James J. Lencke and Janene B. Lencke - Page 6

                                        - 6 -                                         
          in the train and toy magazines or the two-page flyer distributed            
          to their customers.  Thus, petitioners primarily conducted a                
          mail-order model railroad activity from their home.  They used              
          the model railroad shows they attended as a way to attract mail-            
          order customers.                                                            
               During 1990, 1991, and 1992, petitioners attended 4, 13, and           
          24 model railroad shows, respectively.  The number of tables they           
          rented at the shows increased during that time.                             
               During a week in which petitioners were not preparing to               
          travel to a show, they surveyed their inventory, which was stored           
          in their two-car garage and in a 24- by 30-foot shed adjacent to            
          their house, to assess which items sold well, which items needed            
          to be reordered, and which items needed to be marked down.5  They           
          also discussed whether each railroad show they attended was                 
          worthwhile, and processed orders from their mail-order customers.           
               During a week in which petitioners were preparing for a                
          show, they made sure they had all the merchandise they would need           
          for the show.  After marking a price on each of the items, they             
          packed the merchandise in their truck to take it to the show.               
          Each item's price was generally based on the price for which the            
          item was advertised in model railroad magazines.  However, if               
          they realized that another vendor at a show was selling an item             

          5  At its inception Red Caboose's merchandise consisted of                  
          cardboard signs imprinted with train logos, 50 different                    
          railroads, and mugs and buttons.  Red Caboose's merchandise                 
          expanded during the years in issue.                                         




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011