Why the Huge price difference????

[Anonymous]

[%-)] Hello All: You will need the Sept. CTT for this one. A Lionel 24111 Swing Bridge Listed for sale On page 43, Top add Bottom right corner is $399.00, the same Item on page 37 Bottom left is $169.00 , page 28 third row near the bottom $159.00, page 23 $199.95, page 88 199.99, page 93 $ 279.95. Seem's to be some wild pricing going on here, Somebody want to try & explain this one. I didn't mention dealers name's, My Intent is not to bash a person's business, but a reasonable answer would be nice. Regard's Steve

[trigtrax]

Lionel sells to dealers two ways. Through regular distribution and then it get rid of unsold inventory through it's top ten dealers by closeout. Roughly normal wholesale is 60% of list. Msrp on that bridge was $399 so it comes to a cost of $240 for some sellers.
But the swing bridge didn't sell well because of size so Lionel ran a closeout of 20% of MSRP. The top Ten picked up the excess for $80.. They are the ones who decide what to hold and what to blow-out. so the guy selling for $160 is actually doubling his money and the guy selling for MSRP is stuck with his inventory and an undeserved reputation as a price gouger.

[brianel027]

What you describe here Rehawk, is one of the most hurtful practices to the overall future health of the model train business, as far as growing the hobby goes.

The train business is not the only one with blowouts. But when the remainder / inventory overstock blowouts happen and are only offered to a select few dealers it hurts the hobby in the long run.

1) Small dealers become increasingly reluctant to preorder merchandise for fear it will be blown out later on and sold at sale prices that by far beat the local dealers wholesale price. When dealers don't preorder, items get cancelled or made in smaller numbers.
2) The consumer becomes increasingly reluctant to preorder or to buy when the train item first comes out because they suspect if they wait a little bit, they can purchase the item at a substantial savings.

This is already happening big time in the hobby. Notice on the train forums when a blowout gets posted, how many are quick to buy. I strongly suspect there are many who like the higher end, more expensive trains and wait patiently and act quickly when the blwouts happen.

Of course (IMHO) many of the blowout prices are actually more realistic when it comes to train prices. Again (IMHO) many of the list train prices, especially on the Lionel postwar reissues are way way too excessive. If the Vapor Records caboose ($80 list)or the postwar Boat Loader ($60 list) had a reasonable price in the first place, manybe they wounln't have ended up as blowouts for a few select dealers. Which makes all the other who already have those items in stock as greedy price gougers, as said above.

A current example of excessive list is the Lionel PW reissue of the 9-inch sheet metal framed Rocket Fuel Tank Car for $48 list! You gotta be kidding! Even at 25% off, I'd have to REALLY want that car to pay $36 for it. I'm sorry to differ with Mr. Calabreese, but I think many of Lionel's list prices are ridiculous and it is no wonder that so much of it ends up being blownout... that's when the prices start getting reasonable. Even the Lionel starter cars at $27 list is a royal ripoff given what they cost to be made in China. Obviously other consumers agree with me, as you see the starter cars on eBay for much less.

But meanwhile (while clearing out inventory and gnerating needed money) these blowouts are shooting the whole retail end of the train business straight in the behind. It would not surprise me at all given this reality to see the numbers of local dealers (who are the front line infantry soldiers when it comes to growing the train market to newcomers) continue to decrease at an increasing rate.

So Red, (I'm being sarcastic here) help put a local dealer out of business - Lionel and the others approve! - and wait for the blowout and order then. Of course too bad when you call "Train On-Line Unlimited" they don't want to be bothered with questions or sales of screws, wire, and other train doo-dads. Essential items for any train modeler, yet items that don't make anyone any real money. The big guys who are privy to the big blowouts figure the small dealers can survive on sales of screws, wire and doo-dads.... big news: they can't.

[trigtrax]

This close-out business is not Calabrese's fault. Lionel's been doing this for years. They do not want to stock unsold goods and the Big Ten have the ca***o buy it all out. The result of this is the decreasing Death Spiral.. The general public cannot be exposed to trains in their local Hobby Shops, because frankly only a fool would do business under these conditions.. So trains are sold Mail Order through magazine ads in CTT and OGR. Of course the only people who ever see these ads are Hobbyists anyway.
Now the reality has finally set in and as Brianel points out fewer are pre-ordering and actually forcing the closeouts..
An Ironic example is Lionel's Acela.. The catalog stated they'd only make 2000 and they'd only do the run if they had 2000 preorders... So why is it offered at 20% discount in some ads? And what's the effect on the customer who now knows he would have saved $400 if he didn't order it?

[brianel027]

Good points Trigtrax. The blowouts have been going on for years, although when I renentered the hobby 15 years ago, it took a year or two for items to end up as blowouts. Now items get reudced before the next catalog is even out.

I made the reference to Mr. Calabrese about Lionel's sometimes excessive list prices because he specifically answered a question I submitted about Lionel's pricing on one of the on-line chats. Of course, he disagreed. But I suspect he's not buying trains. And if he is, is probably in a better position to do so than many.

There are lots of good examples in addition to the Acela. The thing I would imagine might be causing some concern to someone is when limited production items end up going on sale. Another example, The Greendale Set. What did they make? Around 500? At the $500 list price, the thing was in my opinion, to quote a Neil Young song "A Piece of Crap." Had the set been half the list price, maybe... it was still a cheap set with a single motored Alco diesel... not even 2 motors. And I see the limited production Greendale Set is still available. You might have thought will the Neil Young tie-in that it would be gone already?

[trigtrax]

Originally posted by brianel027

. The blowouts have been going on for years, although when I renentered the hobby 15 years ago, it took a year or two for items to end up as blowouts. Now items get reudced before the next catalog is even out.

It's actually the Big Ten who decide if and when an item is blown out. They can buy low and hold if they think the item is a sleeper or they can cash in quickly. Lionel's role is just emptying their warehouse

I made the reference to Mr. Calabrese about Lionel's sometimes excessive list prices because he specifically answered a question I submitted about Lionel's pricing on one of the on-line chats. Of course, he disagreed. But I suspect he's not buying trains. And if he is, is probably in a better position to do so than many.

There are times when Lionels prices are down right evil.. Like the Boys Train $500 for blue painted starter Set. But the Polar express came in at the price of a Williams Set. So they can do a reasonable price if they need to.

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