I feel for the original poster of this thread and completely understand where he is coming from. I also understand some of the follow on posters stating they will not pay a deposit on a preorder and others stating that they will not preorder period. Let’s break this down a little bit.
I previously owned my own company for when I placed my order, I, as the owner of the company, had to put down a deposit. Now a vendor as large as Charles Ro may not require a deposit due to their purchasing volume however, those mom and pop stores or smaller local Hobby/train stores may not be afforded that luxury because of the size of there orders. Those dealers are simply passing that deposit cost onto the customer. Yes, it may only be 10% for which a car costing $79.95 is only $8. Not bad. A BTO locomotive that is costing $1700.00 and upwards, now means some serious cash deposit.
For the smaller local Hobby/train stores who pass this cost of the deposit onto there customers, please, do not fault them for this action. That store may have to place $10,000 deposit when they are placing their entire order. For a small business like mine, that is substantial cash outlay that will be tied up for the same 6 months, year or more that you are waiting. He is in the same boat the rest of us are in waiting on those darn preorders to be filled. For the customers who cancel, this owner is now stuck with a potential white elephant. I do not blame the consumer either. I have been one of those poor people who have waited up to 3 years to get a power unit.
Based on the past several years of business practices of Lionel and MTH, they have come up with some really beautiful pieces. However, if they do not receive enough orders/preorders for those pieces, they drop it like a hot potato. Again this frustrates us the consumer and all of those Hobby/train shops. In today’s marketplace, I also understand that Lionel and MTH cannot just simply produce 2, 3, or 4000 pieces of speculative selling product. History has proven to them many times over that some items just blow off the shelves with a rapid secondary market after sell out at double and triple the original price. On the other hand, both vendors have had to blow out product at rock bottom prices because quite frankly, it was a crappy idea and no one wants it, even at the rock bottom blow out price.
Myself, after getting burned on a preorder for which I had placed the 10% deposit on a power unit that was subsequently cancelled, I will no longer place a preorder. At first I blamed the train shop for only giving me a in store credit but I later came to realize, based on the owners explanation to me, Lionel did not refund the deposits back to him after they announced their cancellations for that year. Instead, Lionel credited that extra deposit to the outstanding balance coming due for the remainder of the order that Lionel was going to produce and distribute. If the train store had refunded my deposit, he would now have 20% of his capital tied up for which there is no return on investment now. For example, $200 deposit by me for a power unit to the dealer. Dealer pays that deposit, plus others, to Lionel. Lionel cancels product and rolls that deposit over for outstanding balance of dealers order. If the dealer gives me the $200 back, he will now be out $400 on a non existing order until existing order at Lionel ships and he can collect the rest of the funds from the remaining sold product.
i do feel that Lionel and MTH have a very bad communication skills with the public however, they know that they are pretty much your only choice for mass produced and variety of product. Like the auto companies, what we feel really feel is of no consequence to them. They have paid consultants who are supposedly the market experts in regards to how you and I will behave when it comes to our dollars. In short, as we said in the military, BOHICA. For the rest of you, that means “bend over, here it comes again”.
Surely there is a better business model out there. But until it is discovered and implemented by Lionel and MTH, we are where we are. So, after all of this rambling it comes down to just YOU. What are you going to do? In my opinion, and we all know about opinions, they are like a**ho***, we all have one, You need to do what suits YOU best and move on. You may feel saddened by your choice but, after all, it is your choice.
