50' Waffle Boxes and direct marketing.

[ljudice]

Where did you hear this?

Robbman, several versions of this story have floated around.  The one that I heard, from a dealer was that one of the founders (the tooling guy) who was running things was focused on doing things the old fashioned way, multi tier distribution model, but was just tooling too many models, disagreements ensued, and he left.  The other principal, who I believe is a internet bazillionaire (or data mining guy actually) wanted to run the company on his original idea which was direct sales with tons of marketing intelligence, which is his specialty. 

Take it for a grain of salt... 

[Robbman]

That's my point... there's several different versions of several different rumors etc.   ER made their decision... either buy or don't buy, but don't make up stories and try to pass it as fact. 

[wcfn100]

That's my point... there's several different versions of several different rumors etc.   ER made their decision... either buy or don't buy, but don't make up stories and try to pass it as fact.

My personal memory is that they were direct only at the time of their first announcement and ended up offering some sort of wholesale distribution very soon after.

Jason

[SkipGear]

ER was direct sale from the get go but from day one they were also soliciting hobbyshops to be dealers. Our shop got a number of letters asking us to be a dealer. After about a year, Walthers picked them up, about 6 months later they dropped everybody. We got another letter from ER asking to be a dealer about 3 weeks before they canned the dealer network. We were just getting ready to fill out the paperwork and do it. Glad we didn't.

I'm glad the topic hasn't gotten snarky. I am really curious if it is working for them or not. I don't know how the HO market has dealt with it and they seem to have a lot more HO offerings. At least from the customers we see in our shop, HO guys are more set in the "traditional" system than N scale so I thought HO would be a bigger struggle for them. It seems just the opposite though, there is more N scale hanging around in stock than HO. It just seems that releases have suddenly slowed to a crawl in both scales after seemingly having at least a new release every month in one scale or another.

[Coxy]

I agree with the comments earlier in this thread about retail transitioning to online. ER is wise to follow this trend and rely on direct marketing.

Personally, I have no problem with direct marketing from manufacturers of products I am interested in. My personal experience with many LHS's over the last 40 years is that with a few exceptions, they have not added much value beyond being a place to see and buy N scale items. With that as my baseline, direct marketing and online sales are perfectly reasonable alternatives.

I care a lot about the longer term viability of quality N scale manufacturers. I'm sitting on about 800 freight cars (y'know, it's not hoarding until you can't get out the door ). My fleet is pretty good, but I'm progressively replacing the lower quality stuff (MDC, Roundhouse, Atlas etc.) with better models so it matters to me that quality manufacturers like ER stick around. It matters even more that manufacturers like ER are willing to offer new outlines, and not just re-release old models in different paint.

I monitor the rolling stock adds in the various railroading mags noting the presence of N vs. HO. My impression is that over say the last ten years, HO just gets better and better in terms of offerings, while N scale has declined a little. For smaller markets like N scale, manufacturers will need to rely on efficiencies such as direct marketing to make decent returns on their efforts. More power to them. I hope the DM model works out well for ER and that the N scale market continues to represent a worthwhile business to them.

[asarge]

Horse Hockey! Direct Marketing works in a B2B setting in certain industries because you are only selling direct to other businesses who are the end user. In the retail business, it's a much, much tougher sell. Lotsa people have tried it and eventually they turned to getting their product in front of someones eyes and in their hands. They may end up buying online in the end, but the vast majority of nof grocery retail sales come from sticking the product under other peoples nose's and that's the way it's going to be for the foreseeable future.

[Mark5]

I am one of those guys that likes to see the product in person before I buy. I am lucky to have a LHS where I can do this.

I am reluctant to buy product based solely on website photos.

I have heavily resisted buying from ER since they went direct only. But I have to admit that aside from the waffle, they really haven't tempted me with anything since they went direct.

I resent the fact that if I want one of their releases, I have to tack shipping on top of the cost of the car - in the case of the waffle I am looking at ~$30 for one car. I don't have this issue ordering from e-tailers or the LHS.

I am personally hoping someone that still distributes (like WOT, Trainworx, etc) will do this ER HO model in N scale:



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Mark

[cv_acr]

I am one of those guys that likes to see the product in person before I buy. I am lucky to have a LHS where I can do this.

I am reluctant to buy product based solely on website photos.

On the other hand, ER has such nice big photos (and of at least half a dozen angles) on their website, I can see the car better there than stuck in a box and in its plastic packaging in a hobby shop aisle that may or may not be nicely lit.

[Mark5]

On the other hand, ER has such nice big photos (and of at least half a dozen angles) on their website, I can see the car better there than stuck in a box and in its plastic packaging in a hobby shop aisle that may or may not be nicely lit.

Yes, I have a secret strategy for these situations, I take the item out of the box.

Mark

[Ed Kapuscinski]

Yes, I have a secret strategy for these situations, I take the item out of the box.

Mark

I've seen him do it!!

[Packer]

On the other hand, ER has such nice big photos (and of at least half a dozen angles) on their website, I can see the car better there than stuck in a box and in its plastic packaging in a hobby shop aisle that may or may not be nicely lit.

You can't "weigh" the item through a computer screen...

[kalbert]

Like it or lump it Exact Rail doesn't sell through a distributor and only sells direct. Some of you are choosing to lump it. Some are choosing to like it. Either way what's the big deal? If you don't like it what the hell do you care if they are sitting on a pile of stock yet? Sounds like you're getting what you wanted!

I was one of the guys clamoring for them to do the waffles, to me it doesn't matter how they are sold to me, somebody just take my money and send me some damn waffles. For some of you the distribution method is a deal breaker, and that's ok if that's you're thing. None of us is right or wrong for buying/not buying direct.

[JSL]

+1  What he said!

[Denver Road Doug]

Like it or lump it Exact Rail doesn't sell through a distributor and only sells direct. Some of you are choosing to lump it. Some are choosing to like it. Either way what's the big deal? If you don't like it what the hell do you care if they are sitting on a pile of stock yet? Sounds like you're getting what you wanted!

I was one of the guys clamoring for them to do the waffles, to me it doesn't matter how they are sold to me, somebody just take my money and send me some damn waffles. For some of you the distribution method is a deal breaker, and that's ok if that's you're thing. None of us is right or wrong for buying/not buying direct.

Yep, couldn't agree more.   I don't think anyone here is calling someone out for jumping through the picket line.   

I think it's just human nature for some folks to know how a business decision turns out.   I love watching shows like Undercover Boss, Shark Tank,  et al and reading books about successful (or not) businesses for that same reason.   I like learning from other peoples' mistakes--err--experiences.   

[Ike the BN Freak]

I'm not a huge fan of the direct sales, however they do offer free shipping for over $50, so its not hard to order 2 cars instead of 1, plus they send out emails and once in a while cars I want are on sale.