Athearn and Hobby Store vs Mail order.

I agree to a point. But if the difference between my local shop and some other source is only a small percentage(10 or less); I'm going with the local guy. I like haveing a shop to go too for all the other intangibles you can't get from an Internet or mail order purchase.

Roger T. ( snipped-for-privacy@highspeedplus.com) wrote: : AFAIK, when it comes to buying model railway items, it's Price, Price, : Price.

: The cheapest supplier gets my buck.

: I don't care if it's a local Canadian retail store or an American deep : discount outfit.

: It's my money, I work hard for it, and I'll spend where I get the best : value. period.

: -- : Cheers : Roger T.

: Home of the Great Eastern Railway :

You are both correct. Value for money spent has to be the criteria. What Steve is saying is that in his opinion the hobby shop offers some value that the mail order doesn't and it is worth 10% extra to get this value. I guess the question we all have to ask ourselves is how much is it worth to have the shop and all it offers available. (consider all purchases over say a year) Sometimes "we don't know what we got till its gone", and it hard to get it back.

If it was a 10% upcharge at a local hobby shop, I'd always buy there. But, instead it usually ranges from 20% to 100%.

I use local shops to buy one or two items, but mail order or internet to buy larger amounts.

Well, if you're going to use mail order, at least make the order big enough to make the shipping worth it.

I'm always buying onesies-twosies, so mail order doesn't make sense.

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

prices can even vary substantiall between mail order/internet stores (20-100%). many times, a local hobby shop will have the same item at or less than the mail order price.

I have yet to see a 'store front' shop regularly have items for less than the average mail order operation. A 'hobby shop' has to pay for that overhead. Most of the mail order or train show dealers have their hand on the 'pulse' of the hobby and are ordering/selling the newest releases. They have very short 'on the shelf' time for a product and many do not carry a lot of additional inventory. The trick is to get pre-orders and 'turn' the merchandise very quickly. When I was an owner, we wanted to 'turn' the inventory at least 3-4 times per year. Since we also had general hobby items(plastics, military and 'crafts'), we could weather slow periods in sales, but summer was bad for trains. Most folks had outdoor activities, and many of the new items were not released until the hobby trade shows. We had sales on selected items, and did some discounting on at least one pre-order(Athearn's new SD40-2 at the time). We got a lot of complaints forwarded to us from another chain of hobby shops via a local distributor! We did sell something like 185 of those units in the week after it was released, that turn over of our investment offset the 15% discount we offered. We did have other limited sales like Kadee #5's for 'cost' over a week's span in the fall. This got modelers back in the store after the summer. They also bought up a lot of kits to put this couplers on! But, to regularly sell at a discount was not in the cards with only a 40% markup. Now, the craft side could range rom 50% to 250% markup - there was room to work with there, and having 'classes' would boost those sales even further.

Jim Bernier

ga wrote:

Jim,

Thanks for letting us know how it is from the hobby shop perspective. It must have been fun running a shop for a while.

Sometimes, the cost of shipping can be balanced out by not having to pay sales tax...

I'll betcha it's only because they have an online store somewhere in the background! (grin) Regardless, that's not the case in Milwaukee - strictly retail all the way.

I am not sure about Athearn and other HO trains; however; I have started a small collection of O-27 and O gauge trains. I like going to my local shops since I can see their layouts, of course built to impres and sell the trains, which then give me ideas about what I would like to do. I am still a beginner only been doing this since Dec 1999. I find I get a lot of help and attention I need to questions I can not get online. There is one store I go that specializes in O guage trains, the other is more of a traditional Hobby Store with trains and other models and crafts. I also realize there is a store in Addison that is well known for HO train sets.

My sister was telling me she found a health food store that sold beeswax at $14 a pound, which she thought was a good deal until she found another place that sold it for $1.50 a pound.

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

In WI you're supposed to declare that on your tax forms. I haven't yet heard of anybody who does.

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

When I was at UC Santa Cruz a buddy of mine (a gimpy Khe Sanh survivor) was from a long time carny family, as was his wife. In addition to collecting political memorabilia, they did a great flea market business, and he operated on one very telling rule: if it doesn't sell at $5, price it at $50 - some fool will haggle you down to $45 and think he got a bargain.

(Bought that Escalation yet Jerry?)

We are a "clicks-and-morter" model train supplier. We discount, and we can compete with the mail order discounters on a variety of product lines. Presise, Boley, Bachmann, Kibri, etc. Check our web page at peachcreekshops.com.

We do NOT have two pricing structures. If you walk into the store you get the same large discount as our mail order operation.

I've read a lot of gripeing about Horizon buying Athearn. I can only imagine that some of these gripes come from individuals that were somehow getting their Athearn from sellers that had some kind of sweetheart deal where no distributor was involved. In the old days, Athearn would sell to anyone with a truck and a buck. A few years ago they began to clean that up. Now with Horizon requiring a real honest to gosh dealer that has an account with Horizon, that will all change.

Someone griped that other distributors should be able to get Athearn. If I were a distributor I'd be screaming to high heaven, but how does this differ from the Walther's operation? You can only get Cornerstone from Walthers and who's complaining?

Other distributors have absorbed manufacturers or created their own proprietary line. There is nothing new here.

If you look behind the curtain, you will see two major business decisions being implemented. First, vertical integration. If you make the model and distribute the model, logistical problems are reduced and your profits increase. A secondary effect is that if you rigerously control the distribution, and limit it to only legitimate dealers, you strengthen the retail base. Example: A guy with a van full of Athearn ( this is just used for example) stuff may show up at a train show and offer prices that are really cheap. Good for the buyer at the show, bad for the retailer who bought it from a distributor and has it on his shelf. When this happens too many times, the retailer shys away from the product line in question and this effects the manufacturer and distributor in a very profound way. The bottom line shrinks.

I can only applaud Horizon. This was a business coup rarely seen in the model railroading industry.

John Glaab Peach Creek Shops

Are you a Horzion dealer now? Of course you APPLAUD them, they are going to help you kill off the people you have been complainging about and slander here! You want to keep your discounts as small as possible to jack up your profits. OK fine, but at least admit it!

You don't do shows so the guys who go there are slandered by you as some thief with a truck?? Cut me a break and go tell that to the guys in Timonium where you refuse to even go to, then whine nobody drives down to Laurel and kiss your ring.

The only person this helps is YOU, but 'forcing' anyone who wants Athearn to have to do business with YOU. And of course, if the distributor discounts shrink, or you competition shrinks, you won't raise prices will you? Please spare us.

This is the most self serving, thinly hidden post I have seen here since that moron from ehobbies trolled here.

A real life event about a company that forced its best customer to pay inflated prices and that company's fate.

For years I worked for a company that traditionally had Gross Margin (GM) between 15% and 19%. That was pretty much on par with the rest of our industry. Long about 1994-95 we bought out a much smaller company that had good ideas. By patenting and implementing those good ideas we were able to get that GM up to 34%-42% against our main customer (~80% of all sales). That customer asked us to please lower that margin to allow them to be more competitive in their own market. Our CEO refused which did anger that customer. In less than a year our main customer was able to set up new procurement channels from other vendors (with lesser quality) and our company lost 100% of that customers business. This loss started our company on a 5 year march to bankruptcy as other companies were reluctant to do new business with us. From 14 manufacturing plants in two countries (3 plants overseas, the rest here) we went to 2 plants overseas and over 2500 jobs lost. From being the undisputed industry leader, to being in last place. The company still exists to this day. But now it is run by the creditors at a fraction of what it used to be. It will take years to fully recover if they are able to at all.

Lesson: Do not screw with your valued customers just to make a few good quarterly reports.

I have never heard of anybody doing that, either. Say, I thought there was a law that made sales tax exempt online, unless the company you're buying from has a brick & mortar operation in the state you're buying from?

Ah, Mr. Rarhburn! I see that you are an equal opportunity flamer. I wonderd how long I would have to wait before I too, became a member of the elite organization of individuals who have felt the innefectual wrath of your putrid tongue. I am truly honored.

And what makes you think that Horizon is going to suddenly raise prices? Not too likely for that would certainly kill the golden goose.

You accuse me of being self serving so that I can somehow force people to pay inflated prices at my shop. How do you know this? Are you as clueless about this as you are about almost everything else?

A couple of comments so that anyone who actually wants some fact might be helped.

I talked to the folks at Horizon this afternoon and asked about some of their future policies.

If a distributor has a backorder for Athearn products that will not be available untill after March 1st he will have to reorder with Horizon. This affects the upcoming Challenger.

Horizon/Athearn will honor all orders for proprietary products. This will allow Walthers to get their SF F-7 sets.

Athearn will be operated as a separate division of Horizon for the forseeable future. Athearn will have control of new product choices and development.

Mr. Rathburn I cordially invite you to my shop to see for yourself how I gouge and pillage my customers. I'll even buy you a cup of coffee. Education can help everyone, well almost everyone..........

My most sincere regards for you continued good health and disposition after death.

John Glaab

Wow! You managed to read all of that into his reply. You even found "slanderous comments"? Wow you sure can be a hoot at times

By the way just exactly what is your experience in the Hobby Industry. A brief resume would be appreciated. Perhaps something more than "I buy at the lowest prices I can find".

Dave