a little OT - Unhappy events at Athearn Models

Pure and utter horse hockey.

This is the 21st century, not the 1960s. I know scads of non-storefront dealers who do ALL of the above. I've known a few storefront dealers who were way more shady than most non-storefront dealers. (One left distributors and manufacturers holding the bag for about $750K in 2002. The VERY SAME guy who did the same thing in the late '80s.)

There are many reasons for storefront dealers to be unhappy with non-storefront. This is NOT one of them.

Peter King in NY

Never saw the logic in that myself in my own case, but don't some states tax inventory?

There's also the power some people see in inventory "turns", or how many times a year you sell thru your inventory (the more the better).

Denis, Athearn will now only be sold through bricks and mortar stores that are approved via Horizon, the new owner and sole distributor.

The discussion is about that and it's impact, not the 'buyout' itself.

If Joe Smith had bought Athearn there would be little if any discussion unless he came in and immediately did what Horizon has done here.

What is more important a $100 item that sits on the shelf, or a $100 item that you sell and reorder 6 times a year with a 30-40% markup, seems to me that you make more money on the 6 items that you do sell, then the one that just sits there. So you sell the item that doesn't sell at a loss so you can use that money to buy items that do sell.

It costs you money to have stock sitting one the shelf.

How do you make a little money in a hobby shop?

Start with alot of money

We could get into the cost of money and return on investment if you really want to get into it

-Hudson

(who works in a hobby store with stock that has more senority there then I do)

Been there, done that. I occasionally had sales, but never sold anything for less than I paid. At least until the going out of business sale.

Last time I was there, I was told by one of the counter guys that Walthers has dumped all its injection molding equipment. YEARS ago. Nothing is made on the premises except _maybe_ prototypes for the models, at least, that's what I surmise from what I was told.

Jay CNS&M North Shore Line - "First and fastest"

Charles,

If you have inventory that you can no longer get restock on, or is not selling; you might want to sell it off below cost to at least get some funds out of it to invest in inventory that does turn over. The other side of the coin is if you consider it to be collectable. In the case of Athearn inventory, it will be available through Horizon certified retailers, so the 'collectable' issue is dead.

I suspect we may see some large scale dumping of Athearn by Walthers and other jobbers who no longer will be able to job out the line. Remember about 2-3 years ago when Life-Like produced too many E units? They unloaded them, and it seems like every felt market/train show I went to had them for $20-30 each; the N scale ones were going for as low as $18 each. My LHS has already received back order cancellation notices for Athearn back orders at Walthers.

Jim Bernier

Charles Kimbrough wrote:

If it's sitting on your shelf unbought, why would you worry about replacing it? You have limited shelf space. Dump it and replace it with something that sells

- repeatedly.

The trickiest thing in business is keeping your finger on the pulse of "what do people want to buy from me?".

The next one is "How can I get more people to buy from me?"

Jay CNS&M North Shore Line - "First and fastest"

stuff deleted....

Some people know how to ignore the point.

Sheesh.

Legitimacy is NOT gained by having a storefront. Who's better overall? The non-storefront dealer who pays his bills ON TIME, keeps his customers happy and follows ALL legitimate business practices? Or the crook I mentioned above? (BTW, the $750K is just what he owed to distributors and manufacturers. It's unknown what he may have owed in back rent and taxes. I'm not aware of any customers who lost money.) Quite a number of manufacturers and distributors extended WAY too much credit to the shady character, despite the fact that it was well known in the industry who he was, and what he had done before. Yet many of these same suppliers wouldn't sell to a dealer who didn't have a business address because he wasn't "legitimate". Where's the logic in that?

There are MANY wonderful dealers, of all kinds. There are some bad ones of all kinds. Using a storefront as a measure of "legitimacy" doesn't work. Do you think EVERY non-storefront dealer sells stolen merchandise, doesn't pay taxes and skips off when the customer needs service? Do you think every storefront dealer does the opposite? Sorry, that's not how it is.

BTW, why haven't you answered Jeff Sc.? Still working on that list of three storefront dealers who have been put out of business by mail order? Can you name even ONE? I've been asking that question on this newsgroup since 1995. NO ONE has ever been able to provide the name of even ONE. In fact, only one person ever had the stones to come back and admit that he didn't know of one.

Good business people stay in business. (Barring some disaster beyond their control.) While I disagree with Dave Henk on this particular subject, I respect his opinion on it. This particular turn of events will benefit him, but he never whined about "unfairness" before. I have no doubt that Dave will have a long and successful business career, because he knows that there are people out there who want what he has to offer, all he has to do is seek them out. The Daves of this world are the ones who will survive because they make the effort to be a good business. Anybody can sit back and whine about how unfair competition is. They usually continue to do so right through the going out of business sale.

I will reiterate that I see nothing "fair" or "unfair" about Horizon's move. I simply think it's a bad business decision. Like other manufacturers who have pulled out of the established distribution network, they will likely see diminished demand when they drop out of general visibility. And, good or bad for me personally, that's bad for the hobby in general.

Peter King in NY

Neither is "illegitimacy", which seemed to be your point! Calling all B&Ms into question based on the actions of exactly three, is pretty weak.

It was also suggested by someone that Horizon would probably soon change the name Athearn to Horizon. That was based on my concept that Athearn was a manufacture but that Horizon was a jobber even though Horizon owned both. While an interesting though I doubt Horizon would pay a few million to eliminate the name Athearn which has been around 50+ years. He also suggested that nothing can be done with lawsuits as some case _Costco vs ????_ was decided that a manufacture could sell to anyone they wanted and exclude others, their choice. My thoughts that even though they are owned by the same company there is a difference, Athearn is a manufacture (importer) and Horizon is a jobber. I have no idea on these thoughts!

I thought 'resale price maintenance' is illegal? Keith Make friends in the hobby. Visit Garratt photos for the big steam lovers.

Keith,

"Resale Price Maintenance' or 'Fair Trade Laws' are pretty much gone. Horizon is not telling a retailer to sell at a certain price. They are telling retailers what kind of operation they must have to get product from them. Horizon is demanding a 'store front' before they will deal with a firm. It makes no difference how good the credit rating, or how much in sales the retailer is doing. The problem here is that Athearn will only be distributed by Horizon. The 'non store front' Internet/Train Show dealers will be cut out from marketing the Athearn product. How much this will reduce the 'exposure' of Athearn products remains to be seen. The position taken by Horizon can be termed as 'protective' of the traditional hobby shop distribution channel. The problem is that the marketing channels are changing, and the Athearn line does really need an 'update'. The upgraded RTR paint jobs of the past year are a start, and the new SD50 is a step in the right direction(mixing existing techology with 'best of breed'). Athearn has had some bumps in the road with their steamers and the SD70 line. the SD50 looks like a nice offering.

Jim Bernier

I neither said, nor even implied, any such thing. But you didn't like it much when you THOUGHT I was saying that. Yet YOU claim that ANY non-storefront business is not a legitimate business. There are MANY non-storefront businesses that are more honest ("legitimate") than SOME storefront operations. You condemn them all because their front door is a url instead of glass. What's not "legitimate" about simply having lower overhead costs. Would you similarly condemn a storefront operatior who's only paying $50 a month rent because his Great Aunt Tilly owns the building? If not, why not?

I ask you again, which is better? The crooked storefront (atypical) I cited, or a non-storefront who pays his bills, takes care of his customers, and pays his taxes? (Typical)

How about the other questions? Have you thought of the name of a shop that's been put out of business by mail order? If mail order has been putting stores out of business for over 50 years, why are there any stores left at all? (I did a check last year on the number of hobby shops listed in MR's dealer directory (all storefront), compared to the number listed 10 years prior, before the internet "explosion". Virtually the same number were listed.)

Finally, I DO thank you for remaining civil while disagreeing with me. It's something that's sometimes lacking on this group.

Peter King in NY

Neither. Give me a storefront who pays his bills, takes care of his customers, and pays his taxes.

Have you been reading MY posts? Try The Nashville Depot (my store) for one certain one. How many of those ads are true storefronts? Wish there was a way to know for sure.

I don't tend to use names unless the other party fires first! I appreciate your POV as well. 8^)

Which, depending on your location, may or may not make your minimum order quantity.

Kennedy

seen. The position taken by Horizon can be termed as 'protective' of the traditional hobby shop distribution channel. The problem is that the marketing channels are changing, and the Athearn line does really need an 'update'.<

There is also something interesting that I just learned. This sale was loaded with stipulations. What they all are I have no idea and as it's a private sale no one will, but there are rumors. Set number of years before Horizon could resell if they wanted to. There appeared to be certain people that Athearn did want to buy the company. Possible even the present owners get first right of refusal, who knows.

Brian, lumping all non-storefront together as you have into 'bombers' is pretty week also, no?