With Mike Wolf retiring, where does that leave his dealers?
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It has been discussed in numerous threads. Several well known stores are closing due to MTH shutting down. This is on top of the many local shops closing due to the normal business pressure.
@GVDobler posted:"It has been discussed in numerous threads. Several well known stores are closing due to MTH shutting down."
I think that is the fear of many.
Would please identify the shops that you state will be closing due to MTH closing.
For a starter: Mercer Junction Train Shoppe in Mercer, Pennsylvania.
Be sure to check out MJ owner David Minarik's Steel Haulin' Road video here at OGR!
It would be a shame if there is a buyer in the works and stores closed because of MTH's unknown future. I know there is a lot of things that can't be discussed in business but watching stores that were predominately MTH either close or struggle as to what's next isn't good.
Why do they have to close? There are other train manufactures these stores can stock their shelves with. Woodland Scenics, Scenic Express, Menards, Bachmann, Lionel, Atlas, 3rd Rail. Just becasue MTH is going away, does not mean they have to close. Are the customers who bought MTH going to stop buying trains? I doubt that. They will either go to the used market OR they will start buying other manufacture products. It may not be the desired choice to sell other products but it is an option.
Joe
The owners of some LHS have invested all they have in MTH, they are the ones that will be hurt. LHS owners who are diverse in their offerings will not hurt as much.
@Joe Fermani posted:Are the customers who bought MTH going to stop buying trains? I doubt that.
I think that's the million-dollar question that many of us speculate about.
MTH was LHS friendly they dealt directly with the LHS; and, they had lots of merchandise.
I understand Lionel goes through distributors and caters to big time on-line operations, not the LHS.
Third Rail has great stuff but you pay for that greatness. It deals directly with purchasers. Not for the mass market!
Atlas, a possibility but not yet.
Williams, lower end but good stuff for their pricing. A good second line but not a primary line.
LHSs for the most part lease their stores and must pay for inventory, they simply can't wait and see if MTH is resurrected.
The whole situation doesn't bode well for our hobby.
@raising4daughters posted:I think that's the million-dollar question that many of us speculate about.
What was my LHS has reduced their O gauge offering to a few small shelves of Lionel, Plasticville and Scenic Express. They even stopped carrying O gauge magazines. Slot cars now occupy what used to be 3 aisles of Lionel, MTH, Williams and K-Line.
@jim sutter posted:With Mike Wolf retiring, where does that leave his dealers?
Jim,
Thanks for the call on Saturday. It was nice talking to an old friend!
Dave
Rumors galore that I've been hearing but I won't repeat them here. Lets hope someone steps up and purchases MTH but I just don't see it in this economic climate. I really don't see a way for someone to take over the DCS/parts aspect of the business and be successful at it.
MTH has great products, they will be missed.
In a recent interview with the Standard Gauge group, Andy E. stated that if there was a path forward for MTH in the future it would be announced at earliest in early 2021. He obviously knows stuff the rest of us don't and that he cannot divulge. Doesn't mean something's going to happen, but apparently there are possibilities being discussed.
@Joe Fermani posted:...Are the customers who bought MTH going to stop buying trains? ...
To a large extent, the answer depends on how the other manufacturers react, especially Lionel. If variety goes down, prices go up, and service and quality suffer, then the market in general could shrink. There is a temptation to get greedy.
@jim sutter posted:I sure hope someone or a group of people take it over.
Me too. Many great and unique products in the MTH portfolio.
OMG, i could go on forever about the hobby, the industry. Suffice it to say that the industry is going thru some contraction, which, IMHO, is fine. It had over expanded. The hobby is not dead, however, and the sky is not falling. I've gotten more new customers in the last few years than ever before.
Talks are on going about the future of the MTH product. I hope it succeeds, for the sake of the people involved, not because I need to have the product to have model trains to sell.
I could go out tomorrow and spend 100K on trains at wholesale prices, no sweat. Theres so much stuff out there now, looking for a buyer. Its been that way for 20 years, and there still hasnt been enough contraction in the industry to mop up the backlog. I have to hold back in purchasing because I have to watch cash flow, and I just dont have the time to put things into stock, inventory, put up on the web, and then fulfill orders. And answering questions. I dont mind, but that's more time that I dont have.
The LHS...sorry, but its going the way for the local hardware store, the local shoe store, local milk delivery, the local stationery store, etc., etc., etc. Its not a hobby thing, its the American public, overall, wanting to buy things as inexpensively as possible, and even moreso, wanting to buy things with the convenience and easy of online purchasing. (Note: If you're one of those people who goes to the LHS to chat, pick up trains to look at them, but not buy anything, STOP IT. You're not helping your LHS owner by taking up their time, that they need to spend on running a business and making sales.)
And, there's other BIG issues the hobby has at the business level. The only reason anyone has a model train business, is cause they like model trains. From a strictly business point of view, there is no reason to ever want to invest $$ and time in being an O gauge model train dealer.
But after all is said and done, Ive been hearing about the demise of the model train industry for 30 years now, and it still hasnt happened.
FWIW...
Beth. You hit it out of the ballpark.
@john in western pa posted:Atlas, a possibility but not yet.
Williams, lower end but good stuff for their pricing. A good second line but not a primary line.
Very unfortunately...
Atlas will never be a possibility. Years ago, they used to put out a huge dedicated Atlas O catalog. Since then, they have become a very niche--albeit still very nice--player in the O gauge market. That's not going to change--at least not in the positive direction.
Williams by Bachmann is not a good second line. It's not any kind of line. For a number of years, they have produced next-to-zero new product. All of their existing product is being blown out by the big dealers.
I wish things were different.
Did anybody ever think that if there is no cash on the table by May 2021 to buy it that Mike keep it going forward because it has as a brand and product more value running than shutting down and Mike doesn't want to retire on air. After all its his down-payment to buy his Dolphins!!!
@Keith L posted:Very unfortunately...
Atlas will never be a possibility. Years ago, they used to put out a huge dedicated Atlas O catalog. Since then, they have become a very niche--albeit still very nice--player in the O gauge market. That's not going to change--at least not in the positive direction.
Williams by Bachmann is not a good second line. It's not any kind of line. For a number of years, they have produced next-to-zero new product. All of their existing product is being blown out by the big dealers.
I wish things were different.
Can't say that I agree. The reason there hasnt been much "new" stuff out there, is purely economic. New tooling costs A LOT. and there is still way too much inventory out there looking for a home, and not nearly enough demand to make anything close to economic sense to pay for new tooling. There are only so many $$ that are going to be spent on O gauge model trains in a year, and the more trains that are out there on the market soaking up dollars, the less there is to be spent on anything new, which is going to be more expensive. Sorry, but u cant expect someone else to spend 100K on tooling, and take a loss on it, so you can have something new to get excited about.
I'll give u an example. I have ppl come to me occasionally and ask if I can do a special on on a car that they would like. And i ask how many pieces they would want, and the answer sounds like "well, I'd take at least 2." You dont understand...I cant buy 100 or 200 pieces of something with a guarantee of 2 pieces being sold, and 198 on the shelf. I dont know anyone here who wants to put up the 10,000 $ for a special run, so they can have 2 cars, and then hope to break even in 3 years....Or anyone who wants to put up 100K for new tooling, so they can have a "new" engine that hasnt been made before.
Now, I do appreciate ppl having special run suggestiions. Sometimes its something that I feel there will be enough demand, and i go ahead with the project. But unfortunately, most of the time ppl are disappointed if i say sorry, I just dont think i can sell enough of them.
I have dealt with Beth, both buying and selling and they are very fair. I buy most, 75% or so, from Toms Trains my LHS, and he is 90% Lionel but he is in NY. Regarding special run, it seems that Mr Muffins Trains has figured out that segment and has done well. That latest Amtrak E-9 run has people drooling and wanting a set. I bought the Lehigh Valley C420 from last year, that I could easily sell and make a few dollars on. Muffin does his homework and research, he sees what loco Lionel is producing, looks at a roadname that is offbeat, Monon, LV or Amtrak and keeps the run in the 25-50 range. He then makes a profit and probably gains new customers.
Beth is 100% right. I have gotten more new in the box old stock or hardly run engines I always wanted when they came out,but didi not have the money. I am talking legacy,mth preimer, steam and diesel engines. Most off ebay almost 1/3 or half price of new. Some were special store blowouts and some were purchased during online trainworld free shipping or 10% off sales. Some people need money more than trains for family or other resons and some like me need very little money to get buy on and more trains. I fortunately am single and had a good 401k built up. I am almost done buying locos though. My only concern is with the economic times we are facing that there will be enough new track production for me to stock up on next to build my next 072 friendly layout. If china or the US lockdown again via covid it could put a halt to new track being produced or at lest recived through distribution channels.
It isn't fair to in essence say that it is the LHS proprietors' own fault because their store closures are a response to MTH pulling the plug. The market dictates what there primary product is. The typical LHS proprietor primarily buys product which is available and priced so he or she can make a reasonable profit while still selling merchandise at a fair price. For the LHS, the Lionel profit margin didn't justify making it their primary line of inventory. Conversely, MTH facilitated the LHS.
For many years many LHS have survived by being MTH heavy and Lionel being available. Many have arranged for custom run items because MTH was LHS friendly; and, would supply items in limited runs. Let's see how that going to work in MTH's absence.
As I have already stated, MTH was LHS friendly, while the Big L primarily chose to deal through the high volume retailers. There's nothing necessarily wrong with that business model that's Lionel's choice. It hasn't been all that many years ago that Lionel went belly-up!
Maintaining a small/boutique business isn't easy, it's hard work. It's simply not fair to say that LHS are folding because the proprietors "screwed up." How many auto dealers have closed because Pontiacs, Oldsmobiles, Mercurys, etc. are no longer manufactured. Their demise was lack of product not that the franchisees "screwed up." This is precisely what's causing many LHS to close. Internet orders have their place but you can't walk into your LHS, see new product and BS with other like minded electric train hobbyists on the internet.
Can't say that I agree. The reason there hasnt been much "new" stuff out there, is purely economic. New tooling costs A LOT. and there is still way too much inventory out there looking for a home, and not nearly enough demand to make anything close to economic sense to pay for new tooling. There are only so many $$ that are going to be spent on O gauge model trains in a year, and the more trains that are out there on the market soaking up dollars, the less there is to be spent on anything new, which is going to be more expensive. Sorry, but u cant expect someone else to spend 100K on tooling, and take a loss on it, so you can have something new to get excited about.
I'll give u an example. I have ppl come to me occasionally and ask if I can do a special on on a car that they would like. And i ask how many pieces they would want, and the answer sounds like "well, I'd take at least 2." You dont understand...I cant buy 100 or 200 pieces of something with a guarantee of 2 pieces being sold, and 198 on the shelf. I dont know anyone here who wants to put up the 10,000 $ for a special run, so they can have 2 cars, and then hope to break even in 3 years....Or anyone who wants to put up 100K for new tooling, so they can have a "new" engine that hasnt been made before.
Now, I do appreciate ppl having special run suggestiions. Sometimes its something that I feel there will be enough demand, and i go ahead with the project. But unfortunately, most of the time ppl are disappointed if i say sorry, I just dont think i can sell enough of them.
Your comments about new tooling are well taken. However, I wasn't speaking about new tooling. I was speaking about new product, regardless of whether it's from new or existing tooling.
For example, Lionel says they produce about 3,000 sku's per year. Of those, probably only a handful are from all-new tooling. But the point is that they (their subcontractors) are making a lot of product every year.
Atlas makes only a small number of O gauge products every year--and, again, regardless of whether it's from new or existing tooling.
Williams by Bachmann has, for several years, been making almost zero product--not from new tooling or from existing tooling. Most of whatever inventory WBB had is being blown out.
Hopefully, there will be an MTH II. But if there isn't, neither Atlas nor WBB will fill the void.
Some day steve will tell me if he actually makes any money on the custom engine runs. He is a much bigger operation than i am, which is fine. Special engine runs are in the 10,000 to 20,000 range, for 25 to 50 pcs. IDK if anyone will even let u do as few as 25 pcs. Just remember, 1 engine sitting on the shelf, eats up the profit of 4 engines that sell. And that with relatively inexpensive diesels. Its worse with steam.
Ive done over 60 special runs with freight cars, and in the long run, I've probably broken even.LOL. Some things have sold thru, and some sit. You do i cause u enjoy it, not cause its gonna make u rich.
@dk122trains posted:Did anybody ever think that if there is no cash on the table by May 2021 to buy it that Mike keep it going forward because it has as a brand and product more value running than shutting down and Mike doesn't want to retire on air. After all its his down-payment to buy his Dolphins!!!
In a recent zoom meeting of the Standard Gauge Module Association, Andy Edleman of MTH made it clear that Mike Wolf is retiring and MTH as it exists now is closing after May 31, 2021.
He also said the most valuable asset that MTH had was its building, and it was sold in February 2020 (for $14.5 million, so there's the down payment on the Dolphins).
Andy added that the only involvement that Mike Wolf might have after May 31 would be to keep his finger in the new DCS business.
Hopefully, there will be an MTH II; however, if there is, it won't be Mike Wolf's MTH. That's just the way it is. The man has every right to retire. Why should we expect/ask him to do otherwise?
@Keith L posted:Your comments about new tooling are well taken. However, I wasn't speaking about new tooling. I was speaking about new product, regardless of whether it's from new or existing tooling.
For example, Lionel says they produce about 3,000 sku's per year. Of those, probably only a handful are from all-new tooling. But the point is that they (their subcontractors) are making a lot of product every year.
Atlas makes only a small number of O gauge products every year--and, again, regardless of whether it's from new or existing tooling.
Williams by Bachmann has, for several years, been making almost zero product--not from new tooling or from existing tooling. Most of whatever inventory WBB had is being blown out.
Hopefully, there will be an MTH II. But if there isn't, neither Atlas nor WBB will fill the void.
My point is that that there may be a void in what you are looking for, but the industry as a whole, there's no void. There are more trains chasing dollars than ever. As for Williams, Kader Corp, which owns bachmann, williams, LGB, and IDK how many other companies, is a huge company, and if the Williams line isnt making the return that the other lines are, they just back off. They dont need to make williams trains to exist.
There's a lot more that I wish I could tell you, so you;d have a clearer picture of whats going on in the industry....but other parties have very rightly asked that it all be strictly confidential.
What I can say, is that I wouldnt be worrying about the future of model trains. If you're fretting over the possibility that your all time fav engine might never be made in O gauge. there are far worse things in life. Perspective.
@john in western pa posted:It isn't fair to in essence say that it is the LHS proprietors' own fault because their store closures are a response to MTH pulling the plug. The market dictates what there primary product is. The typical LHS proprietor primarily buys product which is available and priced so he or she can make a reasonable profit while still selling merchandise at a fair price. For the LHS, the Lionel profit margin didn't justify making it their primary line of inventory. Conversely, MTH facilitated the LHS.
For many years many LHS have survived by being MTH heavy and Lionel being available. Many have arranged for custom run items because MTH was LHS friendly; and, would supply items in limited runs. Let's see how that going to work in MTH's absence.
As I have already stated, MTH was LHS friendly, while the Big L primarily chose to deal through the high volume retailers. There's nothing necessarily wrong with that business model that's Lionel's choice. It hasn't been all that many years ago that Lionel went belly-up!
Maintaining a small/boutique business isn't easy, it's hard work. It's simply not fair to say that LHS are folding because the proprietors "screwed up." How many auto dealers have closed because Pontiacs, Oldsmobiles, Mercurys, etc. are no longer manufactured. Their demise was lack of product not that the franchisees "screwed up." This is precisely what's causing many LHS to close. Internet orders have their place but you can't walk into your LHS, see new product and BS with other like minded electric train hobbyists on the internet.
Jeez...MTH may be a whole lot friendlier than Lionel , but idk where u would ever get the idea that any of the O gauge manufacturers supply anyone at a price with a reasonable margin, compared to industry standards.
There's a reason that, when Mom and Pop retire, and would like to sell their model train store to someone as a viable business, that there are no takers. By industry standards, the margins are really bad, even if u sell at retail price...and who can do that?
My point is that that there may be a void in what you are looking for, but the industry as a whole, there's no void. There are more trains chasing dollars than ever. As for Williams, Kader Corp, which owns bachmann, williams, LGB, and IDK how many other companies, is a huge company, and if the Williams line isnt making the return that the other lines are, they just back off. They dont need to make williams trains to exist.
There's a lot more that I wish I could tell you, so you;d have a clearer picture of whats going on in the industry....but other parties have very rightly asked that it all be strictly confidential.
What I can say, is that I wouldnt be worrying about the future of model trains. If you're fretting over the possibility that your all time fav engine might never be made in O gauge. there are far worse things in life. Perspective.
Most of us understand basic economics: supply = demand; or, in today's O gauge model train space, supply > demand. We don't need proprietary information to know that.
The only point, my point at least, is that we should not expect Atlas or WBB to fill the void if there is no MTH II (precisely because supply > demand).
("And answering questions. I dont mind, but that's more time that I dont have." Really?)
@Keith L posted:Andy added that the only involvement that Mike Wolf might have after May 31 would be to keep his finger in the new DCS business.
Hopefully, there will be an MTH II; however, if there is, it won't be Mike Wolf's MTH. That's just the way it is. The man has every right to retire. Why should we expect/ask him to do otherwise?
Maybe this is a sign of what I've been thinking....do we really need that many more engines when software and hardware upgrades would suffice.
Sure, new features are nifty, but as Beth pointed out above, tooling is expensive and a fixed cost that has to be absorbed by the pieces it produces. Volumes seem to be dropping.
I'm 55 and own traditional/semi-scale engines....1/4 conventional postwar and 3/4 modern with TMCC or PS2/3. I'd be satisfied if I can keep this collection running for my remaining 20-30 years. I'd be even happier if I could simply upgrade some to better performance.....more chuffs and speed control on the TMCC 1.0 engines. Sure, I'll end up buying more engines over time (just picked one up Saturday from Stockyard Express) but my bigger concern is keeping otherwise-fine engines rolling. Even better if features could be added for less than the cost of a replacement.
Serious gamers like my nephew build and upgrade their computers all the time.
The world is moving to everything-as-a-service....XaaS. Maybe train components as a service is a real business. I'd pay an annual subscription to keep my engines current and upgraded. My TMCC 1.0 semi-scale Pacific looks as good as anything that's come out in the past 20 years, but it'd be even better with modern sounds, speed control, and 4 chuffs.
OK...this thread didn't take long to meander into another discussion about what is going to happen with MTH....we have enough of those already. Topic closed.
