Its a smart business practice to do so. First, get your brand famous enough for people to know who you are, then cut out the middleman.
Granted, they may lose some potential customers since its now harder to "discover" scaletrains things physically in stores or train shows, but they get enough brand recognition from ads or simply fellow modelers asking the make and model of their scale trains loco.
It's what Apple sorta does too, for ex you cant buy a new Iphone from Amazon.
Charles
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Modeling the PRR & NYC in HO
Youtube Channel: www.youtube.com/@trainman440
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riogrande5761 What Paul mentioned is true but leaves out the fact that ScaleTrains does sell though hobby shops and used to sell through MB Kleins but appearantly parted ways over business arrangements.
What Paul mentioned is true but leaves out the fact that ScaleTrains does sell though hobby shops and used to sell through MB Kleins but appearantly parted ways over business arrangements.
I suspect that Kleins wanted a bigger discount......
I suspect Scale Trains would be happy to loose all the retail outlets and be web only.
Discounting killed the distributors and required shops be big enough to by direct. Kleins was actually one of the earliest to offer EVERYTHING at 20% retail. Going way back, he bought most stuff direct from the manufacturers but used distributors to keep the shelves full in between big orders to the manufaturers.
Having worked in this business, I would not even consider opening a retail train store today without a big space, a really big pile of interest free capital, and a plan for a big web presence as well.
As for Scale Trains, really nice stuff from what I have seen. But, nothing I want, nothing in my era.
Sheldon
Rio Grande. The Action Road - Focus 1977-1983
willy6,As part of their overall business practice, ScaleTrains would much rather you buy from them directly. In this way, they can cut out the middleman wholesaler like Walthers, MB Klein, etc. and retailers like your local hobby shop in order keep that money for themselves.As an example, say something's $100 MSRP. In yon olden days, a typical retail discount was the so-called 40-10-10. It's when a retailer got 40% off the MSRP and would get an additional 10% off that price if they paid within 10 days. So that $100 item would cost a retailer $54 to purchase from the middleman if they paid on time. (This 40-10-10 is pretty much a thing of the past except for Bachmann; everyone else "short discounts" these days so instead of 40% off list price, a retailer may get 30% off).The wholesaler would have purchased that same $100 item from the manufacturer at around 50% (+/-) off the MSRP. They don't make much per item sold, but they make that up in volume. A retailer may only buy a dozen items but the wholesaler is selling thousands.
For ScaleTrains, if they sold the old conventional way to wholesalers and retailers, would only get about $50 (+/-) for that mythical $100 item. However, by selling directly to the consumer, they get it all. ScaleTrains usually is selling their items on their website at 20% off the MSRP, but then they can afford to do so because they'll make $80 out of $100...which is significantly better than if they sold to Walthers, et al.
I just go to their web site.
https://www.scaletrains.com/mobile-home/
Mike.
My You Tube
I am not on this forum everyday, so I may miss some news. I haven't seen HO scale Scale Trains for awhile on places like MB Klein, Tony's, Charles RO and Walthers. I see them advertise on this website, but I don't see their products. Whats up with that?