Lost my 3rd favorite online dealer..... (1 Viewer)

[VIRIATO]

Living in Brisbane Australia I am very lucky to have Bretts 'Bricks and Mortar store' here. I work on the simple plan - I ask Brett first if it's in stock if not I go E-Bay. I say I am lucky that there is a bricks and mortar store near by because 1. you can see in the flesh first always better than going on pics. 2. it is a social thing as well, I would not have come to know some of the madmen who all so visit his store. His prices are still better than any thing on Ebay as shipping to Oz is very costly, Just MHO.
Wayne.

Yes, these clearly are great advantages of going to a BMS, the same here with my Portuguese dealer's small showroom.

Paulo

 

[tdubel]

The economic theory behind all this intrigues me.

In a classic sense, supply and demand meet at a point which determines the price of an item. Classic Econ 101.

But...is the collectible market the same as a classic market? Collectibles are not technically 'necessary' to life (OK, I suspect some collectors might disagree ^&grin). They are purchased bsed on a 'perceived value' of an item. If a collector thinks an item is worth what he paid for it...of if he thinks he got a bargain...then he is a happy bunny. He knows that what he paid for an item is at LEAST what it is still worth. This is where loss aversion comes into play. If that same item is discounted, the collector looks at the item that he paid full price for and thinks, "This isn't worth what I paid for it." The next time he wants to purchase an item, he will hesitate before buying at a retail price, fearing that the value may drop once again. The collector has two choices: he can either wait to see if an item will be discounted (helping him avoid a 'loss' on his purchase) or he can purchase an item from a company that fixes prices and will 'guarantee' that he will not have to see his purchase 'devalued.'

I don't think that the loss aversion effect is insignificant in any collectable market. People feel good about purchases that they think will at least hold their value. Some markets have collapsed because the perceived value could not be sustained, driving prices lower and lower to the point where people left the market because they did not want to 'lose more' on their purchases. I view the pricing structures of many toy soldier manufacturers (and most manufacturers are strict on this) as a way of maintaining a perceived value at a suatainable level for both manufacturers (who need to sell product) and dealers (whom the manufacturers need to make the product visible and available).

I'm not going to pretend that I don't know what side my bread is buttered on...but I find the economics of this interesting. Time for someone to write a graduate thesis on the economics of the toy soldier marketplace!!

Pete
All good points, but again, as stated later on the thread, the market interference caused by a pricing policy creates artificial value at times (not on every item, I still stick by the product that is a home run, sells, sells fast and appreciates over time). I think another valid point to the artificial value theory, is look at Ebay OR secondary market sales of an item, value is more freely determined there. Now, you have to take an average to get rid of the anomalies of a super high/low sale, but it is interesting how the perceived value can vary greatly on products once they are in a more free market. The home runs still sell and most of the time appreciate, but there is a good lot of stock that doesn't.

Again, it is an interesting discussion this thread has embarked upon. I don't think I have thought this much ECON since college.

TD

 

[Peter Reuss]

Pete

Again, it is an interesting discussion this thread has embarked upon. I don't think I have thought this much ECON since college.

TD

I went to college to be an Econ major...took Econ 101...and switched!

I'm a preacher, not an economist!

One more interesting thought about perceived value: those who have been in the hobby since the days of $89 tanks perceive that the price has gone through the roof and that current offerings 'are not worth the higher price.' Those who are new to collecting have only known the higher prices, thus often don't have the same perception.

 

[tdubel]

I went to college to be an Econ major...took Econ 101...and switched!

I'm a preacher, not an economist!

One more interesting thought about perceived value: those who have been in the hobby since the days of $89 tanks perceive that the price has gone through the roof and that current offerings 'are not worth the higher price.' Those who are new to collecting have only known the higher prices, thus often don't have the same perception.

The last paragraph - "ain't that the gospel"!! Very true statement.

TD

 

[Winston]

Those who are new to collecting have only known the higher prices, thus often don't have the same perception.

Though as a consequence expect more for their money. As the rise in the past 6 or 7 years is over 100% across all manufacturers. You only have to visit the bricks and mortar stores that stock all ranges to find items gathering dust.

The industry as a whole does seem to have reached a crossroads. Not just in terms of sales outlets but the amount of production available to collectors. There's too much high priced product chasing a dwindling number of collectors.

The major issue for me as a collector is the uplifting of price on already manufactured stock. I know of no other industry where stock is revalued (often annually) when it hasn't sold, sometimes for years. So hardly surprising that discounting takes place. As even amongst dealers there is a differential in purchase cost price.

If the market heads towards more limited production runs then the possibility of seeing it in store reduces even further. As hard to see stores selling sufficient volume to cover operating overheads.

One issue that does concern me is the apparent hoarding of popular sets by "dealers". Some time after the set is retired and impossible to find, they materialise on Ebay. Reaching prices far in excess of retail. All this does is distort the market value of the product.

So its the manufacturers themselves that need to rethink their distribution and sales channels.

 

[VIRIATO]

The industry as a whole does seem to have reached a crossroads. Not just in terms of sales outlets but the amount of production available to collectors. There's too much high priced product chasing a dwindling number of collectors.

I think with some long retired rare items we are sometimes crossing the line into antiques/art and the price logic completely changes.

Paulo

 

[marco55]

I wish there was a BMS near me as the higher prices would be offset by a savings on shipping.
Mark

 

[ucla1967]

One of the things I value vis-a-vis the brick and mortar store is the ability to actually see the product, pick it up, and in that manner determine whether I want to buy it or not. That being said, I still purchase most of my toy soldiers on line. The brick and mortar stores that will survive this sea change will be those that also sell on the internet. In any case, I always attempt to support the brick and mortar store when possible. I try to attend the San Diego County based (an hour away) Old Toy Soldier Home's two annual open houses. I encourage members of our Southern California Toy Soldier Collectors Society to also attend and I publicize the events on our calendar. I realize that many of you do not live anywhere near a store and must rely on internet dealers and eBay. We are doubly lucky to also have an annual toy soldier show in this area.

Regarding discounting, I got my first job after receiving my MBA from UCLA's Graduate School of Management, with a company located in New England. As a Product Manager, my job was to manage the introduction of new products to our line from concept to roll out and after. One of the major marketing decisions involved price setting. We had a premium pricing policy (i.e., we priced higher than our competition) with little leaway on discounting for our nation-wide 400 plus sales force. We did offer quantity discounting on large purchases, but the sales rep's commissions were reduced accordingly.

When I worked for Pacific Bell Directory (which was a one billion dollar a year business with 70% gross margins AKA a cash cow), we also had a strict pricing structure which only allowed discounts for the same purchased advertisement in certain other directories. There is nothing worse than selling a certain product to one customer at the list price while giving that customer's competitor a discount for the same item. If sellers want to be dealers for a particular toy soldier product line, they shouldn't sign on if they disagree with that company's discount policy.

 

[damian]

I just cannt see how the market can absorb all the current product. Every month there seems to be no end of really great stuff released all round. Is all this product moving? I cannot keep up and just pick and choose, confident that next month, next father's day next Christmas there will be other must have sets.

 

[Peter Reuss]

There's too much high priced product chasing a dwindling number of collectors.

This is at the heart of the issue. If the hobby is strong and possibly expanding (a sentiment I actually adhere to based on what I can see from my end of things), then it justifies the amount of product coming out.

We got into the hobby over a decade ago, and for that entire time I've heard from people that the hobby is shrinking. I haven't seen it yet!

 

[damian]

This is at the heart of the issue. If the hobby is strong and possibly expanding (a sentiment I actually adhere to based on what I can see from my end of things), then it justifies the amount of product coming out.

We got into the hobby over a decade ago, and for that entire time I've heard from people that the hobby is shrinking. I haven't seen it yet!

That is good to hear. If the market expands then it can absorb all these wonderful new releases.

 

[hsm]

Great post and I concur or have experienced all of this.

My two cents. It is a fact of life that the Internet has completely changed retail as we know it. If you are a brick and mortar store, and do not have a strong online presence you will probably cease to operate in today's global economy. There are many people making very good livings with internet only businesses. I have operated mine for almost fourteen years. Every year my business has grown. Now if I was trying to run a store front with my product line I wouldn't have lasted six months. With an online store you are open 24/7 globally. No way brick and mortar stores can compete with that kind of exposure. I have watched the largest hobby store in NJ steadily go down hill because they simply do not understand this concept. I am not even allowed in the store because they now consider me the enemy.

Several years ago I contacted Britain's about becoming a dealer. I was told that they were no longer offering dealerships to "Online Only Businesses", even after I told them what kind of sales volume I was doing at the time. Not sure how any manufacturer can turn away business like that. But after thinking about I was kinda glad that was there response. With the steady decline of the physical store front I'm sure that policy will change in the future.

I would also like to know how there are so many eBay dealers selling all of the major toy soldier manufactures that have no store or their own web site. Someone has to be selling to them. Are they businesses that we all know selling under a different name ? Are they manufacturers dumping their old inventory. I think its a big conspiracy I was not allowed a dealership, but these fly by nights have goods to sell. Very strange.

As far as manufacturer suggested retail pricing I am a big fan. Why - because I have watched numerous retailers selling product like mine at or below cost because they need funds to buy new inventory. This hurts all dealers. Rule number one when starting a business is to have enough cash on hand to run your daily business operations.

 

[Martin Tabony]

Just a thought but, if it's all about on-line presence why doesn't Britains just sell directly to the collector and cut everyone else out?

Martin

 

[Toy Soldier Brigade]

Just a thought but, if it's all about on-line presence why doesn't Britains just sell directly to the collector and cut everyone else out?

Martin

You can buy directly from Britain's just go to there web site. I don't think manufacturers should be in competition with their dealer network, but that's just my opinion. You can also buy directly from King & Country, Conte, Collectors Showcase, Figarti, First Legion, and Thomas Gunn to name a few.

 

[Martin Tabony]

You can buy directly from Britain's just go to there web site. I don't think manufacturers should be in competition with their dealer network, but that's just my opinion. You can also buy directly from King & Country, Conte, Collectors Showcase, Figarti, First Legion, and Thomas Gunn to name a few.

But if it's all online do you need a dealer network? If the point is that bricks and mortar are loosing out to internet dealers, that are all competing with each other over price, then surely as long as Britains can store the stock and get a presence at the few shows around the world, then they can offer the best price to customers!

Martin

 

[Winston]

Just a thought but, if it's all about on-line presence why doesn't Britains just sell directly to the collector and cut everyone else out?

Martin

Finance. Huge sums of capital tied up in stock, some of which may not sell well.

 

[Warrior]

I remember when I was a kid collecting toy soldiers and building model kits, there were over a dozen places close to my house that sold such items. When I got out the hobby in my teens and then back into it in my late twenties, I was shocked at how many of those stores where gone when I visited their locations; try all of them.

As has been pointed out in this thread, we live in a different time today as far as shopping is concerned, there's this new fangled thing called the internet that allows people like me to have a website and sell a product offering to literally a worldwide audience.

I also attend about 20 shows per year where I set up my products and hundreds if not thousands of people get to see them up close and in person. From what I've seen at the shows the past 15 years, the hobby is growing, not shrinking, people keep showing up in large numbers and drop big coin at the shows, they are all thriving, at least the ones I attend.

If a storefront is struggling because they do not have a website and depend solely on walk ins, they are missing the boat in a major way.

Three of the biggest toy soldier companies in the states (and you all know who they are) have both a storefront and a website; they use both to put themselves where they are saleswise.

I've thrown around the idea of opening a store a few times and each time I do, my accountant shoots down the idea faster than you can blink an eye; I pay him a lot of money to keep this ship moving in a positive direction, so I do what he says.

As far as the comments about why don't the manufacturers drop the dealer network altogether and sell their product direct; collectors go to shows and stores to see the product in the flesh, canning the dealer network would kill both the stores and the shows, where as collectors would you go to see the product before buying?

Luckily the manufacturers don't think the way some of you do or myself and hundreds of dealers would be out on the street.

But keep the brilliant suggestions coming..................

 

[hsm]

Just a thought but, if it's all about on-line presence why doesn't Britains just sell directly to the collector and cut everyone else out?

Martin

Dealers can be the face of your product, and also put it in front of people "live and in person" at shows etc. In front of new customers! young folks and etc. our modle of internt and local shows works for us quite well - and by appointment.
Local folks like to support local dealers- that can offer customer service, and enthusiasm.-BMS however is not sustainable in my area- too expensive!
........ (Martin call me....lol)



Grant toysoldiertoronto

 

[The Military Workshop]

"'One more interesting thought about perceived value: those who have been in the hobby since the days of $89 tanks perceive that the price has gone through the roof and that current offerings 'are not worth the higher price.' Those who are new to collecting have only known the higher prices, thus often don't have the same perception"

This is very true. New collectors coming in have no previous price comparison and buy based on current pricing across all brands. I recently tried to broker a sale of some long retired K&C items at what I thought was a fair price. The potential buyer appears to have done a Google search and seen the original price and made an offer which was pretty much original RRP but about half the asking price (note in Australia they would have sold for at least 40-50% more than he offfered due to the exchange rate at that time).

Just a point on discounting and discounting by dealers. The ''dealers'' I am referring to in my posts are those on Ebay (ie. as per first post) whose ''business'' is run entirely on the basis of significant discounting to get the sales. Personally as a dealer with a shop I would prefer suppliers not supply those kind of dealers as they drive prices down (sorry guys {sm4}).

Somebody commented on suppliers doing away with dealers and selling direct themselves. An example of this would be FL for the first few years who had no USA shop dealers and then changed this policy recently. In my case I would like to think my shop display and product knowledge (ie. what is available for different eras and pricing and quality issues) helps sell the brands I stock more than any online image can. However you will rarely find me promoting a brand I do not stock (exception being if they cover an era I do not have covered). I am sure other dealers are the same.

Regards
Brett

 

[Jack]

"'One more interesting thought about perceived value: those who have been in the hobby since the days of $89 tanks perceive that the price has gone through the roof and that current offerings 'are not worth the higher price.' Those who are new to collecting have only known the higher prices, thus often don't have the same perception"

This is very true. New collectors coming in have no previous price comparison and buy based on current pricing across all brands. I recently tried to broker a sale of some long retired K&C items at what I thought was a fair price. The potential buyer appears to have done a Google search and seen the original price and made an offer which was pretty much original RRP but about half the asking price (note in Australia they would have sold for at least 40-50% more than he offfered due to the exchange rate at that time).

Just a point on discounting and discounting by dealers. The ''dealers'' I am referring to in my posts are those on Ebay (ie. as per first post) whose ''business'' is run entirely on the basis of significant discounting to get the sales. Personally as a dealer with a shop I would prefer suppliers not supply those kind of dealers as they drive prices down (sorry guys {sm4}).

Somebody commented on suppliers doing away with dealers and selling direct themselves. An example of this would be FL for the first few years who had no USA shop dealers and then changed this policy recently. In my case I would like to think my shop display and product knowledge (ie. what is available for different eras and pricing and quality issues) helps sell the brands I stock more than any online image can. However you will rarely find me promoting a brand I do not stock (exception being if they cover an era I do not have covered). I am sure other dealers are the same.

Regards
Brett

Brett

If you ever have to have a fire sale, I call dibs on the Nile Steamer!

Jack