Why do model railway builders expect a discount

[Classsix T]

Never negotiated your pay rise, I have. But that is not haggling is it, especially when it is with the secretary of state for health.

 

 

Er, yeah, it kinda is Clive. Negotiation is just the posh word for it!

And I bet you started at a figure of at least a third more than you'd be happy with.

 

(Am humming and hahing about a career at ACAS actually, seriously.)

 

C6T.

[jjb1970]

Business is business. I don't ask for discounts, I hate the practice of haggling which is the norm in so many countries and like a sticker price which I'll either pay or I'll go elsewhere. However, if retailers are happy enough to offer a discount and customers are happy enough to ask then good for them, if it results in a mutually agreeable outcome (and people don't sell if the outcome isn't agreeable) then both parties win. In some ways I'm probably a worse business proposition than those who ask, as in my case if I don't like the sticker price I'll just walk, at least if somebody asks for a discount there is the opportunity to come to an agreement.

 

Another thing which is apparent is that there are many business models, from high volume low margin models like that of Hattons through to exclusive low volume premium service and with a lot in between. People will pay for genuinely great service, it's common to assume everybody just wants minimum price and there is no doubt than an awful lot of people do just seek out the lowest price (and btw, I see nothing wrong with that personally). Others will factor in convenience, shop feel (wouldn't it be nice if all model shops could be like the new Rails show room?), choice, customer service, after sales support etc and pay more. The problem for some shops is probably that some of those shops that offer aggressive pricing also offer great service, while some that offer prices you'd associate with premium service are anything but. One of the things I value for example is good web design, a great website draws me in and wins my business even if the prices aren't as cheap as alternatives.

[Butler Henderson]

Hattons discounts are offset by models they sell at full price or more which equate into the whole financial figure. Always wondered exactly how many Farish minerals they sold a decade + ago when they were £4.75 according to Bachmann, £4.25 at most retailers and £5 at Hattons. No doubt a number when in parcels with a loco than had a good few quid off it but which each mineral wagon regained some monies for them.

[Junctionmad]

As an ex-retailer, I can certainly sympathise with the OP.

 

The one's that really annoyed me, were those who asked for a "little discount of 10%". I would ask them what their reaction would be if their employer suggested a 40% cut in their wages (which would be approximately the same as we were working at 25% margins). Apparently, they would not be up for that. "So", I would ask them, "why the **** do you expect me to?"

I find it hard to understand your attitude. Firstly a polite request for a discount should be met with whatever your policy is , again with politeness

 

Secondly , a discount request is not comparable with a similar cut in salaries , it’s entitely different

 

If you business is perched on such an knife edge , that small discounts are very problematic ( especially from RRP ) , the. (a) you are going out of business anyway , (b) your supplier margins are too low , see ( a) , or your costs are too high , see (a)

 

As for people telling me they have costs , get a grip , after 30 years in business we all know there are costs in running a business , big deal , there are costs in just living too.

 

Personally I see no point or future in specialist suppliers having bricks and mortar facilities. It’s costs me 20 quid in fuel to make a round trip to my model shop . I ordered a new hard disk , Monday from amazon ( 1TB for 40 quid) deliver free to my door Wednesday , all from the comfort of my computer

 

Sorry but it’s the way of the world.

[Legend]

I find it hard to understand your attitude. Firstly a polite request for a discount should be met with whatever your policy is , again with politeness

Secondly , a discount request is not comparable with a similar cut in salaries , it’s entitely different

If you business is perched on such an knife edge , that small discounts are very problematic ( especially from RRP ) , the. (a) you are going out of business anyway , (b) your supplier margins are too low , see ( a) , or your costs are too high , see (a)

As for people telling me they have costs , get a grip , after 30 years in business we all know there are costs in running a business , big deal , there are costs in just living too.

Personally I see no point or future in specialist suppliers having bricks and mortar facilities. It’s costs me 20 quid in fuel to make a round trip to my model shop . I ordered a new hard disk , Monday from amazon ( 1TB for 40 quid) deliver free to my door Wednesday , all from the comfort of my computer

Sorry but it’s the way of the world.

Harsh , but tend to agree

[PatB]

Although, as I've said, I have no problem with customers asking if I can do something on the price of a purchase and will make a fair(ish) judgement as to whether or not I will, there is one customer tactic that I've come across that made steam come out of my ears.

 

Elderly lady perusing some of our smaller pieces: "How much are these please"

 

Me (speaking clearly):  "$15 each"

 

Her: "I'd like this one please"

 

Me: "Certainly. I'll just wrap it up for you. That'll be $15 please"

 

She hands me $12.

 

Me: "That's $15 please"

 

Her: "Oh, I'm sorry, I can't afford that"

 

Me: "Sorry. Here's your $12 back"

 

Unwraps piece and puts it back on shelf.

 

And she  walked off.

 

Now, if she'd asked before handing me the short amount I'd have probably said OK. I'd have got the sale and she'd have got a bit of a discount and we'd both have been moderately happy. However, I was clearly expected to be guilted into cutting the price (there was definitely an air of this being a regularly used tactic) and I refuse to be manipulated in such a way. Maybe that makes me a cold-hearted git. I dunno. Anyhow, we both ended up losing out on that one.

[TomJ]

I do find it mildly amusing when Hattons, Rails, Kernow etc are referred to as the big coporates of the model railway world. True they’re bigger than your local corner shop model shop but not quite in the Amazon or Apple league yet!

[Jol Wilkinson]

I do find it mildly amusing when Hattons, Rails, Kernow etc are referred to as the big coporates of the model railway world. True they’re bigger than your local corner shop model shop but not quite in the Amazon or Apple league yet!

No, as far as I know they don't yet have a head office based in a low taxation state, nor do they "employ " their staff thorough agencies as in the case of Amazon (one of my nephews works in their London office), no doubt for some further financial advantage. For these reasons, and through the experience of the charity for which my wife is a volunteer and which uses Amazon for online book sales, I will avoid buying anything through them.

 

Mind you, I don't buy anything through Hattons and their ilke either, but that is for different reasons.

[Mallard60022]

I find it hard to understand your attitude. Firstly a polite request for a discount should be met with whatever your policy is , again with politeness

 

Secondly , a discount request is not comparable with a similar cut in salaries , it’s entitely different

 

If you business is perched on such an knife edge , that small discounts are very problematic ( especially from RRP ) , the. (a) you are going out of business anyway , (b) your supplier margins are too low , see ( a) , or your costs are too high , see (a)

 

As for people telling me they have costs , get a grip , after 30 years in business we all know there are costs in running a business , big deal , there are costs in just living too.

 

Personally I see no point or future in specialist suppliers having bricks and mortar facilities. It’s costs me 20 quid in fuel to make a round trip to my model shop . I ordered a new hard disk , Monday from amazon ( 1TB for 40 quid) deliver free to my door Wednesday , all from the comfort of my computer

 

Sorry but it’s the way of the world.

Harsh, but tend to disagree, apart from the last bit about having 'brick and mortar' facilities as the way people now purchase is changing fast.

P 

[Free At Last]

I suppose adverts like this http://web.archive.org/web/20130319072314/http://www.cravenmodels.com/SIGNALBOXLEVERS.htm lead some to believe there is a bit of haggle room.

[boxbrownie]

Although, as I've said, I have no problem with customers asking if I can do something on the price of a purchase and will make a fair(ish) judgement as to whether or not I will, there is one customer tactic that I've come across that made steam come out of my ears.

 

Elderly lady perusing some of our smaller pieces: "How much are these please"

 

Me (speaking clearly): "$15 each"

 

Her: "I'd like this one please"

 

Me: "Certainly. I'll just wrap it up for you. That'll be $15 please"

 

She hands me $12.

 

Me: "That's $15 please"

 

Her: "Oh, I'm sorry, I can't afford that"

 

Me: "Sorry. Here's your $12 back"

 

Unwraps piece and puts it back on shelf.

 

And she walked off.

 

Now, if she'd asked before handing me the short amount I'd have probably said OK. I'd have got the sale and she'd have got a bit of a discount and we'd both have been moderately happy. However, I was clearly expected to be guilted into cutting the price (there was definitely an air of this being a regularly used tactic) and I refuse to be manipulated in such a way. Maybe that makes me a cold-hearted git. I dunno. Anyhow, we both ended up losing out on that one.

She was obviously a little old lady that used to run a retail business Edited September 27, 2018 by boxbrownie

[Jol Wilkinson]

I suppose adverts like this http://web.archive.org/web/20130319072314/http://www.cravenmodels.com/SIGNALBOXLEVERS.htm lead some to believe there is a bit of haggle room.

But how much? What you might perceive as a large profit margin might not look so generous when you factor in the retailers costs. Don't forget that the trade price may exclude VAT, but the Retail price would probably include it. In the world of boat bits, the wholesales/supplier/manufacturers price list often showed Trade less VAT, Retail less VAT and Retail including VAT. The "discount" chandlers generally used Retail less VAT as their selling price, which is why there was often a remarkable similarity.

 

If you want an example of a really big margin, look at a restaurant wine list. The customer might think a three or four times markup excessive for unscrewing the cap The restaurant owner would say they need it to cover wages, overheads, etc. When did you last haggle over your bill or ask for a discount before they opened the wine?

[GeoffAlan]

Yes. That's the average per day.

 

But worth considering if Hattons or Rails sell 200 new locomotives priced at £150 then that is actual sales of £30,000 just on that model. Whereas another shop might sell 2 of them at £160 making £320 whilst the rest is stuck on the shelf. 

 

So £30,000 in the bank against £320. Which business is liked by the bank manager and which one goes under as they can't pay the rent that week?

 

 

 

 

Jason

One of the best explanations of why our high streets are failing. I'm afraid, for those who like shops and shopping, it's unlikely to reverse.

[MJI]

It all depends on the circumstances.

 

If over priced I go elsewhere.

 

If something big ticket and known to be a lot cheaper elsewhere ask politely.

 

If I know the sales person or shop owner, ask politely.

 

If something of a standard price everywhere, or bought from maker, or limited supply, don't even think of it.

 

However if I bought a box of track and no advertised discount for box, I would politely ask.

 

I know I can get discount if I wanted at Cheltenham Model Centre, but their prices are usually good. I know Trevor. I also had the odd bit knocked off at other shops on big ticket where I was regular.

 

As to discounts, failed on car as wrong time of year, but managed on TV to half way between internet sellers and shop price.

 

But most things buy from cheapest safe supplier.

[MJI]

I used to frequent Cotwold Models and Gloucester Model Shop next to Phototopic, before that Fletchers, also CMC, all sold below RRP and were good shops with great staff.

[jjb1970]

I think how a business manages its affairs, what margins it makes, discounting policy, whether it goes for a high turnover/low margin model or more limited turnover but high margin model etc are its own business. However, that is a too way thing, just as I don't expect to be told how much money a shop is making out of me (if I am happy with the product and service and find the price fair then I don't object if the shop has made a good profit from me). On the flip side, if a shop offers aggressive pricing and good discounts I feel no guilt taking advantage of such offers.

[br2975]

,.........

 

I have basically 3 outlets within access of my home that sell RTR model railways; one is the above mentioned shop, which is a very good proper model railway outlet that has a secondhand department and carries a good stock of accessories, one of which is a general modelling shop which stocks some RTR and a small range of accessories, but is very good for tools. basic materials. and comestibles such as paint, thinners, and glue, and another sort of halfway between shop which is a very long established business.  Sadly, this latter's very knowledgeable owner has departed for the great exhibition in the sky, where he has a permanent trade stand next to the bar, and the people running it are doing their best but are a bit out of their depth.

 

You have to know the catalogue number of what you want or they don't understand, and then they can't remember where to find it; it is therefore my 'shop of last resort' before I give up trying to buy something locally and resort to online ordering from an outlet that can survive perfectly well without my meagre business.  This is a shame, and not helped by coming away with the feeling that you've been a nuisance and asked for something unreasonable.  I'd like to support them more than I do, as I get the impression they could use all the support they can get, but the situation is off-putting.  

 

We had a shop some years ago in my city that was within 5 minutes walk, and it was a very good shop, too, but the owner was outright rude and arrogant even when he was having a good day, which wasn't often.  He is remembered in the area with considerable distaste, and nobody was bothered when he inevitably went under, blaming everybody but himself.  People like this, who clearly have genuine issues in dealing with the general public, should really think hard before they go into this sort of fairly intimate and personal hobby retailing.  It's a bit like bus drivers who seem to be the sort of people who are annoyed by heavy traffic and the general public, why do they do it if they hate those things so much...

.

From Johnster's eloquent guide to the local outlets I've identified all four !.

.

The last, once located in Broadway, was run by a man upon whom Basil Fawlty could have been based, but with added vitriol !

[LBRJ]

A prcie tag is nothing but an Invitation to Treat - 

Sometimes I treat it as being far to high

[grahame]

As for people telling me they have costs , get a grip , after 30 years in business we all know there are costs in running a business , big deal , there are costs in just living too.

 

Although, of course, buying model railway products isn't generally about 'just living' . . . .

 

G

[njee20]

One of the best explanations of why our high streets are failing. I'm afraid, for those who like shops and shopping, it's unlikely to reverse.

No it isn’t, it’s grossly oversimplified. Shop B won’t have 148 models sat on the shelf. Hattons simply move more money about, that doesn’t make them inherently better or more likely to survive.

 

Say the models cost the retailer £151. Hattons buy 200, and have spent £30,200. They sell them at £150, so yes, they’ve got £30,000 in the bank. But they’ve actually lost £200.

 

Local shop buys 3, sells two at £160 and has one left. They’ve spent £453, have made £18 profit and have a third they can afford to sell for as little as £133 without losing money.

 

Which looks better now?

 

The suggestion that selling lots of units makes the business somehow ‘better’ is flawed. Comet spring to mind...

[chris p bacon]

No it isn’t, it’s grossly oversimplified. Shop B won’t have 148 models sat on the shelf. Hattons simply move more money about, that doesn’t make them inherently better or more likely to survive.

 

Say the models cost the retailer £151. Hattons buy 200, and have spent £30,200. They sell them at £150, so yes, they’ve got £30,000 in the bank. But they’ve actually lost £200.

 

Local shop buys 3, sells two at £160 and has one left. They’ve spent £453, have made £18 profit and have a third they can afford to sell for as little as £133 without losing money.

 

Which looks better now?

 

The suggestion that selling lots of units makes the business somehow ‘better’ is flawed. Comet spring to mind...

 

 

This is a strange analogy.  Why would a business with the cashflow to lay out £30,000 on purchasing product sell at a loss.

[RedgateModels]

The point is that in the above analogy Hattons have 30 grand in the bank to pay rent, wages, fuel etc and probably have not paid for the models yet. Even if they were to make a small loss on paper with one particular range (which I doubt) they can make their profits on other higher markup ranges. Cash flow is the enemy of businesses. You can't pay rent with unsold models on the shelf.

[Jol Wilkinson]

This is a strange analogy.  Why would a business with the cashflow to lay out £30,000 on purchasing product sell at a loss.

 

Because sometimes a business chases sales volume and looses sight of making sufficient margin to cover overheads.

 

I saw this a lot in the "trade" sales sector of car dealerships, where parts mangers would chase low margin, high delivery cost "captive" parts sales such as body panels just to get high turnover, ignoring more profitable lower value, more local, parts business.

 Cash flow is the enemy of businesses. You can't pay rent with unsold models on the shelf.

 

Insufficient cash flow and/or insufficient margins are the problem. You run out of cash when you don't generate enough to cover overheads and pay the supplier bills, even though you have paid your short term creditors by generating cash income but without enough profit..

 

Running a retail business needs an understanding of good financial practices, as well as many other aspects of operating in a competitive market place. The rise of the online retailers, usually operating out of lower cost facilities, selling at lower prices and without the need to provide a face to face personal service has probably caused the demise of the majority of small high street model shops. It has put pressure on those who ran a shop because it was an extension of their hobby and who managed to make a reasonable living from it. Their "corporate" knowledge about modelling is being lost, although some would claim it is replaced by forums such as RMweb.

Edited September 28, 2018 by Jol Wilkinson

[dpgibbons]

Hattons' latest accounts show they hold a lot of stock - almost four months sales - so relatively little of the business is financed from supplier credit.

[Nick C]

I think the problem is that you go to many shops and they have permanent sales on, can you recall there not being a DFS sale or some places price reduced and there was only ever available at full price for five days in one shop!!

 

What is full price, just a figure to convince people they are getting a bargain when it is the normal one in disguise, no wonder that people are cynical about pricing!

 

Mark Saunders

 

The big DFS type places get away with it by having several almost identical products - e.g. they will have Sofa A with blue piping and Sofa B with purple piping. Sofa A will be in the sale, "50% off", Sofa B will be tucked away towards the back of the shop at full price. When the sale ends on Tuesday, they swap them round - Sofa B at the front with the big discount, Sofa A at the back at full price. Of course the salespeople never show the punters the one at the back...