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BYOAC Discounts With Vendors?
RandyT:
--- Quote from: DashRendar on October 15, 2009, 11:06:57 am ---...and others may do it because they love the hobby and want to help others with it.
--- End quote ---
The IRS will put up with that for about 2 years before they classify you as a hobby business and refuse to recognize you or any deductions associated with the venture. I don't recommend anyone do this unless they are hoping to become an arcade charity ;)
--- Quote ---I suppose the point of the OP was to give vendors a place to offer discounts to members of this community (and a caveat there- we are not the only community that does this. You have KLOV and several gamer websites that get into this). The hope would be that while the consumers could get a price break, the vendors could get increased sales and publicity. Which is a good thing for everybody! 8)
--- End quote ---
The dedicated vendors here usually give much more than what you are asking. Some of us produce specialty items at great personal expense, simply because the community wants them. Usually, they are items you can't get elsewhere (or not at the same quality / fitness for our purposes), and often times cost thousands of dollars in tooling and part minimums. Sometimes, it takes years to recoup the investment due to the limited audience. Therefore, they tend to rely on the small profits made on other not so specialized items to offset that investment. And if those costs aren't offset, then there is no more capital for anything new, and the offerings to the community stagnate. I can give you several examples totaling about $15,000 in the current GGG catalog.
KLOV is a different bird. I'm not sure who you are referring to on that side if things, but a fair number folks who supply that crowd are machine strippers and part hoarders who often will charge many times the cost of that same part when it was new, simply because it is rare. Example: It was not uncommon to see Tron and Satan's Hollow Joystick shells for selling well above the $150 mark as they had been off the market for over 20 years. We have over 10k invested in putting these parts back into the hands of collectors and new panel builders, and we could have charged much more than the $24.95 we sell them for. But we didn't. A comparison to console gaming communities isn't even worth going into, as they are using mass market items.
So while I can understand an individuals desire to save some money, around here it usually happens at the personal expense of the vendor, or to the community as a whole when one looks at the "big picture". Drumming up sales would be the only reason to do it, and even then, the value isn't high because the vast majority of customers build one cabinet / panel and never build another.
RandyT
saint:
--- Quote from: RandyT on October 15, 2009, 12:48:55 pm ---
--- Quote from: DashRendar on October 15, 2009, 11:06:57 am ---...and others may do it because they love the hobby and want to help others with it.
--- End quote ---
The IRS will put up with that for about 2 years before they classify you as a hobby business and refuse to recognize you or any deductions associated with the venture. I don't recommend anyone do this unless they are hoping to become an arcade charity ;)
--- Quote ---I suppose the point of the OP was to give vendors a place to offer discounts to members of this community (and a caveat there- we are not the only community that does this. You have KLOV and several gamer websites that get into this). The hope would be that while the consumers could get a price break, the vendors could get increased sales and publicity. Which is a good thing for everybody! 8)
--- End quote ---
The dedicated vendors here usually give much more than what you are asking. Some of us produce specialty items at great personal expense, simply because the community wants them. Usually, they are items you can't get elsewhere (or not at the same quality / fitness for our purposes), and often times cost thousands of dollars in tooling and part minimums. Sometimes, it takes years to recoup the investment due to the limited audience. Therefore, they tend to rely on the small profits made on other not so specialized items to offset that investment. And if those costs aren't offset, then there is no more capital for anything new, and the offerings to the community stagnate. I can give you several examples totaling about $15,000 in the current GGG catalog.
KLOV is a different bird. I'm not sure who you are referring to on that side if things, but a fair number folks who supply that crowd are machine strippers and part hoarders who often will charge many times the cost of that same part when it was new, simply because it is rare. Example: It was not uncommon to see Tron and Satan's Hollow Joystick shells for selling well above the $150 mark as they had been off the market for over 20 years. We have over 10k invested in putting these parts back into the hands of collectors and new panel builders, and we could have charged much more than the $24.95 we sell them for. But we didn't. A comparison to console gaming communities isn't even worth going into, as they are using mass market items.
So while I can understand an individuals desire to save some money, around here it usually happens at the personal expense of the vendor, or to the community as a whole when one looks at the "big picture". Drumming up sales would be the only reason to do it, and even then, the value isn't high because the vast majority of customers build one cabinet / panel and never build another.
RandyT
--- End quote ---
I was told I had to make a profit in the last 5 years to be able to continue to claim deductions when I wrote my book.
syph007:
I have a hobby business here in Canada, and used to make a decent side income, but it's dwindled to maybe a few tens of dollars a month... which mostly went to Randy or Andy btw :D... anyway, I dont know how it works in the US, but I dont HAVE to turn a profit to claim my operating expenses etc, but what happens is the business deductions only come off the business taxes, so If i make 1000 in the whole year, and have 2000 dollars of business credits, there is no carry over to help my personal taxes. Does it work different with the IRS?
RandyT:
--- Quote from: syph007 on October 15, 2009, 01:19:58 pm ---I have a hobby business here in Canada,... <snip> Does it work different with the IRS?
--- End quote ---
I recommend anyone considering anything get help from a competent tax attorney, but my experience is that a "hobby business" is NOT something you want the IRS to classify you as. In the US, there are a number of different ways to structure a business, and a number of them are very closely attached to the principals. Losses and gains can be closely tied to individuals, so the Canadian type of separation is not common here, nor is it very desirable, for a small business, IMHO.
And while the IRS may have changed their expectations over the last few years (it wouldn't surprise me, given that small business is one of the few hopes we have left for our economy), after a few years of losses, especially if you are talking about large ones, the red flags will probably start popping up all over the place.
Anyway, it wasn't my intention to turn the discussion into banal tax debate :). It was simply to illustrate that a business can't survive very long in "charity mode". It just makes them ineffective, short-lived and of no great benefit to the community in the long term.
RandyT
opt2not:
I don't really care for the discounts, because the prices of these parts aren't that bad really. The thing that kills me the most is the shipping and duty (to Canada) that seem to hike the overall cost extremely. But I can't get away from that anyways, so there's no point in complaining.
Anyways, I just wanted to throw a shout-out to the vendors here that are keeping this arcade legacy going. Without them, and us supporting it, arcade love would go the way of the Dodo. It's really a joint effort on both sides to have this service available, and for that I'm thankful.
:cheers:
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