a little OT - Unhappy events at Athearn Models

That's OK Mike we still like you even if you do live across the line from me. BTW I finally started the new store layout. Should need some of your light circuits come summer.

Dave

Neither was I so how did you get there? Might want to reread my reply. I never even mentioned holding onto a product for a higher MSRP. Heck that would be insane to say the least. Although I do know shops that resticker old stock with new higher MSRP these didn't sell before and will be there the day they go out of business.

Dave

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

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

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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Dave,

The original message didn't say preorders with Horizon were canceled.

What it said was preorders retailers had with other distributors for the Challenger that were cancled as of March 1st. And those preorders would have to be resubmitted through Horizon, at a higher price than those retailers would have originally gotten.

And with no guarantee that those resubmitted preorders would be filled, even though the manufacturing of those units was supposed have been based on those original preorders.

Since the latest "Industry News" section of the on-line ordering software Walthers provides to retailers states, "Athearn has guaranteed delivery to Walthers of all new items currently on order, the exception being the Challenger.", I believe what Mike's retailer told him, which he then passed to this group.

Personally I think this stinks, and flys in the face of the Horizon/Athearn annoucement which explicitly stated it would be, "business as usual", after March 1st.

-- Len Head Rust Scraper KL&B Eastern Lines RR Museum

Ahhhh, thanks, big guy.

It's about time! You'll be running all Athearn, UP rolling stock, right?

Mike Tennent "IronPenguin" Operating Traffic Lights Crossbucks Special Effects Lighting

Dave,

I suspect that Horizon cancelled non Horizon pre-orders. I doubt seriously they would wish to cancel their own. That would piss-off a lot of you retailers that historically use Horizon. Also I would imagine that Horizon perhaps had a higher distributor mark up than the now cancelled distributors. So now they are bringing everyone to their standard.

Sound plausible?

If you live on the north side, there's also Larry's Hobbies and Spring Crossing up this way.

Thanks, I'll do that. Is that the shop across from Le Peep?

Gale Gorman Houston

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No, the price I had was similar to what I had listed from my other distributors. Generally I was getting Athearn at Great Planes (48% regular line

43% Genesis). Horizon has had the same discount. I had other distributors but they were tertiary ones for trains. BTW virtually all my Athearn was coming from Great Planes only because they stocked it first and pricing was so close why change. My train purchases have picked up at Horizon the last as they have added lines. These I used to get from Walthers and others but Horizon has better price and availability.

Dave

I'm thinking a Challenger heading up a PFE reefer train for starters .

Dave

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

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

Dave,

I think you'll agree that one downside for you is the loss of the ability to pick and choose from distributors to get the Athearn stock you want.

I know you take pride in being able to quickly handle special orders for your customers and you go to multiple sources. What if Horizon can't handle the distribution of a major line like this, or it bogs them down across the board?

I think that's the greatest risk for them (and possible aggravation for you.)

Mike Tennent "IronPenguin" Operating Traffic Lights Crossbucks Special Effects Lighting

This is your wish. You think everyone will come to you and pay your prices. Horizon thinks the same thing. You are both wrong.