a little OT - Unhappy events at Athearn Models

Please excuse this rather large post.
Also, I would ask forgiveness in posting to several inappropriate newsgroups. I can assure you that this is an extremely rare event and will
not soon be repeated by me. If for no other reason than I do not want the spam I know I am going to now receive.
I sent this post to all railroad related newsgroups that I subscribe to as I am confident that there are railroad modelers out there that may not have heard or may not know the possible ramifications of Athearn's buyout by a single distributor.
I am enclosing three emails originated by individuals in the retail and/or manufacturing of model railroad items. I will name them as I post their message. My initial reaction is to concur with their comments and fears. I also would encourage discussion (in the proper forums of course) on the topic. There are few potential upsides to this from what I have read.
Ordinarily I do not like the propagation of SPAM or SPAM-like material but I would ask those of you that may have interest in this subject to pass this message onto other newsgroups and venues in which railroad modelers hang out.
Again, I wish to apologize for the inappropriate postings. I knew of no other way to widely disseminate this information.
Keep your rails shiny!
Art
Unknown
To: snipped-for-privacy@yahoogroups.com
From: fish snipped-for-privacy@webtv.net
Subject: [Frisco] Athearn
From fish snipped-for-privacy@webtv.net Fri Jan 9 02:09:03 2004
Gentlemen,
I truely apologize for all the cross-posting but I feel this is important enough to risk my hide for..
Many of us are model railroaders in one scale or another. As you may or may not know, Horizon Hobby has acquired Athearn and its line of model trains.
It has also become public information that Horizon Hobby has no intentions on selling their product to anyone other than hobbyshops who actually have stores, that have an ad in the local yellow pages, and that will only carry a certain level of merchandise in the confines of their store. To further prove this, they are sending disposable cameras to current dealers, and expect them to send photos of their retail locations.
We all like to support our local hobby retailer as best as we can, but as we all know, many are basement operations, who do strictly internet order, or train shows, and cannot afford a storefront to house their product in.
I ask that every modeler, reguardless of guage, railroad preference, or era modeled, will please take the time to call, write, or email Horizon Hobby and let them know of your displeasure as a model railroader on how they intend to railroad many fine hobby retailers by forcing them into storefronts, or forcing them to give up the Athearn line of trains.
Even if you feel your voice dosen't count, I urge you, please, for the sake of the hobby, and in support of your local retailer, take the 5 minutes to reach out to them.
I am a believer that we all can make a change, and I have included all the information below to help make this task a bit easier. Also, please, forward this to other email lists relating to our hobby. The more people who get informed, involved, and voice their opinion, the better off we as a community will be in the long run,,.,
Horizon Hobby 4105 Fieldstone Rd. Champaign, IL 61822 Phone: (217) 352-1913 Toll Free: (800) 338-4639 Fax: (217) 352-6799 http://www.horizonhobby.com
Thank you for your time, and again, I truely apologize for the severe cross posting. I just would hate to see several hobby retailers hit even harder times because one of the most popular brands will become under heavy restrictions as to who can carry the product line, and who cannot.
Joseph D. Fisher
Ship it on the Frisco!
Castle Graphics
To: snipped-for-privacy@yahoogroups.com
From:
Subject: Re: [BNlist] Athearn
From jkohl Fri Jan 9 08:34:57 2004
I just wanted to verify that this was the case, so I called one of my
"distributors" this morning to ascertain the extent of this commentary. No offense, Joseph, but the internet is a haven for mis-truths andmisrepresntations, so before I forwarded it on to the CB&Q list I wanted to make sure everything was "kosher". Yes, it is true. Someone I know who does a considerable amount of Internet business has inquired into a Horizon Hobby distributorship, and beeninformed this very thing. Photos, leases, tons of information requiredwhere previously it was a handshake. While I think that I understand that they are trying to help the "brick & mortar" stores, they are not really helping them that much. Putting a few internet distributors out of business will not help a local hobby shop,especially when now you've removed their ability to do creative pricing on somethings if they choose to. Not only that, but with this continued policy of "let's build only a Few things and force everyone to buy up front if they want it" it is going To hurt the local hobby store even more.Contact information for Horizon Hobbies in Joseph's email below.Cheers!Jan KohlCastle Graphics - http://www.castlegraphics.com
Eastern Classic Model RR Products 202B Faller Drive New Milford, New Jersey 07646 (201) 967-0161
-----Original Message----- From: snipped-for-privacy@aol.com [mailto: snipped-for-privacy@aol.com] Sent: Friday, January 09, 2004 8:20 PM To: snipped-for-privacy@aol.com Subject: ATHEARN <> THIS IS IMPORTANT
Dear Friends,
I ask you to take the time to read this as I feel it is of most importance to all of us who lately have been the victims of a greedy trend infiltrating our hobby. I welcome your suggestions and ideas. They are important and there are many out there willing to listen and who do put the modeler's concerns first including some manufacturers.
Many of you already know about the purchase of Athearn. Acquisitions happen all of the time.
This one however deserves special attention because it can result in unpleasant and expensive
consequences for all of us and lead to a trend thatwill eventually remove any economical
practicality that remains and seriously threatens the long lived pleasure model railroading
has provided all of us for so many years.
Athearn was purchased by a hobby distributor. That in itself is no big deal, however, they will be the sole distributor of Athearn products. This is a great situation for the distributor, however, it will be devastating to the other wholesalers and many retailers.
Many good people who I have worked with for many years are going to be hurt very badly, some taking enormous cuts in salary and some even losing their jobs. After all of what so many have done for Athearn especially when they were first purchased from the original owners 9 years ago, no one deserves pay cuts and loss of jobs over a few greedy individuals who only desire is to create an excessive money grab for themselves, and DICTATE to the consumer where they should buy their products.
Most obvious is that this distributor is using Athearn for three SELF SERVING purposes, as they eliminate all other sources of the product. (1) It immediately increases their profit by 20%- 25% You and I pay far more for Athearn than the wholesalers who have been cut out. (2). They can name their retail price ( if we let them). (3). Athearn will be used as a magnet to attract buyers to purchase their other products.
By eliminating competition, the higher prices are a certainty both at wholesale and the retail price you will asked to pay. Should enough wholesalers be hurt bad enough to go
under, prices on other brands will increase as well as the competition dwindles. This is a situation that must be avoided at all costs and this is a risk for all of us not worth taking. Once the other manufacturers realize modelers are paying increased prices for Athearn, they will follow suit, just as they did last year when Kato raised the price of their SD80/ 90. It took Life Like all of 4 days to hike their locomotives to $140, an increase of $30 without an improvement. Hopefully we have learned our lesson.
We need competition. It is imperative to stop those with greedy notions and intentions, and we should be allowed to enjoy our hobby without some coming along and raking us over the coals at every chance available to them. It is the consumer that must remain in control and not allow one company or maufacturer to dictate THEIR terms to us. We deserve better and without us they become prunes. It is US who should dictate the terms to them. Without competetion, there will be no end to the HIGHER prices Athearn or any other manufacturer puts on their products, especialLy if we keep paying those prices.
There is a lot of talk going on. Fears of a competing distributor buying up another major manufacturer are real. This could set off an ugly trend with the victims being the consumers. With the exception of a very few, most in the industry are outraged over this situation and rightly so. We can almost expect some kind of retaliation because some of the larger wholesalers who stand to lose millions of $$ in annual revenue, will have to somehow compensate or offset the losses. This could very well all be at the expense of the consumer.
We as the consumer are really in the drivers seat unless we hand the controls over to the marketers. As long as we keep purchasing, they will keep dictating the terms to us and hose us as we stand in line begging for it. A decrease in demand is the only way we can prevent being soaked by individuals who view the most enjoyable hobby that ever existed as an endless money pit for themselves.
You all see the deals I offer on a frequent basis. Example: Atlas ALP44 Locomtive which at one time sold at a well discounted price of $99. Now they are $25. If we were still buying them at $99, would they be available for $25 ?...Heck no!! The lack of demand drove the price down and you see, the system works, and we should continue to make it work in OUR favor.
I know you all understand what I am saying here. This hobby was meant to be enjoyable. When things like this happen, and then Union Pacific sinking their teeth into the kill trying to collect on SP&S and Tidewater Southern models, it destroys the integrity of our hobby. This too has caused an increase in prices which is totally unreasonable and driven solely by greed. There is no room for greed in Model railroading, and those who expose themselves so blatantly as the new owners of Athearn SHOULD BE SHOWN THE DOOR.
What happens from here is in our hands. We can either accept it, and pay the inflated prices every time they throw them at us or we can tell them to stick it the same way they tell us to, and choose other products to purchase. Again, this is the only way we can protect ourselves from being soaked at the cash register.
The model railroad community is a tightknit and friendly unit. It is my greatest hope we will all stick together on this issue, claim a huge victory and make the greedy ones see it our way for a change. This distributor views us as a group of foolish train junkies who do not know any better and would buy anything at any price if the headlight works when the power is turned on.
After March 1, I encourage everyone and anyone to BITE THE BULLET and purchase other brands and SEND THE NEW OWNERS THE MESSAGE that we have had enough. With Broadway Limitied making the highest quality steam locomotives and all the other manufactures who offer the same or ususally higher quality locomotives, rolling stock and accessories surely we can survive and enjoy the hobby just as much as we always have without a few pieces of Athearn
I cannot say it enough. This situation can lead to an extremely unpleasureable series of others if we let. The new owners of Athearn in no way deserve to be rewarded for this type of business practice. IT IS FOR US TO SEE TO IT THERE IS ALWAYS COMPETITION AND THAT IT FLOURISHES. THIS IS TO OUR BENEFIT.
America is known for it's free market and it is up to us to keep it that way. Indiviudals who try
to ignore or change it deserve nothing more than the consumer purchasing other brands.
It is important that you know that all items on reserve will be locked at the prices I advertised them. Most all the Athearn now on reserve is expected within the next two weeks. Basically, everything will remain as is until March 1. After all to cancel orders now is only going to hurt those who are already in for the hurt of their lives
Please feel free to pass this on to all other fellow modelers.
Best Regards to all, Al
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NO ONE is dictating where I should buy my products.
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http://www.yahoogroups.com/group/MRPics
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Yes but they are not telling you that you have to buy Athearn.
Trainman wrote:

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I would estimate that 50% of sales of Athearn and other products are not because of pricing but because the person buying doesn't live near a hobby shop. Horizon is speculating that they can make a hobbyist drive 25-50-100 miles to a hobby shop to buy Athearn. I'm willing to bet money they are wrong. What will happen is the sale of all the other kits/cars (such as Accurail) will increase big time. In fact I hear all those folk threw a party as soon as they heard that news<VBG>.
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wrote:

Who says you will have to drive to a hobby shop to buy Athearn?
All they said is that they will only sell to stores.
There are literally ~dozens~ of stores that sell via mail order.
No one is being "forced" to drive to a hobby shop.
Let's keep things in perspective, shall we? Sure, this is awful for some of our favorite suppliers, but it is far from being the death of the hobby.
Jeff Sc. Reality, Ga.
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<not.fishplate> wrote in message> wrote:

not
hobby
25-50-100
And if a mail-order firm wanted to set aside a small segment of their operation and make it an actual store, then what. I'd bet most of the large mail-order entities could easily do that.

Exactly.
Cheers, Bill Sohl
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writes:

Ridiculous! If you are assuming these folks that were buying mailorder will be forced to drive 25-100 miles you are dead wrong. If they did mail order before they still will. There are many mail order operations that have legitimate storefronts. Caboose Hobbies and MB Kleines to name but two of very many. How long do you think it'll take these places from setting up accounts with Horizon? I'd say no more than 30 minutes. If you think Accurails sales will increase big time I'd say you were wrong. Folks buy models based on #1 roadnames and #2 era modeled. If one manufacturer or another makes it it doesn't matter drastically to the consumer.
Dave
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snipped-for-privacy@aol.comspamthis (Dave Henk) wrote:

The biggest complaint as I see it is that for the majority of us, we're losing our el-cheapo source for Athearn stuff. You can't tell me that a Caboose Hobbies can sell as cheap as Big Al or Peter King. The fact that Caboose Hobbies has a huge store and piles of inventory and a lot of employees will tell you that. It's the same argument that we've gone over here on RMR; the local hobby shop vs the online dealer who has no storefront.
:D
Kennedy
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No. Horizon is dictating where retailers can buy their Athearn. I am not a hobby shop.
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Not to nit-pick, Don, but Horizon is dictating where the _retailers_ can buy Athearn. We still have somewhat a choice, unless all local sources dry up, which is more their loss than ours.
Could Terminal Hobby Shop buy Athearn? Or since that's attached to Walthers, and it's a distributor, would that be verboten? I wonder.
Jay CNS&M North Shore Line - "First and fastest"
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Trainman wrote:

No, they are dictating where the dealers must buy Athearn. True, some of the dealers (mail order only) won't be able to buy from Horizon but that's no big deal to me. It won't change anything should I desire to buy an Athearn kit. Normally I stay away from Athearn completely since I prefer craftsman kits, not shake-the-box kits.
--

Rick Jones
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A company is telling you where you are not going to be buying Athearn after March 1st.

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What's preventing the shop from getting Athearn from Horizon Hobby?
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Mark,
From my understanding of the items I forwarded earlier, I interpreted Horizons intentions to limit their customers to those brick and mortar shops that will sign minimum monthly order commitments. That can be disastrous to smaller hobby shops that basically and traditionally made small, one time orders to fill vacancies on the shelves. I wonder how long they can compete if these shops are forced to purchase (by contract) 300 units a month but can only move 180 a month (example). That to me would be a frightening scenario.
Art

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On 1/10/04 3:08 PM, in article vRZLb.3302$ snipped-for-privacy@newsread1.news.pas.earthlink.net, "Art Marsh"

If that is true, I would have to agree with you. However, if it is true, then eventually, Horizon would have to sell Athearn to someone else after they look at the bottom line. No doubt they would also decide to sell to other distributors as well.
--

Brian Ehni


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Brian,
That is the problem, I did not know if I was interpreting the sentence correctly. But out of all this, This is the area I am most concerned with. Will I or will I not be able to buy from the nearest hobby shop or not. As far as I can see, he alone is willing to stock the items that move the slowest. The larger hobby shops out here stock mainly the items that move out the quickest. All else is special order. My local (if 17 miles can be considered local) actually special orders quite a few items for me and allows my previewing them before I actually buy. I have met few out here willing to do that.
Art

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Says who? How many times have companies been bought only to have the product line drop off because of an inventory, or lack of sales issue.
john binford
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It's $300 per month net or about $10 per day net. If a store can't sell the equivalent of one or two freight cars per day then they have bigger issues such as why are they in business. BTW sell three genesis and you'll make that "quota". <G>
Dave
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On 1/10/04 10:59 PM, in article snipped-for-privacy@mb-m26.aol.com, "Dave Henk"

AH! That sounds reasonable.
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Brian Ehni


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