Hornby cuts model shops' allocations of items due summer 2022

[Clearwater]

1 hour ago, spamcan61 said:

I recall Simon Kohler has stated on more than one occasion that he wants Hornby (overall, not necessarily direct only)  to be a 'one stop shop' for all buyers' toy train needs, but I question the financial sense of having large quantities of low value, probably low margin, sales items. Last time I bought a catalogue, 2008 IIRC (peak Hornby?) the included price list ran to more than 8 sides of A4 in a pretty small font, that struck me as being an awful lot of items to manage profitably.

 

If memory serves, didn't Davies, when he came on board as CEO, make a similar comment that there were too many different product lines?

 

[Pmorgancym]

Maybe the Railroad/scenic stuff to the shops, and sell the premium stuff only direct?  Rebrand railroad as Hornby, and the premium as Dublo or maybe desecrate the Bassett Lowke  name again....

[Phil Parker]

2 hours ago, jjb1970 said:

I guess I should declare an interest in saying all my model trains come via online sales, although there are several excellent model kit shops for paints, adhesives, tools etc I can visit any trains come via the mail. 

 

I think you are a very typical model railway customer. The problem with this is that the excellent model shops will need to shift some big-ticket items to remain viable. People can witter on about customer service all they like, but the UK customer cares about price above all else. If any company decides to consistently undercut the shops, then those shops will disappear. Arguably, this solves the problem.

 

There is another question - does Hornby need to sell track, pins, paint etc, or should they focus on those who just buy the boxes to stuff in a cupboard? Presumably, if they do this via the web, this maximises the profit, and if they can discourage people from actually modelling, or even running the locos, there are no worries about that expensive after-sales service.

[Helmdon]

7 minutes ago, Phil Parker said:

 

I think you are a very typical model railway customer. The problem with this is that the excellent model shops will need to shift some big-ticket items to remain viable. People can witter on about customer service all they like, but the UK customer cares about price above all else. If any company decides to consistently undercut the shops, then those shops will disappear. Arguably, this solves the problem.

 

There is another question - does Hornby need to sell track, pins, paint etc, or should they focus on those who just buy the boxes to stuff in a cupboard? Presumably, if they do this via the web, this maximises the profit, and if they can discourage people from actually modelling, or even running the locos, there are no worries about that expensive after-sales service.

 

Yes and no - I tend to buy online because I live in the middle of nowhere, but I'm pretty discriminating on where I buy online *from*

 

- second hand locos, Hattons because I trust them for second hand (and more importantly I trust their descriptions of condition when I'm over 100 miles away and buying unseen)

 

- new locos and rolling stock, Derails, because of the customer service and because they test things....

 

Rails/Hattons/Kernow for exclusives

 

etc.

 

Obviously there are many options on line, and people will have their own preferences and relationships, but I'm very sure that I'm buying from Derails on customer service in particular, and I have tried - obviously I'm not going to name them - cheap options who were hard work to deal with.

Edited July 8, 2022 by Helmdon

[jjb1970]

3 minutes ago, Phil Parker said:

 

I think you are a very typical model railway customer. The problem with this is that the excellent model shops will need to shift some big-ticket items to remain viable. People can witter on about customer service all they like, but the UK customer cares about price above all else. If any company decides to consistently undercut the shops, then those shops will disappear. Arguably, this solves the problem.

 

There is another question - does Hornby need to sell track, pins, paint etc, or should they focus on those who just buy the boxes to stuff in a cupboard? Presumably, if they do this via the web, this maximises the profit, and if they can discourage people from actually modelling, or even running the locos, there are no worries about that expensive after-sales service.

 

In fairness I would prefer to buy from shops, for non-railway purchases my spending is a mix of physical shopping and on-line. However for model trains it's a non-starter as it's a long trip to visit a model train shop. There's a couple of shops that sell model trains nearby but stock levels are very basic (a handful of models seemingly picked at random) and prices are very high. So for me online is not really an option.

[The Stationmaster]

3 hours ago, Mike Harvey said:

I believe that the Corgi direct sale operation was contracted out for a very long time using the same contractors as Oxford Diecast in Southampton. Oxford now carry out their own mail-order operation, which seems to be efficient (speed of dispatch, packaging, updates on shipments) and has the scope to embrace Corgi Diecast mail order.

Which helps explain why the reps were always badgering retailers to take slow moving stuff like platform sections and platform ramps because such things were presumably sitting in the warehouse costing the company money.  Retailers won't take the chaff of slow moving, low value, items unless they also get 'the grain' - the new models and big ticket items which draw in a lot of their customers especially when they can increasingly get those from other 'manufacturers'.

 

Thinking further about Clearwater's comments some more numbers might help show what he means.  At one point today the stock market was valuing Hornby at £50 million give or take a few tens of thousands.  At financial year end it held £16,46 million in  inventory and just over £4 million in cash and valued its total equity at £43.1 million.   That means that there is an awful lot of value in there which might, or might not, cost a lot of money to secure if  it were offered in whole or in part for sale for whatever reason.

[darrel]

I have to buy online as my nearest model railway shop is 73 miles away. The second nearest is 120 miles away. 

It's not like the old days when I had 2 shops in my town selling model railways and 4 shops 24 miles away in my nearest city.

One new shop opened a few years ago but Hornby would not supply him unless he had been open for a certain number of years. Therefore he didn't have much to sell and went out of business.

Now if I order a loco from one of the big retailers I have to pay postage, I don't mind that. But if I want to buy a small tin of humbrol paint i have to pay the same amount of postage, which is more than the cost of the tin of paint. 

If I'm buying direct from Hornby it costs more for whatever item I'm buying. Compared to buying it online from a model shop. 

I get why Hornby want to sell directly to the public, more profit. But it should not mean we have to pay more. Nor should it be to the detriment of their big customers like Hattons or Rails of Sheffield. 

[Gilbert]

1 hour ago, Helmdon said:

 

- new locos and rolling stock, Derails, because of the customer service and because they test things....

Obviously there are many options on line, and people will have their own preferences and relationships, but I'm very sure that I'm buying from Derails on customer service in particular, and I have tried - obviously I'm not going to name them - cheap options who were hard work to deal with.

I do buy on line but I  use Derails for the reasons stated - plus they are a well stocked shop - and always check them first for most small orders - a. to support them and b. their post deal is very good. They are almost my local shop (35 miles) and I have a pre-order loco due whch I'll probably drive over and pick up....

Chris

[adb968008]

7 hours ago, The Stationmaster said:

 

 

…that brand would have a saleable value - probably to a Chinese purchaser - but it would only fetch what someone is willing to pay.

I’d maybe look at Companies House filings, they give a good state of who can claim what in the event of the unexpected. Auditors would then pickover the rest.

 

Looking at k’nex is an example of what can happen if things unexpectedly unravel overnight… one day they came to the office to find its stock, toolings and brands were no longer their own, but the liabilities still were.
 

https://www.plasticsnews.com/article/20180212/NEWS/180219984/k-nex-brands-sold-to-florida-based-toy-company

 

Edited July 8, 2022 by adb968008

[Neil]

3 hours ago, jjb1970 said:

...l. I guess I should declare an interest in saying all my model trains come via online sales, although there are several excellent model kit shops for paints, adhesives, tools etc I can visit any trains come via the mail. 

.....

1 hour ago, Phil Parker said:

 

I think you are a very typical model railway customer. The problem with this is that the excellent model shops will need to shift some big-ticket items to remain viable. People can witter on about customer service all they like, but the UK customer cares about price above all else. If any company decides to consistently undercut the shops, then those shops will disappear. Arguably, this solves the problem.

 

 

It's possible to use on line sales for big ticket items and support model shops. I now live in mid Wales, a good seventy mile round trip from my nearest model shop so I often buy mail order, but I do this using the model shop in my old home town of York (Monk Bar Models). It's a brilliant shop, I'm always welcomed when I visit on trips back to see family, I find that it's rare that I'll pay slightly more than the box shifters and I know that stuff will be checked before being sent out.

[Delta_Who]

I keep seeing peope cite Amazon as competition... but (at least in the UK), the Amazon Hornby offerings are rather dreadful.

[Robin Brasher]

 

Rails have remained viable without selling any Hornby items so perhaps that is a way ahead for other retailers.

 

 

 

 

 

 

 

 

 

 

r

[JohnR]

1 minute ago, Robin Brasher said:

 

Rails have remained viable without selling any Hornby items so perhaps that is a way ahead for other retailers.

 

 

I think their size helps. A smaller model shop might not be able to replicate that. 

[2E Sub Shed]

3 minutes ago, JohnR said:

 

I think their size helps. A smaller model shop might not be able to replicate that. 

Rails & Hattons also have a large 2nd hand trade, which must have reasonable margins for them (see eBay madness thread), a lot of  small model railway shops I have visited have said they do not want to trade in 2nd Hand pre-loved models.

Edited July 8, 2022 by 2E Sub Shed
Missed word.

[JohnR]

Just now, 2E Sub Shed said:

Rails & Hattons also have a large 2nd hand trade, which must have reasonable margins for them (see eBay madness thread), a lot of  small shops I have visited have said they do not want to trade in 2nd Hand pre-loved models.

 

Hattons leverage their 2nd hand very well. Someone visiting their website and searching for, say, a Class 37, will be presented with the pre-owned as well as the new. Rails have gone down the route of ebay for theirs, again putting the stock in front of a large audience when searches are made for items. 

[adb968008]

12 minutes ago, Delta_Who said:

I keep seeing peope cite Amazon as competition... but (at least in the UK), the Amazon Hornby offerings are rather dreadful.

It would take amazon just a few days to change that, and probably starve off many model shops doing so. However they obviously do not see it as a worthwhile investment of time for the return.

 

They do however turn up some quite good deals every now and again.

 

 

[adb968008]

11 minutes ago, 2E Sub Shed said:

Rails & Hattons also have a large 2nd hand trade, which must have reasonable margins for them (see eBay madness thread), a lot of  small model railway shops I have visited have said they do not want to trade in 2nd Hand pre-loved models.

Why would they, in the old days a shop window, or a newspaper,  was the the place to buy it, and retailers did good trade.
However online you can cut out the middle man and customers across the world can see whats on offer.

 

Smaller retailers might do well however to up their service offerings, on things like spares and / or broker selling online, rather than buying, holding stock and selling.

 

Plenty of book dealers have gone to the wall holding huge amounts of valuable stock that hugely devalued.

[Dunsignalling]

26 minutes ago, JohnR said:

 

I think their size helps. A smaller model shop might not be able to replicate that. 

No, but a group coming together as a co-operative probably could.

 

Nowadays, model shops are, in most parts of the UK, sufficiently far apart that they aren't in competition with one another.

 

John  

Edited July 8, 2022 by Dunsignalling

[Helmdon]

20 minutes ago, JohnR said:

 

Hattons leverage their 2nd hand very well. Someone visiting their website and searching for, say, a Class 37, will be presented with the pre-owned as well as the new. Rails have gone down the route of ebay for theirs, again putting the stock in front of a large audience when searches are made for items. 

quite - and, rightly or wrongly, I trust both of them (not had a bad experience yet) for second hand. And were in an era where a lot of second hand is quite good...

[JohnR]

23 minutes ago, Dunsignalling said:

No, but a group coming together as a co-operative probably could.

 

Nowadays, model shops are, in most parts of the UK, sufficiently far apart that they aren't in competition with one another.

 

John  

 

I think something along the lines of the Toymaster model could work quite well. 

[Jonboy]

44 minutes ago, adb968008 said:

It would take amazon just a few days to change that, and probably starve off many model shops doing so. However they obviously do not see it as a worthwhile investment of time for the return.

Amazon actually make the suppliers do a hell of a lot of the work in listing items, to upload a new product the spreadsheet template has around 100 columns of data of which around a quarter are mandatory.

The more you complete the better the listing. Then you have to submit images to their specifications and named in their preferred format…then anyone else that sells it reasonably legitimately can piggyback off the suppliers efforts…

[JohnR]

48 minutes ago, Jonboy said:

Amazon actually make the suppliers do a hell of a lot of the work in listing items, to upload a new product the spreadsheet template has around 100 columns of data of which around a quarter are mandatory.

The more you complete the better the listing. Then you have to submit images to their specifications and named in their preferred format…then anyone else that sells it reasonably legitimately can piggyback off the suppliers efforts…

I believe the Competition Market Authority has just launched an investigation into their listings practices. 

[Dunsignalling]

12 minutes ago, JohnR said:

I believe the Competition Market Authority has just launched an investigation into their listings practices. 

I always scroll down through at least three pages of results when searching Amazon. Especially with books, you can often find the same thing for half the money the vendors on page one are asking.

[Jonboy]

20 minutes ago, JohnR said:

I believe the Competition Market Authority has just launched an investigation into their listings practices. 

I hope not, it’s complex enough as it is and hearing those fateful words “I am from the Government and here to help” do not inspire confidence…

[jjb1970]

10 hours ago, darrel said:

I have to buy online as my nearest model railway shop is 73 miles away. The second nearest is 120 miles away. 

It's not like the old days when I had 2 shops in my town selling model railways and 4 shops 24 miles away in my nearest city.

One new shop opened a few years ago but Hornby would not supply him unless he had been open for a certain number of years. Therefore he didn't have much to sell and went out of business.

Now if I order a loco from one of the big retailers I have to pay postage, I don't mind that. But if I want to buy a small tin of humbrol paint i have to pay the same amount of postage, which is more than the cost of the tin of paint. 

If I'm buying direct from Hornby it costs more for whatever item I'm buying. Compared to buying it online from a model shop. 

I get why Hornby want to sell directly to the public, more profit. But it should not mean we have to pay more. Nor should it be to the detriment of their big customers like Hattons or Rails of Sheffield. 

 

In my case it's a long haul flight. We are having a holiday in England in August when I hope to visit a model shop or two but it would be a bit selfish of me to turn a family holiday into a model shop expedition. I will be flying back for meetings as things return to normal but I don't expect to have time to get to model shops. So I really do not have a viable alternative to on-line shopping for trains.