Model Railway Constructor Magazine, July 1972 Issue

We have said many times that we have little or no patience, or trust, in importers, wholesalers, or retailers who give bad service, or do not conform to the accepted standards of good business and courtesy, and we still uphold these views. On the other hand the model railway trade is not all a bed of roses, or a land of milk and honey, and while we have to protest sometimes at ths actions (or non-action) on the part of a few traders, we have to generally sympathise with them over many of their problems. Many o'f the trade headaches are unknown to the customer or the enthusiast, and this is how it should be, except that there are occasions when a little understanding would be a good thing on the part of both sides, rather than the consumer burying his head in his own little "model world". There can be few shops dealing with other commodities that have to put up with the vagaries of the modeller, and to give good service are expected to keep such a complete stock of small parts, which apart from tying up capital, may lie on the shelves for two or three years, and sometimes even more. Possibly a lack of standards in this country is to blame for the multiplicity of sizes o'f the "bits and pieces" which the modeller requires, but they all have to be available, 'and no one gets very fat on the profit which exists on such items.

With the high costs of overheads, postage and packing—to say nothing of labour, it is increasingly difficult - almost impossible - for the wholesaler to maintain prices, especially for small orders and therefore the cost of small parts has to be increased out of proportion to their real value, or the service drastically curtailed. A source of concern to most traders is Purchase Tax, and the position is 'not going to be eased with the changeover to the new Value Added Tax (VAT), which is due to commence next April. Having read the White Paper on the subject, it appears that the new system does not allow any relief on the Purchase Tax which the trader has already paid o'n the stocks existing in his shop at the time of the changeover. Yet after next April, the purchase tax is abolished and a 10 per cent VAT introduced—How does the trader recover the difference between the lower VAT he 'has to charge and the higher Purchase Tax which he 'has already paid? The position could be serious, for the profit margin on some items is very small, and it is these items that are likely to be held in stock. In many cases it could mean a considerable loss, which the business may have difficulty in meeting. On the other 'hand, if the dealer does not re-order as and when his 'present stocks are exhausted, he w.ill 'not be able to give the service to his customers. What happens to the 'manufacturer if he gets no orders and is unable to dispose of the products he is continuing to produce. This problem is being taken up by the Model Engineering Trade Association (META), on behalf of the trade and already telegrams have been sent to the Prime Minister and the Chancellor o'f the Exchequer, and the Association are urging their members to write to their M'Ps about the matter. It is hoped that common sense will prevail before it is too late.

The new VAT will affect the modeller in several ways. It does not 'necessarily mean that prices will be lowered from next April, for at the present rate of price increases due to increased cost of raw materials, higher overheads etc, it is more than likely that these will have overtaken any small reduction in nine months time. There are also many items which do not bear Purchase Tax, yet from next April they will be subject to the new 10 per cent VAT. Such items include power controllers and transformers, scenic accessories and materials, paints, and tools to name a few. The solution would appear to be to buy now while the going is good! One further point—bear with your retailer, for he has his problems too!