Walthers & wood structure kits...

[fseva]

Do you buy wood structure kits direct from Walthers? If you do, I would really like to recommend that you patronize your local hobby shop, instead. (If you don't have a LHS, please find someone else to buy from (wink)).

Walthers has been moving aggressively into the retail market, while they continue to rake in money from being a distributor. I realize that this has been happening for a while now, but this month, I just decided that I had to speak out. They are currently offering 20-30% off select wood kits by JL Innovative Design... while selling as a distributor to other small businesses. If this trend continues, LHSs are going to have a very hard time competing, given that Walthers can spend lots of money on marketing (monthly color flyers, free shipping offers, etc.)

 

[myltlpny]

The LHS I used to frequent (local meaning 40 minutes away) just closed a week or so ago. Business was good, they had some family issues that were more important and couldn't find a competent buyer. If I had alternatives, I would use them. When I travel I usually stop by a model railroad hobby shop if there is one and usually buy something.

 

[stripes]

I think it is a shame what Walters is doing! How can they expect the LHS to compete if they are going to cut their throats by undercutting the retail prices?
I also sell JL Innovative, but can only afford to sell at 10% off retail. (I buy direct)

David

 

[COMBAT]

Both of my LHS that I go to will sell the items in the Walthers sale book at that price. My understanding is they still make some money. I am finding more and more the mark up on this stuff is so bad that the discounts they give dont hurt them as bad as it may seem. At least thats what I have been finding so far. Just take a look at the group buys. The Kato that sold for 75.00 each, retail of 150.00 and my supplier had to hake a few dollars still.... Hmmmm see what I mean.

Dont get me wrong, I am in no way saying you shouldnt support you LHS. At the same time in a free market if your not getting the biggest bang for your buck then thats your fault.

 

[Squidbait]

Most distributors are retailing on line these days. Some are better about it than others. Horizon Hobby (exclusive distributor of Athearn and MDC/Roundhouse); Tower Hobbies is ther retail arm of Great Planes; and of course, Walthers.

Some are better to their retaillers than others... some will offer items on-sale on their retail site while also discounting to their retaillers, others will blow stuff out at retail prices that are only a few points above their wholesale price. And the retailler is stuck in the middle.

It seems people would rather sit at home and order on line than go to visit their LHS. And it's harder and harder to find an LHS, because it's harder for a store-front retailler to compete price-wise with a basement/garage/online retailler.


With respect to the JL Innovations kits, I think most distributors are finding it harder and harder to move craftsman-style kits. The entire market has shifted to "ready-to-roll", pre-built, pre-painted, pre-detailled models. When companies like Woodland Scenics are offering pre-built/painted/detailled buildings for the price (or less, in some cases) of a comparable craftsman kit, I can imagine a distributor wondering how to get that dusty stock of craftsman kits out of their warehouse, since product on the shelf isn't making any money.

I don't know if Walthers is offering to discount these to their distributors or not, but my guess is that the only way they feel they can move them out without losing money is to blow them out at the retail level. Walthers paid X dollars for these kits, and if they sell them at close to wholesale price, they wind up making the same amount of money they would as if they'd sold them to their retailler.

 

[Mountain Man]

Combat said it best: in the end, it comes down to me spending my hard-earned money, and I want the best deal I can get.

It's interesting to read this discussion, then go elsewhere on the forum and read posts by modellers who are proud of their latest purchase on eBay or from a friend or from a modelling show at well below the LHS or the retailer's price.

My LHS guy understands this process all too well, and he knows that he has to either stay competitive or supply items that are wanted but otherwise unavailable - preferably both.

He is actually a very nice guy. The last time I visited, I told him I was just doing some comparison window shopping, He thought that was fine, and walked me around while showing me many items that I did not realize were either available or in a comparable class, and openly discussed the pros and cons of each. I quickly learned that price isn't the whgole story when buying engines and rolling stock. He also offers a discount for larger purchases - if you are buying something like an engine and your purchase comes to over $200, he discounts 10% and enters you into a drawing for a pretty good prize, awarded periodically.

 

[Squidbait]

... it comes down to me spending my hard-earned money, and I want the best deal I can get.

And it really comes down to what you define as "best deal". Your LHS fellow is an example of what a good LHS should be... knowledgeable and service-oriented.

In my LHS I've seen several people bring back items that had problems (noisy locos, kits missing parts), and get an exchange over-the-counter, no problems, no questions asked.

Sometimes the best deal is more than just the lowest price.

 

[Bill Stone]

The discount game is changing the playing field for a lot of small businesses. Around the mid-90's my company stopped selling personal computers because by then they could be purchased retail from the big stores for LESS than we were paying a distributor for them partially assembled.
Bill S