Exactrail doing SOU Waffles in N

[lock4244]

Problem I see with direct model is that you are stuck with mfg A or mfg B's product. Nice thing about the LHS or a website like MBK's is that you can build your order with many mfg's and many products to spread the cost of shipping out. I would pass on an EXR offering that I only wanted one of since the cost with shipping is way too high. IMO, this is the real problem with direct sales and is one very important reason that the traditional dealer networks exist.

Possible that if all mfg's went direct, they'd see lower sales. I know for a fact that bundling to save shipping costs is a factor in the buying habits of more than a few people. You'd have to really want one boxcar to pay $22 for it and another $10 to ship. This is why EXR offers free shipping over a certain dollar figure, but being in Canada the order must be over $150, eh, not the $50 for US addresses.

Again, why is shipping to Canada made to seem like such a big deal in the US? It ain't difficult!

[conrail98]

The other issue with direct (and pre-order) is that as prices continue to climb for cars, and I do think they will continue to rise, you're not going to want to shell out that $50 or more without seeing the actual product first-hand. To me, LHS are like the car showrooms. You can go and tangibly look at a car there and if they don't have one in stock that fits your needs, they'll order it for you. If every manufacturer moves to direct, LHS will go away and so will the online stores we've become accustomed to buying from will also. My biggest fear is that as LHS continue to carry less and less N-scale, we might see our scale become the one with direct, but HO not. Now, if direct sales means that the tooling is always available and say I can only purchase 1 or 2 cars today, but next year I could double that purchase and still be able to, it may not be a bad thing to do. I just worry about the ramifications of such a model with not only our hobby but the growth of it as well (if shows and LHS go away, where do the kids go to get a taste of what model railroading is all about?),

Phil

[C855B]

...
Again, why is shipping to Canada made to seem like such a big deal in the US? It ain't difficult!

This is why:

2.2.1
   
Customs Duties and Taxes

Any item mailed into Canada is potentially subject to duty and/or taxes with few exceptions. Visit the CBSA web site at cbsa-asfc.gc.ca/import/postal-postale/menu-eng.html for more information on mail imports. The CBSA collects provincial sales taxes (PST) on most taxable imports valued at over $20CDN entering Quebec, Manitoba and Saskatchewan. The CBSA also collects Harmonized Sales Taxes (HST) on most taxable imports entering Newfoundland and Labrador, Nova Scotia, New Brunswick, Ontario and British Columbia.

Collection of the PST and HST is done in accordance with the agreements between the CBSA and the provincial governments.

Customers with questions regarding the collection of these taxes should call the CBSA Border Information Service (BIS) line:

    * within Canada 1.800.461.9999
    * from outside Canada 1.204.983.3500 or 1.506.636.5064 (long distance charges will apply).

A handling fee of $8.50CDN per dutiable or taxable mail item is applied. This fee is in line with the government’s efforts to help recover costs from those who benefit from services, and is similar to arrangements in the United States and other countries.

Mail items containing merchandise enter Canada through CBSA screening centres, are inspected by CBSA Officers and assessed for applicable customs duties, taxes and charges. If duties and/or taxes are owed, items will be delivered along with the E14 Customs Invoice indicating the amount that the addressee must pay before the package can be released to them. Canada Post collects the fees on behalf of the CBSA and accepts the following methods of payment:

    * cash
    * certified cheque or uncertified business cheque (payable to Canada Post Corporation)
    * credit card (Visa, Master card or American Express)
    * commercial account.

Upon payment and receipt of the item, importers should retain a copy of the E14 Invoice as a receipt for their records.

Talk about a "Royal" pain-in-the-tuckus. If you have only a handful of Canadian customers amounting to maybe one or two orders a month, this is the kind of thing that takes beaucoup staff time. Personal shipping back and forth, no big deal, but commercial shipping has to play by your gov't's rules.

This doesn't address the issue of a customer filing a false dispute with his credit card company and screwing the shop out of their payment. International law is extremely weak for cross-border fraud and theft, especially on small scales. Even shipping to Canada is a risk. Before you pooh-pooh this assertion, we (in the U.S.) are currently dealing with a number of scams based in Canada, mostly because of their US-system phone numbers. U.S. authorities are stymied because of the penny-ante nature of the scams and they can't get enforcement attention up there.

Bottom line - time and risk have to be offset by revenue. That EXR even offers free shipping to Canada tho' with a higher minimum is good. They could simply not ship at all.

[sundowner]

Man, people need to relax, EXR main business is HO like Athearns, Up untill recently they have pretty much ignore our scale. Sure they make nice cars like the TBOX but they are not the only game in town.  As for the waffle it should be price under $20.00 after the sob story they put out to go direct, if not it will sit.

[Puddington]

I like the Exactrail hoppers I own; I bought them all at an LHS

I will not buy another Exactrail product, other than those found at an LHS

I chose to support LHS's and will express my dislike of Exactrail's new policy with the silence of my wallet.

Exactrail is free to run their bsuiness however they choose; I am free to ignore their products if I choose to do so; and I do.

I hope their new business model fails; because it is not one I want to see others copy. I hold the owners no ill will; but all the same I hope they flop with this model and re-think their position.

[Brakie]

Guys,To be blunt LHS is a dying thing since there's no money in it since you're depending on your customers disposable income.What young man with a family would gamble his family's future with a high interest small business loan knowing most small business close within 5 years?

How you going to compete with the bigger on line shops,pay state and local taxes on everything in your shop's inventory and support your house hold bills,car payments,home mortgage,pay property  and school taxes and save for the kids college??

Once the old establish shop owners retire or pass there will be very few takers and some of those that do will fail.

Most young men will want that $30-35,000 a year cubicle job instead.

[MichaelWinicki]

Just some random thoughts...

If this was company "FYS" who just arrived on the scene in N-scale and offered these cars at the same price point and same ordering stipulation i.e. direct sales only, would it cause a ripple in the community?

I'm not sure if the $50 price point is the one that causes people to say, "I'm not ordering this car unless I see it first."  There are a lot of folks out there that drop $50-$100-$500 on stuff without ever seeing it first.  As long as you're working with a dealer who has some sort of reasonable return policy I don't think it's an issue. 
 
As far as the money EXR makes on each car, I think EXR knows that they will not sell as many cars going direct as they were wholesaling the product to distributors, who in turn offered the product to retailers.  Also keep in mind that just because EXR has gone the direct-to-consumer route, doesn't mean that there aren't associated costs many consumers don't see such as increased staff help for order taking & processing, much more time and effort involved in shipping products (shipping out 50 small boxes per day takes FAR MORE time than shipping out 3 large ones).  And then you have all the other "fun" a business model like this comes with like answering consumers questions, having to deal with returns and maybe the worst thing is dealing with all the credit card fraud.  EXR's % of fraudulent sales is going to increase-a lot!  And I guarantee that EXR's marketing costs are going to go up.

I've thought more about Hyperion's point about not finding EXR product in (many) hobby shops.  That could have rubbed EXR the wrong way.  They may have realized, "OK, if dealers aren't going to carry our product in stock, then why we do have a dealer network?"  I don't claim to be a big-time hobby shop visitor.  I just don't have many shops nearby, but I will say that virtually all of them follow a merchandising "pyramid" where the base represents all the lower priced items in their store and the tip represents the most expensive, meaning the higher the spot on the pyramid the less representation of the more expensive items.  I'm sure EXR saw some of that.

[havingfuntoo]

I find it shallow thinking that some would consider that a company would discard a dealer network simply to be greedy.

I can not be certain but I have a dim recollection that Exactrail runs were of a limited number and if you did not place your order early you would miss out. I live in a country on the other side of the world and some of our LHS (and there is not many of them) are not the fastest out of the blocks when it came to ordering new stock. Now if the LHS owner you are dealing with is blessed with indecision on how they will divide up their meager resources (yes I acknowledge they do have to be careful) then he or she will miss the opportunity to buy, which could explain the lack of product distribution that has often been mentioned in this topic. Having a bunch of customers who require seeing it, touching it, and what ever else before they commit to purchase does not help the LHS make it through to the end of the month.

Paying bills is hard work for most business.

I am sure Exactrail is in the same position, if you extend credit you can find yourself trying to live on fresh air and if you don’t you find it hard, if not impossible to sell your product to the market place. Your LHS will most probably not let you take something home until you have paid for it.  Who ends up being the meat in the sandwich, you got it right, the bloke that made the stuff and offered the LHS the unsecured credit. I would much rather sell a little less and make a little more on each item by selling direct. I could then do away with having to fund money recovery processes and having all the ill feeling that was created between the two involved parties. Credit card fraud is a problem but not if you are careful and take a few simple steps.

In the end who stands to gain the most out of this type of fat cutting exercise? We the modeler. No matter from whom you buy quality will always sell, especially if it comes at a reasonable price, and as an added bonus, if you buy direct you usually get the item you ordered. You are not left waiting to find out the LHS did not act quickly enough on your order and you have missed out. Anyone here been there before?

It is good to have principals and support your LHS but sometimes the reality of life means that there will be change. How many here use the bay to obtain items they want to buy or sell? Enough said?

Not quiet just one more thought …..

To take it a step further we used to go to the LHS to have a social chin wag and pass comment, now we turn on our computers or tablets or even our telephones and log onto ‘The Railwire’ and have our discussions.

[SkipGear]

** Long reply deleted **

It is as simple as this, they have no respect for the dealers that helped establish them. I don't really care if it was premeditated or a last ditch effort to stay alive, it was a crap decision either way. I would have never purchased the limited number of their cars that I do have without seeing them in person first. They will never see another penny of mine.

[Hyperion]

If your problem is that you can't see the cars before you buy them, that ship sailed long before Exactrail even existed.

I'm trying to think of the last N scale item that I really wanted that I actually could look at before I bought it.  It's all been "better buy it now because "in stock" won't exist for this stuff".  No joke, it's gotta have been a decade since I could really say to myself "Man, that announcement ooks really cool, I can't wait until I can check that out at the LHS and decide then if I want to buy it".

I suppose one could argue that when I pre-order through an LHS that at least I could have examined it before actually paying for it and refused it if I didn't like it.  But, really, that's just making my problem someone else's.  And only slightly more convenient than just putting it back in the box it came in and returning it (and less so if your LHS is further than your post office).

So today, I, like the majority of purchasers seem to be doing based on the ever-dwindling number of LHS and the fact that the remaining of any significance almost all have e-storefronts, end up buying online, sight-unseen anyway.  And, really, what's the difference between me ordering from Chulvis and me ordering from Exactrail?  Nothing, that's what.  Added shipping maybe, but these orders get to be so expensive, what's a few more bucks.  And that'd be offset by the fact that I'd be FAR more likely to send something back if I wasn't happy with it directly to the manufacturer than I would Chuck (though, really, poor items are so rarely a problem anyways).

So, "crap move" for the relative handful of people still purchasing prime N-scale rolling stock from LHS inventory?  Of course.  If you're a guy that has to see something before you purchase it, yeah, this sucks.  But more likely than not, N-scale would have sucked for you for many, many years.

With these mystical "LHS'" becoming fewer and farther between for most people, and "N scale inventory" a rarity amongst already rare LHS' (particularly of good, new things people want), the move only makes sense.  It's simply the inevitable next step of an industry that has moved to a 'build to order' model based on preorders off an announcement made 2 years prior.  As a consumer, the retailer and distributor in such arrangement provide absolutely no value whatsoever and could, in fact, provide negative value (missed/incorrect orders, having to drive to get my order, etc).  What do I care whether I submit my order to an LHS (or, more likely, to its' website) or to ExactRail's website?

[SkipGear]

If your problem is that you can't see the cars before you buy them, that ship sailed long before Exactrail even existed.

....

I'm sorry you seem to live in the same Hobby Wasteland that Brakie does. I haven't needed to buy a new product online in at least 2 years. The last new item that I bought on line was a special run MTL 3 pack from BLW and that was the only way to get it. Between the shop I work at and other local shops and shows, all my needs have been covered. I do buy used old, out of date items on Ebay periodically but never anything new. Our shop is not going anywhere fast, has very little web presence and is shooting for over a million in sales for the 4th year in  row. The LHS is not dead no matter how many times you guys keep shooting at it.

[Brakie]

Tony,Maybe you should move here and open a well stocked hobby shop so,I won't be living in a hobby waste land?

However,be warned.

The last well shock hobby shop was in Tiffin and lasted less then 6 years and it too specialized in HO and carried very little N Scale-serious modelers buys HO so he once said...

Again my hobby shop mecca is a 128 mile round trip and most of those shops specializes in HO and Lionel with limited  N Scale stock-doesn't sell very well according to them..

Seeing you are gainfully employed by a hobby shop I can understand your bitterness and failure to realized a lot of areas doesn't have quality hobby shops that stocks new  N Scale or in some cases new HO.
Some cities (like Marion) doesn't even have a local shop.

[ljudice]

So getting back on track can we talk about the SOU Wafflesides again, instead of the future of the retail hobby business?

[Brakie]

So getting back on track can we talk about the SOU Wafflesides again, instead of the future of the retail hobby business?

Sounds good to me..

I wonder if they will do the short line cars like they did in HO?

Needless to say I'm very excited about this long needed car.

Now to get Atlas off their lazy behinds and get 'em to produce a SW1500 we'll be in  N Scale paradise.

[bbussey]

... It's simply the inevitable next step of an industry that has moved to a 'build to order' model based on preorders off an announcement made 2 years prior.  As a consumer, the retailer and distributor in such arrangement provide absolutely no value whatsoever and could, in fact, provide negative value (missed/incorrect orders, having to drive to get my order, etc)...

Actually, the distributor network does have value.  Distributors have a larger built-in customer base (dealers) that they advertise to regularly.  They act as another marketing arm for the manufacturer in that regard, and significantly increase demand over dealing directly with the dealer network or directly to the end consumer.  That's how they earn their 10% of the pie.  The manufacturer is willing to pay that vig for increased production and exposure.