Over the past few weeks, I’ve been watching “Buy It Now” listings on E-Bay, especially those posted by stores. Got to wondering…I know what the Lionel catalog shows as the ‘List’ price BUT what is the actual dealer cost? Any ideas? As always, many thanks.
PS. Without taking into account for marketing “loss-leaders”
Dealer’s cost is based on sales/orders and a target set by Lionel. After that I believe it is up to the dealer to set his price. That’s why the jumbo dealers can sell at a lower price than the LHS. If we support the local LHS his sales improve and hopefully his costs from Lionel go down and he can reflect that in his prices.
Miss Edna at Todd’s Train Depot is really a lot less than MSRP. She hits as close or almost as close as the mailorder guys. Her shipping is cheaper. The only way I can beat her prices is to bid on Choochoo Auctions on items and get them when the starting price is real low and no interest is shown. Now Tom’s in Raleigh/Cary is MSRP. I don’t buy from him. Ridiculous!!! Nice guy. He still sells because folks are not aware.
A LHS needs about a 40% mark-up to pay for the building, lights, etc. That is to break even. If they are competitive with a web-based seller on a $300 price, they make about $10 profit. Hardly the mark-up they need, so they need to make the money on the small stuff that you need.
Some LHS owners will not try to compete, so they want list for an item (about 30/40 percent mark-up) and you buy from the internet. That’s why they are going under at a rapid pace.
Dealer cost is determined by volume.
Roger B.; Chief Eagles; gvdobler; John L.: Thanks for the info. I can always count on the “guys-with-the-know”.
one of the LHS here not only charges list price…but charges shipping on anything you order as well. the other LHS here sells less then list , does not charge shipping, and at least with me, give me a 10% discount on top of his already lower then list price. both are the same size shops.
Another price factor is where the seller buys from. Large volume sellers can buy direct from the Mfg. If the seller has a low turnover he has to buy through a distributer and so his retail price must be higher to make a profit.
Round 30% to 40% would be my guess.
Keep in mind that it is expensive to carry a store. Throw in a small percentage for a fair profit and all is well.
Until the internet blows out the choo choo at prices far less than what the distributor is willing to sell to that store.