Prices increases at a well known retailer!

[colin penfold]

In trying to catch up I apologise if someone has made this point and I missed it.

 

There is currently an issue of supply volume and choice for retailers, which must be harming profits.

 

New models are simply not coming through from the factories - we are in some cases waiting for products announced over 2 years ago. Frustrating for many buyers, but arguably terminal for some businesses. How are they to keep up the necessary volumes to maintain profitability if there is nothing new to sell?

 

In the situation where there are still only 3 main players for rolling stock - Bachmann/Farish, Hornby and Dapol, plus Peco for track etc. - if these start to squeeze retailers, they can't simply go and get stock from someone else. For example, you don't want to sell Hornby's S15 because they are squeezing you. customers want an S15. Who else can you turn to to obtain an S15 to sell. Nobody. So you sell Hornby or lose customers.

 

Faced with this it's perhaps less of a surprise that model shops are removing special offers, and more of a surprise that they don't give up and turn their shops into cafes.

[black and decker boy]

I think the point I am making is that the increases have been wide spread and severe in many cases.  I think we can all agree that we've had it so good for a long time, but perhaps a more progressive increase in prices would have been easier to swallow than the sudden shock of a 30% increase.    After all, most of us are still waiting for pay rises in our jobs after years of pay restrictions.   A gentler increase would have been welcomed.

 

But that would require Hattons to sell at a loss and why would they do that, they are not a charity.

 

Retail business pricing can be very simple. Take your trade \ wholesale price, add you pre-defined markup for TAX, OH&P and you get your retail price.

 

Having been into Hattons last year for mega-pack, I know that their system works along these lines. The pack I wanted had run out that morning and they had the order on its way from Bachmann, they already knew the new, higher, trade price and I was offered the megapack post free at the new price which was around 30% higher than those available the day before.

 

I didn't scream, shout or stamp my feet, I simply refused the offer and bought a different megapack still on the old RRP. You could say I was smug having beaten the Bachmann Price rises but we all get caught sooner or later.

 

Ultimately, the choice is with us, the consumer. If we think Hattons are now more expensive and not value for money we will vote with our wallet and buy elsewhere. We know that, Hattons know that, Rails know that. We don't really need endless gnashing of teeth about it.

[Dunsignalling]

Or start getting into 3d printer production against the day when everybody will be printing their own stuff as opposed to buying in.

 

I might well be pushing up daisies by then but am convinced it's not that far away.

 

Edit ...not the me pushing up daisies day, the everyone printing their own stuff day!

I think more generations than ours will be pushing up the daisies before we see an affordable household 3D printing set up that is capable of producing a fully finished locomotive to Hornby or Bachmann standards that just can be plonked on the track by those whose who profess their practical skills to be barely sufficient to open the boxes that their r-t-r models come in. 

 

John

Edited July 16, 2015 by Dunsignalling

[farren]

True - to a degree.

 

However, we aren't talking about Hornby building a factory somewhere with near-zero wages. Even if we were, it might take three or four years to get it built, staff skilled up and output up to the quality required.

 

But Hornby don't make stuff any more, they pay others to do it for them. Therefore, they could only transfer production to a country where the factories and the skills already exist.

 

There are a couple of, perhaps unpalatable, impediments to that.

 

1. Even as the UK market leader (if they still are) the amount of business that Hornby generate is pretty small beer compared with general electronics or household white goods.

 

2. Model railway customers in the UK are heavily concentrated in older age groups, many of them early-retired on decent pensions, both of which are becoming things of the past.

 

At present, overall demand is being supported by such people (including myself) whereas most younger enthusiasts have more important things (families/mortgages/rent) to spend their money on and can't look forward to as much in the way of retirement conditions.

 

Consequently, as we baby-boomers (and older) drop off the perch, the current big spenders will not be replaced in anything like the same numbers so the size of the hobby (and the industry that supports it) will inevitably decline fairly dramatically over the next 15-20 years.   

 

The sensible course for Hornby is to keep making as many models as they can while they still have substantial numbers of customers willing/able to buy them. Finding new producer countries and transferring output to them would only disrupt that.

 

John

I would like to be able to disagree with you but I think you're probably right. This does make you wonder what will happen in the future. Will the hobby end up just for the rich or are we seeing the golden age of detail and new releases. Will the new models end up as more of a starting point for you to add the detail your self in a effort to keep the prices down to try to keep the unit numbers selling. And will the costs raise 100% for ever ten years like they have in the last ten.

[Dunsignalling]

I would like to be able to disagree with you but I think you're probably right. This does make you wonder what will happen in the future. Will the hobby end up just for the rich or are we seeing the golden age of detail and new releases. Will the new models end up as more of a starting point for you to add the detail your self in a effort to keep the prices down to try to keep the unit numbers selling. And will the costs raise 100% for ever ten years like they have in the last ten.

I don't think it will end up as just for the rich but those of us who do not occupy that category will have to decide which models really matter to us and forgo a lot of others.

 

It can be argued that the new normal is just a restoration of the old normal and what we came to think of as normal in the first decade of this century was the real aberration, albeit a very pleasant one while it lasted. Welcome to the status quo ante and the death of Rule 1.

 

If that seems an extreme view, check out what the average wage was in the early 1960s* when a Hornby Dublo "Barnstaple" cost £5-19-6. Then compare the level of detail on that model with that on a modern Hornby rebuilt WC.

 

John

 

Edit: * in 1962, for a UK manual worker it was £312 per annum! So "Barnstaple" represented about a week's wages (before deductions)

Edited July 16, 2015 by Dunsignalling

[NINJA]

If they have a good turnover on their secondhand stock they must be making up any shortfall on ther new stock turnover. I say this as a person who has been quoted rock bottom prices for goods compared to what they resell them at.

[Trains4U]

If they have a good turnover on their secondhand stock they must be making up any shortfall on ther new stock turnover. I say this as a person who has been quoted rock bottom prices for goods compared to what they resell them at.

 

***Sigh***  We've been here before 

 

My response now is the same as then.

 

http://www.rmweb.co.uk/community/index.php?/topic/86388-rails-of-sheffield/&do=findComment&comment=1468271

 

Only this topic is regarding the retailer beginning with R...

[40F]

If they have a good turnover on their secondhand stock they must be making up any shortfall on ther new stock turnover. I say this as a person who has been quoted rock bottom prices for goods compared to what they resell them at.

 

 

As stated before peoples concept of the true value of their goods is often way way short of the ACTUAL value

[antrobuscp]

I well remember taking a large quantity of Hornby-Dublo into Hattons 40+ years ago on an occasion I had to raise cash. I was, in one sense, very disappointed with Norman Hatton's offer. I was, however, realistic about it because I understood the finances of a small shop business(I was brought up by parents who ran two shops), and I was also training as an accountant. I had done some research, and although disappointed I appreciated the maths from the retailers point of view. It turned out much as I had expected(feared). Nothing has changed, I'm afraid, except that the numbers are bigger. At least today you do have the Ebay alternative.

 

I could well imagine that although profitable in principle, there must be a fair number of problems with used items, and repair and other costs, which eat into the profit - and the money could be tied up in stock for ages. The margin may be bigger than on new goods but I bet there are losses on quite a few items - even if you know your market.

 

I've always believed, as I said in an earlier post, that Hattons has been/is a well run business and they have had a clear idea/plan of what they wanted to achieve. I think they are doing what they believe they have to do to survive and prosper in what will become an ever more challenging area of business as it adjusts to a worsening demographic, reduction in volume, and changing "manufacturer" terms.

 

I should also add I have no knowledge about Hattons other than that gained by being a satisfied customer/observer over many years.

 

Colin

[gordon s]

Retail business pricing can be very simple. Take your trade \ wholesale price, add you pre-defined markup for TAX, OH&P and you get your retail price.

 

 

Having spend years in electronic component sales, pricing is certainly not that simple.  Of course it may be different in retailing, but as I said at the outset, pricing of the end product has many other facets than just the cost price.  There are so many other elements to consider and all of those ultimately lead back to your business plan and how your performance compares to the original budget you have set for your business.

 

This is the often the problem with these discussions.  Business appears to be so simple and whilst it can be if you get all your parameters correct, it is very easy to go bust with the wrong pricing strategy.

Edited July 16, 2015 by gordon s

[coachmann]

What Hattons charge is up to them, but with 'Pre-Owned', but i wonder how many retailers would dare do this.....

 

Bachmann Standard Class 4 75070 with late crest, weathered, Missing chimney and missing mainframe below smokebox. Bargain £69.00 

 

I can't help thinking Hattons has crapped in the nest.....

Edited July 16, 2015 by coachmann

[Ian Hargrave]

What Hattons charge is up to them, but with 'Pre-Owned', but i wonder how many retailers would dare do this.....

 

Bachmann Standard Class 4 75070 with late crest, weathered, Missing chimney and missing mainframe below smokebox. Bargain £69.00 

 

I can't help thinking Hattons has crapped in the nest.....

They are not alone in this.Rails are also at it.But you have to think that somebody out there is going to fall for it,otherwise they wouldn't do it.A quick trawl through e bay is a good reality check as to what really ghastly rubbish is out there.

[Hroth]

They are not alone in this.Rails are also at it.But you have to think that somebody out there is going to fall for it,otherwise they wouldn't do it.A quick trawl through e bay is a good reality check as to what really ghastly rubbish is out there.

Well, they're pricing to the ebay standard nowadays (just like all the charity shops do).

 

At least with Rails, they have the grace to clearly label it as rubbish ie restoration project/needs attention.  However, I do wish Hattons would separate new and seconhand listings completely so you don't have to wade through the dross if you don't want it!

[Free At Last]

I wonder if they would advise anyone that their new stock is cheaper than their pre-owned.

 

31-931
Bachmann Branchline
Class 1000 Midland Compound 4-4-0 1189 in LMS black
OO Gauge (1:76 Scale)
£89 BARGAIN List price: £139.95
More than 10 in stock

 

31-931-LN-01
Bachmann Branchline
Class 1000 Midland Compound 4-4-0 1189 in LMS black - Pre-owned - Like new
OO Gauge (1:76 Scale)
£95
Limited stocks, but available for immediate order

[Andrew F]

Could the over-pricing of 'pre-owned' be a marketing ploy to make people think they are getting a bargain buying new stock?

 

Eventually as everyone gets used to widespread mega over-pricing, some things that are merely over-priced will appear to be relative bargains.

[farren]

I do think the price charge is just seeing if a fool can be parted from there money. I did buy something for rails second hand with a higher price then I would have paid. So I offered half what they wanted and it was excepted.

Edited July 17, 2015 by farren

[Gwiwer]

I wonder if they would advise anyone that their new stock is cheaper than their pre-owned.

 

31-931

Bachmann Branchline

Class 1000 Midland Compound 4-4-0 1189 in LMS black

OO Gauge (1:76 Scale)

£89 BARGAIN List price: £139.95

More than 10 in stock

 

31-931-LN-01

Bachmann Branchline

Class 1000 Midland Compound 4-4-0 1189 in LMS black - Pre-owned - Like new

OO Gauge (1:76 Scale)

£95

Limited stocks, but available for immediate order

 

A point I raised in my post earlier in this topic and one I have taken up with Hattons themselves.

 

In relation to the latter I received a very terse email in response reminding me, as we all know, that they are free to price as they see fit.  

 

No law was broken.  The onus is on the buyer to beware and to check they are getting the best deal available to them.  But when we have confirmation that "rock-bottom" prices are paid to sellers of those items which are then listed as "Like new" at more than the "Brand New" price for identical items what are we to make of Hattons' business model?

 

Personally I have moved a number of pre-orders to other retailers and will continue to shop elsewhere unless the products are not available or are priced significantly higher in other places.

[Ian Hargrave]

I do think the price charge is just seeing if a fool can be parted from there money. I did buy something for rails second hand with a higher price then I would have paid. So I offered half what they wanted and it was excepted.

I've done likewise.Never offer what they originally ask.I have to say that by and large,I have been well satisfied with what I have bought.

[ParkeNd]

Well, they're pricing to the ebay standard nowadays (just like all the charity shops do).

 

At least with Rails, they have the grace to clearly label it as rubbish ie restoration project/needs attention.  However, I do wish Hattons would separate new and seconhand listings completely so you don't have to wade through the dross if you don't want it!

You don't have to. Just tick a box on the category you are looking at eg Diesels-Farish and used locos are excluded.

[Hroth]

You don't have to. Just tick a box on the category you are looking at eg Diesels-Farish and used locos are excluded.

And its a lumpy, buggy method.

Sometimes ALL the listings vanish......

 

Secondhand should be categorised under its respective gauges, rather than being lumped in with new stock. It doesn't have to be done by manufacturer, just "Locos/Rolling Stock/Misc". Computers are GOOD at that sort of thing!

[chris p bacon]

And its a lumpy, buggy method.

Sometimes ALL the listings vanish......

 

Secondhand should be categorised under its respective gauges, rather than being lumped in with new stock. It doesn't have to be done by manufacturer, just "Locos/Rolling Stock/Misc". Computers are GOOD at that sort of thing!

Whereas I find that going somewhere like Trains4u** means that you can look in the case or on the shelf and actually inspect and handle the item before purchasing. Think of it as digital purchasing.

 

 

 

 

 

 

 

** Other model shops are available, but quite possibly for a limited time 

[Legend]

It's the same old story...Caveat Emptor......let the buyer beware. If you don't like Hattons prices don't buy from them. I don't see Hattons as being any different from Rails, Kernow etc.And in general I don't see increasing prices as being the fault of greedy retailers, I put the blame for that firmly at the manufacturers. In fact I have considerable sympathy for model railway retailers at the moment. Lack of goods, some manufacturers trying to sell direct, others with huge increases. Really who would be a retailer just now.

[jjb1970]

In the case of retailers, whilst many people now find it difficult to visit a physical shop unless they take quite a trip there is still a healthy number of Internet and mail order dealers. If people do not like Hattons there are other shops and I'm sure almost everybody here could name their favourite suppliers so the advice is that if you don't like the way things are going at Hattons there are plenty of other shops to try.

[patrick116]

About 18-24 months ago my great local model shop, who used to sell locos at a much higher price than Hattons, but now their prices are equivalent to Hattons told me that the reason for this was that Bachmann had required retailers to sign a sales agreement NOT to discount below a certain level. I understand that Bachmann set a discount limit on retailers c. 15%.

 

It was my experience that Hattons discounts used to be in the 20-25% range but are now much lower.

 

I am also still puzzled as to why Hattons spent a lot of money on Smithdown Road store then suddenly found "structural faults" and, in effect, became mainly an online only dealer. My cynical side thinks this was just to reduce the costs of operating a shop in Liverpool.

 

I agree with other posts that Hattons are no longer the cheapest online retailer.

[Wheatley]

I wish it was the case that Hattons only bumped the prices up when the item had sold out and had to be replenished at the new increased price....but there are numerous examples of where this has not been the case, far from it!

 

For example, their Bachmann Mk1 and Mk2a coaches sat at £24.01 for ages with a healthy stock level and all of a sudden those SAME stock items have gone up to over £33, despite Hattons having bought them from the supplier when the price was lower.   Is that profiteering?   It's certainly a tad cheeky!!!   They have increased prices on all items across the range, not waiting for the existing stock to run out.  This might be ok when they are adding a few pence to a model, but not increasing it by around 30%!

 

This has been their business model for years. They buy in bulk or buy up manufacturer discounted stock and take the risk of being left with unsold items. The popular items sell out and they are left with the slow sellers (Bachmann Mk 2s, Intercity and NSE Mk 1s, Gresley buffets and sleepers) which are heavily discounted to get rid. As soon as they are down to "less than 10 in stock", it goes back up to RRP (or thereabouts) because by that time they are the only retailer with any stock. It's not cheeky and it's not profiteering, it's supply and demand. In the meantime there is a supply of Hornby Gresleys at £14 which makes them attractive for adding Comet sides, or WDs in garish liveries at £60 to be resprayed black.

 

The only difference, as Dibber pointed out, was that Keith Hatton used to manage all this in his head.