Disappearing discount due to Demand?

[Robin Brasher]

I don't think Hornby have been making reduced numbers of the H class because they have to make a fixed number of models to recoup the costs. If my memory serves me correctly Hattons were not taking pre-orders of the R3540 Southern olive H class because they had sold out on pre-order. I pre-ordered mine from Rails for £89.50 and Rails put their price up from £89.50 to £97.50 and gave me the option of cancelling. That is what I paid for it and is considerably less than the recommended retail price which seems to be £119.50 and is now the going rate because they have been sold out at Hornby and possibly at Hattons.

 

The demand for R3631 Hornby lined black cycling lion H class does not seem so high. The recommended retail price is £129.99, Hattons are taking pre-orders for £104 and Rails are undercutting Hattons by offering them for £99.50 effectively charging the same as Hattons with free postage.

 

Eventually Hornby will probably produce another few runs of the H class until they find that the demand has been satisfied and they will turn into Hattons bargains like the Drummond 700, the T9 and the S15. At this stage the enthusiast will already have all the H class models they need so casual buyers will just get them as a cheap run around locomotive.

 

I don't think anything has changed with Hornby in the past few years and it still makes sense to either pre-order from Hattons, Rails or Kernow or wait a few years for demand to subside if you are not fussy about a particular model.

[shunny]

It has been interesting reading the replies to my original post I think the main point I was trying to make is that the current new models from Hornby have seen some of the large retailers change the way they sell some products due to supply/demand issues on a few select items. I can only assume that the sales have been good enough at rrp that none have felt the need to reduce the H Class which has been out for 2/3 weeks now in SR green. It will be interesting to see if the trend continues with other sold out models in the future possible the black Peckett will be the one to follow this trend or not?

 

For me I try to buy/pre-order from my local shop who cannot compete on price with the big mail order guys except for the odd changes mentioned above but at least I can buy track pins and ballast without postage cost and I can try before I buy so it is worth supporting them.

[adb968008]

To me it feels like the traditional manufacturers are trying to slow the market down.

 

By reducing quantity, increasing prices (accepting inflation, Falling £ and increasing Chinese labour), the unit cost of a loco off the line in China is still very low (maybe where the “£50” Exeter figure comes from), especially when using an older tooling that’s already amortised. Re-releases for a manufacturer preserve a good margin.

 

What’s probably frustrating the manufacturers is the sudden prevalence of Shop (Retailer) Comissions, which realised the market acceptance of higher prices actually means higher than retail margins, as they are going direct to OEMs in China and getting their own... so whilst there’s slowing supply from the traditional, that gap is being filled by others.

 

The risk is the traditional manufacturers are right, that a bubble forms, and many retailers go under as they are holding older tooling stock, at higher prices that cannot shift as people’s money is flowing with the specialist retail commission tide.

 

If you look on here today, we are all fawning on a £100 P class, but that’s no benefit for the network of retailers stuck with a £130 8f or a £170 A1 even if their manufacturers are home free having sold out their latest run off a 10year old tooling. RRP might be the current trend, but will dealers have sufficient funds to hold the increasing amount of slower selling stock ?

 

This weekend maybe 500+ people are going to get a £250 bill for the first instalment of an APT.. that means £125-250k of modern image modellers money will move away from model shops stocked up with newly released £150 Bachmann class 47’s, which may now linger for a few more pay checks to arrive.. of course 47245,625,628 and 832, plus a load of 37’s are on the horizon too, did I mention class 87 ?, retailers will need to find funds to buy these to their shelves too, especially if it’s buy now or forever sold out !, but have to await the modellers tide to change direction before the money comes in.

Edited March 29, 2018 by adb968008

[YesTor]

This weekend maybe 500+ people are going to get a £250 bill for the first instalment of an APT.. that means £125-250k of modern image modellers money will move away from model shops stocked up with newly released £150 Bachmann class 47’s, which may now linger for a few more pay checks to arrive...

 

Yes, that's a good point, as thinking about it the majority of my spend over the last 12 months or so has gone toward crowdfunding/pre-order models.  In fact I am struggling to recall my last purchase of a brand new Bachmann or Hornby model...

[JSpencer]

To me it feels like the traditional manufacturers are trying to slow the market down.

 

 

 

The traditional manufacturers are now facing competition  from one man bands and retailers doing it themselves. This is the consequence of outsourcing I'm afraid.

 

The greatly increased prices after the cheap & detailed years means taking  a more cautious route. Hornby with a reduced program and Bachmann limiting themselves to some extent to derivatives of existing or already announced models. Amazingly Heljan's diesel reruns don't have the great price hikes seen elsewhere. Their steam locos seem to be another story however.

[JSpencer]

My Opinion! Because I'm an opinionated B****** I thought I'd air it!

 

I generally model pre-grouping subjects these days, and as some of you will know I have begun 3D printing models. Some have questioned my logic with this, but it can be explained by the following:

 

I am at the very young end of the hobby, and as such have a very limited income.

 

As such, I can only afford to spend a certain amount on railway modelling. It's not a case of not being willing to pay x amount, or wanting things at unrealistic prices because I want fully-detailed models at next to nothing. I spent from announcement until just before the original release date saving up for a Hattons Barclay - A single one.

 

What frustrates me is that I, and others at my end of the hobby, are finding themselves priced out. I cannot afford the vast majority of RTR releases these days, and have relied on the box-shifter deep-discounts in order to be able to afford almost all of the RTR models I own. I also cannot afford the overwhelmingly vast majority of kits, and these are often much more expensive than RTR models these days. As such, my only options are second hand models (Though even these are gradually pricing me out), scratchbuilding (a skill I am slowly working on) and designing my own 3D prints to fit chassis I have managed to accumulate, as to buy wheels, gearboxes and motors is bl00dy expensive. A 3D Print at £20 including a £7 postage cost is manageable. RTR at >£100 is not. Kits at >£80 minimum are not. 3D printing also allows me to actually make some money too. I am not one for wishlisting, as I'd rather spend the time getting the model I want in my own way, but when I cannot afford pretty well anything that is available, other than the occasional RTR wagon. RTR Coaches? Forget it!

 

When a member of this forum (Linny - Skinnylinny on here) can produce 4-wheel coach kits for <£10 in laser-cut card, <£50 for a four-coach rake after the addition of wheels and other bits, then I realise that kitbuilding does not need to be expensive (The same 4-wheeled Stroudley Coach is £20< in resin form and £30< in brass form) and I begin to feel as if some people are actually making an effort to encourage the younger end of the hobby to make things. At the price Linny has quoted me for his kits (which will  be available in due course, possibly via Ebay) I can afford to get most of the set I require for the layout I'm building together for less than the price of a Bachmann birdcage.

 

As for RTR pricing? Having been fortunate to purchase a model at just under trade price (£50 for a brand new Hornby 'Exeter', bought through an unusual situation) I realise just how much some retailers, but in particular the manufacturers are raking it in. Another irritation is the fact that models sell out within days now, and announcements are often getting very close to release dates. This leaves young modellers like myself without any time to save up!!

 

When I was young, I do remember finding this hobby pricey too. But I do feel that the new generation are finding it harder than  I did.

 

There seem to be reasons for that, the younger generation getting degrees are finding themselves not much better paid than someone who school and just started on the minimum wage - yet have to pay that tuition off.  I really don't know what to advise my son who will be reaching school leaving age in about 5 years time! And the new generation is downsizing.

[Widnes Model Centre]

My Opinion! Because I'm an opinionated B****** I thought I'd air .

 

As for RTR pricing? Having been fortunate to purchase a model at just under trade price (£50 for a brand new Hornby 'Exeter', bought through an unusual situation) I realise just how much some retailers, but in particular the manufacturers are raking it in. Another irritation is the fact that models sell out within days now, and announcements are often getting very close to release dates. This leaves young modellers like myself without any time to save up!!

 

Having just read this and then checked my Invoice for 28th December 2015, I would love to know the "unusual situation". That is nothing like the trade price, it is not I suspect even close to what Hornby would have paid. As for raking it in, shops closing down and not being taken up by new investors. Why would that be when they in your opinion are such lucrative businesses.

 

PS: If you can get any more at that price please pass my details on.

[Big James]

I never really experienced the deep discounts of days of yor from the big box shifters but my local model shop used to be cheaper and was even in some cases cheaper then the Hornby website with the club discount. And now even his stopped discounting.

 

Big james

[JSpencer]

I never really experienced the deep discounts of days of yor from the big box shifters but my local model shop used to be cheaper and was even in some cases cheaper then the Hornby website with the club discount. And now even his stopped discounting.

 

Big james

 

When I was young, web sites did not exist (or at best were just starting to appear). You had to look through ads in magazines. A bargain took at least 2 months to be published, by which time it was often gone!

 

When I worked for the signal box, we were amazed at how some shops sought to have only £1 mark up on a loco. They would sell out quick so we focused on a bigger margin and service quality. We did not advertise everywhere. It was 2 pages in railway modeler and 1 page in BRM. From memory, that cost close to 2 grand a month - a lot back then, let alone now so you needed to shift a fair amount to recover it but this is how this small model shop got big (it started with a premises no bigger than 200 sq ft - then later moved to 600 sq ft).

[Legend]

To me it feels like the traditional manufacturers are trying to slow the market down.

By reducing quantity, increasing prices (accepting inflation, Falling £ and increasing Chinese labour), the unit cost of a loco off the line in China is still very low (maybe where the “£50” Exeter figure comes from), especially when using an older tooling that’s already amortised. Re-releases for a manufacturer preserve a good margin.

What’s probably frustrating the manufacturers is the sudden prevalence of Shop (Retailer) Comissions, which realised the market acceptance of higher prices actually means higher than retail margins, as they are going direct to OEMs in China and getting their own... so whilst there’s slowing supply from the traditional, that gap is being filled by others.

The risk is the traditional manufacturers are right, that a bubble forms, and many retailers go under as they are holding older tooling stock, at higher prices that cannot shift as people’s money is flowing with the specialist retail commission tide.

If you look on here today, we are all fawning on a £100 P class, but that’s no benefit for the network of retailers stuck with a £130 8f or a £170 A1 even if their manufacturers are home free having sold out their latest run off a 10year old tooling. RRP might be the current trend, but will dealers have sufficient funds to hold the increasing amount of slower selling stock ?

This weekend maybe 500+ people are going to get a £250 bill for the first instalment of an APT.. that means £125-250k of modern image modellers money will move away from model shops stocked up with newly released £150 Bachmann class 47’s, which may now linger for a few more pay checks to arrive.. of course 47245,625,628 and 832, plus a load of 37’s are on the horizon too, did I mention class 87 ?, retailers will need to find funds to buy these to their shelves too, especially if it’s buy now or forever sold out !, but have to await the modellers tide to change direction before the money comes in.

Good posting . The only thing I’d say is that I don’t think manufacturers are deliberately trying to slow the market down . There is no one big enough to do this and have an effect on the market. Hornby I think are reducing the batch size of models made or limiting the release of subsequent batches to avoid the deep discounting they previously resorted to. I think Bachmann just struggle to get resources out of Kader . Really lots of limited edition 37s and 47s but mainstream stuff slowed to a trickle. Dapol actually seem to be increasing model output, and of course Hattons and now Rails and TMC with their commissions

 

I do think there is a danger the bubble is about to burst here. As you say there’s a lot of models competing for cash . I wonder if the APT interest will be maintained now you actually have to pay hard cash .

 

I’d really hate to be a retailer in this . The only bright side is the big mail order folks going to RRP which as I said before should allow the independent retailer to have a level playing field and even an advantage in that he can offer personal service for same cost. On the downside he really is up against it with all these special commissions cutting out the retailer.

[Butler Henderson]

Having just read this and then checked my Invoice for 28th December 2015, I would love to know the "unusual situation". That is nothing like the trade price, it is not I suspect even close to what Hornby would have paid.

Suspect the £50 loco was a case of simple economics - the seller had sold the rest, made a profit and just wanted rid of it - the same approach that a certain West Midlands model shop does every year  in seemingly giving locos away well under trade prices. Looking around there are a number of Hornby locos available deeply discounted from various sellers, none are the H but then they have not yet swamped the market with it unlike other locos and neither have they done it seemingly in a livery that no one wants, although given the apparent limited demand for BR early logo and pre nationalisation locos (looking at what gets discounted heavily generally) I do wonder if a subsequent run of those will sell as well or will it be the case that nearly everyone who wanted one has already bought one and does not want another.

Edited March 30, 2018 by Butler Henderson

[Legend]

I know I’m a tightwad . I do have the money just don’t like spending it on me . I do think I’m generous to members of my family though. To me price is a factor in enjoying the hobby. Is it just me ....maybe . I have to say one of my best purchases in recent years was Olton Hall direct from Hornby at £47 . When I see her running I think wow I only paid £47 for that and it’s a great wee runner. On the other hand when I run my Locomotion 4-4-2 which I think arrived at roughly the same time, I think I paid £189 plus postage for that , is it worth 4 times more and it has coloured my opinion of her.

Edited March 30, 2018 by Legend

[The Stationmaster]

The traditional manufacturers are now facing competition  from one man bands and retailers doing it themselves. This is the consequence of outsourcing I'm afraid.

 

The greatly increased prices after the cheap & detailed years means taking  a more cautious route. Hornby with a reduced program and Bachmann limiting themselves to some extent to derivatives of existing or already announced models. Amazingly Heljan's diesel reruns don't have the great price hikes seen elsewhere. Their steam locos seem to be another story however.

 

It's not just 'competition' in the traditional way we think of competition but far, more importantly than that, the market itself has moved on and changed significantly in recent years.  Buyers of r-t-r are increasingly looking for novelty, just in the issue of new models let alone new features incorporated in models so Hornby's traditional approach of Year 1, Year 2, Year 3 has had to change (apart from it lumbering them in recent years with unsold stock which is then dumped causing retailers to lose trust in them) although some of that approach still lingers even in the current catalogue.  They need also to get closer to their end market and were, through The Engine Shed, getting rather good at it - recognising that the ;net could help them serve the craving for news, tit-bits of information, and teasers although for some (idiotic) reason they've dropped that.

 

Where is this relevant to price and discounting". Simple really - if you feed a market with what it will buy you can do so at prices which achieve earlier return on investment although you will need continuous investment.   That is what the commissioners and own account people are doing, they've recognised (partly through necessity and opportunity) how the market is working and by getting close to it they can be more fleet of foot and have lower overheads.  Hornby appear to be pulling back have pulled back from that strategy despite the fact it was seemingly working quite well and look, from recent events, to be turning back the clock a decade or so to the now well outmoded approach to the market they had in the past, it won't do them any good in today's market.  That will in turn mean that retailers will, their own financial pressures apart, also look to get whatever return they can on new models, partly in case Hornby revert even more to type, and take the wrong models into Year 2/3 territory yet again.  

 

And apart from anything else can certain deep discounters actually continue to afford to work on their past miniscule margins any more - I don't think they can, even if their suppliers were to let them.

[ruggedpeak]

I think overall the model railway market is in rude health, as the sheer volume of serious investment in new models demonstrates, but it is also changing significantly. At Ally Pally there were quite a few larger retailers with acres of stock, yet Hattons had a large amount of floorspace but were not directly selling anything, despite being a well known volume seller. Instead they offered a spacious stand demonstrating all their new commissions. It appeared to be a similar size to Hornby's but was more impressive in terms of models on display. A statement of intent?

[sem34090]

I appear to have been misled by my memory with regards the trade price of my Bulleid, and will edit the post if others request as such.

 

The 'Unusual Situation' arose at the Woking show. An individual who specialised in weathering RTR locos, and renaming/renumbering them, had passed away very suddenly, and had left a few unfinished subjects. There were several Un-rebuilt Bulleids, a couple of S15's and a King Arthur if I remember correctly. My one was 'Exeter' redone as 34023. Thinking about it more closely now, it was an unfinished job, as the nameplates had not been applied. This was carried out by one of the late individual's friends.

 

I remember being told by one of the men running the stand that the locos were being sold at trade price by the man's widow, who wanted them out of the house. Thinking about it, there were some locos that had yet to be started and as such were in completely new condition. I think these were £75, so perhaps this was the trade price being referred to? Given the above comments, I expect not, and I apologise for any offence caused. 

 

I was fortunate enough to get mine for £55, and an SR Malachite rendition of the same loco for £30 (unboxed) to act as a friend's birthday present. I was slightly put out that Kernow were selling the same model, essentially, for £149.99 and with a trade price of £75 this seemed ridiculous. However, it seems that the trade price is significantly higher than that.

[Widnes Model Centre]

I appear to have been misled by my memory with regards the trade price of my Bulleid, and will edit the post if others request as such.

 

The 'Unusual Situation' arose at the Woking show. An individual who specialised in weathering RTR locos, and renaming/renumbering them, had passed away very suddenly, and had left a few unfinished subjects. There were several Un-rebuilt Bulleids, a couple of S15's and a King Arthur if I remember correctly. My one was 'Exeter' redone as 34023. Thinking about it more closely now, it was an unfinished job, as the nameplates had not been applied. This was carried out by one of the late individual's friends.

 

I remember being told by one of the men running the stand that the locos were being sold at trade price by the man's widow, who wanted them out of the house. Thinking about it, there were some locos that had yet to be started and as such were in completely new condition. I think these were £75, so perhaps this was the trade price being referred to? Given the above comments, I expect not, and I apologise for any offence caused. 

 

I was fortunate enough to get mine for £55, and an SR Malachite rendition of the same loco for £30 (unboxed) to act as a friend's birthday present. I was slightly put out that Kernow were selling the same model, essentially, for £149.99 and with a trade price of £75 this seemed ridiculous. However, it seems that the trade price is significantly higher than that.

 

At £75 you are still not even remotely close to the trade price for Exeter or anything else. I appreciate your explanation and I am sure any other retailers reading this will all feel the same.

[Ian Stewart]

It seems the thrust is towards (hopefully) premium products to be sold at (certainly) premium prices, driven by short runs - "when it's gone, it's gone!" with no re-runs.

 

Are we the greying, balding, and increasingly creaking generation being seen as the last which is willing, able, and paying to generate profit?

 

Pre-order to avoid missing out?

 

What about when the model arrives? Yes it runs, but it's not quite right, then the reviews tell us what else isn't right or even plain wrong!

 

Will, however, good sales on short runs with freed-up factory & warehouse capacity generate 2nd runs with alternate numbers, or even liveries?

 

Perhaps it's time to relax in the tranquil world of cricket.

 

Dear Cricket Australia ... tee-hee-hee!

[JSpencer]

It's not just 'competition' in the traditional way we think of competition but far, more importantly than that, the market itself has moved on and changed significantly in recent years.  Buyers of r-t-r are increasingly looking for novelty, just in the issue of new models let alone new features incorporated in models so Hornby's traditional approach of Year 1, Year 2, Year 3 has had to change (apart from it lumbering them in recent years with unsold stock which is then dumped causing retailers to lose trust in them) although some of that approach still lingers even in the current catalogue.  They need also to get closer to their end market and were, through The Engine Shed, getting rather good at it - recognising that the ;net could help them serve the craving for news, tit-bits of information, and teasers although for some (idiotic) reason they've dropped that.

 

Where is this relevant to price and discounting". Simple really - if you feed a market with what it will buy you can do so at prices which achieve earlier return on investment although you will need continuous investment.   That is what the commissioners and own account people are doing, they've recognised (partly through necessity and opportunity) how the market is working and by getting close to it they can be more fleet of foot and have lower overheads.  Hornby appear to be pulling back have pulled back from that strategy despite the fact it was seemingly working quite well and look, from recent events, to be turning back the clock a decade or so to the now well outmoded approach to the market they had in the past, it won't do them any good in today's market.  That will in turn mean that retailers will, their own financial pressures apart, also look to get whatever return they can on new models, partly in case Hornby revert even more to type, and take the wrong models into Year 2/3 territory yet again.  

 

And apart from anything else can certain deep discounters actually continue to afford to work on their past miniscule margins any more - I don't think they can, even if their suppliers were to let them.

 

Agree, in the past it was 3 releases in the first year then 1 or 2 each year after. Hornby are still following that. Bachmann 3 models year one then 2 or 3 the following year and the odd accasional release.

There was some logic/feeling in that whereby it was felt people will buy one anyway in year 1 even if it was not really the model they wanted and then release model they do want in later years (Blue Merchant Navy). That strategy does not work with today's price increases adding year on year. Me, I brought the TTS MN which is physically the same shape as the blue one - that I would have preferred - having got that one, the blue one does not interest me anymore.

 

The commissioners, can be seen whacking out between 6 and 12 models of the same class (when not a unique one off of course). Hornby/Bachmann should be doing 6+ variants in year 1 and adding the odd popular request the years after. Hornby did do 5 variants of the Coronation but 2 of those were exclusive to just 2 shops.

 

I believe we all want something unique on our layout, and R-T-R is filling those gaps but - oddly - they are then no longer unique! Conversely, I think most people won't buy kits anymore unless they are pretty sure they are going to build them. There are couple nice loco kits I fancy but am not buying until I've cleared the few I have yet to build. But these at least really will be unique.

[Georgeconna]

More accurate matching of supply to demand will inevitably lead to less, or no, discounting.

 

Hatton's et al will know how many of these they'll be getting upon release. All they need to do is deduct the number they have pre-ordered and it'll be pretty clear whether they need to discount in order to shift the remainder in their preferred timescale.

 

Hornby dropped a brick by releasing follow-up versions of the 72xx, S15, D16 and a few other locos, too early, resulting in some heavy discounting from day one, of which I took full advantage. Since then, they have evidently got their production schedules and batch quantities under better control, making everything more predictable for all concerned.  

 

John

 

 I wonder re the discount the S15 had this more to do with the Extremely Poor Motor inside, Mine and many others were Returned to the UK for replacement, some from what I have been reading multiple times.

 

Personally I have enough locos now for a couple of life times. Amazing how stock creeps up so much!

[Georgeconna]

At £75 you are still not even remotely close to the trade price for Exeter or anything else. I appreciate your explanation and I am sure any other retailers reading this will all feel the same.

 

Not Far off it I would imagine, Rails have BOB's say for STG139 , Take off the 20% Vat, take off 33% profit shop Margin it does come down pretty close.

[Widnes Model Centre]

Not Far off it I would imagine, Rails have BOB's say for STG139 , Take off the 20% Vat, take off 33% profit shop Margin it does come down pretty close.

Way off it actually even without the VAT.

[The Stationmaster]

I think overall the model railway market is in rude health, as the sheer volume of serious investment in new models demonstrates, but it is also changing significantly. At Ally Pally there were quite a few larger retailers with acres of stock, yet Hattons had a large amount of floorspace but were not directly selling anything, despite being a well known volume seller. Instead they offered a spacious stand demonstrating all their new commissions. It appeared to be a similar size to Hornby's but was more impressive in terms of models on display. A statement of intent?

 

Nothing new in Hattons doing that sort of thing at the few shows they do attend.  I suspect that if they appeared in 'pile it high, sell it dirt cheap' mode at any exhibition the organisers would be hard put to find any other traders prepared to attend in subsequent years.

[JSpencer]

I appear to have been misled by my memory with regards the trade price of my Bulleid, and will edit the post if others request as such.

 

The 'Unusual Situation' arose at the Woking show. An individual who specialised in weathering RTR locos, and renaming/renumbering them, had passed away very suddenly, and had left a few unfinished subjects. There were several Un-rebuilt Bulleids, a couple of S15's and a King Arthur if I remember correctly. My one was 'Exeter' redone as 34023. Thinking about it more closely now, it was an unfinished job, as the nameplates had not been applied. This was carried out by one of the late individual's friends.

 

I remember being told by one of the men running the stand that the locos were being sold at trade price by the man's widow, who wanted them out of the house. Thinking about it, there were some locos that had yet to be started and as such were in completely new condition. I think these were £75, so perhaps this was the trade price being referred to? Given the above comments, I expect not, and I apologise for any offence caused. 

 

I was fortunate enough to get mine for £55, and an SR Malachite rendition of the same loco for £30 (unboxed) to act as a friend's birthday present. I was slightly put out that Kernow were selling the same model, essentially, for £149.99 and with a trade price of £75 this seemed ridiculous. However, it seems that the trade price is significantly higher than that.

 

Kernow were selling off Exeter for £110 at the start of last year. I know as I brought one.

[adb968008]

For those of interest,

 

I have i front of me an invoice from more than 15 years ago.

 

R2218 Wilton 34041 Unrebuilt Bulleid, from the same tooling as 34001 Exeter was a trade price of £53.62 + 17.5 % VAT.

 

That was 15 1/2 years ago.

 

Obviously things change since then, I suspect margins then were more generous in those days too.

An Exeter in 2018 is not £50 trade, because it never was in the first place, right back to when the tooling was new.

 

I think most people would be very surprised to find how slim the margin is on a loco, when I used to do my bit in retail, there was more profit on 3 wagons for £10 than a loco for £60.

 

In case your wondering what “1” means, that’s the minimum order... and today I still have 34041 and 35029 (below it), one of the flaws of the 1990’s is anyone could be a “trader”, so the ultimate discount was trade price, and in the days before ebay they would trawl their unwanteds around swap-meets which dragged prices for retailers to the bone.

 

This industry goes in circles, but whilst the circle gets smaller, some things never change.

 

For those really desperate to work it out... Hattons last sold 34041 new in 2008, at £82. Bear in mind 34041 was last released in 2003.. which means it sat in their warehouse eating their cash flow for 5 years before the last of the money was recouped.

http://www.hattons.co.uk/7370/Hornby_R2218_Streamlined_West_Country_Class_4_6_2_34041_Wilton_in_BR_Green/StockDetail.aspx

So taking into account VAT on £82 (17.5% back then)... that’s £67 and assuming they paid same trade as everyone else, they get on that £53 investment...that’s feasibly just £14 for 5 years work, warehousing, staffing etc etc.

 

Today’s margins could well be less.

 

Now your a retailer with 3x Wilton’s and 100 others such like.. you’ve £150k cash tied up in stock, watching maybe 10 walk out of the door on a good day... £140 a day yippee.. now pay the business rates, electric, advertising and your staff from £140 and see how much you’ve got leftover...

That’s why many shops are sole owner, reliant of friends, or have to upscale into the box shifter range to compete.

 

Consider you sold 10, and got £820 back... then you need to re-invest that cash in new stock... but the new price has doubled. The retailer now needs to 1. dig into their own pocket, 2. order less or 3. chose not to stock everything...

Let’s take a look at the options..

1. This means subsidising your business from your pocket.

2. Order less means you have less to sell down the road.. £14 on 1 = £28 profit on 2, but even if you make £20 on 1.. that’s little comfort if you only order 1 and the higher price means it takes longer to sell.

3. Risk losing customers as your starting to get gaps in your cabinets.

 

If a retailer is now selling at RRP and discounting is faded away, it’s through business necessity, not profiteering. But even then I feel the risk has been greater shifted from manufacturer onto retailer, and cash reserves for any retailer are finite. I’m in the camp that things are going to get tighter down the road.

Edited March 30, 2018 by adb968008

[Retro_man]

Not Far off it I would imagine, Rails have BOB's say for STG139 , Take off the 20% Vat, take off 33% profit shop Margin it does come down pretty close.

 

The margin hasn't been 33% for quite a while!