For consumers who deal every day with the difference between list prices and sales prices on all kinds of items, some people choose to be remarkably dense about Walthers. Maybe they just want something to complain about.
The answer has been posted already in this thread. The Walthers catalog prints manufacturer’s suggested retail prices (MSRP). They expect that you will buy the items cheaper elsewhere from their primary customers: local hobby shops and on-line hobby shops. This insures that hobby shops can make some profit: they buy from Walthers at a discount from MSRP, mark the item up a little or a lot, and then offer it to you. Printing only MSRP in the catalog keeps Walthers from competing with its primary customers.
This is also true for the items Walthers manufactures. Again, the idea is to make it more appealing for the customer to buy from a retailer, that is, hobby shop (on-line or local), than to buy from Walthers directly. Otherwise, Walthers could put all the local hobby shops and most of the on-line sellers out of business overnight by selling directly for less. But they don’t because they function primarily as a distributor, not a retailer. Good for Walthers, good for the retailers.
If anyone is going to put up naive polls like this in the future, they should add as one of the responses: “I just don’t understand economics”
Point taken, understood and agreed with. What I think has caused a rash of these type of threads (one started by me several months back) is that the prices of P2K locomotives and rolling stock have increased significantly in the last couple of years. Initially I felt that Walthers had really pumped up the price, but I was shown that the price surge happened before Walthers purchased the line. However, I think that there are many out there that believe that Walthers was responsible. Of course no-one has to pay Walthers MSRP. But since MSRP is a lot
And probably one of the reasons why eBay listings are so popular today too! Some auctions $$ are not a good deal, but most are better than the MSRP even with shipping!
alco_fan,Now,Let’s look at it in a different light…What if there was NO deep on line discounters .Would we be happy to pay full MSRP and say its: Good for Walthers, good for the retailers.Oddly I think not unless we are the one standing on the other side of the counter…
Last month I was at a local train show and notice the prices was at or near full MSRP and was being pass over…The only good prices I seen was on Athearn,Accurail and Atlas use cars.May have been some use Bowser there as well.
I just went to a large LHS here in LA and was totally shocked at the prices they were asking for. Now I do large scale, which Walthers doesnt do much of (they dropped distributing LGB a couple years ago). I went looking to see what they were asking for an LGB Forney, which I have seen listed at several on-line discounter stores for as low as $275, I walked in and my jaw just dropped to the floor when I saw that they were asking over $400 dollars for the same engine. A newly issued Genesis P42 thats been averaging around $300 on-line was $500+ there. Now I know they have to make a profit but it seamed to me to be insane to be asking full retail asking price when the competition can offer the same thing for almost 1/2 the price. Now I can also go to another LHS I know of and buy both these engines at the same lower price, and this is from a mom-and-pop LHS where the service is just as good even if the store is not so froo-froo-n-fancy.
My point is that Walthers, aside from their propreitary items, almost everything else in their catalog if you really look can be found elsewhere for a lot less. Is a company like Walthers eventually going to either be forced to change its business model to be more competitve to these on-line discounters or go under? Is the LHS eventually doomed if they do not include competitive on-line sales services ?
vsmith,Exactly! If asked I bet the owner of that shop would have no kind words for on line deep discounters or e-bay which I am sure is hurting his sales.
I cringe the other day at the full MRSP of a Bachmann N Scale 2-8-0 at a LHS…$140.00!
All I have to say is thank goodness for the on line deep discounters.[:D]
Plastic is made from oil. The ships that bring these goodies from China (or where-ever) burn oil. The trains that transport from the docks to the distributors burn oil. The planes or trucks that deliver goods from the distributors to your LHS or your door burn oil. Do you see a pattern there?
Bob, the outrageous rise in the price of model railroad products started about 8 years ago, long before there was any claimed serious shortage of oil or its byproducts. The manufacturers understand that they have a certain fraction of hobbyists running scared who will buy limited run items at any price for fear they will otherwise miss out. Until that mentallity changes, expect to see prices go ever higher…regardless of what oil does.
EVERYONE wants to make a profit.
(If they don’t they go out of business).
When they go out of business, you won’t be able to find product to buy.
YOU want to make it profitable for yourself to buy. - OK.
There’s enough GREED to go around. isn’t there - call it what you will -
How does ''Opportunity" sound?
When something is offered on the market, you pay for it - if you want it -
or PASS on it if you dont - BUT
YOU make the decision, don’t you?
Walther’s is not trying to compete with the LHS, PERIOD. They are a distributor who is allowing you to buy direct from them, but at retail. When you go into Fred’s or Allen’s stores, remember they have to pay rent, someone has to pay Brians salary and that of the rest of the help. Just where do you think that money comes from? Also, remember that the store in Van Nuys near the airport gets most of its income from sales to private airplane owners, not trains. The only reason they have trains is because Al likes trains & planes. And when was the last time you visited Internet Trains store? Aren’t they in Brea? Now that All Aboard is gone, what “mom & pop” store is discounting, besides the one I memtioned? If it wasn’t for the discounters, you would be paying MSRP because there would not be no other choice. Every store would have the same price, and you would be happy just to be able to buy something you want. No price comparing. Stop worrying about Walther’s prices.
Ok, lets take a look at this…anything that Walthers buys from OTHER vendors, they have to stock, and then mark-up in price to make some profit themselves. That is obvious, and should be obvious to all of us, afterall, they are not going to do that for $0 are they. Granted, they do get a volume price break from these vendors because Walthers buys in huge quantities.
Items that Walthers manufactures, or through their take-over companies, they "should "be able to sell cheaper.
Now lets look at the story behind the story. The LHS’s do quite a business with Walthers, and as such, get a price break that we never see buying as a retailer from Walthers. And Walthers wants this business with LHS’s so they protect them via good price breaks… That is GOOD business…end of story!!!
And if you want a better price at your LHS…just offer cash and ask for a break as opposed to paying with plastic. Many LHS’s that I have worked with will give me a price break if I pay with cash because it cost the LHS’s money to use credit cards.
Walthers has a great catalog, we can everything in one place, it is great for reference also. And, they do have sales all the time that are not too bad in price.
Like Don’s says, you have a choice. You can pay the $365 list price from Walthers for the new Proto 2000 “sound” 0-8-0 and 0-6-0 switchers, or you can hunt around and get the same locomotive for at least $100 cheaper elsewhere. (I’ve seem them as cheap as $225 new on eBay - with sound.)
The one big advantage that you gain from Walters is that you can enjoy the privilege of “one-stop shopping” - i.e. when things are in stock.
All I was trying to do was point out that an older distributers like Walthers and many LHSs are increasingly under siege from on-line discount stores and that maybe it they who will have to adapt to this new environment if they are to survive, thats all, not a slam against Walthers or any LHS.
I fully understand that both the LHS and the distributor have to pay the rent, make wages, and all that and that has an impact as what the distributor charges the dealer to get product into the store.
Point being that not all of us can afford to pay those higher full prices and will look to make our dollar stretch as far as it can. Hence the popularity of the discount on-line store that are ordering and recieving thier product directly from the manufacturers. The Van Nuys store is a good example of that.
I wonder what LHS owners have to say about that? [?]
I seriously doubt if full price hobby shops will drop their prices to match Walthers on line sales because I suspect they are counting on their customers not knowing that fact and end up paying full MRSP…Is this wrong? I suspect that could be debated for months without a final answer.[:D]
To be honest, I dont care as long I dont pay full MSRP for the high ticket items. My LHS’s try to assist with decent discounts provided that thier suppliers can give them a decent pricing for a small profit. In general they do a good job.
I dont for one minute believe the bull about high oil prices.
I DO agree that prices went up about 8 years ago and has not really come down much. You can buy a non-dcc and NON sound unit for 100.00 anywhere but after installing the sound and DCC you are probably back up to 300.00 for a factory equippted engine.
For me I will rather order a factory equipted engine from the LHS at a small discount than have to go thru the headache of installing the stuff myself. I enjoy the benefits of dual mode for either analog or DCC. it is expensive.
The final result of the increased pricing is very simple to me:
“I dont buy as many items in a year at the store or online.” Period.
That 30 dollar RTR boxcar is not that much different than the 2.50 Blue box kit from 20 years ago.
Yea I’ll still buy X number of rolling stock but can tell you that I dont buy as many each year. Maybe 6-10 peices per year out of the dozens that are availible.
Have you ever heard the term “loss leader”? While you are looking at the sale item, you might find something else that strikes your fancy. So, instead of making 20% on an item, they make 60%. Kind of evens things out. In the case of your examples, the first two items are about 25% off, which is still more then the LHS pays. The centerbeam flat is 55% off. If I were you, I’d grab as many as I could. Phil is still making money even at that price. But look at all the cars not discounted. Walther’s provides a service to people who don’t have a well stocked LHS. In my case, the nearest “hobby shop” is 26 miles away, and they don’t have much. The next bigger store is 120 miles. The closest well stocked store is 6 hours round trip, plus the cost of gas! Sorry, I don’t see Walther’s as much competition to the larger LHS, especally the ones in LA.
Bob,There is no foul deed by Phil and I agree he is helping those that may not have a full line hobby shop without having to drive for miles…I fully understand the bait selling since its widely used.
Still,One has to wonder what the LHS owners think of those prices especially if they are charging full MSRP…The full price hobby shop owners I know don’t like the on line stores or e bay.Come to think of it when I was a part time Train Show dealer I was given the cold shoulder treatment by many of the shop owners and even today some continue to give me the cold shoulder…Who cares? Since I am on a driving restriction due to health reasons 90% of my hobby dollars are spent on line anyway.
In my experience when ever Walthers has a sale flyer it always contains a list of LHS’s that have signed up to participate in the sale. There is no doubt that they do everything they can to let the LHS get in on the action.
The other big MRR distributor, Horizon, does even more to try and pu***he business to their bricks and mortar retail network. They won’t even sell to dealers that don’t have a store!