Will Snubbing the Pre-Order System Get Us the Products We Want?

glennac Aug 10, 2015

  1. bumthum

    bumthum TrainBoard Member

    304
    12
    13
    Actually I've managed to locate these cars currently selling new at e-tailers in the $8.95-$13.95 range. On the low end that's within the "adjusted for inflation" price range and on the high end it's still not unreasonable. Perhaps some of the issue is retailers asking full MSRP for items previously subject to routine discount.

    I worked for many years at a brick and mortar LHS and have seen that price transition first hand. The original owner always discounted all RR items by at least 10% (often more). Sales were brisk and product moved with few exceptions. New owners took over and began asking full retail; sales tanked, product backed up, and they blamed the hobby and product for the slump. The customer is most often going to choose price if all other things are equal.

    It appears that Atlas is selling this car to distributors at a price which allows some wiggle room on the retail shelf and I know what the hobby shop I worked for was paying for them... Some of this price discussion has to come back to business models and willingness to be an active participant in the market on the part of retailers.
     
  2. Maletrain

    Maletrain TrainBoard Member

    734
    337
    18
    I have a hard time seeing any diffrence between the Microtrains cars I buy on eBay with "$3.00" printed on their labels and the new ones that sell for much more. So, I question whether the "new, better tooling" is actually responsible for the greater-than-inflation price increases. BUT, I also want to point out that the government's "Consumer Price Index" is a politicized and highly fudged index. The government has "rules" for it that minimize the effects of the ACTUAL cost of living increases so that the associated wage and benefits increases (COLAs) are minimized. For example, the government will do something like mandate new emissions controll equipment on cars, which raises the price of the new cars, but NOT put that cost increase into the Consumer Price Index because that new equipment "made the cars better." Of course, our ACTUAL cost of LIVING just went up if we intend to keep driving, but the government index will not show that. SO, I have my own cost of living index, that basically looks at simple things like the cost of buying a new car, the price of a dozen eggs, the price of a gallon of gas, and my property taxes and insurance premiums. Since the early 1970s, I figure that my cost of living has increased by well over a factor of 10. Exxcept that gas prices just dropped by about 30% in the last year, so that has tened to make things look "better", at least so long as that lasts.

    How that figures into n scale models I don't really know, since I have not tried to tie release dates and their prices to my own measures of inflation over time. Inflation, real and indexed, have not been evenly progressing over the decades. There are obvious steps to the cost increases.

    Steve
     
  3. Rossford Yard

    Rossford Yard TrainBoard Member

    1,191
    48
    32
    I always love the biz side of the hobby discussions, but will point out my observations are opinions only.

    As to the hoppers costing more than inflation, Atlas has no obligation to price them as such, nor any to price them at 10% or whatever above their actual cost to make! They set that as a minimum, I am sure, but also look at what the market will bear. And, with newer cars at $25-40 now, they probably feel/know from experience that offering older but updated cars at updated prices 25-30% under the finer scaled cars still represents a good enough value for many of us to buy and "save." Let's face it, with loco runs down 90% as Inkaneer points out, repaint and re-issues of old tooling is their safest bet for profit, and likely needed to offset the risk of new tooling for them.

    Since he quoted that post in a discussion group, I will mention that it was part of an age survey for N scalers. It was scary, with about 90% of N scalers responding over 50. Only 1 or about 1/2% of each age from teens, 20's, 30's, or even early 40's. I think there were 4% at 45-49, and a big bump for all groups 50-75, at which time it drops off. Not entirely sure of how representative that is of real N scale, but it seems to show that MRR really isn't for kids. My comment to that was that it is a family introduction kind of thing, and as participation in adults dropped, obviously, the amount of kids after that drops exponentially.

    Also, for some reason, I have heard from those in the hobby that the 2000 recession really tanked sales for good, as in most of the drop from tens of thousands to mere thousands happened in about a year. Obviously, as Inkaneer states, that forced a change in the business model. I guess we could look at the bright side.....that the pre-order model may morph (if 3D printing and a few other things fall in place) to a "made on demand" model, or something close to it, which would in effect, replace the Blue Box model of getting it whenever you want it. Of course, these things may not be made by Atlas, and probably won't be made in this country, but you can't have everything. Change is constant, and hard to predict, but always fun to ride along and see!

    BTW, for those interested, I think the annual HMA report comes out this month in conjunction with their show at Rosemont (traditionally, not sure if still the same) Last time I looked, wholesale sales of MR goods has stayed pretty steady at $400-420M. In the last report, post great recession, it actually jumped up somewhat, not declined. Of course, you can interpret those stats in a couple of ways, especially in light of our aging base, and the simple fact that the same spending over higher prices (inflation) means that fewer items are sold at more money.
     
  4. Inkaneer

    Inkaneer TrainBoard Member

    3,986
    754
    65
    I don't doubt that you can but my comparison was MSRP then to MSRP today. In other words, apples to apples not apples to apple sauce.

    People who have been in the hobby know that there is a retail price and a street price. You will sell a lot more product at the street price than you will at the retail price. We had a long standing LHS go out of business lately. They adamantly refused to discount anything. They would prefer to vilify other marketing methods. First it was mail order then the internet. This pointed out one of the persistent problems of the model RR hobby which has been a lack of competition. As a brick and mortar hobby store they had no real competition in the area. But mail order fueled by ads in the hobby magazines exposed their customer base to other venders. Then came the internet. This hobby store, like so many others refused to compete in that arena and that, not the internet, was the reason for their demise. This lack of competition permeates the industry from retail shops to distributors to manufacturers . How many manufacturers will go head to head with another on a specific model. I can think of only one time that occurred in N scale and that was when LifeLike and Kato both came out with a PA at the same time. Atlas and Kato never competed head to head. You wanted a GP9 you had to buy Atlas; a SD40-2 you bought Kato. It is only recently that this is starting to open up and that is probably due to the perception that all of the popular locomotives have been done. Plus many of these locomotives were not designed for DCC and sound. So the addition of these two elements need to be factored in also. But will anyone take a chance on making a FMH20-44 or a 2-6-6-4? Probably not.

    Quite true. I would not be surprised if Atlas and others were selling direct to, at least, some of the big E-tailers and skipping over the distributors.
     
  5. umtrr-author

    umtrr-author TrainBoard Member

    2,173
    772
    48
    Then I would suggest that you're not looking very carefully.
     
  6. BarstowRick

    BarstowRick TrainBoard Supporter

    8,935
    3,404
    134
    In light of what Ken Price brought forward to this discussion. I feel like he does with regard to train equipment. Don't get me wrong I love the detail but slow to trust anyone else with it. When operating with inexperienced fellow model railroaders I bring out my older stuff. Break something there's no real lose. On the flipside, I bring out the detailed stuff when operating with experienced handlers and operators. Just makes sense.

    Swapmeets and train shows. What puzzles me is why in N scale, guys and gals are selling off all their old used Micro Trains stuff. I can't get enough of it and the detailing isn't complicated and easy to replace if the need arises. Used stuff is all I can afford at this point. Four years and no raises except one last year for those of us on set incomes....sigh!

    Heck, I have what I want and I can spend hours repairing it, operating it, and still have stuff in storage that will never get run. Not bragging just saying.
     
    ken G Price likes this.
  7. mtntrainman

    mtntrainman TrainBoard Supporter

    8,675
    5,344
    131
    The detail guys sell their old MT boxcars on Eckbay for what a newer more detailed boxcar goes for...and some idiot pays the asking price. Then the guy goes and buys the new one with no out of pocket cost.
    Quite a racket eh ? ;)
     
  8. bman

    bman TrainBoard Member

    454
    113
    20
    And pays shipping and handling to boot. Probably $7-10 and it arrives in a USPS $5.95 flat rate box. It's not called capitalism for nothing you know. I can't tell you how many times someone has told me they save $4 or $5 per car over mine that they got off the internet. I always ask, "how much was shipping?" I hear the above mentioned $7-10 and I just nod approvingly. Hey, they seem happy. Unless your buying those cars in multiples with combined shipping, then yes, you saved a bit. And I've supervised the guys unloading and loading those small packages. The less it gets handled the happier I am. That rings true for any segment of the transportation network. The 'bay is good for that one oddball car I need and cannot find at a show.
     
  9. BarstowRick

    BarstowRick TrainBoard Supporter

    8,935
    3,404
    134
    Yes sir!

    And the fool is?

    Let the buyer beware.
     
  10. bumthum

    bumthum TrainBoard Member

    304
    12
    13
    Shipping is only really a concern if they buy only one car. If an e-tailer saves me $5/car (which is common) then buying as few as two cars will still result in a small savings. I typically buy 4-6 cars at a time and the savings I get from buying online becomes significant, even with shipping.
     
    ken G Price likes this.
  11. Maletrain

    Maletrain TrainBoard Member

    734
    337
    18
    This morning a well-known Baltimore retailer showed 3-packs of just released Atlas B&O 2-bay coal hoppers for $37.99, which is $18.86 off the MSRP. Tonight, those 3-packs are out-of-stock at that store. Another e-tailer showes them now available at $45.89, but really may only order them when they get my order, so sometimes they take forever to fill my order and sometimes they come back a month later and say the items I ordered are no longer available.

    Just one example, but it seems very familiar. I think manufacturers are INTENTIONALLY running LESS of an item than they think the market will bear at street prices. That way they drive-up prices and take little SHORT-TERM risk. Of course, the LONG-TERM risk is that they shrink the hobby. But, I doubt they care about that, since they can always produce something else to sell to us when we give-up on mmodel railroading.

    The paradigm seems to be to sell out everything fast, with the last of not-so-popular items probably going at or below cost to get rid of them. I think the main reason for this is government taxing policies. "Just in time" inventory has now become "just missed it" in too many cases.

    Steve
     
  12. Maletrain

    Maletrain TrainBoard Member

    734
    337
    18

    I have a hard time seeing any diffrence between the Microtrains cars I buy on eBay with "$3.00" printed on their labels and the new ones that sell for much more.

    George, perhaps you can educate me (and others) by listing the differences between the $3.00 version and the current version of the Microtrains undecorated 23000 box car?

    Steve
     
    pastoolio likes this.
  13. Calzephyr

    Calzephyr TrainBoard Supporter

    3,889
    675
    63
    Kind of an 'apple' versus 'apple sauce' comparison when we look at Trainman versus the Master Line of Atlas. These multi-tiered product names appeared in the early-mid 2000's. Those Trainman cars are essentially the same molds (probably re-done a few times) using essentially the same features (none) that we could get in the 1990's versions of the same cars. Whereas... the Master Line is the one which has more added detail. I don't see a LOT more detail in those Master Lines products... but the prices hint its all there... Hmmmm???

    Now... the real difference in price is at the Trainman product level. It has probably increased 3-4 times in MSRP since the 1990's... much more than the CPI for many products. YET... before 2005 we didn't have to pre-order those Trainman products (which were not named that until after Pre-Ordering paradigm). They were announced... arrived whenever... and were plentiful at about $ 6.00 (1990's MSRP). Now... all of this China Syndrome of manufacturing... didn't really do us much good for the lower value models. In the 1980's I could buy these over-produced models on sale for $1.50 to $2.00 a piece. If I compare my 70 Ton Ore Cars from the 1980's to the ones I would get now... I would be hard pressed to justify the 5 to 6 times increase in the 'discounted MSRP'.

    So... I wonder... has the price of the Trainman product line increased so much in order to justify the REALLY high prices of the Master Line series. I know Atlas has a strategy to spread costs over the entire product line... as it has been discussed before... but at some point the evidence of some items being over-priced does show up when comparing to previously offered models from a couple decades ago.
     
    Last edited: Nov 6, 2015
  14. bremner

    bremner Staff Member

    6,016
    5,111
    104
    Either way, it makes the American made Micro-Trains line a lot more affordable in comparison.
     
  15. Rossford Yard

    Rossford Yard TrainBoard Member

    1,191
    48
    32
    Calzepher,

    Please define "over priced." On these threads we always have some complaining over priced, others complaining they sell out too fast, so obviously, someone in the market, no many someones, are willing to pay the price Atlas (in this case) decided to offer X at. It is pretty rare that something I want comes in at a price I really want (i.e., who doesn't want everything cheaper?" I want a car in the sub 30K range, but the ones I like are over $39K, I want a house under $200K, but the ones I want are over $200K, etc.

    Of course, MSRP and average MSRP over a category, like locos or freight cars sort of sets expectations. And, when one brave soul broke the $100 barrier for locos (actually, from memory, IM jumped it to $120 for the limited appeal TM series), or even the $40 for cars (first I recall was the articulated Auto Max by Athearn, which you could justify as two cars.....) then others feel more free to follow.

    As to Train man, I don't see a lot of difference between the newly tooled GP 15 running or detail to the Master Line series, and am glad to run them because I like the model. I agree it seems the low cost model seemed to have gone away to a degree. But, my guess is that the low cost models didn't really do much to spur sales, because frankly, there weren't enough starters in model railroads to sell starter sets to. I guess MT does okay with theirs, but those probably never go further than Xmas sets in 99% of cases. Maybe a few buy a half dozen more cars before putting them back in the closet for a year.

    Meanwhile, us old guys keep buying the most stuff, because that is where the money is. And we like detail.

    Sorry for the rant. No real point after my first sentence! The free market is what the free market is.
     
  16. Calzephyr

    Calzephyr TrainBoard Supporter

    3,889
    675
    63
    Merely a comparison of items which have not changed significantly in decades... but the prices have jumped 'seemingly' in multiples of the CPI during that same time frame. Labor cost savings should have kept prices more stable by producing items in China & Korea. I used the Train man example because I can relate to how little they have changed physically... but how much higher their prices have become. I certainly don't expect to pay only $1.00 -$2.00 in today's market... but feel a discounted price of $7.00 - $8.00 would be appropriate. They are running at about $12.00 - $15.00 discounted. Yes... the market does dictate where the price will settle at... but... given how much higher the Master Line series is at... $12.00 - $15.00 may be what the majority of new modelers can afford. They may not see anything out of sorts with the cost. The 'old timers' can see the apparent pricing disparity over the past few decades. We know prices have to go up simply on average inflationary conditions... but...it seems inflation at the model railroading level is out of control. Since we have had the pre-order paradigm shift... there has been more inflation in our hobby

    Sent from my SM-G530T using Tapatalk
     
    Last edited: Nov 7, 2015
  17. BarstowRick

    BarstowRick TrainBoard Supporter

    8,935
    3,404
    134
    That's true we've seen prices spiral out of control or so it seems. You can't justify it by attributing it to inflation. Even the well known auction sites are seeing outrageouly high prices on what we considered to be junk in the past. Prices inflated beyond the actual value of the train equipment. And there are fools buying it up like candy on Halloween at the Dollar Store.

    Does the expression, "Buy it now before the prices go higher," make any sense?
     
  18. Calzephyr

    Calzephyr TrainBoard Supporter

    3,889
    675
    63
    Regarding the above expression... I've seen this train wreck coming several times before. Hype it up until there is no more tolerance... then prepare to crash.

    The auction sites (eBay) and others are fueling the fire somewhat. The buyers are looking at current MSRP of similar items and buying the old stuff as if it was the new stuff. Certainly some sellers are making money on the model trains they are auctioning... yet others can't draw flies so I've heard. In the early years of the Great RePression... when some model railroader had to thin their collections at fairly low prices... good deals were fairly plentiful. Yeah... there were the typical crazy bidders too... but... deals could be found. The past three years have been just the opposite... more crazy bidders and less good deals. The 'so called' good times we are supposed to be in right now is justifying the higher value to some and they can look at the MSRP being published for new stuff as a guide to what they would expect to pay on the auction sites. The more 'seasoned and savvy' model railroader finds the current market out of control. But... in the rest of the economy we are seeing similar results... upward prices on several items (except fuel... thankfully)... with the inflation rate mysteriously low. Hard to explain the situation other than these are strange economic times.
     
    bumthum and BarstowRick like this.
  19. BarstowRick

    BarstowRick TrainBoard Supporter

    8,935
    3,404
    134
    It will get worse before it gets better.

    The problem with low gas prices, at the moment, is they are like a yo-yo and you can't depend on it to stay down for longer then one, two maybe three months at a time. I think Washington DC is way out of touch with reality.
     
    bumthum likes this.
  20. bumthum

    bumthum TrainBoard Member

    304
    12
    13
    Everyone "wants" change, but everyone also "wants" to keep what they know. The problem is just going to get worse.
     
    BarstowRick likes this.

Share This Page