Trains.com

Subscriber & Member Login

Login, or register today to interact in our online community, comment on articles, receive our newsletter, manage your account online and more!

Another money on the hobby question? How much would you pay.

12621 views
139 replies
1 rating 2 rating 3 rating 4 rating 5 rating
  • Member since
    April 2003
  • 305,205 posts
Posted by Anonymous on Wednesday, May 19, 2010 11:54 AM

 Interesting to see, how this thread has changed direction, from a question on how much one would be willing to pay to the R-T-R vs. kit/scratch building issue, only to arrive at the age-old collector vs. true model railroader question.

Time to move on?

  • Member since
    October 2001
  • From: OH
  • 17,574 posts
Posted by BRAKIE on Wednesday, May 19, 2010 11:59 AM

Sir Madog

 Interesting to see, how this thread has changed direction, from a question on how much one would be willing to pay to the R-T-R vs. kit/scratch building issue, only to arrive at the age-old collector vs. true model railroader question.

Time to move on?

No,I think its been a rather interesting topic with several excellent view points and so far its been civilized-far more then it would have been 5 years ago and that speaks well for the current membership and how well the moderators have this forum under control..Thumbs Up.

Larry

Conductor.

Summerset Ry.


"Stay Alert, Don't get hurt  Safety First!"

  • Member since
    April 2003
  • 305,205 posts
Posted by Anonymous on Wednesday, May 19, 2010 12:01 PM

 Fine with me, Larry. Just wanted to point out the risk we may be running with these issues.

  • Member since
    January 2010
  • 699 posts
Posted by UP 4-12-2 on Wednesday, May 19, 2010 12:02 PM

Sir Madog

 Without the intention to start a flame war - we have to remember, that the only reason, why a company is moving their production to China is to reap extra $$$ and improve the bottom line, and not necessarily to provide good products at an affordable price. Yes, we are all racing for bargains, to get the best value for our money. There is nothing wrong on that, unless it starts to kill an economy. For an economy to be able to survive, we need to have a balanced mix of the agricultural sector (feeding us), industrial production (creating marketable values) and the service sector (supporting the first two). Globalization has led to cannibalization of the production sector in most western countries, effecting, that our money is not backed by the necessary amount of values, making it fodder for speculation and inflation. We have been there before...

Globalization is not a one-way street. If moving the production to China means providing them with income they can use to buy in the US, or Germany - any where in the western world, then this will provide the necessary balance. I am afraid, that this is currently not the situation.

Back to the original question. It is my feeling, that the low price situation will end sooner than we expect it to happen. The Chinese are learning fast and the RMB will appreciate quite a lot vs. the USD and the EUR in the long run. We have been there before, when Japan took over the camera market, the car market and the home electronics market. Given the cost of shipping and quality control (quality is still an issue, and will remain so for a long time), there are some industries, which are now looking to in-sourcing strategies.

Would I pay a premium for domestic products? Yes, within the means I can afford. I see this as an investment into the nation I am a member of - be it for R-T-R or kits, that is not an issue Smile

Sorry, but you are dead wrong on your first paragraph.  Companies are moving production to China because the competition already forced them to--not out of pure greed, as some of the folks on these forums want to believe.

You cannot make the $20 (or higher priced, now) can motor in the U.S. when your competition is getting the exact same quality at $4 from China.

You WILL NOT REMAIN IN BUSINESS.  The choice faced by many manufacturers is either make the stuff in China, and be able to compete with Atlas, Walthers, etc. on price/quality

OR

Close your doors.

It's not about greed.  People don't make trains out of greed--there are way better ways of making money than producing and selling toy, ahem "model", trains.  A friend of mine, actually the current boss of Bowser, had to take a 50% personal pay cut after 9/11 to stay in business.  He is not getting rich on Chinese labor--he's just trying to stay in business.  Lee English would say directly to your face he is trying to provide a quality product at an affordable price.

At my job, which isn't so great either, I'm likely making more money than Lee, especially per hour of time spent at work.

Also, when China becomes expensive, as they surely will, production will move elsewhere.  The plastic train manufacturers follow the lead of the brass importers.  When Japan became expensive, they moved to Korea.  When Korea (think Samhongsa and Ajin Precision) became expensive, they opened factories in China.  When China becomes expensive, production will move to some other developing country--but it won't be moving back here.

John

 

  • Member since
    July 2006
  • From: west coast
  • 7,670 posts
Posted by rrebell on Wednesday, May 19, 2010 12:12 PM

UP 4-12-2

Sir Madog

 Without the intention to start a flame war - we have to remember, that the only reason, why a company is moving their production to China is to reap extra $$$ and improve the bottom line, and not necessarily to provide good products at an affordable price. Yes, we are all racing for bargains, to get the best value for our money. There is nothing wrong on that, unless it starts to kill an economy. For an economy to be able to survive, we need to have a balanced mix of the agricultural sector (feeding us), industrial production (creating marketable values) and the service sector (supporting the first two). Globalization has led to cannibalization of the production sector in most western countries, effecting, that our money is not backed by the necessary amount of values, making it fodder for speculation and inflation. We have been there before...

Globalization is not a one-way street. If moving the production to China means providing them with income they can use to buy in the US, or Germany - any where in the western world, then this will provide the necessary balance. I am afraid, that this is currently not the situation.

Back to the original question. It is my feeling, that the low price situation will end sooner than we expect it to happen. The Chinese are learning fast and the RMB will appreciate quite a lot vs. the USD and the EUR in the long run. We have been there before, when Japan took over the camera market, the car market and the home electronics market. Given the cost of shipping and quality control (quality is still an issue, and will remain so for a long time), there are some industries, which are now looking to in-sourcing strategies.

Would I pay a premium for domestic products? Yes, within the means I can afford. I see this as an investment into the nation I am a member of - be it for R-T-R or kits, that is not an issue Smile

Sorry, but you are dead wrong on your first paragraph.  Companies are moving production to China because the competition already forced them to--not out of pure greed, as some of the folks on these forums want to believe.

You cannot make the $20 (or higher priced, now) can motor in the U.S. when your competition is getting the exact same quality at $4 from China.

You WILL NOT REMAIN IN BUSINESS.  The choice faced by many manufacturers is either make the stuff in China, and be able to compete with Atlas, Walthers, etc. on price/quality

OR

Close your doors.

It's not about greed.  People don't make trains out of greed--there are way better ways of making money than producing and selling toy, ahem "model", trains.  A friend of mine, actually the current boss of Bowser, had to take a 50% personal pay cut after 9/11 to stay in business.  He is not getting rich on Chinese labor--he's just trying to stay in business.  Lee English would say directly to your face he is trying to provide a quality product at an affordable price.

At my job, which isn't so great either, I'm likely making more money than Lee, especially per hour of time spent at work.

John

 

Since you know a manufacturer, you ought to see if you can get him on here or we could send questions to you and you get his feedback. It would be very enlightening.
  • Member since
    January 2010
  • 699 posts
Posted by UP 4-12-2 on Wednesday, May 19, 2010 12:19 PM

Lee English is my former boss, actually my first boss ever, and I consider him a friend, though I'm not a "close" friend (I'm closer to the store sales manager).  Lee and his (now retired) parents have known me since I was about 5 years old.

Quite frankly, he's often quite busy, with his hands very full, just trying to run his company to be able to come on here, follow discussions, and post.

I also have absolutely no right to speak on Lee or Bowser's behalf--but I very much believe he would say he is trying "to provide a quality product at a good price".   That's all they've ever tried to do in the 36 years I've known them, whether it be made here or somewhere else.  I'm proud to be able to say I once made the stuff, too.  It was indeed challenging work.

Bowser is not a large company--but anyone who wishes may contact them through their website.  They have some real modelers working there who will either forward questions on to Lee or answer them directly.  People have provided them useful information through email that has resulted in new products.  This is actually ongoing.  They are becoming more responsive to their prospective customers than ever before.

John

  • Member since
    April 2003
  • 305,205 posts
Posted by Anonymous on Wednesday, May 19, 2010 12:35 PM

 Jobless people don´t buy trains.

Remember the heydays of the hobby? Those glorious 1950´s and 1960´s? Trains were expensive, much more expensive than today, but people had jobs, an income and a perspective. That´s why they also spent money on trains - for their children (that´s us now) and for themselves. 

I agree, it may be too late already, as most of the "toy" (no offense meant, but that´s what it is) production has  moved to China and the price level is rock bottom. If China gets too expensive, moving on may not be an option - too few modelers left.

But I just don´t believe in this "Move to China or bust" - argument any longer.

So if those importers/manufacturers are not making any money, why stay in business at all? I guess we all would be surprised, when some of those companies would have to publish their financial results. Only few are in the business just for the love of model railroading.

I wish Bowser would still make those PRR loco kits, I´d pay a good price for it, because I know the care that went into this product. Call me old-fashioned, if you like.

  • Member since
    September 2002
  • From: California & Maine
  • 3,848 posts
Posted by andrechapelon on Wednesday, May 19, 2010 12:51 PM

blownout cylinder

CAUTION: Use of Hyperbole very extensive in this post---used to emphasize a point--- Whistling

---------------------------------------------------------------------------------------------------------------------

OK---time for a different tack--what about AFFORDABILITY? Do we even think of this now?

HELLO!!

What do you think the kid who is not wealthy going to do huh? He's going to stay out of the hobby!

So much for growing a market------SoapBox

How about the ones who do want to build kits---regardless of how out of date/time they be? They can get other kits yes but Athearns were in point of fact AFFORDABLE!!

Huh---obviously we are more interested in what is convenient----grumble growl mumble snortGrumpy

First off, affordability's a relative term. Seocndly, I wouldn't feel all that sorry for those "poor" kids who go around with cell phones, lap tops and iPods while wearing designer label clothes. And these aren't the "wealthy" ones.

When I bought my first Athearn kit in 1957, a D&LW 40's box car, it was $1.29. My allowance at the time was 50 cents/week, so that car cost the better part of 3 weeks allowance. $1.29 may sound affordable, but if you're only getting 50 cents a week, trust me, it's expensive.

Fast forward to today. I'm retired and on essentially a fixed income. However, my wife and I were very conservative financially. We never had any credit card debt, never used our house as an ATM, never bought a car than we could not afford to pay off in 3 years or less and certainly never lived in the type of house that goes by the term "McMansion". We managed to put 4 kids through college and acquire vacation real estate. Everything we own is paid for and we have no debt.

Our annual income is about 10% above the US median income, so we're not multiple standard deviations above the median. Still, we're probably considerably better off than a family with mortgage debt, car payments and 2 or 3 kids still at home. OTOH, we were in that situation at one time and somehow managed our finances so that the situation was temporary, which is the way it should be. Neither I nor Athearn (nor any model railroad manufacturer) is responsible for how other people manage their money regardless of their ages.

When I was a kid, my mom used to tell me that if I wanted something badly enough, I'd figure out a way to come by it honestly. Amazingly what I found out along the way is that there is a lot of stuff I can easily do without (McMansions, BMW's, 60" plasma TV's, designer label clothes, expensive watches to name a few). Some of my jeans have patches just like they did as a kid when I'd wear a hole in the knee and my mom would patch them (people did that to make things last 50 years ago, some still do). 

I just have no sympathy whatsoever with the affordability argument when it comes to discretionary spending on railroad models. You don't need 'em. You can't eat, wear, live in or drive them. If you want a model that badly, find places where you can save enough money to buy it.. Otherwise, do without.

You've indicated an interest in becoming a manufacturer. OK, fine. You make something I want badly enough, I'll figure out a way to buy it. What I won't do is snivel and whine about your pricing.  And if you don't make something I really want, hey, I'm no worse off than before and you can join the thousands of of other manufacturers of all types  who will never see one red cent from me. You'll be in good company, Gucci, Ferragamo, BMW,  Division Point (OK, I'd like some of their stuff, just not enough to be willing to cough up the asking price).

Andre

 

It's really kind of hard to support your local hobby shop when the nearest hobby shop that's worth the name is a 150 mile roundtrip.
  • Member since
    July 2006
  • From: west coast
  • 7,670 posts
Posted by rrebell on Wednesday, May 19, 2010 1:16 PM

Sir Madog

 Jobless people don´t buy trains.

Remember the heydays of the hobby? Those glorious 1950´s and 1960´s? Trains were expensive, much more expensive than today, but people had jobs, an income and a perspective. That´s why they also spent money on trains - for their children (that´s us now) and for themselves. 

I agree, it may be too late already, as most of the "toy" (no offense meant, but that´s what it is) production has  moved to China and the price level is rock bottom. If China gets too expensive, moving on may not be an option - too few modelers left.

But I just don´t believe in this "Move to China or bust" - argument any longer.

So if those importers/manufacturers are not making any money, why stay in business at all? I guess we all would be surprised, when some of those companies would have to publish their financial results. Only few are in the business just for the love of model railroading.

I wish Bowser would still make those PRR loco kits, I´d pay a good price for it, because I know the care that went into this product. Call me old-fashioned, if you like.

Nobody said they were not making any money, just not that much money! Why would anyone do that you ask, just ask any business owner and you will find that it is much more enjoyable to work for yourself. No one to tell your what hours to work and if something comes up and you need more time you just work longer hours, no overtime bullshit, you can come and go as you please and if you want to schedule yourself a 1/2 hour lunch or no lunch for that mater, you can. One of the things I hated at HD was being told I had to have an hour lunch and that if I wanted more $ for whatever and they had the $ in the budget that I couldn't because of overtime rules, while working for myself I have done a few 20 hour days  and dozens of 70 hour plus workweeks.
  • Member since
    December 2006
  • 1,879 posts
Posted by YoHo1975 on Wednesday, May 19, 2010 1:49 PM
I wonder if this conversation would take a different tack if the economy and people's paychecks and retirement accounts were in a different place right now?

The Blue Box kits are interesting, because you're right, inevitably, the Pennsy, ATSF, UP stuff would sell and the rest would sit there. But if they didn't make the stuff then people would complain.

It's less of a problem if you model 1960s onwards. As you're as likely to see any roadname on the train. And a TTX well car will work on any line. But again, BB kits were never made for those modern prototypes, so how they would sell is nothing but a guess.

I model from roughly the late 70s through current, and my big issue is locomotives. I see lots of people at train shows running a single very fancy Diesel engine on the point of a train. That's great, that DCC+Sound engine probably cost north of $200. good for you, but I'd like my SP freight to look realistic.

That means 5 or more units probably 3 tunnel motors, an SD45R and an SD40R and if it's really a big consist, maybe a 4 axle unit in there 2. 5 of those units, even at the $80 DC base price for Athearn RTR is $400 once you start talking DCC, you're looking at close to $600 and if you're talking Sound, it could easily exceed $1000. For just 1 train's loco consist.

If you've got a small layout with a handful of units, it's not so bad, but if you're interested in big time modern operations on a club or big home layout, it WILL be a problem.

With Blue Box, that cost was less. Maybe not much less, but every penny saved is a penny to use on something else.

That's my problem. And I'm thinking mainly of in a club setting for me personally.

  • Member since
    July 2006
  • From: west coast
  • 7,670 posts
Posted by rrebell on Wednesday, May 19, 2010 2:37 PM

YoHo1975
I wonder if this conversation would take a different tack if the economy and people's paychecks and retirement accounts were in a different place right now?

Only for some, most people do not plan for things going wrong and they always seem to be surprised when they do. I can tell you that unfortunately  the economy is getting worse again, how can I tell, how well I am doing is always the opposite of the average Joe out there, it has to do with the way I invest.
  • Member since
    January 2010
  • 699 posts
Posted by UP 4-12-2 on Wednesday, May 19, 2010 4:12 PM

Sir Madog

I wish Bowser would still make those PRR loco kits, I´d pay a good price for it, because I know the care that went into this product. Call me old-fashioned, if you like.

I'm not here to call people names.  Maybe my opinions will not agree with others, but I'm likely nearly as "old fashioned" as you.

An unofficial source told me they did an accounting and realized the yearly sales of Bowser kits were down to less than 1/3 of the employee payroll.  Now, maybe a little bit of that time was also connected to the internet/mail order business (selling other people's products) but the stark reality was that production of the kits could not continue.

They were losing money on the kits, period, no matter how you'd do the accounting.  Unfortunately, real American jobs were lost.  People that knew me years ago and were still there...

I work in civil engineering consulting--which quite frankly is a bad business right now with work dried up.  If I could figure out a way to make an honest living in the model train business, which I do love, don't you think I'd do it in a minute?

Even as a sales manager of a fine train store, I could not support my family on the income they pay for the 50 to 60 hours per week they have to work.  That's even if I was a good enough sales person to be the manager.  (I have a friend who is--and I'm just not that good with people--though I loved retail train sales and miss it).

John

 

 

  • Member since
    January 2010
  • 699 posts
Posted by UP 4-12-2 on Wednesday, May 19, 2010 4:21 PM

Sir Madog

 Jobless people don´t buy trains.

Actually, I believed that to be true in the past, and Lewis K. English, Sr., the long-time owner of Bowser, now about 93 years old, set me straight on this issue.

Actually, jobless people do buy trains!  Unemployed men attempt to forget about their problems through various means--which usually does involve their favorite hobby--and even spending more time/money on it than when they are working.

Now, since right after 9/11, the train business has suffered and has not fully recovered, and perhaps this "recession" or more appropriately, depression, is a bit different than others, but Lew English made it crystal clear to me on more than one occasion that, historically, when the economy was bad their business actually picked up!

Nowadays, with the internet, and people shopping for the lowest possible price everywhere, it's more a case of "holding your own"--holding the market you have.

The really good train dealers are basically trying to hold their own and maintain what they have--but sales aren't really down significantly if you average them out over the course of a whole year.  It's hard to know for sure, because there were down years in the past, too.

John

  • Member since
    January 2010
  • 699 posts
Posted by UP 4-12-2 on Wednesday, May 19, 2010 4:31 PM

Profits in the train business?

I have no idea what the actual profits are.  I know the English's lived cheap all those years.

I know that famous train dealers like John Glaab are fond of saying "Wanna make a small fortune in the train business--then start with a large fortune".

Sure there is profit, but if you think only in terms of profit you will not last.  The manufacturers generally do this because they love trains more than money--because there's way better ways to make money.

I have no idea of the actual profit in the train business, but I don't know anybody who lives other than a middle class existence.

My 2c.

John

Moderator
  • Member since
    November 2008
  • From: London ON
  • 10,392 posts
Posted by blownout cylinder on Wednesday, May 19, 2010 6:08 PM

andrechapelon
You've indicated an interest in becoming a manufacturer. OK, fine. You make something I want badly enough, I'll figure out a way to buy it. What I won't do is snivel and whine about your pricing.  And if you don't make something I really want, hey, I'm no worse off than before and you can join the thousands of of other manufacturers of all types  who will never see one red cent from me. You'll be in good company, Gucci, Ferragamo, BMW,  Division Point (OK, I'd like some of their stuff, just not enough to be willing to cough up the asking price).

MY--you got quite piculous about this particular topic didn't you?MischiefSmile,Wink, & Grin I thought I'd get you out of the woodwork---You see, the thing is that there is still an idea about growing a market---at some pointBig SmileEvil--we want people to buy at some point right? Can't do it if the price is so high that the only one who can is a guy who is buying McClaren Supercars---Or the new Bugatti's---

----but then again-----Whistling

LaughLaugh

Any argument carried far enough will end up in Semantics--Hartz's law of rhetoric Emerald. Leemer and Southern The route of the Sceptre Express Barry

I just started my blog site...more stuff to come...

http://modeltrainswithmusic.blogspot.ca/

  • Member since
    June 2003
  • From: Culpeper, Va
  • 8,204 posts
Posted by IRONROOSTER on Wednesday, May 19, 2010 6:25 PM

CNJ831

IRONROOSTER

 Fascinating how we keep rehashing the same old topics in this thread. 

My observations are:

Most people don't want kits they want RTR.  They only buy kits because that's all that's available or they are on a very tight budget.

Paul, on just what "observations" do you base your conclusion? Reviewing the replies made by posters  to this thread, those actually responding with a clear preference and not just roundy-round arguments, turns out by my count to be 16 in favor of kits, as opposed to 5 favoring RTR.

CNJ831

 

 

 

My observations at hobby stores, train shows, and new product announcements.  Fewer kits are in evidence and the ratio has been shifting toward RTR.  The hobby store nearest to me stopped carrying Athearn kits a few years ago (the others were already gone).  Kits are still available, but it is becoming a niche market and dealers stock fewer of them if they have them at all.  OTOH, everyone seems to carry RTR. 

And manufacturers are dropping kits - Athearn is just the latest one - in favor of RTR.

Look at On30, it took off with Bachmann's RTR line.

The great popularity of hirail where it's all RTR.  And N which has been mostly RTR for years.  

All of this says to me the market wants RTR more than kits.

I'm not sure this forum is representative of the marketplace, but I sense that much of the concern is over price - the loss of low cost rolling stock. 

I admit it's all anecdotal, but no one's releasing sales figures for kits and RTR.

Paul


 

 

If you're having fun, you're doing it the right way.
Moderator
  • Member since
    November 2008
  • From: London ON
  • 10,392 posts
Posted by blownout cylinder on Wednesday, May 19, 2010 6:47 PM

IRONROOSTER

All of this says to me the market wants RTR more than kits.

I'm not sure this forum is representative of the marketplace, but I sense that much of the concern is over price - the loss of low cost rolling stock. 

I admit it's all anecdotal, but no one's releasing sales figures for kits and RTR.

I'm not really sure the data we are looking for will be forthcoming either.

Hence we are only speculating about this whole trend, but, the nature of the forums that I've been on is still indicating that a LOT of modellers are not happy about the loss of all these kits and such. That is a segment that is seeing losses--

Look--even if it is a niche market--that market segment will still existGrumpyWhistling

Any argument carried far enough will end up in Semantics--Hartz's law of rhetoric Emerald. Leemer and Southern The route of the Sceptre Express Barry

I just started my blog site...more stuff to come...

http://modeltrainswithmusic.blogspot.ca/

  • Member since
    June 2003
  • From: Culpeper, Va
  • 8,204 posts
Posted by IRONROOSTER on Wednesday, May 19, 2010 8:08 PM

blownout cylinder
...

Hence we are only speculating about this whole trend, but, the nature of the forums that I've been on is still indicating that a LOT of modellers are not happy about the loss of all these kits and such. That is a segment that is seeing losses--

Look--even if it is a niche market--that market segment will still existGrumpyWhistling

 

I understand that it's tough seeing old favorites get dropped.  But while everybody moaned about the end of Bowser locomotive kits, how many went and bought some?

I agree that there will always be kit builders, just like there will always be scratch builders.  Question is: how big is the market for kits?  That is, not just how many actually buy them, but, also, how many do they buy? 

Paul

If you're having fun, you're doing it the right way.
  • Member since
    January 2010
  • From: North East Florida
  • 327 posts
Posted by the North East Rail Modeler on Wednesday, May 19, 2010 8:21 PM
dm9538
Let's say we pay on average about $25 to $35 for an RTR freight car with a high level of detail that is produced largely China.
Yes, I will pay as much as it takes to get "Made With Pride in the USA" back to being stamped on the box and molded on the car (I'm a die-hard patriot, and the way I see it, the charity begins at home. We shouldn't owe our soul to China. No, I'm not talking politics. Don't bring it up.)
dm9538
Question 2 Would you still pay the same $25 to $35 for the same car produced in the US but with less detail. how much less detail I'm not really sure.
Yes, As long as it says "Made in the USA" on it, I'll be more tha happy to add what details are missing, and/or correct flaws. I don't like RTR anything (even buildings) and it gets torn to pieces, so I can re-build and re-detail everything (Bring back the Athern Blue Box kits. That's the reason they were good) RTR means to me Ready To Rebuild.
Moderator
  • Member since
    November 2008
  • From: London ON
  • 10,392 posts
Posted by blownout cylinder on Wednesday, May 19, 2010 9:43 PM

IRONROOSTER

 

I agree that there will always be kit builders, just like there will always be scratch builders.  Question is: how big is the market for kits?  That is, not just how many actually buy them, but, also, how many do they buy

Look. Let us suggest that the market is big enough to talk about it as a cottage industry--enough to maybe give someone enough pin money to get a few extra xmas presents at the end of the year---that market will still exist.

And yet--it will liveMischief

 

Any argument carried far enough will end up in Semantics--Hartz's law of rhetoric Emerald. Leemer and Southern The route of the Sceptre Express Barry

I just started my blog site...more stuff to come...

http://modeltrainswithmusic.blogspot.ca/

  • Member since
    July 2006
  • From: west coast
  • 7,670 posts
Posted by rrebell on Wednesday, May 19, 2010 10:48 PM

blownout cylinder

IRONROOSTER

 

I agree that there will always be kit builders, just like there will always be scratch builders.  Question is: how big is the market for kits?  That is, not just how many actually buy them, but, also, how many do they buy

Look. Let us suggest that the market is big enough to talk about it as a cottage industry--enough to maybe give someone enough pin money to get a few extra xmas presents at the end of the year---that market will still exist.

And yet--it will liveMischief

 

You know I just noticed you were from Canada, the name of your railroad caught my eye as we used to have a farm near Scepter in Saskatchewan.
  • Member since
    April 2001
  • From: US
  • 3,150 posts
Posted by CNJ831 on Thursday, May 20, 2010 10:26 AM

IRONROOSTER

CNJ831

IRONROOSTER

 Fascinating how we keep rehashing the same old topics in this thread. 

My observations are:

Most people don't want kits they want RTR.  They only buy kits because that's all that's available or they are on a very tight budget.

Paul, on just what "observations" do you base your conclusion? Reviewing the replies made by posters  to this thread, those actually responding with a clear preference and not just roundy-round arguments, turns out by my count to be 16 in favor of kits, as opposed to 5 favoring RTR.

CNJ831

 

My observations at hobby stores, train shows, and new product announcements.  Fewer kits are in evidence and the ratio has been shifting toward RTR.  The hobby store nearest to me stopped carrying Athearn kits a few years ago (the others were already gone).  Kits are still available, but it is becoming a niche market and dealers stock fewer of them if they have them at all.  OTOH, everyone seems to carry RTR. 

And manufacturers are dropping kits - Athearn is just the latest one - in favor of RTR.

Look at On30, it took off with Bachmann's RTR line.

The great popularity of hirail where it's all RTR.  And N which has been mostly RTR for years.  

All of this says to me the market wants RTR more than kits.

I'm not sure this forum is representative of the marketplace, but I sense that much of the concern is over price - the loss of low cost rolling stock. 

I admit it's all anecdotal, but no one's releasing sales figures for kits and RTR.

Paul, in response to your basis for believing that the desire for RTR far outweighs that for kits today, let me again point to some situations I've posted earlier that would tend to indicate that things aren't necessarily what they might seem to you.

As I've said, Horizon/Athearn apparently curtailed the availability of its own supposedly "available" BB kits 12 to 24 months prior to announcing that kits were no longer selling. How does one judge the salability of a product that is essentially not even being produced? Likewise, the decision to drop the line was essentially Horizon's and from what I was told (pretty much directly); no Athearn market research was presented at the brief critical meeting when the final decision was made.

Now the people at Horizon are certainly no fools when it comes to the hobby industry. They appreciate that the hobby market is steadily shrinking and to maintain a certain level of profit under the circumstances, reducing production runs and increasing prices is the best answer. It was not possible to double the price of the long established kits, but it was reasonable to offer them RTR to justify the increase. The production cost difference between the two would be small, but the profit margin per unit sold significantly larger. Likewise, if kits weren't available to many hobbyists - particularly those newbies with ready cash, a small but very significant faction in the hobby today doing much of the purchasing - they would be left with little other choice.

That a number of other manufacturers followed Horizon/Athearn into RTR while dropping, or curtailing, their kits, is no surprise either. However, not all were successful in doing so. They appreciated that they were likely to garner a better profit per sale and by limiting runs, get it faster than kit sales would ever allow. 

I will agree with you that this, or most other "popular" forums, aren't a very good place to gauge what is actually going on in the marketplace, as they are highly bias toward newcomers and younger (under 45) hobbyists, who are a minority. In fact, I know relatively few hobbyists over 55 that are on-line. Those that are participate mainly in the highly specialized, advanced, forums from what I've seen and do reflect a totally different approach to the hobby than is seen here. 

You pointed out the great popularity of RTR in Hi-Rail, but I would counter that Hi-Rail hasn't been regarded as part of the adult scale model railroading hobby in over 50 years. In addition, when MR and RMC ousted that pursuit from the our hobby, N gauge was yet to exist. One has to wonder just where it would have fallen in this schism, considering that HO, OO and TT were all considered truly craftsman's gauges at the time, while N was much more RTR oriented.

An additional point worthy of comment; in years long past, most of the hobby's companies were owned by actual hobbyists. Many loved the hobby so much that they would tend to sacrifice profits to keep it affordable and expanding. Today, the majors are for the most part simply businesses run by boards, few members of whom have any direct relationship with the practicing the hobby any longer. Some of the smaller companies are still old-school, but in the changing marketplace they are often seem uncomfortably close of the survival/non-survival line.

Finally, those fully aware of the hobby's history understand that Irv Athearn, truly the hobby's 800 lbs gorilla, was the controlling influence in the hobby pricing for decades, keeping them very reasonable for the hobbyist. Long before he gave up the reins of his company, I had pointed out to others that I felt once he was gone hobby pricing would go out of control. Try graphing locomotive prices from the 1970's to today and see the dramatic upsurge that takes place just a few years after Irv passed from the scene...and it's still accelerating.

CNJ831   

  • Member since
    July 2006
  • From: west coast
  • 7,670 posts
Posted by rrebell on Thursday, May 20, 2010 10:59 AM

People keep on saying the hobby is shrinking, this is not the case (as far as numbers goes), now as a percentage, yes it is dramatically but manufactures look at numbers and not percentages. Most of the people I regularly talk to either online or in person would not own MR mag and a great deal only go to hobby shops for bits a pieces. In fact I know a dozen or more manufactures that are expanding their lines or building new companies from the ground up, now these are craftsman kit manufactures but they are a growing part of the hobby and there are a lot of people into that that are only into that just as there are people that are only interested in a plywood central.

  • Member since
    April 2001
  • From: US
  • 3,150 posts
Posted by CNJ831 on Thursday, May 20, 2010 12:51 PM

rrebell

People keep on saying the hobby is shrinking, this is not the case (as far as numbers goes), now as a percentage, yes it is dramatically but manufactures look at numbers and not percentages. Most of the people I regularly talk to either online or in person would not own MR mag and a great deal only go to hobby shops for bits a pieces. In fact I know a dozen or more manufactures that are expanding their lines or building new companies from the ground up, now these are craftsman kit manufactures but they are a growing part of the hobby and there are a lot of people into that that are only into that just as there are people that are only interested in a plywood central.

And you have actual citable statistics that backs up your statement? Please, by all means post them!

I've been asking here for the better part of ten years now for someone, anyone, to produce  verifiable evidence that the hobby isn't shrinking, because I've found plenty of material that indicates it is. Over the years a lot of personal opinion, all lacking anything to substantiate it, has been voiced here, but in all that time not one single bit of factual evidence has ever surfaced. Kinda odd, don't you think?

I will agree, however, that there is a very significant percentage of advanced hobbyists who today choose not to read MR, or participate in most forums (this I've pointed this out myself many times), who are avid kit builders, but many, if not most, of those folks were formerly scratchbuilders who have switched approaches. They are not some new segment of model railroading that is generating totally new hobbyists in numbers. Nearly all that I encounter are past middle age and thus their numbers are in decline, just as with the hobby overall. The fact that the field of craftsman kit manufacturing has expanded in recent years is largely because the prime company in this field pretty much priced a lot of its former customer base out of the market, leaving an opening for newcomers (but look where most of the new guys' pricing has gone of late!).

CNJ831 

  • Member since
    December 2006
  • 1,879 posts
Posted by YoHo1975 on Thursday, May 20, 2010 12:53 PM
CNJ831

Finally, those fully aware of the hobby's history understand that Irv Athearn, truly the hobby's 800 lbs gorilla, was the controlling influence in the hobby pricing for decades, keeping them very reasonable for the hobbyist. Long before he gave up the reins of his company, I had pointed out to others that I felt once he was gone hobby pricing would go out of control. Try graphing locomotive prices from the 1970's to today and see the dramatic upsurge that takes place just a few years after Irv passed from the scene...and it's still accelerating.

CNJ831   

Precisely. It all goes back to uncle Irv. Many things like this, not just in hobbies but in many businesses go back to personalities. Look at the Disney Corporation. It has not been the same since Walt and Roy died. They are successful sure, but they aren't the same. Athearn set the prices and set the trends. Irv Athearn set prices and trends. And again, I'll say, that I really don't think this is a kit vs. RTR thing. This is a perceived value issue. Athearn kits were perceived to be a great value. RTR is perceived to be too expensive. Perception may or may not be reality in this case, but anyone who has looked at human psychology or sociology knows that reality doesn't matter at all. Perception is all that matters and I perceive that life was better in the BB days.
  • Member since
    September 2002
  • From: California & Maine
  • 3,848 posts
Posted by andrechapelon on Thursday, May 20, 2010 1:18 PM

Paul, on just what "observations" do you base your conclusion? Reviewing the replies made by posters  to this thread, those actually responding with a clear preference and not just roundy-round arguments, turns out by my count to be 16 in favor of kits, as opposed to 5 favoring RTR.

CNJ831

What's that old line about "money talks and BS walks"? It's easy to say one is for kits since it doesn't cost anything, it's a whole other matter to lay out the cash for them. It doesn't matter what people say, it's what they actually do. Yet, amazingly, kits are available, just not the mass produced screw-driver assembly kits anymore. Somebody's buying kits, just not in massive Athearn BB numbers. and more are being produced every year. La Belle Woodworking has been in business since 1947. Somebody's got to be buying their kits else they'd have gone out of business years ago.

You can still get Silver Streak kits from Ye Olde Huff N Puff. They ain't cheap (costing about as much as a plastic RTR car), but they're still available. So are a number of the  Suydam kits now available from Alpine. However, they represent an earlier era and don't quite fit in with anyone modeling later than the early post-steam era.

Whether there are or are not more modern era kits available is of little consequence to those of us stuck in the steam or steam/diesel transition era since we wouldn't buy modern era items anyway, kits or RTR. I personally don't care that you can't get an SD70ACe kit because I wouldn't buy an SD70ACe under any circumstances. Whether or not it's produced as a  kit, RTR or both ways is up to those who will actually pony up the cash for one and the manufacturer's determination  of what produces the best return.

An additional point worthy of comment; in years long past, most of the hobby's companies were owned by actual hobbyists. Many loved the hobby so much that they would tend to sacrifice profits to keep it affordable and expanding.

Yeah, and they're out of business now. How does that help the hobby? Varney, Mantua, Penn-Line, John English, J-C Models, Tru-Scale, to name a few. The ones that were successful and survived changed with the hobby instead of trying (like Henry Ford with the Model T) to sell the same thing year after year after year. It does a fat lot of good for the hobby (not to mention your business) if you're a manufacturer who thinks you can sell at a unit  loss and make it up on volume. Love of the hobby is one thing. Love of the hobby in the absence of good business sense is idiocy and only leads to bankruptcy.

. Andre

 

It's really kind of hard to support your local hobby shop when the nearest hobby shop that's worth the name is a 150 mile roundtrip.
  • Member since
    April 2001
  • From: US
  • 3,150 posts
Posted by CNJ831 on Thursday, May 20, 2010 4:46 PM

andrechapelon

Love of the hobby is one thing. Love of the hobby in the absence of good business sense is idiocy and only leads to bankruptcy.

. Andre

So does pricing your product ever higher in an attempt to find out what is the absolute maximum the traffic will bear. When the big boys with all that supposed business sense, but no understanding of, or really caring about, the hobbyist, allow prices to soar beyond the point of no return and it all comes tumbling down, look for them to leave the shambles and convert to the manufacture of electric razors, or something similar without caring, or missing a beat.

CNJ831 

  • Member since
    December 2006
  • 1,879 posts
Posted by YoHo1975 on Thursday, May 20, 2010 5:00 PM
andrechapelon

What's that old line about "money talks and BS walks"? It's easy to say one is for kits since it doesn't cost anything, it's a whole other matter to lay out the cash for them. It doesn't matter what people say, it's what they actually do. .

you can't buy something that doesn't exist. the Blue Box line never produced modern prototypes past the 70s and production tailed off at the end.
Whether there are or are not more modern era kits available is of little consequence to those of us stuck in the steam or steam/diesel transition era since we wouldn't buy modern era items anyway, kits or RTR.
And in my case, a wall of BB kits of transition era boxcars with roof walkways, shorty Passenger cars and cabeese is less than nothing to me. I'm not sure what the point you're trying to make?

Your assertion is dead wrong on Henry Ford too. Athearn survived for how many decades on the Model T formula? They didn't need to innovate their process, they needed to produce different kits and make the changes to keep prices down. Anecdotally, when I'm at the club, the people running transition era are usually 75% shake the box kits. 10% RTR and 15% craftsman kits. Engines are usually fancy new Steam. For the Modern guys, it's all RTR, because that's all they can get. But the people that can use BB kits have them.

  • Member since
    July 2006
  • From: west coast
  • 7,670 posts
Posted by rrebell on Thursday, May 20, 2010 7:41 PM

I know of at least 10 craftsman kit manufactures that did not exist 10 years ago and another 5 that are new but the bulk of their offerings are not and if you go back 30 years such names as MTH and Scenic Express did not exist plus hundreds of others. What you ask, to document is impossible because a lot of companies don't even advertise let alone share data. Also a majority of people in the hobby are lone wolves. You can't judge from MR sales or who advertises there, of the people I know only I subscribe to MR and that may be ending soon unless they offer a deal like last time that hooked me in for 3 years (first time I subscribed and my currant incarnation as a model railroader is over 20 years), just dropped my Gazette subscription. So if you can think of a way to document I would be happy to do so.

  • Member since
    July 2006
  • From: west coast
  • 7,670 posts
Posted by rrebell on Thursday, May 20, 2010 7:43 PM

I just thought, show me documentation that the hobby is declining!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Subscriber & Member Login

Login, or register today to interact in our online community, comment on articles, receive our newsletter, manage your account online and more!

Users Online

There are no community member online

Search the Community

ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
Model Railroader Newsletter See all
Sign up for our FREE e-newsletter and get model railroad news in your inbox!