Sachsen coach rake.... great price from Germany!

In the toy and hobby industry in general (which I'm in for a living, albeit in a rather different area than model railways), a distributor markup of 30-35% is far from uncommon. Most often, when a distributor is involved in the loop, the final retail price works out at one-third for the manufacturer, one-third for the distributor and one-third for the retailer. This is just one of many reasons why the vast majority of my sales are direct online mailorders between me (the manufacturer) and the end customer!
Retailer markups of only 4% or 5% are the stuff of things like the computer retail industry.

Jon.
 
I could tell you how much the Hobby Company wanted for this set last year but it will make you cry! Our retailers are not making that much from them.
 
If we can go direct to suppliers in Germany, I don't know why UK retailers can't deal direct with Marklin like those in Germany clearly do!? The volume of orders for LGB must be relatively small anyway?
 
I suppose I can see this Paul - does this mean Hobby-co actually do some LGB authorised repairs? If I buy something from Germany though, I presume it is still under warranty, just that I have to return it to them if there is an issue. For something as expensive as an LGB model, I'd be happy with this anyway :) Maybe our hobbies traditional view of import/distributor/warranty is outdated with the EU economy and internet shopping.
 
Its not just LGB....if I wish to resell TrainLine products they direct me to the UK distributor.
 
Alec said:
.........
So not sure how the Hobby company can hold force retailers to only purchase from them
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It's not actually Hobby Co that forces them, it is Marklin - by simply refusing to sell direct at trade price to anyone in a country where they have an authorised distributor. If you're a trader in the UK, and you want stock at trade prices, then you have to go to Hobby Co for it.
What Hobby Co does presumably set for themselves is the amount of mark-up they put on the products they handle.

Mind you, at the sort of savings we've been talking about, an enterprising UK dealer could actually buy stock of certain items from other TRADERS in Germany, at those traders' full retail prices, and then still re-sell in the UK at prices that would undercut the items that had to go via Hobby Co (for example I could have bought half a dozen of the Sachsen sets instead of one, at £350 a pop, then re-offered them to folks on here or on evilBay at, say, £400 - making £50 on each one!); however doing so would probably incur the wrath of a) Hobby Co, b) other UK traders, and c) Marklin themselves, and it thus wouldn't be a good move for a shop or other full-time trader who wanted to continue in business in the long term...... thus the distribution system is perpetuated.

Jon.
 
Alec said:
Same here Alyn, I must admit I don't buy anything like as much new stuff as I used to, there is plenty of good second hand stuff around, but anything new comes from Germany, last 2 items have been a Blue V52 (279 euros) and a red Kof (215 euros) even with very poor exchange rates and postage that translated to £264 and £198, over £300 less for the 2 then the UK prices.
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Exactly - I've just worked out (very roughly) that buying my last three locos and this coach set from Germany has actually SAVED me almost £1000.....

Jon.
 
As I said - the EU free market level playing field and the internet, plus fast courier service, mean (language aside) we can shop from anywhere in Europe - if I was a model shop in the UK I would be talking to my competitors (especially in the Garden Rail market) and going en-masse to Marklin and pointing out this disadvantage and seeing what could be done about the changing shape of the market. The HobbyCo might mark up the prices so much because of the low volumes, but the volumes would be higher with more competitive pricing! Catch 22?!
 
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