I have never heard such bull sh*t:
Marklin and LGB are almost non-existent in the remaining hobby shops!

http://grw.trains.com/en/Product%20and%20Hobby%20News/Hobby%20News/2014/08/Marklin%20to%20Expand%20Distribution%20Network%20in%20North%20America.aspx



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Märklin to Expand Distribution Network in North America

Published: August 7, 2014


Märklin GmbH has announced it will expand its distribution network in the North American market starting on January 1, 2015. Wm. K. Walthers, Inc., will remain a key distributor partner, and will continue providing authorized dealers and modelers with popular Märklin, Trix and LGB model railroad products in all scales.

“We have appreciated the support and partnership provided by Walthers over the years of the exclusive distribution agreement and look forward to continuing to work together to promote the growth of the LGB, Märklin, and Trix Brands in North America,” said Florian Sieber, Managing Director of Märklin GmbH.

Following the announcement, Walthers President J. Philip Walthers said, “We are proud of the role that we have played over the last six years in helping Märklin to increase and strengthen the brand awareness of Märklin, LGB, and Trix in the North American market. We look forward to a continued strong partnership with Märklin as they expand their distribution network in North America.”

Edited by user 09 August 2014 19:47:36(UTC)  | Reason: Not specified

From "exclusive distribution" to "key partner" - could be a step in the right direction.

With a non-exclusive distribution agreement Walthers may reduce their efforts. So Märklin have to compensate that (or better over-compensate that to make it better than before).

The link in the first post didn't work for me.
I found the note here:
http://grw.trains.com/en...n%20North%20America.aspx

A few things to remember:

1: No manufacturer can afford to anger or sompletely cut out walthers. They are too big to live without. Remember while we are advanced hobbyists, if a kid in remote alaska inherits grandpa's Marklin set and need a few things, the local hobby shop can provide them via walthers. I'm willing to bet a fair amount of basic Marklin supplies are sold (at a ridiculous price..) this way. Walthers reach is huge.

2: Now that they are non-exclusive, Walthers has no reason to do Marklin any favors either. I'm curious to see how the parts situation shakes out...

3: Even without Walthers, prices may drop a bit (yay!) but they won't to the level of MSL, Lokshop etc.. We need to remember that those dealers are bulk discount houses even within Europe, and that they are slashing prices of all the mom and pop shops across europe as well.

Not saying I have an answer for Marklin, but they need to chose between a long term investment or a short term one:

Long Term: Get product in shops across the country, even if on a small scale. But make sure they have product on the ground in US distributors so a special order can be had in a week's time. Stop shipping German dealers everything 3-4 months in advance. Get prices to a point where US collectors appreciate having a local source, and don't mind paying a few bucks more to get it from someone they know and can hold in their hands before deciding- even if that means cutting their own margin a bit. Make an investment in US warranty work via a centralized US warranty and repair center. If need be partner with a 3rd party to do it- this worked so well for Lionel they wound up buying the company and making it the in house warranty center! The win here is happy US customers and dealers, and the exposure in the shops means hopefully more people will get into the hobby. The marketing person in me thinks there is a lot they can do to get new buyers, even in the competitive landscape: Sell a certain start set at no margin in order to compete on price with the high end US start sets on the same hobby shop shelves, and bank on the profit from the aftersales of things like track short term, and locomotives etc.. longer term.

The list goes on, but all the above means a few years of sacrificing profits...

Short term: Cater to the existing (and let face it- aging) customer base. The only way to sell anything to folks like us in the US is cutting prices and establishing solid product availability and warranty fixes. this might work short term, but what is the benefit to them? Slightly happier US customers, but they won't be selling any more product, and long term the US business will sink due to the churn out of guys like us down the road, and no new customers to take our places...


Its not a good situation for Marklin at all, and I would bet whatever happens is not much change at all- they don't have any good options to chose...

I think "Key Partner" is more of an honorary designation, to make sure that M can sell directly to dealers and honor warranty issues in a better way directly...

What I read between the lines is that M wants to be more present in shops at better prices than an "Exclusive Distributor" can offer while also saving the
face of Walthers as a reliable market player...

The old M USA was a great subsidiary organization, but the bean counters who were formerly in charge at the Göppingen headquarters did not see it that way...

I wonder what will happen in the UK then. When Marklin decided that the UK dealers could no longer buy direct from the factory and had to go through a distributor, it was as the distributor contract with Gaugemaster ran out, and so they decided to go with the LGB distributor as Marklin had recently bought LGB. However the new distributor has been hopeless at marketing Marklin, and retailers are either going grey market or shedding the product as far as I can see.

I have had problems finding a dealer to handle UK Insider stuff, so have eventually asked Lokshop if they can honour the Insider offerings, and they are happy to.

So my UK Insider offerings will help increase the german market share ... ;)))

At least if they are sold through the current exclusive distributor who will soon be a key partner ...

Did any US forum member see "Made in Germany" on LGB new items from 2010 or later?

Do you have any evidence?
In May 2013 they wrote that one of their midterm targets was reducing production in China. I take "midterm" to mean "several years".

Battery-powered trains are made in China, power supplies are made in China - and who knows what else.
Rumours say the new I gauge P8 is also made in China.

US customers buying their stuff through Walthers will be able to tell us what they see on the "Made in ..." stickers.

Very counterproductive for biz ... hasn't history shown that all and any monopolies just really s**k ... ?

Hard to believe that all M* products have been led to the US market through only one distributor for so long ... !

Maybe this is changing ...

Y

Well, not **so long**.(of course it depends on what you mean by "long".. )

I remember the days about 10-12 years ago when Märklin Inc in New Berlin was the hub for Märklin distribution in the US.

There were already difficulties for Märklin Inc trying to gain any market share in the N. American market, although there was a lot of Märklin coming to the US from online vendors.

No officials statistics here, but anecdotal evidence within ETE (probably the largest association of European train lovers in N.America) showed that the wide majority of members were purchasing directly from European on-line vendors.

The keys here were "product availability and accessibility" and accessorily "price": In most case it was a lot less expensive to buy directly from Europe and internet vendors, even though often there were sometimes language barriers problems and misunderstanding in communication.

Not helping this was the myopic Märklin policy of "Brick and mortar, you need a store with display cases and Mom and Pop at the cash register"
The problem with that idea is that in the US, distances are such that driving to that store may take you several days!

There was a visible exception though, with an excellent "virtual" distributor (and also a good personal friend of mine) in NY who became probably the n° 1 or 2 largest Märklin dealer in the US. The quality of his service, the availability of products and reasonable pricing were the reasons for his success. He continues to draw an enthusiastic following today. Never heard any complaint about him.
And I personally still even buy things from him occasionally.

Märklin never acknowledged officially that his model was a recipe for success (even though the people from New Berlin privately had to agree that indeed it was!!)

A bit like "we know it's the right way, but we won't do it". Duh!

How much bright lights does one need to look in the right direction?

In my humble opinion, I don't see how Walthers could have contributed to my friends continued success...but at least it allowed me to buy through him a few non-Mârklin items to complete my US collection now that I am living in Europe.

Yes their reach is enormous, but how much market share points have they gained for Märklin?
And have they contributed positively to the US dealers' profit margin??

Of course one can still continue to maintain that the way to do business today is the "mom and pop brick and mortar and display window" approach....