Heljan pricing - 15% discount rule

[Trains4U]

With immediate effect, Heljan are introducing a 15% discount rule, alongside Bachmann and Dapol.

 

 

Retailers are being asked to limit discounting to no more than 15% of MSRP for the first 6 weeks of release.

 

 

Hopefully this will level the field a bit for smaller retailers.

Edited September 11, 2018 by Trains4U

[Great Western]

Asked or required?

 

There very different meanings open to interpretation, if say a retailer decided to continue to offer a higher discount what could Heljan do?

[centraltrains]

Such protectionism is this marketplace!

[Trains4U]

Its a request, but suggestions from other schemes would indicate that your supplies may be disrupted for the first 6 weeks.    And if an item is sold out to other retailers, allocations may get "Lost"

 

Whilst it is illegal to fix prices, there are loopholes and grey areas that leave various options open to suppliers that means it is better to follow the request.

 

To be honest, I'm  not complaining as it encourages local purchases, improves margins and and has hugely reduced the number of "Can you match Hattons/Tower" queries

Edited September 11, 2018 by Trains4U

[Andy Y]

Such protectionism is this marketplace!

 

Do you want local model shops to be viable or not?

[Trains4U]

Tower models effectively had everyone running on a 8-10% margin on O gauge.  

 

a £500 sale of an O gauge loco had less profitability than 50 pots of paint.

 

I welcome this as:

a) buyers are less likely to assume that Tower/Hattons (Enter favourite discounter here) are the cheapest.  therefore there is a greater chance of buying from a smaller enterprise, the price differential is gone.

b) there's a little more profit for everyone.   (Yes, the discounters need to sell far fewer units to get the same profit)   - and please don't read "Profit = greed"   - Profit = investment.  how many crowdfunded models would have  or may not see the light of day if not for retailer investment?

[Godfrey Glyn]

I totally agree with Gareth on this. Your local shop cannot take the risk of ordering one unless s/he has a order from a customer. A big item such as an O gauge loco with a RRP of £600 is a big investment for your local model shop and the risk is too high that s/he will end up with a large value loco sitting on the shelf for a long time tying up much needed capital. By limiting the discount there is far more chance that your local shop will take a risk and stock the loco and that it will sell. I suspect that Heljan have worked out that they will sell more O gauge locos if they prevent huge discounting by a few shops.

If I as a customer am thinking of buying one I certainly want to see it before offering up the significant amount of money involved.

 

all the best

 

Godfrey

[Bilbo]

The problem here surely is that the big boys can buy what they like because they have the clout and wait the 6 -8 weeks to apply whatever discount they like. People know this will happen so wait. That is unless they are the nut cases who wanted it yesterday  !!!

[Great Western]

Tower have shocking customer service, their view they are doing you a favour in allowing you to buy from them.

[bike2steam]

With immediate effect, Heljan are introducing a 15% discount rule, alongside Bachmann and Dapol.

 

 

Retailers are being asked to limit discounting to no more than 15% of MSRP for the first 6 weeks of release.

 

 

Hopefully this will level the field a bit for smaller retailers.

 

Ah reminds me of the days a few decades ago when a certain manufacturer claimed they were only dealing with those that had retail premises only, and we knew Toy Fair only sellers were driving their cars to the 'certain manufacturers' warehouse and filling them with what ever they wanted!!

[mdvle]

The problem here surely is that the big boys can buy what they like because they have the clout and wait the 6 -8 weeks to apply whatever discount they like. People know this will happen so wait. That is unless they are the nut cases who wanted it yesterday  !!!

 

But you are then rolling the dice that there will still be stock in 6 to 8 weeks, and that the stock available matches the livery and / or number you want.

 

You are also assuming that they big discount will appear in 6 to 8 weeks, which it may not given that the big initial demand will have gone and thus there is less ability to make a profit on the big discount as the volume will not be there, the retailer will have had the product on the store books for 6 to 8 weeks already, and the ability to corner the market is gone.

[RedgateModels]

Tower have shocking customer service, their view they are doing you a favour in allowing you to buy from them.

 

I made an effort to visit their shop once, only once mind ......

[John Tomlinson]

Tower have shocking customer service, their view they are doing you a favour in allowing you to buy from them.

 

Really? I have to say this is not my experience, either on personal visits to Blackpool, or by 'phone orders.

 

No connection other than as a very satisfied customer.

 

John.

[John Tomlinson]

Presumably if you are a price sensitive customer, there's nothing to stop you waiting beyond the initial period of limited discounts, to then see how the market goes.

 

It's only the people who have to have it now that potentially suffer, and if that's a cost of helping the smaller guys a bit then fine by me!

 

John.

[Great Western]

Really? I have to say this is not my experience, either on personal visits to Blackpool, or by 'phone orders.

 

No connection other than as a very satisfied customer.

 

John.

Like most things in life when things are going well the service you get is generally good, but when it goes wrong.....

[adb968008]

Ah reminds me of the days a few decades ago when a certain manufacturer claimed they were only dealing with those that had retail premises only, and we knew Toy Fair only sellers were driving their cars to the 'certain manufacturers' warehouse and filling them with what ever they wanted!!

Ah yes, i remember that warehouse, I just had a quick look and it’s still there, still offering to the trade so I’ve modernized your quote for you...

 

Ah reminds me of these current days when a certain manufacturer claimed they were only dealing with those that had retail premises only, and we knew Amazon/Ebay only sellers are ordering online to the 'certain manufacturers' warehouse and having delivered what ever they wanted!!

:-) Edited September 11, 2018 by adb968008

[Legend]

Was it typical to get a discount of more than 15% in the first 6 weeks anyway? So I don't think this announcement will set the fires burning .   If its a new model surely you would want to sell it at the highest price you can , especially if you think its going to be sought after .  In general though I am surprised companies get away with policies such as this , although as Gareth points out its a grey area and although and your supplies could be disrupted . A bit ominous I would have thought.

Edited September 11, 2018 by Legend

[centraltrains]

Do you want local model shops to be viable or not?

 

Was only an observation. I do wish I had a local model shop.

[Andy Y]

Was only an observation. I do wish I had a local model shop.

 

I'd say it was more of an accusation than an observation. I'm sure there may have been a model shop close to you in years gone by (but maybe they couldn't compete with deep discounting) and now you're left wishing you had one.

[Trains4U]

Was it typical to get a discount of more than 15% in the first 6 weeks anyway? So I don't think this announcement will set the fires burning .   If its a new model surely you would want to sell it at the highest price you can , especially if you think its going to be sought after .  In general though I am surprised companies get away with policies such as this , although as Gareth points out its a grey area and although and your supplies could be disrupted . A bit ominous I would have thought.

 

 

Tower are/were consistently 20/21% below MSRP

Hattons 18-20%

 

Margins on Heljan are not as generous as other manufacturers, leaving a very small margin on which to trade.  Thereby excluding many retailers  who don't have the sales volume to support the margin.

 

 

If I were a retailer new to O gauge, I might buy 1 loco and hope to turn it into a sale.      I'd have to sell 9 Heljan O gauge locos at the current competing margins before the initial investment in purchasing that first loco has paid off.

 

With the new scheme, I only need sell 4.5 locos.   Meaning I'm able to re-invest sooner, whilst also being more likely to make the sale in the first place.

[Hippo]

Was it typical to get a discount of more than 15% in the first 6 weeks anyway? So I don't think this announcement will set the fires burning .   If its a new model surely you would want to sell it at the highest price you can , especially if you think its going to be sought after .  In general though I am surprised companies get away with policies such as this , although as Gareth points out its a grey area and although and your supplies could be disrupted . A bit ominous I would have thought.

 

The RRP for the class 07 is £139.00

 

 

Rails have been doing them for £105 since day, approx. 25% off the RRP.  £6.00 cheaper than Hattons and I though Hattons were cheap !

 

Owen

P.s. Hope my maths are right

[centraltrains]

I'd say it was more of an accusation than an observation. I'm sure there may have been a model shop close to you in years gone by (but maybe they couldn't compete with deep discounting) and now you're left wishing you had one.

 

What arguments are there for it not being a protection based decision? As far as I can see it is perhaps a pointless first post from me stating an "obvious" fact, but I would be very interested in hearing why it's not that type of move/decision. I didn't say there was anything wrong with protectionism, but in retrospect the starting word of "such" made it more of an opinion type claim?

 

I'm not aware of any, my father only ever mentions model railway items being available in the market in the city so I am inclined to guess at not.

 

I'm the type to Google until I find the absolute lowest price, which often ends up being a random local model shop of another area. Is there much wrong with wanting the lowest possible price? 

[Andy Y]

 Is there much wrong with wanting the lowest possible price? 

 

None if you don't want a shop to call in and buy sundries when you want or need them. I'd say my local (deservedly) makes more money from me calling in every few weeks to stock up with paint, brushes, tools and anything else that takes my fancy than if I beat him down on a price for a loco.

 

Where do you live then?

 

I know of a few shops that haven't bothered stocking Heljan as the margins have been small and the risk of being substantially undercut high so hopefully this will mean that Heljan products will see more stockists.

[Trains4U]

The bigger concern for me is the dumping of stock on one or two of the larger retailers, without offering them out on a more general basis.

 

One or two (Who advertise prominently on here) are selling Heljan O gauge wagons and locos at prices lower than cost.

Some of these items being less than 6 months old when pushed out.

 

People assume that we are just being tight when I refuse to sell a loco at an £80 loss.

 

That is where I get frustrated.  (Perhaps a topic for Ben to pick up?)

[Trains4U]

Just to add - we have been offered some items at sale prices,  but there are also lots that haven't.