I am not on this forum everyday, so I may miss some news. I haven’t seen HO scale Scale Trains for awhile on places like MB Klein, Tony’s, Charles RO and Walthers. I see them advertise on this website, but I don’t see their products. Whats up with that?
willy6,
As part of their overall business practice, ScaleTrains would much rather you buy from them directly. In this way, they can cut out the middleman wholesaler like Walthers, MB Klein, etc. and retailers like your local hobby shop in order keep that money for themselves.
As an example, say something’s $100 MSRP. In yon olden days, a typical retail discount was the so-called 40-10-10. It’s when a retailer got 40% off the MSRP and would get an additional 10% off that price if they paid within 10 days. So that $100 item would cost a retailer $54 to purchase from the middleman if they paid on time. (This 40-10-10 is pretty much a thing of the past except for Bachmann; everyone else “short discounts” these days so instead of 40% off list price, a retailer may get 30% off).
The wholesaler would have purchased that same $100 item from the manufacturer at around 50% (+/-) off the MSRP. They don’t make much per item sold, but they make that up in volume. A retailer may only buy a dozen items but the wholesaler is selling thousands.
For ScaleTrains, if they sold the old conventional way to wholesalers and retailers, would only get about $50 (+/-) for that mythical $100 item. However, by selling directly to the consumer, they get it all. ScaleTrains usually is selling their items on their website at 20% off the MSRP, but then they can afford to do so because they’ll make $80 out of $100…which is significantly better than if they sold to Walthers, et al.
What Paul mentioned is true but leaves out the fact that ScaleTrains does sell though hobby shops and used to sell through MB Kleins but appearantly parted ways over business arrangements.
I suspect that Kleins wanted a bigger discount…
I suspect Scale Trains would be happy to loose all the retail outlets and be web only.
Discounting killed the distributors and required shops be big enough to by direct. Kleins was actually one of the earliest to offer EVERYTHING at 20% retail. Going way back, he bought most stuff direct from the manufacturers but used distributors to keep the shelves full in between big orders to the manufaturers.
Having worked in this business, I would not even consider opening a retail train store today without a big space, a really big pile of interest free capital, and a plan for a big web presence as well.
As for Scale Trains, really nice stuff from what I have seen. But, nothing I want, nothing in my era.
Sheldon
Its a smart business practice to do so. First, get your brand famous enough for people to know who you are, then cut out the middleman.
Granted, they may lose some potential customers since its now harder to “discover” scaletrains things physically in stores or train shows, but they get enough brand recognition from ads or simply fellow modelers asking the make and model of their scale trains loco.
It’s what Apple sorta does too, for ex you cant buy a new Iphone from Amazon.
Charles
That is not their strategy from what Shane has said. But it’s what cynical people seem to think.
riogrande5761,
Well, yes, ScaleTrains does sell direct to retailers. They have very strict rules on who they sell to, however. They could sell to more hobby shops but they don’t want to. IMHO, that’s because they would prefer to sell direct to consumers because that makes them the most profit. It only makes sense.
Selling to retailers is a calculated risk/reward equation for ST. By selling to retailers at all, they increase their visibility to the hobby at large and can get a quick big sales whenever they release a new product. Part of making money in this hobby is churning through product as fast as you can, so empty the warehouse ASAP and keep the money moving. However, every time they do sell to retailers they are losing potential income they would get from direct sales, but at least it’s not clogging up the warehouse with unsold inventory. They are walking a fine line.
To be fair, ST has never been shy about selling direct. They started with that and that’s been their business model from Day One. Now compare that to ExactRail. They started with the conventional wholesaler approach, then when they got famous, they cut them off and now only sell direct. This did not make hobby shops very happy.
Sheldon,
I agree; I wouldn’t want to get into model train retail right now, either. Trying to stock a store with what people would want to buy would be incredibly tough now compared to 40 years ago. Back then, people would buy generic models because that’s all there was. Today, people want to model a certain railroad…and it could be any of 200+ railroads. You’d have to hope that certain roads sell really well in your area; enough to be a regular money maker at any rate.
Worse, there’s just so much product out there. How could one possibly stock it all? Athearn made about 5 new engines in the 1980s. They ca
That’s a two edged sword. Manufacturers don’t make certain roadnames so they don’t get stuck with inventory so, as a result, they forego sales.
In my case, I model Dearborn Station in Chicago. The owner of the trackage was the Chicago & Western Indiana (C&WI). Five railroads owned the station - - Erie, Wabash, Grand Trunk Western (GTW), Chicago & Eastern Illinois (C&EI), and Monon.
It is all but impossible to find locomotives or passenger cars for those railroads, so I buy nothing whereas if the equipment were available, I would buy plenty of it.
Rich
So here is the question, would you buy a generic car with a correct paint scheme for those less popular roads?
Sheldon
Define “generic” as it relates to passenger cars.
Rich
Window arrangements and/or exact car types not correct for that railroad. Or possibly even shorter cars like the Con Cor and Athearn cars.
Sheldon
Window arrangments and/or exact car types need not be correct for that railroad, but no shorties allowed on my layout.
Rich
One of my greatest regrets in my 17 years of scale modeling was my failure to buy a string of Monon streamlined coaches from Rapido after I lobbied Jason to build them. I procrastinated about the price which was pretty expensive. The Monon coaches were generic, but the paint scheme was right. So, now, I am stuck with a consist of IHC heavyweight passenger cars which I hate.
I know that I am being unrealistic but I yearn for a manufacturer to produce a line of generic full size coach cars that can be ordered in any paint scheme. How hard can that be?
Rich
I’m ready for whatever comments this draws, but here goes.
Today there seem to be a lot of modelers who will do without rather than run something incorrect? I don’t get it either.
Passenger cars were built in small custom order batches, except for commuter coaches and basic head end equipment very few were EXACTLY the same as what some other railroad bought.
There is no practical way for model manufacturers to make correct models of all these cars.
A number of the ones they do now are just “close”. It works like this, Pullman built a car, they they used a core plan and frame, but altered the interior or other minor features for several different railroads.
The differences are small and subtle, the model company makes one version correct for some name train they are doing. Then they paint it for the other roadnames that are VERY close to the same car. Few people know or notice because the documentation may not even be readily available.
Sure, that is better than just making “generic” cars and putting every roadname on them.
But it highlights the problem of the impossible number of different prototype cars to be modeled.
AND THEN, the railroads constantly rebuilt, modified and upgraded these things. All this multiplied by 400 or major railroad
This is how pre-order works.
OK, we have had this discussion before - forget about generic shorties, not all passenger cars are the same length…
RPO’s were typically 60’ as per the post office offical plan. Most baggage cars were 70’ +/-, coaches, even streamlined ones came in a long list of lengths…
So back in the day, before IHC, AHM/Rivarossi made streamlined and heavyweight cars in a wide list of roadnames. Each car was an accurate car, just not for all the roadnames offered.
But just like ConCor and their wide roadname selection, those days are gone. And none of those cars had the detail of todays high end RTR stuff.
So this whole thing leaves the really dedicated modeler to start kit bashing, painting and decaling.
I do that with my generic shorties just to get a reasonabl
I believe in N scale some lines of passenger cars are still offered as generic diners, combines, coaches, etc. in all kinds of “good enough” paint schemes.
It seems the HO modelers are more demanding for accuracy, and the manufacturers are trying to meet this demand.
-Kevin
Very true. N scale seems to still have lots of “close enough” passenger cars.
HO has seen a few new “close enough” cars recently as some manufacturers are responding to the “other customers” who are railing against “museum quality” prices.
Bachmann came out with few new cars, and brought back a few olders ones. But the roadname choices are still limited to the “popular” roads.
The other choice for real accuracy is brass. Some quick math tells me that if I replaced my current generic plastic fleet with current production brass, it would cost more than the two late model automobiles in my garage… Which might be more than I spent on model trains in my lifetime…
Sometimes the enemy of good, is better.
Sheldon