Is there room for the old MDC/Roundhouse business model anymore?

You mean the guys with the 4000 sqft shop with every power tool under the sun that makes little boxes and has problems setting up his equipment?
No, Idon't meansomething snarky, I mean the average guy with a modest selection of tools that spends time actually making something (boxes, reallly?) and getting the joy of actually making something with his hands.

Yeah, the manufactures are doing well.
Of course they are doing well, they are investing in their future. Only of a few of the manufacturers in N are doing that. And the consumers? Some will learn and become fairly skilled, others are ham-handed and move on to something else, learning something in the process.

And you? are you one of the guys that got most of your stuff off the web ten or fifteen years ago and strutted around the LHS saying how crafty you are?

 

I have built kit cars, N Scale Kits, Shapeways, IM and I can firmly say I am on both sides of this arguement. I liked the ones I built, I had fun detailing them, painting, decalling, adding trucks and metal wheels, and weathering them.

Do I build car kits now? No. Is it because I don’t like building? No, just the opposite. Layouts can be massively time consuming. Every square inch of layout takes me roughly 30 minutes to finish (from benchwork to finished scenic detailing). I’m scratch building all my own buildings, making all my own trees, detailing and painting all my own engines. Just like when I build a house, there are parts I Subcontract out. On my layout, companies like BLMA (now in the Atlas line) who make an awesome PD hopper, or Athearn and their fantastic 2 Bay hopper can handle rolling stock construction (c’mon ExactRail, I can’t wait to see the Gunderson 5188’s hit the rails!). I have so much modeling to do, I prefer to buy mostly ready to run cars.

For someone getting into the hobby, maybe the kits would save them some cash they could put towards other items. Time and money are always a trade off.

 

I recently bought an old MDC kit, was awesome to get it after all these years of stupidly priced rolling stock these days. I have alot of MDC and Kadee kits as I started in N, 31 years ago. I miss the old days, and find it ridicules the prices for N equipment these days.

 

I'll say! $15-$20 for a freight car!

 

Cars now are so much nicer than the $5 cars everyone pines for. Rapido couplers anyone?

 

I bought cars at the Greenberg's show years ago at the price of $3 a car and of course MT trucks and couplers were a lot cheaper for a 10 set pack then. Those old cars were put through a paint stripping to remove a thick coat of paint, and details emerged nice and sharp, that were hidden under that thick paint. A much thinner coat of paint was applied with care and then decaled, which were also cheaper then, and a set did more cars than today. Lastly the MT trucks were put on. The final product cost me about $8 per car but I built a nice fleet back then.

 

I remember the MDC (and even the Atlas kits!!)
They stunk up the shelves in distributors and hobby shops. Nobody wanted them, even though the “challenge” of the kit was inserting the brake wheel in the body, throwing away the crappy trucks and couplers, buying M-T trucks and installing them. You end up with a car that was about the then price of a Micro-Trains car.
Like the HO guys that moon for Athearn Blue Box kits it is more nostalgia and inflation memory loss that dives such comments!
If you have a desire for kits I have boxes of MDC, InterMountain and FineNScale cars that I would be willing to sell
Charlie Vlk

 

What I really miss were the 12 car individually numbered sets of tank car kits they used to sell. I need 3 full sets of them right now to make a rotten egg (molten sulfur) train.

 

I miss those kits! They were great for lazy afternoons where you wanted to feel productive but didn't want to do any actual work. The detail on RTR cars is great now, but I have to confess I'd buy a big pile of shake-the-box kits if I could get them in multiple road numbers for half the price of RTR. They pass the two foot test easily enough, especially while they're rolling. There's a place for both.

 

Ah the old Kit Vs. RTR argument. Aside from as Boxcab said, don't assume anyone's motives, I suspect simple kits are not as dead as everyone surmises.

I don't know about in N-Scale brands, because I basically buy mostly old stock now adays, but in HO, Accurail has no problems selling what amounts to shake the box kits. all day every day. They don't line the Shelves like MDC/Roundhouse and Athearn and Microtrains did, but then, there's a reason that model of selling went away. And it wasn't because they were kits.

 

I'll take them off of you hands for you. Love the FineNScale cars...wish he would come out with more but I guess the demand isn't there (as this thread it talking about). I've built, painted and decalled just about every version of every kit he came out with. I love the 'worn' look his cars have...wrinkled sides and the like. Could always use more MDC old time boxes and reefers (and passenger cars), and the IM kits are a good time waster while watching TV.

 

That's a nice car and modeling the SP (NWP actually) I could use some of those too.

 

The only MDC kits I ever had were their three bay hoppers and tankcars. Relatively simple and nowhere near the 'craftsman' level of other kits. If the idea of having kits is to reduce costs then one needs to determine what are the factors that raise costs and which are the major ones

Oh come on now! Do you really think Accumate couplers add any value to a car? Most people do with them what they did with the Rapido's. They chuck them into the trash and add MT's. MT's would add no more than $5.00 per car. Now explain why the newest 2 bay hopper costs $25.00. Especially when they are made from the same molds that turned out previous batches of the same car. Judging from the slight difference in price between an Undec and a painted car the painting does not account for the price increase. The cost of plastic pellets has not spiked. So what has changed to raise the price? Given the current business model where production is outsourced the one thing that will increase prices is an increase in fixed cost allocation per unit produced. Do the math. If your fixed costs are $500 for every 100 units your fixed cost allocation per unit is $5.00 but you produce only half the units (50) your unit fixed cost allocation is doubled to $10.00. Basic economics tells us that a decrease in supply causes an increase in prices and subsequently a decrease in demand. That then triggers a decrease in supply. This is exactly what has been happening in this hobby since the manufacturers went to a "made to order" business model.

 

I was being humorous, but I will give you a serious answer to your way-too-simplified statement. Rapido, ScaleTrains, Atlas have all talked about this.

Some tooling gets re-used, but tooling has a shelf life. New dies need to be made, the price gets written off over the course of a run. What you failed to mention was the price of Chinese labor (where more model trains are made) has more than doubled in the last 7 years. There are also fewer manufacturers in China, and the ones there are have raised rates heavily. This is not companies like Atlas raising their profit. The Atlas track shortage was caused by one of these manufacturers in Atlas’s supply chain. The Chinese also have a very different business model than US companies. The original maker of the Atlas track wanted to charge Atlas more, Atlas shopped around for a new maker. They could not take the molds for the ties with them, they remain at with the faculty, so Atlas had to pay for all new tooling before they could resume production. Price to the consumer goes up. Atlas isn’t making more money.

Your simple math also doesn’t take into account increased transportation costs. When Hanjin when bankrupt, container shipping costs jumped up 20% overnight. Model train companies aren’t going to eat that cost, so it also gets passed on to the consumer. Now add in the markup that online retailers want items discounted. Someone like woo woo woo will only pay 65% of MSRP to the manufacturer, so they can get more sales, the MSRP goes up so Atlas can still make a measly profit. Price to the consumer goes up, Atlas isn’t making more money.

The value of the dollar has also changed. Using a 3% inflation calculator, a car that was $5 in 1980 would cost $16.07 today, not taking any other factor into account except inflation. This isn’t rocket science, it’s basic economics. So taking all of those factors into account, it is pretty easy to see how the $5 of yesteryear is $20-$25 today. The world has changed.

And there hasn’t been a decrease in demand recently. There was from 2008-2010 when unemployment was up and spending was down. 2012-today has seen an increase in demand, regardless of cost. Production runs are selling out even though quantity has increased. Pre-orders are helping manufacturers better gauge which items will sell, so they aren’t wasting money on runs no one will buy. They have less stock on shelves which means they have more money to invest in new runs and new product. This in turn gives us more things to buy.

And that doesn’t even begin to take into account the advances in tooling we’ve seen. My Rapido coupler joke was one example. Compare an LBF hi-cube to an ExactRail version. Or compare a Walthers PD Hopper to a BLMA one. Or compare a Red Caboose Covered Hopper to an Intermountain version. We have come so far in the last 30 years.

 

Amen on that John, and you created a collection of custom cars that nobody else owns. I've done the same, often painting cars in road names I want years ahead of when manufacturers get around to it.

 

Actually you proved my point. And to be crystal clear, never did I say that Atlas or anyone else for that matter was making more profit. In fact I never mentioned the word profit. My point was that manufacturers, by outsourcing the production function to others, whoever they maybe, essentially lost control of not only that function but also the costs associated with that function. So if the producer raises his price for production time all the manufacturers who use those production facilities have to pass that cost along. Since the manufacturers no longer want to hold inventory they adopted a "made to order" business model (otherwise known as the pre-order system) therefore, there is no alternative. Ironic that in the rush to cut costs they actually raised them. You state that production runs have increased. Where did you get that information? That always, as someone once stated, was "proprietary information". The term, "proprietary information" is a nice way of saying, "its none of your d*mn business." So where did you get your information? The last that I heard was that manufacturers were battling for production time and were being stoned walled by their production sources. Less production time means less items produced which means higher fixed cost loading per unit produced. The manufacturers have fixed costs too and that has to be factored in. Going back to my old example the 90 ton open hopper that Atlas sells for $19.95 MSRP today is no better than the ones I bought back in 1980 when the MSRP was only $2.25. I don't care if it now has Accumates; they get tossed in favor of MT's. As far as inflation goes, according to the Bureau of Labor Statistics consumer price index, the dollar experienced an average inflation rate of 2.92% per year. Prices in 2018 are 199.0% higher than prices in 1980. In other words, $1 in the year 1980 is equivalent in purchasing power to $2.99 in 2018, a difference of $1.99 over 38 years. So an item today should be priced 3X what it was in 1980. So my $2.25 ninety ton hopper should only be $6,75. So why is it $19.95? That is over 3 times what it should be.

 

To be fair, most model train manufacturers never manufactured themselves. The number of manufacturers has been reduced and the remaining ones have a stronghold on a once more diverse market.

Production run sizes are hardy secret. Attend one NSE convention, you can walk around and talk to all the major manufacturers in one room. I have and they will let you know most of that info (providing you ask in a polite manner). The manufacturers favor companies that do larger runs, it’s smaller run companies that have the tough time getting machine time.

As for the cost increase, I think I covered that well enough. At this point, all I’m going to say is... if you think you can do better, give it a try. Let me know how it goes for you. So many armchair manufacturers out there.

 

Charlie,

I always wanted the 12 car shake the box sets because of the different road numbers. If you are serious about selling some of your MDC collection, please PM me.