http://cgi.ebay.com/KEY-Brass-N-Sca...wItemQQptZModel_RR_Trains?hash=item19b935b673 Recession? Wow! Athearn are you watching?
Well, only 4 people bidding . . . but still, you got to believe there is a market for a $300 Allegheny in plastic . . . John C.
absolutely.... There is going to be pent-up demand for unique steamers which could easily be satisfied and be profitable for a manufacturer. The $400.00 plastic locomotive 'price point' was broken by the Athearn Big Boy and Challenger... which has a 'street cost' of about $300.00. The large articulated engines will bring in the buyers ~ $300... as would the smaller engines but at a lower cost ~$125. We really need the smaller ones first... But I might go for an Northern Pacific 'Yellowstone'. As for the Allegheny... hmmmmm.... probably not for me.
I've actually often wondered what it would cost to produce a particular model in a limited run - say 500 or 1000 units. I know there are tooling costs, research to be done (particularly in this day and age, where someone will note that the air pumps are the wrong size, or the feedwater heater was an Elesco instead of a Worthington), testing and so forth. So I just wonder - if a manufacturer already had done a mechanism that would be a good starting point, like Athearn, what would they have to charge to make a profit on a very limited run of an item? $500/unit (total revenues of $500,000 for 1000 units, probably not enough)? $1000 per unit? (and if course, I do realize that as price goes up, potential sales go down - those intersecting supply/demand curves from Econ 101 are still rattling around in my brain somewhere . . . ) John C.
I just sent this to my wife along with a suggestion that I *could* be spending more on train stuff than I already do... She was not amused...
Don't forget that not all of that $500 per unit price goes to the manufacturer. He may receive only 40% of it. So you have to adjust your numbers accordingly. Sorry to say but I doubt that an Allegheny would have the total demand that a BigBoy or a GG1 would have. So unless a manufacturer could save on costs another way like using the various parts on another locomotive the chances appear slim at best.
A couple of notes. Rivarossi made these in HO scale and sold out. Also there are several special trains out right now that were only ran by one road. The Allegheny was not only on the C&O but also the Virginia. Articulated monsters like the Allegheny always sell well. If kato can justify an oddball train with a jet engine on it then I would think the Allegheny would go over also. Even the O scale guys have an Allegheny!
I feel bad now. I could have picked one of these up at the LHS last summer for $500 in near perfect condition. Oh well.
Nope, nope nope. When it comes to an auction, there were TWO people who wanted this really badly. (just teasing) The bidding is always just above what the second highest bidder thinks something is worth. So if the second losing guy had not shown up, it would have gone for about $1100- which is probably what new steam goes for? When I sell something, I rarely seem to find these people who have bidding wars. They always show up two weeks later bidding on the same exact item that someone ELSE is selling. :-(
I was at the Chantilly, VA show this past weekend and spoke to a manufacture rep on this same topic. For every point I brought up about why his company should make a N-Scale Allegheny, he countered with a reason why they shouldn't: "too hard, cost too much money, can't really use existing parts (they already sell a 2-6-6-2), not enough demand, can't make a profit, only modelers east of the Mississippi river would want them." I pointed out the two competitors produced a late steam and early diesel N-scale engines and sold out. Those companies have a second run and the engines are still selling. The guy just didn't seem interested. You would think he'd happy to hear what the buyers wanted and would take my comments seriously. Hope one of his competitors makes an Allegheny under $400. I'd buy four!!!!
As much as I would like to see an Allegheny available for all to have, every reason that he countered with is pretty much spot on. I have one of the Key's and it would be a very hard loco to replicate. I bought the Key only after deciding that building one out of Challenger parts was going to be impractical. Because of the extremely long firebox on the H-8, the rear engine sets almost dead in the middle of the boiler. It has as much overhang to the rear as to the front of the rear engine. The Key is built as the real thing and the rear engine is mounted solid to the frame. Articulating both engines would actually make the rear body swing even worse than it already does. The loco is only runable on 14" or greater radius corners, and that is with generous clearence in the corners. The 2-6-6-2 you reference is nowhere close in size to use anything for parts. The valve gear, driver size, steam chests, etc. etc are different. Bachmann is very confident in C&O sales, it has been a proven winner for them before and they tend toward C&O prototypes, so when they say it won't go, that means they have probably looked at doing it already. They are out there and if you want one bad enough it will happen. This one fell in my lap so to say. I hate to admit this but eastern roads just don't seem to go over as big as the west (UP, SP, ASTF). Kato's PRR Broadway Limited has come close to being considered a flop by them. As many SPF's as there are out there, word is they didn't sell half of what the Daylight set sold. The real test will be the El Capitan to see if it was train choice or economy that made the difference, allthough the El Cap has been a dud around us in the midwest so far. This comes from working in a hobbyshop in Cincinnati Ohio, the Daylights sold 5:1 over the Broadway sets. We even sold California Zephyrs about 3:1 over the Broadway and this is a town that PRR was prominent in.
Tony, That thing is pretty heavy. I am more than happy to take it off your hands so it isnt "in your lap anymore". OK, probably that isnt gonna fly. Apparently those guys in HO and O scale just arent as smart as the N scale guys when it comes to the Allegheny.
Where 3 different companies have had multiple runs of HO Big Boys there has only been one run from one company of the H-8 in recent times. The only one to do one in HO was Rivarossi and I haven't seen any recent runs past the first one. O scale defies logic anyhow. The last time I checked, the O scale H-8 retailed around $2000. If they could justify selling them at that price in N, I bet somebody would make them also. O scale has also had quite a few loco's available that have never made it to other scales because O scalers are conditioned to paying outrageous prices for loco's. After watching E-bay for a few years, there might be only a half dozzen people out there at a time willing to go that deep for an H-8. Usually when one pop's this high, another 2-3 will show up shortly looking for a quick cash in and the prices will drop by 1/3 or more for the second and third offerings.
Hi Tony. Since you're familiar with the real business side of the hobby, any thoughts on my questions from a few posts back? Suppose that market research indicated that a company could sell 1000 Allegheny's at $500 each. Would that be anywhere close to a profitable venture after taking into account costs for research, tooling, actual production and distribution? (Not a huge profit, I understand - but, compare for example FVM's decision to do a 30's Hiawatha with a brand new steam engine). It just sort of seems to me that if ever there was a "niche" product, it's the Hiawatha, and yet presumably FVM isn't planning to commit financial suicide even if the owner is a Milwaukee Road fan. So what is the "break-even" point on niche models like this? John C.
No.1 Gauge Allegheny by Aster Lionel Allegheny Key N scale Rivarossi HO Allegheny (redesigned according to website so I assume its at least a second run)
