen areas were there is a successful track. They have good racing and large turnouts. Because of these good turnouts, others decide to open tracks too. Now instead of one good track, you have 5 or 6 tracks in an area. Now everyone's turnout is small and, in some extreme cases I have seen, all of the track end up closing and now there is no place to race.


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## hankster (Jan 1, 1998)

Actually, I would say that 90% of the racers I know would not buy packs from a "local" guy but stick with the brand name matcher even if the price is slightly higher.

This is nothing against you or your business, but from what I know about the people I race with, they would rather buy from a well known matcher that they can depend on then one they may not know if they will be here next week or next month.

While this may sound like having a bunch of "small" guys out there matching may not hurt the better known matchers, it hurts the serious racer in the long run. We all know that there is a percentage of cells in any case that are not up racing standards. Since the only person that will buy from the small matchers are newbies, bashers and low buck racers, this takes away the market from the market for the larger matchers to dump those lower grade cells. Whith no place to get rid of these lower voltage cells, the price has to go up on the cells they can sale to cover the loss on those.

While these cells may not have the voltage of the "racer" cells, the vast majority of the newbies, bashers and low buck racers couldn't tell the difference anyways.

Ah ha!!! So the low buck guys should have good cells you say? I say that even to top racers, the vast majority of time, it wouldn't make a big difference. I know one person that used 1.15v cells to place 4th overall in last years MARS series in stock class.

Next, in many cases, having lower voltage cells will actually let these less skilled racers run faster as they hone their skills on driving the correct line rather then trying to fight for traction or having too much speed.

In the long run, a slightly lower voltage cell may do them a world of good. Feeding them the myth that they need to best cells on the market to be competitive is, IMHO, counter productive.


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## hankster (Jan 1, 1998)

Jack Rimer said:


> I am not sure I agree with your assesment Hank. I believe it is tougher to survive as a matcher because there are MORE people doing it than ever.


Hummmmm.... I thought that is what I was saying?


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## hankster (Jan 1, 1998)

As a side note: I enjoy bringing these types of discussions out in the open. I think it gets people to seriously think about the RC industry, the effects of different forces on it and just to read different opinions and views. While it may seem that I'm arguementive and bullheaded sometimes, I tend to want to push to provoke more details on someone's views.

I think it is a big mistake for anyone to get a single idea and never look at all sides of subject. To have a single viewpoint and to never consider other views keeps us in the same rut we have been in for years.


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## Jack Rimer (Apr 4, 2002)

Hank, you state that it is the longevity of the cell's life that contributes to decreased sales. It is my contention that the market is being saturated by a large number of small matchers who all take a piece of the pie. There is ,of course, nothing wrong with this, however each matcher has his own group of "sponsored" drivers that take away from the hobby shop's sales. Since none of these companies sell through proper distribution, the market is flooded with inexpensive packs sold direct. If you think this sounds good for the consumer, try asking a dealer who has to pay rent every month how he feels about being back- doored. The battery market has always been volatile. It is relatively easy to enter the market and with so many good cells available it is a pretty good bet that you won't get stuck with bad inventory. Just remember that what goes up..... We have already seen tremendous fluctuations in the past couple months in quality. All it takes is one bad batch and many of these small companies will be scrambling to unload cells.


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## hankster (Jan 1, 1998)

Jack... ahhhh, just went back a read my original message and you're right, that was my original statement. How soon we forget... 

But I agree with you too. While I may not have been clear on it, it was part of my thoughts on it.

You are also right. Wait until a few lots come through with poor numbers (and we know that will happen), the local guy will be toast.

The 50% sponsor driver was always a joke IMHO. Most don't even think about that the matcher/manufacturer actually makes more money on the 50%er then they do if their product is sold through a retail outlet. Heck, at one point Trinity has over 500 sponsored drivers!

I can remember in the 90's where a company was started that ONLY had sponsored drivers. Their products were not available to the open market. Of course the sponsored drivers were permitted to sell the items they bought at 50% off directly to local racers. Now that is an MLM scheme waiting to happen...


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## JB_The_Evader (Mar 31, 2002)

I personally hope that all of the small matchers don't go out of business. I've already paid for the brand name on a battery pack from my lhs when I could have gotten superiors cells from zxracing for $10 less. I don't care how many cells trinity sells, a good price and solid cell numbers are enough for me (just take a look at zxracing's site; I'm set on a pack of their "gold level" batteries.)


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## HOOPD1 (Sep 25, 2001)

I think the internet is as much to blame nowadays as anything,I mean it is relativly easy to start a buisness that does mail order direct sales only
Without the distributor taking his cut the merchandise can be sold cheaper.
Now as far as how much more profit there is in direct sales Im not sure,I know for several small matchers it has to be a full time job taking orders and shipping product,plus your dealing with every customer not just the distributor.
I think the days of everything going through a distributor in the RC 
buisness is all but a lost cause.Especially when you have a company like GP who is only intrested in one thing(profit) Thats the goal of any succesful buisness.
The GP cells offer great runtime,good vlotage and are cheaper than Sanyo or Panasonic could do it,this can only be good for the electric Rc market,how many Emaxx trucks do you suppose Traxxas would sell if the hobby shop guy told them they had to have two $80.00 Panasonic packs that would most certainly be junk in two months to run it??
I think the GPs are good enough cells that the small matcher can be fairly confident that they will receive cells they can sell and still make a decent profit.
Whoever is in charge of GPs marketing and sales dept clearly saw the bigger picture when they decided to sell direct.


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## rjvk (Aug 27, 2003)

The honest matchers will always make it. The guys who don't bs you tend to have the customers. The guys who trap like Jack said tend to get figured out pretty quick. If you can make a good name for yourself, people will come to you. Racers always will chase around for good sticks.


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## zxracing (Oct 5, 2003)

I agree with HOOPD1 that GP cells are good for the hobby as a whole. I find it interesting that some people claim that by me being a small matcher, and providing people what they want (good cells at good prices), I'm somehow hurting the hobby. That doesn't make sense to me at all. 

It's not my fault that Trinity spends hundreds of thousands of $$$'s each year on full page ads in RC Magazines and sponsors numerous drivers with free batteries. The money for that has to come from somewhere and it does. It comes from the average consumer who now has to pay $70 for a decent pack of GP 3300's that I can sell for $45 due to my lower overhead. 

That's actually one of the reasons I started this business is that I was tired of overpaying for batteries. Although I think most of the Trinity drivers are very talented and great guys, I'm really not interested in subsidizing their free batteries. 

As far as the direct vs. distributor model, I prefer to sell direct for two reasons. One, it lowers the price to the consumer and two, I get to interact directly with the customer. Let's face it, batteries are pretty much a commodity nowdays and quality customer service is one of the few ways to really differentiate yourself. If you go through a distributor you lose all that.

Just one guys opinion .


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## akrcracer (Oct 1, 2001)

Amen zxracing. My personal battery cost has gone down..Since GPs are out. Maybe "Sanyo and Panasonic" can catch up then prices might become even lower....


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## BobT (Sep 25, 2001)

If we increase the length of races to better reflect the capacity of today’s top cells matched packs will be more in demand.

5-minute races are a joke for GP and Sanyo 3300mah packs. Increase races to 8 or 10 minutes for expert classes and leave sportsman 5 minutes. There would be more incentive to move up and more market for matchers when they do.

The price of battery packs has remained the biggest expense for the avid racer. Lower prices and longer runtimes have erased some of the perceived advantage of nitro. The price of decent chargers has come down drastically in the 7 years I've been in the hobby. RTR packages like the Duratrax Evader have made the price of quality entry level come down. I see more people moving to electric and loving it.

Personally I look forward to Lithium-poly packs with 4800mah, brushless motors and 15-minute mains. 

Race where people who know nothing of this hobby can see you. That's what will grow this hobby.


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## rjvk (Aug 27, 2003)

Japan has already lengthened racing to 8 minutes. All they got was overheated motors and , in mod, permanently damaged packs. One of the Team Orion drivers said the packs were no good after one run in mod. Not good. The race report is on Tem Orion's site.


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## hankster (Jan 1, 1998)

Hehe... mod motors now barely last 5 minutes. At the latest champs the motors were basically trash after one run. Stock motors are about the same... smoke bombs. Going more then 5 minutes really is not fesible until brushless motors become legal.


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## BobT (Sep 25, 2001)

ROAR should legalize a brushless class and set the mains at 8 to 10 minutes. If brushed motors cannot run those lengths of time then they should be left behind like SCRC1700s.


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## Guest (Nov 1, 2003)

We are apt to dump in 4minutes as well.
Seen some decent companies go out of business the last couple years for whatever reason it's a shame.
Could it be that having less variety of battery types used by racers, cut down the number and quality available to the small matching companies.


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## rjvk (Aug 27, 2003)

I think thathaving to carry 3 different cells, and having them change every 6 months will put you out of business. You suddenly have "obsolete" inventory...


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## Shiloh (Feb 11, 2002)

The GP3300 cells are awesome. The only bad thing about them is that the runtime decreases as a function of time regardless of how they are treated. Of four packs of GP3300 cells purchased earlier this year, two packs are now 2500mAh and two are 2700mAh. The cells just do not last forever, or even a full year. Eventually, racers have to buy new GP3300 cells just because their existing GP3300 cells lose so much runtime. I am not complaining, though, since the prices are low and the numbers are good. But the bottom line is that racers are repeat customers. We are not just buying one pack of cells and then racing for the rest of our lives. Since we are all forced to keep buying new cells every 6-12 months, I highly doubt too many matchers are going to go broke any time soon. If matchers are going broke, it is because of something business related that failed to do properly. It is not because of the technology.


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## Guest (Nov 2, 2003)

When I raced 1-2 times weekly and could afford it I was buying new packs once a month or so, now it's whenever work, family and other obligations allow so battery replacement is less so I may only buy 3-4 packs for a big event and make do with what I have for a weekly race.
The major reasons that's mentioned for some of the matchers closing or hanging it up is the inability of getting cells on time or getting good cells (before their supplier sorts through them). So unless you are a big company with the mone and means to buy direct you are at the mercy of the person (company) who can you could be at the mercy of getting second pickings or not getting supplies if their expected shipment is reduced. I don't think having old inventory is a big problem, but the lack of good quality inventory.


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## xxxkat (May 1, 2003)

If you can not adapt to a changing world you will become extinct,look at what happened in the late 80's,their were alot of companys that made parts for race cars(mostley off road)because the cars of the day did not hold up real good for racing.when the car companys started making better cars and supporting them with their own hop up parts no one felt sorry for the companys that went under,why should I feel bad or care what happens to any company,in the end I'm getting a better product with brushless motors and 8000ma poly cells.welcome to the real world.


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## dave w (Dec 12, 2004)

Interesting topic i was in the battery wars of the early 90s my companys name was voodoo batterys we were the 1993 roar and norrca as well as oval masters champions. When there were so many other people getting envolved in cell such as panasonic there were new cells coming out every 2 months we just could not substaine a constant supply the folks at the big T got the idea to weigh cases of batteries before they would send them out to the smaller succesful matchers now several years later im glad to see there is some senality tothis madness 4 cell stock is great 
after 8 years im getting my young son involved but il be buying all my packs from the hobbie shop thanks!


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