Reaper's Moon. Copyright ImagesByHawkeye 2010

There is nearly always a dark side to every story, so it is true within our hobby. Some of you jest about switching over to the dark side, aircraft modeler building armor or a car modeler who built a plane. This is something more serious than that.

I know many of you just want to hear the good news as well as tips, techniques and latest product releases. Unfortunately this could potentially cast a very dark shadow over all of that. Among the topics of conversation at the recent Nationals and within the walls of those involved is that of debt.

We are all aware of the financial crisis the world has and is experiencing. This too has an impact on the hobby and industry. One of the darkest and having potential the most severe impact on the hobby we enjoy is the debt load carried by all sectors of this industry.

Manufacturers, distributors and retailers are (with a few exceptions) feeling the tug of the noose created by debt, whether it be as lender or borrower. As a lender/seller, those who provide and facilitate payment plans for merchandise purchased for resale find themselves being owed a substantial amount of money which isn’t being paid within the agreed upon period.

The lack of cash flow has an impact on the day to day operations as well as the future viability of the company and any future product offerings. In the back of their mind, they must be wondering…“Will I get paid or will the party owing me just skip out?”

Those who have essentially borrowed and over extended themselves find that they now have an 800 pound Gorilla on their back. Debt can be a monster if not kept in check. Nothing worse than having a large inventory with lagging sales and being unable to make payments to the suppliers. The Gorilla may even grow into a  Cyclops if the debt goes unpaid for too long. As the tension builds, those owed could turn towards outside resources to secure the debt…Collection!

This has consequences far reaching than many comprehend. For those small business owners this effects their credit score, raises their interest, lowers their credit limits, affects their personal insurance premiums. Everything these days is tied to ones credit rating…even employment opportunities!

Far too many in this industry need to get a handle on their finances and reduce the debt load they are carrying. Otherwise consumer access to products will become restricted through fewer venues. That is each step of the supply ladder reduces to whom they’ll sell products to. Who ends up paying for all of this? We the consumer of hobby products do!

We often take for granted that we can call upon numerous vendors to acquire the items we want to purchase. But when those vendors are “cut off” and no longer have access to them, we have to shift our business elsewhere. This could make it very difficult for some consumers. The buy now pay later is fine if the pay later occurs within a reasonable time line. The sad truth is this time line is being stretched beyond reasonable limits and it is emerging from the dark side and into the public light. This is a small industry and even a whisper is like a shout. Word travels fast amongst the group. So don’t be surprised if you see “realignments” in the industry and an increase in product access limitations in the future if this issue isn’t resolved soon.

The hobby/industry has seen the toll caused by businesses not adapting to the changing market. Many in this industry/hobby aren’t looking forward to the toll the debt issue will have either. Some believe if it isn’t corrected in the next 12-18 months…the Reaper will come a call’in signaling the death of some businesses who over extended themselves. There is no such thing as too big to fail in this industry…we don’t have the political clout that some do.