Hornby supply and demand gremlins.

[wrex]

The fact is, for many of us, that we'll either get the model we want from our usual trusted retailer be it local or online, or if they are restricted in stock and we miss out then Hornby miss out on the sale altogether.  

 

The head-start sales just to have it on "day 1" won't sway me, but if in two weeks' time everyone but Modelzone is sold out then I'll join those who feel disappointed.

[Stevelewis]

It makes me  wonder  if  we  will see  a future swing  from  the retailers  to give  more  support to the 'other manufacturers' who seem to be playing  fair with them.

 

I too am irritated by the Modelzone Banner  on the forum.

[The Stationmaster]

A very reasonable view from where we sit as hobbyists - but Hornby shareholders will be delighted that Hornby are taking steps to screw max profit out of every item in the container. Ethics are among the first casualties in a recession.

Exactly so.  And, while this is obviously no comfort - let alone equitable business sense - to retailers such as Gareth, Hornby's intentions have been writ large for sometime, as numerous posts on this thread confirm, especially on Page 3  -

http://www.rmweb.co.uk/community/index.php?/topic/67652-Hornby-makes-interim-management-statement-30113/page-3

 

Whether Hornby do or do not intend make this a regular practice is far from clear from what so far appears to be a single example but overall their new policy is becoming increasingly clear - i.e that they hope to maximise their own share of retail sales (via their website and their concession sites such as that which several of us think they have in Modelzone) and that they increasingly have the intention to keep retail sales prices much nearer to RRP with a definite effort to discourage, or render uneconomic, deep discounting by changing their trade terms of sale - as I mentioned on another thread before Christmas.  

 

Hence also my own post (No.30) in the above linked thread regarding pre-ordering which is another area where I can see some discontent potentially coming up over the near horizon where production levels have not equalled retail customer pre-order levels.  In fact an even worse situation might arise if Hornby's '2BIL trick' approach results in their website and concessions still holding stocks of a particular model while retailers have an allocation which doesn't allow them to meet their customers' pre-orders; could that happen? To be honest it wouldn't surprise me if it did although for very obvious reasons I, and many others, sincerely hope it does not.

 

I realise that Hornby Group is in a situation where it is looking to boost profits but I think it needs to realise that it has to support a strong retail trade if it wishes to serve its whole customer base and that if it doesn't do that it will most likely be one of the worst - albeit possibly one of the later - casualties of such a process.  Under production could be as big an evil as over production.

 

In the meanwhile we must continue to support our 'local' model shops because even we don't - especially in potentially awkward times of supply - no one else is likely to.  And I suppose the decider there might be someone's willingness to forego buying a model they want if they can't get it from their 'local' shop or a heavy discounter?

[stewartingram]

Just my tuppence worth.

 

To me Hornby has always been THE name in the UK model railway world. But, my buying has always been on 'Substance' rather than 'Maker'. I have a theme in my modelling (East Anglia, 1950s-60s).

So a B17 from Hornby gets a YES vote, as does a Derby Lightweight dmu from Bachmann. A Royal Scot for instance gets a NO vote, so doesn't get purchased.

Now and again, a model appears that gets a YES even though off-theme - the BP from Bachmann for example.

 

Hornby announced the 2-BIL; I have a small 'reserve' collection of SR so was tempted to get one as an impulse buy. The present debacle on availability has firmly pushed this into the NO vote, along with the recent Hornby attitude with regard to pricing, design clever, concessions (whatever that might mean?) etc.

 

In fact I am seriously considering a boycott of Hornby - I wouldn't be depriving myself as my collection, after many years, is virtually at the complete stage. Nothing in their catalogue this year inspires me, though I am still awaiting a small number of Bachmann/Heljan releases. Reckon it is time to turn to kits again to fill the small gaps.

 

I can see instant gains in this for Hornby, but medium term - even within 12 months - massive losses as retailers turn to other makers, or close, thus no second wave of sales for Hornby. The T4U's of this world may be able to turn elsewhere such as Bachmann, but what about the little place near me in March (forget their name) which is basically a card shop, selling a few plastic kits and some railway items? Will they move into other suppliers, or indeed will their customers accept that?

Probably not.

 

Stewart

[Fenman]

In fact I am seriously considering a boycott of Hornby - I wouldn't be depriving myself as my collection, after many years, is virtually at the complete stage.

 

Actually, I rather agree with most of your post other than the bit I've quoted. You seem to approach things the same way as me: I am interested in two or three places/periods and I buy from whatever manufacturer produces relevant products (plus, of course, an occasional "must have" that is more about childish wants than operational "needs").

 

Years ago I was pontificating at one of my friends about something when she snapped at me that "principles don't matter a damn unless it costs you something to hold them". Irritatingly, I think she was right. So I'm not sure your "boycott" of Hornby, which doesn't seem to involve any sacrifice on your part, is going to make much difference.

 

Meanwhile, Stationmaster wrote "In the meanwhile we must continue to support our 'local' model shops". Which is fine if you have one. I don't. Does that mean I have immunity in purchasing direct from Hornby?

 

As it happens, I've been wishlisting a 2BIL for more years than I can remember, so I feel I owe it to Hornby to buy a few. I've had them on order (from the website of a model shop) since they were announced, and depending on the stock allocated I guess I'll either get them or I won't. If I don't, well, I won't feel as if I owe Hornby the cost of any more 2BILs. I doubt they'll be worried since, by definition, they will have sold out.

 

But elsewhere on RMWeb, numerous people have speculated that Hornby is in major financial trouble -- even that it must have cash-flow problems. If that's what we really think, isn't Hornby's very survival at stake? And, if so, why wouldn't it try to increase its profits? If that means moving to a new distribution/sales model (and there seem to be some hints from the last decade of stock market reports that it has been doing so, with some success), then isn't that a price we have to pay for their survival? Hornby is a business and, like other businesses, is facing major changes -- often brought about by ecommerce. The unpalatable fact may be that the days of the specialist model railway retailer are numbered. If I were forced to make a horrible choice between keeping retailers or keeping manufacturers in business, for entirely selfish reasons (and the fact that I don't have a "local" model shop), I would rather the manufacturers remained in business.

 

Paul

[Purley Oaks]

Point taken about MZ, T4U and Steve.

However, I would expect most of us who want to purchase the model will do so through our usual retailer. I'm also a little concerned about R4538 Maunsell "unconverted" coach from last year's catalogue, not in this years's, but expected mid-2013. Tried to place an order with my local shop (Harburn Hobbies) who said that it was not in the current catalogue and they could not obtain it. Shame!

mal 

 

Does  an APPLE  SHOP have  a  fascia  reading  APPLE?

 

But Modelzone dont have Hornby on their  fascia, do they??

 

 

That isn't really a fair comparison, given that iPhones are contiunally produced (Until upgraded) and the market is massively bigger.

If Modelzone want to be competetive, they should do so through being GENUINELY competetive and not through obtaining unfair advantages from suppliers.  If they want exclusivity of distribution, they should stick to commissioning exclusive models.

[The Stationmaster]

Meanwhile, Stationmaster wrote "In the meanwhile we must continue to support our 'local' model shops". Which is fine if you have one. I don't. Does that mean I have immunity in purchasing direct from Hornby?

 

Paul

That was the reason why 'local' was in parenthesis Paul - one of my 'local' model shops is about an hour's drive from home, the other is several hours on the train (each way).  One of them advertises and sells on the web (although I do like to call in if I can) while the other has a web presence but it is more limited but again I like to call in and both sell far more than r-t-r (yet another reason for calling in of course) but neither count in my book as box shifters or a concern which simply wants to take my money over the 'net.  Both are regularly well spoken of on here. I've known both the proprietors for some years - since before they had their own retail establishments, and in fact I have known one of them for nearly 40 years.

 

But I still regard them as 'local' because although they might not be on my doorstep they offer good old-fashioned shop based service at reasonable prices with no gimmicks and a cuppa.  To me that is about as 'local' as I can get in this day and age and I'm happy to support both for as long as I can afford to do so even if their prices aren't at Liverpool superstore discount levels. So I have Hornby items - among other things - pre-ordered with both of them and they are orders which I will take up with both of them.

 

We are all of us free to shop where we want of course - no restriction on that and many have hno option but to use mail order and your point about ensuring survival of the manufacturers is well made.  My concern is whether or not Hornby might finish up cutting their own throat if they follow a particular course.

[Retro_man]

"In fact an even worse situation might arise if Hornby's '2BIL trick' approach results in their website and concessions still holding stocks of a particular model while retailers have an allocation which doesn't allow them to meet their customers' pre-orders; could that happen?"

 

Two years ago we were unable to get any additional models of "Dominion of Canada" for sale in Canada even though we had firm customer orders. At the time Hornby still had the loco available in their on-line store but would not release them to the trade. Their argument being that their on-line store was like an independent retailer and once they held the stock, it could not be taken back!

 

(Don't ask about this year's "Dominion of Canada" as the situation in Canada is even more ridiculous.)

 

Basically Hornby appear not to care if any particular retailer sells their product because at the end of the day, all units of a release are sold and Hornby's income is the same.

 

Here in Canada we regularly get our Hornby product up to a month after retailers in the UK and many times I have been frustrated at model train shows watching modellers running the latest release they purchased in the UK while I am still waiting for stock.

 

I think times are changing and we are going to see Hornby controlling retail sales even more...

 

Steve

Model Railway Imports

Canada 

[Robin Brasher]

Hattons would normally send a Hornby R3161 delivery update. I am surprised that I have not yet received one for the 2-BIL as its delivery date must be soon. Hornby also seems to sell the less popular version of a model first. Last year I exhibited at Modelworld at Brighton and all the visitors were getting very excited about the Brighton Belle but the only models that were available were the less popular blue and grey models. It looks like Hornby are doing the same this year because the Southern 2-BIL may be less popular than the BR versions. I am modelling the Swanage Railway which does not have a third rail. I have ordered the 2-BIL because it looks attractive and because I used to live on the Sussex coast where some of them ran. It will not be the end of the World for me if Hornby sell out of 2-BILs before they reach Hattons or my local model shop at Swanage Station.

[Mike at C&M]

It will not be the end of the World for me if Hornby sell out of 2-BILs before they reach Hattons or my local model shop at Swanage Station.

I suspect that if this happened, there would be anarchy amongst the model railway trade!

 

There is obviously an allocation of the 2-BILs set aside for model shops. What is puzzling us is why when they are obviously at Margate, are they not being sent out to us just yet.

[brushman47544]

In the absence of hard a fast information, I fear we are at risk of clouding two separate issues. The first, which appears to be well substantiated, is that Hornby appears to be changing is marketing model and is giving priority to its website and Modelzone (apparently a concession - but why only them, there are other retailers who have the same arrangement with Hornby). This does not seen a very equitable, if not unethical, way of doing business and is rightly upsetting other retailers.

 

The second, and separate, issue is the number of each product being made available to retailers. Unless I've missed something, I have not seen any evidence that Hornby has restricted the production runs of the different 2-BILs compared to other "standard" releases or that retailers will receive less stock than they would like to have ordered and therefore that said retailers will be unable to fulfil our pre-orders, or indeed customers who come through the door without pre-ordering. Our fears in this regard may be completely unfounded. Indeed, are the responses being coloured by the way the distribution of the A4 Great Gathering models is being handled?

 

Point taken about MZ, T4U and Steve.

However, I would expect most of us who want it to purchase the model through our usual retailer. I'm also a little concerned about R4538 Maunsell "unconverted" coach from last year's catalogue, not in this years's, but expected mid-2013. Tried to place an order with my local shop (Harburn Hobbies) who said that it was not in the current catalogue and they could not obtain it. Shame!

mal 

 

The Maunsell "unconverted" third open was announced by Hornby as being sold out to retailers last year, so it does not surprise me that it is not in the catalogue and would be why your local shop cannot order any more. Latest information I've seen is that they will appear in June.

 

This is not the only model in the 2012 catalogue but not the 2013 one that is still awaited. Presumably the same applies.

[Bulleidnutter]

My main concern with this. If you havent pre-ordered one of these. How long will it be until they become widely available, if at all?

[Xerces Fobe2]

What is unacceptable, I take it, is that Hornby are favouring one retailer above all others by deliberatly withholding stock for general release. Even if Modelzone is a concession they receive a comission each time a model is sold and from the consumer's point of view they hand over their money to Modelzone, not Hornby. This appears very anti-competitive and legally dubious. It now seems that Hornby are generalising this practice with their 2013 releases as the BR 2-BILs will also see Modelzone getting the same favoured treatment as for the SR 2-BIL. If I were a retailer I would be very angry.

 

I see where you are coming from, however Modelzone is tends to be expenisive and I am sure that most people like me have an order placed with their own favorite box shifter that will get a 2BIL at a  discount the price. I have waited many years for an good RTR 2BIL so a few more weeks will help the 2BIL lose a few pounds and Modelzone will need to price match to sell more 2BILs which is most likely not going to happen.

 

 I doubt if Modelzone gains much in the long term when they look at total sales and all the stock just sitting on their shelves tieing up cash flow!

 

XF

[Godfrey Glyn]

I see where you are coming from, however Modelzone is tends to be expenisive and I am sure that most people like me have an order placed with their own favorite box shifter that will get a 2BIL at a  discount the price. I have waited many years for an good RTR 2BIL so a few more weeks will help the 2BIL lose a few pounds and Modelzone will need to price match to sell more 2BILs which is most likely not going to happen.

 

 I doubt if Modelzone gains much in the long term when they look at total sales and all the stock just sitting on their shelves tieing up cash flow!

 

XF

XF

Taking your last point, if, and I say if, Modelzone doesn't actually own the stock, it doesn't matter to them if stock stays on their shelves. I am content to wait another two weeks to see one at home. I worry that my retailer may not get enough to satisfy all his customers who are happy to support him and receive a small discount as a quid pro quo for good service and a whole range of other stock which is otherwise difficult to see or get. I have never really understood why a new 'must have' item should be hugely discounted by anyone, its nice for the customer but may not be in the interest of the long term health of the model railway business. Maybe, just maybe, Hornby are creating a "Tracey Island" scenario. They may just feel that its time to get rid of huge discounting, again my worry is that the small retailer may get damaged in the cross fire in which case all models will be built to meet the needs of the very average modeller - clever design or design clever? Godfrey

[Stevelewis]

Re the  CASH FLOW  I believe  that  a  Concession outlet may not actually  pay  for  the  stock, but  receive a 'commission' on the  sale, correct me  if  I am incorrect!

[stewartingram]

I see where you are coming from, however Modelzone is tends to be expenisive and I am sure that most people like me have an order placed with their own favorite box shifter that will get a 2BIL at a  discount the price. I have waited many years for an good RTR 2BIL so a few more weeks will help the 2BIL lose a few pounds and Modelzone will need to price match to sell more 2BILs which is most likely not going to happen.

 

 I doubt if Modelzone gains much in the long term when they look at total sales and all the stock just sitting on their shelves tieing up cash flow!

 

XF

I frequent the Holborn Modelzone whilst at work. A few things stick in my mind.

 

Generally prices are high (RRP) though they do say they will pricematch local stores (where in London!!!!).

There are frequent clearance offers across all ranges. Recently they have become more widespread, suggesting selling problems. (Overstocking, poor marketing, cashflow, whatever?).

Certain ranges have been drastically reduced. eg:

   Base Toys - no longer stocked.

   Diecast bus ranges - vastly reduced selection. (Though the bubble appears to have burst in this section of the hobby?).

   Hornby range reduced (I haven't been in for a couple of weeks so don't know if the "concession" has changed this.

   Skaledale - most stock reduced

   Bachmann - less range in the display cabinets.

   Less movement of Oxford stock, new supplies used to be regular across the range, now they seem to be very selective and intermittent, leading to uncertainty of supply of "wanted" new  releases       (sounds familiar?)

   The always limited Wills/Ratio and similar ranges do not seem to be ever restocked.

 

Is this a sign of something amiss with Modelzone as well?

 

Stewart

[Guest Belgian]

I'm afraid this situation is all part of the total change in the market of recent times, most notably driven by the internet and all our complaints are going to have but a negligible impact.

 

Twenty years ago and earlier the manufacturer had no way of getting its products in front of the consumer except by selling to intermediaries which were principally the retailers. Their advertising was targeted to enthuse the ultimate customer to go to those retailers to purchase the products. The manufacturer would give the retailer - and also wholesalers in the middle - substantial discounts in order to get access to those retailers' customer bases and the footfall in their shops.

 

With direct control of the production of the items the manufacturer would keep them in the catalogue for many years and the consumer/customer would buy as and when he had the funds available. We, the consumers, took what we could and had little or no feedback or even contact with the manufacturer, and never knew the names of anyone in the business save, perhaps, that of Frank Hornby. We certainly didn't have 'conversations' such as we have with Dapol Dave on this forum!

 

The continuing demands of we customers to keep the price down together with the emergence of other products competing with the manufacturer's products is an ongoing part of the capitalist system and has been endemic in the model railway business for all time. The most notable disaster was when Rovex became Triang and Triang outperformed Hornby, leading to the total failure of Meccano Ltd.

 

These demands led to manufacturers seeking ways to reduce costs and the emergence of cheaper production overseas led to the abandonment of in-house production and reliance on 'slots' in another manufacturer's production schedule. Thus every production run became something of a 'limited run' and production could no longer be controlled in the old ways and items appeared in the catalogue for a very short period. We, the consumers, revelled in it as we started to get used to being able to have a huge variety of products available. Competition also saw standards rise stratospherically and we applauded that.

 

The manufacturers would really have to have their heads in the sand if they were to ignore modern communications. Today they can communicate directly with their ultimate customers, us, by e-mail or internet connections. So, why shouldn't they adjust their business model to take advantage of that? Their objective is to make money and to do that they make models, not the other way round.

 

So today the manufacturer can keep a greater part of his margin if he cuts out the middle man and the consumers can get the product quicker if he deals directly with the manufacturer. Hornby are only being 'clever' by setting up these concessions with such as Modelzone which gives them footfall and access to Modelzone's customer base and Hornby gets more money. It can't have escaped their attention that the initially-perceived straight-jacket of 'limited editions' which now applies to all their products stirs up an 'I must have it NOW' attitude in the customer base and speeds up the payback enormously. As part of the ever-changing market the manufacturer is also increasingly reliant on large retailers than smaller ones, and, let's be realistic, a large well-run business such as a 'box-shifter' is far simpler to deal with and more cash-efficient (and thus less risk) than the myriad of small retailers who order in units of less than 10 examples.

 

We've benefited from all of this and have a variety of models to chose from which our 20-years younger selves never even dreamt of - we can't have it all ways and if Hornby didn't take advantage of modern communications to keep making profits I for one would worry for their future rather more than I have done in recent times rather than felt reassured.

 

Sadly, in all this gain for us as consumers, there will be losers and, I'm afraid, those will be the retailers, unless they themselves adapt. I have huge sympathy for them but wouldn't want to be one of them. It's noticeable that what appear to be the most successful of them are those who have/are adapting and using modern communications - I for one get three separate e-mailings every week from the most notable ones - and creating markets for themselves with 'limited edition' commissions.

 

We can all be very virtuous by saying we want to support our local retailers, but, unless one has a hell of a lot more money than, for example, me, who can put their hands on their hearts and say they pay more than the lowest price available? Life moves on, and we can't have it all ways.

 

Let's face it, the choice may come down to - we can have manufacturers but no retailers OR retailers without manufacturers. I know we want both, but we probably won't be able to have both. And I know that one of those two choices is a non-sequitur so really, there's only one way this will go. The 2-BIL saga is just part of evolution.

 

I'm sure there will be many who disagree with me . . .

 

Jeremy English

[Southernman46]

I frequent the Holborn Modelzone whilst at work. A few things stick in my mind.

 

Generally prices are high (RRP) though they do say they will pricematch local stores (where in London!!!!).

There are frequent clearance offers across all ranges. Recently they have become more widespread, suggesting selling problems. (Overstocking, poor marketing, cashflow, whatever?).

Certain ranges have been drastically reduced. eg:

   Base Toys - no longer stocked.

   Diecast bus ranges - vastly reduced selection. (Though the bubble appears to have burst in this section of the hobby?).

   Hornby range reduced (I haven't been in for a couple of weeks so don't know if the "concession" has changed this.

   Skaledale - most stock reduced

   Bachmann - less range in the display cabinets.

   Less movement of Oxford stock, new supplies used to be regular across the range, now they seem to be very selective and intermittent, leading to uncertainty of supply of "wanted" new  releases       (sounds familiar?)

   The always limited Wills/Ratio and similar ranges do not seem to be ever restocked.

 

Is this a sign of something amiss with Modelzone as well?

 

Stewart

I concur - and also witnessing the dwindling stocks of plastruc / evergreen and actual modellling materials at the Reading store.

 

Hey but if you want a radio controlled plane helicopter car lorry tank thingamajig......................

[Guest Belgian]

I too am irritated by the Modelzone Banner  on the forum.

 

I haven't seen it yet, but I'm fed up with one that offers a 'free' locomotive with every mag sub! (Only because I want a different loco!)

 

JE

[steve1023]

The fact is, for many of us, that we'll either get the model we want from our usual trusted retailer be it local or online, or if they are restricted in stock and we miss out then Hornby miss out on the sale altogether.  

 

The head-start sales just to have it on "day 1" won't sway me, but if in two weeks' time everyone but Modelzone is sold out then I'll join those who feel disappointed.

 

I have to say Wrex this it exactly my attitude. I have pre-ordered both BR Green ones from Hattons & if I don't receive any of the models Hornby will be loosing out on the revenue as I won't be running down to Modelzone to pay full price (and to be honest I'm not sure I'll care).

 

Hornby seem to be demonstrating a kind of arrogance that this model is the next big thing thats going to be flying off the shelves and I just can't see many people in Manchester, Glasgow or Newcastle getting excited by the prospect of a 2 BIL!! - if they chosen to do this kind of selling on the class 67 which is seen throughout the country then maybe, but not a pre-war southern region only 2 car EMU.  

 

Sorry Hornby - It will be YOUR loss, not mine (my wallet will breath a sigh of relief)

 

Cheers

 

Steve

[Guest Belgian]

I have to say Wrex this it exactly my attitude. I have pre-ordered both BR Green ones from Hattons & if I don't receive any of the models Hornby will be loosing out on the revenue as I won't be running down to Modelzone to pay full price (and to be honest I'm not sure I'll care).

 

Hornby seem to be demonstrating a kind of arrogance that this model is the next big thing thats going to be flying off the shelves and I just can't see many people in Manchester, Glasgow or Newcastle getting excited by the prospect of a 2 BIL!! - if they chosen to do this kind of selling on the class 67 which is seen throughout the country then maybe, but not a pre-war southern region only 2 car EMU.  

 

Sorry Hornby - It will be YOUR loss, not mine (my wallet will breath a sigh of relief)

 

Cheers

 

Steve

If you don't really want a 2-BIL, why have you ordered two?

 

JE

[steve1023]

If you don't really want a 2-BIL, why have you ordered two?

 

JE

 

Fair question. The answer is I like Hornby and I like their products and I would like the 2BILs, however, the bottom line is I don't like the way Hornby is acting on this matter, that and the fact that I'm extremely stubborn and frankly I'm more likely to shove two fingers up at Hornby and go buy some more Bachmann stuff rather than have Hornby try and dictate to me where and how I should buy their products.

 

Steve

[Xerces Fobe2]

Hattons, Rails and Kernow will all get their 2BIL allocation as Hornby will not want to alienate it distribution network and this would be commercial suicide at time when they trying to turn the company around.  Hornby needs to appease its shareholders otherwise they will not have a future.

 

Simon and his team are business savvy and I would not be surprised if there is recovery plan which the other suppliers maybe aware of.  By assisting Hornby in the short term with  they are helping the company to  secure and stable long term future.

 

XF

[Dogmatix]

I frequent the Holborn Modelzone whilst at work. A few things stick in my mind.

What sticks in my mind is that I remember when that shop was Beatties.

Worse than that, I remember when Beatties was on the other side of the Kingsway crossing.

[John M Upton]

I also remember when it was Beatties and when I went in there for the first time in a couple of years the other day I was disappointed by the stock levels and (lack of) range they had.  In fact the place had taken on the same semi-shambolic understocked appearance that Beatties had just before it went belly up...