Today's Visit to the LHS: "A look at the new Horizon"

[Fergmiester]

I caved once again finding myself venturing down to the LHS, though I didn't need anything I still spent $20.

But I digress. The owner who I won't name was on a rant, asked me if I knew these guys and what did I think, and then preceded to hand me a sales folder of a certain company who shall remain nameless. The folder was to say the least in depth, and written in such a way it would make a Philadelphia lawyer proud, and a lot of money.

The poor owner asked me what I thought and if it was worth his while to carry "their" line of merchandise. I said that from I had heard there were a lot of concerns amongst the MR community but he would be hard pressed not to as this "new" company carried old lines that were good sellers and were coveted by the majority of modelers. The owner then went on to say that he had heard some people were scared because of the uncertainty. He also went on to say since this company has taken over the old blue boxes were nowhere be seen and replaced by newer and bigger and brighter boxes with RTR embossed on them with price tag to boot and that the lower prices were a thing of the past. The owner of the LHS was not pleased at all!
Questions like send us a photo of your store front, and a myriad of forms to fill. As the owner said it's like giving up my first born! Credit checks are one thing but though the old guy didn't say it, I was given the feeling his privacy was being violated.

Anyone else with similar observations?

Regards
Fergie

[Anonymous]

This seems like the beginning of the hobby's return to it's primitive form. With the incresaing lack of kits and the rising prices, it'll be only a matter of time when people begin ....

SCRATCHBUILDING!

[Noah Hofrichter]

I agree. I got started on scratchbuilding because of the contest started on here, and I'm not looking back. I'm just finnishing up my first Model, and I've already got ideas for two others.

Noah

[Fergmiester]

Monopolies are just evil, plain and simple. They don't give us what we want but rather what they want to give us at a unfair market price.

[Paul3]

Fergmiester wrote:

QUOTE: He also went on to say since this company has taken over the old blue boxes were nowhere be seen and replaced by newer and bigger and brighter boxes with RTR embossed on them with price tag to boot and that the lower prices were a thing of the past. The owner of the LHS was not pleased at all!

He is also quite wrong. Blue Box kits have not been replaced by RTR. There are less being made, I'm sure, but that's because there are less people buying them. Any company that doesn't make what their customers want will not be in business for long. And there are more people out there that want RTR over kits, and that's a fact.

But if someone can get Athearn RTR, then they can get Athearn blue box.

BTW, lower prices are always a thing of the past in model railroading, except in electronics.

The real trick is, as you mentioned, that the new owners of Athearn and Roundhouse are putting all kinds of barriers up for retailers, probably in order to cut down on discount pricing. I don't know why, but they have done this before in the R/C hobby (probably to keep the big retailers happy).

And scratchbuilding is nice and all, but when my operations on my layout calls for 250-odd cars, I'm not about to scratchbuild them all... [:D]

Paul A. Cutler III
*****************
Weather Or No Go New Haven
*****************

[Anonymous]

QUOTE: Originally posted by flyingscot

This seems like the beginning of the hobby's return to it's primitive form. With the incresaing lack of kits and the rising prices, it'll be only a matter of time when people begin ....

SCRATCHBUILDING!

Unfortunatly the only people scratchbuilding will be the die hards like you and I. and those my age (Noah, being the one exception) are not going to inclined to be scoring and snapping styrene anytime soon.

I am whording as many spare parts as I can before the big crunch happens.

James

[ericsp]

QUOTE: Originally posted by Fergmiester

Monopolies are just evil, plain and simple. They don't give us what we want but rather what they want to give us at a unfair market price.

Even though there are dozens of model railroad companies, there has never been much competition. How many of a certain locomotive or freight cars have been produced by more than one manufacturer? There have been some, more so for locomotives. However there are not that many freight cars that are producred by multiple manufacturers.

As for Athearn, I wish all of the RTR and Genesis cars were available as kits.

[Anonymous]

As consumers, we always have a choice. We can stop buying, thereby forcing the companies to act, or as is usual, most of you will just keep buying what you can afford, regardless of the value. It's simply supply and demand. You demand product, and the companies know you will pay whatever they charge because "you want it". It has been that way with the auto companies for years. Nobody asks, "is it worth it?', they just ask themselves, "can I afford it?". Until you learn to control the desire, the companies will keep changing and charging. Business as usual. Help your hobby shops. Help them help you.

[BRAKIE]

Guys,I visited a hobby shop yesterday and got into a lengthly talk about the state of the hobby.Here is what he said in short:
He stated he has a rough time keeping the RTR and Genesis cars in stock..According to him and his shelves back up what he says next to the Atlas cars Athearn is his best selling cars he carries..He also received a order of blue box car kits..They are collecting dust on his shelf..He sold out of the CF7s,SD70s,SD50s and the P2K SD50 and 60 and has order more..He was one of the biggest doom sayers when Athearn started to release RTR cars and engines and when Horizon bought out Athearn. Now he's singing songs of praise He still gives a 15% discount. Funny how time changes things..He is not the only dealer that feels that way.
Now,the other side of the coin.I know of 3 hobby shops that will no longer carry Athearn or now MDC.One of these shops sells more R/C stuff then trains and does deal with Horizon for such items.According to him Model Railroading is dying as its being killed off by high and higher prices..He predicts that train only hobby shops will become a relic of the past as the INTERNET shops will kill them off..
Guys,I don't know..I talk to several hobby shop owners and many modelers..There seems to be mix feelings over the RTR stuff.As for me I buy both but,lately prefer RTR...I will say this from what I am hearing..We will be seeing more buyouts as the hobby down sizes.Everybody seems to agree that the hobby is not dying but,maintains a slow growth.Some even feel that RTR engines and cars will help maintain that growth because we are living in what they call"I want it right now" world.(shrugs)

[Anonymous]

I'll call them ready-to-run when they're up to NMRA recommended weight (but you'll pay for that in higher shipping fees, which means higher prices). Other than that, they're just more highly-detailed pre-built models - almost-RTR.

[CNJ831]

BRAKIE posts -
...Everybody seems to agree that the hobby is not dying but, maintains a slow growth. Some even feel that RTR engines and cars will maintain that growth...

The discussion over growth or decline in the hobby comes up periodically. To date I have to say I've _never_ seen a single documented fact or figure that indicates any recent growth but quite a few that illustrate that a decline has been in progress since the early 1990's. Can you back up this claim of growth with some hard numbers Brakie? I'd love to see something that would actually confirm growth, rather than just a lot more vague hear-say that things are peachy.

CNJ831

[AntonioFP45]

Hobby's defintely not dying here in Florida. I've noticed that general hobby stores are carrying less model railroad products, but by the same token the regular LHS stores are busy as usual.

I was upset at first by the RTR freight car and passenger car invasion. But I must admit that I have stopped buying blue box freight kits as I've gotten a "tad more" demanding in my old age when it comes to detailing and realism. A few years ago, I could have taken Blue Box kits and spend a lot of detailing time. Forget it now! My hobbying time is limited so I haven't mind paying a little extra for the RTR.

I support my LHS and shop on E-bay. So far the best deals I've gotten have been at the GATS shows. As someone mentioned this hobby is growing "slowly". IMHO though as innovations like DCC, Sound, and RTR continue to improve; this hobby will be around for a long time!

[Don Gibson]

QUOTE: Originally posted by Fergmiester

Monopolies are just evil, plain and simple. They don't give us what we want but rather what they want to give us at a unfair market price.

Your thoughts (on monopolies) do not apply to our hobby and your "unfair market price" comment strikes me as naive. Perhaps you were thinking of OPEC

1. TODAY we have Atlas, Athearn, Life Like, kato, Stewart, and Walthers as major players.. Compare that to just Atherarn and Varny years ago. Mantua was into Steam.

2. WHERE is the "monopoly"? The ever popular F's are currently being offered by Genesis, Athearn RTR, Blue Box, Stewart, Intermountain, MRC, Proto 1000, and recently Tyco. Both Kato and Athearn are bringing out SD-70-MAC's (some in the same roads). If that's not competition, what is? Again, Where is the Monopoly?

3. "Don't give us what we want"? They spend hours thinking of what will SELL!
If they didn't bother to consult us, I guess they'll just have to suffer the consequences.

4. UNFAIR market price? Who? Broadway Ltd.? - or aren't their $300 - $500 engines with sound selling? UNFAIR? - to who? You?? If THEY invest hundreds of thousands of dollars to bring out a Challenger at $600 - and it doesn't sell - Who loses???

FERGIE: In a competative market, there is no such thing as an "unfair price". It sells, or it doesn't - and who do you think gets to make that choice?

[Anonymous]

Well I'd have to say it is in decline here in Tucson, Az. We had 2 LHS's close in the past several months. One dealt exclusively with model railroads. ( Arizona Trains). Thank goodness one opened up in an ACE Harware. They just have a limited selection though.

[jrbernier]

Having to provide a picture of your shop, posted hours open, and credit references are normal - Walther asks for this stuff as well.
As far as model railroading is dying? My LHS has been stocking a lot of P2K, Spectrum steam, Genesis, and BLI engines - They fly out of the shop as fast as they arrive! The old MDC & Athearn kits are not selling as well as they used to, but I suspect a lot of folks are spending their train funds on these new high end products. In the past week I know my LHS has gotten in 5 BLI USRA 2-8-2's - 1 is left. They have gotten 6 E7's and 4 are spoken for. Spectrum steam is sold out except for 1 2-10-0; P2K steam is down to 1 0-6-0, etc...and this is in the summer time! The only items that have not sold well are the Lionel turbines - he ordered 8 and has sold 5 - at least covered his money there. He has firm orders for the Genesis 4-6-6-4 Challengers. He tries to keep at least 1 BLI steamer on the test track so he can demo it to folks(also gives him a chance to 'play'). Folks watch, he give them the 'sell' and another engine leaves the store! Sitting on a stool behind the counter, complaining about the 'state of affairs' of the hobby does not bring in sales. At least get off of the stool and 'dust off' the collection of kits that are not selling!

Jim Bernier

[brothaslide]

Horizon as well as any other business is in business to make money so that the owners, employees, shareholders, etc. can make a living, pay bills, etc. Horizon is not in business to make our lives more difficult by keeping products from us that we want. It is in Horizon's best interest to provide customers with the products they want and reasonable prices, etc. It would be foolish for Horizon to do anything else because they won't make as much money and they would loose market share, etc.

If you were a business owner, would you make it more difficult and frustrating for your customers to purchase your products?

[Anonymous]

Brakie: I agree with you. My guess is that if you looked at Athearn's sales volume today and compared it with ten years ago, there is most likely a substantial amount of growth. If you add up the total dollars being spent in the hobby today and compared it to ten years ago, I'll bet a lot more is being spent. The long term prospects of the industry may not be that bright. The baby boomers are in their peak earning years, while the generation X and younger people are not as interested in the hobby.

[Anonymous]

QUOTE: Originally posted by Student of Big Sky Blue

QUOTE: Originally posted by flyingscot

This seems like the beginning of the hobby's return to it's primitive form. With the incresaing lack of kits and the rising prices, it'll be only a matter of time when people begin ....

SCRATCHBUILDING!

Unfortunatly the only people scratchbuilding will be the die hards like you and I. and those my age (Noah, being the one exception) are not going to inclined to be scoring and snapping styrene anytime soon.

I am whording as many spare parts as I can before the big crunch happens.

James

Count me as a Die Hard then, I'm not much older than Noah and I have several scratchbuilding projects waiting to be started. I also just got an airbrush so I can get undec models and paint them myself instead of paying $30 for a high end RTR car.

[ericsp]

QUOTE: Originally posted by enduringexp

As consumers, we always have a choice. We can stop buying, thereby forcing the companies to act, or as is usual, most of you will just keep buying what you can afford, regardless of the value. It's simply supply and demand. You demand product, and the companies know you will pay whatever they charge because "you want it". It has been that way with the auto companies for years. Nobody asks, "is it worth it?', they just ask themselves, "can I afford it?". Until you learn to control the desire, the companies will keep changing and charging. Business as usual. Help your hobby shops. Help them help you.

I agree with resisting buying overpriced cars. That is why, with the exception of the 8' and 6' plug door RBLs, I do not buy Athearn Genesis unless the price is significantly reduced.

[Anonymous]

i think while the high priced high detail kits may sell well now and in the near future there will be a sharp decline at some point. not just due to the rtr kits. i strongly disagree that the hobbie is growing. while sales maybe high, prices have gone up on many items. but the number of people buying will decreese at some point. i am 19 and i know nobody my age that is into model railroading. i have two brothers. one is 16 and the other 12 who are both really into model RRing, but they also know nobody else who is into the hobby. when i go to train shows i see very few kids. sure there are a few, but not up to the number it should be. most of todays kits are all at home glued in front of the TV with their game box or what ever.

... so anyways, i think prices of this rtr stuff is too high and i hope that my local hobby shop will continue to stock BB and round house kits because i refuse to pay the prices they charge for the new RTR stuff. its simply more than i have to spend on a car or loco or what ever. i simply will not buy it. i'll just stick to buying used or what not if it comes to that. but i dought it will... at least any time soon

[Anonymous]

I'm very sorry to hear about Az trains going out of business. I'm in the senior adult tour business and while the ladies were at Old Tucson I'd go to Az trains and enjoy myself. I support hobby shops were ever I go because I want to keep them in business. It's usually a kit here or their or maybe a decoder or piece of track that I'm going to need when I get back home.

The manufacters are going to produce what sells, that is the only way that they can stay in business. Walthers sold the "Super Chief" one car a month. Now I see that other manufacters are doing the same thing. I can spent $40.00 a month for a car for nine months a lot easier then comming up with the whole price at one time.

I probably have every car that Silver Streak ever made on my layout but the new RTR's have a lot more detail and I've got time to do other things, like listen to my new BLI 4-8-4. I've put sound decoders in some of my old steam engines but it is nice to be able to buy it off the shelf.

I see more people at the GATS shows then in previous years. Look at the circulation figures for MR and RMC and that will give you an idea as to how the hobby is doing.

I was at the Lone Star convention last month and was amazed at how many model railroaders are just arm chair modelers that buy an accasional item for the future railroad.

Have a blessed day and remember SANTA FE ALL THE WAY

Bob

[MAbruce]

A good friend of mine who recently graduated from MIT Sloan (with an MBA) told me he was taught this basic principal about business:

If you want to start/run a successful business, then you must seek out or be prepared to exploit an unfair (but legal) advantage. Slugging it out with the competition on an “even playing field” will only significantly increase your chances for failure.

We forget that the MRR industry is a business, and they each need to be profitable in order to survive. There are those who begrudge Horizon for what they have been doing, but in reality they are simply seeking out that “unfair advantage” to stay in business and grow. It may seem cruel, but that’s a fact of life in a free market.

[wt259]

I visited the LHS yesterday, managed to drop a $20 on detail parts, a grain bin and coupler height gauge. The shelves were full, Athearn BB, Accurail, P2k, Intermountain, Branchline, Bowser kits. Lots of RTR also, IM, Athearn RTR, Genesis, Atlas. Loads of locos, building kits, track and tons of detail parts. Made the trip worthwhile, and I'm planning my next trip.

[Anonymous]

QUOTE: Originally posted by MAbruce

A good friend of mine who recently graduated from MIT Sloan (with an MBA) told me he was taught this basic principal about business:

If you want to start/run a successful business, then you must seek out or be prepared to exploit an unfair (but legal) advantage. Slugging it out with the competition on an “even playing field” will only significantly increase your chances for failure.

A book I recently read on wealth said this:
Wealth is created by seeking out a disequilibrium in markets and filling that disequilibrium. [zzz]

Simply put, hit 'em where they ain't, or find a market that's underserved and fill it. You don't open a burger joint if there are already 10 in town. That's competing for market share and the same dollars.

Horizon's approach is "buy all the burger stands". In terms of creating wealth and growing the economy, that doesn't help a bit. In terms of business practice and controlling market share; I can't argue with it from Horizon's viewpoint.

[MAbruce]

QUOTE: Originally posted by jay_c

A book I recently read on wealth said this:
Wealth is created by seeking out a disequilibrium in markets and filling that disequilibrium. [zzz]

Agreed, but you still have to make sure that you start with an advantage to fend off the copycats that will inevitably jump in the "underserved" market with you.

QUOTE:
Horizon's approach is "buy all the burger stands". In terms of creating wealth and growing the economy, that doesn't help a bit. In terms of business practice and controlling market share; I can't argue with it from Horizon's viewpoint.

If you can’t find a new market to serve, then the next best thing is gain control of an existing market through acquisition (within legal limits).

Of course this tactic comes with its own set of risks. One of them is a potential customer backla***o the “predatory” tactics that a company utilized to gain market control to begin with. There has been a lot of lamenting here about Horizons actions, and if it does turn into lost sales, then an argument can be made that they pushed the envelope too far on capturing market share through acquisition.

It will be interesting to see how this plays out.

[BRAKIE]

CNJ831,That was discuss at our club's Sunday breakfast meeting and I have talked to other modelers and some of the hobby shop owners..As I said everybody agrees that the hobby is maintaining a small growth.I do not have any figures but,several of the hobby shop owners says they are picking up new customers on a monthly bases.Of course we also pick up a 7 new modelers at the club as members over the last year..However all but 2 had trains when they was kids and are now in their 40s and early 50s.The other 2 was looking for a hobby and like what they saw in model railroading.These guys are in their 30s.We did not picked up any student members(16-18 years old) over that same time frame..

[Allen Jenkins]

OK, Uncle Irve has passed, and I assure u, he don carr. Let free enterprise rule. If you wi***o kitbash, great!. What do you think everyone did before Globe? I personally resent out of scale, no prototype, incorrect paintjob, things of the past so much I don't care what I ran or was fascinated with 30 years ago. What is an L&N pulpwood car with the bulkheads reversed anyway? When I can go out and buy a 37 cord car from Walthers, with my local pulpwood mill stenciled of the side, in my favorite RR road name?