I remember a time when most companys in the hobby, when they would deside to close shop, the company would be sold or a least the product would live on in someones elses line. Times have changed and it seems a lot of companys just disapear. Some companys that come to mind are Jordan and Shinohara, both just died.
rrebell I remember a time when most companys in the hobby, when they would deside to close shop, the company would be sold or a least the product would live on in someones elses line. Times have changed and it seems a lot of companys just disapear.
I remember a time when most companys in the hobby, when they would deside to close shop, the company would be sold or a least the product would live on in someones elses line. Times have changed and it seems a lot of companys just disapear.
That change must have happened before 2010. Champion Decals closed, and no one wanted to pay the seller's price.
Ed
When Ron from Rail Graphics closed up and retired, I contacted him about buying the business. He was very honest and said the business was not sustainable and needed all new equipment. He said needed supplies were getting very difficult to obtain, and expenses were soaring. Potential customer base was shrinking, and a huge price increase would be necessary.
-Kevin
Living the dream.
Lastspikemike I had thought Shinohara stuff got bought by Walthers. But the problem of being unable to sell your business when you wish to retire is getting common. I believe it's down to demographics in part. In Canada the ridiculous burdens governments place on business operators are a significant factor. It is literally impossible to run a small business now without professional accounting assistance which is in effect a tax on business due to government offloading tax collection costs onto businesses, among other regulatory functions imposed such as health & safety and so on. There are fewer people willing to start or acquire businesses. At the same time there are more potential sellers. The only other option is just close up shop at the end of your last lease term.
I had thought Shinohara stuff got bought by Walthers.
But the problem of being unable to sell your business when you wish to retire is getting common.
I believe it's down to demographics in part. In Canada the ridiculous burdens governments place on business operators are a significant factor. It is literally impossible to run a small business now without professional accounting assistance which is in effect a tax on business due to government offloading tax collection costs onto businesses, among other regulatory functions imposed such as health & safety and so on.
There are fewer people willing to start or acquire businesses. At the same time there are more potential sellers. The only other option is just close up shop at the end of your last lease term.
Shinohara simply closed up. Walthers sourced their new track from a different vendor.
The business climate here in the US varies from state to state, but is still difficult in many cases as we continue to head down a road that has failed everywhere it has been tried.....
Sheldon
There were several companies I considered buying, but it just never made good business sense.
Me too.
Thank goodness NWSL was kept alive!!! I support them, and hope everyone realizes what a hit that would be for our hobby if they dissappear. Dan
The owner of my local model shop said he would sell every item he had for 1 penny each. He cannot get a buyer.
Thankfully he is still trading as I am one of his regular customers.
David
To the world you are someone. To someone you are the world
I cannot afford the luxury of a negative thought
For many of these small companies, their revenues would not support purchasing the company. Unless the new owner has cash and doesn't need to get financing to complete the deal, the cost of operating it would exceed the income.
Most of the assets outside of goodwill and intellectual property would only be worth as much as the scrap dealer will pay.
The biggest issue is cash flow - If you have rent/lease/mortgage payment due, salary and other employee overhead, insurance on the business, contents, employees and any customer interactions, tooling fees, manufacturing costs, shipping costs, plus the numerous other expenses associated with being a business owner, you must be able to at minimum break even, and most people want to make a profit, as they need money to buy food, clothing, housing, etc... for themselves.
Small "niche" businesses (like all in our hobby are) turn only little (if any) profit for the owners. And that chases potential buyers away from them.
The ones who have a adequate cash flow do continue on, those that do not are the ones that disappear.
But that happens in all businesses, not just model (really toy) trains. Look at retailers like K-Mart, Sears, etc... They did not have a good enough cash flow to turn profit, and are now gone.
In my own experience, a retailer I w*rked for had a decent business, locally owned and operated, and decently profitable, until the building he leased was sold to a out of state conglomerate that owns many strip malls. The lease/rent price was trippled, as that was the new building owners "standard rental fee" in other areas. Every single privately owned business in that plaza is no longer there, and they all were forced to close up period, as no other buildings in the area were available.
The only ones left in that plaza are the chains TSC, CVS, Verizon Mobile, a state owned liqueur store, a chain grocery store, and the fast food guys.
New tennants are limited simply to a single different chain store, Family Dollar. All the other store fronts sit empty and unused, unable to turn enough profit to afford the higher lease/rental charge.
But one chain store, and 3 locally owned businesses all left, because the cost became to prohibitive to remain.
Ricky W.
HO scale Proto-freelancer.
My Railroad rules:
1: It's my railroad, my rules.
2: It's for having fun and enjoyment.
3: Any objections, consult above rules.
There also is the change in what people want. As eras keep on coming the percentage that model a certain era diminish even as the number of modeliers increases.
ricktrains4824New tennants are limited simply to a single different chain store, Family Dollar. All the other store fronts sit empty and unused, unable to turn enough profit to afford the higher lease/rental charge.
And the out-of-state owners are probably writing off losses the empty building incurs, so they are in no hurry to lower rents to attract tenants.
York1 John
rrebell There also is the change in what people want. As eras keep on coming the percentage that model a certain era diminish even as the number of modeliers increases.
I have commented on this many times. All else aside, this is a major problem effecting this industry today. The demand for any one single product is ever lower, and made worse by unnecessary product duplication.
Back in the day, the tooling belonged to the company. Not so in China, where most of our trains are made today. The tool is the property of the parent company/factory. So like the tooling for the G scale line of Aristocraft, which was owned by Kader, is now showing up under the Bachmann line of trains as Kader is also the parent company/factory that makes Bachmann trains.
Silly NT's, I have Asperger's Syndrome
emdmike Back in the day, the tooling belonged to the company. Not so in China, where most of our trains are made today. The tool is the property of the parent company/factory. So like the tooling for the G scale line of Aristocraft, which was owned by Kader, is now showing up under the Bachmann line of trains as Kader is also the parent company/factory that makes Bachmann trains.
It's not that simple. Much tooling does belong to the model train companies, not to the factories.
rrebell I remember a time when most companys in the hobby, when they would deside to close shop, the company would be sold or a least the product would live on in someones elses line. Times have changed and it seems a lot of companys just disapear. Some companys that come to mind are Jordan and Shinohara, both just died.
Certainly there is some old tooling which has proven surprisingly durable, including some items from Varney. But if you look at the advertising index in a Model Railroader magazine from 1965, 1970, 1980, or 1990, or at the product list of a Walthers catalog from those same years, you'll see plenty of names which have indeed simply gone away and the tooling is not to be found.
Dave Nelson
This development is a definate sign of changes in this hobby. With many LHS closing, they might realize that e-commerce is a preferred route. That is probably becoming more challenging with C-19. How people adjust requires refocusing on addressing the multiple supply chain issues. All of these interdependent changes are interesting to watch and discuss.
York1 ricktrains4824 New tennants are limited simply to a single different chain store, Family Dollar. All the other store fronts sit empty and unused, unable to turn enough profit to afford the higher lease/rental charge. And the out-of-state owners are probably writing off losses the empty building incurs, so they are in no hurry to lower rents to attract tenants.
ricktrains4824 New tennants are limited simply to a single different chain store, Family Dollar. All the other store fronts sit empty and unused, unable to turn enough profit to afford the higher lease/rental charge.
I never understood this. In my town is a strip mall. The owner kept raising rents. Many successful businesses had to shut down because they could not afford the new rent. Over the years, many empty stores - is the write off really that good? Somehow that does not make sense to me.
It is a mater of value and writeoffs. For example, years ago in multifamily, a pride of ownership property was worth 12x grose rents. So I raise all my rents to a certain point to get x amount of $ when selling, in the meantime you get to write off any losses and with proper timing you can turn loses into profits depending on the tax codes. In comercial real estate many propertys are triple net, the tenant pays rent, taxes and maintance.
BillwizI never understood this. In my town is a strip mall. The owner kept raising rents. Many successful businesses had to shut down because they could not afford the new rent. Over the years, many empty stores - is the write off really that good? Somehow that does not make sense to me.
I'm with you. I'm not sure how it works.
I learned about it when a grocery store in our town closed instead of paying the ever-rising rent.
The building sat empty (still is) for over five years. All that time, the out-of-state owners had to pay taxes, upkeep, etc., on the building.
I finally asked someone in town how that landlord is able to justify owning an empty building like that. It was explained to me having to do with taxes, depreciation, etc., but I didn't understand it.
If this is part of our tax code, then it's stupid.
Consumers vote with their dollars whom they want to see stay in business. If there is sufficient demand for a particular product, somebody will around to sell it. If a company ceases because the proprietor chose to retire, it probably means there wasn't enough demand for that company's products to make it worthwhile for somebody else to buy out the business.
It can be disappointing when a company whose products you like goes out of business but new companies are starting up to fill the void. Even if it is a new product line, somebody will meet the demand. On the other hand if it is a product that is no longer in demand, there's no reason to expect somebody else to produce it. I remember someone lamenting that Bowser was no longer going to produce loco kits. Apparently most modelers prefer RTR locos.
I think we may be entering a new phase of the hobby. HO engines are more expensive then computers now. 3D printers are coming down also. What if some programmer would make 3D programs for sale and we could print as many cars as we want after purchasing the program? Will it work for engines?No. Would it work for everything else? Probably. Modular building walls could allow any size building. Detail parts could be had. While car bodies could be printed. This could be the future.
ndbprrI think we may be entering a new phase of the hobby. HO engines are more expensive then computers now.
100% true.
HO scale locomotives have become a luxury purchase. Back in the day, when I was buying multiple Kato N scale locomotives to populate my dream house layout, these were luxury purchases, but only because I was buying 6-10 at a time.
Even then, the purchase was less tha half of my mortgage, not even a car payment, and not a full weeks pay even though I was a 21 year old blue color worker.
Now, an HO steam locomotive or two diesels easily exceeds a car payment and is getting into mortgage payment territory.
A locomotive is absolutely something that needs to be budgeted for a lot of households. The hobby is changing.
ndbprr I think we may be entering a new phase of the hobby. HO engines are more expensive then computers now. 3D printers are coming down also. What if some programmer would make 3D programs for sale and we could print as many cars as we want after purchasing the program? Will it work for engines?No. Would it work for everything else? Probably. Modular building walls could allow any size building. Detail parts could be had. While car bodies could be printed. This could be the future.
I have no doubt this will be the future. In fact I'm surprised it is not the present. Maybe the cost of 3D printers hasn't come down enough to make selling software to print rolling stock and structures a lucrative proposition, but I don't see how that isn't going to eventually happen.
What will that do to the LHS if that becomes the reality. There will still be products that can't be made on a 3D printer and with rolling stock you still need trucks, wheels, and couplers. I can't see plastic versions of those replacing metal. Will 3D products hasten the end of the LHS, which are already fighting an uphill battle against e-tailers? Who knows, but it could take a bite out of their revenue.
SeeYou190 Now, an HO steam locomotive or two diesels easily exceeds a car payment and is getting into mortgage payment territory. A locomotive is absolutely something that needs to be budgeted for a lot of households. The hobby is changing. -Kevin
Years ago here in the U.K. a locomotive was produced. If the owner wanted a different number on it he would do it himself.
Now when a locomotive is produced there are eight or nine varients. Different numbers, liveries etc. Then, there is sound etc. etc.. A store has to have them all, yet it is just one locomotive.
SeeYou190 ndbprr I think we may be entering a new phase of the hobby. HO engines are more expensive then computers now. 100% true. HO scale locomotives have become a luxury purchase. Back in the day, when I was buying multiple Kato N scale locomotives to populate my dream house layout, these were luxury purchases, but only because I was buying 6-10 at a time. Even then, the purchase was less tha half of my mortgage, not even a car payment, and not a full weeks pay even though I was a 21 year old blue color worker. Now, an HO steam locomotive or two diesels easily exceeds a car payment and is getting into mortgage payment territory. A locomotive is absolutely something that needs to be budgeted for a lot of households. The hobby is changing. -Kevin
ndbprr I think we may be entering a new phase of the hobby. HO engines are more expensive then computers now.
It was only about 15 years ago that I bought three Hudsons with DCC and sound from Trainworld for about $130 apiece. Granted, this wasn't MSRP but those would probably retail for over $500 each today. I can't remember the last time I saw a loco with factory DCC and sound with a MSRP under $500. I looked at Rapido's Ten Wheeler and even that is well north of $500. Modern locos are so much more sophisticated than just 20 years ago but that comes with a cost. You observed a loco now costs more than computers. Maybe the cost of them will eventually come down just as it did for computers but I don't think that will happen soon. I'm glad my loco roster is pretty well filled out. I can't see paying current prices for a new one.
Oh boy not another "this hobby is getting too expensive" threads.
My argument to the "inflation is the only reason why things are expensive, things are actually comparatively cheap" is to compare the ONE loco that has consistentely been produced over the span of 13 years and counting (2008-2021+) with virtually ZERO upgrades, the BLI I1sa. This engine gives a good idea as to whether prices are being unfairly raised or not. Made in the PCM era with QSI sound, then in paragon 2, paragon 3, and now in paragon 4. Assuming electronics cost roughly the same to produce/buy from QSI, I can confirm the tooling and paint is identical throughout the eras. Therefore, the ONLY thing that has changed over the years is the price.
In 2008, the PCM I1sa MSRP was $399.*In 2010, the paragon 2 I1sa MSRP was $399. In 2016, the paragon 3 I1sa MSRP was $449. In 2021, the paragon 4 I1sa MSRP was $499. Otherwise though, the price has increased $50 every 5-6 years. Bringing all prices to 2021 inflated prices, 2008 $399 is now $509. 2010 $399 is now $5032016 $450 is now $5152021 $499 is now...$499. These prices are a bit unfair due to the rapid inflation which occured in 2021, but it still tells a story.
Make of the data for what you will, I think it concludes that atleast BLI is being pretty fair with MSRP prices. Although I still find $500 for a plastic loco is too much...but that because Im cheap :)
Charles*Some possible reasons why the PCM to paragon 2 didnt increase in price could be due to only having a 2 year gap, and also BLI's paragon 2 costs less to make than buying decoders from QSI.
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Modeling the Santa Fe & Pennsylvania in HO
Youtube Channel: https://www.youtube.com/channel/UCLb3FRqukolAtnD1khrb6lQ
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The primary driving force for any consumer product is supply and demand. If the price of new locos seems high, it is because manufacturers know that we the consumer will pay the higher prices in sufficient numbers for them to maximize their profits. Why would they sell a loco for $400 if they know there are plenty of people willing to pay $600. If they ask too high a price, at some point the consumer will balk and they won't be able sell enough to be profitable. There is an optimum price point for any consumer product and the manufacturers have determined that high end, sound equipped locos, with all the latest features can be sold in the $500-600 range so that is what they are charging us.
I liken it to the cost of golf clubs. Each year manufacturers come out with new club designs. Last I looked, a top of the line new driver sells in the $500-600 range. Meanwhile, the price of the previous years models declines. That driver that today sells for $500-600 will be available in two years for around $300-400 and will be just as good as it is today. If you're really cheap like me, you go out on ebay and buy a used driver about 5-6 years old for around $100. Clubs haven't improved that much in 5 years to make it worthwhile paying the premium price for the newest models.
Manufacturers of locos don't come out with new models every year so there isn't the depreciation that there is with golf clubs. In fact with the pre-order system that is prevelant today, it can be several years from the time a product is announced until it actually becomes available. There are enough of us that want these newer locos badly enough to pay the premium prices. As for me, I'll shop on ebay and find bargains there, even if they don't have the latest bells and whistles.
John-NYBW SeeYou190 ndbprr I think we may be entering a new phase of the hobby. HO engines are more expensive then computers now. 100% true. HO scale locomotives have become a luxury purchase. Back in the day, when I was buying multiple Kato N scale locomotives to populate my dream house layout, these were luxury purchases, but only because I was buying 6-10 at a time. Even then, the purchase was less tha half of my mortgage, not even a car payment, and not a full weeks pay even though I was a 21 year old blue color worker. Now, an HO steam locomotive or two diesels easily exceeds a car payment and is getting into mortgage payment territory. A locomotive is absolutely something that needs to be budgeted for a lot of households. The hobby is changing. -Kevin It was only about 15 years ago that I bought three Hudsons with DCC and sound from Trainworld for about $130 apiece. Granted, this wasn't MSRP but those would probably retail for over $500 each today. I can't remember the last time I saw a loco with factory DCC and sound with a MSRP under $500. I looked at Rapido's Ten Wheeler and even that is well north of $500. Modern locos are so much more sophisticated than just 20 years ago but that comes with a cost. You observed a loco now costs more than computers. Maybe the cost of them will eventually come down just as it did for computers but I don't think that will happen soon. I'm glad my loco roster is pretty well filled out. I can't see paying current prices for a new one.
York1 Billwiz I never understood this. In my town is a strip mall. The owner kept raising rents. Many successful businesses had to shut down because they could not afford the new rent. Over the years, many empty stores - is the write off really that good? Somehow that does not make sense to me. I'm with you. I'm not sure how it works. I learned about it when a grocery store in our town closed instead of paying the ever-rising rent. The building sat empty (still is) for over five years. All that time, the out-of-state owners had to pay taxes, upkeep, etc., on the building. I finally asked someone in town how that landlord is able to justify owning an empty building like that. It was explained to me having to do with taxes, depreciation, etc., but I didn't understand it. If this is part of our tax code, then it's stupid.
Billwiz I never understood this. In my town is a strip mall. The owner kept raising rents. Many successful businesses had to shut down because they could not afford the new rent. Over the years, many empty stores - is the write off really that good? Somehow that does not make sense to me.