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Discussion Boards => General Discussion => Topic started by: Paul M. on February 08, 2008, 05:25:48 PM

Title: And Another One Bites the Dust
Post by: Paul M. on February 08, 2008, 05:25:48 PM
Another hobby shop in my area, Hobbytown USA is closing. There used to be 3 here, but now there will be only one hobby shop. The Hobbytown USA will close in March. They weren't my favorite hobby shop, but once I got the discount the prices weren't that bad. I guess that means that I'll stock up on Model Railroading supplies, though. :-\

BTW, the LHS I like best is still open. It's locally owned by 1 woman, and have really cheap bargain prices on almost evrything.
Title: Re: And Another One Bites the Dust
Post by: Yampa Bob on February 08, 2008, 06:23:04 PM
Everything up here in the mountains is high priced, often higher than retail. All the merchants scream about the internet.  I know they can't compete, and they claim we have a moral obligation to buy locally.

Anyway, the closest HS is 200 miles away, so without the net I wouldn't have a hobby.   They say "if you can't beat 'em, join 'em" and many stores are doing just that.  It's too bad I can't buy diesel fuel on the net, we're paying almost $4/gallon here, it was $1.75 just a year ago.

Check out the following:

http://www3.towerhobbies.com/listings/cat-u.html

They have supplied all my hobby needs for 25 years.  If you join their "Super Saver Club" you get even more savings with monthly quantity discounts. 

Yampa Bob

Title: Re: And Another One Bites the Dust
Post by: SteamGene on February 08, 2008, 07:04:15 PM
Speaking of that, anybody know of a source for Blair Line products that is NOT MSRP?
Gene
Title: Re: And Another One Bites the Dust
Post by: Paul M. on February 08, 2008, 08:02:16 PM
I went there again today
and bought:
-1 1/2 ounce bottle of Model Master paint
-1 3-foot long aluminum tube (for use on my REA Transfer Building- see HO board)
-1 Atlas Trainman 52-foot ATW gondola
-1 20' roll of Pactra Modeling Making tape
-and 1 Proto 2000 Mather stock car kit (Not Timesaver)
+tax
for $16.67

On Receipt:
You saved: $18.30

You know you got a bargain when you pay less than what you saved. ;)

I'm still sad the most convenient LHS that I go to is closing, though.
Title: Re: And Another One Bites the Dust
Post by: rogertra on February 08, 2008, 08:35:45 PM
Hobbytown USA  is hardly a "hobby store", they're more a chain of overpriced toy retail outlets found in malls.
Title: Re: And Another One Bites the Dust
Post by: r.cprmier on February 08, 2008, 09:20:41 PM
My two major sources for supplies are the internet, and the hobby shows.  The one shop I go to is starting to do a lot of mail order.  That tells me something. 
Also; as a engine "remodellere", I use a lot of Cal-Scale parts.  My main source is Bowser.   For other parts, I go to Greenway, Tichy, etc. 

It is truely a sad note that  "The times, they are-a-changin".  It was a joy to jost go to the hobby shop and browse, finding something you didn't expect-sort of lilke going to the park for a stroll, and finding that strawberry blonde...

Rich
Title: Re: And Another One Bites the Dust
Post by: Yampa Bob on February 09, 2008, 12:28:35 PM
Gene
I have a couple of dealer friends in Kansas that give me fair discounts on items Tower doesn't carry.  For example, $49 for a Roundhouse car set listed at $69 at Horizon.   I'll check around for you.  Is there a particular item you want?

These dealers also now have mail order and are competing quite well. 

When I had a business in Kansas City, there was a huge hobby shop one block away. Guess where I spent my lunch hour?  "Let's see, how can I add this as a business expense"......

Bob
Title: Re: And Another One Bites the Dust
Post by: SteamGene on February 09, 2008, 12:58:51 PM
Bob,
Check my stats and send me an e-mail and I'll give you the parts I need and the MSRP.  And thanks for your e-mail, EBTBob.
BTW, several years ago I bought a cast model of a log house - the kind with the porch between the living area and the cooking area.  It now sits up on a ridge overlooking Keezeltown on the CB&W club layout.  I like wide open spaces, too.   
Gene
Title: Re: And Another One Bites the Dust
Post by: Dr EMD on February 10, 2008, 11:23:39 AM
Here in northern Virgina, we lost Granddads in Springfield VA. The moved to West Virginia and on-line. The Rip Track disappeared one day from Woodbridge VA. That was no lost as I did not like their pricing policy. At the RIP track you can pick up an Athearn Box and see the retail price was raised three times to reflect new wholesale prices. Their name reflects what they do, and I don't mean Repair in Place.

We still have Trains, Etc,  in Lorton VA but they are more into the toy side than scale modeling.

There's a few in Maryland just within reach of the beltway (I-495). I usually make a stop there on my way to/from Walter Reed Army Medical Center.
Title: Re: And Another One Bites the Dust
Post by: Yampa Bob on February 10, 2008, 01:22:32 PM
What really irritates me is when I go into a store and ask for something specific.  If the guy doesn't have it I get:   "You don't want that, you want this".

Anymore if a dealer says that I just say "goodbye".  I know what I want, and I want it now.   

If he says " I don't have it but can have it for you next week".  My reply is usually "If I wanted it next week, I would have come in next week".

Another  gripe is when I see the thing hanging on the wall behind the counter, but the guy says "My computer says we are out of that item".

If he says "We don't sell many of those",  I reply "How can you sell them if you don't have them". 

Biggest complaint:  Ask for a pair of  34-34 jeans.  "We're out of them, they are the most popular size".  But they have 500 of them in size 54.   We have to even order our clothing on the internet. 

Now this is way off topic, but when we built our house the guy selling us the cabinets said there was a problem.  To have the appliances where we wanted, there would be a 12" empty space in the cabinets.  I asked him if they made a 12" unit , and he said yes they did  "Well, stick it in there."    I was considering another destination for the cabinets.

Bob

Title: Re: And Another One Bites the Dust
Post by: geoff on February 10, 2008, 01:43:18 PM
I just don't understand retail, and I mean that, I really don't? One company's suggested retail is meaningless while another's is closer to the mark? Somehow the hobby shops are tied to a certain distributer and must honer this "retail" price??? If I buy a Bachmann item I expext to pay at the most 1/2 of suggested retail, usually much less and believe me I have thousands of dollars in Bachmann stuff. On the other hand a Kato item will be closer to that companies suggested retail and Athearn tends to be some where in between. I have several hobby shops that are about 50 to 60 miles away and I will buy some things from them. I would even spend a little more just to keep them going but I am not going to pay $1200 to $1400 for a K-27 that I can buy at Caboose Hobbies for $700 to keep them in business! On the other hand I would be willing to bet that those hobby shops paid more for their K-27's than Caboose hobbies is selling them for? I often thought that if I had a hobby shop why would I have Bachmann Fn3 Heisler on display for $799 when I could buy some at Trainworld for $295, give my customers a break, sell it for about $450 and help my bottom line? But I guess the hobby shops have to buy from certain distributers and there in lies the problem. I don't know what the solution is but my funds are limited and I cand afford to pay 40% to 150% more to keep the locals in business. I will say this, I will continue to by detail parts, couplers and other small items at my hobby shop and any large items when their price is "close" to my best price. I am sorry but that's the way it is!
Title: Re: And Another One Bites the Dust
Post by: Yampa Bob on February 10, 2008, 02:44:08 PM
Since Horizon bought Athearn, or whatever, they are few discounts on Athearn products.  Horizon has a website, and they will sell direct.  However, their pricing is full retail to "protect" their dealers.     

I have a dealer friend in the midwest that recently said this in an email "I refuse to sell Horizon products  at full retail or higher as Horizon has instructed me to do."  I recently ordered 4 Roundhouse vintage cars from him at $14.95 each, Horizon's price is $18.95. 

When I visited his store last summer, I asked him if he had discounts on everything.  He said "No I have to feed my family too".  But on Horizon and some other brands he tries to help out on quantities.  The retail business is tough, I've been there myself.


Bob

Title: Re: And Another One Bites the Dust
Post by: Johnson Bar Jeff on February 10, 2008, 03:17:46 PM
Quote from: geoff on February 10, 2008, 01:43:18 PM
I will say this, I will continue to by detail parts, couplers and other small items at my hobby shop and any large items when their price is "close" to my best price. I am sorry but that's the way it is!

You're fortunate to have access to places that still carry detail parts. Nobody I have access to seems to carry things like detail parts and decals anymore, and if I only need a bell for a new locomotive, or decals for one car, I'd feel foolish trying to order such a small purchase on line.

More than half the time, or so it seems, when I go into a hobby shop looking for a specific item, they don't have it.
Title: Re: And Another One Bites the Dust
Post by: Atlantic Central on February 10, 2008, 03:33:37 PM
To all:

First, the wholesale price from the manufacturer is not the same percentage from every brand, That is why you see Bachmann discounted 45% and Athearn only discounted 15%-20%.

When you do see Bachmann discounted 45% it was bought directly from Bachmann, not through a distributor like Walthers.

Small shops cannot buy large enough quanities to buy direct so they cannot discount lines like Bachmann as much as places like Trainworld, etc.

Athearn is discounted everywhere I shop, but only about 15%-20% because their parent company is their only distrubutor - basicly one price for all, little shop or big you pay the same for Athearn - I think that is good. More fair than a big dealer being able to sell something for just pennies above what the small dealer has to pay - no offense Mr. B.

If direct online sources like Walthers and Horizon discounted their prices, small dealers would simply not buy from them and small shops would all be gone overnite.

Fact is, in most cases, the lowest prices you see on any product from reputible dealers, represents a reasonable profit above what they paid.

And, the myth that volume will always lower the price is just that, a myth. There is a lowest price, otherwise the manufacturers would loose money and go out of business.

One thing that does happen today is that after a product is not longer the "hot" thing, some big retailers will "dump" the rest at very low prices, just above their cost to get their money out of them rather than wait for people to want th rest (train world closeouts, ebay, train shows, etc.).

Some manufacturers who may be tight on cash have been known to do the same thing. My experiance in business tells me this is a bad idea. It creates an expectation in the customers mind that the "value" of the product is lower, making it harder to sell the next batch at a reasonable profit.

Me, I'm a pure capitalist, I shop for the lowest price and best service (if I need any kind of service), but if I really want something and I understand the current price to be fair, to both the buyer and seller, I will pay that price.

Small hobby shops are at a big disadvantage these days - I know, I've worked in that business.

Yampa Bob,

I agree withyou about poor atitudes of shop owners and that you have to have merchandise on hand to sell stuff. But except for large population centers, Model Trains does not have a large enough customer base to support well stocked local shops (unless they are also successfull mail order/internet outlets).

Business owners cannot pay rent for large retail spaces, stock millions (yes millions) of dollars worth of products, pay their help, etc, all on number of modelers in a small town or rural area, unless they are independantly wealth and are just running their store for fun.

The number of products has become so large in this hobby that it takes nearly a super market sized store to have a comprehensive selection.

So while the local shop is a fun and wonderful place, it has become largely out moded by the growth of the hobby.

Sheldon
Title: Re: And Another One Bites the Dust
Post by: Yampa Bob on February 10, 2008, 07:23:24 PM
A new Super Walmart  and Walgreens opened here just before Christmas.  You can imagine the impact on the smaller stores.

Bob
Title: Re: And Another One Bites the Dust
Post by: geoff on February 10, 2008, 11:34:35 PM
Atlanta Central, I appreciate your explaination of model prices and I am sure your evaluation is mostly correct. But everything you mentioned does not explain a situation I just went through myself. I think we would all agree that Bachmann's brand new Fn3 K-27 is a very hot item. Suggested retail is $1400! I have seen NO ONE but a couple LHS's asking that price. On ebay they are anywhere from about $799 to $1000 with free shipping. Trainworld is I believe $799, Caboose Hobbies is around $700 and I bought one from a large online hobby seller for about $570. As you say, no one is loosing money selling these, so what is happening. The item must not be worth $1400? Someone is putting a real squeeze on the LHS forcing them to pay more than a consumer like me has to pay. It reminds me of Rivarossi back in the early seventies. They showed Big Boys with Suggested Retails of over $200 when anyone could buy one for less that $50. I don't understand how this is good for anybody?
Title: Re: And Another One Bites the Dust
Post by: Woody Elmore on February 11, 2008, 07:53:21 AM
I agree with SHeldon - the old fashioned hobby shop just can't compete with the internet. We had several hobby shops in the NYC area and most are now closed.

I also encountered salesman with no personality who was annoyed when I asked for items. I once wanted Testor's styrene glue, which at the time came in a jar with a brush. When I asked for it in one hobby shop I was told brusquely that they didn't carry it. All they carried was TenAX which he told me was "better." I had several styrene glues but liked Testor's because it had a little set up time. I left the store and put the other items I wanted to purchase back. The guy was very arrogant, and yes, the shop closed.
Title: Re: And Another One Bites the Dust
Post by: Atlantic Central on February 11, 2008, 08:49:25 AM
geoff,

I agree, I don't think it is good either. You have to keep in mind that with such a high priced item small percentages equal large differences in price.

WARNING - the Bachmann may delete this if I get too far into wholesale pricing structures/percentages.

But I will say this much, based on traditional mark ups, the guys selling them at $700 - $800 dollars are fair, in fact they are most likely still making a slightly smaller percentage than most in the retail business need/want to make.

The guy selling them for $570 is giving them away at a very, very small profit. Why, who knows what he is thinking, maybe he is using it as a loss leader to get your business on other more profitable items. But on such an expensive item a small percentage is often still a reasonable number of dollars. Maybe he bought too many and needs to get his money back fast, who knows. Just because one person makes a bad business decision and has to get out of it by selling something too cheap does NOT mean that is the "value" of that product or that others should sell it for that price.

You are correct, $1400 is inflated, if only by the fact that lots of retailers can and do sell them for less.

Without making a direct reference to current pricing structures from Bachmann or others, I will explain this much - In the old days when most every retailer bought from a distributor, it worked like this:

Retail price - $100.00

dealer cost - $60.00

distributor cost - $45.00


So you can see that if you can buy it at distributor cost you can sell it at 25% off retail and make the same percentage as buying at dealer cost and selling retail.

I will not reveal what I know about current discounts in the indusrty, but many small shops are still paying around that $60.00 figure through wholesalers like Walthers, even for products like Bachmann. So when you buy from Trainworld you are paying the same price as they pay from Walthers, give or take a few percentage points.

And, as a final note, in ANY retail business with a store front, if you cannot buy stuff for $60.00 and sell it for at LEAST $90.00 you cannot make a living, or even stay in business! Just ask K-Mart, Sears or Walmart, they ALL make an average gross profit of 30% or more.

I suggest you stop worring about why their prices are high, shop where the prices are right and the service good. I have a local shop who discounts what he can. I buy lots from him, but I do not buy Bachmann or other heavily discounted items from him. I shop for those items at Trainworld, Star Hobby, Standard Hobby Supply and others with low prices.

Sheldon

Title: Re: And Another One Bites the Dust
Post by: Yampa Bob on February 11, 2008, 03:18:52 PM
During the Ebay Christmas season, we won Bachmann GE 70s at $18 to $22 with $8 shipping.  from you know who.  This didn't detract from the "value" of the product in my mind.  I don't care if he made a profit or not, or what his purchasing strategies are, that's his business.  When you consider his "Buy it now" is $30, I think he did ok.

After the season, there were no more listings on the 70.  Perhaps the offerings were his way of spreading a little Christmas cheer in appreciation for his success.

When a store owner says to me "I really appreciate your business", you can be sure I'll return.  Many of the store personnel haven't been taught to just say "Thank you".
When I say "You're welcome" anyway I get a dumb stare.

I was President of the Chamber of Commerce in the Kansas City Area for 2 terms.  I always preached "If you don't take care of your customers, someone else will"   I also believe that, within reasonable limits, "The customer is always right".

Bob
Title: Re: And Another One Bites the Dust
Post by: Atlantic Central on February 11, 2008, 04:17:41 PM
Bob,

I agree completely, but I have no problem with the retailer who sets a fair price and expects to get it. When I was talking about value, there are those individuals who think like this, "Joe blow on ebay sold it to me for X so everybody should be selling them for X".

I paid $30.00 each for two bachmann GE 70s, at a local train show, no shipping, tax included. None of the sources I usually buy Bachmann from have them priced over $35.00.

I bought a new in the box Bachmann 2-6-6-2 for $50.00 a while back, but I don't expect to find that deal again any time soon.

As a person who has been self employed most of my life, I don't expect anyone to work for free. Walmart only makes a 5% net profit - I would not get out of bed for a 5% net profit.

Many years ago (in the 70's), in a hobby shop where I ran the train department, the owner and I often talked about how in the future hobby shops would have to be large, with good inventories and discount prices to compete with the mail order houses that where just starting then. And no one had even dreamed of anything like the internet. Guess we where right.

Sheldon
Title: Re: And Another One Bites the Dust
Post by: jsmvmd on February 12, 2008, 11:42:21 AM
Dear Friends,

Agree with statements from Bob and Sheldon.  In my little business, I, too am distressed by low profits.  However, in Altoona, "Rust Belt USA," some days I am glad to make any profit.

Years ago, the orthopedic company I worked for had 10% sustained profit, which was considered to be excellent.  I believe most American companies work on 5-10% profit.  Anyone who reports higher profits is probably kidding or using funny accounting, IMHO.

Comments anyone?

Best Wishes,

Jack

P.S. So I do not hijack this thread, our two LHS's have different clientele and staff attitudes.  The bigger one has high prices, will be rude if you ask for an Internet match or what he would be willing to do, and rarely says thank you. Clients ask me all the time to match internet prices, and I will do what I can, so am not offended.  Anything to stay in business!  The other guy is smaller, has less inventory, and usually has to order what you want, but discounts most everything.  Guess who gets most folks' business!  Every business has to make profit the best one can.  For me, it is exceptional customer service that keeps them coming back in the face of stiff competition.