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How does Walthers stay in business? Locked

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Posted by Driline on Friday, June 18, 2010 10:39 AM

blownout cylinder
Look at what just happened in the auto sector--JDPower released figures showing Ford at the top.

 

In 1991 FORD was supposed to be building cars "as good as the Japanese". It was a lie back then. It's been 19 years now and I am supposed to believe that FORD is once again building cars as good as the Japanese? I'll give them 10 years from now. If the cars they build today in 2010 have a reliablity track record as good as Toyota, or Honda, then I'll buy. But it will be 2020 before I throw $30,000 at a FORD again.

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Posted by blownout cylinder on Friday, June 18, 2010 10:24 AM

Sir Madog
Just going for bargains is detrimental to an economy in the long run. The effects of such a deflationary  process is, that investments into the growth of local businesses are no longer made, as margins shrink. This kills jobs by moving production to seemingly "cheaper" countries, which would not be a problem, if we were able to develop new opportunities at the same rate - which we are not. It is all about a balanced give and take - I am afraid that the "global" economy has left the state of balance.

I wonder about how the search for the lowest cost item affects quality control in the long run. Look at what just happened in the auto sector--JDPower released figures showing Ford at the top. The lowest cost is not necessarily the best in terms of quality build. It has always been a bone of contention amongst many people in the electronics field as well.

This is one of many reasons why there is a lot of scepticism about the "global" economy

Any argument carried far enough will end up in Semantics--Hartz's law of rhetoric Emerald. Leemer and Southern The route of the Sceptre Express Barry

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Posted by Driline on Friday, June 18, 2010 8:30 AM

 

johngriffey18ca1
I am an overpaid employee of the U.S Government who gets money thrown at me all the time in the form of bonuses, etc.  But no one can do what I do without the years of experience I have and the training I have. 

Welcome brother Big Smile

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Posted by IRONROOSTER on Friday, June 18, 2010 7:22 AM

I like MB Klein, but they are not really a LHS anymore.  They are an internet business, that has a couple of small sales rooms on site.  They are not located in a shopping center, but in an industrial park.  The last time I went there, I had to use one of their in-store computers to order over the internet with in store pick up - keeps their on line inventory up-to-date.  Their prices are discounted and their service is great - my favorite place to order.

What is going on with hobby shops is no different than other types of businesses.  Either you find a way to compete on other than price or you discount.  Most small shops can't compete either way and disappear.  It happens with grocery stores, bookstores, hardware stores, etc.  Fairfax County, VA where I used to live has had the highest or second highest household income for years (they trade back and forth with Loudoun County next door), and even there the hobby shops keep disappearing - the few that are left with trains are mostly Lionel dealers.

Enjoy

Paul

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Posted by ATLANTIC CENTRAL on Friday, June 18, 2010 6:22 AM

johngriffey18ca1
If MB Klein can chop 20% off on average, maintain great customer service and pay employees and their own rent/light bill then other companies should be able to as well. 

Did you read any of my posts? MB Klein sells at 20% of buying almost everything direct from the manufacturers just like a wholesale house, as do all the other big discounters, Train World, etc.

Small shops buying from distributors have a hard time or need REALLY low overhead to make it if they are selling at 20% and buying from Distributors like Walthers.

So you need big sales volume to buy enough to buy direct from the manufacturers. They will not sell a small shop one of this, two of that. You must buy larger quanitities, usually case lots or at least a larger dollar value on each order.

Sheldon

 

    

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Posted by pajrr on Friday, June 18, 2010 4:03 AM

I am in the process of gutting a hobby store in NJ that has just closed its doors after 57 years. Mail order definitely has killed the Mom & Pop stores. Nothing like sitting at a computer and looking at thousands of items at once, purchasing all from one easy spot.  I prefer dealing with a hobby shop. Go in, talk about the product. Actually see the product. Get one on one service. But if you are at a hobby shop you can't be somewhere else at the same time. Walther's may be high, there are other, cheaper sites. But the fact of the matter is people will pay more for convenience. So here is to your local hobby shop. It may be here today but gone tomorrow. One has complete freedom of choice how they want to deal and purchase equipment. Enjoy it and take advantage while you can. (By the way, we used to get our inventory from Horizon & Walther's.)

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Posted by Anonymous on Friday, June 18, 2010 3:37 AM

 John,

no need to shout at us "old Farts" by typing in bold. I don´t see, that anyone responding to your post intended to be patronizing, just passing on information you may not have had before.

Just going for bargains is detrimental to an economy in the long run. The effects of such a deflationary  process is, that investments into the growth of local businesses are no longer made, as margins shrink. This kills jobs by moving production to seemingly "cheaper" countries, which would not be a problem, if we were able to develop new opportunities at the same rate - which we are not. It is all about a balanced give and take - I am afraid that the "global" economy has left the state of balance.

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Posted by johngriffey18ca1 on Friday, June 18, 2010 3:12 AM

Ok maybe I phrased my original post incorrectly.  I realize that MSRP or greater can be paid from time to time with rare or hard to find items.  It's done in every other aspect of life.  Anyone who has purchased a hard to get new car off the showroom floor knows this.  However, I didn't understand how walthers stayed afloat until I found out from you all that they are the largest distributer.  Now I know.  To those of you who are rude and grumpy saying I'm obviously new, uh I stated that in my post so there is no need for you to look down on me. [Edited for content by selector.] Attitudes and criticizing just scare people away.  As for shopping for bargains, this is not going to kill america.  If MB Klein can chop 20% off on average, maintain great customer service and pay employees and their own rent/light bill then other companies should be able to as well.  I'm not asking for 50 or 60 percent off an item, I'm just looking for a decent deal.  I am an overpaid employee of the U.S Government who gets money thrown at me all the time in the form of bonuses, etc.  But no one can do what I do without the years of experience I have and the training I have.  Therefore, I have no competition so I feel no remorse when my fat bonuses drop into my account.  However, Walthers does have competition in the sales market.  So if they wanted to excel there they should lower their prices.  If they are ok with just kicking butt as a distributer than fine.  I understand how they stay afloat now, distributing.  But if it wasn't for that, I think they would be out of business.

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Posted by Anonymous on Friday, June 18, 2010 1:41 AM

 The "El Cheapo" mentality is not only confined to US consumer behavior, it has reached the entire western world. The hunt for bargains has led to the deterioration of the MSRP, which long has shed its guiding function. The Walthers catalogue has been my guide to model railroading for years. I used it to calculate my shopping list, knowing, that my LHS can get the items of my desire for me, sometimes even with a slight discount. The most important issue was, that I did not have to shop around to get what I wanted, I knew, it was available in short order.

Times have changed. I do have to spend a lot of time chasing the product I want to buy in the internet - not always to get the best deal, but just to get it. Limited runs force me to buy at a time I may not want to buy yet. More than once I missed to get something I wanted. And even if I am able to buy, is it really a bargain? None of us knows, how the MSRP is actually calculated, whether those fantastic discounts have not already been considered. What does that DCC equipped sound loco with a MSRP of $ 399 actually cost, landed in the US? Maybe $ 60 - 80? Even with a discount of 30 - 40 %, there is a lot of money to be earned. Would Walthers, Horizon and the likes be still in business, if there wasn´t any money in it? I doubt that.

I am not bashing Walthers or anybody else for that - it is finally our own behavior, which has fostered this change. But it has led to the demise of the LHS as a stable source of product for our hobby and hinders the entrance of new players into the market. And finally, it costs a lot of jobs, local jobs, not Chinese jobs, as the Chinese by far are not buying products from us to the same extent. Do we really want to deplete our own economy  in the long run?

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Posted by Allegheny2-6-6-6 on Thursday, June 17, 2010 11:11 PM

johngriffey18ca1

I'm a young guy fairly new to model railroading, and I have to be honest...the first thing I noticed about Walthers is they list everything at MSRP.  I know they have sales from time to time, but they list everything newly released at MSRP and usually can't keep stocked up on items.  I am also aware they make model railroad items such as cars, turntables, building kits, etc but as far as sales go how do they stay in business?  I get a deal from my LHS and shop around for the best prices on items all the time.  I just ordered 9 SD70ACe's for $209 each and free shipping from a website when Walthers wanted $249.99 plus they wanted to charge $40 shipping.  I saved $400 on that purchase by shopping around.  Is it catalog orders that sell this stuff out or what?  I'm confused on who willingly pays MSRP?

P.S.  If you pay MSRP don't take offense, I just won't do it if I can easily find a cheaper price (like a google search for the product)

 

 

Well as one poster stated don't take offense but being admittedly new to the hobby you really don't understand the pecking order if you will when it comes to model railroading whole sale distribution. It's like this if you want to be in the model train business there are two places who are the major distributors of all things model railroading. #1 W.K. Walthers the unarguable giant of the industry and #2 Horizon Hobby,they are the two big dogs and then come all the little mom & pop suppliers some who deal through Walthers and some who deal directly with train stores and retail customers.

If you want to be in the model train retail business those are the people you have to deal with no question about it. Their main business is supplying their customers (the train/hobby stores) not the individual customer.

You are also obviously a newbie when you ask a question such as  "I'm confused on who willingly pays MSRP?"

When there is a kit that you've been looking for or absolutely have to have you'll be more the happy to pay only retail and not above MSRP. I myself have sold brand new in the box out of production Walthers kits for far more then MSRP and buyers have gladly paid it just because they needed it. When you really want something believe me you will be happy to pay for it.

 Of course we all bargain shop and don't feel like you've got an exclusive when it comes to doing Google or any other type of searches for the best possible deals we all do it, when your in this hobby long enough you learn how to sniff out a deal where ever it may be even at Walthers. I have bought many items from them at discounted or sale prices and one thing that you will most definitely get when dealing direct with them as opposed to dealing with an LHS or an internet store is their level of customer service.I purchased the Walthers Roundhouse kt a few years back and wanted more pieces to extend the walls so I could fit larger engines. I called Walthers customer service and they shipped to me FREE of charge. I have gotten defective and some times missing pieces from a Walthers kit, I gave them a call and received the parts in the mail you know what you would get if you purchased the stuff from your LHS or an internet store, oh sorry too bad you opened the box we can't take it back or exchange it with maybe a very small amount of places this is the norm, you buy it you own it and thats that. Walthers being the distributor and having their name out there goes the extra mile to keep customers happy some times that in it self is worth paying a few more dollar. Bottom line is a great number of us buy direct from Walthers but the percentage of those sales compared to that of buying from other sources at least in my own personal experience is around 10% from WKW and the other 90% form various sources.

 

Just my 2 cents worth, I spent the rest on trains. If you choked a Smurf what color would he turn?
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Posted by Colorado_Mac on Thursday, June 17, 2010 8:06 PM
It's the Wal-Mart/internet mentality. In other words, people think everything should be free or extremely inexpensive. It doesn't matter to the buyer that by demanding lower prices they are taking money out of the seller's mouth. Us vs them. Like the guy said, he won't discount HIS work, but he expects others to do so for him. It's the new American Way and it is sad. My daughter said to me one day, "I buy my groceries at Wal-Mart. i get more for less money." i said "#1, you don't need MORE. # 2, do you really want to buy meat from the lowest-paid butcher in town?" With my trains, do i want simply a low price, or do I want something that I know will be taken care of when it doesn't work? From a company won't charge my credit card three times because their salesperson can barely count, much less work a computer? That said, SLIGHTLY lower prices at an LHS or reputable internet dealer are understandable. But I've been around long enough to know bargain--basement prices mean bargain-basement quality.

Sean

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Posted by rdgk1se3019 on Thursday, June 17, 2010 7:17 PM

 They layoff a lot of people , raise prices, and do not all ways have in stock what they advertise.

Dennis Blank Jr.

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Posted by blownout cylinder on Thursday, June 17, 2010 3:52 PM

Old way of mgmt---How do I cut cost?

New way of mgmt---how to maintain and build pricing power----Big Smile

Any argument carried far enough will end up in Semantics--Hartz's law of rhetoric Emerald. Leemer and Southern The route of the Sceptre Express Barry

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Posted by ATLANTIC CENTRAL on Thursday, June 17, 2010 3:47 PM

Driline

trainsBuddy
While Walthers prices are generally high, they sometimes have sales on Walthers rolling stock and buildings that are very competitive if not the best I could find.

 

I think the big question that was NEVER asked and should have been....is......::drum roll::

WHAT PERCENTAGE OF WALTHERS BUSINESS IS OVER THE COUNTER MSRP?

WHAT PERCENTAGE OF WALTHERS BUSINESS IS WHOLESALE TO THE DEALERS?

 

Ok, so that's two questions that should have been asked.

My guess is 2% for over the counter MSRP (to people who don't care what they pay)

And 98% for wholesale to the dealers.....(for the rest of us enjoying our 20 to 30% discount)

So.........What do they care.....hmmmmm? I wouldn't care either Approve

Driline, you are likely right on about Walthers sales - AND, of that 98% that is wholesale, 80% or more of that is likely Walthers branded products.

Because, big shops like Kleins and Train World are buying those other lines direct, they have no reason to buy them from Walthers. So the only thing those kinds of outlets are buying from Walthers is the Walthers exclusive products.

In the hayday of distributors, Walthers was a big one, but with Athearn and so many other big players self distributed or sold direct to big dealers, that is long gone.

I would be willing to bet that Train World sells more Bachmann than Walthers.

Sheldon 

    

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Posted by ATLANTIC CENTRAL on Thursday, June 17, 2010 3:38 PM

Hamltnblue
Apparently the Hobby industry and other retail use the number to figure their net since it looks like the Manufacturers don't post that number to their distribution. 

Exactly! Athearn or Walthers or Bachmann do not print/publish a dealer net price list. Neither do the remaining traditional distributors that are not also manufacturers like Walthers or Athearn. They simply tell the dealer this line is 40% off, that one is 45% off, and this months special is an extra 5% off the net if spend 10K and pay net 30 days.

You never see a printed "cost" price until you get the invoice!

In another life years ago, I sold Matco Automotive Tools, that business was the same way. The company printed a retail price list, which had letter codes that indicated the "dealer discount" for that item, ranging from 25% to 55% off MSRP.

Sheldon

 

    

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Posted by Driline on Thursday, June 17, 2010 3:31 PM

trainsBuddy
While Walthers prices are generally high, they sometimes have sales on Walthers rolling stock and buildings that are very competitive if not the best I could find.

 

I think the big question that was NEVER asked and should have been....is......::drum roll::

WHAT PERCENTAGE OF WALTHERS BUSINESS IS OVER THE COUNTER MSRP?

WHAT PERCENTAGE OF WALTHERS BUSINESS IS WHOLESALE TO THE DEALERS?

 

Ok, so that's two questions that should have been asked.

My guess is 2% for over the counter MSRP (to people who don't care what they pay)

And 98% for wholesale to the dealers.....(for the rest of us enjoying our 20 to 30% discount)

So.........What do they care.....hmmmmm? I wouldn't care either Approve

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Posted by Hamltnblue on Thursday, June 17, 2010 2:48 PM

fec153

When I was in business and even in school, the method was-

Profit and loss, based on the cost.

Flip

 

 

Exactly.  It's actually a good exercise and also good that people in the business explain how they charge.

A successful business usually tracks actual cost and uses that to calculate margin. Seems in the hobby business they do the same but find themselves always calculating down from MSRP and back up from there.

My past background is in product management and setting both the net and list pricing (MSRP).   Current is project management where we track net pricing (cost).  The MSRP/List price is basically set so that the end user feels better when they receive a discount.  Apparently the Hobby industry and other retail use the number to figure their net since it looks like the Manufacturers don't post that number to their distribution. 

I find it interesting and although some get defensive, I still find it educational.  I now know the numbers that my LHS is using when I see them verbalize the 10% discount. Whistling

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Posted by trainsBuddy on Thursday, June 17, 2010 1:39 PM

Wow, 4 pages of replies when the answer should be pretty simple. They stay in business because they stay profitable. Guess it works for them. While Walthers prices are generally high, they sometimes have sales on Walthers rolling stock and buildings that are very competitive if not the best I could find. Plus they usually have complete stock of items in a passenger car series such as UP Cities, whereas other shops might only carry a portion of cars in stock.

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Posted by TMarsh on Thursday, June 17, 2010 1:24 PM

Driline

TMarsh
If they're happy, I'm happy and that's the best we can hope for.  Just myMy 2 centsMy 2 cents

 

Oh, you're just way too happy. Maybe Sheldon and I like to be angry and depressed. Have you thought about our wants/needsBig Smile

Laugh Forgive me I forgot. Laugh You do have that right. Please feel free to be unhappy. If it makes you happy to be unhappy then I'm happy that your unhappiness makes you hap..... oh this could go on for hours.Laugh

(By the way, I still think you're happy.)

Todd  

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Posted by fec153 on Thursday, June 17, 2010 11:02 AM

When I was in business and even in school, the method was-

Profit and loss, based on the cost.

Flip

 

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Posted by Driline on Thursday, June 17, 2010 10:41 AM

TMarsh
If they're happy, I'm happy and that's the best we can hope for.  Just myMy 2 centsMy 2 cents

 

Oh, you're just way too happy. Maybe Sheldon and I like to be angry and depressed. Have you thought about our wants/needsBig Smile

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Posted by TMarsh on Wednesday, June 16, 2010 10:22 PM

Well, for all our figuring of who will and who will not and if or why, one thing is sure. There are businesses, both brick and mortar and online that are doing very well charging various discounts, MSRP and above MSRP. What a business chooses to charge is exactly what he hopes his customer base can tollerate. If he is in New York, his customers with a higher salary and a higher cost of living are used to paying more for a product and don't bat an eye at MSRP. If he is in Central Illinois MSRP, quite frankly, cannot be found except for Hobby Lobby and we know about that. So my opinion is why would I pay MSRP when I cam drive 20 minutes for 20% off. Yes there is gas but usually I'm there in town anyway. IF I buy something from the internet, it must be something I cannot get from one of two Hobby shops and that is tough, or a substantial savings including shipping which on purchases the way I purchase MRR stuff, would have to equate gas for at least a 65 mile round trip specifically for MRR purchase. I'd rather pay the same or less, including tax, to my local hobby shops.

Now, I know everybody has their own situations regarding availability of a LHS, and my situation is not a blanket situation, but my point is apparently many shops do well charging higher rates than others, and the area they are in allows for the margins they choose. 20% goes alot farther in Springfield, IL than is does in Chicago. They need more profit to keep the doors open and the employees paid. And don't forget the owner. No one, and I mean no one, starts a business and is satisfied with breaking even. They have to eat too.

All this talk means nothing. I've seen things go on E-bay for way more than I can buy it new. Some say that's the idiot bidding, but I say, ask him what he says is a good price for a particular loco. He may say $225 is cheapest around and a good price. I look at him and say there are several in my LHS for $185.Same with anything, where you live dictates what you pay. I wonder why anyone would pay MSRP for the stuff when the internet can set it on their door much cheaper. They still do it. It's their choice and if that's what their pocketbook can support then well I guess the hobby shop maybe can stay open another day.

If they're happy, I'm happy and that's the best we can hope for.  Just myMy 2 centsMy 2 cents

Todd  

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I'm a small town boy. A product of two people from even smaller towns. I don’t talk on topic….. I just talk. Laugh

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Posted by ATLANTIC CENTRAL on Wednesday, June 16, 2010 10:13 PM

Hamltnblue

If your comments are based on something, note it. Because making 30% can mean 2 different things.

Your math is correct but it's not what any business should be using.

Since different manufacturers provide different discounts from MSRP a company should use the basic margin formula.    Margin = 1- (cost/Sell price)

Using that formula takes MSRP totally out of the picture and is much faster.  It is "bottom line" and is what large and publicly traded companies use to figure the bottom line.  It is also not profit, but a number used along with many others.

First, I did note it by using the term dealer "discount" from MSRP, and never using the term "markup".

You can say what you like about what companies should do, or about what larger industries do, fact is wholesale/manufacturer prices in the hobby business have been based on MSRP less (fill in the percentage, typically 40) for 70 years or more. I don't see it changing any time soon.

Why is your fomula faster? It is the same. 1 - $60 (wholesale price) / $100 (MSRP) = 40%, I said this type of business needs to make 30% - just like your fomuula. 

1 - $60 (wholesale price) / $90 (sale price - 10% off MSRP) = 30%

1 - $40 (direct from mfr price) / $60 (sale price - 40% off MSRP) = 33.3%  

Dealer discounts in the hobby business are typically standard per brand/product line and until the last 10-15 years almost all were 40%. Then fast pay or volume incentives were deducted from the net due, typically no more than 10%, usually 5%.

Now IIRC, Athearn is 50%, Bachmann is about 70% direct from them, and 45% from most wholesalers.

Many other lines remain at 40% through distributors and are about 60% if you can buy enough to buy direct.

Sorry you don't like how they do it, but that is how they do it.

Sheldon

    

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Posted by jmbjmb on Wednesday, June 16, 2010 10:09 PM

I guess I'm also not helping the economy by my purchases.  The OP mentioned saving $400 in his single purchse.  I on the other hand don't spend $400 per year.  So why would I spend MSRP at Walters?  Well they usually have what I need when I need it.  There is no LHS near where I live anymore.  But recently I had some business travel so I was able to visit hobby shops in a couple of cities.  I've been needing some paint so I took this chance to support an LHS.  Guess what, in the end after visiting several LHS's, I only spent $15 and didn't get what I wanted anyway.  Could have saved myself the trouble, ordered it all from one place, with one shipping charge, and had what I needed for the lowest life cycle cost.

One thing I've learned over the years -- saving money costs in the long run.

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Posted by Hamltnblue on Wednesday, June 16, 2010 9:32 PM

ATLANTIC CENTRAL

Hamltnblue
If you buy a product for 70 bucks and make 30 percent, the price would be 91 dollars, not 100.  70 *.3 is 21 dollar mark-up.

In retail it is more common to refer to gross margin of selling price than to refer to "mark up"

ALL my comments are based on this industry standard method - not on markup, but on gross margin.

I never used the term "mark up", and in fact explained the "discount off MSRP" and used the term gross profit or gross margin.

Wholesale discounts are figured backward from MSRP, traditionally 40% in the hobby industry.

So a product with a $100 MSRP would typically cost the store $60 from a distributor and likely cost the distributor about $40.

Extra discounts for quick pay or volume are typically less tha 5% of those numbers.

Using the "mark up" method, you had better be at or above 45% to make any money in retail.

$70 x 1.45 = $101.50 OR $100.00 less 30% (100 x .7) = $70.00

Sheldon

 

If your comments are based on something, note it. Because making 30% can mean 2 different things.

Your math is correct but it's not what any business should be using.

Since different manufacturers provide different discounts from MSRP a company should use the basic margin formula.    Margin = 1- (cost/Sell price)

Using that formula takes MSRP totally out of the picture and is much faster.  It is "bottom line" and is what large and publicly traded companies use to figure the bottom line.  It is also not profit, but a number used along with many others.

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Posted by fwright on Wednesday, June 16, 2010 8:30 PM

Driline

I assumed nothing. And with a hobby budget of only $40 a month, you certainly aren't helping put food on the table at your LHS charging full MSRP.

You should be thanking US. Those who gladly accept discounts and are willing to put our money where our mouth is. My LHS is thriving and with 20% discount everyday I intend to keep it that way. 

 

I do thank you, and all the "conventional" model railroaders and collectors.  Your $$ have made the wide variety we all enjoy today possible - whether at MSRP or at a discount.  Your purchases, and the products made to meet that demand, have put a ceiling on the appreciation of both used brass locomotives and the OOP kits that I prefer as my base for my locomotives.  And the availability of truly RTR plastic locomotives has reduced the demand for the models I want.  Just because I do things differently doesn't mean I don't appreciate what other peoples' money has done for the hobby.  I do lament the passing of the kit era, but there's enough unbuilt kits out there to take care of me and the few others that share my hobby interests for a while to come.

Bottom line:  for the models I prefer, there isn't the demand to support the high volume transactions at discounted prices.  You reap the advantages of desiring popular models, which are made in large runs.  I reap the higher prices of models where supply and demand are tilted more towards the seller.

Fred W

....HO and HOn3 modeling of foggy coastal Oregon, where it's always 1900....

  • Member since
    January 2009
  • From: Maryland
  • 12,897 posts
Posted by ATLANTIC CENTRAL on Wednesday, June 16, 2010 7:55 PM

Barry,

A few thoughts more from someone who ran a train department in a hobby shop that largely charged MSRP.

I understand and agree with the "customer service" idea, that's what I did.

I still pay whatever fair price someone asks for a product if I see it as a good value, MSRP or otherwise.

Sure, in many ways the hobby might be better if the discounting thing had never started or never got to the point it is at - but - see my story about Klein's - it started a LONG time ago, that was in the 50's.

In my view, smart shop owners buy each product at as low a price as they can, put a fair price on it based on their cost, and try to provide good service. The rest should take car of its self. But trying to sell Bachmann at MSRP or even near it is just foolishness.

I am a bargin hunter, BUT, I don't haggle or expect anyone to sell something at a price lower than they have marked on it.

Knowing what I know about the cost and distribution structure in the business, I spend my money with different outlets based on their ability to sell specific products at reasonable prices. My closest LHS is only about 10 houses down the street in our little village. I buy lots from him, including most all the Athearn I buy. He discounts enough to be fair, not the cheapest, not the most expensive.

BUT, when I want a Bachmann loco, he is not the source. He does not buy Bachmann direct, we have three shops within about 40 minutes of here who all buy it direct and have great prices, and have lots of it in stock all the time - at about 40% off retail!

Service is important, and not to be to arrogant here, but after 40 years in this hobby and having worked in the business as well, the only service I need is a good inventory, a fair return policy (I virtually never return anything anyway), and an effective special order department.

I don't need help with my models or repairs or "advice", in fact I give a lot of HO advice at my LHS since the owner is a more of a highrail and 2 rail 1/4" scale guy.

I simply need the products I need, when I need/want them and at a "fair" price, MSRP or otherwise, depending on the type of item.

I don't even pay attention to the price of things like Kadee trucks and couplers, scratch building supplies, or any of the general "do dads" of our hobby, I just buy them.

But I did not equip the ATLANTIC CENTRAL with 120 locos, even Bachmann Spectrum locos, at list price.

But what do I know...............

Sheldon   

    

Moderator
  • Member since
    November 2008
  • From: London ON
  • 10,392 posts
Posted by blownout cylinder on Wednesday, June 16, 2010 7:12 PM

Driline

ATLANTIC CENTRAL

But these are all exceptions rather than the norm. Again, what is YOUR business experiance? Or do you just collect a pay check from someone?

Sheldon

 

I"m an overpaid underworked Government employee sucking off the teat of the American taxpayers.

And I thank you :)

mmmm---dang. This is a funny way to have a discussion but since we are in this I'll suggest that some LHSes up here do seem to survive even though they do charge MSRP---maybe they do because they offer more than just the goods--I don't know. But there we be---

I'm thinking that the stuff Walthers have been doing, in that they serve both roles of Distributor/retail outlet, seems to have been going rather well for them. I get my $100/mth budget rather well spent--be it MSRP--or good deal---so as for the LHS's that survive inspite of the MSRP thing-----all I can say was said in the words of a certain situationist writer---

And yet, they LIVE....Big Smile

Any argument carried far enough will end up in Semantics--Hartz's law of rhetoric Emerald. Leemer and Southern The route of the Sceptre Express Barry

I just started my blog site...more stuff to come...

http://modeltrainswithmusic.blogspot.ca/

  • Member since
    July 2006
  • From: Bettendorf Iowa
  • 2,173 posts
Posted by Driline on Wednesday, June 16, 2010 5:59 PM

ATLANTIC CENTRAL

But these are all exceptions rather than the norm. Again, what is YOUR business experiance? Or do you just collect a pay check from someone?

Sheldon

 

I"m an overpaid underworked Government employee sucking off the teat of the American taxpayers.

And I thank you :)

Modeling the Davenport Rock Island & Northwestern 1995 in HO
  • Member since
    July 2006
  • From: Bettendorf Iowa
  • 2,173 posts
Posted by Driline on Wednesday, June 16, 2010 5:55 PM

fwright
The second is why I pay full MSRP.  Another poster implied I was a buffoon for doing so.  Ultimately, the difference is not what price you pay and what price I pay, but that what you buy and what I buy are worlds apart.  You assume that I buy and collect large numbers of RTR plastic or die cast engines made in China.  That's a common mistaken assumption that everybody else in the hobby shares your passions and prejudices.

 

I assumed nothing. And with a hobby budget of only $40 a month, you certainly aren't helping put food on the table at your LHS charging full MSRP.

You should be thanking US. Those who gladly accept discounts and are willing to put our money where our mouth is. My LHS is thriving and with 20% discount everyday I intend to keep it that way.

 

Modeling the Davenport Rock Island & Northwestern 1995 in HO

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