Inflation?

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NP2626

Well-Known Member
I lost my "Train of Thought". It must of got hung-up in a tunnel somewhere!

The truth is I really don't care about explanations of why companies feel they can justify their high prices for the stuff they make and/or sell. I work from my gut and the 31 years as a successful manufacturing and consulting business owner. In the end all that is needed is being O.K. or not with the prices being charged. Some days I am O.K. with the prices, some days I wonder what in the _____ happened!
 
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Selector

Well-Known Member
Nothing speaks louder to any vendor than a decline in sales.
Very true. Both Samsung and Apple are learning that very lesson as I type. Huawei is cleaning up in the market because they make 'good enough' phones that are affordable. But both corporations will still do very well because of the value millions place on having the 'best' phone with the latest and greatest features, including foldable screens.

I think St. Matthew said it best:

"Lay up for yourselves treasures in heaven where neither moth nor rust can corrupt, and where thieves cannot break in and steal it away. For, where your treasure lies, there will your heart be also."
 

Espeefan

Well-Known Member
I was perusing this site:
http://www.keymodels.net/index.html
Gee, I wonder why they don't quote any prices...?
Because they don’t know yet. Lots of things can effect the final price on one of these projects. How many reservations received. More means lower unit cost for example. Currency exchange rates, are another. Contract conditions between the importer and the builder may allow for escalation which will get passed to the buyer. Tariffs if applicable. Once they move into production you will see pricing, but it will still be subject to change. With some of these projects there may be as few as 25 models made. The folks ordering them know this and take it into consideration. I once bought a Sunset 2-6-0. The price when announced was $699.00. It didn’t change but could have. That’s the modern brass business. The importers take a pretty hefty risk and all of the financial exposure, and if even 10% of the models don’t sell, their profit evaporates.
 

NP2626

Well-Known Member
Would we be in agreement that whole sale price is basically 50% of Retail? Mark-up for retailers is pretty standard at 100%. Is there any reason to think a lesser; or, greater ratio would be at work here in Model Railroading?
 

Iron Horseman

Well-Known Member
Would we be in agreement that whole sale price is basically 50% of Retail? Mark-up for retailers is pretty standard at 100%. Is there any reason to think a lesser; or, greater ratio would be at work here in Model Railroading?
I should know the answer to that as three years ago I attended a seminar on how to bring a model to market, but I really don't remember anything about it.
 

santafewillie

Well-Known Member
Would we be in agreement that whole sale price is basically 50% of Retail? Mark-up for retailers is pretty standard at 100%. Is there any reason to think a lesser; or, greater ratio would be at work here in Model Railroading?
Close to correct. Before he retired and closed shop, my long time LHS owner who sold everything at 20% off list to begin with, admitted that he still made about 7% even after he reduced everything an additional 20% to clear out inventory before he closed. He was known over the years to give me additional discounts because of my volume and the fact that I paid cash which relieved him of the credit card fees. He rang everything up on the register so he wasn't hiding anything from the tax people.
 

Bruette

Well-Known Member
I've been buying and selling, even manufacturing for over 30 years. From my experience nearly every product has a different mark up and wholesale values vary accordingly. As a capitalist market supply and demand are the biggest factors.

Calculation of selling price is usually done by dividing the cost, believe it or not. For example to find a true gross profit of 35% (a rather high mark up) divide the cost by 0.65, example; cost = 100 divided by 0.65 = a true gross profit of 35% for a total selling price of 153.85. That's how I was taught to do it and every company I worked for in the 80s and early 90s did it that way. I continued to do that throughout my career.

I was also taught to never sell below 12% gross profit. If you do you are ignoring the cost of doing business and could end up losing money.

I also know accounting methods vary. I knew of one company that basically threw everything into one pot and hoped they made profit at the end of the year. They would even sell below cost to maintain purchase levels to keep their buying prices low. They went bankrupt.

Other than eBay I was never professionally involved in the buying and selling of model trains.
 

NP2626

Well-Known Member
All I did was Google Whole Sale VS Retail Prices. My figures are from what was stated there. Of course, everyone's results can and will be different. To me, to mark something up, simply because you bought it and are trying to sell it and make 100% on your money, does not seem right. The manufacture, who has labor, engineering, design costs, along with the materials needed to manufacture, plus some profit, hopefully, has justification for what he charges. The retailer, who has only purchased and had shipped to his place of business is much less justified in marking up 100 % and selling, in my opinion! Now, I do not need; or, want, a lecture in American Economics 101! I've only given my opinion. You disagree, good for you!
 

cv_acr

Active Member
The retailer also has storefront (i.e. rent & utilities) and staffing costs, and is paying all the shipping on the stuff they get in before they make their own small profit (i.e. make a living for their self) on it, not to mention capital tied up in inventory.

If you can get stuff direct from the manufacturer at wholesale you'll definitely get a discount, but most manufacturers don't do that - they don't want to undercut all their distributor and retail customers so if they sell direct it's usually at MSRP list price.
 
Case in point, the 1500 dollar smartphone. I have nothing to base this on but I'd wager that most people, say 35 and older, are not going to shell out that kind of money for a smartphone.
I'm 56, and have a $1,500 dollar cell phone. For the line of work that I'm in I would give up a lot of things before I gave up that cellphone.
 

cv_acr

Active Member

These are low-volume limited production brass models - pretty much going for what I'd expect them too. I've seen rare and difficult to obtain brass go for WAY higher...
 
These are low-volume limited production brass models - pretty much going for what I'd expect them too. I've seen rare and difficult to obtain brass go for WAY higher...
None of the first ebay runs met the 'reserve' placed on them. The Challenger was relisted with a $750.00 starting bid... didn't go anywhere.
 
I'm 56, and have a $1,500 dollar cell phone. For the line of work that I'm in I would give up a lot of things before I gave up that cellphone.
I said "most people". There are exceptions to everything. I'm 56 too and I was perfectly happy with my Apple 5C till it crapped out completely. I now have some cheap off brand android but it's fine for what I need which is allowing my family to keep up with me when I'm out and about. I have no need or desire to be anymore connected than that. I'm a techno nut and it's wonderful to have the latest and greatest but I suspect very few people need all the tech in those overpriced expensive phones. Honestly if it weren't for texting with family members, I could probably still get by with a basic flip phone. BTW, knowing the difference in what one wants and what one needs is a basic tenet of common sense that the younger "instant gratification" generation seems to lack.
 
I said "most people". There are exceptions to everything. I'm 56 too and I was perfectly happy with my Apple 5C till it crapped out completely. I now have some cheap off brand android but it's fine for what I need which is allowing my family to keep up with me when I'm out and about. I have no need or desire to be anymore connected than that. I'm a techno nut and it's wonderful to have the latest and greatest but I suspect very few people need all the tech in those overpriced expensive phones. Honestly if it weren't for texting with family members, I could probably still get by with a basic flip phone. BTW, knowing the difference in what one wants and what one needs is a basic tenet of common sense that the younger "instant gratification" generation seems to lack.
Ok, I understand where you're coming from now.
 





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