Inflation Strikes the Hobby

[corsair7]

CNJ831

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, 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!"

CNJ831  

    

There is alot of truth in what you say but Pogo was an optimist. Because we aren't the only enemy that needs to be taken care of. We need to very carefully scrutinize those we vote for because often their motives are more slefish and for sale than many realize. Fotr example why did the model railroad industry relocate all manufacturing and design jobs overseas? It all comes back to the fact that we have the best Congress, Senate and Presidency money can buy. But thr real blame for that is who we vote for and why.

I'll get off the soap box now.

Irv

[galaxy]

Seems like I touched a nerve somewhere.

Interesting.

Very interesting.

[jwhitten]

Mister Mikado

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

 

Oh, they are, they are. I bought my kid a set of three emergency trucks last year for christmas. My total outlay? $19 bucks. Each one is a bit bigger than a large box of matches-- maybe two boxes, and has batteries, on-board sound and flashing emegency lights (that sound as good as any of the HO sound decoders, IMO), metal axles, three buttons to push to make the sounds, rubber (or nearly rubber) tires, and reasonably decent detail-- not P2K quality but easily as good as Athearn blue boxes of not too long ago, and a pull-back rubber band drive. And the plastic is thick enough to withstand kid-abuse (tossing, kicking, stepping-on, falling down the stairs, and beating on other toys with) and they still look good and work good, aside from some slightly warped axles.

*Three* of 'em, for $19 bucks. Which means someone even made a profit on 'em. And I've seen the sound boards, they're roughly the same size as the sound decoders for the trains.

You can't tell me in any way that I'll believe that it costs that much to make this stuff. Sure I believe there are upfront tooling costs and whatnot. But these toys aren't such major sellers or perennial sellers or bring in so much money that their manufacture run is going to be all that much greater than a typical loco run.

And before you start the "buh-buh-buh"-ing...

How come its $500 bucks if it says MTH or BLI on it but only $100 bucks if it says Bachmann?

 

John

[jwhitten]

fwright

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.

 

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).Fred W

 

So then a reasonable question is:

When does the amount of mark-up / profit tip from being "honest"  to "cheating" or "fraud" ??

 

John

[jwhitten]

galaxy

Yet our esteemed Congress men and Representatives have voted themselves a raise the last two years!!

 

One may hope that equally steamed citizen voters might do something about that.

 

John

[andrechapelon]

How come its $500 bucks if it says MTH or BLI on it but only $100 bucks if it says Bachmann?

 John

So tell me where you can get a DCC  and sound equipped  loco from Bachmann for $100 because that's what you're trying to compare.

http://www.bachmanntrains.com/home-usa/products.php?act=viewCat&catId=189

While you can certainly get one of these for less than MSRP, you'll still be considerably north of $100.

Now if you don't want DCC/Sound, then you can get Bachmann for substantially less, but it's not valid to compare those to the BLI, MTH, Walthers "luxury" models any more than it's valid to compare a base model Corolla to a loaded Avalon. Both will get you where you want to go, but the Avalon will cost you quite a bit more for the privilege.

Of course, you could always do the Johnny Cash routine and build it "One Piece At A Time" (and it won't cost you a dime).

http://www.azlyrics.com/lyrics/johnnycash/onepieceatatime.html

OTOH, you'd have to get a job with Walthers, BLI, MTH.........

Andre

 

[rrinker]

 One thing seems to be overlooked - there just aren't that many model railroaders! No matter how much we think our hobby is the best one ever (and it is!), there just aren't that many of this. 'VOLUME' is not a word in the MRR manufacturing industry.

 On top of that, that limited pool of potential customers has gotten a lot pickier in the past few years. No longer is it acceptable to build one F unit body and print on the road name of every railroad that ever owned one (and even some that didn't). That's not good enough any more. Modelers have demanded more prototypical accuracy and manufacturers have delivered - but to make all those variations means even smaller unit sales and higher costs.

                                  --Randy

 

[jwhitten]

andrechapelon

How come its $500 bucks if it says MTH or BLI on it but only $100 bucks if it says Bachmann?

 John

So tell me where you can get a DCC  and sound equipped  loco from Bachmann for $100 because that's what you're trying to compare.

http://www.bachmanntrains.com/home-usa/products.php?act=viewCat&catId=189

While you can certainly get one of these for less than MSRP, you'll still be considerably north of $100.

Now if you don't want DCC/Sound, then you can get Bachmann for substantially less, but it's not valid to compare those to the BLI, MTH, Walthers "luxury" models any more than it's valid to compare a base model Corolla to a loaded Avalon. Both will get you where you want to go, but the Avalon will cost you quite a bit more for the privilege.

Of course, you could always do the Johnny Cash routine and build it "One Piece At A Time" (and it won't cost you a dime).

http://www.azlyrics.com/lyrics/johnnycash/onepieceatatime.html

OTOH, you'd have to get a job with Walthers, BLI, MTH.........

Andre

 

The last two 2-8-0's I bought (from the Favorite Spot) on ebay were both under $100 and had sound and dcc.

 

But I'll agree that I paid less than usual-- so let's say $500 from MTH and BLI and $200 from Bachmann 'cause I can buy those all day long.

But still, there's a huge unexplained difference in price. Sound and DCC decoders don't cost that much to make, they're just priced expensively.

John

[jwhitten]

andrechapelon

How come its $500 bucks if it says MTH or BLI on it but only $100 bucks if it says Bachmann?

 John

So tell me where you can get a DCC  and sound equipped  loco from Bachmann for $100 because that's what you're trying to compare.

http://www.bachmanntrains.com/home-usa/products.php?act=viewCat&catId=189

While you can certainly get one of these for less than MSRP, you'll still be considerably north of $100.

Andre 

 

From ebay-- the guy's got at least three listings of these, and each of those is for multiple units. I agree that's a bit bigger than your typical loco. But the same thing from MTH or BLI is still around $500 bucks. Best I've seen for something similar to this from them is around $450.

Spectrum HO 82624 C&O H-4 2-6-6-2 Articulated Steam DCC

Buy It Now

$221.95 Free shipping

Time left:8d 22h 35m

(Moderators: I removed the link since this is just an example listing.)

 

John

[galaxy]

rrinker

 One thing seems to be overlooked - there just aren't that many model railroaders! No matter how much we think our hobby is the best one ever (and it is!), there just aren't that many of this. 'VOLUME' is not a word in the MRR manufacturing industry.

 On top of that, that limited pool of potential customers has gotten a lot pickier in the past few years. No longer is it acceptable to build one F unit body and print on the road name of every railroad that ever owned one (and even some that didn't). That's not good enough any more. Modelers have demanded more prototypical accuracy and manufacturers have delivered - but to make all those variations means even smaller unit sales and higher costs.

                                  --Randy

 

So by that theory it becomes a more "exclusive" hobby that only the rich can afford, and not the commoner, thereby automatically reducing the number of willing and able participants who can buy anything manufactured.

Maybe we should go back to only brass models. That'll knock out all the hobbyists of lower means and make it more an "exclusive club"!

[selector]

jwhitten

 

 

So then a reasonable question is:

When does the amount of mark-up / profit tip from being "honest"  to "cheating" or "fraud" ??

 

John

In sales, never.  Many years ago, people with as much intelligence as we have coined the term Caveat emptor.  I am perfectly entitled to make a $1M plastic, horn-hook equipped purchase of a Tyco What'sit, and the seller is going to be lucky if I pay that much.  We both get what we hope to, and what we set out to do.  No fraud, no cheating.  Honest?  What's that?  I am in no position to ask the seller what sort of profit he expects, nor is he required to reveal that information to me.

-Crandell

[fwright]

jwhitten

fwright:

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.

 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).Fred W 

So then a reasonable question is:

When does the amount of mark-up / profit tip from being "honest"  to "cheating" or "fraud" ?? 

John

I have never bought into the populist and/or socialist position that the rich are somehow undeserving of their money, and therefore it should be "redistributed" to those more deserving.

Cheating or fraud occurs when I as a supplier fail to deliver what I have agreed to deliver.  If I cannot deliver, I expect to try to make good my failure through a price adjustment (at the very least).  At the same time, I expect you as a buyer to honor the price you agreed to pay without complaint unless my product actually falls short of what I agreed to deliver.  Note that amount of mark-up or profit does not enter into these principles.

Unless you are sharing in my risk in producing Dream Locomotive Co's latest model, then my profit or mark-up is none of your business.  We either come to an agreement on price, and you buy the product, or you don't .  If I misjudged in planning the model from a cost of production, quantity of production, or pricing point of view - I lose.  You don't.

Having been involved in the push for quality that started in the '80s, I have seen the resulting (and supposedly brilliant) business model of moving upscale in terms of quality, price, and customer base take hold in more than one industry.  But globalization is quickly ruining the upscale business model.  Sure, globalization allows production of goods to be outsourced to cheaper places, and results in cheaper prices for consumers, at least until costs begin to level.  Most forget that globalization also levels wages as the machinists and engineers now compete with their Indian and Chinese counterparts.  While China and India have upward pressure on prevailing wages due to the desire to be (and be paid) like their US and European counterparts, there is downward pressure on US and European wages and benefits due to the competition to do the work.  The premium in wages that US workers commanded is way more than is/was justified by higher productivity and performance, and is therefore unsustainable - just like the housing prices that outpaced prevailing wages were unsustainable.  This leveling pressure on wages will undermine the business model of moving upscale with your product line.  Applied to model railroading, there will be fewer buyers of $1200 locomotives sooner than most folks predict based on buyer age and interest alone.

So my prediction is that model mass production as we know it now will be gone within a decade, if not sooner.  Whether there will be a new lower cost mass production (similar to today's Bachmann and traditional low end Lionel) that takes it place remains to be seen.  Certainly, there will be a steady resurgence in cottage hobby suppliers, and quite likely an accompanying resurgence of model building.  The industry will be much smaller, especially if we are once again building our locomotive and car rosters.  You just don't have as many locomotives or cars if you build them instead of buying them.

And lest you think I'm one of the "rich" producers, I'm not.  By far, my most expensive locomotive is my one FED HOn3 2-6-0, for which I paid over double what it cost when new 30-some years ago.  And it still runs just as poorly out of the box as it did when it was new.  I may someday break down and buy a $300 locomotive, but it's not going to be in the next year.  I'm more likely to try to develop my skills tweaking and fixing an FED or similar to run decently.

just my thoughts

Fred W 

[andrechapelon]

From ebay-- the guy's got at least three listings of these, and each of those is for multiple units. I agree that's a bit bigger than your typical loco. But the same thing from MTH or BLI is still around $500 bucks. Best I've seen for something similar to this from them is around $450.

The price is still well north of $100 bucks and if it's not a loco you want, you're as SOL as if the price were much higher. A guy who wants a modernized ATSF 3800 class 2-10-2 isn't going to be satisfied with a Bachmann USRA light 2-10-2 regardless of price and while scratchbuilding is an option, it's not going to save money.

You're treating locomotives as if they were commodities like wheat or corn and they're not . I don't care how cheap this guy is selling DCC/sound equipped C&O H-4's because I have no desire for one. Now that particular price would be much more attractive for the USRA version (incidentally, the Bachmann H-4 is nothing more than a modified version of their earlier USRA 2-6-6-2) because that could be bashed into one of the two SP MM-3's. But even then, I'm not that interested because SP's two MM-3's were restricted to the LA Division. 

Suppose you could get BLI's Reading T-1 for the same priceas the H-4 from this guy. The chassis could probably be used as a starting point for a SSW L-1/SP GS-8. However, you'd need to scratchbuild the boiler and cab, shorten the tender chassis and scratchbuild the tender body. By the time you got through with that project and paid for all the PSC and Cal-Scale castings, you'd probably have spent as much money as if you bought a Westside GS-8 on the second hand brass market.. In any case, how many people are going to buy a Reading T-1 based primarily on price? For that matter, how many people would buy a Pennsy K-4 if the rest of their steam locomotives were equipped with radial stay fireboxes even if the K-4 were cheaper than, say a USRA Light 4-6-2 (more in keeping with their USRA inspired steam roster). The fact that they're both Pacifics is irrelevant. A rebuilt Bulleid :"Merchant Navy" is also a Pacifc ( http://www.clan-line.org.uk/html/gallery.html ), but I doubt there are many people on this side of the Atlantic that would take one even if they were given away.

I would, but then I've ridden behind "Clan Line".

Andre

Spectrum HO 82624 C&O H-4 2-6-6-2 Articulated Steam DCC

Buy It Now

$221.95 Free shipping

Time left:8d 22h 35m

[rrinker]

galaxy

rrinker:

 One thing seems to be overlooked - there just aren't that many model railroaders! No matter how much we think our hobby is the best one ever (and it is!), there just aren't that many of this. 'VOLUME' is not a word in the MRR manufacturing industry.

 On top of that, that limited pool of potential customers has gotten a lot pickier in the past few years. No longer is it acceptable to build one F unit body and print on the road name of every railroad that ever owned one (and even some that didn't). That's not good enough any more. Modelers have demanded more prototypical accuracy and manufacturers have delivered - but to make all those variations means even smaller unit sales and higher costs.

                                  --Randy

 

 

So by that theory it becomes a more "exclusive" hobby that only the rich can afford, and not the commoner, thereby automatically reducing the number of willing and able participants who can buy anything manufactured.

Maybe we should go back to only brass models. That'll knock out all the hobbyists of lower means and make it more an "exclusive club"!

 Perhaps those are the unintended consequences. But it surely is not "big evil greedy manufacturers" FORCING this stuff on us. We've chosen, and spoken with out wallets, that we want the more prototypical and accurate models.

 A manufacturer can't MAKE customers buy something. There is no captive audience, or a monopoly in operation here. There wouldn't be a dozen different Big Boys on the market if someone wasn't buying them.

                                  --Randy

[selector]

It is an open game of poker.  Ante up, and there's a seat for you with five cards to come.  No biggie.....

[cambus267]

I have been watching this discussion and I would like to give a point of view from the other side of the pond. I was at the major model railway show in Glasgow at the beginning of the year, and I was looking at the Bachmann Europe stand, very impressive by far the largest trader on display and I was looking at their lastest British outline models. The finish and detail were better than anything that had been around the U.K. scene. Very nice detail very crisp finish. At last someone was giving British modellers quality, however, the rub was the price in excess of $200-300 way above what was expected. I inquired as too why the high price to be informed by the rep "Its all about DCC". I found this a bit strange since unlike American model railroaders we dont have the space and we only run 1 or 2 locos at a time. I was then told that "That's what we have agreed with the Chinese. Every unit has to have DCC regardless". So it would appear to me that the Chinese are dictating what we want, not everybody wants DCC but everybody will have it adding $100 aprox to the price.Also I have noticed that on ebay it appears to be almost now the sole domain of ebay stores many of which refuse to sell outside the US or who put you of by charging ridiculous mail prices I have price quoted for a 40ft boxcar to be shipped to the UK range from $6 to $45 can somebody please explain that to me. But the bottom line is we as a hobby are being ripped off because we are seen as to have money.

[Flashwave]

This all still makes a good point. A Bach, even a Spec, most of the time does not match a BLI, but how much difference IS there between the decoders? That;s what I got form the orignal comparison.

There can't be that much, they both do the same things, made of the same parts, and there's only so many weays you can safely wire a decoder. Some of Bach's DCC only boards are shorted some of their features, or at least the prorgramming, but what's the difference there?

I will however offer that the boards in those ambulances are only recieving three inputs, and not having to be wired against fluctuating currents, two different current levels, (DC, DCC) have to interept a messege from a single input, and turn it into one of 12 functions, maybe even 24 or 30, or one of hundreds of programming cues.

[jwhitten]

Flashwave

This all still makes a good point. A Bach, even a Spec, most of the time does not match a BLI, but how much difference IS there between the decoders? That;s what I got form the orignal comparison.

There can't be that much, they both do the same things, made of the same parts, and there's only so many weays you can safely wire a decoder. Some of Bach's DCC only boards are shorted some of their features, or at least the prorgramming, but what's the difference there?

I will however offer that the boards in those ambulances are only recieving three inputs, and not having to be wired against fluctuating currents, two different current levels, (DC, DCC) have to interept a messege from a single input, and turn it into one of 12 functions, maybe even 24 or 30, or one of hundreds of programming cues.

 

That's a good question.

Its not as difficult as you might think. A DCC decoder is comprised of a small embedded microcrontroller / CPU (a one-chip "computer"), a motor controller-- which is typically a just a simple H-bridge type circuit, nothing fancy, and a handful of discrete components.

Handing DC (power-pack) versus DCC (digital control) is pretty simple really, the microcontroller looks / waits for the presence of DCC signals on power-up for a short amount of time, and if it doesn't sense any, it flips an electronic switch which permits the track voltage to go directly to the motor and bypasses (disengages) the DCC portion. Its a software trick and one extra component. I even looked up the patent to be sure (http://www.freepatentsonline.com/6320346.pdf). Personally I think the technique was pretty obvious and not deserving of a patent, but that's a different topic.

Once you have the microcontroller onboard, all of the other stuff is easy and is for the most part handled through software. DCC controllers are pretty simple beasties.

When you add the component of sound, it gets a little more complicated, but not much. Depending on the scheme of the manufacturer, they generally add a DAC (digital to analog) circuit (IC chip) that knows how to interpret a sound file (typically in ".wav" format) and a few additional discrete components to fill-out the sound-- generally some sort of RC "tank" circuit-- tack on a speaker and you're good to go.

The cost of both chips and the various discrete components is probably $10-15 bucks in quantity-- if even that much. Add on the circuit board manufacturing costs, again in quantity, and you're probably looking at $0.50 a board or so. I don't know whether they typically hand-stuff the boards (SMD components) or have a pick-n-place robot do it-- but either way, that's probably the "costliest" aspect of manufacturing the board-- and even that is not terribly expensive, especially if they have robots do it.

The newer boards add "Back EMF" sensing / feedback, but that adds nearly nothing to the circuit design, a diode, capacitor and resistor and a free analog-to-digital input on the controller being the most likely scheme, but other methods are possible and possibly even easier.

Newer sound decoders include more memory on the chip to store larger / more wave files and such, but that's a byproduct of ever-improving / ever-shrinking microcontroller design-- and those parts keep getting cheaper and cheaper in every iteration.

Frankly, there isn't much you can do to the basic DCC decoder circuit design to make it all that more expensive. For the most part the "new" and "extra" features are generally byproducts of whatever "stuff" is crammed into the microcontroller and however many pins you have left over on the controller to do other stuff with (this part can be variable, at the manufacturing level, based on the manufacturer's selection of microcontroller-- some have more pins, some fewer. The cost varies a small amount based on the selection).

Compare this to the sound board on the ambulance toy-- almost identical.

 

John

 

 

[jwhitten]

 

Here are some (admittedly old) links to various do-it-yourself DCC sites that show how many of the items involved in DCC work. As I acknowledged earlier, a lot of this stuff is "old" in "computer-years" terms, but demonstrates the basic principles and circuitry, and the new stuff really isn't all that different, just newer updated parts which typically tend to compact or eliminate earlier sections, or else just add additional functionality for a similar price.

OpenDCC

http://www.opendcc.de/index_e.html

MERG List DCC Resources (Model Electronic Railway Group)

http://www.merg.org.uk/resources/dcc.htm

 

John

[jwhitten]

andrechapelon

From ebay-- the guy's got at least three listings of these, and each of those is for multiple units. I agree that's a bit bigger than your typical loco. But the same thing from MTH or BLI is still around $500 bucks. Best I've seen for something similar to this from them is around $450.

The price is still well north of $100 bucks and if it's not a loco you want, you're as SOL as if the price were much higher. A guy who wants a modernized ATSF 3800 class 2-10-2 isn't going to be satisfied with a Bachmann USRA light 2-10-2 regardless of price and while scratchbuilding is an option, it's not going to save money.

You're treating locomotives as if they were commodities like wheat or corn and they're not . I don't care how cheap this guy is selling DCC/sound equipped C&O H-4's because I have no desire for one. Now that particular price would be much more attractive for the USRA version (incidentally, the Bachmann H-4 is nothing more than a modified version of their earlier USRA 2-6-6-2) because that could be bashed into one of the two SP MM-3's. But even then, I'm not that interested because SP's two MM-3's were restricted to the LA Division. 

Suppose you could get BLI's Reading T-1 for the same priceas the H-4 from this guy. The chassis could probably be used as a starting point for a SSW L-1/SP GS-8. However, you'd need to scratchbuild the boiler and cab, shorten the tender chassis and scratchbuild the tender body. By the time you got through with that project and paid for all the PSC and Cal-Scale castings, you'd probably have spent as much money as if you bought a Westside GS-8 on the second hand brass market.. In any case, how many people are going to buy a Reading T-1 based primarily on price? For that matter, how many people would buy a Pennsy K-4 if the rest of their steam locomotives were equipped with radial stay fireboxes even if the K-4 were cheaper than, say a USRA Light 4-6-2 (more in keeping with their USRA inspired steam roster). The fact that they're both Pacifics is irrelevant. A rebuilt Bulleid :"Merchant Navy" is also a Pacifc ( http://www.clan-line.org.uk/html/gallery.html ), but I doubt there are many people on this side of the Atlantic that would take one even if they were given away.

I would, but then I've ridden behind "Clan Line".

Andre

Spectrum HO 82624 C&O H-4 2-6-6-2 Articulated Steam DCC

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Andre,

You keep moving the target. The original issue here was the cost of buying locos and stuff. Certainly if you "build an automobile out of spare parts" its going to cost a fortune, if for no other reason than paying all of the individual markup and "warehousing" costs associated with the individual parts. So to say you can start with loco X or Y and then tack on a bunch of after-market / third-party parts to come up with something uber-expensive is-- quite oddly at the same time-- both making the original OP's point about the cost of the hobby -AND- way off the mark to being a separate topic.

The point I was making is that you have to locomotives of similar size, complexity, raw materials, and degree of manufacture and the resultant price for the one is far and away higher than the other. The quality and refinement of the end product-- which I'm sure can be argued endlessly-- at least to *my* view is not all that different, and frankly, to hear other people in other threads talk about it-- not even necessarily on-par with each other. I've heard many horror stories about the more expensive brands that would cause me to have pause-- parts failing prematurely, or never working at all. Units arriving maladjusted and/or broken. Poor quality-control. etc. And to put it out there bluntly-- what is the point of spending a zillion dollars on an item (relative to the cost of an ordinary item) and not even getting decent quality control !?!?     (But that too is the subject of another conversation)

John

[corsair7]

cambus267

I have been watching this discussion and I would like to give a point of view from the other side of the pond. I was at the major model railway show in Glasgow at the beginning of the year, and I was looking at the Bachmann Europe stand, very impressive by far the largest trader on display and I was looking at their lastest British outline models. The finish and detail were better than anything that had been around the U.K. scene. Very nice detail very crisp finish. At last someone was giving British modellers quality, however, the rub was the price in excess of $200-300 way above what was expected. I inquired as too why the high price to be informed by the rep "Its all about DCC". I found this a bit strange since unlike American model railroaders we dont have the space and we only run 1 or 2 locos at a time. I was then told that "That's what we have agreed with the Chinese. Every unit has to have DCC regardless". So it would appear to me that the Chinese are dictating what we want, not everybody wants DCC but everybody will have it adding $100 aprox to the price.Also I have noticed that on ebay it appears to be almost now the sole domain of ebay stores many of which refuse to sell outside the US or who put you of by charging ridiculous mail prices I have price quoted for a 40ft boxcar to be shipped to the UK range from $6 to $45 can somebody please explain that to me. But the bottom line is we as a hobby are being ripped off because we are seen as to have money.

Shipping rates, especially international rates is a function of who makes the market and also how much packaging costs. Not everyone gives tyou free packaging for shipping like USPS or others do. In addition you usuall need more than just the box so now you've got to buy buble wrap or peanuts to put into the box so that the product you're shipping doesn't get smashed becaquse if it can get smashed it will get smashed since all shipping companies seem to have discovered gorillas to do the job who will work for bananas instead of cash. Then there is the person who packs the box. All of that costs money in one way or the other. It has to come from somewhere and it isn't always practical to include this cost in the price becaue sending something to New Jersey from New York isn't as costly as sending something to the UK. So why charge your New Jersey customer the same price as the one in the UK?

There is also another factor to be considered and that is customs duties. Usually the purchaser is responsible for these when he or she picks up the product yo sent them bu that isn't always true as sometimes it's the shipper who has to pay certain fees to swend something to certain countries regardless of hwo you sent it.

Add that to the fact that international rates are set by treaty and may, but usually don't, reflect the actual cost of shipping. In other words the rates that you pay may not reflect the acftual costs of doing the job plus the differences in exchange rates between currencies. So why would a $100 Bachmman itkem cost $400 on the shelves? It isn't only DCC. Currency fluctuations certainly don't help.

Irv

[Anonymous]

I am pretty much in the same boat as Cambus. Modeling US prototype is a small niche in Europe and there are not many businesses selling US stuff over here. There is not really a market and, thus, hardly any competition. Pricing is purely done on a mark-up basis, with an orientation on the overpriced local stuff. The result looks like this:

A Bachmann Spectrum 4-6-0 w/o DCC, which you can buy at $ 100 - 120, sells for 180 Euros in Germany, which translates into roughly $ 250. To my knowledge, they are not bought in the US, but directly from Bachmann in China.

The only way to go is to buy in the US and have it shipped to you from there. It then looks like this

• Loco:        $ 100
• Shipping:  $   50
• Customs: $     15
• VAT.         $  31,35
• Total:        $ 196,35

Still a considerable saving, but nearly double the price you folks have to pay in the US!

[jwhitten]

fwright

 

 

I have never bought into the populist and/or socialist position that the rich are somehow undeserving of their money, and therefore it should be "redistributed" to those more deserving.

Cheating or fraud occurs when I as a supplier fail to deliver what I have agreed to deliver.  If I cannot deliver, I expect to try to make good my failure through a price adjustment (at the very least).  At the same time, I expect you as a buyer to honor the price you agreed to pay without complaint unless my product actually falls short of what I agreed to deliver.  Note that amount of mark-up or profit does not enter into these principles.

Unless you are sharing in my risk in producing Dream Locomotive Co's latest model, then my profit or mark-up is none of your business.  We either come to an agreement on price, and you buy the product, or you don't .  If I misjudged in planning the model from a cost of production, quantity of production, or pricing point of view - I lose.  You don't.

Fred W 

 

Fred, and Crandell (and anybody else :-)

Boy this is a tricky / touchy subject and it isn't easy to talk about any aspect of it in a vaccuum. Its all inter-related and the points made by all sides have validity to them. Economics is not a static, dusty topic, but rather it is alive and dynamic and exists as a sort of viewport into human business / transactional activity. Certainly there are economic principles that can be learned individually, but must be applied and adopted to the whole. When considering one and only one transaction, without the overhead and baggage of "everything else", it seems easy and simple. But in truth, its all inter-related, and the effects of an unknown (to you) actor in some faraway location may have a real and direct effect on some essential business transaction you have here and now.

For example the effects of a transaction made by the Chinese government, say to purchase all of the output of a particularly large copper mine in Australia for the next 99 years, may have a very real and profound effect on the cost of wire, motors, nickel-silver (a copper alloy), and a whole host of other things as that transaction will change the availability of copper within "the system" and other producers will have the ability to take advantage of the reduced supply to increase their prices-- where else are you gonna get it from ??

So in this example, who is to blame for the price increase? The Model Railroad reseller? The locomotive manufacturer? The raw materials supplier? The intermediate sub-assemblies supplier? All of whom have had to adjust their costs and pricing commensurate with the prevailing market price and, more likely than not, pass the increased costs along to the end consumer. (Or in the case of a costs drop, pocket the difference if they can get away with it.)

There, I've made a large part of your case for you.

As to whether the "rich are deserving of their money"--  that's mostly a separate topic-- but one aspect of it seems germaine:

Is there a "natural" price of a thing?

This, to my mind is really the essential question, and unfortunately I don't see any easy answer to it. Regardless of who's theories you ascribe to-- capitalist, marxist, socialist, or looney tunes-- the idea of a "natural price" attempts to "normalize" the value / cost ratio (or classically the price / value ratio) via some (supposedly) objective measurement, which is itself questionable in terms of what it does or does not include in the analysis. And then, supposing you can make a determination, you then have to state it in terms of some sort of "universal" reference that everyone can pretty much agree on, which is also subject to question-- i.e. to state it in terms of "cost versus what?", or more plainly "What's it worth in chickens and goats?" (Or gold, as would be the more traditional "relative" currency)

However, to me there might be an even more "natural" way of defining it, which is "a price that most everyone considers 'fair and reasonable', based on their own criteria of assessing its relative and/or intrinsic worth." Which would eliminate the fringes-- the "give me everything for free" crowd and the "sky's the limit, torque 'em till they bleed" folks. (But of course that definition gets harder and harder to achieve as the type of item (or service for that matter) gets more and more esoteric-- to the point that it, or the technolgy / processes it is based on, is ever farther from the experience, education or understanding of the "common man" to assess.)

To obtain that thing below the assumed natural price, would be getting a "bargain". To have to pay more than the assumed natural price would be "getting gyped". To what degree is also up for collective assesment. If you obtain an item at a little below its "natural price", you're getting a good deal. If you get it for a lot below the natural price, you're getting "a steal". Likewise, going the other way, if you pay a little more for it, you might grumble but acknowledge that "a man's gotta make a living", or mumble about "profit margins" and such. If you buy it in a 7/11 or other "convenience" store, you might remark about who's being convenienced. If it goes northward of that you might  complain about price gouging and so forth, and ultimately about "being robbed". Of course, the nice little mantra that always follows, is "you didn't have to make the deal" which is supposed to dismiss the concerns of the purchaser and absolve the conscience of the seller.

So by that criteria and standard, the "morality" version of the question "do the rich deserve their money" is essentially-- what did they do to get it? Did they treat people "fairly" and engage in "fair" transactions to achieve it? Or did they "put people to the screws" and "bled 'em" for "all they were worth"? And then, "so what if they did?" And of course this also assumes we're only talking about the "rich people" who "earned" their money (one way or another) as opposed to those "rich people" who inherited their money and just used their money to make more money. Which I think pretty much everybody (except perhaps the "rich people who inherited their money") would agree is a separate category.

And just for the record, I don't have anything in particular against "rich people", except for the ones that use exclusionary, monopolist or coercive tactics to achieve their wealth. Even the ones who inherit their money are acting on the "accidentals of fortune" that surround their birth-- i.e., we're all given a "hand to play" (as Crandell suggests and I just got.... Ante Up! :-)

And that leads to the second element of the question-- and the one that is most germaine and relevant to this topic, and that of Model Railroading in general-- what happens when the "actors" (vis a vis their businesses, corporations, or other legal apparatus) "use" their wealth to garner for themselves a "favored" position? I.e., a monopoly, near-monopoly, or a "legal loophole" (or a "legal exclusion"), back-end "deals", "exclusionary sales channels", or some other construct that unbalances the market and tips the equation to their favor?

This is where I (personally) part company with traditional capitalism.

As long as the unbalance is purely local, I don't have a big problem with it because it's generally possible for a new actor to enter the market or else influence it in a different way to rebalance things. But as businesses grow, they tend to reach out and seek new / other / additional markets. And it is only "natural" (human nature) for their owners (or controllers) to want to "fix things" so that business will continue to work "in their favor"-- i.e., give them some sort of advantage-- and thus "guarantee" their continued success. Each time they "reach out" they begin to affect more and more of the larger "regional" market, and then larger "regional" markets, "national" markets, until finally they are able to operate in an international market.

From the traditional perspective, each of these expansions offers them additional customers (consumers),  access to new resources, reduction in costs through economies of scale and so forth, and other benefits that go along with a growing ever-expanding concept of business. The other side of that however, is that each expansion helps improve the odds of longevity and continued viability for the business, and increases the difficulty of competition in the same market by others. As the level of difficulty of competition increases, the dominant business is more and more able to compete with less "drag", brought about as the consequence of competition, and more able to set pricing for their products that is favorable to themselves and farther away (northward) of the "fair" ("natural") price of their customers.

The standard response to this is of course, "We just put the products out there and set our price. You're free not to buy them." Which is all fine and good as long as there is plenty of healthy competition-- or at least, potential competition. But once the dominant business has eliminated all (realistic) possibilities for competition, there remains but only one or two or a few places to purchase the product-- and then it is no longer true to say "You're free not to buy them."-- the implication of which is that you can go elsewhere for your products-- because there is no elsewhere, or else only a few elsewhere's, and the consumer no longer truly has a choice, and the market for that product or service is no longer truly open and free.

Sometimes monopolies occur or are "granted" in the "interest of everyone"-- under the euphamistic term "natural monopolies". The idea being that the potential of "economies of scale" reduction in costs can in the overall benefit the community at-large, and are thus claimed to be a "sound" basis for granting a provider sole, exclusionary (or near-exclusionary) access to a product, resource, or service, with the thought that likely there would be no real "competition" for that same product at the same level or scale that is being granted. Thus the community is "betting" they will have a better deal if they "give the works" to a single actor who has everything, rather than buying the "best of breed" product or service from the collection of actors that may exist to offer the same product or service in a more traditional competitive market. Of course those entities permitted to operate as a monopoly are also generally saddled with some sort of "oversight" or "regulatory" element, but in practice, they rarely (IMO) seem to do all that much regulating and instead exist as another greedy hand held out. (My opinion)

Thus, it is my opinion that companies-- corporate entities-- "businesses"-- left to grow unchecked, unbounded, free to practice "capitalism" will always, if able, exert themselves that is negative and ultimiately ANTI-competitive in nature.

One classic real-world example of this-- which, as an aside is ironic in the extreme-- is Microsoft giving money to Apple in the early 2000's to prop them up and keep them afloat during a rough patch so Microsoft could continue to point to them as a "competitor", so scant was its competition-- and as it was being itself examined and ultimately tried and *CONVICTED* by the U.S. Justice Department of engaging in monopolistic and coercive practices. There are many people in the computer and IT community who feel that Microsoft has done much to stifle and quench competition, innovation and influence-- if not outright set-- pricing and the de-facto adoption of operating systems and software throughout the industry. Perhaps there is an argument to be made regarding the "benefit" of a more-or-less singly-adopted operating system $1***$2"standard") or that it might have occured on its own naturally-- but that would be the rosiest spin of the history of the industry. The more typical view would not be so nice, nor polite.

So what's the "one true" answer?

I don't know if there is one.

Is "capitalism" all bad?

I don't know the answer to that either-- or at least, I haven't decided for myself yet. Perhaps it is merely "corruptable" and presentedly "corrupted", in which case at least in theory the situation oughta be able to be rectified through oversight and regulation (and a few judicious prosecutions). But I haven't seen any indication that any of the three are presently possible-- whether through their inability to apply, or the unwillingness to apply remains to be seen (personally I think more of the latter than the former).

 

But my question / challenge still stands I think-- I would like someone to make a good case / argument demonstrating how Manufacturer "A" can made a product nearly identical to Manufacturer "B"s product and then charge five times as much (or much more) for it while claiming it to simply be a matter of "differences in costs". If you wanna put it out there that its simple "greed" (or we can be nicer about it and say "mark-up", "profit margin" or whatever euphamism you choose) that's fine. But as the old saying goes, don't sprinkle me with the hose and tell me its raining.

Oh, and whether "rich people deserve their money" or not, I reckon is left as an exercise for the reader!

 

John

[Anonymous]

John,

yes, there is a natural price for all goods and services - it is called market price. It is the price the market is willing to pay and the seller is willing to sell it for. It works for most products, but not for all - in both directions.

If you´d throw all HO scale locos into one big basket, locos costing $ 500 - 600 would have a hard time to compete with Atlas Trainman locos or the regular Bachmann line. So you have to segment the market and create extra demand - by choosing landmark models, limited runs, extra features, like DCC&sound, super-detailing  - you name it. These things are just a tool to harvest seemingly better margins. Unfair? No, just normal practice, which finds its natural correction after a little while, when demand is slacking. It only turns to be unfair, when other issues than market economy mechanisms determine the price, be it taxes or be it state controlled exchange rates.

Even if the hobby gets more expensive, it is much better than not having any supplies available. Would you believe that in the days of the Soviet Union, there was only one company producing model trains in all of the eastern block states? It was Piko in Eastern Germany....

So let´s enjoy the vast supply we have and also the chance to rant a little about pricing.

[jwhitten]

Sir Madog

So let´s enjoy the vast supply we have and also the chance to rant a little about pricing.

 

(If you wanna know the truth, my real "rant" is that I wish Bachmann, P2K, or somebody, made some nice mid-size Pennsy locos with belpaire fireboxes that I could actually afford )

john

[IRONROOSTER]

A fundamental question is:  Should the wealth of the world be allowed to be concentrated in the hands of the few?

But this leads to politics and I get enough of that on TV these days.

What is missing from the hobby is the old Dollar Car series that MR ran many years ago.  Maybe they could bring it back and call it the Five Dollar Car.

Enjoy

Paul

[Anonymous]

jwhitten

 

Sir Madog:

 

So let´s enjoy the vast supply we have and also the chance to rant a little about pricing.

 

 

 

(If you wanna know the truth, my real "rant" is that I wish Bachmann, P2K, or somebody, made some nice mid-size Pennsy locos with belpaire fireboxes that I could actually afford )

john

I follow you down this path!

[DigitalGriffin]

Bachmann pretty much owns the biggest model train plastic plant in China.  This same plant also produces for several other manufacturers.

About a year ago they were having problems securing the raw plastic pellet matrial used to manufacture the engine parts.   As a result they had to pay more for the material.

Add to the fact that our dollar has sunken incredibly against the Yen, Pound, Yuan, and CN$ due to our mounting gov't debt, it means we have less buying power.  (When the gov't issues free money...ie: tons of spending, it lessens the value of the US greenback in other countries eyes.)  I blame both democrats and republicans for this.  They are both guilty.

 

[andrechapelon]

What is missing from the hobby is the old Dollar Car series that MR ran many years ago.  Maybe they could bring it back and call it the Five Dollar Car.

Actually, it would be more like the Eight Dollar Car adusted for inflation given that most of those articles were prior to 1956.

Interestingly enough, $8 is pretty close to what Athearn was charging for a large number of BB kits when they pulled the plug on them.

OTOH, Kadee charges nearly $7 for a pair of trucks, Even with a 20% discount, that would be about $5.60.  Then you're going to need couplers (#5's @ $3.00 for 2 pair allowing for a 20% discount).  Then there's decals and paint and we haven't yet touched on the raw materials for the car body and underframe. Styrene and/or basswood's not cheap.

Andre

 

[blownout cylinder]

I guess there is going to be a fair bit of crabbiness about the cost of these things. The problem is in the handling of it. What i would like to see is a good old breakdown of what it costs to produce a locomotive--let us see--

1) Material Costs--I suspect that a lot of the problem here is that material is not as readily available in China due to certain financial situations--hence the growing costs there

2) Labour Costs--keep going up due to the wage inflation going on in China. It is no longer possible to find the el cheapo labour there as much as it was likely possible to get...

3) Currency Exchange rates bouncing around all over the map--PLUS the ongoing currency exchange wars that are now breaking out in the Southeast Asian countries as elsewhere

4)Cultural/Socopolitical Costs--Regulations are now starting to take hold in China as well as elsewhere

5) Many companies that used to mfg in China are now looking elsewhere to outsource THEIR costs--which lead to more of the above

Which all leads to doing more with less---or less with less--and going all coocoo in the bargain---