This thread got me to go look at their new site again. I’d like more detail about the items, but it has good photos and availability information. Probably one of the best on-line ordering systems I’ve seen in Large Scale.
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Ok, does Nicholas (above) have the analysis? Question is: Who is turning the screw?
IF, I say if, ARISTO - CRAFT sells their products consistently at current vendor cost, there’s no problem at this time becaue their single source pricing is comparable to wholesale - again speculation. However, single seller is not the same as competitive pricing. How long before the single source raises prices not based on increased production costs but on market exclusion?
ANALYSIS: Large scale historically has one type of product per one manufacturer. Granted, there are now at least two comparable 2-6-0 moguls – PIKO and LGB for price comparision. But, nothing like HO or N scale with a number of mfg. choices for the same livery as well as type of loco or rolling stock. So Aristo may have the best world – all new products will come out through them and the older, or what’s not selling, may go to TRAINWORLD for their price reduction specials. They won’t have any “same product” competition from other manufacturers. For a manufacturer to put out a “NEW” loco means they want to take a chance on the current population of large scalers antsy to buy. That’s a risk because the marketplace is so tiny and restricted since virtually what’s being introducced into the hobby is a ghost town. Where is everyone? Everyone in the hobby are those who have been in the hobby for at least five years (majority) and have everything they can run or store – or got a divorce.
Wendell
my trains have survived 3 divorces…so far…
Wendell Hanks said:
................ Granted, there are now at least two comparable 2-6-0 moguls -- PIKO and LGB for price comparision.Wendell
Comparing a LGB mogul to a PIKO mogul is like comparing a Porsche to a LADA.
A bit of cheek on Aristo’s part - was it not Aristo a few years ago that enforced the MSRP policy? Dealers could not advertise a price more than 25% discount on retail price or no goods would be shipped to them. Do as I say not as I do is Aristo’s policy now - they lost me for good. This is a company on the verge of chapter 11 when it resorts to such measures. The dealer network was always the market front for a manufacturer to get the product on view. Of cause the internet has changed the way we shop but the outcome will be continued shortages and no stock when we wish to order. The dealer network was like a large wharehouse for product. The manufacturer would ship it to the dealers for ‘storage’. The dealers got too cunning for their own good though and started ‘just in time’ drop shipping, causung the manufacturer to be the wharehouse.
Aristo’s ploy is very short term as the market will not have the exposure a dealer network has. I think Kader Industries will have a new manufacturer in their sights for a bargain basement price. They got Sandra Kan for $8 million, how much will they pick up Aristo for?
TonyWalsham said:A birdie once told me that LGB offered the same discount (wholesale price) to all customers, big and small. The difference with the big boys was free shipping.
Norman. I don't doubt big dealers like Trainworld get bigger discounts than the 40% (perhaps less) small Ma & Pa stores did/do get. Trainworld would get the basic 40% like the Ma & Pa's. Then extra discounts for buying bg quantities and an extra discount for pre-payment. Other wise why would they still keep buying stock if Aristo is selling direct for 40% off list. Never mind the super discounts for clearing lines.
Tim Brien said:
..................Aristo’s ploy is very short term as the market will not have the exposure a dealer network has. I think Kader Industries will have a new manufacturer in their sights for a bargain basement price. They got Sandra Kan for $8 million, how much will they pick up Aristo for?
Doesn’t Kader produce most of the ARISTO stuff? In which case it will be really cheap, they just have to acquire the rights to the name and a few other “minor items”.
Consolidate the sales org with Bachmann and be done.
HJ,
Sandra Kan did have assets, if somewhat depleted. With Aristo there is little more than a brand name and that is muddied by their last ditch effort to secure sales. The Aristo Classic line has been forgotten (no real value in the tooling) so that leaves only the standard gauge line which of late has come in for severe criticism (PCC trolley onboard electrics) and the Consolidation (wheel standards). Just how much is the company worth to Kader? Aristo has depleted the company standing over the years due non-investment. It was only towards the end, when they started pumping in cash to revitalise the Mallet, Pacific and the old Classic Consolidation. It does not take five years to bring a new product to market as it did with the Consolidation (and then get it wrong!).
What ‘very intelligent individual’ convinced them to start live steam manufacture and then talk of revitalising manufacturing of another GG1 in the marketplace (that was put to bed about six years ago we all thought). I think the term ‘senility’ has a lot to do with their current economic situation. It is not just the GFC as people are still spending on hobbies. Look to the expanding Piko line. Herr Doctor Wilf is not expanding into a vacuum. He obviously sees light at the end of the tunnel. With Aristo they are not looking for light in the tunnel, they are digging a tunnel to bury themselves in.
Any talk of AristoCraft going under is still somewhat premature. I think going direct will ensure at least a skeleton presence for the time being in the hope of buying time to ride out the GFC.
If and when failure did occur, the acquisition price would of course be determined by, amongst other factors, who actually owns the tooling for their models.
Perhaps AristoCraft is a lot smarter than we give them credit for. Consider for the moment if Crest is actually part of the corporate umbrella even though Crest is carried as part of the same merchandising banner. If I remember correctly, some years ago AristoCraft hived off Crest. If Crest is in fact a separate Company that will stand them in good stead if any sort of carve up takes place, as the Revolution has been an outstanding sales success when compared to the general AristoCraft product line. Even though Crest doesn’t have much product to sell at the moment.
Crest would be the stand by for the future not affected by whatever else might happen.
Tony,
of cause talk of failure is all doom and gloom, but given that Aristo rise again like the veritable Phoenix, do you really think the potential dealer newtwork will sit up and beg like good little puppies? Aristo will be at the mercy of the dealers’ demands at their terms. Interest free credit with generous repayment terms, Aristo copping advertising costs for the dealer network including very limited supply outside of the network. To come back onboard the dealers will want exclusitivity. Of cause the dealers themselves will need to establish product line outside of Aristo to remain viable in the meanwhile. Those who survive will hold the golden goose. Yes, Aristo will survive but will it still be in the family control - I do not think so.
As you say, the company could be split up before armagaeddon, giving Crest a foothold without being dragged down by the parent company. The old Aristo under Nat Polk had its fingers in very many pies other than just trains, so perhaps there is hope (just perhaps).
Has anyone considered that the new management at Aristocraft simply believes the new business model is superior ?
Why assume the new business model is an act of desperation?
If they were drop-shipping a lot of the merchandise anyway, maybe the logic is the consumer will spend some of the money saved on merchandise.
Ralph
Tim Brien said:
Tony, of cause talk of failure is all doom and gloom, but given that Aristo rise again like the veritable Phoenix, do you really think the potential dealer newtwork will sit up and beg like good little puppies? Aristo will be at the mercy of the dealers' demands at their terms. Interest free credit with generous repayment terms, Aristo copping advertising costs for the dealer network including very limited supply outside of the network. To come back onboard the dealers will want exclusitivity. Of cause the dealers themselves will need to establish product line outside of Aristo to remain viable in the meanwhile. Those who survive will hold the golden goose. Yes, Aristo will survive but will it still be in the family control - I do not think so.As you say, the company could be split up before armagaeddon, giving Crest a foothold without being dragged down by the parent company. The old Aristo under Nat Polk had its fingers in very many pies other than just trains, so perhaps there is hope (just perhaps).
And here I thought I needed laid!
Tim.
Crest has already been split away from AristoCraft, even though it is still marketed as part of the overall set up.
Ralph, I don’t really assume anything. However without a huge direct adverstising budget I seriously doubt there will be enough exposure to the market place by going direct as your marketing tool to sustain a viable business when compared to having product on dealer shelves. In short, if going direct at discounted prices in direct competition to your own dealer network is such a good idea, why is it that only MTH has been doing it lately. Where are they now in Large Scale?
I believe that the GFC has had more effect on the financial bottom end of the market place, than the top end. As such LGB will eventually get back to where they once were. Making and selling a high quality relatively expensive product aimed and marketed to those with a higher disposable income than the average.
David Russell said:Careful...
And here I thought I needed laid! :)
TonyWalsham said:Tony, I think the point is, that other than a few large dealers, there was very little on dealer's shelves. And two of the larger dealers are now history. If they were already drop-shipping a lot of merchandise, they now have a mailing list of confirmed customers ;) Ralph
Ralph, I don't really assume anything. However without a huge direct adverstising budget I seriously doubt there will be enough exposure to the market place by going direct as your marketing tool to sustain a viable business when compared to having product on dealer shelves.
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Nick,
as I believe attributed to Mark Twain, “The reports of my death are a little exaggerated.” The Polks have a few seasons play left in them (as an American team), although their batting average will take a hit as each season grinds to a halt. The talent scouts will find little of interest and will come back in a season or two and pick over the bones for anything of value. It is really only the very ardent team followers who will stick with them to the end, finding no fault right up to the final bell in the end game of the season. No home runs but plenty of strike outs. The team manager left the team a few months ago, hoping a new captain would inspire the team with new ideas, but alas, not to be. Pity, as at one time they were at the top of the league table with innovative play, capturing the trophy from a German team who won every pennant for many years until in one glorious season they lost every game and were relegated out of the professional league. Is the same fate awaiting them?
Try this:
Today, Tuesday, August 7th
E-mail (SPECIAL SALE) ad from TRAINWORLD lists the LGB chunky 2-4-0 steamer with both a flat stake car and caboose – $195.00. No track or power pack. The engine alone (with tender) is $149.00 This is not the sound version. No disclaimer about the cars not being LGB.
Statement is the products are in an LGB box.
I’ve read an ad for just the loco and tender at $ 250.00.
Who’s in trouble that a special needed to be run at those prices?