About a year ago, the Bachmann Spectrum 4-6-0 w/DCC & Sound was advertised at $ 184,99 and now the same source sells it for $ 214,99. Compared to the MSRP of $ 360,00, that´s still a bargain, but a steep increase of over 16 % in just one year!
At times, when incomes tend to shrink, one would think that prices would at least stay stable, but certainly not to be increased.
Up until recently, the loco sold for Euro 319,00, which is $ 440,22. It is now "down" to Euro 264,90 or $ 365,55. The price includes 10% Customs duty and 19 % VAT. There is no way I ever could lay out close to 400 bucks for a bread-and-butter loco, made in China.
Is the industry pricing itself out of the market?
Sir Madog About a year ago, the Bachmann Spectrum 4-6-0 w/DCC & Sound was advertised at $ 184,99 and now the same source sells it for $ 214,99. Compared to the MSRP of $ 360,00, that´s still a bargain, but a steep increase of over 16 % in just one year! At times, when incomes tend to shrink, one would think that prices would at least stay stable, but certainly not to be increased. Up until recently, the loco sold for Euro 319,00, which is $ 440,22. It is now "down" to Euro 264,90 or $ 365,55. The price includes 10% Customs duty and 19 % VAT. There is no way I ever could lay out close to 400 bucks for a bread-and-butter loco, made in China. Is the industry pricing itself out of the market?
I bought my first car in 1974. It was a Plymouth Valiant. While it was a nice car I could never buy a car for the price I paid for it today. Indeed my current vehicle cost almost 6 times what I paid for the Plymouth and it has a heck of a lot more equipment and rides much better than did the old Plymouth. Inflation hits everything equally hard so what if this happens in the hobby market.
The fact is that we are in the same situation many peple were in ib 1929 after the Stock Market crash back then. And we are there for many of the same reasons which I won't go into as will come across as a political message.
Model railroading as a hobby the hobby we know didn't exist back then. If you wanted to model railroad, there were no companies like Athearn, Walters, Bachman r many of ther others to supply stuff. You had to make most of it from scratch and that made it a very different hobby from what we have today. But if you come right down to it, modelers were diferent back then since most had the skills tomake everything they needed.
So what about inflation? It does exist and it allways and always will exist. As modelers we have to realize that we can't always afford to buy everything we see. We may like Cadillacs, but we may not beable to afford more than a Chevy. So yo buy wha you can and live wih that or make your own.
Irv
Strange that the US Social Security administration recently announced that they won't increase monthly benefits for cost of living adjustments because inflation is supposedly negative (or below a set threshold).
I too have noticed that deals are harder to find in our hobby lately. I suspect it has more to do with the limited run manufacturing strategy which has kept inventories relatively low. Good 'Ol fashioned supply & demand takes over to keep prices higher.
In this case, I don't think it's inflation. Rather, it's the realities of the international marketplace. We have had years of "offshoring" of our production to China, primarily. Now, the Chinese people want higher wages. The stockpiles of low-priced raw materials that built up early in this recession are running out, and those bargain prices are gone, too. Fuel prices are up, so shipping costs more.
Inflation will be back, but we are actually just seeing trains, in particular, catch up to where they would have been.
It takes an iron man to play with a toy iron horse.
MisterBeasley In this case, I don't think it's inflation. Rather, it's the realities of the international marketplace. We have had years of "offshoring" of our production to China, primarily. Now, the Chinese people want higher wages. The stockpiles of low-priced raw materials that built up early in this recession are running out, and those bargain prices are gone, too. Fuel prices are up, so shipping costs more. Inflation will be back, but we are actually just seeing trains, in particular, catch up to where they would have been.
Don't forget the international curency exchanges that continues to affect what the dollar is worth less than it was worth even several weeks ago. I Think that causes most of the price increases these days. Couple that to the lack of confidence in the US economy and the value of anything bought with dollars is certainly going to cost more. It therefore really isn't inflation but a lack value in the dollar.
The retail MRSP of HO engines keep going up and up but i don't pay it. Most sell for way less then the MFG thinks it should. I have 2 Bachmann 4-6-0's and 2 Bachman 4-4-0,s both spectrum and paid less than $70.00 each new.
I also have about 10 Atlas and Broadway engines with sound and won't pay more than $110.00 New.
Just have to shop around more.
Have you noticed the price of silver? I had some siver coins i saved from the 1960's. I just sold them for 15x face value. Got $15.00 for every dollar saved. Thats $15,000 for $1000.00.
Bob
Sir Madog About a year ago, the Bachmann Spectrum 4-6-0 w/DCC & Sound was advertised at $ 184,99 and now the same source sells it for $ 214,99. Compared to the MSRP of $ 360,00, that´s still a bargain, but a steep increase of over 16 % in just one year! At times, when incomes tend to shrink, one would think that prices would at least stay stable, but certainly not to be increased. Is the industry pricing itself out of the market?
Ulrich, up until just the past decade, or so, most model railroad hobbyists were a pretty frugal bunch of guys who could do their modeling mainly through the use of their own skills, inexpensive kits and materials, and ingenuity. Because so much in the way of kits/materials they employed were either crude, or fairly basic and were modified and detailed aftermarket by the hobbyist, manufacturers' costs and their selling prices could be kept relatively low. Then, too, model railroading had had a long history of being largely a "blue collar" man's hobby here in the U.S.A., so a broad spectrum of wealthy guys wasn't perceived to be there to justify higher prices...except from the 1980's onwards, as the brass market's prices started to soar.
Way back when, Linn Westcott editorialized in MR that, "What the hobby needs are some rich guys, so that the manufacturers will offer more sophisticated, detailed, items." Well...Linn's wish finally came true over the past 15 years. There was an obvious influx of folks in the 1990's and early 2000's for which money wasn't a seriously limiting factor, but skills were and whose approach to the hobby was largely not to build much in the way of their equipment, but simply to buy it ready to go.
Although these guys constituted only a modest percentage of all hobbyists, the manufacturers quickly recognized this change in their customer base and since then prices have gone nowhere but up. Just as historically occurred with the brass market, locomotive, rollingstock and structure prices have rapidly risen and production runs have declined drastically. One normally does this only when targeting a very specific market; one where the potential customers have little concern for the prices that must be paid to procure the product. Don't overlook the manufacturers' knowledge of hobby trends either. They appreciate that the skills level of the average hobbyist has very significant declined over the last generation and that even the typical less wealthy hobbyist pretty much has nowhere else to turn for their models but to their higher priced goods (kits are essentially gone and cheaper equipment at modest prices are slowly dwindling in the marketplace).
So, in light of all this I would venture that, regardless of the world's economic situation, don't expect to see any across the board reductions in model prices in the near future as many of us weather personal harder times. I would be willing to bet that many of the newer manufacturers would rather quit the game altogether, rather than reduce their current prices and profit margins to appeal to the low-end market.
CNJ831
I for one can't understand how equipping a $100 DC loco with a decoder and sound chip jacks the price of it up to 2-3 hundred or more. If you add a decoder and sound module yourself to a DC loco, it costs a fraction of that. Is the rest labor? Feels like the market is taking advantage of us because we want our DCC and sound. It's like buying a new $25000 car--OK, you want a GPS and back seat DVD player?--$75000. We'd all walk out of the dealer showroom in a heartbeat. Lucky for me I bought all my stock a few years ago when Spectrum and Genesis DC steam was $100 (or less! ), Proto and Atlas DC diesels were $40 on average and Athearn blue boxes were $4-$7 in the hobby shops. Ah, the good old days!
Robby
I don't think you can make judgements about inflation based on one item. A few years ago when the Walthers 75th anniversary catalog came out, just for grins I compared the prices with the 50th anniversary catalog which I had saved. By comparing just items that were the same as they were 25 years, Kadee #5 couplers, structure kits, etc., I found that most items, when adjusted for inflation, were as cheap or cheaper than they had been before. Only a few were more expensive. One had not changed at all in price without adjusting for inflation. When it comes to locomotives, they have improved so much that I think we are getting a lot more for our dollar than in the past.
As my own personal benchmark for inflation, I compare prices of MacDonald's food items to what they were in 1968 when I got my first job there. The Big Mac was 49 cents, now $3. The fish sandwich was 30 cents, now also $3. Hamburgers were 20 cents and cheeseburgers 25 cents. Those are still under a buck. So the increase in price has ranged from 4 to 10 times what it used to. Overall, I'd guess the average is about 7 to 8 times which is probably in line with overall inflation.
Well, I do sense an overall price increase when I study the ads in MR. Aside from the fact, that people in China begin to demand higher wages for the work they do, I think that importers/manufacturers attempt to reap additional profits. China keeps the exchange rate RMB/USD at an artificially low level to foster exports (and to counteract the wage increases), so that can´t be the reason for the increased prices in the US market.
True, scratch building could be an answer to beat inflation, but not all of us have the means and skills to build a loco.
Germany has been more of a R-T-R market, right from the beginning. A lot of German manufacturers have also turned into importers, having their locos and cars manufactured in China. A Brawa Bavarian State Railway S2/6 4-4-4 steam loco, manufactured at the same plant as the Bachmann Spectrum 4-6-0, with the same level of detail and quality, sells for about $ 620,00 here! Buying a DCC/sound - equipped steamer below a tag of $ 500 is close to impossible. Linn Westcott was right with his statement - you need to be a rich guy to be able to afford that!
Despite being still sizable, the German model railroading community is shrinking year by year, not because of lack of interest, but because of pricing. Show me a parent, who is able to spend $ 1,500 for a Christmas starter set to kindle his son´s/daughter´s interest in trains.
I am afraid that I start to see the same trend in the US market.
Sir Madog Despite being still sizable, the German model railroading community is shrinking year by year, not because of lack of interest, but because of pricing. Show me a parent, who is able to spend $ 1,500 for a Christmas starter set to kindle his son´s/daughter´s interest in trains. I am afraid that I start to see the same trend in the US market.
That's what happened to Lionel toy trains in the U.S.A. over the years, as well. While for decades Lionel was the premier manufacturer of children's toy trains, today it is the manufacturer of mainly collectible, high-end, model trains affordable almost exclusive to only well off adults. Lionel chose to pursue the money. So are today's scale model train manufacturers.
Once regarded as physically the third arm of Christmas in the U.S.A. by both children and adults (the other two being Santa Claus and the Christmas tree), toy electric trains for Christmas are essentially a long vanished element of the holidays for today's kids. And as a result, the ranks of the supposed "next generation" of model railroaders here will be exceedingly thin.
I think it's funny that the Chinese workers are demanding higher wages, yet the quality control is non existent. I don't know how many products I have purchased lately that were defective, I'm always returning things back to the LHS.
If you're gonna jack up the prices on us, at least make sure the stuff works. Geeeeeesh.
Michael
CEO- Mile-HI-RailroadPrototype: D&RGW Moffat Line 1989
Michael,
the word quality is not existing in the Chinese language, only the word copy
Not so long ago, I was able to talk to one of the product managers from one of the leading MRR brands in Germany. They had, and still have, big quality issues with their Chinese sub-contractors. They have resolved it by establishing their own, non-Chinese people, for QA in China. Which, of cause, adds to the cost.
I dare say, if you´d add up all the cost of quality, you might as well move back the production to the US or Germany or .... A lot of renowned companies have already begun to do this.
Whichever way we look at it, we will have to face rising costs in our hobby!
Ulrich,
My sediments exactly! If we're gonna pay more for these products, bring the manufacturing back to the US (or Germany in your case) so we don't have to deal with the quality issues.
These companies have to see the quality issues are affecting there sales. I now stay away from some products because of defective issues. I vote with my wallet.
On a side not, at least these companies are listening to us and are starting to put Kadee couplers on their rolling stock!!! I just noticed Exactrail's new releases have Kadee #5s already installed. Link
Sir Madog the word quality is not existing in the Chinese language, only the word copy
No, the Chinese can manufacture items that are equal the quality of any item in the world. The problem is that level of quality costs as much there as it does anywhere else. If you're shopping based solely on price, you're going to suffer the consequences, and the Chinese have no problem cranking out cheap crap if that's all you're willing to pay for.
I think there are several factors here, all working against an affordable hobby.
1. Standard of living and wages are increasing overseas where much of our Model Railroading locomotives and cars are made, as well as, track and other stuff are made.
2. Currency exchange is changing. The U.S. is pressuring China to revalue their currency. While that's good for us as a whole, it's bad for model railroading prices.
3. Since about 2000, Middle class income has not kept up with inflation (recently in many cases, it has actually declined as workers are forced to take pay cuts or furloughs).
4. The quality bar has gone up significantly. Museum quality is now the norm. Good running out of the box is expected.
Unfortunately, I think think this will only get worse going forward.
Paul
Milepost - yeah, sure they can, but they are not interested in, unless they see top $ for it. Remember that their background is a communistic economy, where a plan determined the output, and only quantity counted. That thinking is still around.
It finally boils down to "you get what you pay for" - I´d rather pay the premium to my own folks, though!
Milepost 266.2 Sir Madog: the word quality is not existing in the Chinese language, only the word copy No, the Chinese can manufacture items that are equal the quality of any item in the world. The problem is that level of quality costs as much there as it does anywhere else. If you're shopping based solely on price, you're going to suffer the consequences, and the Chinese have no problem cranking out cheap crap if that's all you're willing to pay for.
Sir Madog: the word quality is not existing in the Chinese language, only the word copy
I'm sorry, but is NOT true. The products that I have had quality issues with are top of the line rolling stock with high prices. One example was a recent purchase of the new release Walthers Bi-level Autoracks, they were a whopping $28 each (at my LHS), and were $40 each on Walthers site. I had to replace ALL of the wheelsets as the darn things would not even roll, I mean come on. So I had to spend extra money to get them to roll correctly when they should have came this way right out of the box.
Michael - it is a question of who´s bagging the money, the manufacturer or the importer? My guess is, that for a $ 28 car, the manufacturer sees not more than $ 5.
Sir Madog Michael - it is a question of who´s bagging the money, the manufacturer or the importer? My guess is, that for a $ 28 car, the manufacturer sees not more than $ 5.
Yes, this is very likely. People often forget that there is the manufacturer's price (under contract), and then a distributor (could be Bachmann themselves, just as an example), and finally the seller., each wanting to build in close to a 100% profit margin. The final selling price, understandably, rises very quickly. And if the distributor is Walthers, who might sell to other distributors/suppliers to LHS's, now you have another tier in the price setting.
I think I can understand why BLI went the route they did over the past three years or so. It may have been contrary to common practices, but they eliminated distribution/re-seller costs that the customer had to absorb, and it may have helped to keep them afloat in tough times. Not sure, though, just guessing.
-Crandell
One might gripe about the prices of the hobby but look at other hobbies out there and what they cost. You spend $200 on an engine today it will mostly likely be running 20 years from now. Spend $1000 on build and equip an R/C airplane, it could be gone in a matter of minutes. I love sailing and when I had my boat I spent $1500 year to keep it parked at the marina for about 8 months out of the year, and our slip fees around here are a fraction of what someone in Florida would pay. Drop a winch handle over the side, there is another $100. Blow a sail, another $1000 or more And for those of you who love to tinker on old cars, you know the pain. Yes prices go up and one can spend a pile of money on MRR but for the most part our equipement will still be working a lot longer than most the trains we model.
Sir MadogAbout a year ago, the Bachmann Spectrum 4-6-0 w/DCC & Sound was advertised at $ 184,99 and now the same source sells it for $ 214,99. Compared to the MSRP of $ 360,00, that´s still a bargain, but a steep increase of over 16 % in just one year!
This isn't necessarily inflation or importing or anything like that. I think it is part of a normal cycle of marketing. Look at the LifeLike and BLI examples from the past decade. The companies put their prices up high in the sky on their LIMITED RUN products to see if anyone bites. Some do they make bunches of money. But sometimes people don't. Remember the first Walther's release of the Proto-2000 stuff. Way high, no one bought. Suddenly three months later the prices fell back down to realistic prices. BLI stuff sat in the hobby store shelves for months on end. BLI had to sell stuff so they went wholesale and sold a ton (much to the ire of the hobby stores that had stuff sitting on the shelf they had paid more than BLI was charging direct).
They (Walther's) have just tried this again with their new passenger cars. Prices jumped from an average of about $40 to $60 between the Hiawatha set and the 20th Century. I'm waiting to see if people are really paying that outrageous price or not. If not they will appear on the sales flyers soon (like the Empire Builder cars). I feel sorry for everyone who paid for them when they first came out as now I've seem them for about 1/2 the original price.
I guess I'm saying I think a lot of the high pricing is the gullibility of the consumer. If no one pays the high price - it will come down.
.
Does it matter who bags the money?
While I doubt that most model railroad importers or manufacturers are looking for huge profits or easy money, a healthy profit is essential for conducting business and risking capital in the first place. I learned never to begrudge another person his money as long as it was come by honestly (not through cheating or intentional fraud).
It is the competition between the importers/manufacturers - and our desire to buy and pay for that better quality - that has driven the quality bar to where it is today. And even today's quality level is not good enough for many. Cut-throat competition forces one to continually improve or go away. Cut-throat competition also tends to lead to reduced profits for spells of time until innovation takes place through product improvement. But profits are maximized by restricting your competition through government actions (currency valuation, import duties, subsidized loans or labor, etc) or other means (exclusive contracts and distribution) that have nothing to do with product improvement. As in other areas of life, it is usually much easier to destroy the knees of your competitor than it is to improve yourself and your standing through hard work and effort.
What has been lost from the mr market place is the middle ground - the kits, the Mantuas, Roundhouse, Varney, and even IHC locomotives fell into this group. Locomotives that had reasonable, but not great, mechanisms, and relatively sparse detail for a significantly lower price than the top end of the day (Japanese and Korean brass then, Chinese plastic and die cast today). These locomotives were upgradeable (with a little skill and patience) into some pretty sweet, and certainly acceptable locomotives.
The bottom end is still with us in the form of Bachmann and Model Power train set stuff. But now, the bottom end is spurned as unfit even for kids. Back then, it was certainly acceptable for Christmas gifts, for kids, and even for many a model railroader on a very limited budget, who would take these items and improve them. No, they couldn't (and can't) become the equivalent of today's top end. But they were marginally functional from the get-go, and served as the poor man's hobby entry point.
Even today, I still look at the "junk" box at my LHS, and pick out a Mantua "Old Time" flat car with stakes, Talgo trucks, and X2F couplers for $2-$3. Or a Bachmann bobber caboose. Most of these are already weighted. Immediately, I cut off the truck mount couplers and replace with body-mounted Kadees. The wheel sets are also replaced - most of the time the trucks are still functional enough to use for a while. Later on, I'll get around to placing the trucks, putting more refined truss rods on, adding brake and other details, and making it a much better model. In the meantime, the "junker" can roll on my layout while I attend to other projects. Not so much different from what I see in the photos in MR or Model Trains from the '50s and '60s.
my thoughts, your choices
Fred W
Motley Ulrich, My sediments exactly! If we're gonna pay more for these products, bring the manufacturing back to the US (or Germany in your case) so we don't have to deal with the quality issues. These companies have to see the quality issues are affecting there sales. I now stay away from some products because of defective issues. I vote with my wallet. On a side not, at least these companies are listening to us and are starting to put Kadee couplers on their rolling stock!!! I just noticed Exactrail's new releases have Kadee #5s already installed. Link
Some of them can't. For lack of a better term, their stuck. Rapido looked into that very thought, and the startup costs were something like twice or more the manufacturing costs. The actual assembly process didn't see that mch cost increase relatively, but there weren't factories in Canada that could do the printing, the molding, etc. that they needed. Being a small company, it was physically not possible. It's in one of Shron's timetables, I'm not sure wchich issue.
-Morgan
Motley Milepost 266.2: Sir Madog: the word quality is not existing in the Chinese language, only the word copy No, the Chinese can manufacture items that are equal the quality of any item in the world. The problem is that level of quality costs as much there as it does anywhere else. If you're shopping based solely on price, you're going to suffer the consequences, and the Chinese have no problem cranking out cheap crap if that's all you're willing to pay for. I'm sorry, but is NOT true. The products that I have had quality issues with are top of the line rolling stock with high prices. One example was a recent purchase of the new release Walthers Bi-level Autoracks, they were a whopping $28 each (at my LHS), and were $40 each on Walthers site. I had to replace ALL of the wheelsets as the darn things would not even roll, I mean come on. So I had to spend extra money to get them to roll correctly when they should have came this way right out of the box.
Milepost 266.2: Sir Madog: the word quality is not existing in the Chinese language, only the word copy No, the Chinese can manufacture items that are equal the quality of any item in the world. The problem is that level of quality costs as much there as it does anywhere else. If you're shopping based solely on price, you're going to suffer the consequences, and the Chinese have no problem cranking out cheap crap if that's all you're willing to pay for.
Ah, what the others are saying though, is Can the Chinese produce equal or greeater quality product? Yes. Are they? No. Will they? Probably not.
It's a funny thng. During good economic times, prices are lower, but during hard economic times prices rise to get the same profit margins.
Everything is going up. But there are claims here in the USA that there is "no cost of living increase" needed for those who draw Social Security. FOr two years in a row no less. Yet our esteemed Congress men and Representatives have voted themselves a raise the last two years!!
Our food bill is up by about $100-150 a month compared to what it was 2-3 years ago, and we have not changed our eating habbits and have gone to generic products to save costs. COupons off name brands often don't bring the cost down below the generic or store brand so they are useless.
Even gas has been going up again around here, and we know heating oil and propane will rise as the heating season is now here.
The hobby is no different. COsts are rising faster than my eyes can digest the increases! It is during this time that we can show manufacturers and LHS that we won't stand for jacking up prices! We can do so by not buying anything new. WE can stick with putting together kits we have amassed in better years, minimizing what we spend by searching craft shops for paints and scenery stuff, shredding our own painted foam for scenery, working on the scenery of our layouts, resorting to scratch building {for some of us attempts at scratch building LOL}. There are many things we can do to keep active in the hoby "on the cheap" so to speak. WE can save for and eliminate loco or RR car purchases to a one coveted model produced. After all, one can buy 3 $100 locos or only one $350 loco! Their choice!
*sigh* *alas* What can one do? Only tighten the belt buckle and grumble to anyone who will listen and commiserate.
-G .
Just my thoughts, ideas, opinions and experiences. Others may vary.
HO and N Scale.
After long and careful thought, they have convinced me. I have come to the conclusion that they are right. The aliens did it.
galaxy It's a funny thng. During good economic times, prices are lower, but during hard economic times prices rise to get the same profit margins. Everything is going up. But there are claims here in the USA that there is "no cost of living increase" needed for those who draw Social Security. FOr two years in a row no less. Yet our esteemed Congress men and Representatives have voted themselves a raise the last two years!! Our food bill is up by about $100-150 a month compared to what it was 2-3 years ago, and we have not changed our eating habbits and have gone to generic products to save costs. COupons off name brands often don't bring the cost down below the generic or store brand so they are useless. Even gas has been going up again around here, and we know heating oil and propane will rise as the heating season is now here. The hobby is no different. COsts are rising faster than my eyes can digest the increases! It is during this time that we can show manufacturers and LHS that we won't stand for jacking up prices! We can do so by not buying anything new. WE can stick with putting together kits we have amassed in better years, minimizing what we spend by searching craft shops for paints and scenery stuff, shredding our own painted foam for scenery, working on the scenery of our layouts, resorting to scratch building {for some of us attempts at scratch building LOL}. There are many things we can do to keep active in the hoby "on the cheap" so to speak. WE can save for and eliminate loco or RR car purchases to a one coveted model produced. After all, one can buy 3 $100 locos or only one $350 loco! Their choice! *sigh* *alas* What can one do? Only tighten the belt buckle and grumble to anyone who will listen and commiserate.
Ok so we don't buy anything until the prices go down to acceptable levels. Sounds good but it's a bit naive, because all its gonna do is force yur LHS out of buisness andreduce the number outlets you can find any kind of a decent model railroad product, If the LHS's keep leaing the field all you are going to accomplish is to give companies like Walthers even more power to determine what is available and at what price. Personally, I thik te big distributors already wield far to much power because they can set whatever produc t prices the market will bear. And they can determine what products come on the market and how they are distributed and what price it will ultimately be sold for and to whom.
Take for exdample, their car float, car float apron and tugboat kits. They are the only ones importing them and they are also the only ones who can import them in the US. In the old days other importers could sell these HO scale items in other scales with no possible legal action beng taken against them abd everyone made money. But today not onl can't anyone else import these HO Scale items but they are also prohibited from doing it in other scales. So who suffers?
corsair7 galaxy: It's a funny thng. During good economic times, prices are lower, but during hard economic times prices rise to get the same profit margins. Everything is going up. But there are claims here in the USA that there is "no cost of living increase" needed for those who draw Social Security. FOr two years in a row no less. Yet our esteemed Congress men and Representatives have voted themselves a raise the last two years!! Our food bill is up by about $100-150 a month compared to what it was 2-3 years ago, and we have not changed our eating habbits and have gone to generic products to save costs. COupons off name brands often don't bring the cost down below the generic or store brand so they are useless. Even gas has been going up again around here, and we know heating oil and propane will rise as the heating season is now here. The hobby is no different. COsts are rising faster than my eyes can digest the increases! It is during this time that we can show manufacturers and LHS that we won't stand for jacking up prices! We can do so by not buying anything new. WE can stick with putting together kits we have amassed in better years, minimizing what we spend by searching craft shops for paints and scenery stuff, shredding our own painted foam for scenery, working on the scenery of our layouts, resorting to scratch building {for some of us attempts at scratch building LOL}. There are many things we can do to keep active in the hoby "on the cheap" so to speak. WE can save for and eliminate loco or RR car purchases to a one coveted model produced. After all, one can buy 3 $100 locos or only one $350 loco! Their choice! *sigh* *alas* What can one do? Only tighten the belt buckle and grumble to anyone who will listen and commiserate. Ok so we don't buy anything until the prices go down to acceptable levels. Sounds good but it's a bit naive, because all its gonna do is force yur LHS out of buisness andreduce the number outlets you can find any kind of a decent model railroad product, If the LHS's keep leaing the field all you are going to accomplish is to give companies like Walthers even more power to determine what is available and at what price. Personally, I thik te big distributors already wield far to much power because they can set whatever produc t prices the market will bear. And they can determine what products come on the market and how they are distributed and what price it will ultimately be sold for and to whom. Take for exdample, their car float, car float apron and tugboat kits. They are the only ones importing them and they are also the only ones who can import them in the US. In the old days other importers could sell these HO scale items in other scales with no possible legal action beng taken against them abd everyone made money. But today not onl can't anyone else import these HO Scale items but they are also prohibited from doing it in other scales. So who suffers? Irv
galaxy: It's a funny thng. During good economic times, prices are lower, but during hard economic times prices rise to get the same profit margins. Everything is going up. But there are claims here in the USA that there is "no cost of living increase" needed for those who draw Social Security. FOr two years in a row no less. Yet our esteemed Congress men and Representatives have voted themselves a raise the last two years!! Our food bill is up by about $100-150 a month compared to what it was 2-3 years ago, and we have not changed our eating habbits and have gone to generic products to save costs. COupons off name brands often don't bring the cost down below the generic or store brand so they are useless. Even gas has been going up again around here, and we know heating oil and propane will rise as the heating season is now here. The hobby is no different. COsts are rising faster than my eyes can digest the increases! It is during this time that we can show manufacturers and LHS that we won't stand for jacking up prices! We can do so by not buying anything new. WE can stick with putting together kits we have amassed in better years, minimizing what we spend by searching craft shops for paints and scenery stuff, shredding our own painted foam for scenery, working on the scenery of our layouts, resorting to scratch building {for some of us attempts at scratch building LOL}. There are many things we can do to keep active in the hoby "on the cheap" so to speak. WE can save for and eliminate loco or RR car purchases to a one coveted model produced. After all, one can buy 3 $100 locos or only one $350 loco! Their choice! *sigh* *alas* What can one do? Only tighten the belt buckle and grumble to anyone who will listen and commiserate.
While economics is a debatable "science" that fluctuates...
Naive? well lets look at what happened a few years ago with gas prices in the USA. {I know you guys in europe and elswhere pay more than we do due to your road taxes and other taxes added to your gasoline bill}.
The export Oil companies who import to the USA raised prices and raised prices and futures orders drove prices higher. From $2.00 a gallon to $4.50 a gallon in my area. During the summer travel season, The Financial media pointed out the Exporting oil countries had "squeezed the golden egg-laying goose of the USA until it stopped laying the golden eggs that made them so rich" {raised prices to where people didn't buy it anymore so they weren;t making as much} so the prices had to come down. They found the point at which Americans where no longer willing to buy their expensive goods. The same will happen with the hobby. When there are no longer sales on the expensive models that were 25% cheaper a year ago, maybe they will get the hint that we won't pay inflated prices.
True, it will seem that more LHS will close down, but I think online e-tailers will survive better so its not like it will bring about the demise of the hobby. It may make it a bit tougher, but then prices will come down when they need to "fire sale" goods to get some money coming in and make some profits, or find that people won't buy pre-order stuff at high prices. The manufacturers may find they "squeeze the golden egg-laying goose" too hard and we just won't pay their inflated prices. They will find the point at which we will no longer pay their high prices.
When the economy recovers perhaps we will again buy in larger quantities and all will be happy. Until then, those who will not pay the inflated prices simply will not part with their money to the greedy suppliers, simple as that.
galaxy It's a funny thng. During good economic times, prices are lower, but during hard economic times prices rise to get the same profit margins. Everything is going up. But there are claims here in the USA that there is "no cost of living increase" needed for those who draw Social Security. FOr two years in a row no less. Yet our esteemed Congress men and Representatives have voted themselves a raise the last two years!! Our food bill is up by about $100-150 a month compared to what it was 2-3 years ago, and we have not changed our eating habbits and have gone to generic products to save costs. COupons off name brands often don't bring the cost down below the generic or store brand so they are useless. Even gas has been going up again around here, and we know heating oil and propane will rise as the heating season is now here.
Yes.
Corporate consolidations that eliminate the competition makes it easier to control prices and keep profit margins steady in times of recession, which is something that big institutional shareholders (i.e. mutual funds) demand. There isn't direct collusion mind you, but there are so few players in each industry that experienced management can take cues from what other companies are doing and they can all raise prices together.
That's no different in our hobby where we've had mergers. We are a captive market and the large players, mainly the distributors like Horizon and Walthers, make it difficult for the cottage industry hobby company to compete, which could possibly undercut their margins.
As an economy has a whole, the two big national distributors like Walmart and Target (technically they are retailers but function the same as distributors, they are their own middlemane so to speak) , are being found guilty of selling products with lead paint. The government makes all kinds of regulations to impede the little guy from operating but fails to enforce other regulations that really matter.
Back to our discussion of model railroad prices.........
- Douglas
galaxy While economics is a debatable "science" that fluctuates... Naive? well lets look at what happened a few years ago with gas prices in the USA. {I know you guys in europe and elswhere pay more than we do due to your road taxes and other taxes added to your gasoline bill}. The export Oil companies who import to the USA raised prices and raised prices and futures orders drove prices higher. From $2.00 a gallon to $4.50 a gallon in my area. During the summer travel season, The Financial media pointed out the Exporting oil countries had "squeezed the golden egg-laying goose of the USA until it stopped laying the golden eggs that made them so rich" {raised prices to where people didn't buy it anymore so they weren;t making as much} so the prices had to come down. They found the point at which Americans where no longer willing to buy their expensive goods. The same will happen with the hobby. When there are no longer sales on the expensive models that were 25% cheaper a year ago, maybe they will get the hint that we won't pay inflated prices. True, it will seem that more LHS will close down, but I think online e-tailers will survive better so its not like it will bring about the demise of the hobby. It may make it a bit tougher, but then prices will come down when they need to "fire sale" goods to get some money coming in and make some profits, or find that people won't buy pre-order stuff at high prices. The manufacturers may find they "squeeze the golden egg-laying goose" too hard and we just won't pay their inflated prices. They will find the point at which we will no longer pay their high prices. When the economy recovers perhaps we will again buy in larger quantities and all will be happy. Until then, those who will not pay the inflated prices simply will not part with their money to the greedy suppliers, simple as that.
Unfortunately, the approach of not buying by the average hobbyist will not strongly influence the model railroad manufacturers to lower prices for the simple reason that there is currently a significant percentage of hobbyists that appear quite willing to pay virtually any price for the latest item. And judging by what one sees posted on various forums, they are still asking the manufacturers for further, additional cost, "improvements" to the models. If you think prices are a hindrance to some, just look around this forum and see the posts from fellas indicating how they recently acquired "4 of these and 7 of those" new engines, or are purchasing whole fleets of hoppers, etc. It's only the little guys that suffer from pricing currently and we are not what is driving the hobby any longer in the manufacturers' eyes. In an age of pre-orders and limited production runs of models that are all but fully spoken for before they ever arrive on our shores, the guys occasionally purchasing in ones, perhaps twos, of a given item no longer really matter.
If you look into events of the past 15, or so years, (also read my earlier long post) you'll see that it is the hobbyists that have most definitely brought the current situation upon themselves. Prior to the coming of the Internet, probably 90% of hobbyists were reasonably content with what was being offered. If what was available didn't match your prototype, you modified it yourself to the particular specs. That was part of the fun! However, with the rise of hobby forums on the Internet one began to see a very small, but highly vocal group of zealots endlessly demanding far more sophisticated models, simultaneously claiming they'd be willing to pay for such. At the same time these guys also would belittle existing models over lack of road-specific detailing...because they apparently were incapable to actual kitbashing, or otherwise modifying, models themselves. Likewise, virtually every new, modestly detailed, model to appear was criticized by these "experts" across the Internet for their supposed short-comings. Eventually such posts influenced and won over others, particularly the no-can-do hobbyists and this undoubted hurt sales. As a result, one by one the manufacturers began offering increasingly detailed, super accurate, models at ever increasing prices.
So...the "I must have prototypical accuracy, with smoke, sound, and more" folks have gotten their wish. Yes, many of the current models are indeed starting to approach brass-level quality, but so are their prices. So long as the current crop of big spendering, largely non-modelers, are with us, any boycotting by the little guy will have no significant impact on sales in most quarters. As long as even a modest percentage of hobbyists keep purchasing expensive models the only response from the manufacturers to boycotting will be the further limiting of production runs, expansion of pre-orders and jacking the prices higher yet. I see high-end steam definitely reaching, or exceed, $1,000 per unit, with diesels not far behind, before the end of this decade. If some of you think the hobby is too expensive now...just wait a while. As Pogo said, "We have met the enemy...and he is us!"