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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.
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Last modified: May 25, 2011