Has anyone tried Factory Direct Trains??
What was you experience with them if you have purchased from Factory Direct Trains??
Good service??
Thanks
Example below of advertisement in MR
PCM Big Boys for $325 No Sound
Y6B's for $399.00 with Sound
I purchased the Y6b on January 2 for $399 from their website. Prior to placing the order I spoke with Factory Direct Trains and they confirmed that all locomotives come with full warranty. UPS shipping to Michigan was $9 but I believe this is a special 30 day rate.
UPS tracking indicates that it will be delivered today. What is interesting is that the loco was shipped directly from BLI/PCM in Florida so it truly is factory direct. I'll update this when I receive the loco.
Mike
Manifest wrote: I purchased the Y6b on January 2 for $399 from their website. Prior to placing the order I spoke with Factory Direct Trains and they confirmed that all locomotives come with full warranty. UPS shipping to Michigan was $9 but I believe this is a special 30 day rate.UPS tracking indicates that it will be delivered today. What is interesting is that the loco was shipped directly from BLI/PCM in Florida so it truly is factory direct. I'll update this when I receive the loco.Mike
Thanks for the reply. Sounds like they are representing PCM to sell their overstock, which should be good for us. This also sounds like the first PCM blowout that I am aware of.
Enjoy the low prices while you can. Once again, IMHO, a manufacturer has shot themselves in the foot with some retailers. This is what happened last week:
Prominent distributor sends my competitor an e-mail about Broadway clearance prices. One of the items listed (to us, at wholesale) was 1.00 HIGHER than what BLI/PCM is selling direct to you guys...per the centerfold style MR ad.
I know of a few retailers who are now no longer going to carry anything from Broadway or PCM. It's not worth the risk.
Buy direct, save money, good luck.
One Track Mind wrote:Enjoy the low prices while you can. Once again, IMHO, a manufacturer has shot themselves in the foot with some retailers. This is what happened last week:Prominent distributor sends my competitor an e-mail about Broadway clearance prices. One of the items listed (to us, at wholesale) was 1.00 HIGHER than what BLI/PCM is selling direct to you guys...per the centerfold style MR ad.I know of a few retailers who are now no longer going to carry anything from Broadway or PCM. It's not worth the risk.Buy direct, save money, good luck.
Crazy way to do business for sure. Why would any shop, real or virtual, carry their products when there is a good chance they will get significantly underpriced by a deal with someone like FDT?
One Track Mind wrote: Enjoy the low prices while you can. Once again, IMHO, a manufacturer has shot themselves in the foot with some retailers. This is what happened last week:Prominent distributor sends my competitor an e-mail about Broadway clearance prices. One of the items listed (to us, at wholesale) was 1.00 HIGHER than what BLI/PCM is selling direct to you guys...per the centerfold style MR ad.I know of a few retailers who are now no longer going to carry anything from Broadway or PCM. It's not worth the risk.Buy direct, save money, good luck.
I am not a business person, and can't claim any experience or insight into pricing policies.
I have found that my local LHS in Nanaimo (not really local, but....) does quite well when he needs to. For example, I can get something brought in on his next order, and he always seems to match what it would have cost me to get it shipped, after those costs and customs, from the USA to my home on Vancouver Island. In fact, he offered me a 10% customer discount, so I came out ahead.
If it would not be an imposition, or an intrusion, for you, OTM, would you help the readership here to understand precisely, and in as much detail and specificity as you can comfortably share, exactly what impact this type of practise has on you.
Thanks very much for any illumination you can shed on it for us.
-Crandell
Hi Selector...and others...
first I apologize for derailing the original question posed by this thread. Lack of judgement on my part.
Now, I'm barely a businessperson myself, so I'm not sure I can explain exactly what you want to hear...especially within the confines of no advertising on my part, no discussion of wholesale pricing per my distributor and or by BLI/PCM policies...etc, limits what I can say...
But the bottom line is, let's say I thought the Broadway Limited On30 galloping goose was going to sell real well here. Let's pretend I ordered....6 of them. A lot of you already know what our "standard" wholesale discount is to retailers...I can tell you that BLI sells at a SHORTER discount than that. This gets tricky - delete this if you want Bergie - but I already discount a certain percentage to compete with the 'net and mail order....by the time someone pays with a credit card, the amount of profit we make on these products is nearly nothing...but that's sort of a different part of the discussion.
OK so I have 6 coming in, and 2 sell and 4 are on the shelf. The Feb '07 MR arrives and - with no advance warning from anyone - there you see that these very same products are now discounted 66% off of the MSRP, straight from the factory to you.
Now, what do I do with those units I have on the shelf? What would you do?
It's a free enterprise system in a free country, BLI can do whatever they want. But no one should expect real stores to carry BLI and PCM products as stock items anymore.
A similar situation happened with Proto 2000 back in the late '90s in my opinion. You wanna dump excess inventory at giveaway prices - fine - but don't depend on us (LHSs) to promote your line. Don't come to me/us if or when you have problems.
Don't know how else to answer your question Selector, it's just business sense...why take the chance of stocking something at a price based on MSRP and then turn around and see the same items selling for 2/3rds off...business in general is all a gamble, but this is a risk I'm not willing to take.
Any other questions, feel free to ask.
One Track Mind wrote:hang on...got busy here this afternoon, may not have time to answer until tonight
I hope it was a "good" and profitable busy...
Yes, I follow you...it is as simple as arithmetic. If you get invoiced for something like 40-50% of what you would place them on the shelf, and then have the distributor or manufacturer dump them at about that price, how can you hope to break even with your carrying costs factored in, even if you did manage to sell them off one-by-one? You get cut off at the knees.
Maybe, and I am way out there in la-la land on this one, there should be an agreement that shipped/invoiced items have a 15% holdback or something so that if this takes place, you get the benefit of the holdback sent to you at month-end. At the very least, this would replace some of your costs and maybe net you a whopping $100 at the end of the month.
How you and your colleagues across the globe could ever engineer that, or impress it upon XYZ Company is beyond me.
Thank-you for taking the time to respond. I get a strong sense it ain't a great way to make a buck at the best of times without this type of action.
selector wrote: One Track Mind wrote: Enjoy the low prices while you can. Once again, IMHO, a manufacturer has shot themselves in the foot with some retailers. This is what happened last week:Prominent distributor sends my competitor an e-mail about Broadway clearance prices. One of the items listed (to us, at wholesale) was 1.00 HIGHER than what BLI/PCM is selling direct to you guys...per the centerfold style MR ad.I know of a few retailers who are now no longer going to carry anything from Broadway or PCM. It's not worth the risk.Buy direct, save money, good luck. I am not a business person, and can't claim any experience or insight into pricing policies. I have found that my local LHS in Nanaimo (not really local, but....) does quite well when he needs to. For example, I can get something brought in on his next order, and he always seems to match what it would have cost me to get it shipped, after those costs and customs, from the USA to my home on Vancouver Island. In fact, he offered me a 10% customer discount, so I came out ahead.If it would not be an imposition, or an intrusion, for you, OTM, would you help the readership here to understand precisely, and in as much detail and specificity as you can comfortably share, exactly what impact this type of practise has on you.Thanks very much for any illumination you can shed on it for us.-Crandell
The way I see it its like Presidents Choice selling a complete train set (and I still have not been able to find one ) for $100 CDN while just the loco can be had for $129.99 USD, on sale, at the LHS or internet store. IHC was able to supply that market much cheaper than the "regular" train market, maybe because of volume or other factors but still undercutting the LHS's.
One Track Mind wrote: Hi Selector...and others...first I apologize for derailing the original question posed by this thread. Lack of judgement on my part.Now, I'm barely a businessperson myself, so I'm not sure I can explain exactly what you want to hear...especially within the confines of no advertising on my part, no discussion of wholesale pricing per my distributor and or by BLI/PCM policies...etc, limits what I can say...But the bottom line is, let's say I thought the Broadway Limited On30 galloping goose was going to sell real well here. Let's pretend I ordered....6 of them. A lot of you already know what our "standard" wholesale discount is to retailers...I can tell you that BLI sells at a SHORTER discount than that. This gets tricky - delete this if you want Bergie - but I already discount a certain percentage to compete with the 'net and mail order....by the time someone pays with a credit card, the amount of profit we make on these products is nearly nothing...but that's sort of a different part of the discussion.OK so I have 6 coming in, and 2 sell and 4 are on the shelf. The Feb '07 MR arrives and - with no advance warning from anyone - there you see that these very same products are now discounted 66% off of the MSRP, straight from the factory to you. Now, what do I do with those units I have on the shelf? What would you do?It's a free enterprise system in a free country, BLI can do whatever they want. But no one should expect real stores to carry BLI and PCM products as stock items anymore. A similar situation happened with Proto 2000 back in the late '90s in my opinion. You wanna dump excess inventory at giveaway prices - fine - but don't depend on us (LHSs) to promote your line. Don't come to me/us if or when you have problems. Don't know how else to answer your question Selector, it's just business sense...why take the chance of stocking something at a price based on MSRP and then turn around and see the same items selling for 2/3rds off...business in general is all a gamble, but this is a risk I'm not willing to take.Any other questions, feel free to ask.
I think we can agree that this blowout is a great deal for us buyers, but not so good for any of the LHS or owners. I have noticed the BLI and PCM models are missisng from the shelves on the LHS and probably will not be there in the future.
BLI stated the blowout sales about three years ago and shot themselves in the foot with the dealers and LHS owners. The LHS had stock on hand that could not sell until much later when the discounts were gone. I like their products overall and would hope they can get back into the smaller LHS so we can see them before we buy the model.
As a dealer, your money gets tied up and prevents you from investing in items that will sell. I would image BLI/PCM combined will continue to blow out deals since they are probably short of cash also and cannot protect their dealers. It sort of snowballs since the dealers will not stock unless they have a reservation and BLI/PCM is stuck with too many on the shelves so they wholesale them out to us.
Factory Direct Trains is a new start up and sells other products also, but mainly BLI /PCM.
I was curious about this new sales approach was and how it will affect future sales of all BLI / PCM models locally.
csmith9474 wrote:Aha!! One Track Mind has helped answer one of my questions. I purchased a set of diesels (PCM) at wholesale (30% off MSRP), and then saw that a large nationally known train store is selling the same set of diesels for only a few bucks more than what I paid through a distributor. At that point I was wondering how they would be making any profit on this. I am assuming that this is explained by what was stated above about PCM selling directly to the hobby shop at a lower cost than what they might give to a distributor, or did I interpret that incorrectly? Are certain places getting them at 40% off or possibly more? The profit has to be made somewhere.
Correction
In this case, the dealers who stocked up on the same products that are now being blown out below wholesale are stuck with their stock.
Smitty -
Not sure if I explained something wrong or if I misunderstood your post...I've been sick for two weeks and it's been a long day and eventually someone is going to tell me that I should never bring this stuff up in the first place...
I'm not sure what question I answered for you.
The bottom line, from my viewpoint only, is that an item is offered for sale at a MSRP at it's introduction into the marketplace, and my store buys it at the wholesale price of that MSRP. All is fine and dandy.
Then the manufacturer decides to dump the old inventory - maybe I still have some of it on the shelf, maybe I don't - and sometimes when this happens, we are offered even better wholesale deals from the factory through the distributor to help them move what needs cleared out.
My point was, in this case, even the clearance sale wholesale price was 1.00 higher than the ad states they will sell to you. Technically yes, stores can get a pretty good deal on some BLI products right now, but it's still HIGHER (even slightly) than what "Factory Direct" is selling directly to consumers.
And of course all this only applies to the stuff that doesn't sell well in the first place. The desirable items are already sold out, that isn't something that I have qualms with I guess, it's just that I don't have a crystal ball to determine what is going to sell well and what is gonna get blown out in a few months.
I don't know how BLI sells directly to a hobbyshop, I'm not a big enough place to be ordering direct. Can't speak for what other places consider to be a profit.
Hope that clears up what I posted, if not, I'll be around.
One Track Mind:
I suppose I may have mis-interpreted you. I somehow derived that certain hobby shops were getting additional discounts directly from the manufacturer that hobby shops purchasing through the distributors werent' getting. Say hobby shop A (larger shop) is purchasing large quantities directly from PCM at 40% or more off MSRP, and hobby shop B is purchasing products from a distributor for the standard 30% off MSRP for PCM. Either I need to read a little slower or lay off the crack!
I have TRIED to keep my mouth shut, but here goes.
As a customer I feel cheated that these enormous retail prices for PCM or BLI products are getting SO low direct. I see this as a problem because now no one will expect to carry BLI or PCM products in ANY store at current prices.
I consider BLI and PCM very GOOD manufactors with decent equiptment, first class service etc etc. But... I fear they just created a massive glut of products that now wont sell and will hit thier outlet or sit for weeks unsold at invoice prices.
I support One Track Mind's comments and I know that there are several stores that will no longer carry BLI or PCM simply because of pricing. There is literally no more profit to be had at the Factory Direct Prices.
What I dont understand is this: BLI created PCM. BLI and PCM are one and same as far as I am concerned. Suppose they took thier website "Outlet Direct" one step further and created a Distribution network aimed directly at the customer bypassing the Hobbyshop and Distributors??
Is that possible in the Corperate world?
I already have several BLI products on back order from the last twelve months and already wrote one of them off as never to be run again out of the factory. I fear that future BLI or PCM engines may in fact be in jepoardy because no one will make them availible at the prices currently being advertised... example, the PCM HO scale Heavy I-1 Decapod 2-10-0 That thing has been on the PCM's website at about 400 dollars with a short tender with a second run forcast with a possible coast to coast tender. I will not be ordering this engine via the LHS even with the very NICE discount that I enjoyed in the past. Why? because Factory Direct will have pricing that might make it worth my while to BUY TWO of these engines for 400 dollars.
What happens 5 years from now when QSI and other sound equippted engines completely collaspe the market nationwide and they become a sort of a non-profitable item because they cannot be sold at a good price to feed anyone involved in making, shipping, marketing, distribution etc etc etc ...
More importantly what happens now that the OTHER MAJOR DISTRIBUTORS are forced to slash pricing to dump the suddenly idle inventory onto the LHS's? It will be a castrophe. And if it is severe enough, it could lead to a total stoppage of the current HO scale model engines as we know it today.
Taking it one step further, what happens after a period of time the LHS's actually close becuase all they sell is paint, kaydees and a few structures and nothing else? NOT GOOD.
One other thing to consider. I think pricing to LHS's just got revealed very close to what it costs for one of these thanks to Factory Direct and now there will be a flood of customers waving the ad in a printout at the LHS counter saying why can I not get X engine for half this cost?
I suspect BLI/PCM overstepped themselves and shot thier foot trying to generate volume. Is it possible that enough product rotted on the shelf these last... 18 months enough to hurt them and motivate them to actually take these drastic steps and get rid of the old product? Several engines have already "Vanished" in the last 12 months.
I say this. They are getting too greedy for volume sales. As tempted as I am at these pricing, I feel sad now that most people will understand what the new pricing is and no one will ever see 400 dollar pricing anymore.
I am motivated by the feeling that Manufactors will take a stack of orders to a factory, have them produced for that number plus a few more and once X dollars profit comes in, they are finished with that model and work on introducing a new model to keep up the "Money Train" (Bad pun intended)
This is in direct contrast to several decent manufactors that have dared to maintain production or availiblity of engines in HO scale for years or decades. Slow and steady wins the race I say.
We are either going to have a new resurgence of BLI via these direct sales that re-starts the engine on the product line and allows BLI to do more business with a wider line of products in the future....
Or we will see BLI collaspe like a Nuetron star that has burned up all it's fuel trying to illumate more of space too quickly.
Missed the UPS drop off on Tuesday as a signature was required - received the package on Wednesday. The Y6b came in a new PCM box and was in new condition. I did a quick test run and everthing checked out fine but the test was limited as I only have DC. Hope to have a Digitrax Zephyr set up soon. Overall I was happy with the purchase and would buy from them again.
CAZEPHYR wrote: Has anyone tried Factory Direct Trains?? What was you experience with them if you have purchased from Factory Direct Trains?? Good service?? Thanks Example below of advertisement in MRPCM Big Boys for $325 No Sound Y6B's for $399.00 with Sound
All I can tell you is I ordered a hard to find BLI F7 A/B set from them for $240 + shipping and they arrived in less than a week. I really don't care who gets undercut by this. I am out to get the best value for my money and this price was way below what has been listed elsewhere. Now I did just place an order from Walthers latest sale brochure through my LHS. The total is over $600. There were some outstanding bargains in it. I think my LHS dealer is as happy as I am.
Manifest wrote: Missed the UPS drop off on Tuesday as a signature was required - received the package on Wednesday. The Y6b came in a new PCM box and was in new condition. I did a quick test run and everthing checked out fine but the test was limited as I only have DC. Hope to have a Digitrax Zephyr set up soon. Overall I was happy with the purchase and would buy from them again.Mike
Good to hear your Y6b came and is good. Thanks for the update.
CAZEPHYR
jecorbett wrote: CAZEPHYR wrote: Has anyone tried Factory Direct Trains?? What was you experience with them if you have purchased from Factory Direct Trains?? Good service?? Thanks Example below of advertisement in MRPCM Big Boys for $325 No Sound Y6B's for $399.00 with SoundAll I can tell you is I ordered a hard to find BLI F7 A/B set from them for $240 + shipping and they arrived in less than a week. I really don't care who gets undercut by this. I am out to get the best value for my money and this price was way below what has been listed elsewhere. Now I did just place an order from Walthers latest sale brochure through my LHS. The total is over $600. There were some outstanding bargains in it. I think my LHS dealer is as happy as I am.
Thanks for your update. I ordered one of the non sound Big Boys and look forward to the savings. My LHS is not stocking either the PCM or BLI products so mail order is the only way.
Safety Valve wrote: I have TRIED to keep my mouth shut, but here goes.As a customer I feel cheated that these enormous retail prices for PCM or BLI products are getting SO low direct. I see this as a problem because now no one will expect to carry BLI or PCM products in ANY store at current prices.I consider BLI and PCM very GOOD manufactors with decent equiptment, first class service etc etc. But... I fear they just created a massive glut of products that now wont sell and will hit thier outlet or sit for weeks unsold at invoice prices.I support One Track Mind's comments and I know that there are several stores that will no longer carry BLI or PCM simply because of pricing. There is literally no more profit to be had at the Factory Direct Prices.What I dont understand is this: BLI created PCM. BLI and PCM are one and same as far as I am concerned. Suppose they took thier website "Outlet Direct" one step further and created a Distribution network aimed directly at the customer bypassing the Hobbyshop and Distributors??Is that possible in the Corperate world?I already have several BLI products on back order from the last twelve months and already wrote one of them off as never to be run again out of the factory. I fear that future BLI or PCM engines may in fact be in jepoardy because no one will make them availible at the prices currently being advertised... example, the PCM HO scale Heavy I-1 Decapod 2-10-0 That thing has been on the PCM's website at about 400 dollars with a short tender with a second run forcast with a possible coast to coast tender. I will not be ordering this engine via the LHS even with the very NICE discount that I enjoyed in the past. Why? because Factory Direct will have pricing that might make it worth my while to BUY TWO of these engines for 400 dollars.What happens 5 years from now when QSI and other sound equippted engines completely collaspe the market nationwide and they become a sort of a non-profitable item because they cannot be sold at a good price to feed anyone involved in making, shipping, marketing, distribution etc etc etc ...More importantly what happens now that the OTHER MAJOR DISTRIBUTORS are forced to slash pricing to dump the suddenly idle inventory onto the LHS's? It will be a castrophe. And if it is severe enough, it could lead to a total stoppage of the current HO scale model engines as we know it today.Taking it one step further, what happens after a period of time the LHS's actually close becuase all they sell is paint, kaydees and a few structures and nothing else? NOT GOOD.One other thing to consider. I think pricing to LHS's just got revealed very close to what it costs for one of these thanks to Factory Direct and now there will be a flood of customers waving the ad in a printout at the LHS counter saying why can I not get X engine for half this cost?I suspect BLI/PCM overstepped themselves and shot thier foot trying to generate volume. Is it possible that enough product rotted on the shelf these last... 18 months enough to hurt them and motivate them to actually take these drastic steps and get rid of the old product? Several engines have already "Vanished" in the last 12 months.I say this. They are getting too greedy for volume sales. As tempted as I am at these pricing, I feel sad now that most people will understand what the new pricing is and no one will ever see 400 dollar pricing anymore.I am motivated by the feeling that Manufactors will take a stack of orders to a factory, have them produced for that number plus a few more and once X dollars profit comes in, they are finished with that model and work on introducing a new model to keep up the "Money Train" (Bad pun intended) This is in direct contrast to several decent manufactors that have dared to maintain production or availiblity of engines in HO scale for years or decades. Slow and steady wins the race I say.We are either going to have a new resurgence of BLI via these direct sales that re-starts the engine on the product line and allows BLI to do more business with a wider line of products in the future....Or we will see BLI collaspe like a Nuetron star that has burned up all it's fuel trying to illumate more of space too quickly.
You have some good points with the BLI/PCM and other sales hurting the initial sales of all the future new products. I have stopped advance reservations since those prices are much higher than the sale prices we have seen recently. The problem with this is some very popular models do sell out and are not on the blow out sales list.
The owners are the same for BLI/PCM, but the PCM was started because of some restrictions in the contract with Loksound for the PCM products. The two organizations having the same money backers probably requires these sales to stay afloat.
The points about BLI/PCM not being available in the future is already going on in many of the smaller LHS. I asked about Factory Direct Trains since the PCM engines are not available in my area at any of the LHS.
BLI/PCM not being available locally is already a problem in many areas and will probably hurt their overall sales in the future. The distributors will also stop stocking BLI/PCM products if they get stuck with them. BLI started out strong with the LHS several years ago but imported too many models and then started the blow out sales. They have had two or three blow outs and manh dealers were involved in at least one of those sales.
The bottom line is the low prices from Factory Direct will cause some LHS to not stock any future products from BLI/PCM and only get the products if they have a reservation.
a sincere thanks for the advice, rrebell (and others) but that was kinda my point...even me dumping them at my cost is still considerably HIGHER than they are selling direct to you.
That was a theoretical situation anyway, for many reasons I've never stocked a lot of BLI anyway....this direct stuff ultimately has no effect on my shop whatsoever...I didn't make any money on their items anyway.
On the hobbyshop owners forum I belong to, trust me, there is plenty of talk about no longer carrying BLI/PCM products. And the distributors have been contacted for their thoughts on the matter.
But what may have an effect someday is if ALL or most manufacturers decide this is a good idea.
For those of you who say "we don't care about LHSs, we don't care who gets undercut, we only want the cheapest price possible"...personally, and this HAS NOTHING TO DO WITH ME OWNING A SHOP....but I think that is shortsighted at best.
Hopefully none of you who have mentioned similar comments have ever posted anything like "my hobbyshop doesn't seem to care about me"...it is a two-way street to some extent.
rrebell wrote:Having been in business for many years (not trains thou), I would dump the items at my cost, if you don't you my be stuck with them and if you have to pay invetory tax and carrying cost that would be the best soloution and they may buy something else at the same time that will give you a profit.
Having been in business for many years (not trains thou), I would dump the items at my cost, if you don't you my be stuck with them and if you have to pay invetory tax and carrying cost that would be the best soloution and they may buy something else at the same time that will give you a profit.
This is why my LHS has a pre-inventory clearance sale every year about this time. Most items are 15% off. This is when I wait to buy big ticket items and things that can wait like books and DVDs.
I find this kind of funny. At least once a month someone starts a thread bellyaching about prices and how the manufacturers are trying to impoverish hobbyists, yada, yada, yada. Now that someone is actually selling at prices that should slow the bellyaching (although it'll never stop - some people want to get paid to take merchandise off a retailer's hands), the worry is that there is a glut of merchandise. Oh for the good old days when selection like this was just a pipe dream.
I'm not privy to BLI/PCM's corporate decisions, but one thing I have heard is that the company was unusually well capitalized for a startup, especially in this business. My guess is that some of that initial capital capital was burned off doing a rather thorough study of the market, that BLI had a long range strategy right from the get go and that we're seeing some of the long range planning being executed with the emergence of FDT. This was not a shoot-from-the-hip decision. Whether or not this does permanent damage to small retailers, I don't know. We'll see.
To me, it looks like FDT IS trying to position itself as a distributor. If you check their site, there is a "Find A Dealer" icon. If you press it, you are told a dealer locator is coming soon. They're also showing Intermountain as one of their lines.
As far as competing with retailers, factory direct outlets for other goods exist all over the place. However, there's probably not enough volume in the MRR market unless BLI/PCM/FDT becomes a chain of retail outlets as well and is completely vertically integrated (i.e. controls the supply chain from the manufacturing floor to the sales floor).
I think your worries are a bit overblown. For one thing, FDT is showing low prices on a post Christmas sale WHILE SUPPLIES LAST on SELECT items (not the whole list of what BLI/PCM manufactures). As for MAJOR distributors, there are only two I know of, Walthers and Horizon. They should be able to withstand the "storm".
How is this suddenly "excess" inventory going to be dumped on the LHS? Why would a shop owner suddenly order more of what he already has sitting on the shelf unless his shelf is about to be emptied because he's doing a land-office business?
I think I'm going to walk away from this shaking my head. People moan and whine because mfg's make "limited" runs and that's one of the things that will kill the hobby. Then, when it appears (and I use that word advisedly) that one has made too many of certain items and is offering those items at a pretty hefty discount, a permanent glut is predicted which will, of course, lead to TEOHAWKI (The End Of The Hobby As We Know It).
Has anybody at all noticed that the upcoming New Haven I-5 has not been steeply discounted and is, in fact, still being advertised at the originally announced price? http://tinyurl.com/y4vzwu This would indicate to me that, in fact, the FDT after Christmas sale is just that, a sale. IOW, BLI/PCM has not, in fact, permanently lowered prices to gain market share in the locomotive biz. They don't have to. For the most part, they ARE the market
Andre
One Track Mind wrote: a sincere thanks for the advice, rrebell (and others) but that was kinda my point...even me dumping them at my cost is still considerably HIGHER than they are selling direct to you.That was a theoretical situation anyway, for many reasons I've never stocked a lot of BLI anyway....this direct stuff ultimately has no effect on my shop whatsoever...I didn't make any money on their items anyway.On the hobbyshop owners forum I belong to, trust me, there is plenty of talk about no longer carrying BLI/PCM products. And the distributors have been contacted for their thoughts on the matter.But what may have an effect someday is if ALL or most manufacturers decide this is a good idea. For those of you who say "we don't care about LHSs, we don't care who gets undercut, we only want the cheapest price possible"...personally, and this HAS NOTHING TO DO WITH ME OWNING A SHOP....but I think that is shortsighted at best.Hopefully none of you who have mentioned similar comments have ever posted anything like "my hobbyshop doesn't seem to care about me"...it is a two-way street to some extent.
I think we all realize the BLI/PCM products are hard to find on many shops even now and I also feel it is a smart move not to stock them on your part. I know one dealer who still has five Lionel Challenger in stock at full price after Lionel dumped their HO.
The distributors will probably continue to stock a few items from BLI, but not reruns since they tend to be slow sellers and are more subject to blowouts.
The LHS is very important to the industry as a whole and we appreciate every one who is making a living running them and continue to purchase from them. If BLI/PCM continues this trend, they probably will have future problems in distribution and cooperation with any dealers other than blow out deals.
When I first started in 1968 buying HO, almost every shop had brass and lots of items that have been missing from the average LHS for many years now. The market has changed so much in the last thirty years and it is impossible to know what is in store for the future.
I thought the sound models would be a great boom for the LHS, since most of them are affordable, but now they are actually hurting the LHS if they cannot be sold and stay on shelves.
There is no easy answer to the question.
Good luck with your business and go on line if possible.