My hobbie shop told me the other day they will not be stocking any new lionel stuff because lionel 2010 pricing and how crazy it is. my hobbie shop said they would not be able to make any money with out ripping off the consumer. They will be only mth and william bachman.
In the past, I have come across similar explanations from train dealers. Some talking about Lionel, others talking about MTH, etc. Not going to get into a discussion for the different companies, but enough to say, different dealers have differing opinions and experiences. I know both Lionel and RMT have had increases this past year though.
dennis
Personally I’d ask him well I guess its Okay that Williams by Bachmann has had at least 2 price increases since they took it over and no longer offer a discount to its club members but oh yeah that means more for you. I forgot that . and I believe MTH has also in past couple years .
personally there all cranking up the price bottom line is he probably isn’t getting as good of profit from Lionel than the other and he knows he can’t compete with some of the bigger hobby shops on line like Charles Ro, trainz, Nicholas Smiths trains , ect,ect,ect.
Just so folks know, it isn’t only the MSRP, but could likely have more to do with distributor and wholesale pricing.
Last I knew, Lionel basically had one set wholesale percentage which can be lowered a little depending on how much a dealer orders and how quickly he pays for the merchandise. Also, all the various train companies have their own distributors and wholesalers. Meaning sometimes a small hobby shop might have to deal with several distributors to carry every product line they would like. Last I knew Lionel’s wholesale average was around 25-27% off list. In other words, the small dealer pays $30 for a $40 list box car, plus shipping and interest. Not much of a marigin for a small dealer.
MTH has a three-tiered wholesale pricing system, meaning some products are available at a better price point for dealers. I don’t know how Bachmann operates, but they are a much bigger company with a more diverse product line in the various scales. So a small hobby shop that carries N and HO scales selling the Bachmann brand can easily add on the Williams by Bachmann products and maybe get a better price advantage since he is ordering more inventory.
If that dealer has to go to another wholesale company to get Lionel product - a wholesaler who might not carry as a diverse a line, or might not offer the same price breaks on HO and N scaqle products - then that dealer might pay a little more since he is not ordering as much from that distributor.
The suggested retail price can go as high as the sky, but what really matters is the price point the dealer can get the product for. The lower his wholesale price, the more likely he can offer a deeper discount off the list and still make a profit. That was one of the big advantages of the original Industrial Rail line: the wholesale price was nearly 50% off list, meaning small dealers could still offer a good discount and make profit.
The LCCA that deals directly with Lionel stated a couple weeks ago that they will be unable to continue the Post War Reproduction sets after this years Burlington set due to Lionel pricing that would be prohibitive to the clubs membership.
I can only tell you this from talking with the hobby shop people in my area of Florida; one said he can order stuff from Lionel through a vendor in order to get what he wants, like a special order. Same person told me that most distributors want you to place at least a $500.00 order before any kind of discount can be put into play, he was talking about Gargraves track.
Another hobby shop owner I knew who is now out of business said that Lionel wanted him to spend $5000.00 before they would ship an order, also he couldn’t pick what they sent him. Like if Lionel wanted to send him a $1200.00 engine he had to take it in the order, or if Lionel wanted to send him a shipment primarly of Fastrac he had to take it.
Bachmann discontinued giving a discount on their products, and stopped the small time Williams distributors as well. For Williams by Bachmann you have to deal with either a nice sized hobby shop or order it from Bachmann on their website.
[#offtopic] I have the website address for ordering some Plasticville parts from a parts dealer, independant of Bachmann. www.tandemassociates.com/plasticvilleparts
Don’t know how it is for other companies.
Lee F.