Just stumbled on something that made me go, hmmmm....... Trix has an ad in most model train magazines for their Bigboy steam loco, the ad says the MSRP (manufacturers suggested retail price) is $598.00, OK, so Walthers sends me a sale flyer which states that they have it on sale for $575.00, and the regular price is $649.95. Does it seem weird that the regular price is more than the MSRP? I am not the sharpest knife in the drawer, but where did Walthers get this 'regular price'? My local shop can beat Walthers 'sale price' by almost $100, (which explains why I buy little if anything from Walthers directly). Just commenting....inquiring minds want to know!! 2slim
2slim, I had noticed that as well and just blew it off as a "Walthers" mark up. You know how Walthers is on cost.. However, I hear that thats a running machine! The entire loco is cast metal! With an exceptionally strong motor and bell shaped flywheel. and with all the lighting in it. Plus a cast metal tender.... I figured it be an expensive toy. I just didn't think it cost that much! But, I still like my Rivarossi Big Boys, that I have custom redone to be Yellowstones as B&O EM-1's. I would think the Trix one is a strong great puller.. Thing is, to customize it to a B&O Yellowstone, "EM-1" might be more work then I'd care to do with an almost $600 loco!
John, It really seems silly to me that Walthers even sends out those 'sale flyers'. My local shop owner laughed out loud when I showed that 'regular price' to him. As mentioned I paid about $100 less than Walthers 'sale price'. I asked my LHS owner if he took it in the shorts on this and he said 'no, cause there are shops on the net who will sell it cheaper and they are still making money on them'. So I wonder if Walthers is trying to pass off the import fees to their customers? One thing I thought was funny is my LHS got mine and the others that customers ordered from Walthers!!! And IIRC he once told me he charges me dealer + 20% cause I'm a club member!! In the imortal words of Elmer Fudd: "Thewe's something afwey scwewey going on awound here! 2slim
I get the Walters sale flyers too. I just use them for a resource numbers book. to get numbers of a specific item. I have never once bought anything from Walthers! And with their prices, I probably never will. Just the flyers and their catalog is a good ordering number book to have a LHS order whatever, and then give them the number... It sure is awittle scwewey fings goin' on awound here! Someone trying to get rich overnight????? Or pay for their importing costs???? Thats enough to really p*ss someone off. But then, thats their lost customer! I was never a customer and all so. No love lost here.... And I get my stuff at a good price so..... I shop around for the best offered price, and then thats where I buy... And I don't get mad at the high prices, I just don't buy. and then look for somewhere that has the same thing for a better price!
If you want to know who is making these engines cost us such high prices....it is those of us who will pay the high price! Go to Ebay and call up item #1762 661 736 and see the Big Boy a guy in Italy paid over 600 Euro for! That is over $667.00 US plus shipping and insurance! Because there are guys with tons of money that pay these prices and even buy 2 to 5 engines at a time, is the reason the distributers keep raising the price on us! It is considered "good" business practice! As long as we are happy to pay the price, they are happy to keep trying to see just how high we are willing to go before we refuse to be robbed! Anyone with an American MBA could tell you that, (if they were willing to), its taught in college! I have had it with these rediculous prices for a model that is afterall mass produced! I was in mass production most of my working life, so I do know what mass production is! A good hand made engine is worth the skill of the craftsman, but once it is tooled up for mass production, it only costs the materials (mostly plastic now days), a little electricity, minimum wage labor, a little overhead, and some packaging. The advertizing cost is the distributer's, and some storage and a little discount freight. That knocks a $500.00 retail product down to about $60.00 actual value. You have to understand that the company is not in business to provide you with your favorite engine, they are only in business to make as large a profit as the trade will support! They even took the jobs away from our US labor, and gave it to the 3rd world countries to make bigger profits, then raised the price on you! That is how much they care about you! And you are supporting it! That's the bottom line! I'm angery at the injustice our businesses do to the general public!
I have to agree with Watash, Guys he's right.. I'm in the hobby as well. for repair work and custom building. and being I do my own tool work and all. I don't charge that kinda money! I do it as a hobby is ment to be.. FOR FUN, and then make a few dollars. but for those who seen my work and know what type work I do. They know I earn the dollar I make.. Its not a HUGE profit! The companies up the price to see just how far guys like you all and myself will actually pay. once they "milk" us of our hard earned dollar. they could careless. As long as they get that dollar, and sell their product! This is what Walthers been doing for years! They have been tryin to "set" the hobbies standards and cost to whatever they seem to think its worth to them! And being they have been doing it. Theirs guys who seem to think, that if they pay high dollar for it, they're getting the best. sadly its (as Watash said) mass produced, which makes it worth about $60 dollars total! all the rest of the money your spending is simply going into some guys pocket and making him rich. OVERNIGHT! I haven't bought and thing brand new since 1998! And then to that point, it was cheaper then normal... and also on sale. So I know I got it far less then I would have if I would have bought it at the regular price! I have less then $150 in a brand new Rivarossi 2-8-8-0! The first one I ever bought, I got him in 1998 and never bought another loco or car new since then! At that time, that loco was listed at $289.99 and I tell ya for a poor guy that works for a living, that almost $300 is alot of money! Unless you own a bank or likes credit card debt! Which I have neither! Its sad for all of us tho, that they done this to a hobby thats supposed to be fun. and creative, not high dollar/cost stuff for someone else to get rich over.... I hear ya ole buddy, I'm angry at this same thing! We're getting taken more or less to see just how far we will go...
I have to agree with you on mass production. The more you produce the price starts going down. But a company has to recover the tooling costs. This is done on a per unit basis over the anticipated number of items in the run. This why some railroad specific models won't get produced. One example being hi-hood ALCO Century units. Only the Monon, N&W and maybe the Long Island had hi-hood Centuries. It would cost too much to tool up a hi-hood for the anticipated low demand for these models. I will say that Atlas is now producing more hi-hoods. It makes me wonder if a combination of economy of scale and new techonology has allowed this. This is a trend that we can all benefit from. But you are right about another thing Watash. If we buy more, I don't think the prices will come down. It will be more profit to the manufacturers. But if they make a profit, it means that they may be more willing to make more other models as well.
AJy6b, that's right. During the initial Product Proposal Meetings, we did a market prediction study. Then the designteam designed the product to cover as many different models as we could, even faking it on some. Then Engineering Design got into tooling, fabricating, assembly, packaging, and in house storage logistics. They determined if, and what new tooling would be needed, if any. They were expected to cover shipping and warehousing with distribution costs. The Sales Dept. came up with a projected cost envelope and advertizing. They decided on how much the distributer could pay, and how much each dealer should pay. A hand crafted "prototype" was made to "look" like the finished product, so photos and demos could begin. Working models often "worked" far superior to the "final" product. (If you can ever get your hands on one of these, you will never get rid of it!) Now we had a tenative "budget" to work around. Then we designed it for manufacture (DFM) and re-designed it for assembly (DFA). We saved money by eliminating all the fasteners and employees that we possibly could. That is why you have "snap-together" products today. We saved even more if we could ultra-sonically weld some of the assemblies together to save on injection mold cost. Then we got with purchasing and found what "off-the-shelf" parts and assemblies were available, and their cost. There are discounts for various quantities. Then prototype development will sometimes be done. Here is where the Professional Model Builders come in. (With a $750,000 toolroom at your disposal, you can do wonderous things with plastic!) These must be to print, so they must "snap" together "exactly" like the production product will. If it can't be done here, everything stops, and is re-designed. Other times it is just like an Erector Set, we can come up with a new line of products by using parts we already have, and maybe just add a new boiler dome, or smoke stack, even a whole new boiler if needed. Maybe add another pair of drivers a couple of rods and screws, and we have a whole new engine ready to sell! We got rid of screws, by providing you with a wonderful new invention! A totally insulated plastic "push-pin-rivit-thingy" to hold your trucks to the car body frame. NO SCREWS to bother with! They will even hold the side rods to the drivers! Isn't that marvelous? It may not be to Prototype, "but the kid wont know, neither will his parents". He will tear it up by Christmas night anyway, and we can charge as if we had totally tooled this thing up from scratch! (Sometimes it was just a new silk screen, or mask, or even different color paint.) Yes, sir, If we could put one of these packages together, you bet we got a bonus! I pulled one of these off, and ended up with a new 1965 Caddy Coupe Deville! Now, you say you want a new product, (not just a different paint scheme), and you can show the manufacturer that you can almost guarantee enough sales to make him a profit, then you might have a shot. (Call it a Limited Run Special) Ever hear of that?And if it does sell, the retail price will match it within a year. It used to be, you could get a few cents royalty on something like this, but those days are also gone, along with good will. All that gathered together, got the Accounting proposal group working to chart procurement line costs, and assembly line cost. We knew how much a product cost at every station down the line all the way from the first part to come in the door, to when the final total package got sealed in the box. And I knew the cost of that little piece of tape too! Then Management had a set-down and we figured out an Amortization schedule like AJy6b mentioned. Some things were perishables, some would take a few days (at Christmas) or a few weeks, others might take several months to re-coup the cost of a mold base, or some new machinery we had had to buy. With production quantities per hour known, a time limit is set. An Amortization Quantity is selected, (usually by the least qualified), and that becomes a goal to meet. (General Motors will not even tool up a part, unless they are guaranteed to sell at least 200,000 units!) When all the "startup costs" have been satisfied, is when the actual profits begin to roll in later on. There were never any meetings, discussion, mention, memos, or even whispered conversations in the dark of night; about possibly lowering the RETAIL price! Yes the cost (of manufactureing) went down to bare bones, but now we are making a big profit, and that is addictive! Stockholders are profit addicts! Then the next step is pure greed, and you are called into another meeting and informed that you have to or "should probably" come up with another product, (if you liked your position with that company), because the stockholders are getting figgity. Somebody, somehow, must have acted like it might be possible to pry a few coins from their cold dead fingers! It comes down the line like a tidal wave! No, American business will probably never share any profits with the customer again, at least not in our life time. Best make do with what you got! Slap some pretty paint on it and call it a diesel! [ 17. October 2002, 19:56: Message edited by: watash ]
