Re: Another Horizon/Athearn Stupidhead move.

Try looking at it from the standpoint of $1500 initial order and $200/mo ONLY of Athearn stuff.

Let's say I'm a storefront and I get all my MR stuff from Linton's. Now, to get Athearn, I have that minimum requirement. I already have a fair amount of Athearn already. Can I afford the Horizon min? If not, should I take business away from Linton's solely to get a few of the Athearn stuff I need? What about all the stuff I already have in stock?

$1500/$200 might work if I had NO Athearn, but.....

As I'm not a storeowner, I don't know. But, it's a consideration.

Kennedy

See my other post. I'm saying that in some instances, a store that doesn't normally deal with Horizon will now have to do so if they want Athearn. And, if they can't meet the minimums and such just with Athearn, then they'd have to buy other stuff to meet the min. Say, they can buy Accurail or MDC. But, he's already buying those from somebody else. Will he switch? Who knows, it's a business decision on the part of the store owner.

Though I am rethinking the issue of whether a store can solely buy Athearn from Horizon with the $200 min. That could be so, but special orders for that AutoMax in the hard to get roadname may have to wait a long time.

Kennedy

You shouldn't be shocked... that's what "exclusive distributor" means, and that's what's been reported to rec.models.railroad since this story broke.

What is shocking is that Horizon is the one telling the distributor to take a hike now. From the context of what you report, it sounds like the distributor(s) didn't have an account with Horizon and even declined having one in the past... so how could Horizon tell her "to take a hike?"

Exactly. Horizon has declined to offer Athearn via other distributors. Plenty of hobby products that area "exclusives" to a distributor are offered to others. For instance Trumpeteer models are exclusively imported by Stevens. Stevens is the main source but they also distribute to MMD, Sentai, and Great Planes. Why? because in this case the models can reach a broader market. Horizon does not need to do this as they are considerably bigger.

Dave Jacksonville, FL

Actually as a store owner I try to spread out sales. I do not want to buy everything from one sources. I use three main distributors. By using my stores computers to track costs and availability (via Vendor supplied software) I can best determine the source I want to buy from. In other words I shop around the same as my customers. Having more than one choice is and advantage. However my experience with these types of exclusive deals is that in fact it's easier to get what I want with good pricing.

Dave Jacksonville, FL

AH!! The "nibbled to death by a herd of ducks" syndrome, (yeah I know it's a gaggle). I see where the multiple distributor requirements could pile up.

The average Hobbytown probably carries $200,000 in inventory at any given time. Smaller shops probably carry $30,000 to $80,000 in inventory. A $1500 initial order is not that much at all.

A distributor doesn't want to mess around with a guy who places $100 orders. It is just worth it. Frankly, if a hobby shop is placing $100 orders he really isn't in business anyway because he's is doing no business.

Jim

Horizon is a distributor. Why would they offer their product to their competition if they can have exclusive distribution of the product? To be nice guy? They lose 15% if they sell to other distributors. The smart thing for them right now is to sign up more hobby shops because they want Athearn and start selling more and more other products to those shops as well.

Jim

Only if the distributor applied to Horizon now for an account, and Horizon is refusing to do business with them..... In other words, the application was returned with a "Dee-Nied!" stamp on it. :D

Kennedy

OK, I'll buy that. If, though, some other distributor that you don't deal with at all snaps up a popular line you've been getting from you usual suspects, then the decision has to be whether you want to start up another business relationship with a distributor you haven't dealt with before. And whether you want to divert any existing business with the usual suspects to this new distributor to make up any shortfalls in minimums.

Kennedy

That's why I mentioned in another post that I'm rethinking this. THe $200 min could be only for those shops doing the special order for something, like those oddball Auto-Max or something like that. The stuff somebody like me walks into the store, the guy asks me if he could help, I say I want X, they say, no, but we can order. But, I want 3 of those RTR WFE reefers, maybe $45 tops. How long now do I have to wait?

My rethink is more in line with general business, the store won't be ordering regularly until he has the minimum. We may have looked at from the standpoint that it's a monthly reorder, but that doesn't have to be the case. In fact, it seems to me that in the past, we've stated that some stores hold on to special orders for a long time before it goes in with a general reorder....

Kennedy

This is much more of a concern for a trains-only shop than a general hobby shop. Horizon seems to distribute most of the major lines of model RR products, but they are far short of other distributors on smaller manufacturers. Bowser has about 3x the number of lines Horizon carries, Portman about 6x, and Walthers probably close to 10x.

A couple of people have mentioned maybe things will change, and Athearn will go back into other distributors in the future. If that does happen, it will be limited. Athearn is probably every model RR distributor's largest line in terms of variety of items. If they want back in later, few other distributors will be able to, or even want to, come up with the money to restock. I did a rough estimate a few years back, for Train World's ad where they claim a "giant $100,000 Athearn inventory". I figured it's about 2 of each item.

Peter King in NY

Is this the Hobbytown USA chain? If so, the nearest one to me had a whopping

9 Blue Box Athearn kits and no Blue Box locomotives. I think they had 5-6 Genesis locos. This one seems strictly for RC cars, boats, and planes. I doubt seriously if they had even $5000 worth of N and HO inventory. This is the Newark, CA branch. I do not even count them in my list of local hobby shops.

Art

Jim,

They lose more than 15% by distributing to others... they lose 15%, plus 2% for 10 day payment (all distributors live on this additional discount)... PLUS distributors require manufacturers (in the case Horizon) to pay for the shipping of their products to them... and that isn't cheap.

Art Fahie

Where is their store? I lived in Union City until mid-2001 and I don't remember them.

I used to use Jim Kennedy's model train store at Newark Boulevard and Jarvis, until it closed maybe 10 years ago. A real model train shop run by a hobbyist.

It is in the shopping center next to those 2 new hi-rise hotels at Decotto RD (Cal-84, Dumbarton Bridge) and Newark Blvd. I believe there to be a Raleys (Jarvis and Newark Blvd) next door to the shop. It has been there for a few years.

I never knew there was another in the same area.

Art

Linton's is not now nor has been an Athearn 'distributor' .. they buy Athearn products from other distributors (but not at distributor pricing) to supply small stores with a small assortment of items and handle special orders .. This works in Canada because the small store does not have enough volume to ecomically bring the product through the border themselves.The extra frieght and brokerage charges to import from the US are very high on small orders. Horizon will not sell to businesses that do not meet their requirements for a retail business and so it seems that Linton's will probably not have access. The small store in Canada should still have access to Athearn products. There are some Athearn distributors in Canada, and I know that at least one of them is saying they have been told they will still be able to carry the line. It seems reasonable to me that while Horizon is the exclusive Athearn distributor in the US, Athearn distributors in other countries may continue to be Athearn distributors. Time will tell.

Regards John Deecker (retired Canadian store owner)

When I helped out in a hobby shop (which seems like 84 years ago now) reordering was a weekly occurance from several distributors. Generally on a specific day of the week the orders would come in and that's when you looked at the invoices and compared what was hsipped to what was actually sent. Back then I remember the Walthers invoice being filled with items that were backordered. It was not a gigantic shop by any means but there was a fair number of regulars who would shop there. To buy $200 worth from a single distributor doesn't seem like much when you start adding up what needs ot be restocked. I am not sure what Horizon carries but if they expand their product line 95% of the shops would have no problem with a $200 a month minimum. That represents about $350 in retail value? Or about $4200 a year in retail sales.

You do bring up a good point about special orders. If a shop order once a month that is bad for a lot of special orde customers because they have to wait up to a month to see if the item is even in stock with the distributor. More frequent ordering is better for customer service and an indication of steady sales.

Jim

To All: Why not solve the problem of Horizon/Athearn by buying other manufacturers products? From looking at just last years Walther's Catalog I would say there is plenty of other manufacturers to choose from. From what I have read here, Athearn products were not that great and many were modified after purchase. I concentrate on Steam, and am not interested in diesels or diesel/electric, other than the GG1, but I cannot see why Athearn rates all this bother!