Williams now has direct sales from thier website

RMT did not sell at MSRP.

 

I have no problem with a manf. selling at msrp.

IIRC they have been doing this for a while......Street price is very different.....

You have it backwards.

 

The website sells at List Prices.

 

The large Train Stores often sell below the List Prices.

 

They are not taking away from on-line hobby shops.

 

Only small volume Hobby and Train stores sell at list prices.

 

Andrew

I've looked a prices on the WBB site and compared them to other stores prices.

Don't know how a MSRP or list of $290 for a locomotive and $65 for a boxcar makes them a competitor for other stores with prices of $203 to $220 and $45 to $48

 

Jerry

Bob Kazian...While I appreciate your comments, the situation is complicated and has many 'sides'. Simply stated, RMT tried to convince more dealers to stock RMT products...I personally called almost 300 brick/mortar shops in 2009...but a combination of the economy and dealer product preference was not in RMT's favor.

 

If RMT wanted to grow and really serve the end consumer, the time (in 2009) was ripe for a change. Rather than dealers embracing the RMT pricing structure...sell say 10 BEEPs of varied roadnames for a small but reasonable profit margin and keep the end cost to consumer lower (and create return customers), dealers would compare an RMT BEEP at $69.95 (that would sell in quantity) to another product selling at $300 for 1. Overall profits may have been similar but one would think that selling to 10 different customers rather than waiting for that 'big one' with $300+ in his pocket to walk in made more $en$e. It didn't! 

 

Regardless of the product marketplace, as more and more consumers enter the computer era, manufacturers (and retail stores) need to be there online.

 

As far as the comment about dealers not wanting to carry RMT when you asked, perhaps the additional question of how long has it been since that dealer ordered RMT if indeed he ever did, would have also been appropriate. 

 

In closing, since RMT went direct/online the RMT customer base has grown greatly and is still increasing. Even though the RMT website has not yet re-opened for ordering, the RMT email list has increased (during/since December 2013) by over 400 newly subscribed consumers waiting for more RMT products to arrive in 2014.

 

Thanks for your continued interest and support.

 

Walter/RMT

 

www.readymadetoys.com 

 

 

I don't understand why folks feel Walter/RMT needs to explain anything about his business to any of us.

I work pretty closely with a company in another hobby segment.....you better love hobbies because there are easier ways to make a living....it is tough out here......

Walter,

 

Thank you for taking the time to interact on the forum. Also, thank you for making the Ballantine hoppers. They are important to me. The man who taught me much of what I know, worked there for years (My Grandfather). He's gone, but I smile, when I see the hopper on the Christmas layout. I think you are unique, in that manufacturers and distributors get beat up and praised here. Good for you taking the time to interact with your customer base. Looking forward to the new RMT iteration. Good Luck.

 

 

It is possible that Walter may create a better demand for his product by selling direct. Some dealers may be fixated on making higher margins by selling higher ticket items. RMT products are really different enough compared to Lionel, MTH and WBB so that people looking for something different may want to have a few Beeps, Peeps and Beefs in their collections ... I know I do.

 

I personally don't own any yet since Walter refuses to sell me any

I agree  But RMT blew out the MSRP.. After the product was purchased and stocked in stores..Below dealer cost. Leaving stores with inventory that is now overpriced in a over saturated market with $10.00 coal cars and other items. 

My original post did not intend to"bash" RMT. I have alot of his products, appreciate his sponsorship of the forum, have spoken with him on the phone and wish him the best. I was more concerned about the local hobby shops that are being forced out by this style of practice. There must be some better way to keep those very special places around and supported.

 

Same argument can be used for many industries ...

Take travel and travel agents for instance, all airlines sell direct.

Unless they add a value you need, they are not much use.

 

I am not fortunate to have any decent hobby shops where I live. The two I have in my area do not cater to my needs ...

My original post did not intend to"bash" RMT. I have alot of his products, appreciate his sponsorship of the forum, have spoken with him on the phone and wish him the best. I was more concerned about the local hobby shops that are being forced out by this style of practice. There must be some better way to keep those very special places around and supported

 

Silver Lake, I too wish him the best in whatever he does, but my concern is my business and I need to provide for my family. I can't sell a line and support it if you, the customer can buy it cheaper direct. BTW, is RMT still a sponsor anymore? I don't see the ads anymore.

One has only to go and use the MTH Product Locator to "try" and find a product at an online store to see why...

90% of the dealers listed there do not have online ordering and most of the websites are POOR.

If not for Nassau Hobby, Trainworld, and 2 or 3 others I would be grateful to just buy from MTH, Lionel, or Williams even at premium to "cut to the chase" and locate and buy my product.

RMT has always fully supported the OGR Forum (and still does).

 

Sponsorship began as RMT and then was officially as/under RMT by ARISTO. Now that the ARISTO itself ended operations on 12/31/13, RMT is deleting all references to that arrangement in print and media.

 

It is my intention to resume a sponsorship at the appropriate time.

 

Thanks.

 

Walter/RMT

 

www.readymadetoys.com

 

The RMT classic logo will return in 2014... 

 

 

 

While this is excellent information the topic heading is misleading!

I thought this was a discussion about Williams by Bachmann and not RMT.

 

Lee Fritz

Kind of interesting, The LHS's complain about the Big Dealers undercutting them, the Big Dealers complain that the Manufacturers are undercutting them. The Manufactures build an online store want to get their product out to the area that their are no longer any LHS's since they were undercut by the Big Dealers and manufacturers

I can see both points of view with each needing to do what they need to make it in this competitive business.

 

I have bought 99% of my trains in person at a LHS. Because of that I have paid more for each item. The reason why was service. Treat me nice, talk to me, let me touch the product, exchange defective products on the spot, fix trains that I bring to you but mostly smile like I am the most important person you saw that day.

 

To me service is what I want then price will take care of itself.

 

The 1% that I bought on line also came from LHS with web sites. these were products that were not offered or could be ordered by my local LHS's. They simply offered product and to be honest I did not get much of a price break but it was so unpersonal.

 

I know others will go for the cheap price 100% of the time, but hook me and you have a customer for a long time. To do this just talk to me and smile with your voice and face. Like I said I do value service and I don't think enough LHS try to sell this part of thier business. After all this is what does seperate them from the others.

LOL. Thanks Rick.. That says it all. But this is a challenging industry and its the customers that make it worth it.

Rename the topic ... no big deal.

 

My issue with the LHS's around here is when I ask for something they don't have they give me the "look" and try to sell me what they have in stock.

 

Often I get the "You should buy MTH, Lionel is crap" response.

 

If I dare ask for Williams or RMT they say we don't carry those products since our customers don't like them.

 

No need to change the title,just stay on topic.

The original post was about Williams selling direct to the consumer not RMTs business model which has been hashed out before. If you can't stay on that topic start a new one with RMT as the subject.

Rick is right:

 

 

Jerry

I really like this forum because there are people here that understand the inner workings of businesses, and how business decisions are not always made to intentionally "hurt the little guy."

 

I understand how dealers would feel that RMT undercut them. However, Walter has very carefully, and convincingly, explained how they intentionally tried to NOT undercut the dealers by pricing online at List, and even RAISING prices at dealer request!

 

At some point, RMT had to do what it had to do to survive in the face of a drastically shrinking wholesale market. It was unavoidable that a few loyal dealers would get caught with some leftover stock. Technically, they were "undercut" but those loyal few dealers were simply not enough to keep RMT afloat. The alternative was for RMT to go out of business.

 

Then what? The loyal few dealers are STILL mad, because they think RMT went out of business to intentionally hurt them!

 

Sometimes you just can't win.

The only point you all are missing is that price does not matter, if what the consumer wants is not available in the stores inventory.

A customer can search thru millions of internet records in mere seconds to narrow down what he wants and where they want to buy it.

That...as well as the ability to order the product if found, can all be done faster and more efficient than any store can for their walk in and phone customers.

 

You want service?

What kind of service?

Repairs? Yes, its great to have a LHS nearby to do your repairs.

 

What other kind of service?

Having the store help me decide what I want? Well, in the past maybe..but now, most consumers already know what they want before they buy, as they have done internet research to determine that.

 

What other services?

Browsing? ok, well touchie feely is finer than looking only with your eyes, unless the item is in a box and sealed.

Oh you want the store to break the seal and open the box so you can touch it and actually see it?

ok, well and what happens if you dont like it?

The store is stuck with an open box item.

Oh but what about return policies, it results in the same thing, i.e. I dont like it I return it.

 

Up to you and the store and its policies.

 

The thing is, great personal service is awesome, but only if there is a product to buy and a place online and/or in person to buy from.

Stores are dying breeds because all stores are hurting due to internet sales, and the ones that are not hurting and keep their stores is due to that store having a great internet presence with a fully functioning, accurate, and efficient online ordering system.

 

As lee Iacocca once said, "move forward or get out of the way"...

Most stores with no internet sales and the associated online viewing and ordering system, just seem to only get out of the way and are then found discarded by the road side, still trying to figure out what happened or blaming others for their own inability to change with the times.

 

Time waits for no one.....

What would you do in RMT's shoes?  Should he hold the line on prices while the business is failing / unraveling / under severe distress because there is allegedly a principle at issue?  Would you stick purely to such a principle if feeding your family required you to depart from principle?  I am not judging anyone, but it's a dog eat dog world out there.  You or another dealer could have liquidated your RMT inventory at the same price RMT was selling, and taken a loss.  The extent of the loss would have been, I suspect, modest, since I've been buying trains for 30 years and very rarely have I seen more than a few RMT items at any of the major train stores.  Or another option is to do what Warrent Buffett would have done, is simply to hold the inventory ("Get greedy when others are scared and scared when others are greedy.").  If RMT sells out of GG-1s because he is selling them at rock bottom prices, hold on to your equivalent inventory until he sells out.  Then you can sell them at a price that covers your cost -- if the consumer can't buy them from RMT, and wants one, then you are an option, but now the cost will be higher to reflect your higher carrying cost.  If, after RMT sells out, you still cannot sell your inventory at a price that covers your cost, then frankly the inventory simply isn't worth what you are carrying it at and your best course is to liquidate it, take the loss, and move on. (If it is any consolation, RMT won't fare much better once the company reemerges with product at higher prices if the market isn't there at those higher, non-liquidation prices.) 

 

That's all a long way of saying that it strikes a lot of us as childish to bash the man anytime this issue comes up.  If you are in business, then you know already that it can be rough and that's life.  Move on.

 

As to what WBB is doing, they are using their website to advertise the product at a price that doesn't threaten the dealer network.  They are in a much stronger financial position, like Lionel.  If someone wants to buy factory direct with no market discount, that is the person's perogative and the number of people who do that is so small relative to the number of train buyers that it doesn't threaten the dealer network. 

First, I give Walt Matuch a lot of credit for explaining the process. A lesser man would have just hidden in the bullrushes until the storm passed. The same goes for the gent from Collector Dash Trains.

 

Secondly, I still don't understand why an LHS can't buy directly from a manufacturer/importer, as opposed to be required to buy from a wholesaler/ distributor/ middleman. I don't see value-added to the LHS in this arrangement.  It's just another party taking a cut of the pie. That just makes it more difficult for an LHS to make a profit unless it sells at or near MSRP.

 

Finally, there's nothing I know that guarantees that any company is going to make a profit on every item it sells all the time. If there is such a guarantee, I certainly missed it in economics class and in over 40 years in business. If something isn't selling at your price-point, discount it to the price it will move at, and clear the shelves for something that will sell. The only exception to that rule is if the LHS is contractually bound not to do so, and, in my view, that may constitute  a contract of adhesion that may be unenforceable under applicable law.

 

It's not that simple ... the distributor will order stock and have it on hand long after the manufacturer has run out, that is his function. Although I am not in the hobby business, my stocking distributors have products on the shelf that is 10 to 16 weeks delivery if they order direct.

Thanks for that explanation, yamawho!  Now I have a bit more understanding than I did before.

Face it folks. We are all going to make decisions, when we spend our money. Business models need to adapt. Im not daying it is easy. My first job, 30 years ago, was in a local pharmacy, so i get it. I really do. For better or worse, e commerce is here to stay. Smaller margins are here to stay. Luckily, I have been able to find my toys, at a price point i can afford. Some hobbyists have larger hobby budgets, than I do, some have smaller budgets. i like my N scale lhs, but i cant afford 50 to 100 extra per engine. In O, I never would have bought a williams gg1 at msrp. At a sponsors 169, i could justify using christmas money and selling some box cars...

The problem with distributors (at least some of the ones I know) are also hobby shops, and since as hobby shops also sell direct to customers (non-hobby shops), many times they perform their own special sales or sell below MSRP enough to undercut the very hobby shops that buy from them.  I this I believe also hurts the mainstream hobby shops.  I think that in order to have a more level playing field, anyone that acts as a distributor should sell at MSRP just as the direct online ordering model being discussed.  Or get rid of the distributor network altogether.  I know distributors have their place in the retail world in a general sense but that doesn't mean it's a one-size fits all model that is a perfect fit in all markets and market niches either.

You are correct that is how it is supposed to be and on paper anyways it is. What actually happens is the the distributor opens another company and that one sells direct ...

Going back to the original post, it's quite common for companies in our hobby to sell products directly.

 

I believe William (before the Bachmann) purchase did as did Bachmann for a long time.  Atlas, Weaver, and 3rd Rail also sell directly to the customer. In addition, the last couple of RCS switches I bought came directly from Ross.

 

Jim

 

FWIW ,I was thumbing thru the current MTH Gauge 1 catalog and noticed on a bunch of items that they may be purchased DIRECT from MTH. Why?? The answer is no different than what has been described here. If a manufacturer/importer has excess inventory and cant move it thru the traditional channels, then they need to unload it the best way and at whatever price they can to maintain cash flow.

  We all know about conventional b/m stores closing and we point fingers at the economy etc and that is NOT always the reason. Could it be they were poor businessman who wanted top dollar and carried too much of the wrong inventory?? And heaven forbid they reduce something or have a sale! There have also been shops closing due to the "next" generation of family taking it over, and they dont want a thing to do with it,other than to drain it and move on.