By coinnews 
00:00 Speaker A
Stacey, it is good to see you and have you on the show. Maybe just quickly begin Stacey for the viewers watching here at home. Can you tell us a little bit about your company? I know you’ve been around a long time Stacey. So a little bit about the history and what, what you all offer the model train fan?
00:23 Stacey
Yeah. Thanks so much for having me, Josh. Um, happy to share. We’re a 93 year old family run and operated business. Um, owned and operated business founded by my great grandfather who’s over my shoulder here. Founded the business in the depression. Um, and so it’s a true entrepreneurial story. Started his business um taking something that he loved and turned it into a business. And then four generations later, here we are. So we um produce and distribute model railroad equipment, essentially helping people to make miniature worlds. So we’re a producer of product in our own Walthers branded product line, um in pretty much every category that helps a model railroader to do that. And we also distribute 175 lines of other people’s product. So that includes Lionel and Atlas and a bunch of other um products, um, and we sell to hobby shops all over the globe, but we also sell direct to consumer. So we’re, we’re really in this thing and we’re in support of this hobby which is model railroading and also hobbies in general.
02:03 Speaker A
Stacey, let, let’s get to a big issue that I know is front and center for you and a lot of small business owners, which are the Trump tariffs. Walk us through what they mean for your business, the ripple effects. Where, where are your trains made, Stacey?
02:24 Stacey
So there’s various categories of things that we produce much like the big world. You know, it depends on the kind of specialized skill set that you need to make the thing. So when it comes to uh locomotives, like which have digital control and sound and a lot of components, um and they are highly technical, they’ve got a lot of detail, like the ones that you’re putting up on the screen there for your audience. Um, those are all produced in China. Um, and so if we’re a producer of that product and that impacts us, it also impacts all those other companies I just described, who also um represent the same uh product. So we’ve got some that are made in other parts of Asia, but if you look at um certain product categories, uh we’re never made in the US. Um this is something that was, the skill set was developed, you know, in Japan, it kind of it, it advanced in China, um, and really the whole model railroad industry shifted their supply chain about 30 plus years ago. So um, with 145% tariffs, it’s really calling into question whether we can still bring in that product, whether we can make it long-term. Um, it’s a discretionary item. We’re in a hobby business, so the pricing um that you would have to increase to absorb that tariff is pretty onerous for somebody who might be choosing a hobby. Um, and our core customers being uh, you know, boomers, uh people who might be on fixed incomes. And then families on the other end, the new customer that we want to get, um it’s their budgets are being pinched elsewhere by rising prices. So um, we kind of, we, we get hit in a couple places here.
04:50 Speaker A
So what would the plan B Stacey as you try to think through this? If your costs go up, is the plan okay, you eat those costs Stacey? You pass it along to the customer, the, the model train fan? Would it be a mix of the two? How you, how you try to think through the various scenarios here?
05:13 Stacey
Yeah, so we have got a lot of scenarios, like a lot of businesses do, right? Um, and so it’s a little bit of both. Obviously, you know, we want to, we have to protect our business in the short term and in the long term, but our customers are, you know, the way that our bills get paid around here. So we have to protect them too. Um, but at 145, there’s absolutely no way you can absorb that. There’s just no way you can do it. So you have to pass along a price increase. Um, should they go down to a more reasonable level? Um, I think that we have the appetite to absorb a lot more and have the impact on our customers be a lot less. Um, but uh this is a decision, even right now, um about whether we continue production or not on certain products that we had scheduled for the back part of the year. Um, so there’s a lot to discern. So in some cases, um our customers will be impacted because they just won’t be able to get the product that we’ve, you know, that we originally would have been supplying them.