# MAP pricing ???



## Dave F (Jan 2, 2008)

OK.. so I know that as of the 1st of Jan, 2009 all them there E-tailers were supposed to conform to the Minimum Advertised Pricing regs.. So I just did a little survey of five on-line retailers... St.Aubin, Wholesale, Trainworld, RLD & Ridge Road. I was looking at the Aristocraft Mikado 2-8-2, electric version. 

Threer of our fine suppliers were within $1.50 of each other... ranging between $440.49 and $441.99.
One didn't have any listed.... 
But we had one outlier..... One retailer had listed a retail price of $330.75.

My impression of the MAP pricing issue was that it was a federally mandated operation. 
Isn't everyone required to play? Do we have a Rebel in our midst? I know that they can price it however they like when the sale is made, but aren't they SUPPOSED to advertise at the price set by the manufacturer?????

What's up with that?


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## Nicholas Savatgy (Dec 17, 2008)

Dave if you call the dealers you will find the prices are far better than that for a mikado...
Nick


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## Randy Stone (Jan 2, 2008)

MAP is not federally mandated. It's an attempt by the manufacturers to limit internet sellers, typically. I'm talking about the sellers making 5 or $10.00 on a $400.00 sale. The brick and morter shops cannot compete as they have overhead to pay for while the internet sellers work out of their house. The only way MAP can be enforced is by the manufacturer refusing to sell to the dealer that is not abiding with the MAP.


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## Dave F (Jan 2, 2008)

Ahhhh.. that's the kicker.. I though I recalled reading somewhere that it was Gov't mandated... If not.. then that's a whole different ball of wax.


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## cnengineer (Jan 2, 2008)

All the info regarding MAP is on the first page of St. Aubin ad in the last GR 
Bruce


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## trainman707 (Jan 3, 2008)

Posted By rlvette on 01/05/2009 5:58 PM
MAP is not federally mandated. It's an attempt by the manufacturers to limit internet sellers, ........... The brick and morter shops cannot compete as they have overhead to pay for while the internet sellers work out of their house.......



So, am I to assume that St. Aubins, Trainworld, Ridgeroad who sell on the internet do not have 'overhead' to pay? Or, are we talking about E-Bay sellers...then I know of several
of them that have 'brick and mortar' storefronts too. Personally, I don't think I've ever purchased via the internet from a company that didn't have a physical store as well.
Who are we talking about here? Not trying to be 'testy' here, just curious.


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## Scottychaos (Jan 2, 2008)

St. Aubins, Trainworld, Ridge Road station and wholesaletrains.com all have "brick and mortar" shops, 
so its safe to say they have overhead...a building, utilities, employees, etc.. 

Scot


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## trainman707 (Jan 3, 2008)

Posted By Scottychaos on 01/06/2009 6:32 AM
St. Aubins, Trainworld, Ridge Road station and wholesaletrains.com all have "brick and mortar" shops, 
so its safe to say they have overhead...a building, utilities, employees, etc.. 

Scot


Thanks Scot,

I knew that. But can't figure out who that is selling on the 'net' doesn't have an acutal store that I might be buying from. I know there are indiviuals
selling, but most of who I see on-line, at least who I do business with, like the above 3 or 4 are solid businesses.

LOL...but of coruse, those above are usually my suppliers!


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## vsmith (Jan 2, 2008)

So does this explain why on Wholesaletrains.com I saw Aristo Centercab power bricks before Jan 1st were $45, now they're $65?!!!









If these"mandated" online pricing increases are the cause, then I'm dropping out of the engine building business, as it soon won't be worth it anymore if prices are mandated by the manufacturer, they only seam to go up.


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## Road Foreman (Jan 2, 2008)

Guys, 

MAP priceing only works with stores that get help in advertising, then the manufacturer can set a minium price.. Most of the on-line stores that get help tell you to put the loco in the cart.. They can then give you there lowest price.. Only have to show the MAP price on the main pages of the web-site.. If a store does not get help with the advertisement cost they can put what ever price they want.. This just played out in the record industry.. 

BulletBob


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## afinegan (Jan 2, 2008)

I work for a manufacture so I can give you the details on MAP (Minimum Advertised Price). 

No manufacture can price fix, or tell anyone what they can sell there items for, but manufactures will tell the retailers/e-tailers that if they dont advertise at the set MAP pricing they will tell there warehouses to stop selling to them or the warehouses will lose there discounts. Not very enforceable. (traditional supplier system. Manufacture -> Wholesale -> Retail) 

Soon after some lawyer came up with a MRP policy. MRP (Minimum Retail Price) policy is an agreement between the manufacture and wholesaler/retailer, states if you don't comply with the set resale prices that you lose things like warrantys, and the manufacture will stop selling to you. This only works when you are a decently well known brand name. This also explains why some devices are found everywhere at the same price. As for the law, there is nothing set in stone yet and its illegal to price fix in the USA. 

So prices are unenforceable, but the manufactures can guarantee there profit levels by making legal agreements to hold the prices or choose not to sell to you. 

Price Fixing (very illegal in most places) 
 [url]http://en.wikipedia.org/wiki/Price_fixing [/url]

DiabloSport (where I work) MRP policy drafted up by lawyer for untold hours (MRP is the first policy that actually has worked, MAP didn't work for us) 
 [url]http://www.diablosport.com/legal/mrp/MRP_Policy.pdf [/url]

It is still a HUGE commerce topic and is the basis for a ton of lawsuits till this day. 

and no I am not a lawyer, just a software engineer


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## vsmith (Jan 2, 2008)

Thanks for the explaination Andrew, 

To me its still "price fixing" no matter how you chose to split the hairs describing the policy. If I have no choice but to pay the higher price because the retailer will be punished by the manufacturer and wholesaler for selling below the MRP on the side, then I'm still forced to pay the MRP as set forth by the manufacturer. so that $45 power brick is now $65, and your TSOL mate! 

Its like Ebay slimy way to force everyone to use Paypal by monitoring the sales transaction and punishing sellers who bypass that monitoring system accepting MOs on the side, it all boils down to "pay us or we breakz yu legs" mentality. Uggh! between Evilbay's Paypal enforcement, St Aubin being in bed with LSOL, the BTS going all scales, and now these price increases...Sheesh! 

Think I'll stick to working with what stock I have from now on, I have plenty, I'll scratchbuild what I dont have. I dont like being forced to do anything and I think its pretty bad to screw with price increasess of things under the current economic condition. I wonder what the backlash will be? 

Lets all raise prices during a recession! It's the American way to go broke !!!


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## Nicholas Savatgy (Dec 17, 2008)

Posted By vsmith on 01/06/2009 8:04 AM
So does this explain why on Wholesaletrains.com I saw Aristo Centercab power bricks before Jan 1st were $45, now they're $65?!!!









If these"mandated" online pricing increases are the cause, then I'm dropping out of the engine building business, as it soon won't be worth it anymore if prices are mandated by the manufacturer, they only seam to go up.

















Aristocraft had a 20% price increase the 1st of Jan... across the board


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## vsmith (Jan 2, 2008)

Thanks Nicholas, That explains the price increase, I wonder how many others will follow suit. 

Looks then like my engine building days will be much more curtailed, maybe even over completely, $90 for a pair of bricks was doable over time, but at $130+ will require a much longer time to set aside funding, then I'll have to justify the project... thats almost the price of a new Annie just for bricks! 

Looks like I'll be cannabalising some of the larger engines made for the yet unbuilt outdoor layout that really dont work too well on the smaller indoor layout. As it is I'll be storing away almost all of my larger items and refocusing on my smaller rolling stock. Macks are still inexpensive, for now at least.


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## Truthman (Dec 13, 2008)

Honestly, I really dont know what Aristocraft is up to. MAP pricing AND a 20% increase. MAP pricing IS legalized price fixing and will hurt the uninformed buyer and I fear many newbies to this hobby. I personally promise myself to buy only what I need and if I need it. That way I can fight back, we all can by buying less. I've got to admit, just when I thought I was about to drink the Aristo kool aid they pulled what i think is a very bad move on us. I read an article while searching MAP pricing and in many cases, manufacturers tend to back off after a awhile. Lets hope that to be true. This hobby is already expensive for many of us and like I said I will just buy less. We can voice our approval with our wallet and I plan to do exactly that.


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## afinegan (Jan 2, 2008)

Hopefully, raise prices = less sales, until they lower them again cause they aren't selling anything or make room for another train company to fill in that gap (big out front costs though). 

Capitalism....... Pros and Cons


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## Truthman (Dec 13, 2008)

Well its a tough situation, we dont want to see our manufacturers suffer so bad they go out of business, but maybe "suffer" enough to come to their senses. I mean, 20% across the board is WILD to say the least. Maybe I could see on some of their products but across the board? USAT didn't go up 20% and their stuff is made at the same place Aristo's is. Sheeesh


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## Dave F (Jan 2, 2008)

One option I see an opportunity for the manufacturers is production of a "less detailed" line of rolling stock. Many (most, All) of the pieces that I see out there range from finely detailed to beyond neurotic detailed. The initial engineering, tooling, production set up and production cost must be astronomical. Hence we get boxcars that retail at $95.00, and can fnd them "discounted" to $45.00.... 

How about rolling stock that looks perfectly adequate rolling past at a scale 40 MPH, that rolls well and has couplers that fucntion well, but not necessarily every rivet in place or working door hardware or opening roof hatches..... Retail around $45.00.. available "discounted" at $22.50 ? 

Of course keep the "good stuff" as well.. but offer a more "work a day" line that has good margins for the manufacturer, good margins for the retailer and reasonable cost for the consumer.. 

Just a though.


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## Santafe 2343 (Jan 2, 2008)

*All I can say about this MAP pricing is, there are going to be alot of trains just sitting in the wharehouses going nowhere. I spend alot of money on trains and that will dry up real soon. I'll just live with what I have for now. I can afford to wait, the sellers can't. I bet sales will drop drasticly. Just like the gready oil companys, they lost alot of slaes in gas and the price came way down, and they may never get all that buisness back. People found other ways. *


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## rpc7271 (Jan 2, 2008)

Quite frankly I have enough stuff in the back room to keep me busy for a couple of years without buying anything unless I really want it so they can do what they want with prices. Personally I think it sucks. Most manufactures sell to everyone for the same price. It is up to the retailers to price competivally and still operate. If they want to sell over the internet or ebay that is their option. If they can't compete they fail and go out of business. That is the American way. The idea that a MAP pricing is going to help is rediculas because I am always going to shop around and get the best price. USA Trains has policy that you HAVE to have a shop. To become a seller of their products you have to send them pictures of your business liscence,the front of your shop and the inside of your shop. That's good. i will rent a shop for 6 months, send them their pictures, sell on ebay, close the shop and continue selling on ebay. there is always a way around anything you want to get around.


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## vsmith (Jan 2, 2008)

What i dont understand is that dont the retailers buy their product at a set price from the manufacturer? 

So Joe's Train Shop buys a crate of 24 locomotives from a manufacturer for $5000, now the manufacturer states they should be sold for $700 each, yet the retailer bought them for only about $200 each, the manufacturer isnt going to get one penny more of that as the retailer has already purchased them for $200 each and there sitting on his loading dock and the seller knows they can clear the lot of them for only $500 each and still make enough profit to stay in busines and to buy more product, yet the manufacturer is going to insist that the retailer cannot advertise the product for less than $700, knowing the product will sit for much longer on the retailers shelfs until they sell off the remainder, and maybe never if the price point is too high, and if the retailer does in fact sell them on the side for less than that the manufacturer might drop them as a seller??? 

Disfunction Junction, what your function???


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## Truthman (Dec 13, 2008)

I had some pretty big plans for "outside expansion" this spring but I can be quite happy playing trains indoors on the current setup as well.


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## Dave F (Jan 2, 2008)

Depending on the volume of the retailer, wholesale prices can varry. If Joe's Trainshop can only move 20 units per year in a restricted area he'll pay $200.00 per unit. If Mike's On-Line Bargan Hut can move 200 units in the same time frame he'll only pay $100.00 per unit. Thus Bob the train builder isn't making as much margin per unit from Mike, but that is easily over taken by the volume of sales.


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## Jerry McColgan (Feb 8, 2008)

As a retired factory rep I can understand the logic behind MAP pricing but as a consumer I am not concerned about the logic of MAP pricing. I am concerned about the inconvenience it creates for me.

One thing that annoys me with MAP is that i am losing my primary reason for subscribing to Garden Railways which has been to have a portable pricing guide so that I can have a quick reference to mail order prices to decide if I am willing to pay what someone (dealer or individual) is asking for a product.

What MAP will do to me is to eliminate impulse buying (which is what most of my buying has been). If I have to research a price before reaching a buy/no buy decision my enthusiasm will likely have gone before I ever reach the buying stage.

Marketing can instantly destroy what Salesmen have built up over many years. I don't have (and never have had) a decent G Scale hobby shop within 100 miles. Now MAP is going to destroy my ability to browse the ads looking for deals.

Why would dealers go to the expense of multi-page advertising if all they can do is to quote the same prices as their highest priced competition? I suspect that the big dealers will cut their ads significantly resulting in far fewer dollars for the magazines to stay profitable and keep the flow of new product information and how-to projects flowing to us.

I sympathize with the small hobby shops but every instance I have seen where manufacturers tried to make small dealers more profitable at the expense of large dealers only had short term results with major long term harm being done to everyone.

I really hate to go to Wal-Mart but if we are honest we have to admit that their business model (Lowest Prices - Always) may have driven thousands of small businesses out of business yet Wal-Mart is one of the few companies that is thriving in the current economy.

The fact is that I have long since forgotten where I bought 99% of my trains just as those sellers have long since forgotten their sales to me. There are a few dealers that I always go to first because of their good service in the past but I still need to see what my prices are going to be BEFORE I talk to anyone about making a purchase.

When MAP eventually fails the marketing types will never admit it did not work - they will just blame the economy. By that time we will have not only fewer small dealers but probably fewer bigger dealers as well.

Jerry


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## NW Jim (Jan 2, 2008)

I have been a factory rep in the casual living segment for over 10 years. MAP pricing has been around for years, and quite successfully. A prime example is Weber Grills. They are the same price at HD, Lowe's, and Bob's BBQ Barn. How the retailers get around it is by offering free assembly, delivery, tools, etc. But the price of the grill itself is consistent...

How train retailers can get around this is by simply adding value to the purchase. This can be done by including such items as metal wheels, Kadee couplers, extra smoke fluid, free caboose, etc. 

I say sit back and let them battle it out for a few months. In a country of free enterprise, the most resourceful retailers - the ones who offer prompt service, quick and easy returns/exchanges, and good communication, will always, always come out ahead. Will we lose a few of our on-line retailers? Perhaps. Will that neccessarily be a bad thing? I don't think so.

To be clear, I still service dealers who don't have a clear grasp of what MSRP/MAP/MRP is. It's simply this:

MSRP - $10
MAP - $8
MRP - $6

Of course, these are fictional numbers and percentages. One company I rep for all the dealers across the country voted overwhelmingly to raise the prices this year - and we are already the most expensive product in our category! Again, the dealers want to compete on service, customer relations, and good will, not neccessarily prices. 

While not having prices at the ready might not be convenient when you walk into your LHS, I would surmise that you have a pretty good idea what it is anyway. All of us vote with our wallet. Yes, I buy stuff when I'm at the conventions and shows, and yes I've purchased a few things from on-line vendors. But the majority of my hobby dollars goes to my LHS, albeit 100 miles round-trip, because I want them to thrive so they'll be there tomorrow when I have a question, or need a part, or advice.

Again, sit back and watch how these national retailers step up (or not!) to the plate this year, and let's see who is left standing next January...


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## vsmith (Jan 2, 2008)

No matter how I read it it simply spells out the same thing: Higher overall prices across the board. 

I'm already being priced out of some Aristo parts for kitbashing, combine a general 20% price increase and now MAP listings, I really have serious doubts about how many new projects I've planned I'll be able to do in the future. Looks to me like poor guys like me are being squeezed out of the hobby, the Rich Guys and Trust Fund babies will still be able to afford their Accucrafts but us po'folks are being pushed into New Blight land. Like Jerry says, cut alot of the impulse buying out but also means for many of us, smaller layouts, smaller engine rosters, smaller rolling stock fleets, and longer lead times to save to purchase said items, overall that equals lower sales in general across the boards. I hope the manufacturers are aware that these issues are going to lead to lower overall sales and have factored them into their long term sales projections.


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## Truthman (Dec 13, 2008)

There is hope though for us 1:29 ers: USA Trains only had a small increase on pricing. I bit higher than avergae but only about 7%. AND NO MAP PRICING. I am seriously headed back to USAT !! Too bad as i had most of this years train budget planned for ARisto products, but not now. I think this MAP thing is fairly isolated, I may be wrong though. It seems only Aristocraft is pulling this stunt. maybe they figure if their stuff gets a higher price than USAT stuff will be considered the off "lower" quality brand? NOBODY is talking about the Aristo massive price increase and the insidious MAP idea on the Aristo kool aid site.


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## ohioriverrailway (Jan 2, 2008)

Welcome to the world of downsizing!


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## Truthman (Dec 13, 2008)

you bet and you have NO idea of how much downsizing I have to do. ........


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## trainman707 (Jan 3, 2008)

Posted By NW Jim on 01/07/2009 4:01 PM
.......... But the majority of my hobby dollars goes to my LHS, albeit 100 miles round-trip, because I want them to thrive so they'll be there tomorrow when I have a question, or need a part, or advice.

Again, sit back and watch how these national retailers step up (or not!) to the plate this year, and let's see who is left standing next January...



Okay everybody has their opinion on LHS i'm sure. My example is this; We have one LHS that has G Scale products that is 3 miles from my home...not much, but some. I go into their place of business because I want to
support them. I see an Aristo A/B Unit on the shelf. I can tell by the box and dust on the unit (and from being there XX times before)...that it's new/old stock. The price is MSRP...period.
They tell me it's new stock....I know better. They advise me they can order anythying I need....of course knowing what I can pay elsewhere, I didn't buy. 

Another time I go in for some supplies for a building project. I advise what I need. They say, 'That stuff is not available anymore....nobody builds their own buildings' Ouch....I don't think
I heard them right, but yes I did. (They had Aristo buildings on the shelf)

Now, this is the only place within at least 130 miles that has anything G Scale. Considering price of fuel (even though down now), time, and convenience, I'm going to drive 130 miles to
pay more than Internet prices...I think not. Personally I don't care if this LHS 'thrives' or not. I'm done with them and not going to drive 130 or more miles to shop. 

As far as advice.....That's why I joined this service, subscribe to GR Magazine and frequent their forums as well. I'm also a member of a club and have friends that are members of
other clubs.

Now, that said, I will say this. When I lived on the west coast....the story was different....to some extent. Most of my track at the time was purchased from the LHS because they
gave me a deep discount do to a special buy they had at the time. Even there, I purchased from all of the companies who have been
mentioned on this thread and will continue to do so. I will however, continue to 'shop' for the best price even if it is a little inconvenient with a few more clicks or another phone call.

Let's face it, most of us, not all of course need to watch our budgets in this economy. I plan to expand my railroad this summer, but will certainly shop around for special deals
(if I can find any!).

I have no doubts that all of the stores mentioned herein will be around next year.

Hey, Jerry, perhaps I should contact the buyer at the HO and see if they can get into G Scale! lol Boy, wouldn't that be a kick! Better be quick about it our stock dropped .90 over 
the last two days. Should I sell now and invest in more track?









I ramble a lot, so I hope nobody takes anything personal. Just thinking/typing outloud.


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## Jerry McColgan (Feb 8, 2008)

Posted By NW Jim on 01/07/2009 4:01 PM

While not having prices at the ready might not be convenient when you walk into your LHS, I would surmise that you have a pretty good idea what it is anyway. All of us vote with our wallet. Yes, I buy stuff when I'm at the conventions and shows, and yes I've purchased a few things from on-line vendors. But the majority of my hobby dollars goes to my LHS, albeit 100 miles round-trip, because I want them to thrive so they'll be there tomorrow when I have a question, or need a part, or advice.





Therein lies the problem for people like me. I live in rural Arkansas. Looking at the February 2009 Garden Railways Magazine page 103 at the Directory of large-scale train retailers there is NOT A SINGLE retailer listed in the entire State of Arkansas. Further there is not a single retailer listed for the State of Tennessee or for the State of Mississippi. 
If I had to pick my favorite LHS I would probably say it would be Wholesale Trains - which happens to be in Horseheads, NY which is 1,163 miles away (one way). My last major purchase was from several dealers that bothered to go to and bring goodies for sale to the MWLSTS in Springfield, Illinois (419 miles each way). There will not be a MWLSTS in 2009. Before that it was the HAGRS in Kansas City (441 miles each way). 
The last time I went to a local hobby shop (not large scale) I bought all the Digitrax DG583S decoders he had. A couple of weeks later I asked if he had any more and was told no. I asked when he expected to have any more. He did not know. I asked if they were on order. He said no.I asked if they would work with LGB's MTS voltage. He did not know. In effect the decoders cost me noticeably more considering the price plus sales tax compared to mail order prices but I was trying to support the LHS even though he did not carry large scale (I bought most of his LGB track and switches when he got out of large scale) 
I am not knocking this dealer. Quite frankly I think it would be dumb for a small hobby shop to try to carry any sort of representative inventory of large scale trains when one considers the huge inventory cost and the heavy demand it makes for shelf space. 
If I was the owner of a small hobby shop I would never consider carrying large scale trains and instead focus on smaller trains that required less shelf space. I suspect that most of today's large scale LHS's are BIG hobby shops and several of the large Internet dealers are also big hobby shops. 
If I had a LHS and IF I still NEEDED after the sale value added service I might be willing to pay higher prices to pay for it but higher prices also mean less that I can afford to buy. I for one am unwilling to pay higher prices to support someone else's LHS. 
My LHS's are exclusively Internet, Train Show and other National Hobby Shops - I DO NOT HAVE a LHS - just NHS's. Another problem with small LHS's is their limited ability to put together frequent orders that are large enough to qualify for free shipping from the manufacturer or distributor. My experience (as a factory rep) has been that it is very common for small dealers to tell customers that the manufacturer (distributor) is on back order when the truth is that he is waiting to build an order large enough to get him free shipping. 
I am not disagreeing with anything said - my point is that what may be true for some of us in one part of the country may be totally untrue for those of us in another part of the country. There has NEVER been a local LHS to help me when I first got into this hobby and I am unwilling to pay a premium to support LHS's when I still do not have a LHS and my after the sale service comes from places like MLS. 
If MAP pushes the retail prices higher it will simply make it more attractive to buy used products rather than new products and the winner will be eBay rather than the LHS's. 
Regards, Jerry


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## Greg Elmassian (Jan 3, 2008)

The last 2 posts mirror my experience. There is really only one hobby shop in San Diego, Reeds. I went there and all the new old stock was pretty much list. I bought USAT cars until I did not like anything they had left. Did they re-stock? No. I bought a Spectrum Anniversary 10 wheeler, about $300. Yep I know prices had come down, was again trying to stimulate business. Nope. 

I go every 2 months to buy something. No new G scale, no prices other than list. The holes in the stock on the shelves are the ones created by my purchases. 

Do they want to stock QSI? I buy them like candy... nope.... Do they have Digitrax decoders I use for my switches, nope. 

And half of this shop is large scale... 

I tried. I still try, but they don't even re-stock Kadee couplers.. .just a bunch of empty pegs. 

It's RLD and Litchfield from here on out. 

Regards, Greg


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## trainman707 (Jan 3, 2008)

Posted By Jerry McColgan on 01/07/2009 7:43 PM
Posted By NW Jim on 01/07/2009 4:01 PM

While not having prices at the ready might not be convenient when you walk into your LHS, I would surmise that you have a pretty good idea what it is anyway. All of us vote with our wallet. Yes, I buy stuff when I'm at the conventions and shows, and yes I've purchased a few things from on-line vendors. But the majority of my hobby dollars goes to my LHS, albeit 100 miles round-trip, because I want them to thrive so they'll be there tomorrow when I have a question, or need a part, or advice.





Therein lies the problem for people like me. I live in rural Arkansas. Looking at the February 2009 Garden Railways Magazine page 103 at the Directory of large-scale train retailers there is NOT A SINGLE retailer listed in the entire State of Arkansas. Further there is not a single retailer listed for the State of Tennessee or for the State of Mississippi. 
Regards, Jerry 

Jerry,

Well stated!! I don't know of any retailers in NWA either....but had never looked down your way...but now I know how it is 'down under' (lol). I'm with you on the subject. Natives got to
stick together!

Monte


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## Jerry McColgan (Feb 8, 2008)

Posted By trainman707 on 01/07/2009 8:24 PM

Jerry,

Well stated!! I don't know of any retailers in NWA either....but had never looked down your way...but now I know how it is 'down under' (lol). I'm with you on the subject. Natives got to
stick together!

Monte

Heck Monte,

You are 1/2 way to Kansas City and a LOT closer to Springfield, MO. It only takes you ONE tank of gas to go find a LHS where it takes me at least TWO tanks of gas (each way).



I always have to drive a gas guzzler (Suburban or Expedition) to bring home enough "savings" to justify the trip!









Cheers,

Jerry


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## Art (Jan 3, 2008)

I plan to buy nothing until I can figure out what MAP is really going to do to the hobby. I have plenty of work to do on the layout that does not entail purchasing anything from the train manufacturers so that is what I will do. Each year I spent quite a bit of money on Aristo, USA and LGB but that is all off for now. I have the money but don't like the entire idea of MAP. 

Art


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## trainman707 (Jan 3, 2008)

Personally I think everyone is getting this pricing thing all blown out of proportion. Historically prices on everything from milk, gas, eggs, housing, electricity and such have gone up. Many of these are pricing fixed by utilitiy co-ops, authorities, cartels (sp), and such. We complain about increases but they are still things we purchase...whether needed or just 'wanted'. 

If I want something, can afford it, I'll buy it. If it's a few dollars more, then so be it providing it doesn't break the bank. If I don't 'need' it, or 'want' it....it will stay on the sellers shelf. Like I've said 
before, I shop all suppliers and get the best deal for me. 

One thing is sure about all of this.....it's given us something to hash around. Guess we are giving the gas stations a break for a while! lol......and I thank you for that! 

PS: Gas is on the rise again. Our station went up .18 day before yesterday. Ouch! Cost me an additional $1.80 to fill up my truck. Then again, I was only down 10 gallons. Of course I'm not complaining...yet...needed to haul some more stuff for the railroad!


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## chrisb (Jan 3, 2008)

I have head that for the small shop to buy low they need to move a larger volume. It seems that this was what happened with power tools, big box stores
and online stores made it so the small lumber yard could not compete. Its frustrating to see an engine for $600 in a local shop and well less than $400 online.
The samll guy is being pushed out like the old mom and pops stores. Does that sound correct?


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## NW Jim (Jan 2, 2008)

Shame on me - I never really thought about the lack of good local hobby shops around the country. I travel the 5 Northwest states, and there are really only 2 decent shops that have any kind of LS stuff. And yes, I try to plan my trips so I can visit them when I can. And yes, my income dropped 28% from 2007, so I am cutting way back on optional purchases, MAP or no MAP. However, consulting to specialty retailers is still my vocation, my passion, and so I still tend to side with them. I want them to make a fair profit, especially during these rough times, so they can continue to stay in business. Of course, the tough balancing act comes when price outweighs value, and the lack of volume doesn't make up for any price increase.

What this economy is doing is making retailers better. Better at follow-up, merchandising, customer care, and the like. Poor retailers, no matter what line of goods they carry, will simply not survive. Price is not the over-riding factor. Discount chains in the appliance, furniture, and electronic fields who have based their reputation primarily on price, are the ones generally going by the wayside. The same should ring true in the hobby world, those that offer the best overall cutomer experience will survive, and one day soon will thrive again.


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## blueregal (Jan 3, 2008)

Mr. Scott is right if you are looking for something, do your research, and find the best price on what you are looking for, and GO FOR IT!! Reality is that everything is going to go up at some time or another, and if you want to stay in the hobby you will have to deal with that or just be content with what you have. Look for used bargains on the same thing you are looking for NEW. The old adage applies here if you can afford it and want it buy it. If you can't don't. The Regal http://blueregal.angelfire.com Check out some new videos on you tube and classified here for some bargains, don't like the price let's wheel and deal.


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## trainman707 (Jan 3, 2008)

Posted By chrisb on 01/08/2009 8:22 AM

.............The samll guy is being pushed out like the old mom and pops stores. Does that sound correct?



What I have observed is this; In our economy today, everyone (minus the filthy rich) are struggling to stay afloat and still retain some quality of life they
have been used to having. This could be just in survival or to enjoy our hobbies. I need a new Dremel Tool. I could go to a local lumber yard and purchase
one for their price, or pay about $10.00 less at Lowes. Where do you think I will go? That $10.00 I save will pay for some gas to get to work, perhaps
a few (not too many) Hillman Rail Clamps or something else...perhaps a couple gallons of milk. The good thing is I can go ahead and get the tool.

The big box stores, ie: Wal-Mart, Lowes and such are a god send to some communities. They may push some smaller merchants out of business, but bring
so much more. Those people who were struggling to stay in business, but just not making it can go to work for those companies. Sure, not as much money
(I can atest to that), but will have benefits they could not afford to purchase for themselves by being self-employed. I've lived the story to some extent.

Let's face it, almost everyone needs the 'discount' or 'big box' stores to stay alive in this day and age. Hard facts, but true. Mom and Pop in thier old age
with the cost of inflation just can't make ends meet anymore. They need a shot in the arm just as we do. Sure, I hate to see the old stores go...but let's
face it, change is necessary in these troubled times....or any time. If we fail to change (grow if you will), we will ultimately disappear.

Sorry, I hope I have not opened a can of worms here. The Moderators may ban any further comments on this topic. I didn't mean to cause any discontent.

I wish only the best for all my friends on this service and in the hobby. I would hate to see anyone loose out due to potential changes...whether by pricing
or availibility. 
Whew....I was gowing cross-eyed....had to increase the size of the print. Glad that is done!


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## vsmith (Jan 2, 2008)

Posted By trainman707 on 01/07/2009 6:58 PM
My example is this; We have one LHS that has G Scale products that is 3 miles from my home...not much, but some. I go into their place of business because I want to support them. I see an Aristo A/B Unit on the shelf. I can tell by the box and dust on the unit (and from being there XX times before)...that it's new/old stock. The price is MSRP...period. They tell me it's new stock....I know better.









I've run into this both ways, I know of one LHS that still has a 1st generation B'mann Shay for sale, full MSRP. its been ful MSRP since the day it arrived. Its still "new" to them even though the New-N-Improved Shay has been out for years....









One OTHER shop, I went in to buy track, this was right after LGB raised the prices, the owner tells me, "Oh, dont buy_ those_ stock numbers, they raised the prices, buy _these _old stock numbers and you can have them at the old price"









Well I guess you can tell who gets my future business


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## trainman707 (Jan 3, 2008)

I've run into this both ways, I know of one LHS that still has a 1st generation B'mann Shay for sale, full MSRP. its been ful MSRP since the day it arrived. Its still "new" to them even though the New-N-Improved Shay has been out for years....









One OTHER shop, I went in to buy track, this was right after LGB raised the prices, the owner tells me, "Oh, dont buy_ those_ stock numbers, they raised the prices, buy _these _old stock numbers and you can have them at the old price"









Well I guess you can tell who gets my future business











Yeah....wish that store in Fresno was still in business and carried Aristo Track! lol I'd be there in a heatbeat!

Alas....times have changed (and my location)


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## trainman707 (Jan 3, 2008)

Posted By blueregal on 01/08/2009 8:25 AM
Mr. Scott is right ............


*Please......It's MG or Monte....not Mr. Scott!







You make me feel SO old! lol *(Of course...if the shoe fits....)


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## Art (Jan 3, 2008)

I believe the economy will be tanking much more than now and after that there will be plenty of very cheap train equipment for sale everywhere. I will wait and see as I'm not going to purchase anything that is going up in price unless I need it to live. I mean things like food, heating oil, and a few other things. The economy is a mess and the people running it are just screwing up big time.


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## blueregal (Jan 3, 2008)

Monty Der Ya Go!!!







LOL The Regal Remember me we emailed each other a few times, about our dalmations. I too have a middle name that my relatives always want to call me, and I have advised them that I am 60yrs young now, and prefer they do not use it!! Hee hee


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## jlinde (Jan 2, 2008)

What a coincidence - I actually _am_ an antitrust lawyer. The issue of "resale price maintenance" is something I've dealt with quite a bit recently. Andrew did a great job with his primer, but – as with most things – the subject is a bit complicated. 
Unless something like a joint venture is involved, agreements between "horizontal" competitors (i.e.[/i], companies that compete against each other directly – say manufacturer v. manufacturer or retailer v. retailer) to set prices, reduce output, divide up customers, etc. are treated by the law as illegal, per se[/i]. There's wide agreement among economists, scholars, and jurists that there are no[/i] possible procompetitive justification for these agreements. These are the arrangements people are usually referring to when they cite "price fixing." 
On the other hand, an agreement between a manufacturer and a retailer setting a minimum price for a particular product is a "vertical" agreement. Until recently, minimum "resale price maintenance" agreements were also treated as per se[/i] illegal under the federal antitrust laws.
If a manufacturer wanted to stop a retailer from discounting its products, it could threaten [/i]to cut off sales to the retailer or punish it in other ways so long as the manufacturer and retailer didn't agree[/i] on a minimum retail price (a pretty fine distinction). This is the form that the DiabloSport policy takes – if you look carefully, there's nothing indicating that the policy constitutes an agreement. 
This all changed in June 2007 when the Supreme Court issued its Leegin[/i] decision. In a 5-4 vote, the Supremes held that minimum resale price maintenance agreements were no longer per se[/i] illegal. Instead, courts applying federal law were to apply the comparatively lax "rule of reason" test to determine if a resale price maintenance agreement violates the antitrust laws. Without getting into the details, this test makes it much harder to show that a pricing arrangement between manufacturer and retailer is illegal. 
At corp HQs throughout the world, there was much rejoicing.










Until everyone remembered an itty bitty detail - 
Numerous states[/i] have consumer protection laws prohibiting resale price maintenance agreements (for instance, New York). And because these laws are more protective than the federal standard, they aren't preempted by Leegin[/i]. The result is a crazy patchwork of state statutes applying in some places (no rpm agreements) and the federal common law standard (rpm agreements okay) applying elsewhere. 
You haven't lived until you prepare a chart describing the applicable standard for each of the 50 states. 

Back to trains . . .


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## Truthman (Dec 13, 2008)

Jlinde, 

This could well explain why Ridge Road Station's prices are lower than everyone else's. Maybe they haven't updated the prices yet. But, for example, they list Aristo GP40's at about $266.00. the closest price from other dealers not in NY state are around $295.00 claiming they are at MAP pricing. Anyone have any thoughts? 

Nate


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## jlinde (Jan 2, 2008)

Truthman - It's certainly possible that Ridge Road's prices are lower because NY State law prohibits resale price maintenance. On the other hand, and notwithstanding Lionel and MTH, I find it hard to believe that model train manufacturers are sufficiently sophisticated to implement an RPM policy with any effectiveness. It may just be that Ridge Road is more willing to stimulate sales in a down economy through discounting. I wish other retailers would do the same thing! BTW, 35 state attorneys general have written to Congress asking that it make resale price maintenance a _per se_ violation of Section 1. This would mean that manufacturers could _never_ set retail prices for their products. I'm hearing that there's a decent chance Congress will act on this during the year and that Obama will sign.


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## Allan W. Miller (Jan 2, 2008)

"I believe the economy will be tanking much more than now" 
--------------------------------------- 

All indications are that you're probably right about that. What we've seen thus far is probably just the tip of the iceberg. How the hobby industry will fare through it all remains to be seen, but it will likely be a very bumpy ride. I imagine that most of us here already have more trains than we need or can use when it comes to enjoying this hobby, so my advice is to spend more time playing with what we already have as a way of weathering these rather stressful times. There's nothing like a hobby when it comes to reducing stress to tolerable levels!


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## vsmith (Jan 2, 2008)

Now more than ever, I'm glad I bought like a drunken sailor at San Vals closing when I did!









I can survive in the hobby without another major purchase for the "duration" by staying focused on my current roster, layout building and continued "forced learning" in scratchbuilding


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## Jerry McColgan (Feb 8, 2008)

Posted By Allan W. Miller on 01/23/2009 4:22 AM
my advice is to spend more time playing with what we already have as a way of weathering these rather stressful times. There's nothing like a hobby when it comes to reducing stress to tolerable levels!


For those of us who are retired on a fixed income this hobby can prove to be a wonderful way to stay home, conserve fuel and finances and manage well enough until the economy gets better. 

Hopefully enough new people will see the long term economy of this hobby and buy into it and keep the dealers and manufacturers solvent until the economy gets better for them as well.

Jerry


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## Wendell Hanks (Jan 2, 2008)

With Jack Lynch, formerly with LGB, on the corporate side of Bachmann, we hopefully may find a change in their loco reliability (see posting inquiry of Jack Lynch and his reponse) which could result in and increase in trusted competive products, consumer purchases and resultant competitive pricing. 
Wendell


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## TonyWalsham (Jan 2, 2008)

Posted By Wendell Hanks on 01/25/2009 4:41 PM
With Jack Lynch, formerly with LGB, on the corporate side of Bachmann, we hopefully may find a change in their loco reliability (see posting inquiry of Jack Lynch and his reponse) which could result in and increase in trusted competive products, consumer purchases and resultant competitive pricing. 
Wendell


One lives in hope.

Unfortunately I have to breathe now and again so I won't be holding my breath for very long.


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## Ted Ompinski (Aug 13, 2009)

Let's get back to discussing MAP policy, shall we? 

MAP stands for Minimum Advertised Price. It does not control the price at which something is sold. It simply controls the price at which something is ADVERTISED. 

The program is initiated with the hopes that dealers with limited advertising funds will have a chance to compete with those who spend a lot of money advertising a low price. 

The consumer will not necessarily experience higher prices for the goods. The impact on the consumer is that he will have to do some extra work to uncover the price offered by those dealers who sell below the price allowed in the MAP agreement. The consumer will no longer be able to thumb through a magazine or use a search engine to compare prices. 

It is important that consumers understand the difference in policy. MAP is not price fixing, nor is it an attempt by the manufacturer to raise prices. It is simply an attempt to give small dealers a chance at making some sales. 

Ted


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## Dougald (Jan 2, 2008)

Speaking solely as a forum participant and not as a moderator ...

I understand what MAP is and why it is there. 

After all the effort (and legislation too) expended to eliminate deceptive practices and provide everyone with full disclosure and information, I find the use of MAP to generate some sales for dealers by hiding the price to be anathema. Yes consumers can find the price if they do more work but that is exactly what consumer rights has been about - to provide information openly to the marketplace.

It is a sad way in supposedly a free market economy to preserve the status quo of non competitive retailers by restricting the flow of information to consumers hoping to trick a few into paying extra.

Regards ... Doug


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## SteveC (Jan 2, 2008)

Also, not speaking as other than an individual.

While I have no argument that each business has every right to operate in the manner they see fit. It's very simple as far as I'm concerned, any supplier that participates in the MAP practice and I become aware of it, and quite frankly it really isn't all that hard to discern, they cease to receive my support. Two things that I'm not saddled with; the need for instant gratification and there's nothing in this hobby that I have to buy.


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## Truthman (Dec 13, 2008)

I agree Dougald. It will gouge unsuspecting consumers. It's an awful game. As far as I know there is only one company in G that has engaged in this rip off policy. But is it blatant gouging or basic self preservation? I think this manufacturer has proven with it's additional 20 percent price increase and MAP trap double whammy what the answer is.


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## blueregal (Jan 3, 2008)

MAP M=MORE A=ANNOYING P=POLICIES !!! IF YER SMART YOU WILL SEARCH OUT THE BEST PRICE OF ANYTHING, ANYWHERE, ANYTIME, AND THEN DOUBLE CHECK YERSELF. THE REGAL


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## Mik (Jan 2, 2008)

I used to deal for Sher----. A few years ago they went to a MAP policy because there were a few 'dealers' trying to push everybody else OUT of business by advertising the machines at $25 or so over wholesale. Many of the other dealers complained because all you got were rude comments "So-and-so has it for $X, why are you so much more?" Explaining that you had it IN STOCK, while the other guy probably just drop shipped, and YOU were AT the show, while so-and-so wasn't, didn't make an impression, people wanted it for the cheap price. and were mad when you wouldn't give it to them. 

They said you HAD to advertise their price, they didn't care what you actually sold it for. End result? People figured why bother searching for a local dealer when the factory has the same price?..... No more grouchy calls, no more calls. period.


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## NavyTech (Aug 2, 2008)

There is much of this hobby that individual businesses has over inflated the price of products and the consumer is faced with paying the price. Luckily most of us consumers are smart enough to shop around and even hold out to pay the price we are willing to pay. At the end of the day the consumer will end up paying what the majority of us are willing to pay but it takes time for all of it to settle out. I feel that it is unfair that businesses ask us to pay too much and it will end up being the death of this hobby if it continues the way it has. 

I have been looking at the prices of LGB products and wow they have almost doubled since they came back in the picture.... Some of you will end up paying that price because you can afford it and the rest of use will simply wait and hope that the price drops. The only thing holding myself back from building the layout I want is the cost of track keeps going up. As long as there are people willing to pay $8..10...12...15....20.. a foot it will keep going up. But if you all stop paying it then they will have to drop there prices in order to sell it. 

This is only my opinion


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## East Broad Top (Dec 29, 2007)

I don't find MAP pricing quite as annoying as I do over-inflated MSRP prices to begin with. If there's a practice that's ripe for "gouging" customers, it's setting your pricing such that a vast majority of your dealers are going to sell for roughly half your stated MSRP, but a handful of guys are going to pay the same wholesale price, and charge full MSRP. 

I liken it to the Kirby vacuum cleaner guy who came by our house a while back. He did a great job demonstrating this wonderful-do-everything-but-pour-your-coffee vacuum cleaner, and then told us it retails for $2,500... BUT if we traded in our old vacuum (a 15-year-old Kenmore canister, mind you) he'd drop the price down to $1,000 for us. By the end of the sales pitch, the salesman's manager was on the phone with me practically begging me to buy it for $800. I politely declined, but thanked them for shampooing my front carpet for me. You know they're making money selling these things at $800--how many people do they "suck" into paying more? 

I much prefer a more even pricing structure that--while not fixing prices--doesn't present the dealer with a whole lot of latitude in pricing if he still wants to pay the rent. Consider Accucraft--what they set as their MSRP is pretty close to what most of the dealers sell them for, maybe within 10%, 15 if they're having a sale. Even the deep discounters like St. Aubins don't discount the Accucraft stuff much. Granted, if there's anything I wish had a street price for half the MSRP, it's a $4,000 locomotive, but they could very easily list their MSRP as $8K and play the same game the others do. In my opinion, such pricing games don't do the hobby any favors. A customer seeing a 4-figure price tag on a company's web site might run away in sticker shock, unaware that the loco really sells for half that at most stores. It's just not a realistic view of the hobby, and they're cutting their own potential customers as a result. 

Later, 

K


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## jimtyp (Jan 2, 2008)

Do I ever agree. Every ad I've seen for the Bachmann K-27 in a magazine by Bachmann says $1,400, but everybody sells it for $700, so why bother listing it at $1,400, it's just going to scare people off. I have one and love it but I would never have considered it for $1,400.


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## Steve S. (Jan 2, 2008)

I have been in retail sales for over 30 years. I find it funny how everyone thinks that retailers are ripping them off but never admit that 98% of the same people complaining try to make as much money as possible too in their line of work. We sell high end baseball and softball equipment. Did you know that there are composite bats that sell for over $400.00. The huge box stores and the (_out of their garage dealers )_ were happy to make about 30 bucks on a bat like this. When you are stocking many models in many lengths, you can tie up a small fortune in product real fast. Customers would come into the small and medium size stores, pick your brain for over an hour on the differences on each bat, let their kid go out into your parking lot and take swings then happily leave and buy the bat on line or at the big box for the "price" after you gave them all the "service" for free. The manufacturer's realized this and made a policy that if you advertise certain products via print, radio add, internet, etc., you can't sell them for less then a certain price. In our instance, this MAP price means we make about 25% on these bats and can survive. I LOVE MAP PRICING!!!!!! I also realize that in todays economy how slim the margins really are on most products and services and how many people like to whine.


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## Allan W. Miller (Jan 2, 2008)

MAP is really nothing more than an added layer of humbug that requires the consumer to exert even more effort to determine what a given item is REALLY selling for. I realize that the dealer is more or less stuck in the middle on this thing, but it sure doesn't make much sense from the consumer perspective. It only artificially levels the playing field and basically screws over both the dealer (in many cases) and the prospective customer.


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## Totalwrecker (Feb 26, 2009)

K, 
... a Kirby! I sold ONE one summer way back in '68 out of Escondido Ca. That's all I could take before my stomach churned over the ethics of the sales force... 1st commission $50, 2-3 machines $75 and a hundred for everyone after that, my boss got a hundred as did his boss and so on up the chain... It was a machine that cost $35 selling for $600 (1968 dollars). The kicker to me was they were targeting people on welfare and low incomes. Sweepstakes come ons to get in the door and then dead skin scare tactics, we'd vacuum a mattress and the dirt would spell out Kirby on a white tissue that we handed to the mark...er customer. My boss closed the deal by under cutting what I could offer.... 

MAP pricing does have it's place, it does help the smaller retailer. Unfortunately smaller Mom and Pop hobby shops are a dying breed. I live near Tucson, second largest city in Az and the best train store is an extension of an Ace Hardware store! They started offering just G Scale because hey had overhead layouts in their 2 franchises, I've watched them grow into all scales. I think that by combining it with the large overhead of the hardware they can keep the prices within reason. I watched the Lionel store wither and die. 

I have a feeling some collectors are more impressed the higher the MSRP than not. For those with that size wallet, our concerns are the affairs of 'those people'! lol The point is they are part of the market and any manufacturer would be foolish to ignore them. Besides we can pat our selves on our backs when we find the real deals. I'm glad collectors help our suppliers survive 

John


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## East Broad Top (Dec 29, 2007)

Steve, there's a distinct difference between making a comfortable profit and ripping people off. Take gas prices as an example. There is no ceiling on gas prices--stations can charge whatever they feel like charging. Still most gas stations fall within 10¢ of each other, the result of the market setting the average price. Then you get one guy who figures he's in a "prime" location, and charges twice that. You can bet he's going to be investigated for gouging. Translate that to trains, where the market has a similar effect. I'll use Bachmann's K-27 as an example. Probably 90% of the retailers are selling that locomotive for between $650 and $800. That seems to be what the market will bear on that. Yet because the MSRP is $1,400, that gives the other 10% the justification they need to charge full price. Gouging? Depends on where you stand. The gas station owner doesn't think he's ripping people off, as people are willing to pay the price. As a consumer, though, you're being charged twice the "usual and customary" price. If you're an informed consumer who pays the price willingly, that's one thing. If you're "forced" to pay that price through being targeted as not knowing any better, or because of location, that's completely different. 

I used to work for a model train retail chain that specifically set up shop in high-end boutique malls. We charged list (sometimes list plus) for a vast majority of our items. Our target market was not the average hobbyist who read the magazines and knew what the true "market" prices were. Our target was the uninformed newbie who came in off the street, not having a clue as to what they want, so would pay the price out of sheer ignorance. To do that as a corporate culture is in my opinion predatory and goes beyond making a comfortable profit. (Not surprisingly, the chain went bankrupt in 2000.) 

I'm all for the manufacturers leveling the playing field and making things fair for the consumer and the retailer. That is indeed what "MAP" pricing is designed to do. They can make their lives a lot easier, too, by setting reasonable MSRPs that actually reflect what the market will bear. 

Later, 

K


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## blueregal (Jan 3, 2008)

There was a guy on EvilBay this or last week selling k-27's for either $1100 or $1400 he was not a private seller but a major ebay site seller. I emailed him and told him that if he wanted to come down to "reality" and I told him new are going for around $7-750.00 and used for $500-560.00 give or take, I wouldpossibly consider a purchase from him. He emailed me back stating that the price he was doing I believe on the buy it now or bidding starts now was right at his cost. There is a business in u.s. that will give you a "wholesale dealer" status, i had applied for it, and never heard back. theyre pricing for what they called "wholesale" was actually almost full retail, so I didn't want to pursue even if they had bestowed upon me therye grand wholesale distributor "title" hah lol. At any rate since I contacted this guy i believe he is on there now with em advertised at $695 which is still too high for a piece of "Botchman" which is going to need extensive upgrading or repair if you happen happen to be unfortunate to get a "bad" one we'll say.

The Regal


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## Dougald (Jan 2, 2008)

I would never claim that retailers are "ripping off" consumers directly BUT ...

The use of MAP to protect a form of traditional retailing that is non competitive is folly ... and it does lead to some consumers paying more for a product unnexessarily and consequently being ripped off. If customers are unwilling to pay more for extra service, then why should a retailer using an extra service business model be given help or a subsidy to survive? The mail order and internet retail model has grown and has changed the way retailing is done in a drastic manner. Smaller retailers must either adapt, offer greater value for the dollar or leave the business - that is the nature of a free market economy. Organizing artificial barriers like MAP to keep non competitive retailers in business is not only fundamentally dishonest but is like try to keep the tide from rolling in. 
Regards ... Doug


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## jlinde (Jan 2, 2008)

MAP is also a way for manufacturers to avoid restrictions on mimimum resale price maintenance (MRPM); many states prohibit manufacturers from setting the retail price of their products. The Supreme Court overturned that prohibition at the federal level, but state law actually trumps federal law in this instance. MAP is just a tool that manufacturers invoke to make discounting levels less transparent and reduce intra-brand price competition while not violating state MRPM laws. On the gouging issue, while there was smoke about initiating gouging investigations last summer when oil prices were high, there is no standard under the competition/antitrust laws to discern between "high" prices and "gouging" and gouging cases are extremely rare. If there's no collusion or other violation of the antitrust laws taking place (and we aren't talking about a regulated industry like energy), and they haven't taken illegal steps to become monopolists, retailers can charge as high a price as they wish.


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## Steve S. (Jan 2, 2008)

In the business that I am in, MAP pricing can also be the consumers [/i]best friend. The major companies like Easton and Louisville Slugger bring new high end bats to the market twice a year. When the new mode hits, the kids do not want the "old" one, but the new. Like I have said, with MAP we are assured approx. 25 - 30%. Now, to get rid of the older model that had such a small margin to begin with there is very little room to discount down. Many times you loose money to make room for the new models. It is my responsibility to try and order correctly so as to not get hung with a lot of these "out of vogue" models. But, no one has a crystal ball and retailers have to dump merchandise all the time at a loss. And, there are times that you have to make it up elsewhere when and where you can.

Like I said in my earlier post, I would love to know what many of the folks that trash retailers do for a living. I am sure that they try to make as much money as they can and I am happy for them and hope that they are very successful.

P.S. Let's not get into oil and gasoline prices or this good discussion will turn political real fast.


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## East Broad Top (Dec 29, 2007)

...Like I said in my earlier post, I would love to know what many of the folks that trash retailers do for a living. I am sure that they try to make as much money as they can and I am happy for them and hope that they are very successful. 

Surely we all strive to make a comfortable living. No one's arguing the retailer doesn't have every right to do so. The argument lies more in how the prices being charged by some affect the overall health of the hobby industry. Vast differences between MSRP and street price in my opinion do more harm than good. I'm not begrudging the retailer a profit, but profit without concern for long-term health is short-sighted at best--both for the business and customer. 

In the case of the hobby shop I worked for, the money was made on the wallets of the non-hobbyist; the traveler looking for a souvenir, the grandparent simply wanting to get a grandkid a train set, the well-heeled individual who didn't mind paying a premium for the slightly escoteric. Corporate made that very clear when we went to them with questions about pricing based on customer feedback. We made our money on books, videos, mugs, and train-themed souvenirs (whistles, cutlery, etc.). From corporate's perspective, it was less trouble to keep one $1,000 locomotive on the books and make $800 by selling it once than to keep track of 5 $500 locomotives and making $300 on each one. We were to concentrate more on the bread and butter items, and if customers bought the models while they were there, all the better. We were "not a hobby shop," but a "train store." Corporate's opinion was that if customers wanted to buy models cheaper elsewhere, they were welcome to do so. Models were more of a sideline to us. 

My principle argument with that business model is that while it may be good enough to keep dollars coming in for the store's core business (souveniers, etc.) it does nothing to promote the hobby. The customers we catered to are ripe for getting involved. By scaring them with unnecessarily high, off-market prices on the models, they leave with a false impression of the hobby, and are little inclined to pursue it. The business model could easily have been changed to bring prices more in line with other retailers (even though corporte didn't view them as "competition"), probably would have improved the bottom line, and given a much more realistic impression to those customers who came through the doors. More importantly, the customers would have come back for more models, picking up more mugs, videos, etc. while they're there. You're far more likely to pick up a $3 item while shopping for a $300 item than vice versa (the "impulse" buy). It's the repeat customer who keeps retailers afloat. A business model that doesn't support that relationship long-term is doomed to failure. (As evidenced by this company's 2000 bankruptcy.) 

Later, 

K


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## Semper Vaporo (Jan 2, 2008)

Several years ago I was talking to the son of a friend of mine. He worked for a local RR in an area that was not the "core" business of the company. The economy was "bad" at the time (not nearly as bad as today) and I asked him if he felt he had job security. He proudly replied that his part of the company made a cool even million dollars profit the last year and he was not at all worried. A few months later the company decided that since that part of the company was only 10-percent of the bottom line they didn't want to be involved anymore so they shut down that division and he was laid off. 

Odd thing that I noticed is that the company profits dropped 10-percent that year for which the "Investor's Year-End Report" had scads of excuses... but no matter the excuses it has never recovered that 10-percent.

I have never understood the desire of companies to "focus on our core business" to the exclusion of making money. If your "core business" is losing money and that which is not the "core business" is making money it is time to change your "focus" to that which does make money.

A hobby shop that would rather chance making $800 one time to the exclusion of making $300 five times is failing to understand the purpose of business. I suspect that the owner just wanted to be able to purchase what they wanted at wholesale prices, not run a business and once they got what they wanted had no need for the business anymore and so just let it go.


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## Truthman (Dec 13, 2008)

Dave F, 

was the item listed as a clearance or blowout item? there are a number of major E Tailers that advertise clearance and blowout items for less than MAP would seem to require on everything else. There must be a little leeway from Aristo or other engaged in MAP pricing that allows them to do this. 

Nate


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## Truthman (Dec 13, 2008)

Dave F, 

Was the item listed as a special clearance or blowout item? I notice several dealers do this and they advertise below what MAP pricing would otherwise require for similar items. There must be some leeway or loophole that allows them to do this. 

nate


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## Steve S. (Jan 2, 2008)

From corporate's perspective, it was less trouble to keep one $1,000 locomotive on the books and make $800 by selling it once than to keep track of 5 $500 locomotives and making $300 on each one.
WOW.............................. if there are those kinds of margins in toy trains am I ever in the wrong business!! I need to stop selling bats and start selling toy trains. If somebody is wealthy (or stupid) enough to pay that much over the going rate on a toy train, then I do not blame the hobby shop at all. Remember, no one forces anybody to buy anything. And also remember, we are talking about toys.............not food, prescription drugs or other life necessities.


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## East Broad Top (Dec 29, 2007)

...If somebody is wealthy (or stupid) enough to pay that much over the going rate on a toy train, then I do not blame the hobby shop at all... 
I quite agree. The problem lies in the overall effect that parting fools from their money has on the health of the hobby. Using MSRP as a baseline to judge the affordability of the hobby (as is bound to happen when the uninitiated public comes in contact with a store selling at full MSRP) gives a false impression of how expensive/inexpensive our hobby realistically is. The more people who view the hobby as too expensive, the fewer people we have getting involved, the smaller the market gets, the more expensive it becomes to produce products for that shrinking market, the sooner we're scratchbuilding everything because there are no more manufacturers. The economies of mass production require there to be a "mass" in order to produce. When a store sets prices such that they inherently scare off potential customers, I don't blame the customer when the store goes under. 

...if there are those kinds of margins in toy trains am I ever in the wrong business... 
The figures were more illustrative than concrete, intended to give context to the corporate mentality we were dealing with at that store. They simply did not care if the expensive stuff never sold. (And much of it never did. I worked there for around 2 years, and got used to dusting the same models.) I used to do the purchasing for another hobby shop (mostly R/C cars, etc.), and our dealer cost was between 50% and 60% MSRP. A store selling a locomotive with an MSRP of $1,400 for $650 is not dealing with those margins, rather they're dealing with far more favorable ones. If I had to guess based on a comfortable return, I'd say their cost is more on the order of 35% - 40% MSRP. If they're selling at full MSRP, they're making 3 to 4 times the profit the manufacturer is. That tells me the MSRP is set unrealistically high. Bully for the store if they can get it, but as a manufacturer, maybe I'll increase my dealer cost a bit to rake in some of that cash for myself next time 'round. If they're not getting it, and the market is supporting a lower end cost at which the dealers can still make a comfortable profit, then it's time to lower the MSRP and come away looking better to the consumer. 

Later, 

K


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## SteveC (Jan 2, 2008)

As far as I can see, it still remains rather simple, MAP, MSRP, and any other concept that you wish to add to the alphabet soup. Are nothing more than additional impediments placed in my way as a customer/consumer, and as such add no value, only additional cost, to my relationship with any business that participates in those practices.

The other thing is, I do not allow the market place to induce any confusion on my part between 'need' and 'want.' I was taught a long time ago that there are very few things in ones life that should even be remotely considered being acquired through the use of debt. Thus I've always paid cash for what I purchase.


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