Through the years I have read or otherwise come upon far too many people who have such a skewed viewpoint. They somehow think everyone else can lay out cash, just as they do. A bizarre stance, at best. Then we have the 'get out' train of thought, which is really, really twisted.
I for one have never had a lack of empathy for those with shallower pockets than mine. In fact, in may cases I have gifted locomotives, rail cars and hours of DCC and wiring assistance to those who need a little help. It is all part of wanting to be a friendly member of the community.
You are one of the good ones David. I can attest to that. Talking on the phone and getting some invaluable assistance and just talking about anything with you has always made my day
Actually I think we're in a good place. We can purchase the detail level desired at the current price or find entry level for a much lower beginner price point and with that even expose the newbie to the modern technology. So actually even with the lower price point you can still enjoy some of the modern frills; Bachmann for one great example.
Kudos to you for such understanding and generosity! And for using the word "community" as well. That is what we are in this pursuit.
There are those who don't have as much as I do to spend on the hobby, then there are those who can outspend me 100 fold. We can all enjoy the hobby in our spending comfort zones. I don't hold anyone's spending against them. Manufacturers on the other hand have no reason to gear their sales to people who don't buy. That would be the dumbest business decision ever. They gear their sales to people who are willing to pay them for their products. That is how business works. If products don't sell, we will find them in the clearance section until the price point drops to a low enough point that someone picks them up. If the manufacturer can't make a sufficient profit on that item, they won't make another run. They will move on to another product that does sell. They are hoping that they have a product that generates sufficient demand to sell at a good price point. We are hoping they make the things we want at a reasonable price point. Supply and demand. It's what drives business.
Bill, I agree with everything you said. . . up to a point. But what you and others have not addressed is the discrepancy in the 220-250% increase in price for the 90 yon hopper and the 20-25% increase in the price of a locomotive. If all of these items you list are a reason for higher prices then why is the percentage increase in hopper car price ten times the percentage for the locomotive? Your logic fails to explain the difference. Now if someone has an explanation that answers the question of why the discrepancy between the two price percentage increases then let's hear it.
Piece of cake. They are more expensive because they are still selling at a higher price. Again, basic business. If you have a product that sells well, you raise the price. This is one easy method for increasing profit. This helps them weather the storm of a poorly selling product. If consumers stop buying them at the higher price, they can either lower the price of they should have made enough profit to fund a new product. These are businesses people, not charities. While we do this for fun, they do it to make money. That is the purpose of a business! If they fail to make money, they go out of business. And don't try the "They could sell twice as many if the price was half as much" argument. They know how they make money. If you think you know more than they do, lets see you make some product. You should be rich quick... <yes, that was sarcasm>
Kinda like the 'More Ebay Humor' thread....there will always be someone who will pay the higher outrageous price no matter what its really worth.
LOL! Ok, enough with the hopper now. Do you honestly think that anyone here can answer this question to your satisfaction? You really need to be asking Atlas this question, not everyone here. No one has a clue why this one hopper has increased in price as it has. Time to move on.
That is a novel economic theory. In fact it is a "tail wagging the dog" type of theory. Economic history tells us that if a product sells well the price drops. How many times have we seen this to be the case when a new product is introduced and catches on demand is high and that spurs investment in production. Production is ramped up and more product is available and the price drops. It does so because increased demand stimulates production so more is produced which allows the fixed costs to be spread over more product thus lowering the cost loading on each item. This is not voodoo economics but rather basic Keynesian Economics 101 wherein supply and demand are interconnected so that a rise (or drop) in one affects the other and gradually the two forces reach an equilibrium point where prices and production are stable. This occurs naturally in a free market system. But we do not have a free market system in the hobby industry. With production centered in China we have a monopolistic market where the production amount is controlled and not permitted to reach a natural occurring equilibrium. Prices therefore have to rise to attain equilibrium. I recall my introduction to the steel industry. We were told that no steel company could survive if steel was produced by the pound. The costs would be enormous. So steel is produced not by pounds or by tons but by hundreds of tons. It is the only way to lower the costs per ton to achieve a price to meet the demand. Again just basic Economics 101. So how do we (meaning the industry) correct this problem? The only way to do that is by competition. Competition is the mortal enemy of monopolies. Competition increases production capacity and thus production output. That increases supply and changes the equilibrium point between supply and demand. As a result, price has to drop. But as long as the 'manufacturers' are sucking on the teet of Chinese production then competition will never happen.
One reason my be that some of these cost increases are in absolute dollars. Let's assume some force (taxes, salaries, regulatory compliance, raw materials, whatever) adds $8 to the COGS of everything Atlas produces. That $8 would be a 100% increase in the cost of an $8 item like a hopper but only a 16% increase in the cost of a $50 item like a locomotive. Plenty of business forces could cause such an across the board cost increase. Percentages don't always tell the story.
I just went through my stash of Atlas 90 ton hoppers, some from the '80's and some from a few years ago. I found that they came from different molds, so I know there has been at least one mold update. Also the one I have from the 80's don't have loads (I don't remember if they had them when they were new) and the new ones have the pop in loads. I do find it ironic that the price has increased so much more when you compare it to locomotives. I've never worked at a injection plastic company, but have been in the back door of a lot of them when I was doing P&D (pick and delivery driver). The injection machines come in a lot of different sizes from very small molds (4" X 6" X 1") to very large ones (96" X 48" X 24"). And some molds are not interchangeable between machines by different manufacturers of the same size. I'm guessing that the new molds produce a lot fewer bodies, where as the old molds did a lot more. The mold would cost a lot less doing it this way, but add a lot more production costs. Also the machines that there are using now won't hold the older larger molds. So every time you change the production manufacture, you may have to make a new mold. And we know that Atlas has went through two or three lately. Just some thoughts,
That applies to everything imported or exported. BUT (caps for emphasis) that still doesn't explain the difference in price increases between rolling stock and locomotives. So far there has been a lot of speculation and voodoo economics but no one has come up with an alternate theory that addresses the difference in the price increases between locomotives (20-25%) and rolling stock (220-250 %). That is a factor of ten and is not a negligible amount by any means.
I compared retail prices of today and what I paid 25 years ago for analog DC locomotives. I did not include DCC locomotives in the comparison. I used the retail price as this is the price the manufacturers indicate what their locomotive should sell for. Also different dealers discount differently. Then again Kato is using MAP pricing. In some instances the locomotives increased less than 25% and in some cases slightly more. Case in in point a Kato U30-C lists for $110 today. I bought mine about 1990 and they were $90. An Atlas GP 9 today lists for $115 in 1997 it was $83. But and this is a big BUT, locomotives prices have not increased anywhere even close to the percentage increase of rolling stock.
Like you say, we don't have a theoretical free-market system in the hobby industry, so perhaps the theory doesn't "exactly" apply. For instance, when production is in "runs" and supply is not constant, then consumer buying habits are different and so is competition amongst suppliers. There isn't a continuously available competitor for the Atlas 90t hopper, so there aren't market forces to drive prices down. There is a competitor, the MTL version, but production might arguably be less continuous then Atlas and might be in a different market all together. So, in one aspect, Atlas to free to charge what they think they can sell it for, even if their costs have reduced over time. On the other hand, there are competing '3 bay open hoppers' from numerous sources that are comparable to the Atlas model - but model railroaders are a fickle bunch and prototypical fidelity obviously has a big impact on sales (just ask ConCor how that model works today). If I want a rib sided 3 bay 90t hopper from XYZ because that's what railroad ABC had, then a 70t rib side or a 90t smooth side won't cut it. Model Trains aren't white goods - the theory for market forces on toaster supply and demand may not exactly apply here. I also think you're over-estimating the influence of the State in Chinese production. The size of the production runs are likely more controlled by the Client (Atlas etc) based on what they think they can sell or other factors on this end (warehousing, distribution channels, shipping, retail reservations) and not by the factory - a factory will not limit you to 5k models if you want a run of 10k, that's not how business works. There might be other factors like production time in play though - Factory A might say to Atlas we have a 2 week slot for you and Atlas might choose to run 5 models of 5k each in this time, rather than 25k models of the 90t hopper. That's not "control" like your inferring though. There are competing factories within China though, and now in emerging manufacturing countries adjacent (Vietnam as an example), so market forces are hopefully helping our suppliers keep their costs under control.
I'm glad I gave up on ever having a model railroad. I'd wanted to model the BN/GN from the east portal of Cascade Tunnel to Wenatchee-my favorite place to see trains, but I came to the conclusion the real thing is far more interesting and fascinating, anyway. And, when I look at the expense of model railroading, to say nothing of the work involved in building the layout, definitely the real thing wins out even more. I like looking at model railroads, but you can keep them. I would like to get a computer program like Trainz or Microsoft Train Simulator. At least those also take up less room and don't involve as much work or expense. So, all you modelers out there, enjoy! I'll keep watching the real thing, and come by to see a model railroad once in a while.
Well and good if your interests lie in local contemporary railroading. Some of us favor the so-called fallen flags from an era that may be many decades removed from today. Model railroading provides a means to turn back the clock.
