Charles Ro $1899 Lionel Big Boys

How much more room do the dealers have on these anyway?

There is already a post about Ro earlier this morning...

yup I did, must have passed in the mail. Going to stick with Nassau regardless, not worth worry about the 50 bucks. Or I will just buy 2, I can afford to leave one in the box for a few years then eBay it

I am think dealers egos are starting to come into play.

The email I got from ro was 1949. Hmm

Makes one wonder? That's $800 off MSRP. Wonder why they didn't just make the MSRP lower to start with?  Not sure what to think of it all so far? I'm not getting one, but it has been interesting following these threads.

Could this be blow out pricing in reverse? That is, people get them cheaper now and dealers order extras for stock at the lower pricing. Then when they are all produced and delivered, the dealer pricing goes back to MSRP?  People that didn't get one originally all of a sudden have to have one...and...I know, kind of wild and silly speculation here.

My guess (yeah, I know! )is this means that Lionel has moved somewhere close to a 40% margin off MSRP for this loco, which has been typical of their previous margins on many items in the middle and lower cost range of their line, such as sets, rolling stock, track.  High end locos were at margins of as low as 15-20% for some recent years from Lionel, if what I've been told is accurate.  Dealers that purchase directly are obviously in much better position to discount this from MSRP than dealers that purchase from a distributor, who needs to take a cut of the profits. 

All in all, lower MSRP and bigger margins serve everyone well if they're feasible, and they apparently are at this point in history.  We should be pleased, IMO, rather than suspicious.

Chris,

Boy, for someone who continuously bemoans the practice of consumers going for the lowest prices online instead of supporting the LHS and yet here you are proactively advertising the VL BigBoy discount price from a hobby store that seems to be in the lead for lowest pricing and happens to be an online store...  what's one to think of that? 

In the long run, increasing the margin by raising the MSRP is an artificial margin.  If folks look at the product and don't think it is worth the MSRP or the discount being given, the product is not bought.

The BB at this point is free money.  These are pre orders with down payments so regardless of the margin there is little risk to the dealers.  The more volume they get them more profit they make.

The tell will be when the rest of the product line dealer cost sheets come in.  If the dealer cost for track, engine, cars, sets is lower than last year than Lionel has improved the margin for dealers.  G

"what's one to think of that?"

Perhaps Chris just wants folks in Eastern Massachusetts, Southern New Hampshire, Southern Vermont,  Southern Maine, northeastern Connecticut, and all of Rhode Island to know that their local hobby shop, Charles Ro, carries Lionel at excellent prices?

"If the dealer cost for track, engine, cars, sets is lower than last year than Lionel has improved the margin for dealers."

According to Charlie of Nassau Hobbies, that is exactly what Lionel has done, which is why Charlie's prices on Legacy, the ZW-L, etc. have dropped.  Certainly the Lionel sets at Christmas time were going for 30-35% off MSRP at some retailers, which suggests very aggressive discounts from Lionel.  Will it apply to the whole line?  Charlie seems to think so.

the 1899 price is if you pre-ordered with them a few months ago. which I did

Does his letter also state $25.00 shipping? That makes them $1924.99 ?

Chris is buying a second one to keep for an investment. He's plans to sell it in 3 years for $1500.

On top of that, the whole" didn't get a price after 24 hrs" rant  

no.

the special price is a customer loyalty price only.

Should be interesting to see the catalog MSRP's this year.  If they follow the lead of the Big Boy, then they'll be as equally meaningless.

Since it's unlikely that anybody's gonna sell this stuff at MSRP, it's meaningless to talk about margins in reference to MSRP.  Margins are typically measured relative to the dealer's COST, which is why I mentioned this in another thread the other day.

In short... who CARES what the MSRP is?  It might as well be $3500, since we know some of the large dealers are selling the Big Boy "on the street" for $1950 give or take.  Margins are measured "cost up" -- not by discount off MSRP.

David

I have one on order from Charles RO too. Ordered on 12/16/2013. I haven't got an email or letter yet. Wonder if i will get the special price?

I received my letter announcing special early order discount yesterday.

Its a neat thing they done for you all.. I wish I would of pre pre ordered now. I was gonna order mine from Charles ro too.

Thats more than I paid for all but 4 of my cars.

Actually, my LHS only sells at MSRP.  But then he also avoids dealing with all this command stuff too, so I bought it online.  But I do go in and buy freight cars and FasTrack from him.  I also request gift cards from the store when people ask me what I want for Christmas and birthdays.  I've also had him do repairs for me on older stuff, so he gets most of my business, just not the high dollar locomotive this time.

I have not received a letter from them yet and I pre-ordered 2 of them before the end of October. I also had pre-ordered both of the scale Polar Express Berkshires Black & Gold, so I guess it will not be long before I find out what the price will be on them.

Lionel has listed the MSRP on the VL Big Boys is $2699.99 as posted on their web site for about a week now VL BigBoy

Wow, the best-discount-price just comes down and down.  Do I hear $1850 anyone? At this rate by the time the thing is actually delivered, someone will by sending it out just for the shipping charges!

Seriously, I question whether this is self-defeating (not to mention cutting into profits).  I realize toy-train retail is a competitive business, particularly in the internet age, and that it's worth something to put your name on the map as the low-cost, go-to supplier, but this back and forth among suppliers really does look like a bidding war.

Again, I'm sitting this one out  - I have a perfectly good JLC Big Boy upstairs in my trainroom.  So I'm not sure I am objective about this - or maybe that makes me more so.  Anyway, maybe I'd feel differently if I was shopping for one, but frankly an extra $50 or $100 would not make me shift from someone I have bought from before, understand and trust how they work, etc. , and know has prompt service and good response when called.  Particularly given the price, the time until delivery, etc.  Frankly, I get concerned about any supplier, of anything, who appears to be competing on price most of all.  

This is the problem with "we will make as many as you want" sales model.  Each dealer shoots for the volume.  If each dealer was told they are only allocated 2 to 5 engines, there is no way they would sell at rock bottom margins.

This sales model being used (for high end engines) is really suited to direct sales.

I wonder how many "extra" models the dealers will order for inventory.   G

My order confirmation is dated 10/29/13, maybe they're sending the letters in sequence?

isn't this what the free market system is all about. take cars, I always shop for price, the guy with the lowest price gets my business. the guy who sells too cheaply goes out of business. the smart ones know how much to discount and stay in business. you have to give these guys credit for being around so long, so why second guess them. do you think you are a better businessman? maybe you should go into the hobby business or any other business and see if your ideas work.. this commentary is not aimed at anyone in particular, so don't get offended-everyone has an opinion, but only a few actually work. obviously Ro and Charlie N have proven theirs work.

Certainly not a second guess.  I know these guys have been around.  They are also very established shops with a great following that is well deserved.  I would expect that they can take some risk and leverage some deals because of their longevity and loyal customer base.

I wasn't making a disparaging comment, quite the opposite, that system works in this country as well as your system. I would think the overwhelming majority of retail business is done this way. what would do without sales for presidents day etc. your comments about discounting are the disparaging ones with all respect Frank

This is very true, I have heard it from the owner of my LHS. They had a couple of Legacy steamers in stock that were blown out a year or so ago (they have to order Lionel through a distributor). The big dealers and even Lionel's blow out prices were several hundred less than he had paid for his. He wasn't happy and I don't blame him a bit.

I'm sure no one really cares where I purchase my trains, but this could possibly end up hurting Lionel's sales rather than increasing them. I plan to continue purchasing from my LHS (which has to get Lionel from a distributor). If all the Lionel items they have end up being a lot more than the other manufacturers because of their new MSRP's and pricing structures, guess what I will be buying. Think I'll ask about this when I visit my LHS later this week.

In closing, I am a much better quarterback on Monday morning than I am on Sunday afternoon.    

"Margins are typically measured relative to the dealer's COST, which is why I mentioned this in another thread the other day."

At least as of a few years ago, the dealer's cost was figured on Lionel and MTH order sheets as a percent discount off the MSRP.  So unless the method of ordering has changed, the MSRP and the discount off MSRP precisely measure the potential margin, varying with the dealer's choice of sales price above their cost. 

We can be certain that dealers like Charles Ro and Nassau Hobbies are selling the UP Big Boy at above their costs.  Hence the probable discount from MSRP, at least to direct retailers, is likely at least 30%, and more likely as high as 40%.  To put this in perspective, once again  , typical discounts off MSRP in the recent past for similar locos have been as little as 15-20%. Inflation adjusted prices for many locos are lower now than they were 15-20 years ago, both MSRP and "street prices."

But Marty, won't they make it up in volume???  

David