MDC 4-4-0...whom are we kidding?

Kind of like Walthers and Horizon, eh?

fl@liner

Reply to
fubar
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Bruce - How does a manufacturer shut out a guy who doesn't need or want manufactured RTR or instant kits anyway, you ask? Just look around. Most if not all manufacturers are slowly shifting toward all RTR products and dropping or severely curtailing their kit lines. In time it will become impossible to find kits (it's that way already in some hobby shops I've visit lately). Kits sell largely to guys that have been in the hobby for years and are purchased largely on impulse so that, in the short term, they don't sell out quickly. And established hobbyists are unlikely to change their buying habits. On the other hand, todays limited run RTR locos and rolling stock are to a great extent the province of newer hobbyists who panic buy, fearing they'll miss out if they don't, so the limited stock moves much more quickly. The situation with RTR may be good financially for the manufacturers but in the longterm, bad for the hobby in general. As kits disappear, you will likely see a steady decline in the number active hobbyists as the source of buildable items dries up.

CNJ999

Reply to
CNJ999

but in the long-term, bad for the hobby in general. As kits disappear, you will likely see a steady decline in the number active hobbyists as the source of buildable items dries up.< This is simply not true in general but may be true for certain types of kits. If you look at freight cars for example most if not all manufactures run plastic kits at various times. It's just a little harder to get them. Sometimes LHSs simply don't want to order them but they are available from the manufactures, maybe not from the distributors and these are the only people many LHSs wish to do business with. Also have you taken a look at the resin kits available and there are new manufactures coming on line frequently. As to diesels there are literally hundreds if not thousands of detail parts available to upgrade these engines. The same is true of steam. If what you are referring to is a $3 Athearn kit that one can drop twice and it's assembled those days are gone forever. If you are referring to wood kits those days are also gone as styrene is the medium of today.

Reply to
Jon Miller

Just curious. Are either if you in the grocery or hobby business ?

Ken Day

Reply to
Ken Day

I own and operate a very small model train store, as a service to local modellers as much as anything. It makes a enough profit to finance my hobby, and a visit from a customer is a good excuse to talk trains. :-)

As a small hobby shop, I qualify for the "standard trade discount" of

40% off MSRP, unless the distributor or manufacturer happens to have a sale or promotion. (These are often of stock that hasn't moved, so it's not likely to move off my shelves, either.) 40% happens to be very close to the discounts offered by deep-discount mail-order and on-line stores; and many of these happen to be sidelines of distributors... So draw you own conclusions.

As for my knowledge of grocery store practices, there are many sources for this, including owners of local small grocery stores. Which no longer exist: their wholesale costs were usually as much as and higher than the prices at the chain store - which happened to be owned by the the same conglomerate that owns the distributor... Again, draw your own conclusions.

HTH

Reply to
Wolf Kirchmeir

I thought you may be in business in one or the other since you seemed knowledgeble on the subject. Many people think that the hobby shops and grocery stores are making big bucks and no one can convince them otherwise.

As a very young man I spent about eight years ordering , pricing and merchandising for a very large supermarket. 45 employees in the 60's was a large supermarket. I just worked there , didn't own it. Back then we shot for a GPM of 18-20% which would net us 2-3%. Supermarkets now have to operate on a much higher gross profit due to increased business costs. I read somewhere the other day that Kroger is operating on a 27% gpm and netting about 1% or less.

Then I spent about the same amount of time in the brokerage business (food , non rx drugs) so I've been on both sides of the order desk.

Also did a lot construction , architectural work on the side and did it full time for a short while.

The last business was a hobby shop.....all modelers dream , right. The toughest of all the businesses , IMO. Most never realize that other than special promotions,

40% is the most discount on anything , some as low as 20% ,and then you give up most of that trying to meet competition. Some offered an additional cash discount. Walthers , if I recall correctly, had no additional discount and was usually out of stock on probably 50% or more of their mdse. I don't recall any of the train distributors offering more than a n additional 2%. Most RC related merchandise also offered a 40% discount with many items as low as 20%. Most RC hobby distributors , however , offered an additional 12% which ran that discount up to 47.2%That helped a lot. I think when I closed the business my average gpm was about 23%. Not too bad for a store only selling RC and a few trains. I used to get so irritated . although I didn't let it show , when someone was looking at..... for instance , a 200.00 RC radio system which I was only making about 10-12 bucks on and then try to beat me down maybe 50 bucks on that price. I was already meeting mail order prices on most radio systems and other leader items..

As you mentioned , many of the distributors I bought from were also selling mail order at very close , sometimes less than my cost. All the above is the way it was when I had my shop. It's now been 15 years since I closed , but I understand that things are still about the same.

I've run my mouth too long already.

Ken

Reply to
Ken Day

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