Hornby model shop Tiers system

[Markwj]

In a funny sort of way this has given me some reassurance that I will be able to source my models. When I was receiving my cancelled orders emails from Hattons I was worried there was a reduction in the number of models produced (which may also be occurring) but I have been able to place most of my pre orders with other retailers.

 

While I don’t really have an opinion on the tier system and would like to see how it works in practice with my orders going forward I struggle to think what may have worked instead although from reading some posts a bit more transparency from Hornby to the retailers at least would have helped. Are the retailers going to get a sticker to display in the window like the local council do with the food ratings at takeaways?
Mark

[Joseph_Pestell]

7 hours ago, Downer said:

Will Hornby reps be using damp fingers to check shop shelves for dust?

 

If I were a Hornby rep, my fingers would not be available for dust tests. I would be in full chain-mail armour after this.

[Joseph_Pestell]

7 hours ago, The Stationmaster said:

Well that told us something but I'm not entirely sure what and it's certainly somewhat at odds with Hornby's statement to its shareholders in April telling them that supply lines etc are 'resilient'.

 

One odd thing about it is that it does seem to rather conflate history and dates.  The 2020 range would, assuming the normal pattern, have been ordered by retailers in January but the changes in consumer demand at retail level did not come until March/April with lockdown.  Now I could quite understand orders/supplies having to be restricted when that demand grew (although Hornby's own figures said they were selling more and even edged into a [paper] profit) so they were clearly selling something to the retail etc trade).  But that surely would not affect orders placed in January which, one assumes, had been accepted by Hornby.   Now we all know many of those were subsequently delayed although that isn't actually a new feature because there will still models outstanding from 2019.   We could quite reasonably understand development and production delays in China due to the pandemic and there were already some shipping problems as vessels were seriously delayed waiting annual surveys etc but those are only delays.  They were not cancellations of pre-existing factory orders unless , for example, a factory was unable to reopen etc but then the model would surely have been cancelled for everyone?

 

So what it amounts to is a lack of clear explanation of what happened to the original 2020 orders placed before the pandemic increased consumer demand in Britain.  Delays yes, but why canv cel what retailers have ordered simply because a model is delayed?  And were, for example,  Hattons advising end customers back in 2020 that models were cancelled or that they were unable to supply them at all?   In reality 2020 model year models ordered in January of that year would seem to stand in a different position from subsequent orders UNLESS retailers tried to increase their order after the advent of Lockdown 1.

 

Moving forward to the Tier system introduced this year (so well after 2020 January orders had been accepted in good faith) then - as I've said already - I can see a degree of sense in it.  But one still has to ask why some retailers had their original 2020 orders cut back when Hornby had their fully delivered stock of particular models -  had Hornby oversold them to the retail trade in January 2020 or did they hold back retailers' stock in order to sell it directly because a model proved to be particularly popular?   Maybe this was the sort of thing the Tiers have been introduced to avoid in future because it will save at least some retailers from losing very much of their original order?  And that makes a lot of sense because it introduces order to what might other wise be seen as a situation with lack of proper managerial control.

 

When we come to the allocation of Tiers to retailers there does seem to be some 'interesting' factors in the way it has been applied - from what we know of it and i wonder to what level of retailer premises intelligence it is based on.  And quite frankly I'm amazed that Hornby has apparently admitted. that it has still been supplying people who don't have proper retail premises, especially so after years of denying that they do that.  If they truly want to play fair by retailers anyone in that category should be in Tier 4, i.e. get nothing, not even unwanted dregs.

 

Finally in closing I note that despite considerable professed feeling against discounting and its impact on Hornby's brand image (let along on bona fide retailers) nothing has been said about selling via Amazon - who presumably must rate no higher than Tier 3 if Hornby is observing its own system of supply to retailers.  (And do Hornby's online sales fall into Tier 3 ? - someone had to ask  )

 

Mike, As ever you are the voice of reason here.

[phil-b259]

17 minutes ago, Joseph_Pestell said:

 

No, Hornby does not believe in learning from the lessons of history. They have taken on an expensive franchise space with John Lewis in Edinburgh.

 

However please remember that John Lewes itself is not looking to healthy these days. They have declared their staff / partners would miss out on their bonus (aka share dividend) two years in a row now and and over the past year they have been shutting stores such is the destructive power of online retail! Yes covid has made things worse but don't kid yourself the storm clouds were gathering well before the Pandemic hit.

 

It could be that rather than it being an expensive folly by Hornby, both sides can see a potential gain from increased sales thus helping both in challenging times.

Edited May 25, 2021 by phil-b259

[jonnyuk]

23 minutes ago, Joseph_Pestell said:

 

Yes, it's tough out there these days.

 

But Hornby is where it is, after 101 years, due to support from retailers. It is decent now just to drop them?

you really have a downer on Hornby tonight. Where have Hornby said they are dropping them? They are supporting well run shops that offer  a rich customer experience, ensuring they get a fair slice of the pie, tier 1 and tier 2 shops by the sounds of get first dibs on pre-order stuff.

If you take most industries, the manufacturer does pick and choose who to supply, whether that's clothes or cars. Ford has a vast dealer network of its own, but it also has a vast independent network that sells its brand, said network can and does sell other brands at other locations, sometimes next door.

[melmerby]

11 minutes ago, Markwj said:

 Are the retailers going to get a sticker to display in the window like the local council do with the food ratings at takeaways?

Mark

Except if you have a low rating you just don't display it (England & Scotland) making it meaningless.

[Joseph_Pestell]

6 hours ago, adb968008 said:

 

 

maybe were looking at it the wrong way...

if Hornbys “going big”, it maybe that tnk that you are heir relevance to us modellers wanes, but their company profile simply takes them in a different direction to bigger / better markets.. you cant hold it against them for doing it, if thats what they think will work...

 

 

 

I don't think that Hornby has quite the critical mass to "go big".

 

And they have picked a fight with a company with is much stronger financially than they are.

 

I think that you are right that the strength of the brand could open up all sorts of options for them. But instead of pursuing those advantages, they are shooting themselves in the foot.

[Joseph_Pestell]

5 hours ago, Enterprisingwestern said:

 

Anyone remember Gerald Ratner's prawn sandwich?

 

Mike.

 

I thought it was a sherry decanter. But you are right. This press release, despite taking several days to produce, is well up with Gerald Ratner's efforts.

[maico]

8 hours ago, adb968008 said:

There is only so much factory space in China.

Ive said for a while I think the UK OO market is at risk of overheating.

it could be that supply itself will constrain the demand.

 

But also dont forget China itself is seeing increased demand from other countries, who have emerging model railway interests... Poland has had no less than 15 new tooled rtr locos in less than a decade.. plus as many coaches and wagons. Other coubtries such as Portugal, Belgium, Denmark and increasingly Hungary are seeing new markets for specific toolings in their countries.

 

The Siemans Vectron.. its been duplicated not just once.. but by 4 different Manufacturers..Piko, Roco, Trix, LSModels... just in HO).

 

15 years ago, Europeans shunned “made in china” models...hasnt the world changed.

 

Most comes from a few factory floors in China.

owning a factory might be a good thing.

 

Well, most Marklin-Trix, whose revenue is 3x that of Hornby, comes from their German or Hungarian factories. Their Start series from China. Some recent production that was being made in China has been brought back to Europe.

Piko Ho is made in their own own factory in China. See their youtube factory tour video.

Roco-Fleischmann's main facory is in Arad Romania see the video bellow. Tooling and design are done in Austria and the cheaper lines, and increasingly standard models, are made in their factory in Vietnam.

Brawa is in a similar boat to Hornby, 100% made in China with production delays. French REE also makes excellent but expensive all-metal locos in China.

 

 

Edited May 25, 2021 by maico

[melmerby]

3 minutes ago, jonnyuk said:

 Ford has a vast dealer network of its own, but it also has a vast independent network that sells its brand, said network can and does sell other brands at other locations, sometimes next door.

Do they?

I didn't think Ford owned any outlets.

[Joseph_Pestell]

5 hours ago, Oldddudders said:

Never mind trains - who's picking the sprouts this year?

 

I don't know about sprouts. But I do have good knowledge about other crops and the situation is quite robust. Whole plane loads of workers have been quietly flown in.

 

Is this entirely in accord with "controlling our borders" post - B****t? Is it entirely consistent with what our Govt tells us? I'll let you draw your own conclusions.

[jonnyuk]

4 minutes ago, melmerby said:

Do they?

I didn't think Ford owned any outlets.

Ford branded then, i would assume franchise.

But my point stands, they choose who to give that ford franchise to, or which independent network to supply, based on set criteria i would also assume, how is Hornby any different in this regard?

McDonalds is the same, most are franchises, some are McDonalds proper so to speak.

[PaulRhB]

So what appears to be missing is an absolute guarantee that if you pre order you will get the model even in tier 1 . . . . 

[GWR-fan]

I had no idea who or what John Lewis is (or was) so had to Google some information.    This is what I found (quote:)  "Shop new season trends in homeware, furniture and fashion at John Lewis & Partners. Discover the latest beauty products and browse must-have electricals, ....."

 

Now little Johnny wants a trainset,  so where do we go to find Johnny his new toy train?  Do we go to a store selling homeware and beauty products,  or do we go to the local Aldi or Tesco to pick up a cheap trainset on special with no backup support,  or do we go to a model railway specialist who is able to advise and meet further hobby needs in the future?   A trainset purchase from a beauty or homeware store is a one off purchase and most likely to finish up with the trainset in the attic or the basement ignored once the initial enthusiasm has subsided.  Would an aspiring model railway enthusiast actually think to go to a beauty store for his first trainset?  If so then the purchase would have been along the lines of  "Oh,  look over there a toy trainset on sale.  I never would have thought to see toy trains on sale in John Lewis".   Such a purchase would be a spur of the moment decision with little Johnny over excited as to receiving a new toy.  Did he really want a toy trainset or was it just another toy?   Hornby got a sale of a trainset but did they convince a budding enthusiast into the hobby?  My opinion is hardly likely.

[Joseph_Pestell]

22 minutes ago, jonnyuk said:

you really have a downer on Hornby tonight. Where have Hornby said they are dropping them? They are supporting well run shops that offer  a rich customer experience, ensuring they get a fair slice of the pie, tier 1 and tier 2 shops by the sounds of get first dibs on pre-order stuff.

If you take most industries, the manufacturer does pick and choose who to supply, whether that's clothes or cars. Ford has a vast dealer network of its own, but it also has a vast independent network that sells its brand, said network can and does sell other brands at other locations, sometimes next door.

 

I can't deny that. I do. After a press release like that, why would I not?

[Tim123]

17 minutes ago, melmerby said:

Do they?

I didn't think Ford owned any outlets.

TrustFord, previously Dagenham Motors and Polar Motors, owned by Ford Retail.

[Phil Parker]

3 minutes ago, Joseph_Pestell said:

 

I can't deny that. I do. After a press release like that, why would I not?

 

Although it doesn't explain your one-man campaign against Hornby in two other threads over the weekend before you saw this press release. I doubt anyone else as been as prolific with their posting on the topic. 

[Joseph_Pestell]

5 hours ago, jonnyuk said:

Given Hornby's struggles i wonder if they wyour retying anted to ensure everything made was allocated and sold so they no stock sitting on selves just in case, if your struggling would you want 20% of your stock sat in a warehouse just in case you had supply issues?

 

this is a question, i'm not taking a pop by the way

 

I think that your view is entirely reasonable and we would all support Hornby in this.

 

But how does that relate to destroying your retail network?

[GWR-fan]

In a hypothetical world company "A" awards a manufacturing contract to an overseas contractor,  company "B".  However,  company "B" insists that its inhouse design team have a greater involvement in developing the design and cad work for the proposed project.  Company "A" responds that it alone will retain all research,  design and cad work which leads to a disagreement between both companies,  leading to delayed production,  inability to meet production numbers and loss of face to company "B".   Is such an apparently hypothetical situation able to explain current circumstances? 

[Joseph_Pestell]

4 hours ago, adb968008 said:

Completely agree, exactly the same in my industry.

 

Though instead of ditching the sticks and stones, we outsource it to a wholesale reseller who’s more geared towards that and buys in volume from us.

 

 

 

 

 

Totally on the money. Anything I ordered from Jouef was minimum quantity 3.

 

Other Jouef stuff, I ordered from a wholesaler in Angers from whom I could order 1.

[Joseph_Pestell]

2 hours ago, Phil Parker said:

 

Or maybe to quote from the original press release:

 

"These retailers invariably have an effective website and mail order service"

 

 

Less "the absurdity of the Tier system which is surely breaking down in front of our eyes" and more that the grading is more complex than you think. I'd expect any discussion over the status of a shop to be in private between the owner and Hornby and based on more than a single photo on the web. Even if it is a single photo that makes me want to visit the shop very much!

 

So Hornby have a Grade A website??? Can't say that I had noticed.

[phil-b259]

16 minutes ago, GWR-fan said:

I had no idea who or what John Lewis is (or was) so had to Google some information.    This is what I found (quote:)  "Shop new season trends in homeware, furniture and fashion at John Lewis & Partners. Discover the latest beauty products and browse must-have electricals, ....."

 

Now little Johnny wants a trainset,  so where do we go to find Johnny his new toy train?  Do we go to a store selling homeware and beauty products,  or do we go to the local Aldi or Tesco to pick up a cheap trainset on special with no backup support,  or do we go to a model railway specialist who is able to advise and meet further hobby needs in the future?   A trainset purchase from a beauty or homeware store is a one off purchase and most likely to finish up with the trainset in the attic or the basement ignored once the initial enthusiasm has subsided.  Would an aspiring model railway enthusiast actually think to go to a beauty store for his first trainset?  If so then the purchase would have been along the lines of  "Oh,  look over there a toy trainset on sale.  I never would have thought to see toy trains on sale in John Lewis".   Such a purchase would be a spur of the moment decision with little Johnny over excited as to receiving a new toy.  Did he really want a toy trainset or was it just another toy?   Hornby got a sale of a trainset but did they convince a budding enthusiast into the hobby?  My opinion is hardly likely.

 

Well lots of people have!

 

And some of its customers actually like paying more for the personal service John Lewes cites as a distinctive feature of the business, pile it high sell it cheap is not a feature of their operation.

 

Its customers (and its food shop division - Waitrose) do not generally overlap with those who frequent the likes of Asda or Tesco (though they do occasionally shop at Aldi as some of its wines have been rated as best buys by Which)

 

As such I can easily see that for a certain section of society purchasing some Hornby products as a gift for a relative while in a John Lewes store is an entirely feasible proposition.

[Joseph_Pestell]

1 hour ago, 97406 said:

Still, Hornby must have a plan, 

 

Not much sign of it.

[phil-b259]

1 minute ago, Joseph_Pestell said:

 

Not much sign of it.

 

Hornby are hardly likely to release their confidential business plan for RMwebbers to approve any more than Tesco ask their clubcard holders if the boards business strategy sounds good.

 

The people who really matter are the ones holding the purse strings (or in the case of Hornby a lot of IOU notes) - namely THE BANKS AND SHAREHOLDERS!

 

Provided whatever plan Hornby have continues to generate profits to pay off the debit and start paying dividends they really couldn't give a toss what happens to model railway retailers or what we think.

 

That said if Hornby balls it up then scalps will be demanded - however as with many awkward situations the ability to hide management failings as part of the general Covid induced economic chaos means Hornbys management have a bit more wiggle room if it doesn't work out like they hoped.

[Joseph_Pestell]

29 minutes ago, Phil Parker said:

 

Although it doesn't explain your one-man campaign against Hornby in two other threads over the weekend before you saw this press release. I doubt anyone else as been as prolific with their posting on the topic. 

 

Phil,

 

First of all, thanks to you and Andy for getting Hornby to engage. In fairness, I am now in e-mail correspondence with them directly.

 

Am I to be critisized for being able to see this coming? I could have written that press release for them. It was soooo obvious.

 

As mentioned in those other threads, I've got the tee-shirt. This is how manufacturers / importers / commissioners treat the retailers.

 

If you had lost your business through this behaviour, you might feel the same way.

 

Joseph