Tennents Trains to stop stocking Hornby

[Pandora]

I believe Hornby may be stalking the online outlets with a view to taking a greater share of the online trade, after why supply retail outlets with strong web presence such as Rails or Tennents, or Hattons with models  at wholesale prices when Hornby could simply sell directly  to the customer  for better retail margins

[Chris M]

I am sure that Hornby would do never anything illegal. They will have legal advice available to them and you can be certain they would stay within the perimeters of that legal advice.  There can be little point in discussing that here.

 

Whether Horny’s actions are immoral or not is of course another question. Wasn’t it just a few years ago that they sold stock to retailers and then put the same stock on their own website at much lower prices ? This left many retailers with hard to sell stock and a bitter taste in the mouth. So I’m told but I’m not a retailer so I obviously don’t know the whole story.

 

We do know that Hornby are still trying very hard to recover from a very bad situation so I’m sure they are merely doing everything they think they need to do just to survive; there are two sides to every story. Can’t help feeling that pissing off the people who sell your product might not be the best business plan but we shall see...

[Pmorgancym]

I suspect it's moving towards Hornby being a direct web supplier or selling through a handful of approved outlets where they can control the discounting.

[adb968008]

1 hour ago, rembrow said:

We have discussed this issue before on other threads. There is legislation in the UK relating to minimum pricing, it exists due to us previously being a member of the European Community. Normally a seller cannot set a minimum price that a reseller must not go beyond, or impose sanctions. However there are a couple of allowances where the seller can impose a minimum price, one is where a new product is being actively marketed. This is to ensure no individual retailer can grab the market. This allowance can only be used for a limited period. These reseller minimum price restrictions are used by Bachmann, Dapol, Heljan and Hornby  with Hornby being the last to use it. I believe they are using this new product allowance in the legislation as in each case it applies for something like 6-10 weeks after release.

Personally I think this use is open to interpretation, as these model suppliers are not intending for the 'new product to be in circulation for a significant period of time. Their success is to sell out quickly rather than continue with the product in that guise for a couple of years or more, which is what the allowance in the legislation is intended for.

thats the great thing about the British legal system.

law is interpreted.

it requires a test case.

that test case is hugely expensive.
companies can often exploit a loophole, in belief that the prohibitive costs will be so much (vs the actual market size / population affected) that its not in public or individuals interest to bring it.

And if they did bring it, they could quickly retract and fall into line and just accept a slap on the wrist, to close the matter.

 

in short, it may be wrong, it may be right but were such a small minority no one in government will care, and the costs of testing that law its doubtful any shop will, so we just have to lump it.

However that test case could be brought by an individual, rather than a retailer, if they proved the were caused loss. There is much less risk to a retailers livelihood that way. (A recent precedent could include the hairdresser vs UK govt on Brexit debate, which attached Gina Miller on the side).

 

 

Edited August 31, 2020 by adb968008

[fezza]

The problem with price fixing is that it isn't really illegal until someone takes them to court. Who is going to do that? So manufacturers can get away with it... 

[Legend]

Yeah before we all go off on one and link it to the recent Rails announcement , as has been pointed out this news is one year old .

 

i am surprised, however, that it is possible to insist on a minimum price to be charged . I suppose the answer is they can’t stop the discounting but just refuse to deal with you! 

[rembrow]

I find it interesting that the current CEO of Hornby,  who was in post when Hornby applied it within the last 18 months, Lyndon Davies's own company, Oxford Rail and Oxford Diecast, doesn't impose minimum pricing. If you look at the advertised pricing at retail, of the forthcoming J27, you can find it up to 20% plus below rrp, so he, as majority shareholder of Oxford, doesn't see the benefit of applying it in that case.

[adb968008]

The other thing to consider, is:

 

Are retailers unhappy with the situation ?

 

3 years back, the market was cut throat for retailers. A handful of retailers were hugely discounting and taking a large volume of sales. A lot of shops faced a choice of making a few quid on a loco sale, or sitting looking at it for a long time, risking a good seller still losing its value to a rapid second release from the Manufacturer quashing demand.
 

Now, prices are stable at a low discount. Most retailers I have spoke to are feeling much happier, their margins are healthier and for some, volume has increased as people have moved from box-shifters to themselves.

One even mentioned taking a vacation for the first time in years. My inbox suggests several retailers are seeking to capitalise on recent events.
Whats more, things are selling out.

 

The western economy is built on consumers, consuming.. you buy, you use it, it devalues.

So the only loser is you and me.. less discount, higher price, and when selling your losing that higher margin on its resale value...

How is that different on anything else consumers buy..?

I wouldn't expect a retailer to be bringing a case, given their improved and further improving circumstances with a market place thats becoming more normalised to the economy.
 

 

 

Edited August 31, 2020 by adb968008

[fezza]

27 minutes ago, Legend said:

 I suppose the answer is they can’t stop the discounting but just refuse to deal with you! 

 

The law is very clear on the latter point - its illegal. But can a small trader afford to take Hornby to court? The big retail firms would need to get together and make a stand for this dubious practice to stop. 

[adb968008]

11 minutes ago, fezza said:

 

The law is very clear on the latter point - its illegal. But can a small trader afford to take Hornby to court? The big retail firms would need to get together and make a stand for this dubious practice to stop. 

1. Can you prove it
2. Are smaller retailers actually unhappy ?

3. The comparison would be the nations major Supermarket chains ganging up together against the nations corner shops.. to argue for lower prices, what chances do you think that would get ?

 

The market has a clear and legal mechanism for pricing... big retailers can command larger volume discounts. If however our hobby doesn't offer it, given its small size, then thats it.
 

The alternative, is exactly what the larger retailers are doing.. diversify into their own products.

Edited August 31, 2020 by adb968008

[GWR-fan]

I do find it amusing that Hornby take such a stance on discounting when in the past they either undersold their retail outlets through their online store and even failed to deliver some items to their retail network while offering those same items online at full retail.  

[JSpencer]

2 hours ago, rockershovel said:

 

True, as far as it goes.

 

However I could go to several different supermarkets, all within a few minutes drive, and buy products which are (for all practical purposes), no different. I would also have the choice of their own brands, or brands from third party suppliers. There’s also the not-so-small matter that at least some part of their range, is necessary - you have to eat, after all. 

 

Hornby are competing for disposable income, in a market where the option not to buy at all is ever-present. 

 

Yep, as Sam Walton once said "There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else".

 

[fezza]

Retailers are clearly unhappy or they wouldn't be commenting on the restriction.

 

The days of small retailers selling at or near RRP are over in our trade. Very few offer any additional customer service that makes their premium prices viable. Punters have voted with their wallets. Manufacturers have now started worrying about the power of big retailers and their dependence on them.

 

And, of course, some big retailers  have realised they can  generate better returns by going direct to the factory and commissioning their own products. 

[atom3624]

Given the choice, what would you purchase, a new-tooled, brand new, full warranty support where applicable Princess for £200 or one for £145, with the same conditions?

 

I'm not saying these are actual prices, just 'let's suppose'.

 

No apologies, but that £55 difference could fuel my car for at least one month - I know where my money would go.

 

Al.

Edited August 31, 2020 by atom3624

[APOLLO]

Yes the days of most customers buying (big name brands) at RRP  are over (well for me anyway).

 

It works both ways, Sam Walton got it right 100%

 

By the way I have bought from Tennents several times, mostly s/hand O gauge mail order. Always good service.

 

Brit15

[Derekl]

Tennents trains currently have Hornby locomotives on their site at mainly 20% discount, one at 35%, and some are recent releases, so presumably this has gone away (unless Hornby are happy with a general 20% discount).

[Chamby]

45 minutes ago, Legend said:

Yeah before we all go off on one and link it to the recent Rails announcement , as has been pointed out this news is one year old .

 

The timing may not be the same, but the circumstances look very similar... the Tennent’s situation sets a precedent and Rails have certainly been offering among the best discounts on Hornby items for a while now...

 

It is interesting to look at Hatton’s published accounts on the Companies House website since Bachmann stopped trading with them.  Turnover has been pretty constant and they remain profitable, so their new business model seems to be working for them.   The transition from pure reseller to a mixed model including product developer and supplier seems to be working for them, and Rails now seem to be going that way too.

 

The Tennent’s situation is different in that they are primarily a reseller. They have less room for manoeuvre strategically but clearly have taken a principled view that offering customers ‘reasonable prices’ is more important than offering the full range of available products.  

 

Good fortune to them all.

[rembrow]

I've lost my Hornby pre order for the second time in 3 years. Three years ago my local retailer, who I'd traded with for over 30 years, decided to pack up, and told me that his main reason was due to his on going frustration with Hornby, who not only caused his stock value to crash, when they sold surplus stock directly, at huge discounts or to selected retailers, but also their inability to get his trading account correct.

Now I'm seriously thinking of not replacing my pre order elsewhere, but see what the price is after items have been released. I recently paid the going price (rrp less 10%) for the Hornby prairie BR black, however now this can be had for 25% off. Similarly with the first release Princess class. It appears that most Hornby new items, are still on the shelves after 3,4,5 months, so I think I'll curb my enthusiasm and play the market. I've found a small retailer who aggressively cuts prices as soon as they can.

 

[AY Mod]

It's old news, has been covered before several times and there are several inaccurate posts based on incorrect assumptions so I'm closing it off for today.