bart2day Posted January 7, 2019 Share Posted January 7, 2019 (edited) Having majored in Economics at university, this all comes down to demand elasticities and available/acceptable substitutes. The number of substitutes, particularly for Bachmann locomotives more so than their Scenecraft range is low. For example, if Hattons don't stock the Bachmann class 04, you can't just buy a Hornby one instead as they don't make one. Will the demand for a Bachmann item go down if Hattons don't stock it? Unlikely, for their locomotives range at least, considering the number of well renowned competitors such as Rails of Sheffield able to supply them to us, the consumer. In other words, Hattons has many competitors offering the same product, Bachmann don't. Most of Hattons sales are made online where the number of alternative retailers is high and a consumer can, with the click of a button, buy a product not stocked at Hattons from another website. The number of customers who shop in store at Hattons and think for example 'oh, they don't stock the Bachmann class 150 so I'll buy a Hornby 153 instead' is quite low. Therefore, if such a dispute does indeed exist, it would be much more in Hattons interest to resolve it amicably. Edited January 7, 2019 by bart2day Link to post Share on other sites More sharing options...
RMweb Gold The Johnster Posted January 7, 2019 RMweb Gold Share Posted January 7, 2019 It's in everyone's interest for this to be settled amicably, and eventually it will be; this is business! Link to post Share on other sites More sharing options...
37114 Posted January 7, 2019 Share Posted January 7, 2019 If I were sat in Bachmann HQ I would be concerned about the erosion of my market share from new players (including Hattons) picking off my volume/margin by introducing competing/ better models to that Bachmann currently produce. Ultimately the Hattons 66 is being funded by sales of products from Bachmann amongst others so it seems logical to cease supply to them when you have many other sales outlets. Bearing in mind lots of modellers purchases will involve multiple manufacturer products which need to be posted, splitting of orders between retailers incurs extra postage etc so I fear Hattons will lose out on more than just the Bachmann sales. Link to post Share on other sites More sharing options...
RMweb Premium Legend Posted January 7, 2019 RMweb Premium Share Posted January 7, 2019 (edited) If I were sat in Bachmann HQ I would be concerned about the erosion of my market share from new players (including Hattons) picking off my volume/margin by introducing competing/ better models to that Bachmann currently produce. Ultimately the Hattons 66 is being funded by sales of products from Bachmann amongst others so it seems logical to cease supply to them when you have many other sales outlets. Bearing in mind lots of modellers purchases will involve multiple manufacturer products which need to be posted, splitting of orders between retailers incurs extra postage etc so I fear Hattons will lose out on more than just the Bachmann sales. But their issues are much more fundamental than that. The need to use Kader is both driving up costs and slowing release of new models to the market . The gestation period for models at Bachmann is so long , that once announced someone else can nip in get it to market faster. That’s got to be the major concern, that their business model is not flexible enough to deal with the current market. The forthcoming 66 will be more detailed and don’t forget will be less expensive than the current Bachmann model. So while agreeing that new entrants picking off their models is a concern the biggest concern at Bachmann HQ should be the time taken to bring new models to market and the price (and return) being demanded by Kader. I think Bachmann are trying to compensate by going upmarket and introducing new features which are probably low cost to introduce but they perceive will enable them to charge more. That might be correct. I’m really not sure Edited January 7, 2019 by Legend Link to post Share on other sites More sharing options...
ThaneofFife Posted January 7, 2019 Share Posted January 7, 2019 Hattons are to be applaued for this new 66 model at £150 rrp. amazing really. Sorry I know this thread isnt about Hattons........ Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted January 7, 2019 RMweb Gold Share Posted January 7, 2019 Bachmann will lose if they start a fight with Hattons as they have the turnover to commission model runs from the new manufacturing company's directly and the customer base who use them as the first port of call on the web. It will cost Bachmanns big in volume sales but might be good the the smaller model shop. Bachmann may decided to go down the direct sales route via the web but that doesn't seem to have worked to well for Hornby. On a side note has Hornby/Airfix put out of Toy Galaxy? B More likely - as has already happened - other retailers will benefit (as some already have if what I've heard is correct). I expect people will still want to buy Bachmann so if they can't get it from Hattons they'll just go elsewhere. Simple fact is that if Hattons do not comply with Bachmann's terms and conditions then that is it (and only the legal trade might potentially benefit). Hattons seem to be working hard to establish themselves as much as a supplier and 'manufacturer' as a retailer so not really surprising that Bachmann invoke their terms and don't want to, in effect, finance Hattons establishing themselves as a competitor in both r-t-r and now some scenic stuff which competes with Woodland Scenics. And it's no doubt an ideal time for Bachmann to do it with their factory move potentially impacting supplies for a while - they'll still be able to sell what stuff they do get and other retailers will no doubt be glad to take it and be able to sell it without competition from Hattons. Overall it might actually be a good thing rather than a hindrance for the retail trade. Hatton's have been going for over seventy years. They've seen most manufacturers come and go including both Hornby and Bachmann's predecessors.... Jason Hattons as they once were were going for over 70 years would be a more accurate statement. The company and its ownership were restructured in June last year and it would appear that the family at that point lost absolute control although there is one significant document missing on the Companies House website. Link to post Share on other sites More sharing options...
Andy Mac Posted January 7, 2019 Share Posted January 7, 2019 Having majored in Economics at university, this all comes down to demand elasticities and available/acceptable substitutes. The number of substitutes, particularly for Bachmann locomotives more so than their Scenecraft range is low. For example, if Hattons don't stock the Bachmann class 04, you can't just buy a Hornby one instead as they don't make one. Will the demand for a Bachmann item go down if Hattons don't stock it? Unlikely, for their locomotives range at least, considering the number of well renowned competitors such as Rails of Sheffield able to supply them to us, the consumer. In other words, Hattons has many competitors offering the same product, Bachmann don't. Most of Hattons sales are made online where the number of alternative retailers is high and a consumer can, with the click of a button, buy a product not stocked at Hattons from another website. The number of customers who shop in store at Hattons and think for example 'oh, they don't stock the Bachmann class 150 so I'll buy a Hornby 153 instead' is quite low. Therefore, if such a dispute does indeed exist, it would be much more in Hattons interest to resolve it amicably. Very well put..... it just amazes me that some people think that Hattons can carry on as normal, challenge or directly compete, whilst unable to supply the main manufacturers range.... i’m Sure Hattons will have to acquiesce to Bachmanns terms, or else run the very real risk of taking a large financial hit, as the customers, that’s you and I, move to a different online retailer and place our orders. As my mother always used to tell me, ‘Don’t bite the hand that feeds you’..... Link to post Share on other sites More sharing options...
meatloaf Posted January 7, 2019 Share Posted January 7, 2019 Seems to have been a long time between Hattons announcing the 66 and Bachmanns lack of supply for that to be the case. More recently Hattons have started offering their own models to other shops and that could equally be the issue - that Kader/Bachmann will not supply a competing manufacturer. Do Bachmann own the woodland scenic range now? If so that's another problem for hattons as they have just announced there own range of ballast / scenic materials. Interestingly I have had emails from hattons about the Hornby 2019 range launch but nothing regarding the Bachmann range. Link to post Share on other sites More sharing options...
Fireline Posted January 7, 2019 Share Posted January 7, 2019 To be honest, I've stopped shopping with Hattons already. I'd rather shop with someone smaller, even if it does cost me a few shekels more. I know I am more likely to get good customer service if something goes wrong. Link to post Share on other sites More sharing options...
caradoc Posted January 7, 2019 Share Posted January 7, 2019 I'm not saying Hattons are the " exclusive importer" or "control the market" but they are the biggest bulk purchaser of Bachmann products in the UK and can't be easily replaced quickly and that threats not to supply them with stock will considerably hurt Bachmann financially. Hattons and possibly Rails are the only UK retailers who could stand up to any of the manufacturers and not bow down to pressure. I think the development of retailers producing their own label products is a great thing for railway modelers which drives up standards of products that the major manufacturers offer. The question Bachmann should ask is why Hattons have decided to produce a loco that clashes with the main Bachmann range? Bachmann won't stop supplying Hattons but they properly would if this was a mid level retailer. B Regarding your last sentence, that is exactly what seems to have happened; Hattons have had no new Bachmann items arrive for several months now, whereas other retailers have. I have always held Bachmann in high regard due to the range, quality and suitability (for my own interests) of their products, however the recent situation has made me view them in a far less favourable light; OK, so Hattons are now making products which compete with Bachmann, but so are plenty of other companies (eg SLW Class 24, soon Accurascale Deltic), the difference being that Bachmann can do nothing about that (other than improve their own range), but seem to have taken action against Hattons (to achieve what - Force Hattons to abandon their Class 66 ?). I too sincerely hope that the problem is resolved as soon as possible, to the mutual benefit of manufacturer, retailer and not least customer. 1 Link to post Share on other sites More sharing options...
Fenman Posted January 7, 2019 Share Posted January 7, 2019 Very well put..... it just amazes me that some people think that Hattons can carry on as normal, challenge or directly compete, whilst unable to supply the main manufacturers range.... i’m Sure Hattons will have to acquiesce to Bachmanns terms, or else run the very real risk of taking a large financial hit, as the customers, that’s you and I, move to a different online retailer and place our orders. As my mother always used to tell me, ‘Don’t bite the hand that feeds you’..... Hattons has always struck me as a smart operator. I assumed that their decision to go head-on with Bachmann over the 66 was absolutely intentional, and with a full understanding of the likely consequences for their supply of Bachmann products. If I'm right, that suggests to me they calculate their margin from Bachmann is less than they stand to gain by becoming a significant commissioner / manufacturer - and I am therefore assuming that the 66 (like the O gauge A3, A4 and coaches) is just the beginning. If this wild speculation is true, it may be that this strategy has emerged from the dreadful supply problems of both Hornby and Bachmann from a few years back. Hattons had built a pretty significant business from those companies, and for the product supply to suddenly dry up must have been a big shock. 2nd hand could be seen as one response to that problem - a quick fix - but becoming a commissioner / manufacturer might be, in their view, the only way to secure their own long-term future. It could be that Bachmann's production difficulties have had more far-reaching consequences than many of us imagined. Paul 2 Link to post Share on other sites More sharing options...
GWR8700 Posted January 7, 2019 Share Posted January 7, 2019 Regarding your last sentence, that is exactly what seems to have happened; Hattons have had no new Bachmann items arrive for several months now, whereas other retailers have. I have always held Bachmann in high regard due to the range, quality and suitability (for my own interests) of their products, however the recent situation has made me view them in a far less favourable light; OK, so Hattons are now making products which compete with Bachmann, but so are plenty of other companies (eg SLW Class 24, soon Accurascale Deltic), the difference being that Bachmann can do nothing about that (other than improve their own range), but seem to have taken action against Hattons (to achieve what - Force Hattons to abandon their Class 66 ?). I too sincerely hope that the problem is resolved as soon as possible, to the mutual benefit of manufacturer, retailer and not least customer. If they have an agreement in place and Hattons have broken that then surely they are well within their rights to take action? Link to post Share on other sites More sharing options...
Brocp Posted January 7, 2019 Share Posted January 7, 2019 LMS 2P wouldn't be a bad option for Bachmann i think. Link to post Share on other sites More sharing options...
Tom F Posted January 7, 2019 Share Posted January 7, 2019 Out of interest, when is the Bachmann announcement for 2019? Link to post Share on other sites More sharing options...
RMweb Gold TravisM Posted January 7, 2019 RMweb Gold Share Posted January 7, 2019 Out of interest, when is the Bachmann announcement for 2019? Week today, 14th January Link to post Share on other sites More sharing options...
AMJ Posted January 7, 2019 Share Posted January 7, 2019 As Hornby et al have a few industrial locos it would be nice for them to dip the toes into that market. Link to post Share on other sites More sharing options...
Wickham Green Posted January 7, 2019 Share Posted January 7, 2019 Already mentioned in these pages but today's announcement from 'the other lot' emphasises the market for decent brake vans - so hopefully the SECR 'Dancehall' van will be on the list net week. 1 Link to post Share on other sites More sharing options...
RMweb Gold The Stationmaster Posted January 7, 2019 RMweb Gold Share Posted January 7, 2019 Regarding your last sentence, that is exactly what seems to have happened; Hattons have had no new Bachmann items arrive for several months now, whereas other retailers have. I have always held Bachmann in high regard due to the range, quality and suitability (for my own interests) of their products, however the recent situation has made me view them in a far less favourable light; OK, so Hattons are now making products which compete with Bachmann, but so are plenty of other companies (eg SLW Class 24, soon Accurascale Deltic), the difference being that Bachmann can do nothing about that (other than improve their own range), but seem to have taken action against Hattons (to achieve what - Force Hattons to abandon their Class 66 ?). I too sincerely hope that the problem is resolved as soon as possible, to the mutual benefit of manufacturer, retailer and not least customer. The difference is that Hattons are not only a retailer but they are now setting themselves up as a manufacturer and wholesaler to other retailers. The other thing is that unlike, say, Kernow or Rails, they don't appear to be commissioning anything from Bachmann. Don't forget the words of Lyndon Davies in his last Hornby report where he mentioned effectively giving some competitors the financial clout to be able to compete with Hornby, i.e the profit they make on selling the Hornby (in that comparison) range is helping to fund the retailers' ability to commission models. Bachmann made it pretty clear in their revised T&Cs back in 2018 that they would hold the rifght to stop supplying people who competed with them as manufacturers but then within months of that change Hattons announced their Class 66. Will we see Hattons try to upstage Bachmann ina week's time - maybe, maybe not but overall I think Bachmann are maintaining a fairly strong and well spread range plus up to know they've been good at finding left of field subjects. it wouldn't surprise me to see that policy continue plus maybe selecting for major revamp models such as the 'Manor' where someone might try to steal a march on them Link to post Share on other sites More sharing options...
owentherail Posted January 7, 2019 Share Posted January 7, 2019 I hope they have something good, or I'll be getting more accurascale deltic as Hornby not doing much. A freightliner 47, original freight 47 & sealed beam peak will do. Link to post Share on other sites More sharing options...
The Black Hat Posted January 7, 2019 Share Posted January 7, 2019 The difference is that Hattons are not only a retailer but they are now setting themselves up as a manufacturer and wholesaler to other retailers. The other thing is that unlike, say, Kernow or Rails, they don't appear to be commissioning anything from Bachmann. Don't forget the words of Lyndon Davies in his last Hornby report where he mentioned effectively giving some competitors the financial clout to be able to compete with Hornby, i.e the profit they make on selling the Hornby (in that comparison) range is helping to fund the retailers' ability to commission models. Bachmann made it pretty clear in their revised T&Cs back in 2018 that they would hold the rifght to stop supplying people who competed with them as manufacturers but then within months of that change Hattons announced their Class 66. Will we see Hattons try to upstage Bachmann ina week's time - maybe, maybe not but overall I think Bachmann are maintaining a fairly strong and well spread range plus up to know they've been good at finding left of field subjects. it wouldn't surprise me to see that policy continue plus maybe selecting for major revamp models such as the 'Manor' where someone might try to steal a march on them As far as I know its been Bachmanns policy for some time. I'm sure i was told that one shop stopped selling Bachmann as they became the point of contact for a different manufacturer and their spares so their supply was cut. I also know of one shop that refuses to stock Bachmann owing to a breakdown in its relationship and they are still doing fine. Still attending shows. While Bachmann might back off from Hattons (and its their right to) over the fact that Hattons have become a supplier of RTR - I cant help thinking that it will massively hurt Bachmann too, where Hattons have the cash and ability to take a lot of stock. It means putting this onto other retailers and while they might jump at the chance I think it can take longer to achieve the same result - ie for them together to have the cash to order stock and get it ready for sale. Is that what Bachmann wants too? If your creative there are ways around it for Hattons, but if they were would Bachmann then take steps against others that in turn supply Hattons? It all sounds complex and messy, despite both parties wanting to look out for their best interests. Will just have to see where it goes. Link to post Share on other sites More sharing options...
caradoc Posted January 7, 2019 Share Posted January 7, 2019 And of course today we have seen almost the exact reverse situation, with a major manufacturer duplicating an item already being produced as a commission by a retailer ! The retailer however has not thrown their toys out of the pram........ Link to post Share on other sites More sharing options...
mdvle Posted January 7, 2019 Share Posted January 7, 2019 And of course today we have seen almost the exact reverse situation, with a major manufacturer duplicating an item already being produced as a commission by a retailer ! The retailer however has not thrown their toys out of the pram........ Well, it isn't exactly a balanced relationship and said retailer likely doesn't really have the option of dropping a (still) significant supplier like Hornby. At the end of the day while I can somewhat understand the points of view of both Hornby and Bachmann, they both have to various extents brought this on either through the direct decisions made by them (or at least previous management) and by their inability at various times to adequately supply product (not always directly their fault). In some ways one could argue that Hornby's production problems a number of years ago was the first "wake up" to the retailers, that if they needed to be sure of product they needed to at least consider commissioning exclusives to help generate cash flow. Bachmann's problems of the last several years (now thankfully seemingly disappearing) would have reinforced that message. Then add in the period (under previous management admittedly) where Hornby decided that the retailers were "part of the problem" and decided the future was selling direct and it is not a surprise that a retailer decided a more significant change needed to be contemplated for said retailers future prospects. So while I have sympathy with Bachmann's position, it is also time for them to (perhaps grudgingly) admit that the UK market has changed as a result of things that have happened over the last decade and they need to adapt to the new reality. 1 Link to post Share on other sites More sharing options...
RMweb Premium John M Upton Posted January 7, 2019 RMweb Premium Share Posted January 7, 2019 In the case of the Terrier I think Rails and Dapol will have the right to feel mightly peeved, in the case of the Class 66, Hattons have nothing to worry about as it is the old Limby model, the moulds for which really should have been chucked in a skip years ago. Link to post Share on other sites More sharing options...
RMweb Gold adb968008 Posted January 7, 2019 RMweb Gold Share Posted January 7, 2019 (edited) In the case of the Terrier I think Rails and Dapol will have the right to feel mightly peeved, in the case of the Class 66, Hattons have nothing to worry about as it is the old Limby model, the moulds for which really should have been chucked in a skip years ago.Not everyone has £160 in their pocket for a Hattons 66.Now if you want 3 or 4, your looking at an unobtainable £640 for some options. However now you have a genuine competitive choice. At £65 each after discount, you could own 4 for £260. It does two things,.. 1.those who can afford buy 4 from Hornby, but equally thats minus 2 from Hattons. 2. Those buying 1 are more likely to buy another from the same manufacturer If that happens just 500 times, thats 1000 sales away from Hattons.. which will start to hurt. For Hornby.. those tooling as you said were amortised 20 years ago, its pure pocket money. The likely customers here will be at the lower income or lower user risk end... in other words kids as prresents, teenagers pocket money and youngsters.... and I think this is designed to be squarely at them. What i wonder is if Bachmann plans a swamp of class 66’s too,though I think their price point is at odds now with the Hattons model... it certainly is on ebay, Ive gone from zero to 6 class Bachmann 66’s, paying less than £90 each, and as low as £60... at the end of the day its not a bad model, certainly not that bad. My fear is the Bachmann 2nd hand models could swamp the Hornby ones. Edited January 7, 2019 by adb968008 Link to post Share on other sites More sharing options...
raetiamann Posted January 7, 2019 Share Posted January 7, 2019 I hear that Hatton's have developed a strategy of reducing their retail operation and growing the business on manufacturing and distribution. It may be that the Hattons/Bachmann relationship is the first casualty of this plan 1 Link to post Share on other sites More sharing options...
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