# ExactRail



## Carl (Feb 19, 2012)

This thread is not intended to bash ExactRail, but to let you know their new position on sales of the products.

ExactRail, a 2 year company that sales HO and N Scale rolling stock has notified its dealers that the dealer network will no longer exist and that the dealer can buy the ExactRail product at retail plus shipping, so the de3aler can resale to the customer.

My local retail dealer gave me a copy of the notice he received:

“Group,

As of May 1, 2012, ExactRail will no longer offer a dealer discount and will discontinue our dealer network. Hobby stores may continue to purchase ExactRail products from ExactRail.com at the standard consumer price.

Cost of production has increased considerably for ExactRail over the last two years. We have absorbed most of these increases through our margins. As we consider the sustainability of these trends, our conclusion is that the best solution to serve the consumer is through a more direct model. By serving our customers directly, we hope to be able to maintain lower prices.

Our decision to discontinue our dealer distribution network has come from much deliberation. We appreciate the dealer’s contribution to our industry; we feel that this decision is necessary so that ExactRail may contribute with them well into the future.

Best regards,

Blaine Hadfield

Vice President, Product
ExactRail, LLC”

ExactRail had started its business on a direct basis and then shifted to a dealer network. This is not a nice notice to retail dealers who have supported our hobby. This takes a product from their shelf. ExactRail makes very nice and well detailed rolling stock. Their pricing is a little on the high side, which would limit is sales to a smaller number of buyers. 

It does not seem to me that their business model is going to sustain them over the long haul.


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## sstlaure (Oct 12, 2010)

Exactrail cars aren't for everyone. I don't see this as taking it off of the dealer's shelves, they can still buy them and stock them if they like. Just sounds like the dealer discount is gone protecting Exactrails profit margins (I doubt they are very high.) I can see dealers doing them on a special order type of deal.


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## Carl (Feb 19, 2012)

As and example of pricing......ExactRail retails a box car for $32, you buy the car from them and you add $5 for shipping....so your purchase total is $37. 

Let's say you ask your dealer and say I want to buy the box car that ExactRail has. The dealer order's the car from ExactRail, and under the new program, the dealer has to pay retail, $32 and pay for shipping to his shop, lets say $5 for shipping. Now the dealer needs to make a few bucks, so he adds on 10%, or $3.70. Now the cost to the buyer is $32+$5+3.70 = $38.70.

The LHS, that shared this information with me, said that his call to Exactrail included his request for volume discount. Exactrail's response was NO.


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## gunrunnerjohn (Nov 10, 2010)

If I were a dealer, I'd simply stop selling their stuff totally.


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## NIMT (Jan 6, 2011)

Does anyone know how to play the death march? 


ExactRail RIP!​


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## tjcruiser (Jan 10, 2010)

Looks to me like a hobbyist can order direct from ExactRail with free shipping, too (over $50 orders).

From the end-consumer's perspective, I don't see ExactRail's decision as a bad thing. A gamble, for sure ... but perhaps a better end deal for the hobbyist ... if ExactRail can keep its head above water.

TJ


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## Kwikster (Feb 22, 2012)

I can see both sides. However, to me having the ability to move more product would equate to more profits. A lot of times, you get the "impulse purchase" which is more likely at the LHS than the online store. So perhaps instead of 1 or 2 items, they sell 3. Can make all the difference in the world. Too much of our business is done impersonally over the internet these days.

Carl.


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## Prospect193 (Nov 30, 2011)

NIMT said:


> Does anyone know how to play the death march?
> 
> 
> ExactRail RIP!​


Yup I agree!!!

A stupid business decision that will kill their company!!! Sad really as their products are top quality.

Pat


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## HCP (Mar 31, 2012)

Probably there´s people with invested money that want to see more profit in the end of the year and not the owner or founder who makes the best descision for the future of the company.

Small companies like this can only survive if they follow the hobby and not the money, of course it must be economy to survive but when you apply economics from the "school" to a company like this it goes bananas.


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## xrunner (Jul 29, 2011)

Ouch (regarding their prices). I doubt I'll be buying those expensive N scale rolling stock. I don't doubt they are fine quality, but $25 - $27 per car is too high for most of my needs.


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## Gansett (Apr 8, 2011)

I bought 2 covered hopper kits off that auction site for $12 each. Very nice kits. Extremely doubtful I would have bought them from either a LHS or their website @ $30+ each.

This is just the first step of life support,,,


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## sstlaure (Oct 12, 2010)

You know....it's interesting to me how we can have threads talking about how we wish RR stuff was made/designed here in the US and to stop buying foreign goods. 

Exactrail is headquartered in Provo, UT and they do make some outstanding product.

http://www.exactrail.com/


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## xrunner (Jul 29, 2011)

sstlaure said:


> You know....it's interesting to me how we can have threads talking about how we wish RR stuff was made/designed here in the US and to stop buying foreign goods.
> 
> Exactrail is headquartered in Provo, UT and they do make some outstanding product.


Where exactly is the product manufactured?


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## gunrunnerjohn (Nov 10, 2010)

sstlaure said:


> You know....it's interesting to me how we can have threads talking about how we wish RR stuff was made/designed here in the US and to stop buying foreign goods.
> 
> Exactrail is headquartered in Provo, UT and they do make some outstanding product.
> 
> http://www.exactrail.com/


I think the point was they cut their dealers off at the knees.


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## sstlaure (Oct 12, 2010)

I don't know what their business model is or how much it costs to tool/manufacture their cars. My understanding is that they do the tooling/molding here in the US. The level of details means there is probably some decent labor involved in applying finishing details, decals, etc. Maybe the discounts the dealers were getting were making them un-profitable? Fine detail injection molds (and maintaining them to a level that yields great parts) isn't cheap. 

If they aren't selling volume to make up for the bulk pricing, then they have to go higher end and a little more expensive. Even possibly take out a middle-man to eliminate a layer of mark-up to make their product more price competitive or to solidify their profits.

I think the typical buyer of Exactrail (or other high end) products may even be willing to pay a buck or 2 more to be able to window shop at the store and put his/her hands on it. (I would if I wanted to splurge on a nice car and simply had the itch.)

A company making profits isn't being greedy, it's good business. I doubt they are raking in huge sums of money on these products, but they should be able to dictate their own cost-model and try to ensure that it's profitable so that they can re-invest in new products and grow the company. They've been introducing tons of nice new models lately. 

I wish them luck.


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## gunrunnerjohn (Nov 10, 2010)

Well, they certainly are free to dictate their business model. I'm also free express my opinion as to what I think of their business model.


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## sstlaure (Oct 12, 2010)

xrunner said:


> Where exactly is the product manufactured?


I emailed them - I'll let you know. I'd personally love to support US made and manufactured product. Even if it costs a bit more.


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## Carl (Feb 19, 2012)

In todays economy, with concern again being expressed a by the feds about the continuing growth in the job market, etc. I find this to be a very interesting idea that has a lot of possibilites for realtive new model railroad companies that are struggling due to low or no sales:

http://train-worx.com/12-3woodpacker.pdf

Two N Scale small companies get together, produce a car that they both can generate profit from.

Great idea


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## sstlaure (Oct 12, 2010)

xrunner said:


> Where exactly is the product manufactured?


Exactrail responded to my question....I personally hope to see 100% US designed/manufactured train stuff and will willingly pay more for it.

_*Thanks for writing us.

We research, design and tool all of our projects here in the US. We presently send our tooling to a factory in China for injection molding, assembly, painting and packaging. However, we have just obtained injection molding equipment and have started molding our first project here in the states. 

Best regards,

Dave Lotz
Regional Sales Representative*_


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## gunrunnerjohn (Nov 10, 2010)

So, for the time being, it's like most other manufacturers, Made in China. 

I like the idea that they may be moving the production back to the US, that would be a nice sign.


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## Carl (Feb 19, 2012)

Yes it is nice to hear they are moving production to the USA, if they can control labor costs, they have a good chance of being competitive in the retail market place.


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