Jim and Sheldon,
I didn't want to throw a wet blanket on things so much as I wanted to question the obsession with getting things at some ideal cost that justifies in our mind the worth of our decision to buy.
Great model and $20? OK, I'll buy it. Great model and $40? Fergeddaboutit!
Which is not to say we shouldn't watch our budgets and make whatever decision we are personally with most comfortable with as consumers.
What's my bottom line? I've got a budget that is "just so." But it's disposable income and whatever I do with it is justified based on what I want and need, not on some arcane "best price" or "right price" or whatever. If there's something I need, it's either OK, too expensive, or I can build it myself. I'm not going to lose sleep over it, feel guilty about it, project that onto my decisions, or discuss why it really should be 5% cheaper based on some arcane economic analysis.
I'm not questioning anyone else's right to discuss this sort of thing. I just wanted to point out that the endless drive in our society that's expressed in trying to put a price on everything has gotten to the point where it's starting to erode the value of the priceless things that I think we all value about model railroading -- and many other things in life itself, too, but that;s another conversation for another forum.
I enjoy the hobby in part to get away from such things, to revive the idea that there's something about this hobby that transcends the dreary toil of everyday life, that brings out the best in us, rather than what's crass. I'm sure that's not the intent of those who want to write about it, but I think it presents a very unflattering portrait of the hobby that does none of us any good -- and it sure never changes the price of anything anyway.
I will excuse myself now. It's my fault I even dropped in, knowing what I'd probably find. I just wanted to offer an alternative philosophy to the issue in case someone thinks that such concerns dominate the hobby, as they sometimes seem.
Mike Lehman
Urbana, IL
Mike,
I don't think this is so much of an issue of paying a discount price for something just to justify the purchase. Most of us have budgets for our hobby as well as everything else in life. ExactRail products may not be for everyone whether it is because of selection of model's, road names or price. The point here is that ExactRail is taking a big chance that this move is going to pay off for them. Its just another sign of the times and how it changes the landscape of our hobby.
It may be just my ignorance, but they worked hard to build a dealer base, a network of retail establishments, where their products are placed on display and create a large exposure and advertising for them. Now they decide to no longer provide a discount to dealers to purchase their products at wholesale so there is room for markup. By doing this they are losing all of that advertising that they were actually getting paid for when the retailer purchased his inventory. I don't see how this is beneficial for them in the long run.
You have to admire their desire to keep the price of their offerings as affordable as possible. There is no doubt that they make a beautiful product but I hope that by limiting where you can buy their offerings doesn't backfire on them. They know their business better than me and I wish them well on this decision.
Pat
I can't really add anymore than I can. I think my thoughts on adapting to a new way of obtaining products is a valid one, thats the only thing to me which is relevant. Cost? 20 vs 40 dollars? I went to the Timonium Train show in March and saw this really unique CSX box car with the door off to one side on each end. I thought, thats is really unique and cool and would've liked to bought one, but it was over 40 dollars - well, I passed but if I were a Chessie/CSX fan, I probably would get one because they are so unique and AFAIK, a good copy of a prototype.
Anyway, I hope all goes well for ExactRail. If they come out with something I really want after this switch, I may see my self to one or two of whatever it is, otherwise, I'll go back to shopping Genesis and other makes.
Rio Grande. The Action Road - Focus 1977-1983
vsmith ATLANTIC CENTRAL: This is surely bad for hobby shops/retailers - of all sizes and methods of sale - but it may not be bad for ExactRail at all. For all you "young people" out there, there has always been a core of small, direct to the public manufacturers in this hobby. And a few fairly large by model railroad industry standards have gone to direct sales and done just fine - Campbell Scale Models - maker of wood craftsman structure kits since the 60's, is now sold only direct. For the longest time they did not even have a web site, yet they are still in business. http://www.campbellscalemodelsonline.com/Default.asp Now I know for many of you, a wood structure kit is not on your radar - but yet they are still in business some 50 years later. Over the decades the pages of MR and RMC have been full of small ads for special products sold directly by small manufacturers - and that was BEFORE the internet. MARK MY WORDS, I have been saying this for years on here - distributors are all but dead, most products in this hobby will be sold directly to retailers by the manufacturers and/or directly to the public by the manufacturers in the future. It is already happening with a large amount of product, the trend will only continue. Athearn has single point distribution direct to retailers, Walthers is more about their own products rather than being a distributor, Bowser is the same, ConCor as well. The last three just mentioned use to be big DISTRIBUTORS - now they import/manufacturert and sell mainly their own stuff. Dozens of smaller companies are selling direct to retailers and/or consumers with e-commerce web sites. You the public demanded "discounts", and apparently also demanded high detail, RTR, proto specific products which require much higher developement and production costs - you cannot have your cake and eat it too. Manufacturers, distributors and retailers can not do all this, put inventory on shelves to have it available when you are ready to buy, and still have margins that allow for constant 20% to 40% "discounts" off "retail" prices. Get ready for more: Direct marketing Limited production Higher prices OR - maybe consider actually returning to building some of this stuff yourself? Sheldon What I was about to say is pretty much summed up here, thats the future. Just this week a large scale manufacturer, Aristocraft just announced that they too are going to direct sales. I wonder how many other mfrs will follow in the coming years. I can only hope my local train shop survives, as it is the only other LHS is already absolutley useless when it comes to trains.
ATLANTIC CENTRAL: This is surely bad for hobby shops/retailers - of all sizes and methods of sale - but it may not be bad for ExactRail at all. For all you "young people" out there, there has always been a core of small, direct to the public manufacturers in this hobby. And a few fairly large by model railroad industry standards have gone to direct sales and done just fine - Campbell Scale Models - maker of wood craftsman structure kits since the 60's, is now sold only direct. For the longest time they did not even have a web site, yet they are still in business. http://www.campbellscalemodelsonline.com/Default.asp Now I know for many of you, a wood structure kit is not on your radar - but yet they are still in business some 50 years later. Over the decades the pages of MR and RMC have been full of small ads for special products sold directly by small manufacturers - and that was BEFORE the internet. MARK MY WORDS, I have been saying this for years on here - distributors are all but dead, most products in this hobby will be sold directly to retailers by the manufacturers and/or directly to the public by the manufacturers in the future. It is already happening with a large amount of product, the trend will only continue. Athearn has single point distribution direct to retailers, Walthers is more about their own products rather than being a distributor, Bowser is the same, ConCor as well. The last three just mentioned use to be big DISTRIBUTORS - now they import/manufacturert and sell mainly their own stuff. Dozens of smaller companies are selling direct to retailers and/or consumers with e-commerce web sites. You the public demanded "discounts", and apparently also demanded high detail, RTR, proto specific products which require much higher developement and production costs - you cannot have your cake and eat it too. Manufacturers, distributors and retailers can not do all this, put inventory on shelves to have it available when you are ready to buy, and still have margins that allow for constant 20% to 40% "discounts" off "retail" prices. Get ready for more: Direct marketing Limited production Higher prices OR - maybe consider actually returning to building some of this stuff yourself? Sheldon
This is surely bad for hobby shops/retailers - of all sizes and methods of sale - but it may not be bad for ExactRail at all.
For all you "young people" out there, there has always been a core of small, direct to the public manufacturers in this hobby. And a few fairly large by model railroad industry standards have gone to direct sales and done just fine -
Campbell Scale Models - maker of wood craftsman structure kits since the 60's, is now sold only direct. For the longest time they did not even have a web site, yet they are still in business.
http://www.campbellscalemodelsonline.com/Default.asp
Now I know for many of you, a wood structure kit is not on your radar - but yet they are still in business some 50 years later.
Over the decades the pages of MR and RMC have been full of small ads for special products sold directly by small manufacturers - and that was BEFORE the internet.
MARK MY WORDS, I have been saying this for years on here - distributors are all but dead, most products in this hobby will be sold directly to retailers by the manufacturers and/or directly to the public by the manufacturers in the future. It is already happening with a large amount of product, the trend will only continue.
Athearn has single point distribution direct to retailers, Walthers is more about their own products rather than being a distributor, Bowser is the same, ConCor as well. The last three just mentioned use to be big DISTRIBUTORS - now they import/manufacturert and sell mainly their own stuff.
Dozens of smaller companies are selling direct to retailers and/or consumers with e-commerce web sites.
You the public demanded "discounts", and apparently also demanded high detail, RTR, proto specific products which require much higher developement and production costs - you cannot have your cake and eat it too.
Manufacturers, distributors and retailers can not do all this, put inventory on shelves to have it available when you are ready to buy, and still have margins that allow for constant 20% to 40% "discounts" off "retail" prices.
Get ready for more:
Direct marketing
Limited production
Higher prices
OR - maybe consider actually returning to building some of this stuff yourself?
Sheldon
What I was about to say is pretty much summed up here, thats the future. Just this week a large scale manufacturer, Aristocraft just announced that they too are going to direct sales. I wonder how many other mfrs will follow in the coming years. I can only hope my local train shop survives, as it is the only other LHS is already absolutley useless when it comes to trains.
"Campbell is still available in hobby shops, Walthers distributes them!!!!!!"
And on that point I stand corrected, they have however made a significant move to sell their product direct with a new web site and several years worth of ads prompting customers to contact them directly - rather than the traditional "see your dealer" kind of ad campain.
Interesting discussion.
One point I don't recall anyone making is that by selling direct only, they are effectively raising their prices. No discounts will be available once places like M.B. Klein sell out.
Enjoy
Paul
IRONROOSTER Interesting discussion. One point I don't recall anyone making is that by selling direct only, they are effectively raising their prices. No discounts will be available once places like M.B. Klein sell out. Enjoy Paul
I thought that was the whole point of this thread.
FWIW, I think the price isn't the problem, it's the perceived "bargain". If they can hold the retail price down by eliminating dealers, you're saving money, but it's not as obvious as a big "20% off!" banner.
Milepost 266.2 IRONROOSTER: Interesting discussion. One point I don't recall anyone making is that by selling direct only, they are effectively raising their prices. No discounts will be available once places like M.B. Klein sell out. Enjoy Paul I thought that was the whole point of this thread. FWIW, I think the price isn't the problem, it's the perceived "bargain". If they can hold the retail price down by eliminating dealers, you're saving money, but it's not as obvious as a big "20% off!" banner.
IRONROOSTER: Interesting discussion. One point I don't recall anyone making is that by selling direct only, they are effectively raising their prices. No discounts will be available once places like M.B. Klein sell out. Enjoy Paul
I don't think done of us likes paying(say) $40.00 for a boxcar but,if direct selling by manufacturers becomes the standard then we will need to rethink our buying habits and maybe the very size of our layouts.
Of course the ever increasing prices needs to be controlled(curb?) before a (say) $100.00 flat car becomes a reality.
Maybe the price bubble has sprung a leak?
Larry
Conductor.
Summerset Ry.
"Stay Alert, Don't get hurt Safety First!"
Not exactly, they were talking about increased production costs and how this would enable them to keep prices "reasonable". But it also freezes out the discounters at the same time, which has the effect of raising prices - at least for those who buy from discounters. At the moment Kleins, for example, has some of those $38.95 boxcars for $31.19 while Exactrail's site has them at list.
Then this thread kinda of veered off into whether $40 HO boxcars are worth the money. Although a better approach might be how much detail/accuracy do you need to meet your needs and accomplish your goals?
True in the short term, which how so many people think these days. But if they were about to raise prices, that would have raised the prices of the retailers who discount as well.
This aspect of this disccussion has been gone over before on other threads about prices, but no one seems to pay attention.
Cost to produce + manufacturer profit + distrbutor profit + retailer profit = retail price
Most of the discounting that is done is accoplished by elliminating the distributor and lowering the price by all or most of that mark up.
Few businesses can survive of less than 30% gross margin - pay $70 for item, sell it for $100. Something in the range of 40% has long been the "standard" wholesale discount in this business. So if you buy from a distributor it is hard to discount more than about 10%.
Unless they are severely cash strapped, most manufacturers have a bottom line at which they will not go below no matter how much you buy, etc, contrary to the incorrect notion that volume always lowers the price.
That, and their willingness to sell direct to retailers and web outlets it what controls current price levels in this hobby - 20% to 40% off retail - the markup that once belonged to the distributors.
Many of the "big boys" sell to the public at basicly the same price small shops would have to pay distributors for the same item. Nothing in this hobby is bought wholesale for $10 and resold for $100 retail.
So, selling direct to retailers allows manufacturers to both make more money and keep prices lower.
Many manufactuers have alread cut out distributors, some actually kept retail prices the same and split the extra profit with dealers - allowing them to discount 20%-30% and still make a fair profit, others lowered or held prices.
Running a retail store is much more expensive than running a web/mailorder warehouse. Having to discount, regardless of pricing structures makes it hard for retail shops to compete.
I suspect if we could find out the numbers, places like Kleins and Trainworld only keep their retail stores out of tradition, image and as a service to local customers, not because the "store" makes a lot of money - especially as discounted as their prices are.
BRAKIE Milepost 266.2: IRONROOSTER: Interesting discussion. One point I don't recall anyone making is that by selling direct only, they are effectively raising their prices. No discounts will be available once places like M.B. Klein sell out. Enjoy Paul I thought that was the whole point of this thread. FWIW, I think the price isn't the problem, it's the perceived "bargain". If they can hold the retail price down by eliminating dealers, you're saving money, but it's not as obvious as a big "20% off!" banner. I don't think done of us likes paying(say) $40.00 for a boxcar but,if direct selling by manufacturers becomes the standard then we will need to rethink our buying habits and maybe the very size of our layouts. Of course the ever increasing prices needs to be controlled(curb?) before a (say) $100.00 flat car becomes a reality. Maybe the price bubble has sprung a leak?
Milepost 266.2: IRONROOSTER: Interesting discussion. One point I don't recall anyone making is that by selling direct only, they are effectively raising their prices. No discounts will be available once places like M.B. Klein sell out. Enjoy Paul I thought that was the whole point of this thread. FWIW, I think the price isn't the problem, it's the perceived "bargain". If they can hold the retail price down by eliminating dealers, you're saving money, but it's not as obvious as a big "20% off!" banner.
Given the number of new-in-box items still sitting on my shelves, rethinking my buying habits is probably a pretty good idea.
When prices get too high, demand will drop and prices will change. At least, that's what all the capitalists keep telling me.
Milepost 266.2 BRAKIE: Milepost 266.2: IRONROOSTER: Interesting discussion. One point I don't recall anyone making is that by selling direct only, they are effectively raising their prices. No discounts will be available once places like M.B. Klein sell out. Enjoy Paul I thought that was the whole point of this thread. FWIW, I think the price isn't the problem, it's the perceived "bargain". If they can hold the retail price down by eliminating dealers, you're saving money, but it's not as obvious as a big "20% off!" banner. I don't think done of us likes paying(say) $40.00 for a boxcar but,if direct selling by manufacturers becomes the standard then we will need to rethink our buying habits and maybe the very size of our layouts. Of course the ever increasing prices needs to be controlled(curb?) before a (say) $100.00 flat car becomes a reality. Maybe the price bubble has sprung a leak? Given the number of new-in-box items still sitting on my shelves, rethinking my buying habits is probably a pretty good idea. When prices get too high, demand will drop and prices will change. At least, that's what all the capitalists keep telling me.
BRAKIE: Milepost 266.2: IRONROOSTER: Interesting discussion. One point I don't recall anyone making is that by selling direct only, they are effectively raising their prices. No discounts will be available once places like M.B. Klein sell out. Enjoy Paul I thought that was the whole point of this thread. FWIW, I think the price isn't the problem, it's the perceived "bargain". If they can hold the retail price down by eliminating dealers, you're saving money, but it's not as obvious as a big "20% off!" banner. I don't think done of us likes paying(say) $40.00 for a boxcar but,if direct selling by manufacturers becomes the standard then we will need to rethink our buying habits and maybe the very size of our layouts. Of course the ever increasing prices needs to be controlled(curb?) before a (say) $100.00 flat car becomes a reality. Maybe the price bubble has sprung a leak?
Take it from a capitalist, it is a little more complex than that. No business sells its products below cost unless they are very cash strapped or going out of business, So there is a bottom "value" in most cases.
Fact is most of this industry is already operating at bottom value or minimum markup, so when you see fire sale prices, it is just that, someone has decided its time ot get out and is dumping what they have left.
That may be good for you in the short term but it is bad for all of us in the hobby in the long term.
Without "capitalists" willing to risk money to make money, non of these products would exist. Which socialist country would like to move to? Ask some of of our European forum members to tell you about prices of model trains in their country.