a little OT - Unhappy events at Athearn Models

Well, in case anyone is interested Horizon has told my main dealer that the all Challenger orders are cancelled as of today. They will have to be
reordered at a new HIGHER wholesale price. Sounds bad. I'll email the whole notice to anyone that wants it.

cars
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On 1/12/04 10:17 PM, in article snipped-for-privacy@ptd.net, "mike"

If true, Horizon is rapidly making me wonder about their level of intelligence.
--

Brian Ehni


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I have the email from the dealer. He has the letters from Horizon. We all know him and I don't think anyone would doubt his ruefulness.
wrote:

the
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writes:

I got a letter that stated that the Challenger would have to be reordered from Horizon only IF they were previously ordered through another distributor. Orders already on order with Horizon are done. I'm sure I got the same letter.
Dave
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Sort of like Con-Cor's Electroliners that never materialized. "Oh, that's a 4-car trainset? Well, the price just went from X to X+$60. I think the final price on the E-Liner went from $329 (which I'd pay) to $389 (which I wouldn't). And that was the pre-order price. Turns out they didn't get enough pre-orders, so they dropped it.
Jay CNS&M North Shore Line - "First and fastest"
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http://www.yahoogroups.com/group/MRPics
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On 1/13/04 1:09 AM, in article snipped-for-privacy@mb-m20.aol.com,

Yeah, but Jay, we're talking Con-Cor and plastic. $389 for a four car trainset?. It would have to be Genesis quality, and I doubt Con-Cor made that kind of commitment.
--
Brian Ehni


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Yeah, but it's also half the price of brass and probably would run a lot better. The rumor was it was to have Athearn can motors and guts. And it would be a small run. A few thousand units tops. North Shore fans are sometimes willing to pay more to get their beloved stuff. Check brass sales on eBay. Brass North Shore cars typically run upwards of $200 or more, and that's before the auction closes and sniping takes place. The Walthers kits are still fetching over $80 with no motors, and their level of detail pretty much sucks, at least on the car sides.
Jay CNS&M North Shore Line - "First and fastest"
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On 1/13/04 2:38 PM, in article snipped-for-privacy@mb-m16.aol.com,

Good thing I don't model a railroad with a lot of oddball equipment like the North Shore or the Rock Island.
Oh, wait a minute......
8^)
--
Brian Ehni


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Skip the waiting. Wonder now.........
wrote:

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writes:

What?? I just talked to them today. Not only that I have had the Challengers on backorder with them long before the buy out. I update my backordered daily from their mainframe. I didn't see any such nonsense indicated. Also why would Horzin cancel a standing backorder with them so I can reorder with them? If there was a price change they normally notify us of that and we have the option of dropping the order. So yes please post the notice as I haven't seen mine yet.
Dave
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The text of the email I received follows.
Dear Friends,
Well.... here we go. I have been formally informed by my wholesalers that the new owners of Athearn are not honoring the orders placed last Autumn for the Athearn Challenger Locomotive. All reservations are required to be reordered a second time through the new owners at the higher wholesale cost price.
So far, this only applies to the Challenger. All other preorders are safe and if it changes, I will notify you at once. There are rumors that the SD70 will meet the same fate, but I have no information on that yet, but I think the fact that Athearn never offered us a price is most telling. Now we know why.
While I could very easily get around the unreasonable terms of this new company, I am declining to do so. I have already explained my reasons. Since virtually every response I have received from my customers has been in favor of a boycott of Athearn products, and since I intend to stand by my convictions, I will not be offering the Challenger or any products announced by the new owners.
It is in no way my intention to send you elsewhere to purchase Athearn. My intention is to assist the other dealers in keeping the product in the Athearn warehouse. This is the only way these people will understand and reopen the market the way it should be and bring the prices down to a reasonable level. To buy now, will only encourage them to keep up their unacceptable business practices.
Regardless, there is no way I can match the price I advertised them at due to the increased wholesale cost. Honestly, I cannot afford this kind of loss. They will be no guaranteed delivery either. I know how this game is played and I therefore know why they will not do so. I do not care to engage in such a scenerio.
This is a very unfair and sorry situation for us all. There has been a long standing tradition violated here and as I stated, it should not be allowed to proceed any further.
I suspect after the new owners become aware of the massive negative backlash that exists all over the internet, we can expect some kind of gimmic or "come-on" from them in the form of introductory special price offers. This will be short lived at best and a mere distraction from the present furor. I have received letter's from Horizon that I have found to be insulting and untruthful. Their claim is Athearn will conduct "business as usual". This is so far from the truth, you wouldn't find it on the planet Pluto.
This is not good enough for me. They need to restore Athearn to what it was..one of the standard staples of the hobby and supply the other wholesalers which will promote competitve pricing.
Should a few major wholesalers go under because of this, the survivors will take full advantage and raise prices as the competition demises. WE NEED TO AVOID THIS AT ALL COSTS.
Well, I think I have stated my case and all I ask is that you continue to feel free to order the other products and stand with me on this issue. I will be working extra hard to bring you better deals on other quality products.
I have exhausted this topic..you know where I stand and I hope you will stand with me in turning this in our favor. If the inventory remains in THEIR warehouse for only one month.. I think they should get the message, but who knows, there are none more blind than those who do not want to see.
Should anything else important develop pertaining to your current orders I will notify you.
Best Regards, Al
"
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writes:

untruthful.
the
What part was untruthful. With the exception of distribution and marketing Athearn is to carry on as before. All new product is to be left up to Athearn in California to develop. All service of warranty work is to be done by Athearn. Athearn will be under Horizon. This is basically the deal I've seen time and again with other hobby merchandise. The unique thing about this is that it's finally happened with a major model railroad manufacturer. It's been around for years in the R/C and to an extent in plastics.
Dave
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Distribution is not a trivial thing. You like it because you are a Horzion dealer. If the shoe was on the other foot, you would be screaming murder.
snipped-for-privacy@aol.comspamthis (Dave Henk) wrote in message

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(MrRathburne) writes:

Nope. Screaming not needed. It would be but a temporary inconvenience at worse. We have had situations like this occur. Those times they were R/C products. We wanted them so we added the new distributor to get them. This goes on several times a year in the pursuit of products my customers want. Examples: Bandai was coming in exclusively via Sentai Distributors, Firebirds via Horizon, Trumpeteer via Stevens International. I use each of these distributors. they are not near my top 5 but we do use them several times a month. Over the years the shop has gotten Athearn from Bev-Bel, Pan-Am, Walthers, United Models, Great Planes, and most recently Horizon over the last year. Our number two distributor was United and it was bought out by our number one Great Planes. Instead of whining we added Horizon as the number two. Screaming about it doesn't change a thing. Doing whatever you can does (although in my personal opinion a boycott likely still won't materialize nor work). The hobby is much more fluid as far as product movement from manufacturer to the consumer than you might imagine. If you play the game well you'll win. Play badly and it's adios store (or even mail order firm).
Dave
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writes:

of a

Not sure how you'd "easily get around" the unreasonable terms as they simply will not sell to mail order only and that means you. Perhaps you'd like to enlighten us.

Assist other dealers how? There is nothing you can do. Your boycott will not work. If folks want Athearn they will go to someplace that has them period. If not you then someplace else. For a boycott to work you'd need a very significant majority to join in. A model railroader that desires the lastest diesel, N scale coal porter, vehicles, and the Challenger will jump over you to get what they want. It's unlike that significant numbers of people will boycott any product they like for any length of time.
Dave
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This is your wish. You think everyone will come to you and pay your prices. Horizon thinks the same thing. You are both wrong.
snipped-for-privacy@aol.comspamthis (Dave Henk) wrote in message

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As a seller of Athearn (ne Horizon) products, "Mike" is doing the correct thing if he does not like the Horizon distribution terms: not to carry or sell their products. If enough other dealers do the same thing, Horizon may accede to some of Mike requests; if not, Mike may decide to carry Horizon again. That's the way the market works.
For Mike to succeed, the eventual end user (that's most of us) will also have to not buy Athearn products for some reason: quality is down, prices go up, whatever. If we buyers see no difference in price or quality, then we consumers probably won't change our buying patterns. Again, the market at work.
Ed.
in article snipped-for-privacy@posting.google.com, MrRathburne at snipped-for-privacy@aol.com wrote on 1/15/04 8:39 AM:

--
Ed Oates
http://home.earthlink.net/~edoates
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Ed,
Another factor is 'market presence'. A lot of purchase may be made via Internet/mail order dealers or train show dealers. If the only marketing channel is via a 'hobby shop', then you need to get folks in the door. A lot of 'walk in' trade is at train shows - it is cheap entertainment to take the family to a 'train show'. What remains to be seen is how much 'hard core' model railroaders will be purchasing Athearn products. They will drive and seek out the hobby shop at the end of the strip mall. The other new 'walk in' business needs to have a reason to go to that mall location(hubby and the kids 'find' the hobby shop while mom shops(sorry if I am stereotyping, but it still applies in many cases). As I have stated before, the marketing channels are being reduced, and the presence of the Athearn product is not as wide.
Jim Bernier
"Edward A. Oates" wrote:

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Note: A copy of this post is being cc'd to the folks at Athearn in the hope that some official input can be made.
I actually have a hobby shop less than 3/4 mile from my home (Scenarios in Fremont, CA). Up until a year or two ago they stocked a limited amount of HO, N, and O gauge stock. Athearn products (Blue box only) made up slightly over 70% of the sales display shelves. Now this 70% included ALL railroad products irrespective of scale. I took this to mean Athearn products was their #1 railroad seller. As close as the shop was I would very rarely buy from this shop as their pricing structure was either MSRP or a few cents below. I started in the 1960s buying and building Blue boxed kits from two local discount department stores. They were close by and they were in the price range I could afford. I was a very happy camper as I had cars and engines that were much nicer than Tyco and Bachmann and just a little more in price (usually only $0.50 to $1 higher). Perhaps buying Athearn at a discount as a youth spoiled me but to this day I will not pay retail for a Blue boxed kit. I will and have paid retail for their RTR line although I prefer to find them discounted. Back to Scenarios. I guess the railroad hobby lines were interfering with their core customer group and they dropped railroading altogether.
I now drive 17 miles to Hayward to a hobby shop there. This is a nice but rather small hobby shop, similar to the types I frequented way back then. For me it is the place I would go to buy the more expensive lines or to see what it is I am buying. In my case that would be items by Durango Press, Kato, Intermountain, and whatever else not readily found discountable. I also buy most of my magazines and reference books there. They also offer a realistic discount on their items unlike Scenarios. Their one problem, and this is the one that will do damage to (Athearn products) Horizons intent to restrict access to Athearn products, is they do not have anymore free space to set up Athearn Blue box displays. The hobby shop actually has very few non-locomotive Athearn blue box kits. Honestly I am not sure they have any at all. I have never looked for them there as I always ordered these from discount mail order places or train shows. In order to set up more Athearn, they would have to drop other lines or drop their R/C, plastic scale models, and/or hobby tools and accessories. Which they will not be able to do as far as I can see.
There are two larger nationally advertising (or Internet) Hobby shops (one for sure in Campbell) in the south bay area. These I am sure will increase their quantities of Athearn products as they determine the need. But these shops are 10,000-20,000+ sqft each and can easily restructure themselves. They are too far for me to go unless I am in the area anyway. I have not been by either of them in over a year/two years respectively. Without a mail order division, hobby shops tend to serve only local customers. If your local shop does not or cannot offer a particular line (as cheaply as possible) and you cannot find it at a discounted mail order establishment, you will do without.
I have reached the same conclusion as Jim, If Athearns exposure is reduced (and I cannot see it being otherwise) then actual sales of Athearn products will significantly drop. I expect this to affect their blue boxed line the most. It quite possibly could kill the line as well unless Horizon, at some future point and in time, reverses its decision on distributorships and retailers.
Ed, you could add that the end user may not have to consciously make the decision to boycott Athearn products. The potential unavailability may be enough to do the job all by itself. I would like to continue buying the Athearn products that work in my layout. I plan on doing so but maybe not on the scale I used to. Only time will tell if Athearn products go out of my reach financially. I already stated my feelings for the blue boxed kits and I figure on not buying more of those unless pricing remains low. Roundhouse is of similar quality and I can always get them at a decent discount.
I wanted to thank the folks at snipped-for-privacy@athearn.com and snipped-for-privacy@athearn.com in helping me resolve my issue with the RTR Frisco 8000 gallon Tank car. They were able to find a truck frame to replace one broken at receipt. I would also like to ask if you could maintain a spares inventory. The RTR cars are more expensive and are worth repairing when broken.
Thanks,
Art

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