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Post by gerd on Oct 21, 2018 23:21:31 GMT -5
Double up....
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Post by gerd on Oct 21, 2018 23:22:11 GMT -5
Sorry Bob, no, only some other road names
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Post by mgatdog on Oct 22, 2018 6:47:31 GMT -5
thanks Gerd.
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Post by ciccino on Oct 22, 2018 6:52:41 GMT -5
In the end I bought two RDCs and two ES44ACs :-) A great sale indeed
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Post by dazed on Oct 22, 2018 10:34:31 GMT -5
Makes me think there not going to carry AZL anymore with sale like that. Or they see no future with them. So take a cut now and hope to sell out. I hope I’m wrong. Technically they aren't losing money. They've had options to make a profit on their AZL commitment because the had the product in inventory. The opportunity cost is what they paid for. Today, no toy train company commits to buying much ...so they miss sales on hot items by not having inventory. M B Kline stepped up to committing to take six pieces of every item in Z. No comment on what was produced by AZL, except to say that Modeltrainstuff still has plenty of your Road and Iowa Interstate. While you are correct, you still have to make sure that the NET of the commitment is not approaching zero. If so, that is not something that can be sustained for long periods. (This isn't the first MBK "fire sale" by-the-way) You would hope AZL would get the message from this, but I'm doubtful.
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Post by ztrack on Oct 22, 2018 16:50:08 GMT -5
You would hope AZL would get the message from this, but I'm doubtful. I am not sure what message we are to take form this? Dealers actually purchase items through Ztrack Distribution which is a completely separate company from AZL. Our terms for dealers are pretty generous. We don't require any minimum order commitments or force dealers to take products. Dealers set their own quantities. Dealers are also free to set their price and sell as the see fit. We truly try to keep it as simple as possible for dealers. Rob
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Post by dazed on Oct 22, 2018 18:47:42 GMT -5
Is it fair to say that pricing structures change between ordering 1 and ordering 6? Just because you don't "require" minimum order commitments does not mean that there aren't "de facto" requirements to be able to actually attempt to make a profit. And it is clear (from your own admission in one of the previous fire-sale posts) that $92 for a loco is losing money to the point that I bet they're just zero-ing out the dollars on that SKU (hopefully!) and moving on for cash flow purposes. The optimist in me says they make a good enough return on the "home run" products that this is acceptable to them. But even in N, where the market is (at least) 10x what Z is, I've never seen (in 25+ years) a brand survive that practice over the long haul. Thus, I stand by my statement that cannot be sustained for long periods. The message would be that the entire chain is missing the mark somewhere. That could mean the price break goes from qty6 to qty5 or the products need to be designed for a different price point. Could mean the dealers need to charge more (and order less) ...not good for anyone unless...you don't think you need dealers anymore and you don't care. (Ask Exactrail how that's working out for them) That's what the pessimist in me thinks.
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Post by Rob Albritton on Oct 22, 2018 21:09:17 GMT -5
Is it fair to say that pricing structures change between ordering 1 and ordering 6? Just because you don't "require" minimum order commitments does not mean that there aren't "de facto" requirements to be able to actually attempt to make a profit. And it is clear (from your own admission in one of the previous fire-sale posts) that $92 for a loco is losing money to the point that I bet they're just zero-ing out the dollars on that SKU (hopefully!) and moving on for cash flow purposes. The optimist in me says they make a good enough return on the "home run" products that this is acceptable to them. But even in N, where the market is (at least) 10x what Z is, I've never seen (in 25+ years) a brand survive that practice over the long haul. Thus, I stand by my statement that cannot be sustained for long periods. The message would be that the entire chain is missing the mark somewhere. That could mean the price break goes from qty6 to qty5 or the products need to be designed for a different price point. Could mean the dealers need to charge more (and order less) ...not good for anyone unless...you don't think you need dealers anymore and you don't care. (Ask Exactrail how that's working out for them) That's what the pessimist in me thinks. ....uhhhh, that's not correct. But thanks for stopping by!
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Post by Commodore on Oct 22, 2018 22:03:28 GMT -5
Technically they aren't losing money. They've had options to make a profit on their AZL commitment because the had the product in inventory. The opportunity cost is what they paid for. Today, no toy train company commits to buying much ...so they miss sales on hot items by not having inventory. M B Kline stepped up to committing to take six pieces of every item in Z. No comment on what was produced by AZL, except to say that Modeltrainstuff still has plenty of your Road and Iowa Interstate. While you are correct, you still have to make sure that the NET of the commitment is not approaching zero. If so, that is not something that can be sustained for long periods. (This isn't the first MBK "fire sale" by-the-way) You would hope AZL would get the message from this, but I'm doubtful. Dazed, When I was in the retail drug business I'd lose up to $9.00 a pack on Birth control pills. The women who paid cash for drugs also bought Revlon and Hallmark cards ...but they also bought the drugs for their families. I don't know what M B Kline is up to??? They've lost money with me. I'm always up for their "fire sales". Sure, Prolly they shouldn't buy the Canadian stuff. There are maybe 3 Zscale modelers in Canada ...and one of them is Willy. Sure I bought a lot ...but I think MBK is just being stupid.
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Post by Zgauge on Oct 22, 2018 22:26:15 GMT -5
I am a dealer and just wanted to add my perspective. As to what Rob at Ztrack said, they really do keep it simple for us. We order through their portal, what we want, no quantity breaks. We see real time stock. We set our own pricing. There are times where we get overstocked on things. Many times we guess wrong on demand or make the mistake of ordering heavy on what we favor. (I am very guilty of that!) One thing that can come into play is the fact that when our fiscal year ends, we want our inventory low as it is an asset. It's only cost of goods sold to us when it sells! So for us, there are times when we find it best to drop our price to clear out stock and free up cash. If you are just looking at the $92 locomotive, yes they are loosing money. But all things considered, I would guess they are doing very well. They have a quality site that I think it is well done. And look at all the free publicity they have gotten! Every day for 23 years in my father in laws industrial fastener business I have heard "CASH FLOW". Dropping the price on a slow moving item may actually be the smart move, nothing more. I think z scalers are a demanding demographic and that really is a good thing as their attention and demand for detail drives the manufactures to do more. I check out the forum often and one thing stands out with z scalers......passion. That passion will continue to spur on the z scale movement. Jeff www.zgauge.com
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Post by tjdreams on Oct 23, 2018 0:53:40 GMT -5
"CASH FLOW". Dropping the price on a slow moving item may actually be the smart move, nothing more. Jeff www.zgauge.comI think Jeff just hit the nail on the head here. Every day that a item sits on a shelf it cost the dealer money, + by not selling quickly it is tying up funds $$$ that could be otherwise used to buy and sell something else at a profit. There comes a point where it makes more financial sense to drop the price and clear the shelves verses keeping on spending more money in overhead cost to store it on the shelf. If you read back on some of the older post from last year you will see that M.B. Klein closed 2/3 of their Retail Store space to make room for more storage for other items that were selling faster on their website "Model Train Stuff" than from the shelves at their Store front location. With that in mind and considering The Christmas season sales are starting to increase. It would be my guess that the sale is just a means to clear out items that may not be selling as quickly as they would like to make room for other items that will sell faster and keep the cash flow moving. David
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Post by arsenix2001 on Oct 23, 2018 6:54:07 GMT -5
Yep, I was actually at thier store three weeks before they closed it for remodeling. I was so excited to see a real train store after 20+ years out of the hobby. It was sad to see it shrink. I got that exact same explanation. Oh well... Picked up a 92$ Ferromex ES44ac to lash up to my Canadian Pacific for those long hauls up north... Can't complain! Thanks for the heads up.
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Post by dazed on Oct 23, 2018 8:07:35 GMT -5
Is it fair to say that pricing structures change between ordering 1 and ordering 6? Just because you don't "require" minimum order commitments does not mean that there aren't "de facto" requirements to be able to actually attempt to make a profit. And it is clear (from your own admission in one of the previous fire-sale posts) that $92 for a loco is losing money to the point that I bet they're just zero-ing out the dollars on that SKU (hopefully!) and moving on for cash flow purposes. The optimist in me says they make a good enough return on the "home run" products that this is acceptable to them. But even in N, where the market is (at least) 10x what Z is, I've never seen (in 25+ years) a brand survive that practice over the long haul. Thus, I stand by my statement that cannot be sustained for long periods. The message would be that the entire chain is missing the mark somewhere. That could mean the price break goes from qty6 to qty5 or the products need to be designed for a different price point. Could mean the dealers need to charge more (and order less) ...not good for anyone unless...you don't think you need dealers anymore and you don't care. (Ask Exactrail how that's working out for them) That's what the pessimist in me thinks. ....uhhhh, that's not correct. But thanks for stopping by! LOve how you just can't answer a question. But hey, I'll take the high road instead of acting like a 12-year-old. (I mean, it's what customers do...in bizarro world) So I stand corrected....no quantity breaks, no quantity shipping breaks. You buy one, you buy 5,000, same price and per unit shipping. Got it.
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Post by dazed on Oct 23, 2018 8:25:25 GMT -5
While you are correct, you still have to make sure that the NET of the commitment is not approaching zero. If so, that is not something that can be sustained for long periods. (This isn't the first MBK "fire sale" by-the-way) You would hope AZL would get the message from this, but I'm doubtful. Dazed, When I was in the retail drug business I'd lose up to $9.00 a pack on Birth control pills. The women who paid cash for drugs also bought Revlon and Hallmark cards ...but they also bought the drugs for their families. I don't know what M B Kline is up to??? They've lost money with me. I'm always up for their "fire sales". Sure, Prolly they shouldn't buy the Canadian stuff. There are maybe 3 Zscale modelers in Canada ...and one of them is Willy. Sure I bought a lot ...but I think MBK is just being stupid. Yes, that is the concept of the "loss leader". That is a little different than selling an item due to cash flow issues or to reduce inventory to improve overall financial health. But overall yes there are many reasons for selling items below cost and it has happened for forever. My point is that there is no way it doesn't affect how MBK orders moving forward. So if they're making misinformed decisions about buying, that will ultimately lead to changes by them and less sales across the chain. AZL clearly doesn't think that will harm them and that is their prerogative. From that, I just think it means prices for all AZL items will increase significantly. Which is fine by me...none of these items are things we cannot live without.
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Post by Commodore on Oct 23, 2018 13:09:26 GMT -5
Dazed, When I was in the retail drug business I'd lose up to $9.00 a pack on Birth control pills. The women who paid cash for drugs also bought Revlon and Hallmark cards ...but they also bought the drugs for their families. I don't know what M B Kline is up to??? They've lost money with me. I'm always up for their "fire sales". Sure, Prolly they shouldn't buy the Canadian stuff. There are maybe 3 Zscale modelers in Canada ...and one of them is Willy. Sure I bought a lot ...but I think MBK is just being stupid. Yes, that is the concept of the "loss leader". That is a little different than selling an item due to cash flow issues or to reduce inventory to improve overall financial health. But overall yes there are many reasons for selling items below cost and it has happened for forever. My point is that there is no way it doesn't affect how MBK orders moving forward. So if they're making misinformed decisions about buying, that will ultimately lead to changes by them and less sales across the chain. AZL clearly doesn't think that will harm them and that is their prerogative. From that, I just think it means prices for all AZL items will increase significantly. Which is fine by me...none of these items are things we cannot live without. . I think now ...that it's me being stupid. I bought so much!
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