Just purchased a newly released Lionel set

Unbelievable!!!

Williams and RMT comes to mind.

My sense is they are giving the dealers a certain amount of time to clear their inventory but beyond that point Lionel has to clear its inventory too.  Lionel has made a business decision that the firm cannot sit on inventory.  The dealers will need to do the same or Lionel will not be bound by a dealer's perceived unwillingness to match the price to demand.  Business conditions are difficult today and this is consistent with BTO.

I was talking to my local hobby shop owner yesterday-has been in business a good while, and it,isn't easy. he carries a lot besides trains.  Telling him about the Lionel Berkshire fiasco, he has one in the box but wasn't surprised.  He carries a lot of the new engines in a big glass display case, pretty but out of my price range. If I did buy one, I would buy from him instead of on-line.  I still like to see what I am getting plus dealer support.  When I was a salesman the mrs. were usually the biggest problem , not the customer. I fought with them constantly over delivery, pricing, service and competition.

That doesn't sound like a good way to support a dealer network. My LHS has also complained of this happening. I think they got stuck with some items a year or two ago that went to a manufacturer's blow out pricing sale. Items were sold for less than LHS's costs, they were not happy.

I saw this a few nights ago right after Lionel put them on e-bay. It appears that they are all LionChief remote sets. I took notice because I had purchased a few from Charles Ro. And they were $12 to $20 cheaper then his prices plus with free shipping. This may not have been that bad if Lionel would have done this after Christmas. To me this really has to hurt the dealers large & small. Maybe the premium sets are going to be offered only thru the dealers. We will just have to wait and see.

 

Well Ed, with only a $9.00 price difference, why didn't you buy it from your local shop? OK, yes there is sales tax, but part of that benefits your local county if your state is like NYS, where part of the sales tax stays in the county of purchase. Plus, you're supporting your local economy and a local dealer.

 

RAL also makes a good point. Although I understand the position of dealers, especially smaller ones, who do not get the lower wholesale prices that larger volume places do.

 

But then again, Walmart comes to mind. People grumble about Walmart undercutting prices of other local businesses. And then you see the same exact people who grumble about this, shopping and spending money at Walmart. And what is their reason??? Lower prices.

 

Unfortunately, Lionel has the same bottom line concerns as do their dealers. People expect Lionel to make this and that and everything, which costs money. Lionel has a bottom line too, so as RAL mentioned, they move out inventory to help generate it. 

 

That practice doesn't help the small dealer much. But neither do the threads like: "Who has the lowest price on such and such a train?" Anyone recall the Vision Big Boy pre-order pricing battle witnessed here on this forum?

 

I wouldn't blame Lionel anymore than the typical consumer who demands the lowest possible price.

 

 

brianel,

 

The first line of his post says, "Today I purchased from my local hobby shop..."

 

 

Not to open a can of worms, but what I think BTO really is is the elimination of the distributor altogether.

 

Every one who touches the product on the way to consumer will mark the product up to make a profit....which is necessary for a business to exist.

 

To me, the distributor is more than likely the odd man out here.  I think we'll eventually see products go from Lionel to the LHS or online retailer and then on to the consumer.

A lot of nice dealers in my area have gone out of business. It's really sad.

I agree, Lionel should not be in the retail business for any products sold by their dealer network. Why bite the hand that feeds you.

eddiem, I guess I read it so fast, I guess I missed that. My reward for trying to have a couple pages open at the same time, doing 2 different things.

 

Thanks for pointing out my oversight. And my apologies to Ed, and congrats for supporting that local dealer.

 

I've always had good experiences with local shops. And for the time I pay a little more, the payback comes later on in service.

 

But it is not an easy time to be a smaller local train dealer. And it's been that way for some time. I've heard small dealers voice their grievances about the mail order places for as long as I've been back in the hobby... 23-24 years.

It is hard to be a direct dealer.  My LHS was for years but it became easier for Lionel to operate through distributors.  This is yet another parallel to the musical instrument retail model.  On most items i buy direct from the manufacturer but on some we don't even come close to being the speck on the bird poop worth of business and must go through distributors.  Not ideal but it is what it is.  

 

I am glad you opted to buy local.  One of my favorite lines when someone asks me to throw in the tax to compete with an online retailer is "It's hard to mail order a fire truck when you need one". Some understand and buy and others don't get it.  

 

I do prefer to buy local from my LHS but there are some things that I get from the forum sponsors.  

If you buy a Williams product on the Bachmann website it is full MSRP - not discounted.

Looking at Lionel its $399.99 now, must have been a Black Friday special  And personally I don't think $9.00 cheaper from Lionel would have been enough to make me not buy it  from my LHS.

 

I recently just bought a lionel polar express 10th anniversary set from my LHS for 335 tax included lionel had with free shipping for $304 for the extra 30$ I rather give it to my lhs it supports local business and I got it that day and there support is priceless

They keep bringing up the word "collectable" in the new catalogs. Perhaps that concept has something to do with their new decisions.

 

 

 

Andrew

Lionel needs to re-think their business plan, if it is hurting brick & mortar train shops. My local dealer is a Authorized Service Center for Lionel & MTH. This is a big plus to buy at this kind of shop. 

 

I purchased the Albert Hall set from my LHS yesterday and he charged me the same $280.00 plus tax as Lionel was doing. He actually drives to his wholesaler about once a month to pick up the new releases and other product to restock. They have an excellent relationship because they know each other face to face. He pays them on the spot and the boxes arrive back at his business in great shape as opposed to having them shipped and getting dinged or worse.

If you buy a Williams product on the Bachmann website it is full MSRP - not discounted.

 

You apparently don't know about the stunt Williams Trains pulled about 15 years ago. This is not about Williams by Bachmann which is a different company.

Could someone post pictures of the cars that come with the set.  I love this loco (I have two other versions of it), but the cars look a bit strange in some photos and illustrations and not in others.  I'm thinking of buying a set (from a forum sponsor). 

 

Thanks.  

This is why a dealer doesn't stock more than a few of each Lionel set. We have been selling them at $100 off list, and that's not enough. It's cheaper for me to buy them at Menards than from a distributor. The margin doesn't even cover the inbound freight. 

 

The guy that's getting killed here is the distributor. He can't move them in volume. Selling sets one at a time to the retailer instead of full pallets. If I was doing this to make a living, I'd be broke. 

And there you have it.  EXCELLENT RELATIONSHIP.  

 

With management changes constantly occurring these days, we can only imagine how challenging the landscape becomes.  Just when the large dealers think they have a handle on who's who at Lionel, the reset button is pushed and they're dealing with new contacts.

 

Years ago Lionel would never have undercut their dealer network, and they never had consumer warehouse events either.  All that stuff was pushed through the dealer/distributor network as inventory close-outs which we effectively saw in the form of blow-outs.  And some of the largest dealers wanted it that way, 'cause they could then control the price-point better.

 

So now you have an entirely new group running the show.  Not only is their #1 dealer short-shipped on a high-profile BTO item, now Lionel undercuts his price by a few bucks on a Black Friday special?     A time when it's traditionally THE weekend for dealers to move product in a big way?  Wow... Brilliant move guys.    You think your dealer network can't read between the lines?

 

I would find it extremely challenging being a full-time train dealer today.  On one hand you have customers always looking for the cheapest price.  And on the other hand, you have management changes on the importer front to deal with.  Some days it's gotta look like you just can't win.  

 

David

I have been retired 15 years now but having worked for industrial distributors over the years, we faced the same problems then as now. Cash flow and inventory plus nonsense in the management.  Manufacturer"s  put people in jobs who have to just ify their job and salary and they don't give a rip.  We represented a major, reputable pump mfr. when they were bought out by a conglomerate and what chaos !!  We couldn't get any answers from the home office because everyone was busy trying to hold on to their jobs.Seen it many times, could write a book. No loyalty at all, any more. I would tell my boss "It is a Wal Mart" world", low prices with quality and service.  My employers are all gone now, too. No easy answer, for sure. I would buy local as much as possible. Yesterday while railfanning I read some of the new OGR isue-print version.

Not siding with either party here.......but like ALL things in our world.....retail is changing drastically.  Old world was manufacture to distributor to wholesaler to retailer....with each doing some work and each getting a slice of the pie. Today many if not most manufactures have become the distributor, wholesaler and retailer because the other have dropped out of the biz or so they get more pie. Either way it has changed. If much of Lionel is going to be BTO then who needs a distributor to store and ship as needed to retailers??

 

Change is the only constant today......good and bad.

I agree Dave...

Also, I have never seen anything "I want" sold for less directly by Lionel, and those items they did sell for less, I have no interest in, i.e. Sports, NASCAR, and other Fantasy themes.

For me it is the "Mr Muffin's" of the train world and others like him to buy from.

 

As there is no close local shop, ordering from Lionel is as easy as any other place.