Did you ever think that bcause there are fewer people purchasing these products the model railroad companies have reduced the production levels. Reduced production levels means that the fixed cost loading on each item increases. Manufacturers don't want excess inventory laying around so they operate on a made to order basis. That is the nucleus of the so called 'pre order' method that is currently in vogue. So basic Keynesian economics tells us that when supply goes down price goes up. That causes demand to go down which causes supply to further contract and price goes up again. It continues until a new price point is reached where there is an equilibrium between supply and demand. It doesn't happen overnight but it happens. The fact that prices for new product keep increasing is an indication we have not reached that equilibrium. But why did the hobby shop close? Maybe the reason was that it could not compete with mail order or the internet. What we are hearing today is that hobby shop have been and still are closing because their fixed costs (rent, taxes, utilities, insurance, etc.) demanded they sell product at a price point that was higher than their mail order or internet competitors. The hobby shops that are closing are those who did not get into the mail order or internet market.
So you won’t pay more that $.57 for a gallon of gas or $1.57 for a gallon of milk? That’s what they cost in 1975. Your argument holds no ground. Prices go up. This is a hobby. These items are not necessities, and not everyone can afford them. Manufacturers need to make money, they aren’t charities.
Well the problem is the US is still in the manufacturing stone age in many respects. Computer controlled machining was not adapted as much as it should have been, hence using hand crank Bridgeport milling machines was the way 90% of the machining was done even as late as 1995. This is much the same technology that China is using, and the cost of labor is significantly less than the same position here. So that is where the savings come in. It is not technology, only labor costs. Today, modern CAD/CAM systems can almost eliminate the labor costs, but that capital expense can be overwhelming. One way the lower that cost is to never have the machines not running, in other words, 24 hours a day the machines should be running to recoup the capital expense. But that is unheard of here, but it is how China operates. Materials also affect the prices of the products, plastics are getting more expensive as are most metals. This has also crept up the costs for manufacturing. And these costs are rising for everyone. And the fact is, to vet a factory in some other place like Vietnam or Cambodia is a very expensive proposition, but even though the labor may be cheaper, it would take a while for the quality to reach an acceptable level. So even moving from China is not necessarily cost saving venture. What needs to happen is to get smarter about how things are manufactured. Look at Micro-Trains, they are mostly made in the USA, with only the locomotive chassis being made in China. There is no reason that Atlas and everyone else could not bring back all the rail car production and only use China for locomotives. And remember, Kato makes all their products in Japan, and they remain reasonable in an economy that is not too different than ours. So if Kato can produce reasonable cost model train in Japan, there really is no reason why we can not do the same thing here. Using China is just a way to defer all the risk in development/production.
Glad to read your statement. A lot of people mistakenly believe that sources which are strictly e-tailers do not have fixed costs, as with the b&m sites. But they do. Their site usually includes all of those same expenses. Those b&m shops who survive and thrive, using the Internet as well as open doors, do so not just with price or availability. They also provide great customer SERVICE.
No sir, you missed my point. It has nothing to do with the examples you provided above. With regards to toy train items (which is the subject of this thread) presented on e-pay, train shows, train swap-meets. Consider the obvious: If it was junk back when and it's the same junk today, don't expect me to pay inflated prices to buy that same JUNK (back) again. Over inflated prices on yesterdays junk, is still junk. That would be my point. I have no love for inflation as each time we experience such it has set me behind financially. Today more so then in the yester-years. On another note I'm fairly selective about what I buy and there are certain manufacturers I won't buy new stuff from. Keeping in mind, I learned through the school of hard knocks and lessons learned, that newly improved doesn't always mean that. I swore I'd never buy anymore of brand XXX's 4-8-4 Santa Fe Northern...... products again. Odd, I was under the impression that Kato's stuff is made in Japan. A competitive edge thing, as some see it At least that's what I heard from one of the family of Kato's, at a train show. There again I've been wrong before. I have no love lost for any manufacturer's who produce products made in China. I consider it the biggest blundering mistake American manufacturers have made. I did say, "A blundering mistake". Yes, I did. I sight all the difficulties Atlas, has had in the last five years. Consider this have you seen any savings? I haven't seen any savings, just inflation...... on the products I buy from them. Follow the money.
Junk is junk no matter what the price. But what about products that were offered then and are still offered today? Are you willing to sell what you purchased back then for the same price that you purchased it? I accumulated quite a lot of Atlas 90 ton hoppers and 40 and 50 foot boxcars back in the 80's. Paid less than $5.00 for them. Some I got for $2.25-2.50 (full retail). Today those same cars are about $18-20.00. I put MT trucks and couplers on them adding about $3.00 per car in value. Bulk pack of couplers (10 pair) were about $30.00 back then. Today a bulk pack of couplers is $6.00 per car. So my 1980's car has a total value of $5-6.00 while the 2019 car has a value of $24-26.00. In addition, my 80's cars have car numbers that have not been duplicated in the following years. There is no way I would sell those cars for $6.00. I might remove the MT trucks/couplers and put the Atlas trucks with Rapido couplers back on and sell the car for $15.00 then sell the MT couplers as a bulk pack for $35-40.00. The difference in prices is not inflation. It is the cost incurred for carrying that inventory for 30+years
I have train equipment I've upgraded with the MTL's trucks and working knuckle couplers. Yes, I'd want to recover said cost. The rub: What I noted on e-pay is the volumes of older stuff for sale at today's prices. Allow me to say that's a rub in the wrong direction. Used equipment is, used equipment and it's still used equipment years later. I wouldn't consider it ethical to sell it for today's prices. I'd want back what I put into the cars but still they aren't, "New In The Box." Unless they never, ever came out of the box and you'll have a hard time convincing me of that. I can't sell off the junk or even my better stuff at today's replacement costs. I do have a inventory of what I have and would expect my house insurance coverage to pay the replacement cost...but know better. This isn't the "What's Ethical," thread but I have to live with my self and I pride myself on being honest about what I sell. I can only wish others would treat me the same. They don't. The problem here and my focus is on train equipment that I bought 30 years ago. A bunch of Model Power, Life like and Bachmann stuff. Most of it back when they first came out. An assortment of freight cars, passenger cars and diesels. I did sell off or give away a bunch of this stuff advertising it as...what else... "Junk." My focus right now and I probably should have qualified is the above listed stuff. My sales, if it's parts, poor quality and/or "Junk," it is fully disclosed. With plenty of pictures to illustrate the point. Funny, but the stuff I either gave away or sold, most of it moved faster then the quality Kato, Atlas, Athearn, Intermountain offerings I put up for sale. Why? That should be obvious. Price, the real price speaks volumes. Funny, but I made money and I saw it as good.
I'm not buying the shrinking hobby logic. If the hobby was shrinking and fewer people were purchasing higher priced items, Rapido Trains would not be expanding their operation. You don't grow a company by selling fewer items for higher prices, you'll soon price yourself right out of business. Limited runs exist, because the factories in China produce items for multiple model railroad companies. They limit production runs, so everyone gets a slice of the production schedule. Why did the hobby shop close, because the original owner passed away. The son took over the operation and 10 years later he passed away and his wife was not interested in running the hobby shop. I currently have a hobby shop 10 miles from my house that has expanded twice and they do not have an online presence. They also sale more than just trains. It's just like the old saying "Location, Location, Location".
Rapido might be expanding but are they growing the hobby or are they taking market share from someone else? As for "pricing yourself out of business" I think several people here have stated, as far as they personally are concerned, that is exactly what the manufacturers are doing. That is not what I have heard. The way I understand the system is that manufacturers have to reserve time in the production schedule. The Chinese companies don't care who reserves how much time as long as all the available time is scheduled. Their costs remain the same no matter whose product they are running. What is really costly for them is down time. A common occurrence these days as a lot of hobby shops came on the scene following WWII. The original owners would be well past retirement age by the turn of the century. But why just close the shop. Why wasn't the shop sold to someone else? My neighbor buys a lot of liquidated hobby store stock for pennies on the dollar. Usually he buys from one or more liquidators who are only interested in flipping the stock. If they buy it for a penny and sell it for two they make profit. My neighbor will buy it for 2 pennies then sell it on Ebay at a steep discount from the MSRP. Why is that happening? Why are hobby shops liquidating for pennies rather than being sold for more money? Because in order to sell something one must have a buyer and buyersmof hobby shops are practically nonexistent. Thus we are back to Keynesian economics of supply and demand equilibrium affecting price. Weak demand means overstock supply causing price to drop.
Why did this thread get turned from what we have paid for freight cars to another marketing/economics argument? It's boring. Hearing about what we have paid for cars, however, was interesting. Doug
I think it started at the end of page 3 then snowballed on page 4 and reached current state of fruition on page 5. In any event it is an important conversation as it deals with the future of this hobby.
Doug, My contributions to the discussion may be responsible for the turn. After all I like working the locals and turns on private layouts as well as Club Layouts. Ask my closest friends. I thought you'd get it. What we pay for any passenger... oops... the subject was Freight Cars. What we pay for a freight car has a lot to do with what we want, what we can't live without, how long we've had to wait and how long it's taken to finally get a pre-fab unit done correctly. I've paid shamefully...... as much as $32.00 for a hard to find passenger car. I've done the same for a few freight cars. However, you won't find me doing that today because I'm on a set income with no way to move laterally, vertically or horizontally and there's no way to move backwards (to yesterday). Unless I pay the price, some fine but ignorant MR's want for all that used e-pay JUNK!! You could safely sum things up by saying we will pay what it takes to get the car of our dreams and have it running around on our layout. How much is the limit? Only you can set the spending ceiling. There are collector's who will pay what they feel is the collectable value of a specific freight car. For example the Lionel, Western Pacific, Feather Box Car. N Scale hasn't quite arrived at the point but I'm guilty of paying a bit more then face value or MSRP for a freight car. If you get what I mean. Junk, that was junk to start out......no! Can I say hell no? Now back to our regularly scheduled program.
The future of the hobby. ???? According to several documented periodicals there are more subscribers today who profess to be MR's then we've had in the past. More interest in trains at any level. More toy train enthusiast and model railroaders. To answer the question of why? Most point to, thanks to today's production runs. The fact they've made it easier to have a home layout. In other words there are more of us today then in the 50's, 60's, and 70's. Ask me. Those are the years I grew up and cut my teeth on model railroading. Pickings were slim and other things captured the attention of would be providers of model railroad equipment. For example: Slot cars, RC cars and/or RC anything else. In hindsight. All good because during that time technology took off in the right direction, ultimately ending up as a positive for model railroading. Today, there are more clubs, more round robin groups, more museums and volunteer docents. More providers or manufacturers putting out some of the finest stuff ever. DCC has opened up a whole new dimension to model railroading and there are guys and gals going na-na over it. Of course less hobby shops but that's not a real barometer. The problems as to why so many have closed are due to mitigating circumstances internally. As already mentioned. For example I helped a friend open a hobby shop in San Juan, CA., just outside of Hollister, Ca. We had to close it because he passed away. Had nothing to do with sales. He was doing well and making money. He loved his little shop as did his customers. I couldn't stay away from his shop, when i was in town visiting with my dad and working on his layout. A hobby shop I worked for in Kettering, Ohio closed because of things I still can't talk about. Other then to say business requires a considerable amount of attention to legal issues and one slip-up can cost you, your business. It was great place to get your model railroad fix and those all important play toys. We were making money and the sales were good. Oop's and well things happen. Last I heard the owner re-opened his shop in downtown Dayton. At the location he first started out at. I heard, he was a happy camper and having fun with his O scale trains. When you look around you'll soon realize the hobby shops that are open are bigger in size and with well stocked shelves. The product lines and manufacturers today, just the numbers are more then I can count on my fingers. Used to be I could count them on one hand. The hobby shops today are more versatile, provide internet mail order, service departments, repair departments and have DCC advisories. The internet is over run with newbies helping newbies (make the same mistakes) in the form of How-To videos, web-sites, blogs and some (blundering) live podcasts. Did you notice the train shows, swap-meets, club shows and sales? It's all good! The more the merrier. Making it better for each one of us. The question regarding production of products and have they slowed down? There are problems in China, as they sort out what we Americans are really all about. Every manufacturer has had to scramble to find another Chinese plant to make their toy trains. Not a good indicator. The Chinese are prone to closing a plant without notice... or so it appears. At the moment, as I write, yes production has slowed down. No fault of our own. Forcing us into a pseudo scramble for products and inflating the price. Chinese are experienced business men and know how to create a pseudo environment, a buying market. Never mind the copyright issues. Have you noticed of late that some of the equipment looks way to familiar inside the shell. Hopefully, those American based manufacturers will get their head out of their..... fiduciary thinking. Okay, I wanted to say something else. Perhaps, bring the jobs back to...where else? From my perspective. They went to China to save money and I think it's fair enough too say that hasn't worked out so well. Which brings me back to. I haven't seen any savings on my end. Everything I buy for my model railroad costs me more then ever. The future of the hobby? I'll say more on this in a minute. What is changing is the face of the hobby. There will always be those who scratch-build, hand lay track, operate prototypical train equipment and operations. If you haven't noticed at the trains shows the Toy Trains are back and you won't believe what they are doing with them. Amazing Stuff!! I don't like looking at trends as I see that as a pseudo or false indicator. At best compared to a fad. Nonetheless there is a trend going on in the hobby and all indicators point to the survival of the species. We model railroaders will continue to survive. There are old timers coming back to the hobby, youngsters picking up the torch and carrying it on. That's immortality. There I go again. I had to get my two cents in. Time to return you to our intended discussion.
I agree, we've taken a hard left turn in this thread and since I'm partly responsible, let's see if we can get back on track While not the most expensive piece of rolling stock I've ever purchased, the list price of this hopper is $35.99 but they are on sale for $29.99. Since my wife is a breast cancer survivor I just had to get one and add it to my collection of Breast Cancer awareness cars. It's the new Exact Rail Johnstown America Auto Flood II Hopper in the "On Track For A Cure" paint scheme. This is a great looking car and goes very nicely with my Micro-Trains Railbox "On Track For A Cure" boxcar and my Micro-Trains D&H Breast Cancer Awareness 50' gondola.
The next stage in the hobby shop is the conglomerate. For example, four hobby shops in large population areas with a common ordering and inventory. Ship from the closest shop. If something isn’t selling in NYC, rotate your stock with the one in LA. Keep it fresh, pay off your creditors faster.
Are you aware that a lot of mail order houses. Now hold on here I'm not (not at all) getting you back to the original subject. Did some say off track, no pun intended? Still this is noteworthy. These internet train sale houses have learned something vital about (shhh) don't share this, "Taxes". State sales taxes specifically. Since I live in the Mountain Time zone and having lived in CA., If I can buy something in Florida, New Jersey or a location where they are not required to pay state sales taxes for items sold to and shipped out of state. These sales outlet's will intentionally buy up road names for example for the Pacific Coast, Mountain and the Midwest. Knowing full well those of us on the west coast and mountains will buy from them just to save a buck or two. Am I right? Oop's now that question just prolongs things in the wrong direction. Sorry about that. Sacramento, a hobby shop that is unfortunately closed...sigh! He had a mail order operation and I noticed a lot of eastern road names for sale. Curious, I asked the owner what gives? He had customers in New Your (aiiyiiyii) New York, Philadelphia, Boston and etc. He whispered to me Sales Tax. Now please don't let the cat out of the bag. What was the original question?
Not the most but this little gem carried a hefty price tag. The MRSP is $49.95 but got a much better deal from one a TrainBoard advertiser. Happy with how it looks and is a solid running car so it was worth it.
Pennsylvania now requires online retailers to collect PA state sales tax and I believe several other states have joined in on collecting sales tax for out of state online purchases. So it seems the days of purchasing items out of state online tax free are drawing to a close. Which maybe a good question for another thread, what is the break even point for purchasing online verses local? For me personally, it's cheaper to purchase lower ticket items like rolling stock locally. Online the discount price, plus shipping, plus tax usually adds up to be more than the MSRP at the hobby shop. An example is a recent hobby shop purchase. It's not my most expensive piece of rolling stock (trying to keep with the thread theme) and it does not even fit my chosen era, but for me it was a must have. People who are not from the Pittsburgh, PA area may have never heard the name Rege Cordic. He was a morning on air radio show personality in the 1950's and 1960's. Rege was also a model railroader, modeling in HO scale, but we won't hold that against him From radio Rege moved onto television and hosted a show called the Sunday Afternoon Movie. He also was the narrator on many of William Browns Rail Fan videos (WB Video Production) As part of Rege's morning radio show, he came up with a comedy routine about a beer called Olde Frothingslosh, it was the pale stale ale with the foam on the bottom The comedy routine became so popular The Pittsburgh Brewing Company on special occasions would repackage their Iron City Beer into cans carrying the Old Frothingslosh label. Thank you Micro-Trains for producing this humorous look back at a great model railroader, on air personality and piece of Pittsburgh history.
