I recently read about people with preorders at a hobby shop that went out of business. Who is "manning up" to repay the deposits. I deal with a large shop, but I don't think that the open ended loans we are making is fair.
Find a dealer that requires no money down on a preorder.
Maybe Mr. Muffin can elaborate, but I don't think the manufacturers "ask" for a deposit. This is something the dealer chooses to do likely to help solidify the committment.
I've never put a deposit on any preorder, never will. There are plenty of dealers that take preorders without out one. i.e. Mr. Muffin, as well as the largest O guage dealer in the country to name a few.
No, none of the manufacturers nor distributors require a deposit from the dealers. In some cases when the cancellation comes into the dealer way before shipping, the manufacturer is okay with your adjusting down your order.
The manufactures and distributors do expect payment per the agreement from the retailer on time. If they don't get it, they stop shipping, and the dealer follows the path of Circuit City. Without new stuff, bye bye.
Everything sells in time. But sometimes it takes awhile. We sold an MTH Allegheny set and three MTH Premier Shays this week and they'd been here, NIB, for nine months or so.
The retailer really really needs to have like 8 turns a year on the inventory. That means annual sales/average inventory needs to be 8 or more. The pre-ordered stuff moves really fast; not so much the rest, like track and rolling stock.
People come into the layout, learn that I am a college professor and ask what I teach. I like to say " I teach students how to make money, which is not what I am doing here."
We have the benefit of running a real estate business out of the same location. They graciously help pay the rent and answer the phones. Without co locating with another business, no way we could do this. With them, it all works out.
