Attn: local hobby stores. Please earn my business

=>As a business =>owner myself, I always try to determine *why* I like some stores and =>not others when I go shopping. Sometimes I learn things that can be =>utilized in my own business. =>After all, we are all consumers, and as a result, we are all =>somebody's customer. =>Doug

Excellent point

A few hobby stores in my area, LOng Island, haven't restocked for years. A couple, when I last checked in, did away with trains altogether. RC cars, helis and planes dominate, and model planes and cars.

Robby

Hi Doug, Some interesting points you've made. I'm a bit confused as to what you are saying in the first paragraph above. My understanding of what you are saying is that the big discounters are buying directly from the manufacturers and selling directly to the modeller, essentially eliminating the "middle man". Assuming that I understood correctly, I guess am now wondering what useful role the distributor plays in the whole chain of sales from the point of manufacture to the layout. What is the definition of a distributor that enables them to buy at distributor prices? Is he/she simply anyone that buys in sufficiently large quantities that they can buy from the manufacturer at special lower rates? And if this is correct would there be anything fundamentally wrong with a manufacturer selling directly to anyone (even you or I) at these low prices provided they could buy in sufficient quantity? If this is unfair I really am not sure why. Could you help clarify your point for me. Its good to get the perspective of a retailer who is also a model rail consumer. Thanks

Lynn

My local hobby shop uniformly charges 20% off list. It's the right discount point for me and, I buy most of my stuff there. Full list price would turn me away from any hobby shop.

I haven't yet, but I'll be needing a substantial amount of grey/white ballast for my North Shore Line mainline, so when I do, I'm off to Hiawatha Hobbies in Waukesha, WI (shameless plug).

Jay CNS&M Wireheads of the world, unite!

That's terrific. I like shops that have stacks of old magazines and used and consignment merchandise. In my travels I try to frequent shops that cater in used stuff. You are very lucky to have so many shops in one area.

Sal

Hi Lynn,

I am sure Doug will clarify his point but I feel compelled to jump in too and voice with my big mouth. Distributors in this industry provide a very essential role in getting product from producer to us. A distributor buys from manufacturers in case quantities and breaks bulk thereby allowing retailers to purchase in smaller quantities from the distributor. If it were not for distributors a retailer would have to go to dozens and dozens of manufacturers to get product. They would also have to make much larger purchases from each manufacturer. This scenario would be a logistical and accounting nightmare for manufacturers and retailers. The manufacturer would have to set up thousands of accounts and manage thousands of small orders. This is simply not practical and would raise prices on product to us the modellers significantly. When a retailer buys from a distributor he can purchase 4 of this product from company A, and 2 of that product from company B, and 12 of this product from company C all in one phone call rather. Distributors are essential.

The manufacturer sells the overwhelming majority of their product to distributors not to retailers or us. Manufacturers make things and want to move product in cases not one or two at a time to you and me.

I don't believe the manufacturer create any problem for the industry. They make product and need to sell it. I think if you went to most manufactuers with $10,000 you'd be surprised at what you could buy. But here is the issue, are you in this for the enjoyment of the hobby or do you want to get into it as a business. You could do it and money talks. When a guy pulled up in a van with $20,000 in cash he'd leave with a full van of product at a wholesale discount. If a guy wants to drop 20 G's on product he should qualify for a wholesale discount. Ever been to a train show and a guy has 6 tables with stacks and stacks of product from the same company that he is selling at unbelivable prices. Chances are the day before his van was backed up to said manufacturer.

Some people get so upset because this happens but anyone is capable of doing this is they have the money. With most model railroad companies real cash talks. Some guys pull up and think $200 is going to get them a wholesale discount. That's just not going to happen unless you know the owner.

Is there a problem with that? The only thing I hate is when some people get different discounts because they are in the good ole' boy club. In a perfect world the discount structure would be applied evenly across the board depending on what level you are approaching it at. i.e. retailers would all get the same discount from their distributor, distributors would all get the same discount fromt he manuf., etc. but that does not always happen.

Sal

Lynn, In a perfect world, the manufacturer sells large volumn to a warehouse distributor, who then sells to hobby shops, which in turn sell to us.

Typicly, a product that costs $10. to manufacure and package is sold to the distributor for $20. He then marks it up to about $28.60 and sells it to a hobby shop that marks it up to about $47.50 and sells it to us.

Everybody makes money and the perfect world keeps turning.

The distributor is the biggest middle man, BUT also the most important in the chain, because he stocks many lines and prints a catalog and is very reliable and experienced at picking, packing and shipping orders.

Eliminating the distributor would have hobby shops buying from manufacturers in small quantities, and as a result, not having much in stock.

But it's not a perfect world. Along comes the renegade distributor that has fallen out of favor with the hobby shops and decides to mail order direct. To be successful, he must discount, so he cuts out *his* middle man, the hobby shop. He does not care about the wellfare of the hobby. He only cares about himself and lining his pockets with money.

The manufacturers *say* they don't like these people, BUT, they pay the same for the inventory as a regular distributor, so......they get the goods.

As time wears on, the market adjusts itself. The *BIG* plastic giants like Bachmann, Atlas, Athearn, Shinohara keep going because their product is very costly to tool up for, BUT also very profitable once the tooling is paid for.

Smaller companies like Fine Scale Miniatures are FORCED to deal direct with the consumers and produce limited run kits that are released once a year.

Even the magazines play ball. Have you ever noticed that the power base is in Milwaukee. Lots of politics taking place to insure the hobby survives. Times were the magazines used to publish articles and layouts that were pro brass and craftsmen type kits and construction.

Now the magazine shift is towards layouts featuring products from the big plastic manufacturers.

It's all just business. The hobby will survive one way or another. Doug

That has been an ongoing problem for anyone wanting to learn about DCC that isn't in a major city. I can count on the fingers of one hand the number of hobby shops that know squat about DCC and none of them are in Cincinnati. I'd venture a guess there might be *one* Digitrax system for sale in a retail store in the entire 2-million metro area at this moment, in one of two possible places. DCC is not a fast learning curve, and it's not necessarily fair to expect dealers to instantly know all about it -- but it's not new anymore, it has been

5+ years since DCC really began to catch on, and it's still a mail order special other than decoders.

One of the best semi-local dealers to get DCC stuff from is Gordy's Hobbies who covers a lot of train shows in the midwest. There are also others, like Tony's and the one from GA that is pretty big. But the brick & mortar stores with few exceptions seem to have been left behind. It would seem like if they wanted to sell DCC, and get a solid customer base buying decoders, accessories, telling their friends, etc. that having a demo system in the store would be rather useful. Let customers get a feel for the system, try out some DCC-equipped locos like the Atlas stuff, or have a look at a few converted locos with the shells off, to get some idea of what's involved. This would be a modest investment for the dealer - basically for Digitrax a Zephyr system ($200 sticker) at dealer cost plus a few decoders... and a little effort to set the thing up. DCC is an area where the *service* aspect of the LHS could really come into play, and yet most of them aren't even trying. I think a lot more people would try DCC if they could have some hands-on experience before taking the plunge.

Andy

Andy;

Your post reminds me of my experience back in 1987 when I wanted to buy command control. I went to DesPlains Hobbies, as they were a Keller Onboard dealer, so that I could see first hand what the equipment looked like. Based on magazine reviews, I had decided on either Dynatrol or Keller Onboard.

I wait 15 minutes to get waited on. Salesperson finally acknowledges my presence. I tell him I am interested in OnBoard. He brings back this pile of stuff in a box, including two locomotives, one a powered unit, the other a dummy with the decoder, and a mass of wires between them. He walks away.

I have questions, which I never did get answered, and after 45 minutes of watching the salesperson wait on an elderly couple purchasing some LGB Christman car, I got discusted, and walked out. Ordered Dynatrol the next day through Al's Hobby in Elmhurst, and even got a discount. Discount is a foreign word to DesPlaines Hobby except during their annual 20% off sale.

When I finally caved into DCC, based on the experience of two friends with System 1, it was an in-home demonstration by Don Wangrow on my layout that capped the deal. Don wouldn't sell direct, and encouraged me to go to DesPlaines, as he was a big supporter of brick and mortar shops. I went to Tony's Train Exchange instead.

Tony earns my business. Great prices, great service. When I had problems with run-locomotives, it was Tony that clued me into the problem (decoders programmed for DC operation will run away if the track voltage is below a minimum start-up voltage, which occurs with

10 Bachmann passenger cars on the circuit). His web site is easy to navigate, he provides great phone support, has on-line reviews of products, all which make him a premier retailer in my estimation.

regards, Jerry

Doug and Salinas, thank you for your explanation. So as I understand it a manufacturer must choose how he sells his product - in very large bundles or single sized servings ( or somewhere in between) It also depends on how many customers the manufacturer wants to deal with. The manufacturer/distributor/retailer/consumer model is one that has been around for some time. It seems to have worked well for the most part. Everyone picks up a piece of the profit pie by fitting into this chain. Its funny how things change as new ideas and technology enter into the picture. For example the widespread use of the internet and credit cards has made it possible to give most anyone access to the whole world as a market place much easier today than in the past. With the whole world to sell to directly the retailer can afford to buy in quantities worthy of a distributor discount, so the "model" that seemed to work so well in the past gets tested and in some ways may be found to be lacking. There certainly are advantages and disadvantages to dealing with both the local guy as well as the big box by mail order. To compete the LHS has to recognize his strengths and use them to his best advantage. The way I see it we as consumers must look at what each approach to buying uniquely offers, and then decide what we are willing to pay for it. The customer is really the driving force in the whole scheme of things. Those sellers who can *really* understand what constitutes a quality product/service will be the most successful.

I never had any interest in command control until DCC had matured to the point that there were at least some choices in the market. One Cincinnati-based analog CC manufacturer used to come to every show. Now this is the horse's mouth here.. he always had a demo going, but about all my hard questions, such as consisting, having more than 16 locos, etc the answer was either to change the subject or more along the lines of "You don't need it... we ain't got it". The most common thing heard from any analog CC peddler was "Why do you need more than X locomotives?" and that was the end of the conversation. Those guys openly laughed at my wish list, a list of things I wanted in a CC system before I'd buy one. ALL of those things are met with virtually all of the major DCC systems available today.

I guess my point is, DCC is not that difficult to learn as a dealer, nor difficult or expensive to set up a working demonstration in a store. Certainly a piece of cake compared to analog CC systems.

BTW, I don't know who owned Des Plaines Hobbies on your unfortunate visit in the 80s, but today Ron has an NCE system set up in the store, and carries both NCE and Digitrax. What sold me on DCC was also a hands-on demo from Don Wangrow at the Rosemont show in 1997. I had been through AJ's demo a few times, but the DT-100 throttle's selection process for 4-digit addressing is so convoluted it makes everything else seem hard. In reality, with the DT-100 consisting

*is* easy, it's just selecting that's nearly impossible :-) Anyway, Don handed me the "hammerhead" throttle and talked me through creating a consist, and the process was virtually identical to what I had specified in my "wish list" from the pre-DCC era. That sold me right there. That, plus the fact that it *worked*.

I currently own two DCC systems - the 97 Wangrow and a Digitrax chief w/radio. I bought the latter just for the radio, and because friends use Digitrax and I wanted to learn it and have some shareable, compatible hardware. I think the ultimate thing for my new layout will be to get my Sys-1 upgraded to current NCE specs with radio capability. Digitrax has gotten better, but the Sys-1 has remained bullet proof. Don Wangrow has passed on, but he was the one - with credit to his NCE partners at the time - who convinced me to make the switch.

And the thing is, as much hassle as I've had with DCC and various loco issues, *I* could sell DCC better than most hobby shops. I'd recommend that beginners start out with Atlas decoder-equipped locos first, then begin playing around with doing installs. And mention all the pitfalls with Bachmann's decoder-popping electronics, and P2K's bulb-blowing sockets and decoder-smoking motors, but I think I could make a better case for DCC than most hobby shops. All these problems notwithstanding, I am still very much thumbs-up to DCC.

Andy

Interesting. At the Rosemont show in 1996 and demo by Don Wangrow was the deciding factor to NOT go with his system. When the owner/designer went to select a locomotive, it took off like a jack rabbit. Something to do with the potentiometer not being reset to zero prior to selecting a locomotive.

I when with the Digitrax Chief system that year and upgraded to radio a couple years later.

I an very happy with my choice.

Howard

I have never had that happen... the hammerhead will allow you to select a new loco regardless of the throttle pot position, but you have to roll it back to zero to actually take control of the new loco. It takes some getting used to, but that must have been the fix for what you describe. Digitrax doesn't have that problem since they use continuous clickers instead of a point-to-point pot.

Andy

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- Pre-Interstate Urban Archaeology

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I live in a small town too but we're fortunate to have a nice model train shop near by. Their prices are higher than mail order but usually not full retail. The information I get from the store owner is often worth the extra cost. I do order mail order when he doesn't have something in stock that I want ASAP but I try to balance my purchases by frequenting the store too.

I've been flying RC heli's for about ten years and I would love to have a local store that supports the hobby. However my area doesn't have enough helicopter fliers to make it worth the cost of stocking heli' parts in the local hobby store, especially when some parts are quite expensive. A typical crash can cost $200. I'm usually grounded while I wait for a mail order. Now that I'm getting back into the model train hobby I appreciate having a local shop with a lot of stock.

I live in West Los Angeles and have several model train shops within 75 miles. The closest (largest on the West Coast) does not discount, but hey, they are there. Others, (15 to 60 miles distant) do discount, but of course the governor (whoever he turne out to be) gets 8.25% which can offset a substntial shipping charge.

But my Mother, Grandmother, Sister, and two nephews live in Ashland, Oregon. Last time I was there, January, 2001, we went to check out the local hobby shop. This is in Medford, 15 miles away with virtually no way for those without private automobile access to get to. (That would include the nephews)

It was a halfway decent shop for the square footage. About half was devoted to trains with the rest to automobiles, aircraft and ships. But this was the only model shop within 150 miles. Everything was at MSRP. Of course, in Oregon there is no sales tax which automataclly equals a

8.25% discount for me. But they didn't have anything I wanted or needed. Pretty basic stuff mostly.

I ran into a similar shop in Santa Barbara on a recent Amtrak trip. Nice shop, but nothing of interest to me. If I wanted a big ticket item (Kato engine or such) I'd most likley go to the more local discount shops. If I wanted smaller ticket stuff, I'd more likely go local.

So, I understand the situation of those folks in rural areas or for that matter, urban areas with few local choices.

Conclusion, it AIN'T EASY RUNNING A SHOP THESE DAYS!

Regards

DAve Fan of the late, great Southern Pacific Railroad and Atchison, Topeka and Santa Fe.

Or (not to get TOO far off the subject), if you have a cab with the "digital encoder" instead of the pot, as I do, you don't even have to worry about it! I can leave one locomotive running, select another, and manipulate the new loco's speed immediately.

Joe's Hobby Center in Farmington MI has heli's. Sales and service.

-- The Gratiot Valley Railroad Club bi-annual tra> >