.
What can be done to prevent retailers who deliberately inflate the actual manufacturer's selling price, simply to mislead consumers into thinking that their selling price is considerably less?
I believe that the legal community would consider that this borders on fraud (i.e. false advertising).
How often have you encountered this, and have you done anything about it?
If so, what?
Train Discounts says that MSRP for the Lionel Polar Express set is $351.95.
Lionel's website, on the other hand, says that it is $299.99
Example:
(Click the image to ENLARGE it)
Steve, the answer is simply and legally, absolutely nothing*. Supply and demand rules apply here: if something is selling, raise the price. If consumer demand is nil, you lower the price.
Lionel and others print a disclaimer in their catalogs stating that the prices in the catalogs are suggested retail and to consult dealers for further information. Which pretty much means they can either raise or lower prices however they see fit to do.
In defense of small dealers, most operate on small margins of 25-30%. So a $100 train item is purchased by the dealer wholesale for $70-75 plus freight charges and finance charges. Doesn't leave much room to discount prices to the consumer. Plus on some items, Lionel places dealer allocation numbers, meaning those items are available in limited numbers to all dealers. Other items are available as a premium based on a large minimum order, meaning the dealer has to order a lot of other items to get the few he really wants. Other items are made to specific quantities based on pre-orders meaning if the dealer does not preorder, he does not get those items.
So when a small dealer senses an opportunity to make money, they will often seize the chance. There are tons of examples: the first issue gold Aquarium Car which tripled in price when it was dropped from the next catalog. Now you can find it for around its' original list price. Or the first issue uncataloged Vapor Records box car made for Neil Young. Several thousand went out through normal channels to dealers at normal list of $44.95. When dealers realized what this car was and that is was also uncataloged, the price jumped overnight to $200.00. Rip off? Maybe. But on the other hand, if there are folks willing to pay $200 for a box car, there are dealers willing to happily charge that.
On the other hand, there are plenty of items that fail to muster up planned sales and end up as blowouts. Usually the blowouts go to a few select dealers, and the other smaller dealers who still have these unsold items in stock now get raked over the coals.
The only thing you can honestly do* is when you see something like this that YOU feel is overpriced, DON"T BUY IT. Simple as that. Look around and try to find it cheaper. If, using your example, you pay the price asked for, you send a message to that dealer that those items are actually worth more, because you spent more to get it. Eventually if the items don't sell, the dealer is going to have to lower the price.
Believe me, I've been in the business.... unsold inventory costs money. If you don't move products out in a few months, you going to actually lose money on it between the cost of the item, interest charges, tied up income and all the other related costs of keeping a store open. It takes some dealers a very long time to figure this one out. I've seen guys carry around stuff to shows for years asking the same ridiculous prices before they finally come to their senses (or their wives - or worse yet, collection agencies - make them come to their senses).
brianel, Agent 027
"Praise the Lord. I may not have everything I desire, but the Lord has come through for what I need."
brianel027 wrote: Steve, the answer is simply and legally, absolutely nothing*. Supply and demand rules apply here: if something is selling, raise the price. If consumer demand is nil, you lower the price.
as long as we are talking about toy trains and not the necessities of life after a calamity.
In fact, when certain automobiles have hit the market, dealers have asked and gotten prices higher than MSRP.
Celebrating 18 years on the CTT Forum.
Buckeye Riveter......... OTTS Charter Member, a Roseyville Raider and a member of the CTT Forum since 2004..
Jelloway Creek, OH - ELV 1,100 - Home of the Baltimore, Ohio & Wabash RR
TCA 09-64284
Another possibility is that the manufacturer originally announced a higher msrp to the dealers who continue to use that price because they don't realize it has changed or haven't had time to go through all their ads to change it. It's also possible that the dealer guessed at the msrp based on his cost. Since it's not their actual price I don't see it as a big deal.
I recently bought a steam locomotive. The dealer advertised it as msrp $650, his price was $475. The manufacturer's web site offers it for $599.95 plus shipping. Am I cheated?, no I'm delighted I paid $125 less then then manufacturer's web site price and saved the shipping of $11.50 since I bought it at a train show.
In these days of the internet I don't think there are very many dealers who are deliberately trying to get sales by artificially inflating the msrp. You can and should know what prices are. If you don't then they obviously aren't that important to you. Anyway in the end it's the price you paid that counts.
Enjoy
Paul
fifedog wrote:SIMPLE...don't shop from that retailer.
and simple answers are the best answers.
I guess the lesson learned is: Don't shop at Train Discounters.
I think some of the replies missed the point. Any retailer is free to charge more then the MSRP if he chooses. The retailer is also free to only list his price and not state the MSRP. He should NOT misrepresent the MSRP.
The MSRP is a point of reference for most shoppers. If the retailer lies about the MSRP, then that represents fraud in my book. If the retailer guesses at the MSRP, as one poster stated, then he should be honest enough to say it is a guess (or better yet, not state the MSRP).
A retailer also can damage the supplier (Lionel, MTH, Williams, etc.) by misreprepresenting their MSRP by giving the false impression that their products cost more then they actually do.
When I see that a retailer lies about MSRP (as opposed to an honest mistake), I do not do any more business with that retailer.
Earl
It's the consumer's responsibility--100%--to do his homework and know what he is buying (and willing to pay) before he makes the purchase. If the price is not to your liking, regardless of what any stated MSRP may have been, keep your wallet closed and walk away. Dealers can, and sometimes will, charge what they feel the market will bear.
Remember: MSRP means "Manufacturer's SUGGESTED Retail Price." No dealer is obligated to sell items at that price.
EIS2 wrote: I think some of the replies missed the point. Any retailer is free to charge more then the MSRP if he chooses. The retailer is also free to only list his price and not state the MSRP. He should NOT misrepresent the MSRP. Earl
The loop hole here is the dealer you posted stated "suggested retail", not "MSRP". Nothing can be done to prevent inflated "suggested retail". It is illegal. Our free market enterprise system prohibits it unless it is an federally regulated essential to life such as gas and electricity.
How fast does Lionel Inventory have to be sold by large retailers?
How do they set the calender for a blowout sale?
Andrew
Watch my videos on-line at https://www.youtube.com/user/AndrewNeilFalconer
One example of inflated prices above MSRP is at Hobby Lobby. Take your Lionel Catalog in and you will see prices well above what the catalog says. The exception is the expansion sets that they have that has Lionel's price of $109 right on the box. Otherwise, they have it for between 30-60% above MSRP. The only time it gets to OK pricing is with the 30% over and then get a 40% coupon from Hobby Lobby. Then it is 10% below catalog price. I took a catalog into the store and showed the girl. Her comment was that the pricing is dictated from the main office and she could not do anything about it.
To HL's credit, they do have some items that they put on clearance and will cut the price dramatically. Like the shaker bottles of Woodland scenics ground foam, ballast, etc. They have them on the shelf for clearance and when you check out at the register, the $9+ container comes up $3.00. I loaded up.
In the end, you as the consumer just need to educate yourself about what you are buying. This also goes for items at a trainshow. What may seem like a good deal could actually be a bad deal when all is said and done. To quote the seargent from Hill Street Blues, "Let's be carefull out there".
Dennis
TCA#09-63805
My LHS sells everything for retail or higher, I don't know how he stays in business, well yes I do, the nearest hobbyshop with Lionel trains is about 50 miles. I go to him to buy magizines and not much else. I will drive 2 hours to Louisville or even 3 hours to Indianapolis. And because of my LHS high prices I don't hesitate to shop online.
John
jchase1970 wrote: My LHS sells everything for retail or higher, I don't know how he stays in business, well yes I do, the nearest hobbyshop with Lionel trains is about 50 miles. I go to him to buy magizines and not much else. I will drive 2 hours to Louisville or even 3 hours to Indianapolis. And because of my LHS high prices I don't hesitate to shop online.
Same here, only my LHS sells everything at MSRP. I used to go in to buy magazines, but now I just go in to view certain products up close for quality purposes etc. I also use them to buy track, but not switches because I found an online retailer that sells O-22's for $37. I don't know how they stay in business, but I guess there are enough folks in the hobby who have yet to fully turn to the internet as their source for train supplies. Shame on them, because they are missing all the deals.
"I don't know how they stay in business, but I guess there are enough folks in the hobby who have yet to fully turn to the internet as their source for train supplies. Shame on them, because they are missing all the deals."
-------------------
Well, don't worry much about it. The day will come--sooner rather than later--when there will be precious few hobby shops in this nation and nearly everyone will have to buy mail order or on line. That will be real nice when you need a few more track pins, some scenery items, a bottle of paint, a couple of sections of track, and the like. Add in postage and handling, and you'll be doing no better than you are shopping at the local hobby shop.
But people will have to learn this the hard way, I suppose, since so many seem to feel that their local dealers are "robbing" them by seeking to make a profit on things they sell.
You'll know things have reached the point of no return when places like Trainworld or the other biggies begin to close their doors. I see that Allied Trains--out in California--is going belly-up, and it's one of the largest and nicest train stores in the nation (all scales). The writing is on the wall, as the old saying goes.
We have made our bed, now we must sleep in it (to quote another old saying).
3railguy wrote:There is not a lot of profit margin with O gauge trains. Some dealers will put a 40% markup over their wholesale price which is common with other goods. With O gauge trains, 40% over wholesale can leave a pretty substancial sticker price. Many dealers will put a high sticker price on O gauge trains and they just sit there gathering dust. They don't care. They just continue moving product such as model car kits, paints, or RC car gear that brings them the profit margin they need (or want).
Brent
3railguy wrote:Many dealers will put a high sticker price on O gauge trains and they just sit there gathering dust. They don't care. They just continue moving product such as model car kits, paints, or RC car gear that brings them the profit margin they need (or want).
Right, the LHS around me doesn't make his money off the big ticket items, instead its all the small stuff that people don't want to order online. Heck my LHS has several big money locomotives just sitting on the self in the same place they have been for months. As for me, my LHS is 45 to 50 minutes away from the homestead, it is often faster and cheaper ($2.50 per gallon here) for me to order something online and have it delivered than it is to fit in a trip to the LHS. And before we bash the online industry too much, lets remember that mail order was the online not too many years ago and that bi-passed the LHS too. If the LHS is going to survive they are going to have to adapt to an ever changing environment just like everyone else; because they cannot assume that people are just going to continue to walk through the doors because they are the only place in town. Not to mention that its hard to convince yourself into paying $289 for something when you can get it delievered for $217; or $60 when you can get it for $37 (real life scenarios).
I've been buying undecorated decal sheets from a LHS for years. Always $2 a sheet. Last week the stock was out and I asked the owner to order some more for me. I bought them on Saturday, but they were now $2.50 a sheet. The guy purposely marked them up because he knew I needed them. He does stuff like that since I took him to school with a Lionel 2056 Hudson and 2400 series coaches. He's always trying to stick it to me to even the score. For the most part, I avoid his store. But he's the only one I know of that carries the decal sheets. So I ate you know what this time, but he lost a regular customer. Life's too short to deal with that sort of bull.
Jim
Modeling the Baltimore waterfront in HO scale
jaabat wrote: He does stuff like that since I took him to school with a Lionel 2056 Hudson and 2400 series coaches.
How did you "take him to school"?
ATSJer wrote: jaabat wrote: He does stuff like that since I took him to school with a Lionel 2056 Hudson and 2400 series coaches. How did you "take him to school"?
I bought the loco and 2046W tender for $29.00 and the passenger cars for $75. The loco and tender are Excellent plus grade and work fine now. When I bought them from the Weasel, they were in need of a cleaning and didn't run. The loco and set of 4 cars was a one-year only set and is considered to be a bit "rare". A 2056, 2046W, 2421, 2422, 2423, 2429 comprises the set.
jaabat wrote: ATSJer wrote: jaabat wrote: He does stuff like that since I took him to school with a Lionel 2056 Hudson and 2400 series coaches. How did you "take him to school"?I bought the loco and 2046W tender for $29.00 and the passenger cars for $75. The loco and tender are Excellent plus grade and work fine now. When I bought them from the Weasel, they were in need of a cleaning and didn't run. The loco and set of 4 cars was a one-year only set and is considered to be a bit "rare". A 2056, 2046W, 2421, 2422, 2423, 2429 comprises the set.Jim
3railguy wrote:There is not a lot of profit margin with O gauge trains. Some dealers will put a 40% markup over their wholesale price which is common with other goods. With O gauge trains, 40% over wholesale can leave a pretty substancial sticker price. Many dealers will put a high sticker price on O gauge trains and they just sit there gathering dust. They don't care. They just continue moving product such as model car kits, paints, or RC car gear that brings them the profit margin they need (or want). lionroar88 wroteI love this arguement... if there wasn't much mark up then they wouldn't be in business. Do you think the big online houses don't make money on their pre-orders and close-outs? Come on!
lionroar88 wroteI love this arguement... if there wasn't much mark up then they wouldn't be in business. Do you think the big online houses don't make money on their pre-orders and close-outs? Come on!
Dude.......I'm just passing on the thinking of some dealers. Things I have been told by them. The mom and pop corner LHS in particular. It pretty much explains why they have a small selection of overpriced, dated stock. They won't move and replenish it for any less and will let it sit there until the cows come home. What they pay their wholesaler is not much less than what internet dealers charge us because internet dealers buy in large volume and get much larger discounts than the corner LHS. The same could be true for the internet dealer posted here.
No reason for people to get worked up over this. If people are willing to pay it, so be it. If not, so be it. It's our free enterprise system. The same system that allows to quit our job because someone is willing to pay us more.
Actually, it was posters EIS2-Earl and Warburton who grasped the intent from the first paragraph of my post:
I can't argue that a retailer can charge whatever the traffic will bare for any item that he/she/it/they/them sells.
My objection is misrepresenting what the manufacturer has stated is the MSRP (i.e. Manufacturer's Suggested Retail Price)
If the "Sugg. Retail $351.95 had not been printed in the ad, I would have no objection as to what they were charging.
My question to them is, exactly where did they obtain the information for the Polar Express Sugg. Retail $351.95
If I were Lionel, and had become aware that a retailer was inflating the MSRP, I would take some form of action to prevent it.
The retailer can charge whatever they choose, just as long as they do not misrepresent the MSRP.
stevend wrote: I can't argue that a retailer can charge whatever the traffic will bare for any item that he/she/it/they/them sells.My objection is misrepresenting what the manufacturer has stated is the MSRP (i.e. Manufacturer's Suggested Retail Price)If the "Sugg. Retail $351.95 had not been printed in the ad, I would have no objection as to what they were charging.My question to them is, exactly where did they obtain the information for the Polar Express Sugg. Retail $351.95If I were Lionel, and had become aware that a retailer was inflating the MSRP, I would take some form of action to prevent it.The retailer can charge whatever they choose, just as long as they do not misrepresent the MSRP.
We get your point. However, as I said in my first post, the dealer stated "Suggested Retail", not "Manfacturers Suggested Retail Price". That's his loophole. He left out "Manufacturer" so legally, there is nothing Lionel can do. Technically, he is not misrepresenting them. Our free enterprise laws prevent Lionel from taking any action.
I a guy pays $350 for a $250 train and has a lot of fun with it, I don't see what the big deal is. I'm not defending this dealer but I see no reason to get worked up over it. I can think of a looooot of worthless ways people blow money and nobody seems to give a hoot.
stevend wrote:.Actually, it was posters EIS2-Earl and Warburton who grasped the intent from the first paragraph of my post:What can be done to prevent retailers who deliberately inflate the actual manufacturer's selling price, simply to mislead consumers into thinking that their selling price is considerably less?I can't argue that a retailer can charge whatever the traffic will bare for any item that he/she/it/they/them sells.My objection is misrepresenting what the manufacturer has stated is the MSRP (i.e. Manufacturer's Suggested Retail Price)If the "Sugg. Retail $351.95 had not been printed in the ad, I would have no objection as to what they were charging.My question to them is, exactly where did they obtain the information for the Polar Express Sugg. Retail $351.95If I were Lionel, and had become aware that a retailer was inflating the MSRP, I would take some form of action to prevent it.The retailer can charge whatever they choose, just as long as they do not misrepresent the MSRP..
I see two choices here:
1. The guy is a cheat and this is just one symptom, so don't buy from him. If I think someone is fundamentally dishonest, then I don't do business with them.
2. For some reason, other than trying to cheat you, the guy has a "suggested retail", msrp, whatever that is different from what you think it should be. But since his price is the one he actually sells at, you just ignore the other and buy it if you like his price or not if you don't.
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