Thanks CAZEPHYR...sorry again for messing up your thread, I see some folks are happy with their purchase from Factory Direct and I think I've been pretty careful to not cast any doubt about them concerning the quality of their service. Except for when I said "good luck" in my original post on this thread...I honestly didn't mean to thrust any bad light toward Factory Direct, that was more a general note on shipping damage that occurs about 15% of the time.
With any comment I make, I hope folks understand that I am not (usually) whining and I am not promoting gloom'n'doom for any part of this hobby. And most of the time I am happy with my job.
Like the saying goes, and like you mentioned, nobody said this would be easy.
Interesting business decision on the part of BLI. They must know that they have pretty much destroyed ther relationship with the traditional LHS retail channel including its distributors. Have they done so because (a) they have fallen way short of their sales projections and are desperate to move inventory, or (b) they believe that having established themselves as a brand, it is more profitable to go "factory direct".
Given the steepness of the discounts I'm inclined to believe (a). How can they make more money by selling direct with prices roughly at what they charge distributors?
andrechapelon, I appreciate your thoughts on this matter.
I think we are going to witness the death of the engine display case as we knew it. Instead of engines on-hand at the store, we are cut down to ordering them online or via LHS's who are still willing to take your order.
I consder Engines to be big ticket items. Everything else that is part of the hobby sometimes will cost more like some DCC systems and what have you.
I have been in stores decades ago as a young kid who saw a wall of brass engines behind the counter. It was like drinking water after crossing a wilderness to see every kind of engine in brass built to the best standards of the time. Just to visit the store and view the brass is worth the trip.
Today, you will still get brass but have to do it online or through a mail order house. I know of one or two places that sell brass in stores because I am seeking out a particular item for future purchases. I wont be doing it as a investment, but it will be used every day right next to the plastic rolling stock because no one has produced this item in RTR.
I still stand by what I said regarding the level of customer service and value of the products from BLI. I have experienced this first hand with my engines and nothing can change my position.
I am a customer who needs to see, hear and touch the product in question before making the decision if I want to buy it or not. I dont know what percentage of all the people who go into a LHS shops that way. Take away that and show only a video or a review and very little else to go on except forum postings about a product really removes the customer like me from consideration.
I will always buy Engines and HO scale trains thru the Hobby Shop when I can but dont see that happening very often. However there is plenty of other things to buy at the store and I would hope that this state of inventory will continue for some time.
If there is anything to "whine" about I will have to blast the limited runs and advance ordering. Alot of times I visit a store and learn about a item that will be released soon (As in within 6 months) and have to decide if I want to order this item by a certian date. I would order this item and plan for it.
Ultimately the items arrive at the store and the shop keeper calls me or otherwise lets me know that they are in and ready to be picked up.
What happens if ... 100 people arrive over a month to pick up a pre-order and suddenly a percentage of them decide they dont want it? Or not have the money to pay it right away? Or perhaps for other reasons in life not able to complete the order?
The LHS are the ones who have to decide then what they want to do with this situation.
As for me I found increasing numbers of orders arriving at a rate that I cannot keep up with at times. This is items ordered "Limited run" deadlines etc within the last 12 months. I see this situation getting worse.
In my specific case, I finished all of my items for 2006 and I consider 2007 a new year and have several orders that have yet to arrive. Two of those are BLI engines. They were ordered last year. The pricing for those engines will be more than the outlet sales or other promotions. I dont have a problem with that. As I stated before I already told one store to drop a BLI engine order because I dont see it ever being produced again after it vanished after a really big blow out early summer of 2006.
Stores dont like to have to call BLI or anyone and say "Drop the order" or "send this back" which is why I think that alot of product is going to end up unsold.
steamnut wrote: Interesting business decision on the part of BLI. They must know that they have pretty much destroyed ther relationship with the traditional LHS retail channel including its distributors. Have they done so because (a) they have fallen way short of their sales projections and are desperate to move inventory, or (b) they believe that having established themselves as a brand, it is more profitable to go "factory direct".Given the steepness of the discounts I'm inclined to believe (a). How can they make more money by selling direct with prices roughly at what they charge distributors?
Did you actually read FDT's ad? It said AFTER CHRISTMAS SALE ON SELECTED ITEMS!
A sale. On selected items. Not an across the board lowering of prices.
Everybody who is wringing their hands about this appears to be under the impression that there is a near inexhaustible supply of inventory available to FDT for sale at rock bottom prices. Nobody, I repeat, nobody, has the vaguest idea how many units of each item that is on sale is actually on FDT's shelves. Yeah, FDT is selling "stealth" N&W J's for $126 each. However, of the 6 or so stealth numbers listed at the BLI site, only 2 (#'s 600 and 606) are on sale. Only 2 variants of the sound equipped Reading T-1 are on sale, and one of those is the Iron Horse Ramble version, not the in service version.
There's a lot more varieties of Santa Fe 3800 class 2-10-2's available. However, the biggest criticism from Santa Fe modelers with respect to the 3800's is that the BLI model is the as-built version rather than the post-war version that had the drifting valves, disc main drivers, etc. BLI may have blown it on that one, at least initially. However, they have the basics and a future run may be the modernized version.
Andre
Andre - that's true...and I hope I've not done anything to further that misconception.
What I said at first was, a lot of this stocking of items is nothing but a guess. It's all a gamble. My main deal was, since retailers don't know, when we have to pre-order things months or a year or two in advance, how are we supposed to know what will sell...and if it doesn't...how will we know how fast non-selling inventory will get dumped? It's just too big of a gamble to take.
I've already had 3 customers coming in here asking me why my prices were "so high" when FDT can sell "this low." And it doesn't even matter if it's the same item or not, it's the perception of the entire brand.
But like I said, I don't have to worry about explaining this to my customers anymore.
andrechapelon wrote: steamnut wrote: Interesting business decision on the part of BLI. They must know that they have pretty much destroyed ther relationship with the traditional LHS retail channel including its distributors. Have they done so because (a) they have fallen way short of their sales projections and are desperate to move inventory, or (b) they believe that having established themselves as a brand, it is more profitable to go "factory direct".Given the steepness of the discounts I'm inclined to believe (a). How can they make more money by selling direct with prices roughly at what they charge distributors?Did you actually read FDT's ad? It said AFTER CHRISTMAS SALE ON SELECTED ITEMS!A sale. On selected items. Not an across the board lowering of prices.Everybody who is wringing their hands about this appears to be under the impression that there is a near inexhaustible supply of inventory available to FDT for sale at rock bottom prices. Nobody, I repeat, nobody, has the vaguest idea how many units of each item that is on sale is actually on FDT's shelves. Yeah, FDT is selling "stealth" N&W J's for $126 each. However, of the 6 or so stealth numbers listed at the BLI site, only 2 (#'s 600 and 606) are on sale. Only 2 variants of the sound equipped Reading T-1 are on sale, and one of those is the Iron Horse Ramble version, not the in service version. There's a lot more varieties of Santa Fe 3800 class 2-10-2's available. However, the biggest criticism from Santa Fe modelers with respect to the 3800's is that the BLI model is the as-built version rather than the post-war version that had the drifting valves, disc main drivers, etc. BLI may have blown it on that one, at least initially. However, they have the basics and a future run may be the modernized version. Andre
You are right about the selected items and they are items that have not sold well and are setting on the shelves at BLI/PCM. The N&W J is a good example since they are detailed like the first five J class engines, 600 to 604 and many people may not know the difference having purchased the first J Model, that was detailed after 606 to 613. I purchased both versions with sound since I like the J class and now these are available for just #126.00, but are missing the sound. For many who want multiply models, we will probably secure one and wait for the next shoe to fall at the big sale time.
The advertised after Christmas, but when I talked to Joe at the FDT, they are really gearing up to market any overstock direct for Intermountain and other companies if they can get a deal with the companies.
eclaysmith wrote:It would seem that GM and Ford does the same thing at the end of the year with the remaining cars and trucks that have not sold well, but they acually own the product at the dealers so the dealer is protected and sells the cars at a lower price making some money also.This has nothing to do with trains but still feel the need to correct this minor misstatement by CAZEPHER in a previous post. A dealer ownes their inventory. At the end of a model year you are at the mercy of what incentives are in place and the market to move the inventory. There is no help from the factory. Last year we had a 05 Town Car that did not sell until well in to the next model year and we took about a $4000 loss on it. It hurt.Clay Smith Ford Lincoln Mercury Dealer
Thanks for the correction. I have been told in pass years that dealers paid a percentage per month to have each car in their inventory.
Bad example for me to use if the dealer has to purchase the cars.
CAZEPHYR
Safety Valve wrote: andrechapelon, I appreciate your thoughts on this matter.I think we are going to witness the death of the engine display case as we knew it. Instead of engines on-hand at the store, we are cut down to ordering them online or via LHS's who are still willing to take your order.
Why? For that matter, what would be different than things were back at the dawn of the hobby when most things were mail-ordered because hobby shops were few and far between?
Yeah, I like to see an engine test run before I buy it. I usually buy from my (not so) LHS. OTOH, I'm only going to buy something that's appropriate for the railroad and era that I'm interested in (basically SP in the postwar era up to about 1955 or 56). I don't see The Trainshop in Santa Clara, CA going out of business anytime soon. They still have 3 twenty five foot or so long display cases chock full of engines ranging from MTH O gauge through the latest in DVP brass. I suppose it's possible that TTS might drop BLI/PCM, but that's only one manufacturer which takes up only one part of one display case. TTS also has brass up the ying yang.
The model railroad market is small and fragmented. You can't engage in continuous manufacturing the way Ford, GM or Toyota do without practically guaranteeing you'd choke your business to death with excess inventory. In how many different paint schemes does Athearn offer its Genesis F-3's? The Maine Central F-3's have been produced in both the original maroon and gold paint as well as the green and gold. How many Maine Central F-3's do you think Athearn could produce before glutting the market? Athearn has to short production runs, especially with smaller and less popular railroads. Limited runs are the only way to go,
andrechapelon wrote: Safety Valve wrote: andrechapelon, I appreciate your thoughts on this matter.I think we are going to witness the death of the engine display case as we knew it. Instead of engines on-hand at the store, we are cut down to ordering them online or via LHS's who are still willing to take your order.Why? For that matter, what would be different than things were back at the dawn of the hobby when most things were mail-ordered because hobby shops were few and far between? Yeah, I like to see an engine test run before I buy it. I usually buy from my (not so) LHS. OTOH, I'm only going to buy something that's appropriate for the railroad and era that I'm interested in (basically SP in the postwar era up to about 1955 or 56). I don't see The Trainshop in Santa Clara, CA going out of business anytime soon. They still have 3 twenty five foot or so long display cases chock full of engines ranging from MTH O gauge through the latest in DVP brass. I suppose it's possible that TTS might drop BLI/PCM, but that's only one manufacturer which takes up only one part of one display case. TTS also has brass up the ying yang.If there is anything to "whine" about I will have to blast the limited runs and advance ordering. Alot of times I visit a store and learn about a item that will be released soon (As in within 6 months) and have to decide if I want to order this item by a certian date. I would order this item and plan for it.The model railroad market is small and fragmented. You can't engage in continuous manufacturing the way Ford, GM or Toyota do without practically guaranteeing you'd choke your business to death with excess inventory. In how many different paint schemes does Athearn offer its Genesis F-3's? The Maine Central F-3's have been produced in both the original maroon and gold paint as well as the green and gold. How many Maine Central F-3's do you think Athearn could produce before glutting the market? Athearn has to short production runs, especially with smaller and less popular railroads. Limited runs are the only way to go,Andre
The train shop could close after the owner retires, there has been talk, I hope not though.
Vern Cole has retired. The Train Shop is being run by his son Dennis.
It's an interesting problem and one those of us in business have to deal with. I would be first in line to buy what I want at a substantial discount and have in fact dealt with the early "blowout kings" Trainworld. I support my LHS as well and now a couple of others as the LHS doesn't want to stock much beyond the basics in HO.
For years in my business, I have had customers call up to complain about bills and have heard all about - I can get the same spark plug for 1.38 from so and so mail order. I have patiently explained many times that I need to stock said plug so that I have it in hand when it's needed and that I pay to find it, buy it, and keep it in inventory. I charge list price for the parts and have always been willing to let the customers bring their own parts in to fit assuming they are then also are willing to miss a race if it doesn't arrive in time, doesn't in fact fit, or is defective and needs to be returned. In other words I charge for the service I provide but if the customer is willing to spend the time and effort and take the risk to save some dosh - it's ok with me.
Now back to the LHS. It's a bit unethical for the manufacturer to undercut his own retailers, but it does happen. I don't blame the folks doing retail for any retaliation they see fit, but really - are there two sides to the coin? I know if I cancel an order i lose my deposit. Will the manufacturers take the unsold stock back? Is there a restock fee? When I travel around the country to go to races, I always try to stop in to local train stores. From those visits, i know there are a few really good stores, and a lot where the hours are extremely limited, and the owners/help are less than helpful/knowledgeable/friendly. Is this taking sales down? Just a couple of thoughts, and now back to our regular programing. And for what it's worth I have a New Haven I-5 in plastic on order from an LHS (at the same price as advertised in the magazines)not from FTD or FDT or whatever. J.R.
3railguy wrote:The BLI dealer near me, Engine House Services - Green Bay, got a slew of BLI and PCM engines a few weeks ago just like in the Factory Direct ad and has them priced like Factory Direct. This tells dealers had the opportunity to take advantage of the excess inventory.
3Railguy
It is interesting to hear some other dealers might be in on the blow out sales. Does he have the exact same items that have been slow sales for BLI???
Maybe this deal was offered to others out there but funds or the lack of confidence in the product selling stopped them from taking advantage of the sale.
Maybe One track mind can shed some light on this.
Thanks
GMTRacing wrote: It's an interesting problem and one those of us in business have to deal with. I would be first in line to buy what I want at a substantial discount and have in fact dealt with the early "blowout kings" Trainworld. I support my LHS as well and now a couple of others as the LHS doesn't want to stock much beyond the basics in HO. For years in my business, I have had customers call up to complain about bills and have heard all about - I can get the same spark plug for 1.38 from so and so mail order. I have patiently explained many times that I need to stock said plug so that I have it in hand when it's needed and that I pay to find it, buy it, and keep it in inventory. I charge list price for the parts and have always been willing to let the customers bring their own parts in to fit assuming they are then also are willing to miss a race if it doesn't arrive in time, doesn't in fact fit, or is defective and needs to be returned. In other words I charge for the service I provide but if the customer is willing to spend the time and effort and take the risk to save some dosh - it's ok with me. Now back to the LHS. It's a bit unethical for the manufacturer to undercut his own retailers, but it does happen. I don't blame the folks doing retail for any retaliation they see fit, but really - are there two sides to the coin? I know if I cancel an order i lose my deposit. Will the manufacturers take the unsold stock back? Is there a restock fee? When I travel around the country to go to races, I always try to stop in to local train stores. From those visits, i know there are a few really good stores, and a lot where the hours are extremely limited, and the owners/help are less than helpful/knowledgeable/friendly. Is this taking sales down? Just a couple of thoughts, and now back to our regular programing. And for what it's worth I have a New Haven I-5 in plastic on order from an LHS (at the same price as advertised in the magazines)not from FTD or FDT or whatever. J.R.
GMT Racing
Your comment about the Blow out Kings " Trainworld" is great. Trainworld and MB Klein have done for many years now and it has not stopped the LHS in the past. Trainworld used to purchase the Athearn products directly from Athearn prior to Horizon and sell the Athearn for lower prices than the LHS paid of them. MB Klein used to blow out the P2K products that were made across town before Walthers purchased the line.
I have read article after article on this forum about Trainworld deals and I have purchased items a few times from them over the years. They ship quickly since the stock is usually on hand, but are been less than friendly most of the time, at least to me. I usually ask a question or two and that does not go well with the people I talked to at the time.
I am surprised Factory Direct Trains seems to have jumped on this prior to Trainworld for the latest BLI and PCM models. It will be interesting to look at the February MR Trainworld ads and see if they are in the mood also.
Several days before this topic hit the forums, my LHS owner showed me the Factory Direct ad, and he was angry. He said that this sort of undercutting happens all of the time, but this was one of the worst examples, and that he's not going to carry BLI/PCM anymore because it's too much of a risk. They are a brand that he has spent a lot of time promoting, so he feels betrayed, like some of the manufacturers aren't going to be happy until the hobby shops are out of business. I don't know if the situation is that dire, but he works like a dog and I understand his frustration. I think he's considering chucking the whole business, which would be a disaster for his customers.
When I was a kid in the early 70's there was a local discount chain called Two Guys that had a good sized train department, and every year they had an after Christmas blowout of the stock that didn't sell. This meant AHM/Rivarossi Big Boys and Cab Forwards for $20 apiece, but the hobby shops survived in spite of it. I hope they can find a way to coexist with the big volume guys.
Nelson
Ex-Southern 385 Being Hoisted
SteamFreak wrote: Several days before this topic hit the forums, my LHS owner showed me the Factory Direct ad, and he was angry. He said that this sort of undercutting happens all of the time, but this was one of the worst examples, and that he's not going to carry BLI/PCM anymore because it's too much of a risk. They are a brand that he has spent a lot of time promoting, so he feels betrayed, like some of the manufacturers aren't going to be happy until the hobby shops are out of business. I don't know if the situation is that dire, but he works like a dog and I understand his frustration. I think he's considering chucking the whole business, which would be a disaster for his customers.When I was a kid in the early 70's there was a local discount chain called Two Guys that had a good sized train department, and every year they had an after Christmas blowout of the stock that didn't sell. This meant AHM/Rivarossi Big Boys and Cab Forwards for $20 apiece, but the hobby shops survived in spite of it. I hope they can find a way to coexist with the big volume guys.
TreamFreak
Good point about the early 70's and the AHM models. The were about $25 at Trainworld also, but the LHS still carried them and sold a few to newer customers. I purchased some of those back in the seventies and I still have them unused today. The three pole motors and large flanges make them shelve display items.
I hope the shop you are talking about does not shut down. I don't think BLI/PCM is trying to eliminate the LHS, but they are desperate for money to keep the new products coming in. If you look at their future commentments, it would indicate a lot of money has to be fronted for the models to be produced. From what I understand about the import business, the upfront money has to be in escrow before the order is accepted and the work starts. I don't have any idea of how long it takes to produce the model once the prototypes are accepted, but this is one of the reasons that the mark up is so great.
The BLI/PCM items on sale are not the hot sellers and certainly not the latest new releases, but the fact they did offer this indicates they need money and seems to say, they could care less about protecting their dealers.
CAZEPHYR wrote:I have read article after article on this forum about Trainworld deals and I have purchased items a few times from them over the years. They ship quickly since the stock is usually on hand, but are been less than friendly most of the time, at least to me. I usually ask a question or two and that does not go well with the people I talked to at the time.
I've ordered from Trainworld many times and don't think I have talked to the same person twice. Some of their operators have been very friendly while others just wanted to get the order taken and move on. I wouldn't say the latter were unfriendly, just all business. New Yorkers have a way of talking that sounds unfriendly even when they're not.
Well I can't speak for the what the shop in Green Bay does. But I do know that of all the dealers I've either spoken with or read their comments on a forum, certainly no one else so far was offered any sort of deals prior to last week.
The first I heard about it was when the Feb MR arrived at my shop. A day or so later my competitor called me up to ask if I had received an e-mail from a distributor about a clearance sale with better than normal wholesale pricing.
I replied "Great...have you seen the MR ad?" He had not, and pointed out immediately that at least one of the items was being sold direct to consumers for one dollar less than our distributor was selling to us.
To my knowledge, no "blow-out" deals had been offered to retailers until last week.
One dealer reports that his investigating shows that Factory Direct Trains is owned by the same people that own BLI/PCM. No surprise there.
Maybe the guy in Green Bay could see the writing on the wall before the rest of us did. Believe me, if I had any BLI left in my shop it would be slashed to FDT prices too and I'd just take the loss...
But of all the dealers I've heard from, not one of them had any advance notice of any blow-out sales either to retailers or to the consumers until that FDT ad came out.
That's all I know from here. As always, feel free to ask for clarifications if needed.
jecorbett wrote: CAZEPHYR wrote:I have read article after article on this forum about Trainworld deals and I have purchased items a few times from them over the years. They ship quickly since the stock is usually on hand, but are been less than friendly most of the time, at least to me. I usually ask a question or two and that does not go well with the people I talked to at the time. I've ordered from Trainworld many times and don't think I have talked to the same person twice. Some of their operators have been very friendly while others just wanted to get the order taken and move on. I wouldn't say the latter were unfriendly, just all business. New Yorkers have a way of talking that sounds unfriendly even when they're not.
They do ship quickly since they have the stock on hand and I probably have never talked to the same person like you stated. They are all business as have a New York or big city attitude, which is not the same as Middle America. This is not to fault them as they obviously do well over the years and continue to advertise at a time when most are using the internet.
I have been to New York many times and never bothered to actually go to Trainworld. I am sure they are different if you go into the store. The people on line are probably just order takers, not modelers and if you ask any questions, they simply blow you off since they do not have any knowledge of the actual product.
CALZEPHYR
.
andrechapelon wrote: The train shop could close after the owner retires, there has been talk, I hope not though. Vern Cole has retired. The Train Shop is being run by his son Dennis.Andre
rrebell wrote: andrechapelon wrote: The train shop could close after the owner retires, there has been talk, I hope not though. Vern Cole has retired. The Train Shop is being run by his son Dennis.AndreWow, has it been that long since I talked to vern, maybe? Topic came up one day when customers were lamenting about hobby shops going away and comment was made about stability of verns shop and vern made the comment we'll see! Guess the disision was made and I am glad they are going to be around for awile, That means we still have two real hobby shops in the Bay Area.
I had the good fortune to get to the Train Shop again last year and it was still a very good place to view and purchase items that are hard to find.
I noticed that Vern's name is still listed in the MR advertisement last month along with Dennis.
My favorite shops I have visited in the last two years are Caboose Hobbies, The Caboose, Allied Models, The orginal Whistle Stop, and The Train Shop. I travel for business and get to visit some of the best that I know of.
All are good stores and still stock many items that are interesting and generate sales.
In many areas of the retail business, the wholesaler will in some way 'compensate' the retailer for stock the retailer has on hand IF the wholesaler drops the price below what the retailer has invested in the stock. Sometimes it's given in the form of a rebate to the retail dealer, sometimes as a percentage off on their next orders. I'm certainly not saying that BLI/PCM has this arrangement with hobby shops, I have no knowledge of how they do business, only that in some industries, the manufacturer/wholesaler gets an inventory of what the retail business has on hand (of the manufacturers products) and then issues them a credit for that amount, thus protecting the retailer and keeping in their good graces. Whether the retailer chooses to pass all or some of this amount on to the consumer is their business but they almost always do, simply because their competition will.
Let me say again that I don't know if hobby shops have this arrangement with BLI/PCM or not. I hope they do.
JaRRell
I constantly checked the FDT site and when they last week advertised the PCM F3's I did go ahead and ordered me the WP F3 A-B-B set and I must say they ship very fast!
Ordered last Tuesday and it already arrived (US to Switzerland) and packed very well. I think for the $298 I did get a great deal on some very handsome models with wonderful sound.
I'm not saying this is 100% fair to normal retailers but it's a great way to save some bucks.
I also don't know how long they will do that since all upcoming PCM/BLI models are built as ordered so they just sell off all current stock and the new products will sell out immediately anyway.
doc manago wrote:I´live in Argentina and had ordered a PCN Galloping Goose, at a surprinsingly 1/3d of the price list. I knew they by the MRR web page, so, I suppose a serious firm. Will see when the merchandise arrive. Bye.
doc manago,
Your supposition is correct. Factory Direct is run by the brother of the owner of Broadway Limited Imports. I spoke to both at recent Big-E show in West Springfield, MA. They seem to be on speaking terms so sibling rivalry is not an issue.
The show booth was Broadway Limited, Precision Craft Models and Factory Direct.
Jon