HO & N scale ... Can Athearn - Horizon do this?

[TRAINMAN]

IMPORTANT ANNOUNCEMENT
> Unauthorized Internet Selling
> Action Required
>
> Dear Dealer,
>
> We are pleased to announce that Horizon has contracted with Net
Enforcers, Inc., to assist us in the identification and elimination of
unauthorized distribution of our proprietary brands. Net Enforcers,
based in Coral Springs, Florida, will utilize a combination of automated
search tools and personnel to identify unauthorized resellers of Horizon
products both on the popular auction sites and third-party sites. Net
Enforcers will seek to shut down the auctions of these unauthorized
resellers thereby enforcing Horizon's trademark rights and copyrights as
appropriate.
>
> This program is designed to protect you, an authorized dealer and your
respective online sales from unauthorized resellers. To assist Net
Enforcers in distinguishing authorized from unauthorized dealers, we are
providing them under a confidentiality agreement the Web site addresses,
and Ebay, Yahoo!, and Froogle dealer selling IDs.
>
> Please assist us in identifying these unauthorized sellers by sending
us the ID numbers that you list your auction under for each site by
September 1st, (please, no passwords). You may provide this information
to your Sales Rep, or send via email to [email protected]
<mailto:[email protected]> The deadline to get this information to
us is September 1, 2004.
>
> Additionally, please note that any authorized retailer who distributes
Horizon brands to an unauthorized reseller is in violation of our
Retailer Agreement, and we will take action. We've posted our Internet
Sales Policies on our Web Site (below).
>
> Horizon is dedicated to shutting down unauthorized selling of our
branded products and to protecting our legitimate, authorized retailers.
We appreciate your help in this important matter.
>
> Sincerely,
> Mike Feeney
> Director of Sales
>
> Internet Sales Policies
> Horizon Hobby, Inc. distributes products through a network of
authorized
retailers. Horizon Hobby, Inc. will grant its authorized retailers use
of its intellectual property for the promotion of Horizon products on
these retailers' web sites or on on-line auctions. Horizon Hobby, Inc.
reserves the right to only provide warranty coverage for products
purchased from authorized retailers and to refuse warranty coverage on
products purchased from unauthorized retailers.

[Otto Vondrak]

Wow.


-otto-

[Sir Ray]

Holy cow - it sounds like Horizon is becoming the "iron curtain" of models. NO MODEL FOR YOU!

Does this mean if I want to off-load one of my models on e-bay they are going to "enforce" me and remove it? Yeeeccchhh...

Well, as for you, an individual selling a model on e-bay, since you did not sign any exclusive contract with them, they can't even dream of doing anything to you (and if they tried, you could probably turn around and countersue them, and collect too!). Actually, I remember the RIAA tried a variant of this in the mid-1990s (they were a irrational PITA back then too) in regards to used CD sales, and basically got their butt handed to them.
Come to think of it, using that as a basis, if you just basically purchased some Athearn from a authorized dealer, and then turned around and resold them at, say, a train store (again, not signing a exclusive contract or anything, and NOT claiming to be an authorized dealer), I can't see any possible recourse they may have - you're just a second hand dealer, and Horizon can go scratch (now, if you got a discount from Horizon, or had a contract, or claimed to be an authorized dealer, well now that's different).
If in fact that is what Horizon is thinking about, going after the little guys who are reselling in hopes of squeezing them, well there has been a similar precedent in the computer world, where small web companies have been bullied by firms that buy questionable patents and tried to 'enforce' them with licenceing agreements - now when this happens, the small companies in that field usually band together, get a class action suit going, and turn the table on the 'patent-farm' firms...
Of course, if that is not what Horizon means, then forget I even posted this (so late at night...)

[Don]

For more info on this, check the MR bd. on trainorders for 8/28 titled "Athearn answers ebay ?s". Don

[JDFX]

no offense Don,

But instead of referring us to another board online, how about you give us the cliff-notes version of what was said...

Not all of us belong to Trainorders you know...

As for Horizon, well, it seems they need to tread lightly and clarify their statement..

If I cannot sell an item purchased legitimately through ebay for instance, or at a swap meet, without Horizon playing Nazi Gustapo, then Horizon has issues.

However,

I think what they are trying to do is eliminate the guy who buys from the LHS on the dirt cheap, then resells, usually on ebay for a few bucks more, claiming the product is new, in box (which may or may not be) the truth...

I have heard of stories of so called "internet companies" recently which have been selling product "New in Box" when in reality it wasn't, usually with some part/s missing.

This of course makes Horizon/Athearn look bad.

But I will say, who ever writes the press releases for Horizon, really needs to be fired, and someone who knows how to compose such letters in a more positive manner needs to be put in their place...

As it stands now, my impression with Horizon, from both the Athearn buy out, and now this, is that they are a mega conglomerate, out to rule the world with tyranny... Visions of Darth Vader and the Imperial Senate linger in my head.

Needless to say, their public image and relations both need improvement..

[march hare]

Go over there to Trainorders.com quickly and you can see it for yourself, for free. Only archived threads require a membership.

The notice was aimed at ebay vendors claiming to be authorized Horizon dealers who in truth are not. Horizon appears to be concerned that their legitimate dealers are encountering unfair competition from unauthorized ones, and are taking steps to prevent ebay vendors from misrepresenting themselves.

I have no idea who these people are, but if they're out there, I can see why Horizon would be concerned.

Horizon is not trying(and could not, under the business code of any state) to control the resale of any model purchased at retail from them or from anyone else. You bought it, it's yours to dispose as you see fit. You didn't sign a license agreement, or a lease, or anything else with a no- resale clause in it . Anyone who tried to infringe on your property rights under these conditions can be politely (or rudely) invited to take a flying leap at a rolling doughnut.

Basically, this is a non issue, as usual. Michael Moore and Rush Limbaugh not withstanding, the sky remains aloft and the Huns are not at the gates. Everyone please remain calm and fully clothed (Especially Moore and Limbaugh--I'd rather lookat a rusted Crandall E-unit than either of them!)

[pdt]

Folks, this is about the RC car side of Horizon's business, not the train side. It's about honoring warranties on new stock of Horizon's exclusive brands. New stock has to be sold through authorized dealers, but what they're cracking down on is broken stuff sold through back door sellers, sellers who in turn tell the customers to send it in for a replacement. Without proof of purchase from an authorized retailer, Horizon won't honor the warranty.

It's simple. Any of you guys who have dealt with RC stuff (and I did, very seriously, for several years) go through lots of expensive parts: speed controllers, servos, motors, spur gears, tires, etc. You think trains are expensive, try racing RC cars competitively. I can totally understand where they're coming from on this, though the 'tone' of the letter is pretty sorry.

And for any of you who have dealt with Athearn when it comes to defective merchandise, you know like I do, they take care of the problem. The warranty is their name. They stand by it, before and after the sale to Horizon. The sky ain't falling, folks. It's going to be alright.

And, yes, your individual sales of your own stuff are your business only. This letter/policy only affects authorized sellers and those posing as authorized sellers of Horizon's product lines. So, as long as you don't say you're an authorized Horizon dealer when you aren't one, you're okay.

[jwb1323]

What puzzles me is that a couple of weeks ago on this board we had a post from a guy who'd bought an Athearn CF7 off eBay that was missing handrails. He wanted to know what to do. Everyone said take it back to the dealer.

Now we have a lot of guys saying Horizon is somehow out of line trying to back up their dealers who can honor the Athearn warranty, and also shut down some percentage of scammers who will in fact sell a defective item at a "discount".

I've slowly and unhappily come to the conclusion that amateur efforts -- whether swap meets, train shows, or web selling -- hurt the hobby. You can buy many items at a pretty good discount from places like Caboose Hobbies that honor warranties, and who you can find when you need them. Horizon is trying to shut down fly-by-nights that hurt everyone. I know there will always be guys who'll be unhappy that people who cheat them can't do it as easily, but I don't agree with that approach.

[sjl]

jwb1323,

just to clarify, the suggestions about taking the CF7 back to the dealer were made before the author noted he bought it off e-bay. after that, the suggestions were to contact Athearn, but there was certainly an implication that the replacement parts would not be free of charge.

you have a great point about buying from dealers who honor warrenties. If only my local car dealer had the same philosophy...

[XBNSFer]

This "consolidation" that seems to be occurring in the model RR industry really seems like it's going to suck for the modeler; seems that Horizon's modus operendi is to remove all the inexpensive "shake the box" kits from the market and replace them with we've-assembled-it-for-you-and-raised-the-price-by-150% "ready-to-run" products. It's a pretty sickening extension of the "instant gratification" culture into what is supposed to be a hobby based in modeling as opposed to collecting.

I think Horizon is ruining the best company in the industry, and now we've got to hope for someone to develop from nowhere to fill the void (and with such massive companies to compete with, the costs of entry are going to start becoming prohibitive). We need another "Blue Box" Athearn and another Rail Power to complement them; it's kinda tough to model modern railroading with large fleets of units when every locomotive you want to add in numbers to your model fleet costs about $100 a pop.

[pdt]

XBNSFer and others,

There's no shortage of blue box kits at any of the hobby shops around here. I doubt they'll be making a mass exodus from the shelves anytime soon, either. Add to that the fact that Athearn and MDC continue to produce kits in addition to their growing line of RTR products and I don't see a problem.

I can't understand why so many people seem to think they are owed at least a 20% discount off list for any model railroad product. Now, with Bachmann's out-of-control MSRP structure, okay I understand. But for anything from Atlas, Athearn, Accurail, Walthers, Kato, P2K, et al, I'd gladly pay MSRP (and I have) because the products are worth it to me.

I also don't understand why so many are convinced Horizon is out to destroy the model railroad hobby. In general, consolidation is a fact of business. When predatory tactics and monopolies are involved it's a bad thing, no question. But what Horizon is doing is neither predatory nor monopolizing. There are still a number of competitively priced products out there for you to buy from other manufacturers (heck, even still plenty of old-stock Athearn and MDC).

Remember, Horizon is in this to make money. But they can't do that by destroying the companies they bought. The equipment that goes with these companies isn't cheap, but it's nothing you'd liquidate a company for. Clearly they've had a laissez faire approach with Athearn. The prices haven't gone up (nothing changed on the SD70MACs, the only products announced with prices prior to the takeover and released afterward), the service is as good as any time in the last few years and the quality is the same as it has been in the Geddes era. No announced products have been shelved, and the output continues at a steady rate. Again, look no farther than the SD45T-2 coming soon. Look at the SD50 (another product under development, but not announced, during the Geddes era and released in the Horizon era). Look at the forthcoming GP35, another one of the RPP updates. All of these products are continuing to strengthen the recent history of quality associated with the Athearn name.

Now, enter the MDC acquisition. I don't know how many of you folks have been purchasing MDC en masse in the past 15 years, but those who have know the decline in quality in this time period. Then there's the lack of availability of some items that just can't be run more than once every five years. And, for anyone familiar with the MDC website in the past few years, the 'blem' and factory seconds section has always been full of great deals. I've purchased no less than 100 MDC cars, either direct from MDC, my LHS, through PF&S, or other online sources. The quality just isn't there, but you can't beat the prices and some of the kits aren't represented at all by any other manufacturer.

MDC is coming under the direct control of Athearn. That means the operation that has brought you all the quality products of the past several years such as the Genesis series of locomotives and freight cars and the RTR series responsible for the SD50 (product of the year last year, bar none) and Bombardier commuter cars, among others, is now in charge of raising the standards of MDC's extensive line of kits. MDC's product line will shine once again, guaranteed.

And all the while Horizon will leave the operation alone because letting these companies excel makes them money.

[jwb1323]

I agree with pdt/R.C. Harris on this. I chatted with my local hobby shop owner about this issue yesterday -- as a business insider, he has some reason to distrust Horizon, largely because he worries that their rapid expansion could result in an overleveraged position -- they could go belly up (though there is no evidence that this would happen) and leave a number of important hobby lines out to dry, much as Rivarossi did. But that is the only realistic downside he sees.

But he and I both think it's interesting that the web forum complaints about Horizon never mention the practical stuff. And Horizon has in fact been doing things like LOWERING prices on some MDC items. The complaints seem to be almost paranoid rants about some big company taking over. Maybe they've got Horizon confused with Halliburton!

My LHS owner feels that Horizon's policies are for the benefit of reputable dealers, both on the web and in stores. He does say that they have a high minimum first dealer order ($1000 he thinks) and an annual minimum account ($5000 he thinks) to stay on a good basis with them. However, he says any successful hobby ztore should have no problem maintaining the $5000 of annual business.

In a prior discussion, he says a big reason you see new items on eBay is guys are able to get a dealer discount by ordering like 3 units from someone like Kato USA -- they keep one AC4400, say, and put the other two up for sale on eBay. At the risk of getting some guys upset again, I would suggest this is what happened to the guy who got "such a deal" getting his CF7 off eBay without side handrails.

Horizon is trying to protect its own business, the hobby, and the business of its reputable dealers by trying to minimize this practice. There's nothing to keep an eBay dealer from robbing parts out of a unit he sells to make up for something missing on the unit he kept for himself. A hobby shop couldn't do this, they've got to honor the warranty. A company like Kato USA is hurting the hobby if they let just anyone get a dealer discount and lay off extra units on eBay that way.

By the way, one thing that puzzles me about reactions to my essay on The Sociology of Model Railroading is the guys who complain they had to spend an hour reading it. You're allowed to quit any time, guys. It's not like homework, you don't HAVE to read the whole thing. Unless, of course, you wanted to. If you kept reading it, I can only think it was because it held your interest.

[Otto Vondrak]

If you want to comment on the Horizon issue, that's fine, but please do not attach John B. for his views outside this topic... there is no reason to make fun of anyone for their opinion...

-otto-

[JDFX]

Some food for thought...

As the price of everything else is going up in todays economy (Cars, Homes, Appliances, Clothing, Milk, Gas, etc.) So are the prices of Model Trains...

It would be interesting to see if the increase in price has been consistant with the increase with the cost of living and wage increases.

Trust me, as much as I would like the days of 40 dollar athearn blue box locos to remain today, fact is, with everything else increasing in price, model trains are going to have to as well...

Am I concerned about what Horizon is doing, sure, I would be lying to everyone if I said no, I still stand by my statement that they need to clarify their policy though, as I might very well sell off some of my items on Ebay, and do not need Horizon dragging me to court.

As for the rant about railfans, I can say I read it a while ago, and my experiances with model railroaders in the Northern Eastern New Jersey area coincide alot with JWB's rant. Granted I have met a few good people, but many, in my opinion, can just go straight to you know where.

Have fun kids, still settling into the new apartment with the new wife, so it might be a few days before I respond again...

[Tom Curtin]

Pardon me if this question is already addressed on this thread (I don't have the patience to scroll through to find out), and please answer only if you know --- please, no guesses or opinions: Will Walthers be able to continue to sell Athearn? The meet the letter of the rule by having a "bricks and mortar" shop (Terminal Hobby -- it really has bricks and mortar, I've been there!), even though their corporate position is complicated because they're also a distributor and a mail order retailer.

Above all, they are a venerable and respected outfit --- maybe the most venerable in the industry.