Hornby doing the dirty on another trader?

[user=2089]Ssamm[/user] wrote:

It seems to me that Hornby's business model is based on being successful as both a wholesaler and a retailer. To get there they have tried quite a few different strategies in recent times. 
Perhaps this latest effort is the result of some more convoluted logic to achieve that goal. 
Smaller retailers sell smaller quantities and have a narrower range of products. The smaller shops are also likely to ask for extended credit and higher returns as they have a slower turnaround. So they are not worth the effort (ie cost) of Hornby supporting them at the wholesale level.

Larger firms including some box shifters can demand too big a discount on the wholesale price. Those firms  have also streamlined their operations so can also undercut on the 'recommended' retail price. 

Hornby are then more attracted to those retailers that buy a fuller range, pay on time, and do not compete too much on retail price.

Counterintuitively, a good strategy might be to offer a bigger discount to smaller firms. That gives the smaller shops a bigger margin and hence better scope for competing on price. They would take away some of the market share of the larger firms.

Cheers
Evan

Which is exactly what I was thinking but there doesn't seem too much of that going on at Hornby.

The problem with offering larger discounts to the small shops at the expense of the box-shifters is that it could so easily move the turnover figures in the wrong direction …….

Whilst profit is the ultimate goal, Hornby need a hefty turnover to produce sufficient of it.

It's almost inconceivable they could become masters of their retail trade - they need the shops, large and small, just as much as they need boxes to put their product in.  I can't think of a single manufacturer who also controls their own retail market.

They do indeed have a difficult task in hand.  Retailers, both large and small, have very valid points to make and Hornby must walk a fine line between the two.  Upsetting one side or the other could so easily spell disaster to a company already financially stretched.

A few points. While Hornby does get most of their stuff made in China I also believe they also have other sources, especially Airfix. The actual term is sub-contracting as the design and product development has all been undertaken by Hornby. As China gets richer their cost advantages are going to fall away. Nothing is made in China that could not be made in the UK, or elsewhere, India, Thailand, Vietnam, Brazil, Argentina?
It is actually a bit rich with all these 'box shifters' deciding to get their own designs made in China; no doubt from companies who gained their model railway manufacturing experience on behalf of major companies like Hornby, and then whinging when Hornby and the rest decide they are not in the business of subsidising their competition.

While I do happen to have a couple of proper model shops nearby, Howarth and Shipley Hornby was also sold by a local toyshop, Smyths who obviously closed I suspect calling a greedy landlords bluff.

Really though what business are Hornby in? They are toy makes, part of the leisure industry. That the age range of those interested in their toys ranges from 0-110+ means they have a reasonable market to target. On line trading is becoming very popular, but as others have mentioned the local small shops have not completely gone. So if Hornby, and others have decided that they can sell direct while also supporting smaller traders then it is a business decision. Right or wrong I have no idea.

Evidently they have decided that box shifters are not worth it any more. Probably a good idea to keep ones eys open of the Discount type shops, Home Bargains, B&M, Yorkshire Trading, Works, even Poundland etc. Home Bargains and Works have certainly sold Airfix and Meccano (Ferrari - half price) and Yorkshire Trading unloaded Underground Ernie for Bachmann a few years ago. Outlet shops, especially in tourist areas are also worth keeping an eye on and do not forget the shops attached to heritage railways. The poor guy at Howarth has to compete with the KWVR literally down the road from his shop.

Maybe if Hattons and the rest want to remain in business they should create separate manufacturing divisions and maybe even invest in production in the UK. Maybe they should combine and start another toy making company.

Costs of manufacturing in China have rocketed as they have begun to realise the true value to the Western world of their labour and skills. Most or all items could indeed be made in the UK but at significantly higher costs. Our minimum wage, for example, would be much higher than the Chinese workforce who create our models are paid. That workforce also builds and assembles our products in conditions no employer would be permitted to offer in the UK. 

This is not the place to open the wider debate on ethics, conditions and such like. But we should remember when we think about production being moved away from China that we are currently getting a good deal at the expense of that Chinese workforce. 

Dapol and Peco manufacture in the UK. It might or might not be relevant that some of their products are at the basic end of the scale. But how many of our models would exist without British-made Peco track for example. 

Hornby might no longer be a Margate-based manufacturer but they are still the go-to brand, for many who enter the hobby or who might just want to give Little Jimmy a Christmas train set, simply through longevity and market penetration. If they choose to walk away from having red boxes sold on the High Street they might find they lose that position. 

I Had a look on the Hornby website.

Minimum Postage to Australia GBP 50 or nearly A$100.

To France GBP 19.95.

I'll not be buying from them in any hurry. Even if I could, my preference is to consolidate my orders of various items, impossible thru Hornby.

Yep Peters spares ain't much better.

I haven't bought any rolling stock since Brexit so no idea if there are problems.  I do know problems exist with many UK purchases - either high "handling" costs or, in many cases, a complete refusal to ship to mainland Europe - I think Eileen's Emporium falls into this latter group.  I did buy some Peco points and some Megapoints bits and bobs, both without problems.  In the case of the points, VAT free which of course, should now be the case thus offsetting the postage charges somewhat.
I suspect new locomotives or rolling stock would be a different matter.  Always in the past, French Customs have been involved somewhere in the delivery process.

If Hornby decide retailing is the way forward, they'll need to overcome these problems.  It's one thing importing a lorry load of stock in one go, quite another doing it a wagon at a time to ………

Weren't Hornby opening a European distribution Hub ? I wonder if they will start shipping from there ? Or wether they will just ignore the fact they arent getting European sales ?  As for our Australian and Canadian friends, I'm curious to know, do any of you DO much pre ordering from Hattons ? Or do you browse and buy what they have listed as in stock ? In which case if Hattons DO end up buying some of the remaining stock (if any is left) once its released to the tier three group, you could then still buy and add to your trunk ? 

 I think unless someone else starts offering this service Hattons could still pick up a fair amount of any overseas trade :hmm

Cheers

Matt

[user=2080]Barchester[/user] wrote:

Weren't Hornby opening a European distribution Hub ? I wonder if they will start shipping from there ? Or wether they will just ignore the fact they arent getting European sales ?  As for our Australian and Canadian friends, I'm curious to know, do any of you DO much pre ordering from Hattons ? Or do you browse and buy what they have listed as in stock ? In which case if Hattons DO end up buying some of the remaining stock (if any is left) once its released to the tier three group, you could then still buy and add to your trunk ? 

 I think unless someone else starts offering this service Hattons could still pick up a fair amount of any overseas trade :hmm

Cheers

Matt

I've only ever pre-ordered one minor item, a new wagon I didn't want to miss. I had it directed to the Hattons Trunk for consolidation so it worked out very well.

 Normally I wait until reviews have given any new releases of locos a +ve/-ve as I've been burnt too many times over my modest period of buying. Even re-releases of Hornby's have been problematic e.g. the 2017 Class 48xx, where they worked very hard to mess up the running performance of an established design by making some slight changes.

This defensive approach has paid off for me so losing pre-orders at H is no big deal. Maybe it will play out OK for us in remote locations as you say.

The last thing I pre ordered was the original Heljan Beyer Garratt from Hattons. Waited two years for it to arrive & it was a disaster. Had it five minutes before it broke down so I vowed "Never again" Got a replacement & that was just as bad. 
Eventually I got one of the second batch but not before I saw what it was like.
Now I wait until something is in stock & I see the reviews. 
If that means I miss out then so be it. I can live with that.

[user=2080]Barchester[/user] wrote:

Weren't Hornby opening a European distribution Hub ? I wonder if they will start shipping from there ? Or wether they will just ignore the fact they arent getting European sales ?  As for our Australian and Canadian friends, I'm curious to know, do any of you DO much pre ordering from Hattons ? Or do you browse and buy what they have listed as in stock ? In which case if Hattons DO end up buying some of the remaining stock (if any is left) once its released to the tier three group, you could then still buy and add to your trunk ? 

 I think unless someone else starts offering this service Hattons could still pick up a fair amount of any overseas trade :hmm

Cheers

Matt

I pre-order things from Hattons, Rails and Kernow (amongst others), especially when I know the items are going to be popular and sell out quickly. Hornby's Stephensons Rocket was a case in point.

I don't buy from Hornby's own website because they are expensive, not just for the models at full price bit also because of the ridiculous postal costs. I thnk someone at Hornby must be smoking certain halucinogenic  substances with these recent decisions of theirs.