PCW

Welcome to the Forum Lady Jane, happy de-lurk!

So now you can re-cycle the packaging start modeling the underground?

I think in the last year Hattons have brought into use 1 if not 2 packing machines. the symptoms of these are fairly standard box sizing, tape once round top and bottom but not across the ends, and the contents often slopping around inside the box because the dunnage does not take up all the spare space. I guess this must be a move driven by accountants rather than a desire to pack in the best possible way known to man. It will presumably be cheaper rather than using intelligent people to select the correct box for the job, possibly a re-cycled box from an inbound delivery, possibly cutting it down to a lower height, packing the goods carefully with dunnage filling all air spaces, taping across the end joints as well as the middle seam, and general sending it on the way with care and with pride in a job well done. All very nice but it does cost money, I guess you get what you pay for?

Hopefully the surplus stock from the concessions can be absorbed back into 'central' stock for sale at normal margins either direct by Hornby or through the retailers. This is the only way it can be done without damaging the very strained relationship with retailers. I believe the stock level at Hornby might be sufficiently low to allow this, so rather than paying for lots of new stuff to be manufactured in 2017 you might see more of a concentration on selling what has already been made, and selling it at a 'proper' price, with just a few new bits manufactured to keep the interest going. If this is the stance taken by Hornby I would offer them my wholehearted support.

I think what is needed now is a good long period without any stock dumping / gazumping that has driven so many retailers to despair in the past. When it has been proven that the leopard really has changed it's spots some retailers will gradually re-build their confidence in the brand and start properly stocking Hornby again. It's all about trust really, trust has to be earned and it doesn't happen overnight. I just hope Hornby can afford a period of lower sales while it waits for the trust to be re-built.

It's a bit radical, but I think stock reduction is actually being achieved by selling it at a proper margin through independent retailers! I'm not aware of any stock dumping, and the price Hornby are charging for selling direct on their website is now a lot more than the independents, so you could argue they are actually trying to steer the majority of the sales back into the hobby shops. Bravo! And yes, decent hobby shops have to have a decent online sales facility as well, but still staffed by enthusiastic folk with knowledge and care. I think because the massive over production has stopped there is actually no need to dump stock now, and if independents are regaining their appetite to order with confidence there is no reason why upon arrival of a model the majority of the stock shouldn't go straight out to the shops, it's all very radical because Hornby then simply invoice the shops and collect the cash in 30 days or whatever. No surplus stock to pay for, warehouse, or dump! Gosh, I wonder why no one ever thought of doing that before?

This approach to things seems reasonable. It is good to see a 'promise' to work with and support independent retailers, perhaps forging closer connections with the staff in the inde shops could help ensure the right products and the right amount of the right products are made in the future. A collection of many experienced brains on this has to work better then a smaller number in one office? It worries me that there is a lot of surplus stock that is going to have to be 'sold off' in a structured way. On the one hand Hornby want to support independents, but on the other hand it sounds as if it will be inevitable they will de-value stock in the shops bought at a 'proper' trade price the moment the price slashed overstock hits the streets? So Hornby recognize they need to build bridges with the indes, but there is still the fear stopping independents ordering more than 2 of anything. Hornby can promise anything they want, but independents will be very cynical and probably sit on the sidelines for a year before possibly having the appetite to roll their sleeves up and work with the brand 'properley' again. So the question is can Hornby afford a very slow turnround in relationships with independents? One of the key things in the relationship is for the manufacturer to delivers lots of new stock to the shops as soon as a new model arrives, that way they get paid in a totally predictable 30 - 60days on invoice irrespective of the time the stock might site on the shops shelves. Hornby really do need to persuade shops to buy stock again, otherwise they will have to sit on overproduced stock themselves. So come on Hornby, we want you to do well, but what EXACTLY are you going to do to build bridges with independent shops?

Yes I looked and didn't see them for the few shops I frequent, so presumably the list published must be incomplete. Sorry I didn't browse through all the pages of shops and so didn't come across the ones who do have links published.

Yes, I note they also won't publish links to the independent model shop websites.

And that sir is where there is a major problem in the relationship between Hornby and the independent retailers. On the one hand you have retailers wanting to 'invest' in a good range of stock to put on their shelves, and on the other hand you have Hornby wanting the whole lot shifted PDQ. This results in the current broken/untenable relationship between Hornby and the independent retailers. Think of all the retailers who pay Hornby the 'proper' trade price for stock only to see Hornby 'gazumping' them by flogging it direct to the public for less than trade a few days later. The only sane way forward is for an independent retailer to purchase an absolute minimum quantity of stock in the hope of shifting it before Hornby undercut them on price. Obviously Hornby would prefer ALL the stock to go out immediately to dealers on 30 days credit, that way as far as they are concerned it is all sold and will be paid for in a reasonable timescale. It is VERY ironic that it is the actions of Hornby slashing prices selling direct that stops shops ordering, and thus the stock is sitting in the Hornby warehouse while they moan about disappointing sales. Of course I do understand the need for Hornby to make cash ASAP, but the current situation is very destructive indeed. I'm sure the relationship between Hornby selling in direct competition to the retailers it used to supply (who are turning their backs in droves) will go down in retailing history as a lesson for future generations to take note of. Don't get me wrong, I'm not against a manufacturer selling direct to the public to obtain a wider market penetration with their product, but the only sane way to do this is not to kill the shops who used to like the concept of ordering stock. Hornby must either respect the hard earned cash shops hand over for stock, or else take up position on horseback along the A1 with a mask over their face as an alternative way of raising funds.

Maybe a lack of sales in January is down to having Black Friday sales before Christmas and sales for another 300 days of the year as well. 'January Sales' can kind of make January a good month and clear out slow moving stock in readiness for the new year. If you move the January sales to other times of the year don't complain when January is quiet.... Doh! In a the run up to Christmas you can often sell stuff at a proper price that would be slow moving for the rest of the year. So, in my opinion the correct way to go about sales is to leave everything at proper price until it is too late for Christmas delivery, then see what you have left that might be slow moving for the majority of the following year, and then, well, erm, have a 'January Sale'.

If I could buy up the railway assets (using someone else's money of course!) this is how I'd re-organise things to maximize the value in current tooling: 1. Use the Hornby name and red boxes to do all the train sets and railroad products. 2. Have the quality locos and coaches boxed in a different color and name, depending on the ownership (I find Blue very attractive). 3. I'd probably have to split the Skaledale offerings, Moving some down into the Hornby railroad range and moving the better ones up into a different color of box. Just my two penneth worth, probably what I'd do if I worked for Barclays and called the shots.

Anyone know why they have two websites? I don't get it, but presume there must be a purpose?

I have often wondered why they have two web sites? Presumably there must be a reason, does anyone know?

To return the opening post I understand the question was about how one retailer prices their offerings in comparison to other retailers selling the same goods. So, setting aside manufacturers price increases for another thread how are Hattons positioning themselves and why? The how is apparent, no longer simply the best on price don't even bother looking elsewhere, as it appears it does often pay to look elsewhere, and surely this is to the good of everyone in the hobby? as to the why we can only guess. My guess would be that as Hattons grew it locked in to a certain amount of 'scary overheads' that required a certain volume of stock to be sold at a certain margin. I think their bottom line is something like 4% profit after paying all the bills? And then along came the Hornby situation, not only was there a lot less product being made for anyone to sell but also very different trade terms being imposed. So, a shift in the wind and all of a sudden you are selling less stock to support a fair sized overhead, all of a sudden that 4% profit can vanish into thin air or even turn into a loss. So, what to do? At this stage I'd say hats off to Hattons (no pun intended!), we have seen them fight back on several fronts: 1. A lot more activity selling second hand 2. More activity commissioning their own products 3. Promoting decoder fitting and sound on every loco sold Or, to put it another way lots of hard work to make money in different ways to 'simple' box shifting. None of this is easy and also results could take a long time to filter through to the bottom line. Meanwhile the overheads have to be paid (unless they can be trimmed?), and so possibly the box shifting operation is moving onto slightly higher margins? This has problems of its own of course as the opening post notes how other retailers often have the same stock available at a more advantageous price. This is really good for everyone as it means Hattons are being more creative and focused less on box shifting, at the same time other dealers have the chance to compete and thus grow their own market share and inject their own brand of creativity into the market for us all to enjoy. I believe we will end up with a nice group of shops who are well accomplished with their online selling whilst still serving the local community and putting their own stamp of enthusiasm into the mix. What Hattons bottom line will look like when all this has settled down is anyone's guess, are they simply too big?