Hattons and Farish

[Roy L S]

I have read the recent exchanges with interest.

Firstly I do not think Bachmann's practice of limiting discounts (initially on new releases) does anything to push up prices. The wholesale price at which they sell to retailers would be the one that impacts ability to discount, and there is no suggestion that this had radically changed in relation to RRP that I can find anywhere.

Secondly, much as some would like to believe it I do not think that prices are being kept high for reasons of profit motive. Anyone who has watched the news and developments on this forum will know that there are a multitude of factors that have pushed up prices, in particular wages policy in China which directly impacts production and assembly costs. Here I do think in N there must surely be scope to simplify elements of manufacture with certain detail moulded on not glued on separately but manufacturers are between a rock and a hard place as we modellers demand ever higher standards, but in our typically British way do not seem prepared to pay for it.


Personally I think this dispute (and with resepect Chris M I only know what I have read and don't know full specfics from the Horse's Mouth - either Hattons or Bachmann) but what I would say is that to an extent, if the situation is as we understand, both Bachmann will be hit by losing the purchasing of probably it's biggest UK customer which doubtless runs into many hundreds of thousands of pounds and Hattons by having a massive hole in it's inventory for which people will shop elsewhere.


My own personal perception of the way Bachmann operate is that is appears to be too rigid and lacks he agility it really needs in this day and age, it is all very well to have policies that on the face of it are very laudible but that is no good if sales and market share suffer on an ongoing basis because there is no flecxibility.


Roy

[Dr Al]

Firstly I do not think Bachmann's practice of limiting discounts (initially on new releases) does anything to push up prices. The wholesale price at which they sell to retailers would be the one that impacts ability to discount, and there is no suggestion that this had radically changed in relation to RRP that I can find anywhere.

I think the rigidity of not offering the same wholesale discount to smaller buyers is the thing here - and in this case I think they are helping kill off the small retailer - ability to compete here would be far better.

I think that the truth is Bachmann have seen that they (and Hornby, and all other traditional manufacturers) are at real risk from new starts like Hattons. Why? Not because of quality, or the product, but of simple economics - Hattons immediately cut out the middle man (i.e. a intermediate manufacturer that also has to earn a profit), so their margins can only be substantially higher.

I suspect the means by which models are made and sold may move increasingly quickly from manufacturer and separate retailer, to direct retailers who manufacture fairly rapidly assuming Hattons are successful, giving them more control, and more margin.

Cheers,
Alan

[red_death]

Except that with Hattons also wholesale-ing their own products they are losing some of that advantage both in terms of margin and exclusivity. So swings and roundabouts!

[Newportnobby]

I think the rigidity of not offering the same wholesale discount to smaller buyers is the thing here - and in this case I think they are helping kill off the small retailer - ability to compete here would be far better.

I would go along with that. Some years ago I wanted 5 Farish locos and went to my local dealer first. I asked if they could provide any discount for such a purchase (at the time some £350-£400) and I was told 'No way - we'll lose money'

simple economics - Hattons immediately cut out the middle man (i.e. a intermediate manufacturer that also has to earn a profit), so their margins can only be substantially higher.

Maybe I've misunderstood this but surely Hattons/whoever has to pay someone to make their models and that someone will need to make a profit.
Example - the Hattons Garrett will not be made at break even by someone so Hattons can make a killing.

[longbow]

By going direct Hattons benefit by eliminating Bachmann's sales margin (ie their mark-up over manufacturing cost). Bachmann would also lose their in-house manufacturing profit to whoever supplies Hattons.

[guest311]

maybe slightly off topic, but I tend to use Hattons as my go to retailer because I can normally get what I want in one place / one parcel.

might be paint / glue / scenics / N gauge / or 1:76 for wargames vehicles.

as I see it, if I need to go elsewhere for Farish N gauge, I might also be able to get the rest there as well, so why split my order ?

I would add that I am not one of those people who do their weekly shop at about six different supermarkets, saving a penny here, a penny there, and spending a quid on fuel 

so if Hattons cannot be my one-stop retailer, they might lose all my business [ SWMBO is around so I decline to commit suicide by adding what that might cost  ]

[njee20]

Surely any distributor offers quantity discounts to retailers who are buying larger volumes, that's just basic economics, and nothing to do with evil Bachmann out to screw over the humble local shop.

My standard anecdote on this... some years ago I was buying some brakes for a new bike. They were £200 each, which is pretty high end, so low volume. The distributor offered discounts for 2, 4 and 8 brakes, something like 2%, 5% and 10% discount respectively. I placed my order, and was told it was delayed as Chain Reaction (the Hatton's of the cycling world) has ordered 200 of them. What sort of discount must you be able to negotiate on those volumes?! Although I've read it's not the case I can't believe that the big retailers don't get better trade margins. 

[jacowin80]

The smaller retailers can also put in the same size of order as the likes of Hatton's and Rails and will (probably) get the same kinds of discounts.  It all comes down to if they can afford the outlay and are willing to take the risk.  My dad managed his own shops for most of his working life and as a sole retailer he never got the kind of discounts that chains did.  His big selling point was good old fashioned customer service like you get in a lot of little model shops!

As far as Hatton's not stocking Farish how many people will be happy with a Dapol 66 in the livery they are wanting be? and as for most things coming away with nothing at all!  I know I will look for a while but eventually I will have to go elsewhere.  Unless Hattons are planning on duplicating the whole Bachmann range surely they are on to a no win. 

[austinbob]

I must admit that whilst I used to buy a fair number of items from Hattons as my online retailer of choice I now prefer to support my local(ish) model shop in Alton Hampshire. This shop is one of a dying breed giving excellent service and advice and a reasonable discount. So I'm not too bothered about Hattons problems, although I hope they sort out the problems with Bachmann for the benefit of our hobby in general. 

[guest311]

just sent the following query to Hattons,

"any update on your dispute with Farish / Bachmann ?

will you be receiving items as released or re-stocked or should we be looking at other sources ?

basically, will you be selling Farish / Bachmann when your current stocks are cleared or not ? "

will update when / if a reply is received.
lets be honest, if Hattons are not going to receive stock, it would be nice / honest of them to clarify the situation so customers do not miss out by pre-ordering items they know they are not going to receive, at least for now.

just received this response ....

"Thank you for your email.

We do not currently have any further updates however we have an allocation with the manufacturer and we will be able to send these pre-order items as soon as they are received by ourselves.

I hope this helps and if you have any further questions then please do not hesitate to contact us."

not exactly illuminating 

[Stuart Down Under]

We do not currently have any further updates however we have an allocation with the manufacturer and we will be able to send these pre-order items as soon as they are received by ourselves.

I would have thought that Hattons could get themselves into serious trouble, unless they have a genuine expectation that they will be able to provide these pre-order items.

[Kaput]

Can't help be a little bemused by the idea that Bachmann/Farish is basically sitting on a pile of stock allocated to Hattons yet nobody has any idea whether the dispute will be settled or not.

[njee20]

Whilst I agree it seems odd there is a pile of stock marked "Hatton's" at the back of the Bachmann warehouse, the fact both parties have confirmed that to be the case clearly indicates that they do see a resolution.

As this is all being done by respective legal teams I don't think there'll ever be any 'updates', it'll just suddenly get resolved.

[nookfield]

Whilst I agree it seems odd there is a pile of stock marked "Hatton's" at the back of the Bachmann warehouse, the fact both parties have confirmed that to be the case clearly indicates that they do see a resolution.

As this is all being done by respective legal teams I don't think there'll ever be any 'updates', it'll just suddenly get resolved.

If Bachmann had accepted the order from Hattons and then distributed the stock to other retailers, they would probably be liable for Hattons loss of profit.   

[njee20]

Well yes, but they could equally have rejected the orders. Like I say, both are continuing as if a resolution is the likely outcome.