I can speak firsthand at how the cars are NOT selling. My LHS likes to sweep up the half-off stuff at Horizon. He brings in a TON of stock every few weeks. The cars are NOT selling very well. The guy who owns my LHS knows that no one wants to pay the outrageous prices, which is why he usually only brings in the stuff on clearance (it's all good stuff! I end up dropping 100-500 there every few months and pick up a whole fleet of cars there). Covered cement hoppers for $11.49 anyone? How about LPG tank cars (new tooling) for $15.49? (all half off MSRP)
Originally Posted by MGWSY
The things that are almost guarenteed to sell at this point is locomotives. Regardless of how much they gouge the prices, people will buy them. Of course, there are people who find ways around paying full price for stuff, but because of a higher MSRP and limited quantities, the locomotives hold their resale value very well even when used.
Those Atlas GP40-2Ws... I bought one for $118 with free shipping when they came out. To this day, I have not found another one at that price or better, and I generally don't pay more than $100 for a non-sound locomotive unless it's something I really want.
These manufacturers need to learn the laws of supply and demand. Jacking up the prices will murder the demand.
Case and point of someone who's doing it right:
The Dash 8-40CWs for Norfolk Southern's horsehead paint scheme retailed for $140. They're nearly impossible to find at this point, and I just paid $150 for one on ebay, USED.
I have no doubts that Atlas will make more in the future, but just not in the same road numbers. Atlas releases products slower, which builds up demand, which makes it easier for them to sell their products at a slightly higher price.
Athearn on the other hand, pumps out all this stuff that they can't even deliver on time, with quality control problems. They're not exactly creating a demand, they're flooding the market. If Athearn comes out with a 50 foot box car, and then some tank cars, both costing $30-40 a piece with the same old tooling, people with limited budgets won't buy both, they'll buy one or the other. So, the demand decreases. Since the demand decreased, I bet Athearn is gouging the prices to make up for the losses, further destroying what little demand there is left for their products.
With the prices on new stuff skyrocketing, existing model railroaders will tend to buy older stock and/or used stuff. When a model railroader buys used stuff, or old stock from their LHS, Athearn (or any other manufacturer) is NOT making money from that item. For example, Modeler A buys an Athearn Dash 9 brand new. Athearn made their money on it from his purchase. Modeler A gets some play value out of it. Modeler A decides that he doesn't want his Dash 9 anymore for some reason and puts it up for sale. I see the prices on a brand new Athearn Dash 9 and don't want to spend that much money on one even with a discount. I see Modeler A's Dash 9 for sale as used. Modeler A kept his locomotive in good condition and didn't damage anything so I buy it because the used price is better than the price Athearn has them at right now. I buy Modeler A's Dash 9, and I get to play with it. Athearn doesn't make any money from that exchange, and technically LOSES money because I didn't buy a new Dash 9 for them to profit on.
Same concept with the old stock at the LHS. When the store ordered the locomotive or rolling stock in the first place, Athearn has made their money. After sitting on the shelf for 2 years, a customer comes along and buys it at a reduced price because the store wants to get rid of it. Athearn loses a sale because the customer saw the price tag on the older stock and decided to buy that instead of something new. Because of shelf queens like that item, the store may also cut down on the stuff that they actually order from the distributor/manufacturer, which leads to even less sales for the manufacturer.
Some of the manufacturers in this hobby are digging their own grave!
Don't get me wrong. ALL of the manufacturers have been experiencing quality control problems lately. The only difference is that Athearn has had the quality control problems from day 1 and never fixed it, so it has progressively gotten worse.
Back to the half price cars at the LHS... There are two scenarios. If Athearn can afford to sell the cars at half price and break even or even make a little profit on the cars, then they're gouging the MSRPs to make an unreasonable profit. If Athearn loses money selling at half price, then they seriously need to rethink their business structure.
I'm inclined to believe it's the first scenario.
Walthers is another repeat offender. I was at the LHS yesterday. The shop's co-owner was unpacking a box from Walthers. More than half of the cars either had ends popping off due to shoddy construction or wheels/trucks popped off the model. He knew how to fix them, but Walthers is one of those companies that cares more about lining their bank account rather than the modeler. They're jacking up the prices to $35-$40 on cars that have NOT been retooled, and are simply built-up kits. To save on shipping, they also don't put adequate weight in their cars.
I've realized something... Athearn (Horizon) and Walthers are both large corporate entities. Atlas is not. I think that when the companies get too big, the customer gets screwed with poor quality and bad customer service. For example, McDonalds, Wal*Mart, Best Buy....
Last edited by diburning; 12-23-2011 at 11:56 PM.
Eric from Boston, MA. Modeling Norfolk Southern and Pan Am Railways.