Alan, in response to your expressed opinions and questions in your preceding post, I offer the following in a somewhat abbreviated form.
Correct. I do not regard today's R&D, tooling, etc. in the development of any new item as more difficult, nor relatively more expensive, than it was for Irv Athearn, et al., in the past. They managed to make a living off the net profit from their products without excessive pricing...even though they went from printed cardstock to plastic manufacturing, a vastly greater leap. In fact, R&D and tooling should today both be less difficult and probably less expensive for the manufacturer than it was for those in the 1950's, simply because of the great leaps forward in technology. Yet, in many cases we seem to be paying through the nose for today's trains.
Concerning disposable income today, I would say that in my experience, families actually do devote much more of their funds to this area than years ago. Folks expend huge sums currently on an endless aray of the latest "toys" and electronic gizmos that are far from necessities and that most of us could easily do without. Whether, or not, that curtails expenditures for model trains is debatable. A lack of serious interest among the public is of much greater significance.
There is no flaw in my thinking when it comes to the question of why products quickly sell out today and that it is NOT a sign of high demand. It comes not as a result of a flourishing trade, but rather derives from a combination of ever smaller product runs and the "buy it now, or lose out" marketing strategy the manufacturers use and I cited previously. In the long term, this approach will prove decidedly harmful to the hobby for a number of reasons.
Yes, there are still some good buys left at the lower end of the pricing spectrum currently. However, with the addition of each new product it is clear that nearly all of the manufacturers are moving away from their low-end lines and toward the highend "collectibles" market. Just consider for a moment that a couple of our current biggest names in the manufacture of steam locomotives are former brass importers. Where do you think they intend to take the market? Likewise, have a look at the price tag Bachmann, who for over a decade has indeed been a supporter of some relatively low prices for good models, has placed on its latest HO 4-4-0 steamers: $475 MSRP! Others all have the same story. The days of any affordable HO trains, outside of pure junk, are slowly fading into history.
I see nothing in the increasing profit figures cited that cannot easily be accounted for by the steady hiking of prices we've seen, rather than a result of increased production/sales numbers. We have quite a number of HO locomotives selling in the $500 range now that were totally absent in 2008-09 and IHC, the longtime marketer of affordable entry-level steam is gone forever. Even basic items are rapidly escalating in price. Have you taken a look at the price increases instituted for Atlas' code 83 flextrack in just the past five years! Examples are countless.
Finally, as to the question about the health of the brass market. I can recall in my early years in the hobby that there were literally scores of individual brass importers, large and small. Their product lines formed a larger percentage of the advertising one saw in MR and RMC. Today, only a very limited handful remain and the average hobbyist gives them no notice whatever. More shocking is that, back in the day, some runs of brass were larger than that of today's plastic examples! Further, back in the 60's I remember probably half of my hobby friends owning one, or more, pieces of brass rollingstock, or locomotives. That sort of interest in brass is entirely dead in today's hobby. Most sales of new brass currently actually go to dedicated collectors, most of whom don't even regard themselves as a part of the model railroading hobby.
Clearly the great majority of responders to this thread and similar ones appearing across the Net feel that they are being absused by today's pricing. The feelings of the majority are the same in every poll I've seen, whether one cares to acknowledge that fact, or not.
NYW&B
First let me say that I have also enjoyed this discussion. I'll also say that I don't disagree with everything you've posted here. There are instances of high prices without adequate reason. Take the Athearn shorty trailers for instance. You used to get a box full for around $6.50. Now you get two to a card for $14.98. Same tooling, mostly the same paint jobs. Then there is the track issue, thought I have not bought track in a long time. All in all, I think these are in the minority.
With regards to locomotives and rolling stock, where the pricing increases are most visible, and painful
I can't agree with your argument, because of the vast difference in quality and detail. We can get models now that we never would have dreamed of 20 years ago. Turbines and U-50's, Gensets, things that would have been (and were) available in brass only. Factory sound & DCC pushed prices up quite a bit, and account for a big chunk of the prices of the more expensive models you reference. There's nothing in the "old days" to compare that to.
Freight cars now typically have metal wheelsets, Kadee, Kadee clone, or Kadee compatible couplers, separately applied detail parts like ladders and grabs, full underbody detail. All things we would have had to add when we started out. Painting and tooling detail are much better than they were in the BB era. It's like comparing a 1965 VW beetle to a modern Porsche. And if I'm understanding you, you'd expect to pay the same dollars for the Porsche now as you paid for the beetle in 1967. Unless I've misunderstood you. If I have, please correct me.
On R&D, it's certainly more expensive than it was in Irv's day. Salaries are way up. C&C saves some time but you still have to pay the programmer. You also have to pay for the new machines that do all this (or for their use). There are less people, but they and their skills are more expensive.
On smaller runs, I believe that this is less a selling strategy than an accounting one. The push to stay profitable is relentless in any business. You can bet that sometime, somewhere a bean counter figured out that if the company makes 10,000 freight cars, and sells 3000 right away, then sits on the other 7000 for a year with minimal activity, then blows them out at cost plus 10% or even straight cost to get rid of them, that they could do much better by just making the 3000 and selling them straight away. This is what put quite a few brass importers out of business. Too many unsold models on the shelf ruins your profit margin on a project. Too Too many, and you can't cover your costs, so run sizes dropped drastically. Here again, they are reacting to our buying habits.
On brass, I bought a nice Sunset Models SP 2-6-0 last year for about $650.00. It came with sound & DCC installed, was very nicely detailed, and runs very well. I routinely run it at the club. We still have Sunset, Precision Scale, Glacier Park, Key, and Challenger Imports, among others, and the O scalers have Sunset, Key, and Kohs. The brass market has been whittled down to those who understand the business and are successful. It has evolved to fit the demand. You're right, there aren't as many as there used to be, but can you name any business where that isn't so? There is also a thriving used brass market out there, though it doesn't fit in this discussion.
I was sorry to see IHC pass too, but that was a case of an owner passing away with nobody interested in taking over, wasn't it? The same thing happened to Champ Decals, and looks like it will happen to Westerfield. These are all "Mom & Pop Shops" If the kids aren't interested, they go away, even if they are successful, like Westerfield.
Would I like to see things cheaper? Of course, who wouldn't, but I don't believe we're being ripped off either. We don't get to see the balance sheets, so all we can do is speculate. Just because a Chinese laborer only makes a buck an hour or so doesn't mean you're being robbed. There are other items that are part of the costs you don't necessarily see. What about the living quarters for all those workers on the plant site? Think they are considered as part of the costs? You better believe it! Also, we haven't seen any profit numbers, just gross sales, and gross margins. Without the real numbers (the NET profit), all you can have is an opinion. This one is mine:
I have a hard time believing that there is a vast conspiracy to over charge me for my hobby supplies. The prices are pretty close among the major manufacturers, for example, passenger cars. Athearn, Walthers, Rapido, MTH and BLI are all within about 10 bucks of each other. I think this shows that manufacturing costs are fairly close among them. They would have to conspire to raise prices uniformly if this was not the case. That is called collusion, and it is illegal in this country. Getting caught doing it wins you a free trip to jail.
Bottom line, nobody is forcing you to spend your money. Getting all worked up about how much money
you think someone might be making on what you buy is kind of pointless. The hobby is evolving, like it has been since it began.
Regards,
