Don’t get me wrong. I love the idea of discounted trains up to 40 to 50 percent off of retail price but how do these dealers stay in business? I hate to see them raise prices or go out of business all together.
Simple: most of them don’t have high overhead costs, like a storefront and lots of employees. Couple those prices with larger bulk purchases of items from manufacturers, and you end up with lower item costs. Lower the item costs, and you move more product, giving them more profit through volume sales. Simple economics.
I’m not sure “most” of them is accurate. Internettrains.com is one, but trainworld, firsthobby and some of the others regularly mentioned here also have store fronts. The 'Net side adds some volume which perhaps allows them to buy at better discounts helping both sides of their operation. My LHS still sells at 20% discount even without a Net presence and I try to do most of my business there for the convenience and service. Sure I could save a few bucks if I spent alot of time searching the Net for all purchases, but that’s not what it’s all about for me.
Yes, the bigger discounts are nice, but my local hobby shop is very important to me because they are easier to get satifaction from in case of problems with an item. It has been there for me constantly since the 1950’s. To me that means more than just cheap prices.