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Walthers and Other Similar Distributors

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Walthers and Other Similar Distributors
Posted by ksax73 on Friday, January 21, 2005 11:24 AM
What's up.

I was wondering. What's the point of Walthers distributing other products when they sell them for list price. Some manufactures that appear in thier catalog also sell directly.

I'm having trouble seeing how one would choose Walthers over another distributor if Walthers sells everything at list. Now I do know Walthers has put out mini catalogs quaterly that have discounted items from various manufacturers but this changes and does not get reflected on the website.

Can anyone explain the logic to me? (Genuine Question)

Thanks!

~Kyle

The Mary Lindsay Railroad - Featuring Amtrak Model Trains
Your HO Rail Journey Starts Here......... 

 www.marylindsayrr.vze.com (Last Update: 5/31/12)

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Posted by Jetrock on Friday, January 21, 2005 11:39 AM
Well, let's see...

Because Walthers is the distributor, they deal directly with shops so manufacturers don't necessarily have to.

Because people can order everything from Walthers instead of from several different manufacturers, added convenience to the customer.

Because many local hobby shops sell things at list.

Because many local hobby shops don't carry everything, and many such things can be ordered directly.

Because Walthers sells items at list to the public, but of course they have different prices for retailers! The retailer can order at retailer prices and charge list, or go under list, as they desire.

On-sale items are reflected on the website--on-sale items are flagged as such and can be ordered online at the on-sale price.

What is it that you think they should be doing that they are not doing? It isn't entirely clear from your post what you think they are doing wrong...
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Posted by Anonymous on Friday, January 21, 2005 11:52 AM
Guess I don't understand the question either.

Walthers is a retailer for its own products and many others through mail order and internet facilities and its Milwaukee showroom (which used to be caalled Terminal Hobby Shop). But they also act as a wholesaler for their own products and many others. They sell at wholesale prices to retailers. No mystery.
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Posted by Leon Silverman on Friday, January 21, 2005 11:55 AM
Walthers and other distributors have two price lists since they have different clientelle. The sell there offerings to Local Hobby Shops (LHS's) at a substantial discount so that these LHS's can make a profit.
No doubt you have noticed that some subscribers talk about living 50 to 100 miles away from the nearest hobby shop. This forum even reaches people in other countries. Consequently, some people do not have ready access to a LHS. Walters, et al, will sell their products directly to these people only at the MRSP so as not to compete against the LHS's who are also their customers. Remember, if a person has to drive 100 miles to save $30, he could easily spend more than that on travel expenses and lose a whole day of his free time.
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Posted by Anonymous on Friday, January 21, 2005 12:23 PM
Leon,

You hit it right on the head. Walthers is a distributor to hobby shops. The fact that we as individuals can buy directly from Walthers is to allow folks that live a distance from an LHS or can't find an item. For Walthers to offer discounts to individuals would undercut the LHS or other retailers that sell to the public. I think that Walthers, buy not competing with shops they sell to is to be commended.
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Posted by ksax73 on Friday, January 21, 2005 1:21 PM
QUOTE: Originally posted by fiverings

Guess I don't understand the question either.


Perhaps I should've rephrased it but other members have answered the question........

I just wanted to know how that worked why things are the way they are.

When I said that sales weren't reflected on their website I meant that it was not as up to date as the quaterly catalog. I remember seeing a number of items in the mini catalog that were discounted but not shown on the website. Perhaps Walthers has chaged this and maintained thier online database allot better lately because I will admit that I have seen some items on sale on thier website in recent months. It looks like mostly thier products though, which I can see because they are probably trying to make room for later runs of a particular product or something.

QUOTE: Originally posted by JetrockWhat is it that you think they should be doing that they are not doing? It isn't entirely clear from your post what you think they are doing wrong...


I viewed Walthers as a manufacturer. I still do. After reading your replies I better understand how this whole thing works. I thought Walthers was acting as a retailer as well I guess as it seemed to me as if they were competing with these other manufacturers but the whole explanation makes allot of sense and does seem to work rather well. The only issue I have is getting those hard to find (in the hobby shop) items and having to order through Walthers. It would be nice to get things at a discount (I'm on a College Student's Budget [:D])which I currently do through my LHS. I get things from Walthers through them for the most part.

I used to order from "Terminal Hobby Shop" when I was in High School through that minin catalog they printed out every season and often bought things that were on sale.

I have another question though.

When is it ok for Walthers to discount items from other manufacturers. Do they have to get permission from the manufacturer of the product they want to discount or does the manufacturer tell them to do that?

Thanks for the explanations guys.

~Kyle

The Mary Lindsay Railroad - Featuring Amtrak Model Trains
Your HO Rail Journey Starts Here......... 

 www.marylindsayrr.vze.com (Last Update: 5/31/12)

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Posted by Anonymous on Friday, January 21, 2005 1:25 PM
Like any other store, Walthers can discount the things they sell anytime they like. They don't have to get anyones permission to do so -- that would be price-fixing, which is against the law in the US.
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Posted by Anonymous on Friday, January 21, 2005 4:28 PM
Most dealers get (or used to) 40% off the retail prices listed by Walthers. This is the LHS markup to the public. Some dealers sell at full list price, others take less than the 40% - the discounters.

Bob Boudreau
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Posted by Anonymous on Friday, January 21, 2005 5:31 PM
I have a better understanding of your question now. And it's a good question.

Walthers wears 3 "hats" in the indutry--"manufacturer"(or maybe more accurately these days "importer"), "wholesaler", and "retailer." It's a bit surprising they pull off all 3 roles so well, because they often find themselves in competition with their vendors (other manufacturers), their customers (local hobby shops) and their own operations (e.g., the wholesale operation vs. the mail order business vs. the retail showroom).

Your original question might be rephrased: "Why would Walthers want to wholesale Brand X freight cars from another manufacturer (and get a wholesale price 40% below retail) when it is simultaneously selling the same item through its mail-order operation at full retail price?" The answer must be "volume." That and the avoidance of some operating costs attendant to the mail-order operation.

When Walthers wholesales another manufcturer's product, it obviously is paying that manufacturer less than its wholesale price (let alone the retail price). If Walthers puts a "sale" price on somone else's product, they may be doing it to clear out their own excess inventory--or because the other manufacturer (for its own reasons) wants to give Walthers a price break.
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Posted by Jetrock on Friday, January 21, 2005 9:16 PM
In a way, as a musician who produces my own albums, I'm in a similar situation.

I produce my own CD's--or, rather, pay to have them produced.

Some of them I sell directly to the public. This gets the most money in my pocket, but since my time is limited I can only sell so many.

Some I sell to stores. I get less profit per item selling CD's to stores, but these stores can cover more area and my CD's are available to a larger group than I could trying to sell my CD's in person to people.

Some I sell to my bandmates at slightly over cost. This nets me very little profit, because they helped produce the material and all the little profit represents is my extra time dealing with the CD production facility and graphic design. They are free to sell their share of the CD's to individuals or to stores, or to give them away as promotional items to DJ's. This allows my partners to get some profit for their own efforts.

Even though some of my bandmates' sales might interfere with mine (if they, for example, sell a CD to a record store instead of me) they help ensure wider distribution, and further spreading of our name. The more people know who we are, the more people who might be potential buyers of our CD or coming to our shows.

So while Walthers' picture is more complex, in some ways it is similar--they use a wide approach to ensure that they are a well-known commodity, and interface on the market at multiple levels to receive a variety of possible returns.

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