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Inflation Strikes the Hobby

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  • Member since
    November 2005
  • From: Utica, OH
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Posted by jecorbett on Tuesday, October 12, 2010 7:55 AM

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.

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Posted by Mister Mikado on Tuesday, October 12, 2010 7:49 AM

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

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Posted by CNJ831 on Tuesday, October 12, 2010 7:36 AM

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 

  • Member since
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  • From: Chicago IL
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Posted by bobwrght on Tuesday, October 12, 2010 7:02 AM

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

Bob

 

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Posted by corsair7 on Tuesday, October 12, 2010 6:32 AM

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.

Irv

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  • From: Bedford, MA, USA
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Posted by MisterBeasley on Tuesday, October 12, 2010 6:22 AM

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. 

  • Member since
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Posted by MAbruce on Tuesday, October 12, 2010 6:13 AM

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.

  • Member since
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Posted by corsair7 on Tuesday, October 12, 2010 4:52 AM

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

  • Member since
    April 2003
  • 305,205 posts
Inflation Strikes the Hobby
Posted by Anonymous on Tuesday, October 12, 2010 4:29 AM

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?

 

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