I remember some years ago when Horizon Hobby bought out Athearn. It was a huge topic on these forums of how, why and what happened. The end result was that Walthers coiuld never sell Athearn products again. With that said, I was searching the web the other day looking for a particular Athearn locomotive and ran across numerous sellers. Then i got thinking, why is it that Walthers appears the only hobby store on earth than CANNOT sell Athearn products? Is there a law that bans certain manufactures from selling their products to certain distributors?
No law so far as I know. But Walthers is a distributer and Horizon Hobbies acts as the distributer for Athearn (and Roundhouse as well). I suppose the hobby store part of Walthers in Wisconsin could carry Athearn just like any other hobby store, but the economics of it precludes them from being a distributer for Athearn. And since they make more off their own distribution products, I would suspect that’s all they carry in their own store.
Paul
It’s quite easily explained. Walthers and Horizon are competitors as wholesale distributors and “manufacturers”. It’s generally considered bad form in the wide world of business to sell your competitor’s products.
Try buying brand new Ford Focus from a Chevy dealer some time, if only for the entertainment value of the coffee spraying out the salesman’s nose.
Andre
[:-^]
Oh, Contrare,
Here in our City we have Capital Buick GMC and Capital Ford right beside them and they have the same owner… one stop for either makes.
Johnboy out.
We have the same situation here in southern Ontario, where one company has dealerships for 22 different brands, many located adjacent to one another.
Bowser, which has its own product lines of rolling stock and locomotives, also offer the same from many different manufacturers/distributors, including Horizon and Walthers.
Wayne
First, the car business is not the best comparison since one person can own multiple dealerships. BUT, FORD would pull your dealership in a minute if you used your FORD building and infrastructure to sell a CHEVY from your other dealership next door…
Sometimes car manufacurers do allow “combined” dealerships with other manufacturers, but that requires special conditions. Generally each manufacturer “group” (FORD/LINCOLN), (DODGE/CHYSLER/RAM/JEEP), will have its own buildings/shop/etc, even at the “mega dealership”.
Second, Horizon “chooses” to be the sole distributor for all their products. Yes Walthers could buy Athearn from Horizon for their retail store just like any other retail operation does. But since they are also a manufacturer/distributor they simply choose to promote their own products, or other products they can purchase as a wholesaler.
But there is a history here, which makes the two companies not really interested in doing business with each other.
Back in the day, before Horizon owned Athearn, when Athearn was without question the largest supplier of HO plastic freight car kits, and Walthers was likely the largest distributor, all was well between them - until - Walthers bought Trains Miniature and went into the plastic freight car business themselves.
From that day on, long before the internet, Athearn products received less and less “page space” and quality of “promotion” in the Walthers catalog while Walthers own line of freight cars got fancy color layouts in the front of the catalog.
As someone who managed a hobby shop train department at the time, I can tell you all our regional distributors had more Athearn in stock then Walthers did…
This went on for years, the two big boys in a sort of cold war the customers did not know about.
Athearn had some distribution polices back then that did not help the situation. They willingly sold to anyone with a sale
I cannot say if Bowser has stopped selling to distributors. I think they still do. They are a distributor for less product lines than they once were. I have them trying to see if Horizon still has a particular early version challenger for December…
So Willy, would you pay full retail for Athearn just to be able to buy it from Walthers? Your local dealer can buy Athearn from Horizon and likely sells it at some sort of discount. Walthers would charge him more and he would not be able to discount it.
Forget anything you ever learned about volume pricing - very little of it applies to this business. There is a bottom price no matter how much you buy. And there is a “necessary” markup to make a profit - this is not Walmart.
There is no financial advantage for Horizon to sell Athearn to Walthers and no advantage for Walthers to sell it. Especially not in the internet/information age.
Sheldon
John, I’m sure they would, but I suspect that there is simply no need. What shop would not simply do business with Bowser directly - I know they are willing to sell to even the smallest ligit shops.
And, distributors who are not also manufacturers are nearly a dead issue…
Who is still a distributor in this business? Horizon, Walthers, Bowser, ConCor…
I know there are still a few others, but let’s face it, its dieing faster than the retail shops.
Sheldon
One more example to make sure people understrand:
Trainworld sells all brands at low prices.
Walthers is a manufacturer, distributor and a list price retailer.
Walthers sells Bachmann both retail and as a wholesaler.
Trainworld buys Walthers brand products from Walthers at “wholesale” price levels.
Trainworld and Walthers both buy Bachmann products from Bachmann at same “wholesale” price level.
So Walthers sells Bachmann to small dealers at higher “dealer” price levels.
So Trainworld would never buy Bachmann products from Walthers when they can get them cheaper direct from Bachmann. Walthers would charge Trainworld about the same price Trainworld is selling those Bachmann products for.
Sheldon
Yes, Bowser still sells to at least one distributor.
Atlas I believe still sells direct. Friend of mine whose retirement job is selling trains, mostly at train shows, has pretty much only Atlas now, since you have to be a brick and mortar store to buy from Walthers and many of the others.
–Randy
Sheldon–
There are according to my sales manager friend, about “6 or 7” big national distributors remaining, that so far as I know are not also manufacturers. Their computers are real time linked to the inventory of at least 4, plus Horizon, but they only see in stock items, not available reservations or pre-orders.
So to get me a challenger, they have to call for availability if not fully reserved…If fully reserved, I would have to go elsewhere.
John
So what? Dealerships are franchises. There’s nothing to stop a franchisee from owning multiple franchises from multiple companies. In any case, you can’t buy a Ford from Capital Buick nor a Buick from Capital Ford, which is precisely the point.They may have the same owner, but they’re separate entities.
Andre
My point exactly, there use to be 5-6 regional ones just here in the Mid Atlantic, and similar numbers in other major market regions.
Sheldon
Hi Sheldon–
I was not trying to refute anything…only post what I know to be true.
After others have gone the direct sales only approach, my friends at least briefly for a minute or two considered it, but so far have thought better of their relationship with their network, to not do that. Probably will not happen until some market forces would force that to occur. They believe in supporting the lhs not destroying…they said every lhs you lose, we lose future hobbyists in a 50 mile radius and nobody wants that.
John
Think of it this way…right now, the two biggest rail / model rail publishers are White River Productions and Kalmbach. You can’t buy back issues of Railroad Model Craftsman from the Kalmbach book store, because RMC is a White River publication; just like you can’t buy Great Model Railroads 2017 from White River’s website. Similarly, Walthers and Horizon Hobby are large model railroad distributors. Athearn is affiliated with Horizon Hobby, and so their products are sold through them. Marklin, on the other hand, has it’s products distributed in the US via Walthers, so they show in the Walthers catalogue.
BTW may be helpful to understand that the original purpose of the Walthers catalogue was to find out what was available, and then order it through your local hobby shop. It was later (IIRC) that Walthers (via Terminal Hobby Shop) began selling direct to modellers. (OK yes in the 1930’s Bill Walthers sold his 1st book directly, I’m talking about later when Walthers was an established company.)
As I recall, we couldn’t even buy Athearn products through Walthers before Horizon bought Athearn. It would probably be less expensive for the LHS business if they only had to deal with 1 distributor, not 2, as each probably requres some sort of minimum monthly business.
The hobby shop I worked at had 6 or 7 distributors including Walthers. Our biggest supplier was Cleveland Hobby Supply (now out of business) who had the best stock of Athearn cars and locomotives. But we bought from all of them along with buying from the manufacturers themselves for example Champ Decals, Karline Cars and Trucks, etc.
Rick Jesionowski
Very briefly after the Athearn/Horizon “dee-vorse” from Walthers, I recall that Athearn did supply specially painted F units for one of the then-new Walthers named trains. Then of course Walthers developed its own F units as part of its Proto/Life-Like acquisition and the separation was final and complete. My understanding is that is entirely Horizon’s decision, not Walthers’s. I’d be surprised to learn there are legal or anti-trust reasons why Walthers could not distribute Athearn if Horizon was willing.
And my recollection – supported by the Walthers catalogs in my collection – is that as long as they handled Athearn, Walthers gave them ample space in the catalog including to the extensive line of Athearn parts. I do and did a great deal of my regular LHS shopping at the Walthers showroom and I never had problems buying Athearn parts there. It did become a problem after the divorce because few hobby shops cared or care now to stock Athearn parts (or anyone else’s).
What I do recall was that originally the Walthers catalogs were pretty much purely alphabetical so that “A” (AHM, Athearn, and so on) came before “W” but eventually Walthers put their own stuff first under each topic be it locomotives, freight cars, structures, track, whatever. So Athearn was perhaps less prominent than before, but I do not recall that Athearn stuff was left out of the Walthers catalog as a consequence.
Dave Nelson