First, like the man said Walthers is the wholesaler to most hobbyshops so their sales to individuals does not provide more than 10% of their income. They are obligated to not undercut their primary customers and when they have online sales my LHS matches their price and the LHS is credited by Walthers so the LHS doesn't lose money.
Normal markup is 40% which allows high volume retailers some leeway for discounting. Small low volume shops are disappearing because they just can't compete and make a living. Big ticket merchants will sometimes sell hobby products at a loss to get customers in the store and then sell them something else with a high profit margin such as furniture. The internet has totally changed the picture. Online hobbyshops don't have the overhead of your LHS and can therfore cut their profit margin to the bone and still make money. Walthers and other distributors have been trying to require businesses that get their full discount to prove they operate a legitimate physical store.
However many internet stores have found other sources to get their mechandise. And I have to admit that over the last few years more of my purchases are online. But I do try to give my LHS the first chance to satisfy my needs.
There is an individual who has been trying to sell a Proto 2000 loco with sound for full MSRP for about a year now. After seeing this listing side by side with listings for the very same loco at half or less price, I sent him a message. I asked why he was listing the loco for full retail when the buying public had several of the exact loco at half the price to choose from. I seriously was trying to save him some listing fees. Well, as you might guess, he sent me a very terse message in return, saying," I paid full retail, why would I sell it for less than that?" That was about 6 months ago and its still for sale. I guess if he waits long enough, the supply of other locos might dry up a little, but I still dont see him getting $289 for a loco I paid $109 for.
Service, integrity, honesty. Those go a long way with me. When someone provides a valuable service/product, they should be justly rewarded, even if it means paying them at a rate more than I earn. ... It is unbelievable the services/products we can purchase at such a low price. I can't imagine producing/creating the stuff we can buy. Like, creating a loaf of bread from the ground up, or producing nickel-silver rail from extraction of the ore and beyond.
Mark
Playing with the books sounds to me like doing something illegal or unethical...like cooking the books. On the other hand, reducing one's price(s), which are always voluntarily established anyway, sounds like smart business practice if one is to be competitive. It is often necessary to keep inventory turning over, to keep lines of credit open, to show a positive balance sheet (even if just a few hundred dollars after all costs), and so on.... Also, if one sells an item at or just below cost, it is usually the case that the customer becomes excited and will buy something else on a whim, often paying double what the cost to the seller was.
-Crandell
pastorbobTo me, a manufacturer, dealer, hobbyshop that discounts their merchandise is playing fast and loose with the books. If you sell for less than you pay for it you won't last in business very long. Bob
To me, a manufacturer, dealer, hobbyshop that discounts their merchandise is playing fast and loose with the books. If you sell for less than you pay for it you won't last in business very long.
Bob
Wrong! You are way off base. Only a buffoon would pay full MSRP. Or people with more money than common sense.
My LHS has discounted 20% off for years and are very strong indeed. The Buffoon who recently bought another LHS near me a few years ago decided to charge FULL MSRP. Many of us tried to dissuade him from doing this, but he refused to budge and the poor slob only lasted a year.
I don't know how it divides up, but I'm pretty sure that WKW's primary business is in being a distributor to other retailers, not in selling directly to us hobbyists, and wisely avoids undercutting the prices at which its wholesale customers sell the same merchandise at their local stores.
When WKW does have a sale, it probably makes a break for its retailer customers.
WKW isn't the cheapest place to buy retail, but it keeps a very broad inventory and does provide excellent customer service.
johngriffey18ca1I'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.
They are the wholesaler for almost all of the LHS and online stores out there, so they don't care about selling full price to you. They make their money as a wholesaler. Most LHS get 40% discount from them,so many of them pass on the 20% discount to you.
Honestly I don't know why they even try to sell retail. I mean whats the point?
I don't discount my work because it's impossible. But that's a long story. The problem is there is a load of overhead. I'm not saying sell it to me for what they bought it for, I'm saying instead of making $70 an engine make make $20 or $30. Look at MB Klein, they sell at a very fair discount and thier business is booming. Ok, they're obviously not the size of walthers but they are doing very well. Walthers had a foot in the door decades ago and MB Klein is fairly small and hasn't been around as long as Walthers and business for them is booming.
To each his own. I will take a bargain if I run across one, but generally I pay the price to get things I want. I might mention I picked up several of the ADM grain elevator kits from Walthers and got a nice discount for doing so. So I am happy.
I don't understand the mentality that says everyone should discount as low as possible when you buy from them. Let me ask just one question: Do you discount what you do for a living, or do you except the stated salary, or union scale or whatever and go the bank on payday and cash it? Or do you say "I can't accept this check because it is more than I am worth?"
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)