The Limited Run style of business did hurt the hobby Brakie.
I too have noticed an increase of lower priced and reruns. Now if only Walthers can reissue some of those structure kits....
Alot of things make it to the hobby store. But when the people look up an item in a paper catalog instead of a computer and internet and learn that it is either OOP, BACK ordered or not availible or... worse... reservations taken with no other resources or photos 6 - 12 months before it arrives to the USA it's very difficult to buy anything other than magazines, small supplies and paint in this hobby.
They probably will have to go to the hobby shop at least once a week to grab the item that just arrived before it's all bought out. I point to the Broadway Limited Passenger cars as an example. I saw a few copies in TWO hobby shops that are already reserved for other people and none for sale on the shelf. To me the BLI Passenger cars are a mystery item that elicts curiosity because I have yet to see one in person. Makes the Walthers supply of passenger cars plentiful and fruitful with a bursting storehouse of harvest compared to the limited quantity runs.
Maybe one of the locals will bring it to the trainshow next year and we can all have a look at the nice train.
Another thing is the recent announcement of the Rapido Passenger Cars in the MR magazine. The photos are very restrictive and does not really show the whole car. I am not encourage to seriously consider this item because it probably will be sold out when anyone finally gets around to releasing full visual information on them probably in the 2008 walthers catalog.
So, the wallet goes to what is availible today either at the store or online. Not something that is sight unseen and unknown. I am a customer that likes to pick up an item and explore it's potential either on a test track or thru someone else's display on a layout running as part of scenery or train.
I think there is plenty of demand for everything in the hobby. The most obscure limited run item can be made in mass quanity and sold for years. Perhaps it is the manufactor who wants to spend X dollars to get Y profit before christmas to make a quick buck and have a nice holiday really fast instead of making Z product availible for a number of years like many others (Athearn for example) have done.
That quick profit evaporates like a hot desert mirage when they realize that they need to quickly introduce another 3000 or so copies of an item in time for next christmas while dealing with the people who are grumbling at not being able to get the item or watching exhorbriant prices on ebay such as 250 dollars for a 40 dollar retail kit plus shipping.
Guys,Food for thought..Atlas went from mass production to limited run and now "made to order"..Then they introduce the "Trainman Line" that will be mass produce.Athearn still makes BB kits as well as RTR cars.Even BLI has went low keyed with the introduction of soundless locomotives.
One can not help but wonder if we are seeing the return of low price cars and midrange price locomotives compared to $25.00 plus cars and $140 plus locomotives..
Perhaps the silent(read computerless) masses have spoke with their wallets?
Larry
Conductor.
Summerset Ry.
"Stay Alert, Don't get hurt Safety First!"
Would the fallen flags statistics correlate with model railroader interest?
Because popular roads would have greater market potential and greater competition, it makes sense that vendors would need to be more "competitive" in those roads, thus, lowering prices. Again, the MSRP belies that because the MSRP is standard across roads when, in reality, people pay less for certain roads and more for others in the open market. Again, we can look at the Trainworld model to see this (Thanks Simon).
...I think the MSRP is meaningless because it doesn't directly translate to actual prices and is more likely to be correlated closely to sale prices in the past than today.
Well, Ed, I'll tell ya...I just sell model trains for a living. Some of the information and calculations you and Andre are talking about quite frankly give me a headache! You will be teaching a lot of us about economics and I look forward to future threads.
Keep in mind this little story. Many times over the years I've mentioned to both customers and hobby business reps something along the lines of "what do I know, I don't have a business degree." Most of the time they respond with "In this business, it's probably best that you don't have one because a lot of the principles taught in school really don't apply to our business." Maybe they were just being nice.
Or maybe it's possible that some things that apply to other products may not work here. Sounds like we agree to some extent on that.
But I was only trying to make sure that we are comparing apples to apples and oranges to oranges.
One tip before I go home for the night: beware of the "street value" of particular road names as you have discussed. That of course would vary greatly depending on what part of the country you are in. Possibly.
But like I said, good luck with the analysis...I understand a lot of what you are saying, just not sure all of it applies to our hobby or the model train business. A noble venture you have undertaken for sure.
One Track Mind wrote: I am not a manufacturer, so they can correct me if I'm wrong, but it would seem to me that the manufacturers actually make LESS profit on the "rivet-counters" rather than more. I'm no economist either, as previously noted, but if you only make 300 units rather than 1000, wouldn't the cost of producing the item be the same yet the recovery of the profit would be less for the far fewer pieces sold? I think it would actually be less or the same profit margin but I don't see how it could be more. Good luck on finding some of these low-price mail order houses from years ago. Most of them are out of business because they found out you can't sell something for nothing. I suppose a couple of exceptions to the rule would be Train World or Standard Hobby. But I respectfully disagree, again, that if a standard price - on the very same product - is not used as a benchmark, then all the CPI data and inflation index data is meaningless. The only way to accurately determine real price increases is to look at the MSRP of an item from 25 years ago and compare it with the IDENTICAL item today. That leaves you with few choices. You cannot compare, for instance, most Athearn products from 1982 as the line is much better now than back then. You may look at Athearn trucks: .85 a pair in 1982, 3.00 today. Atlas 9" straight track: .38 each in 1982, .90 each today. But any product that has been even marginally improved in the last 20 years cannot be included in accurate statistical data. Still new to the forum - if these price threads have appeared every week for the life of the forum then I doubt that any amount of work Ed does will accomplish much. I suspect this disatisfaction has more to do with the price of gas being 3 times what it was 9 years ago. Also the gap that is created when there are 250.00 sound and DCC locomotives available yet not affordable for the majority of modelers. When I was a teenager there were similar gaps...I just accepted the fact that (back then) brass was out of my budget, and I worked hard until I could afford an AHM or Athearn locomotive and was happy running it on my layout. Course I didn't have a forum available to gripe about prices back then either.
I am not a manufacturer, so they can correct me if I'm wrong, but it would seem to me that the manufacturers actually make LESS profit on the "rivet-counters" rather than more. I'm no economist either, as previously noted, but if you only make 300 units rather than 1000, wouldn't the cost of producing the item be the same yet the recovery of the profit would be less for the far fewer pieces sold? I think it would actually be less or the same profit margin but I don't see how it could be more.
Good luck on finding some of these low-price mail order houses from years ago. Most of them are out of business because they found out you can't sell something for nothing. I suppose a couple of exceptions to the rule would be Train World or Standard Hobby.
But I respectfully disagree, again, that if a standard price - on the very same product - is not used as a benchmark, then all the CPI data and inflation index data is meaningless. The only way to accurately determine real price increases is to look at the MSRP of an item from 25 years ago and compare it with the IDENTICAL item today. That leaves you with few choices. You cannot compare, for instance, most Athearn products from 1982 as the line is much better now than back then.
You may look at Athearn trucks: .85 a pair in 1982, 3.00 today. Atlas 9" straight track: .38 each in 1982, .90 each today.
But any product that has been even marginally improved in the last 20 years cannot be included in accurate statistical data.
Still new to the forum - if these price threads have appeared every week for the life of the forum then I doubt that any amount of work Ed does will accomplish much. I suspect this disatisfaction has more to do with the price of gas being 3 times what it was 9 years ago. Also the gap that is created when there are 250.00 sound and DCC locomotives available yet not affordable for the majority of modelers. When I was a teenager there were similar gaps...I just accepted the fact that (back then) brass was out of my budget, and I worked hard until I could afford an AHM or Athearn locomotive and was happy running it on my layout. Course I didn't have a forum available to gripe about prices back then either.
One Track,
I think you make an interesting point about costs of production. However, the price of a good is determined by the combination of costs and demand. Given that most companies produce a model in several road names, it is likely that the cost per unit is spread across all roads. Often, only the paint job changes. Therefore, the margins on each unit would be determined by the sale price minus the standard production cost. Because popular roads would have greater market potential and greater competition, it makes sense that vendors would need to be more "competitive" in those roads, thus, lowering prices. Again, the MSRP belies that because the MSRP is standard across roads when, in reality, people pay less for certain roads and more for others in the open market. Again, we can look at the Trainworld model to see this (Thanks Simon).
You make a great point about the price of products that undergo technological changes over time. Are cars more expensive today than 30 years ago? How about TVs? Calculators? As you might guess, almost all products undergo technological improvements over time but this does not prevent an analysis of the cost of ownership. Generally, we would anticipate the technology to improve. At certain times, we would also guess that the newest technology would drive up costs on those products that include it and drive it down on those that don't (think HD TVs vs. standard ones today). Over time, however, we would expect prices to stabilize to the point where the product's utility is comperable to that of one in the past (i.e. my satisfaction with my 42" HD Plasma screen TV is comperable with that of my 31" tube TV from 15 years ago). BTW, this type of conversion is used in CPI calculation where the "basket of goods" is constantly updated to include the modern version of each item.
However, your point is well taken that we may not be able to accurately gauge the price of differing models and roads across time. This would be true whether we use MSRP or advertised prices in MRR. Again, I think the MSRP is meaningless because it doesn't directly translate to actual prices and is more likely to be correlated closely to sale prices in the past than today.
simon1966 wrote: WickhamMan wrote: Topic: Unseemly profits? Rivet Counters – those only willing to purchase specific roads within specific eras and, potentially, specific equipment. (i.e. “I’m modeling the NYC’s Chicago division in 1955 and they only used three engine types”) Proto-Lancers – those who are attempting to model a specific road (or set of roads) within a general era but aren’t very particular about getting the prototype exactly right. Freelancers – Those creating their own road names but may be modeling under a specific era using the general type of equipment available during that timeframe. Misers – Those just looking to run trains. They aren’t’ very particular about equipment, road names or eras. Basically, they are looking to buy the cheapest thing available. This is rather aptly illustrated by the Trainworld business model. Pre-order new releases are closer to MSRP. At the other end of the scale you can pick up P2K's for under $30.00 but they choose the road name. It is a great deal, but not if you care what the road name is.
WickhamMan wrote: Topic: Unseemly profits? Rivet Counters – those only willing to purchase specific roads within specific eras and, potentially, specific equipment. (i.e. “I’m modeling the NYC’s Chicago division in 1955 and they only used three engine types”) Proto-Lancers – those who are attempting to model a specific road (or set of roads) within a general era but aren’t very particular about getting the prototype exactly right. Freelancers – Those creating their own road names but may be modeling under a specific era using the general type of equipment available during that timeframe. Misers – Those just looking to run trains. They aren’t’ very particular about equipment, road names or eras. Basically, they are looking to buy the cheapest thing available.
Topic: Unseemly profits?
Rivet Counters – those only willing to purchase specific roads within specific eras and, potentially, specific equipment. (i.e. “I’m modeling the NYC’s Chicago division in 1955 and they only used three engine types”)
Proto-Lancers – those who are attempting to model a specific road (or set of roads) within a general era but aren’t very particular about getting the prototype exactly right.
Freelancers – Those creating their own road names but may be modeling under a specific era using the general type of equipment available during that timeframe.
Misers – Those just looking to run trains. They aren’t’ very particular about equipment, road names or eras. Basically, they are looking to buy the cheapest thing available.
This is rather aptly illustrated by the Trainworld business model. Pre-order new releases are closer to MSRP. At the other end of the scale you can pick up P2K's for under $30.00 but they choose the road name. It is a great deal, but not if you care what the road name is.
Simon,
Good pickup on that one. Indeed, the Trainworld model looks to exploit the market by better calibrating their sales model to actual demand. I'm wondering what the best way would be to find information on which roads are most modeled. Perhaps a look at the statistics presented on the fallen flags website would be of use:
http://www.rr-fallenflags.org/
They list the most popular sections of their site each month. The prior two months shown seem to be pretty consistent. Does anyone have any thoughts about how to assess the popularity of particular roads? Would the fallen flags statistics correlate with model railroader interest?
Simon Modelling CB&Q and Wabash See my slowly evolving layout on my picturetrail site http://www.picturetrail.com/simontrains and our videos at http://www.youtube.com/user/MrCrispybake?feature=mhum
WickhamMan sez:
Finally, it is possible that “rivet counters” can get lower prices. How? If the aggregate demand for a particular piece of equipment for a particular road name is very high, we will see multiple vendors enter that market and give buyers a choice. This will drive down prices. This is highly unlikely in a low volume carrier but probably happens more often in larger roads (i.e. Santa Fe, EL, NYC, etc.). So, if you want to be a “rivet counter” and want low prices, pick a popular road!
Better yet. Limit your purchases to equipment types for which there are almost as many manufacturers as modelers. There are so many manufacturers of UP Big Boys and Challengers out there that it's a wonder the manufacturers aren't giving them away. At least as far as Big Boys go, you could probably get 25 of them (as many as UP owned) for under $10,000 and they'd all be sound and DCC equipped. Shoot, if you offered to take 25 Big Boys off the hands of (insert name of manufacturer here), they'd probably give you a volume discount.
Hmm. I wonder what kind of a discount you could get on 425 PRR K-4's, 574 PRR L-1's and 598 PRR I-1's. Even more intriguing is the thought of speculating in HO scale steam locomotive futures.
Andre
P.S. Where low volume carriers are concerned, I did see a hobby shop offering an Athearn Genesis 2 unit set of Bangor and Aroostook F-3A's for $159.95, about $100 under MSRP. Unfortunately, they're gone now.
Ed: I sincerely wish you luck in your analysis...a lot of work will go into this. From my perspective I will offer these thoughts:
I’ve read many comments on this forum and others to the effect that vendors are bilking us modelers and making unseemly profits. Referring back to the diagram I introduced earlier, we can see that in a competitive market, the price of a good is determined by the intersection of the aggregate demand and aggregate supply curves.
To answer the question at hand, we need to delve a bit more into what these curves represent. Specifically, I’m going to focus on the aggregate supply curve because this is where we can see if, and where, profits are being made. It’s important to remember that this is an aggregate curve. This means that it essentially represents the collective cost of vendors supplying goods in the market.
The equilibrium point represents the “marginal player” in the market. That is to say, the price at the equilibrium point tells us what the marginal cost of the vendor who makes ZERO profit exists within the market. Why is it zero? Because if the market price somehow existed at a point where all of the vendors where making money, some (many, most) of the vendors would drop their prices to capture greater market share. Because some vendors cannot compete at the resulting equilibrium price, they drop out of the market. However, this also means that there are, invariably, vendors within the market who are making profits at this point. The question is, how much?
It is critical to understand that the vendors do not set the market price for goods unless they have a monopoly. They are “price takers” in that they can only sell based on the market demand. The profits in the industry are mostly determined by which vendors have the lowest cost structures. This is an important point in today’s markets.
Is there a reason why one vendor would have significant cost advantages? It is possible, but only because of volume. It is highly unlikely that a vendor today would have a technological advantage over another. It is also unlikely, that one vendor would have a managerial technology advantage either. By managerial technology, I mean that one company is significantly better run than another. We see this in high volume businesses like PC sales. Dell has significantly better performance management systems than their competitors.
So, can we surmise that in our competitive model railroad goods market, no vendors make huge profits because their cost structures are in line with one and other and the demand curve determines the market price? Perhaps but I doubt it. Why?
Topic: Substitutability
The ability of customers to accept substitutes for goods has a large impact on prices. Going to a simple market, say paper clips, we can see this at work. It is highly unlikely that individuals hold particularly strong preferences for one vendor’s paper clips more than another’s. So, if one vendor raises prices, customers quickly switch to another vendor. This is somewhat less the case in markets like bread, cola and cereal.
In the model railroad market, buyers can be highly selective in their purchases as several posts on this thread have indicated. If you are only willing to purchase a certain quality coach car under a specific road name, you have eliminated a buyer’s advantage in choosing substitutes. Vendors of those items are, in effect, a monopoly from your perspective. They have an incentive to increase prices. This drives out some individuals (who are willing to consider substitutes) and leaves those who will pay higher prices. The result is significant profits for vendors on those items.
Does this happen often? That is really hard for me to say at this point. Perhaps a bit of a poll on this forum would give us some hints. Do you restrict yourself to particular equipment on particular roads? I think we might be able to categorize the market in a few segments:
What are you? The higher you categorize yourself on this list, the more likely that vendors will make higher profits on your purchases. As a few have stated earlier, you have a low “elasticity” in your demand. You want a particular piece of equipment. If only that will satisfy you, you are likely to pay through the nose for it. If you are lower on the list, then you probably will pay much lower prices within the hobby as you are quite open to substitutes.
Where do you think most modelers are? This is an open question that I don’t have the answer to. Opinions?
Questions and comments welcome!
Next Topic: Changes in demand over time. What can demographics tells us?
WickhamMan wrote: BRAKIE wrote: Paul,Yes there has been some prices lowered,some stayed the same-the Atlas locos you pointed out-while others has jump 3-4 fold over the last few years thats why MSRP should be used.After all we don't need VOODOO economics in this discussion since the price of the hobby has raisen greatly over the past few years.. Happily there is discount prices to aid our buying power. This sounds a lot like a conclusion at this point. I think we need a lot more data than has yet been presented to come to such a conclusion. It is not "VOODOO" economics to use actual prices to conduct analysis. Rather, most peer reviewed journals would reject analyses that used MSRP unless there was accompanying evidence that actual market prices were highly correlated with MSRP. A notable case of this being done is with housing data. There have been recent articles written that utilize assessment values as a proxy for actual prices. I think using MSRP would be in a similar vein although, to date, I've not seen any analysis that would show that MSRP is directly correlated with sale prices, especially across multiple time periods. MSRP is a positioning device used by vendors to signal quality indicators of their goods. In markets where good quality is not well know, my guess is that MSRP is highly correlated with sale prices. However, in our hobby, I'm dubious that quality of the goods is unknown. More likely, MSRP is a device employed to help distributors, particularly hobby shops, to protect margins.Given the large changes in distribution channels over the past 15 years, it is likely that there is less adherence to MSRP prices in the market. As more hobby shops close due to competitive pressures from the internet, we have likely seen increasing distance between MSRP and actual sale prices.
BRAKIE wrote: Paul,Yes there has been some prices lowered,some stayed the same-the Atlas locos you pointed out-while others has jump 3-4 fold over the last few years thats why MSRP should be used.After all we don't need VOODOO economics in this discussion since the price of the hobby has raisen greatly over the past few years.. Happily there is discount prices to aid our buying power.
Paul,Yes there has been some prices lowered,some stayed the same-the Atlas locos you pointed out-while others has jump 3-4 fold over the last few years thats why MSRP should be used.After all we don't need VOODOO economics in this discussion since the price of the hobby has raisen greatly over the past few years..
Happily there is discount prices to aid our buying power.
This sounds a lot like a conclusion at this point. I think we need a lot more data than has yet been presented to come to such a conclusion. It is not "VOODOO" economics to use actual prices to conduct analysis. Rather, most peer reviewed journals would reject analyses that used MSRP unless there was accompanying evidence that actual market prices were highly correlated with MSRP. A notable case of this being done is with housing data. There have been recent articles written that utilize assessment values as a proxy for actual prices. I think using MSRP would be in a similar vein although, to date, I've not seen any analysis that would show that MSRP is directly correlated with sale prices, especially across multiple time periods.
MSRP is a positioning device used by vendors to signal quality indicators of their goods. In markets where good quality is not well know, my guess is that MSRP is highly correlated with sale prices. However, in our hobby, I'm dubious that quality of the goods is unknown. More likely, MSRP is a device employed to help distributors, particularly hobby shops, to protect margins.Given the large changes in distribution channels over the past 15 years, it is likely that there is less adherence to MSRP prices in the market. As more hobby shops close due to competitive pressures from the internet, we have likely seen increasing distance between MSRP and actual sale prices.
Who/how is the “street” price going to be set? As others have noted, there is a wide range of "street" prices. Maybe e-bay final sales should be used as a standard street price if that is what is required rather than MSRP. But I would have thought that you would have needed a standard reference over time for the comparison to be valid and only MSRP provides that consistent reference. You may then be able to extrapolate that difference (if any) and see what additional savings can be had by buying at a “street” price.
My gut feel is that there is no difference overall in the cost of the hobby over time but there is a wider range of costs that people can chose to buy from. It is a choice one must make if DCC and/or sound and/or other high cost items are necessary for them to participate in the hobby. Me, I am quite happy with no sound, no DCC at this point.
BRAKIE wrote: Ed,Here is my point about not using "street prices" as a guide and this is just the cheaper on line stores.. Lets look at Athearns RTR GP38-2. From M.B.Klein $69.98-$39.99 From First Hobbys List Price: $69.98 First Hobby Price: $49.99 From First Place Hobbies Retail Price: $69.98 Your Price: $48.99 Toy Train Heaven $50.39-53.99 depending on road names. So you can see the above prices vary..Thats why I think its lopsided economics to use street prices.Again these are the cheaper on line discount shops...The discount prices from other shops can be higher as I have noted while shopping on line.
Ed,Here is my point about not using "street prices" as a guide and this is just the cheaper on line stores..
Lets look at Athearns RTR GP38-2.
From M.B.Klein
$69.98-$39.99
From First Hobbys
List Price: $69.98 First Hobby Price: $49.99
From First Place Hobbies
Retail Price: $69.98 Your Price: $48.99
Toy Train Heaven
$50.39-53.99 depending on road names.
So you can see the above prices vary..Thats why I think its lopsided economics to use street prices.Again these are the cheaper on line discount shops...The discount prices from other shops can be higher as I have noted while shopping on line.
Brakie,
I agree that there are several market prices to choose from. This does not mean that there isn't a average or low price to use for some type of analysis. This is true for any product on the market. Hell, milk is cheaper at one grocery store versus another, sometimes by significant amounts. This does not mean that a good analysis would use suggested retail price from the dairy to conduct a market analysis. We may need to use averages or lowest price available for an analysis across time. Better yet, we could use a consistent "low price" vendor. I'm not aware of which vendors are still in business that were around 20+ years ago but I'm sure they are there. Their cost structures may have changed a bit but they might be a good avenue for a simple analysis.
Good discussion.
CP5415 wrote: My personal favourite is the P2K PA. 2 years ago it was $100 US from Walthers, today for the exact same model D&H 17 & 19, they're $90 US. Gordon
My personal favourite is the P2K PA.
2 years ago it was $100 US from Walthers, today for the exact same model D&H 17 & 19, they're $90 US.
Gordon
That is true..But,we can not over look how the other units that went up in price.The GP9 is now $135.00 whereas before it was $100.00 there are other P2K locos that has gone up in price as well. So the Sky is partly sunny at best.
Brought to you by the letters C.P.R. as well as D&H!
K1a - all the way
WickhamMan wrote:...We might be able to get to the root of the question of whether the hobby is getting "too expensive" and, more importantly, why? Any interest?
...
We might be able to get to the root of the question of whether the hobby is getting "too expensive" and, more importantly, why?
Any interest?
Paul3 wrote: Brakie,Sorry, but there is some real comparison to full prices between the years...or at least from 1991 & 1993. For example, the Roundhouse RS-3 in RTR form was $69.00 in 1993, which is $90.72 in 2005 dollars. Today, the same model from Athearn RTR is $89.98, and that includes being DCC ready, road specific headlights, fuel tanks, exhaust stacks, & steam gen., wire grabs, brass fan screen, see-through cab, etc. You can get a much improved RS-3 for actually less money value than you would have paid 13 years ago. Or how about the Atlas "Classic" locos? They were all $99.95 in 1993, which is $131.42 in 2005 dollars. Today they are still $99.95, and that includes wire grabs, thinner handrails, and other improvements. So again you can get an improved version of the old engine for less money value than you would have paid 13 years ago. Or, how about the Bachmann 4-8-4? In 1991, it was $100, which is $141.11 in 2005 dollars. Today, the same model with no improvements is only $114. Another model that can be had for less money value than you would have paid 15 years ago. But my favorite example is Rivarossi. They have several locos that are actually less than they were 15, 13, or even 6 years ago. A UP FEF 4-6-4 in 1991 was $338.98 (today it's only $234.98). An E8A-A set was $136.98 in 1993 (today it's only $84.98). In 2000, an 0-8-0 was $199.98 (today it's only $109.98). Now that's a heckuva drop in price. That 4-6-4 should be $478.35 but it's only $234.98? And it's got RP25 flanges, a 5-pole skew wound motor with flywheel, blackened siderods & wheels, plus it's DCC ready. And it's $243.97 cheaper? Wow. Paul A. Cutler III*************Weather Or No Go New Haven*************
Brakie,Sorry, but there is some real comparison to full prices between the years...or at least from 1991 & 1993.
For example, the Roundhouse RS-3 in RTR form was $69.00 in 1993, which is $90.72 in 2005 dollars. Today, the same model from Athearn RTR is $89.98, and that includes being DCC ready, road specific headlights, fuel tanks, exhaust stacks, & steam gen., wire grabs, brass fan screen, see-through cab, etc. You can get a much improved RS-3 for actually less money value than you would have paid 13 years ago.
Or how about the Atlas "Classic" locos? They were all $99.95 in 1993, which is $131.42 in 2005 dollars. Today they are still $99.95, and that includes wire grabs, thinner handrails, and other improvements. So again you can get an improved version of the old engine for less money value than you would have paid 13 years ago.
Or, how about the Bachmann 4-8-4? In 1991, it was $100, which is $141.11 in 2005 dollars. Today, the same model with no improvements is only $114. Another model that can be had for less money value than you would have paid 15 years ago.
But my favorite example is Rivarossi. They have several locos that are actually less than they were 15, 13, or even 6 years ago. A UP FEF 4-6-4 in 1991 was $338.98 (today it's only $234.98). An E8A-A set was $136.98 in 1993 (today it's only $84.98). In 2000, an 0-8-0 was $199.98 (today it's only $109.98).
Now that's a heckuva drop in price. That 4-6-4 should be $478.35 but it's only $234.98? And it's got RP25 flanges, a 5-pole skew wound motor with flywheel, blackened siderods & wheels, plus it's DCC ready. And it's $243.97 cheaper? Wow.
Paul A. Cutler III*************Weather Or No Go New Haven*************
Alcoa_fan wrote:Brake .. in order to compare apples to apples, both 1970 and 2005 numbers are advertised "street" prices from retailers. These are what people actually paid in 1970 and what they actually paid in 2005. As I mentioned, both sets of prices came from ads in MR magazine. I'm not sure why people focus on MS RP so much on this forum. Nobody had to pay MS RP in 1970 on these advertised items, nor did they have to pay MS RP in 2005. Nor today -- as you so often point out, lower street prices are always available via looking at ads or via the Internet. MS RP for model railroad products is a fiction for the most part, just as it is for automobiles, cell phones, and many other items.
I disagree..People was paying full price back then as many do today.Nothing as changed as far as that goes.The other items you mention cell phones,vehicles,etc has NO bearing on the price increase of the hobby.Why do people insist on including such items in these discussions?
To use street prices instead of FULL MSRP is padding the actual increase and voids this discussion IMHO because one can randomly pick the CHEAPER discount prices to prove their lopsided economics...
You may hood wink those that BELIEVES such street prices is equal but,it far from the truth because of the wide discounts found back then as well as now.
In your post you stated that this particular individual did not understand Federal tax law; I've got some news for you - the IRS doesn't even understand Federal tax law!!! I got a bill from the IRS disallowing a $2200.00 deduction and assessing me a charge of almost $2500.00 in penalties and late fees. I went down to IRS and questioned what was wrong with my figures; nothing, the auditor said, under the provisions of paragraph XXXXX subparagraph YYYYY and subsubparagraph ZZZZZ such a deduction was allowed. I went back to IRS with an explanation; Wrong!! deduction disallowed under the provisions of paragraph AAAAA subparagraph BBBBB subsubparagraph CCCCC; amount now owed was almost $2600.00. Back to the auditor. Deduction allowed; I argued for almost nine months with the IRS over this bill. Finally, with the bill approaching $3000.00 I caved in and sent them the amount being billed. Nine months later I get a letter from the IRS with a Check for almost $2500.00 with an explanation that an audit had revealed that I had overpaid my taxes by almost $3000.00 but there was a penalty due because my overpayment was more than the 10% allowed by the Federal tax code.
I wasn't referring to the esoterica of the Federal tax code, but just to the basic way income taxes are calculated for a person taking the standard deduction.
Gotta go. Wife calling We're going to the Folk Festival in Bangor. More later.
And here we have the first major stumbling block in operationalizing our discussion. What do we take as a standard indicator, an index, of pricing for the same locomotives that were produced in 1960 compared to the "same" ones in 2005. Clearly, there are no such pairs, except in names and wheel arrangements. Everything else that we would have used to decide to open our wallets, barring a few exceptions, has changed. The dies have changed, the motors have changed, the detailing has changed, and maybe even some of the raw/derived materials have changed. We can still compare brand names in a few cases, it seems, but little else.
FWIW, as a non-economist, unless it can be established that MSRP's are derived in a standardized way from manufacturer to manufacturer, it is not an acceptable basis on which to make our comparisons. What may be a better, more reliable indicator (good statistical term, that one) is the variance between the MSRP's and what people actually paid for a given item, averaged. Question is, how the heck do we get the second value? Anecdotally? Hmm, not getting a warm and fuzzy over this.
alco_fan,The reason to concentrate on MSRP vs. sale prices is that MSRP is usually the same rates and percentages for everyone, making it far more likely to be compared correctly across the eras.
For example, I think every one knows that P2K overproduced E's and PA's. They could be had at train shows for $40 or less (I got them at that). I'm sure internet and mail order dealers were also blowing them out at simliar prices to try to get rid of them. P2K has since adjusted their runs so they don't have that much stock left over, and blow outs don't happen to that degree anymore.
Or how about the old yellow box Atlas RS-3's. A friend of mine had the entire roster of Rutland RS-3's because he was buying them for something like $30 ea. Now, was anyone making money off of them when they were $99 MSRP if they were going for $30? I don't think so. Folks were just trying to get rid of them.
I agree that individual preferences may affect ones ability to choose between substitutes. However, in the example you gave, there are many on this forum who would argue against the limitations you stated. The easiest argument is that you could always purchase undecorated stock and paint/decal it yourself. Of course, this raises the price (in terms of time) but adds flexibility to purchasing choices. I think it will be interesting to explore the market segment you identified to see why so few vendors make "quality" passenger stock.
One thing is being left out here and that is knowledge of the subject matter. I'm referring to knowledge about railroads in general and given prototypes in particular.
The argument about buying stock and painting/decaling it for my favorite railroad (SP) doesn't hold water unless said stock is close enough to the actual prototype to be (at a minimum) acceptable kitbash fodder. Athearn's bay window caboose is an SP prototype. However, it's based on an SP C-40-4 caboose that was built for the SP in the early 60's and therefore out of era for me as a stock item. It probably could be kitbashed in some manner to resemble the earlier C-30-4/5/6 bay window cabooses, but that's not the point. I am sufficiently well versed about the SP to actually know the difference in SP caboose classes whereas your average new entrant to the hobby would only know it's a caboose and perhaps that the type is referred to as a bay window caboose. There are people in this hobby that are sufficiently anal to object to Walther's rendition of the SP C-30-1 caboose because the end platforms are 6 scale inches too short. I'm a little looser than that. If the discrepancy requires the application of a scale rule to determine, it's more than acceptable.
Bachmann Spectrum offers a USRA heavy 4-8-2 (not to mention the light) painted for SP. It may be close enough for some people, but it stands out like a sore thumb to me even though the Spectrum heavy actually trails a protypically correct tender (there are several different types that would be correct) for SP 4-8-2 classes MT-1/3/4/5. The Spectrum heavy is numbered 4367, which is the first number in SP's MT-5 class. The only thing a USRA heavy 4-8-2 has in common with an SP MT-5 is the wheel arrangement. The driver diameter and wheelbase is off, the valve gear is wrong, as are the cab, general boiler profile and a whole number of detail discrepancies. It's not even a decent kitbash candidate. Take a look at this SP MT-4 http://www.northeast.railfan.net/images/tr_sp4346.jpg and you'll see why when compared to a Spectrum USRA heavy even if you were to leave off the skyline casing.
I'm currently saving my pennies for an Athearn MT-4 when they're finally released.
BRAKIE wrote: Jon,I am sorry but,your prices and the prices I am checking doesn't jive..Where are you getting your prices? Atlas advertises the "snap" switch for $10.75 not $7.29.The Athearn GP35 is $84.97 not the $57.49.Athearn kits are 8.50 not the $5.99 You must use full MSRP to find the real cost increase over the years..Anything other full MSRP is Padding the numbers so the increase doesn't look as grim.And that my friend doesn't get it in a REAL economic discussion. BTW..Why are you using minimum wage instead of real average wages? I suppose the word "Fluff Prices" should be used for this discussion since there is NO REAL COMPARISON at full MSRP between the years.
Jon,I am sorry but,your prices and the prices I am checking doesn't jive..Where are you getting your prices?
Atlas advertises the "snap" switch for $10.75 not $7.29.The Athearn GP35 is $84.97 not the $57.49.Athearn kits are 8.50 not the $5.99 You must use full MSRP to find the real cost increase over the years..Anything other full MSRP is Padding the numbers so the increase doesn't look as grim.And that my friend doesn't get it in a REAL economic discussion.
BTW..Why are you using minimum wage instead of real average wages?
I suppose the word "Fluff Prices" should be used for this discussion since there is NO REAL COMPARISON at full MSRP between the years.
I'm going to disagree with you on this point. The MSRP is the "wished for" market price for a good, not the actual price. A good analysis will use the market price for goods. MSRP can be set to any arbitrary number. What the market will bear is what would be needed for a good analysis. For example, I foolishly purchased a BLI Hudson through my LHS for around $275. If I had waited for the market to adjust, I would have paid much less (Trainworld has them for $130).
Market prices are determined by where the product "clears", not where the manufacturers hopes it will. Unfortunately, sometimes the market clearing price is higher than MSRP too! I suspect that we should use the lowest advertised price we can find for any product comparisons across time.
My thoughts.