How does Menard's sell all their items at very low prices? I believe that when they wanted to start making trains, it has been planned forever but hasn't become as much as popular since the summer 2014 (IMHO). All I got to say is keep it up Mark and Menard's!
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I think their prices reflect the true cost of making trains. Like the Williams of old they market at a fair price.
Most likely they can sell for less because it is nowhere near their core business.
Where as Lionel, MTH, and others have very little outside of trains they have to make some profit on their sales. Menards can most likely sell for cost because they are not relying on train sales to pay their employees and overhead.
But that is all conjecture on my part.
Regarding their prices some thoughts come to mind, and SURE, as consumers we have a legitimate interest in this.
1. Their mark up is not unreasonably high as I believe some are.
2. I wonder (really don't know) if the quality of their product might not be "dumbed down" to a just acceptable mass production spec.
3. As previously stated, this is NOT their bread and butter so maybe it is just a little sugar to get the flies in the door. Kind of like a loss-leader at a super market.
But to be honest, I don't really know the answer.
I believe Marty and Michael have pretty much have presented the correct answer.
One thing for sure is Menard's isn't going to tell us and they can use their purchasing power as leverage with vendors.
The laser cut buildings are much closer in price to equivalent Woodland Scenics prices than the rolling stock is to Lionel or MTH prices.
Rusty
Maybe!
1. Their overhead/cost is less.
2. Their profit margin is less.
3. A little of both.
4. Their pricing is actually an introductory price.
Bur we should all remember K-Line. Their pricing was lower than competition. But then again where is K-Line today!
So enjoy it while it lasts.
Ron
True not the highest quality but their prices are interesting compared to all others. They are not going to be putting the toy trains companies out of business.
K Line was a different scenario for their demise. The hobby has friends in high places at Menard's. People that have the say in getting something made with out having to commit to a huge profit. While we keep asking for more scale items and if they make them the price will go up but it will still be lower then the prices now. The line of buildings has been great. So all I can say is Menards keep doing what your doing..........Paul
True not the highest quality but their prices are interesting compared to all others. They are not going to be putting the toy trains companies out of business.
K Line was a different scenario for their demise. The hobby has friends in high places at Menard's. People that have the say in getting something made with out having to commit to a huge profit. While we keep asking for more scale items and if they make them the price will go up but it will still be lower then the prices now. The line of buildings has been great. So all I can say is Menards keep doing what your doing..........Paul
Most likely they can sell for less because it is nowhere near their core business.
Where as Lionel, MTH, and others have very little outside of trains they have to make some profit on their sales. Menards can most likely sell for cost because they are not relying on train sales to pay their employees and overhead.
But that is all conjecture on my part.
I would disagree with your statement as far as Lionel goes.
While it is another Lionel product, it is still a relatively specialized market where as Menards is selling a much larger variety of items in a much larger distribution chain.
You could say the same about MTH and their European and HO market. But in the end the Lionel Racing and Lionel Trains is pretty much targeted market. Toys and collectibles. Lionel does have a slight advantage being able to license it's brand over MTH and other train importers.
The core business of Menards is the traditional train market for cars and they are much cheaper than Lionel and MTH.It is also good at Christmas in their stores .
Mikey
The core business of Menards is the traditional train market for cars and they are much cheaper than Lionel and MTH.It is also good at Christmas in their stores .
Mikey
The core of Menard's business is home improvement.
Trains are a very, very, very small sideline. I just looked at their Christmas flyer yesterday, O gauge trains took up about 1/4 page of a 10-12 page flyer.
Rusty
How does Menard's sell all their items at very low prices? ...
you should approach the question from the other direction.
what do you think it costs Lionel to make a 6464-type boxcar?
i'd be surprised if it was more than ~$8-$10.
Good to see someone is focusing on the traditional market, at any rate. I almost decided to give my hand at it after Kline left the market, but couldn't figure out wheels. That would have killed me.
They also do not have a distributor who needs to make a profit....they sell their own product.
True, there is a Lionel Store, but it's not the same.
Peter
I won't speculate beyond what's already been said... other than the fact that I've always maintained we mere mortals don't really want to know the real manufacturing cost of this stuff, as we'd all have severe bouts of depression. 
David
How does Menard's sell all their items at very low prices? ...
you should approach the question from the other direction.
what do you think it costs Lionel to make a 6464-type boxcar?
i'd be surprised if it was more than ~$8-$10.
Nailed it.
And more to the point... I'm certainly no longer paying outlandish prices to have L-I-O-N-E-L printed on the box of my trains either. Some folks might be inclined to do so, but I ain't one of them. Whether it's Lionel, MTH, K-Line, Atlas-O, GGD/Sunset, Weaver... whatever... if it's something that calls my name, I'm in.
The absolute LAST reason I buy a toy/model train is because of the Lionel brand. All of this stuff basically comes from China now. So the importers -- with very few exceptions -- all look the same in my eyes. They're NOT manufacturers anymore, they're IMPORTERS. And for anyone at Lionel who thinks that seasoned enthusiasts are foolish enough to shell out $$$ for their inflated prices are working with a house-of-cards business model. An isolated item every now and then, perhaps... but paying premium prices for the entire product line is just living on borrowed time, IMHO.
David
I have to laugh when someone says they buy stuff at list price.
Quality like John says.
I don't own any Menards cars but find it hard to believe that for the lower price you're getting the same level of scale, detail and roll/coupler quality that you do with MTH Premier and Lionel Vision line. And I have been able to get the MTH and Lionel quality I want at Menards prices on the secondary market. On the FSOT forum, I've purchased at least a dozen or more new Lionel Vision line scale cars at $25-$40. I've had similar success on eBay. I intend to be on the hobby a long time and am in no hurry to acquire the latest RS or engines.
If you have Menards cars and like them that's great. Be glad they are available and enjoy them!
Scott T J,
You have a point to some extent, however now that Menard's upgraded the Trucks on all their rolling stock, their quality has come way up, now the detail is no where near the hi grade Atlas Steam Era Premier rolling stock, however neither is the cost. With any of these companies, the more detailed the rolling stock becomes, the greater the cost. Menard's Military rolling stock is quite nice for the money expended, infact I replaced the 1st generation Menard's Tank Flat Car trucks, with full MTH Primer Trucks and now that particular Menard's Flat car is a very nice piece of rolling stock, it now floats down the track like it's riding on glass. The newer Trucks on the Military Ammo Box Cars turned out to be real nice stuff, so no replacement was even necessary. For the money expended they are now serious stuff and I will keep purchasing from them,
especially the Military rolling stock.
PCRR/Dave
Given that Menards cars with fish belly frames and K model brake systems which looks a lot like Williams by Bachman freight cars. Could it be these come from the same Chinese manufacturer?
Bogie
I have only scanned quickly through the responses.Here is my two cents.SECONDARY MARKET..learn it,live it.You can get Atlas high quality rolling stock OR MTH Premier like new in the boxes for sometimes 20-30 bucks a car people.Why buy low low end product that weighs 3 ounces,is UNDER scale and will be just as USED in a few weeks anyway.Try selling your precious "Menards rolling stock"on the net in a year or so.You will have to pay people to take it.
Well Menards is the K-Mart of home improvement stores.
Given that Menards cars with fish belly frames and K model brake systems which looks a lot like Williams by Bachman freight cars. Could it be these come from the same Chinese manufacturer?
Bogie
It has been stated before that the Menards' rolling stock comes from "Golden Wheel Die-Cast", a company with no known ties to any other 'O'-Gauge train manufacturers. For all we know, they may be an existing contractor for other Menards-branded exclusive product in their home-improvement line.
Also, Bachmann/WBB representatives have stated they have nothing to do with Menards' train production.
---PCJ
rockstars1989,
Wait just a minute, that all depends on the Atlas & MTH Primer rolling stock you want to purchase, if you can find a Atlas Premier WAG Box Car for $20.00 or $30.00 I will purchase a half dozen of them right now, even the older Weaver less detailed WAG
Box Cars are going for about $50.00 now. So it all depends on the particular rolling stock you are looking to purchase, when it comes to the Atlas and MTH Primer Cars.
PCRR/Dave
rockstars1989,
Wait just a minute, that all depends on the Atlas & MTH Primer rolling stock you want to purchase, if you can find a Atlas Premier WAG Box Car for $20.00 or $30.00 I will purchase a half dozen of them right now, even the older Weaver less detailed WAG
Box Cars are going for about $50.00 now. So it all depends on the particular rolling stock you are looking to purchase, when it comes to the Atlas and MTH Primer Cars.
PCRR/Dave
I also am curious to know Menards pulls it off, but we'll only find out if they tell us. Meanwhile, what I do know is that they are selling train items at prices well below what other companies charge for comparable items. Many will pay $50 or more for a traditional piece of rolling stock from Lionel and that's of course fine. But others will be happy to buy a comparable quality piece for under $25, and that's a big spread.
As for better quality pieces, I bought two of the scale-sized flats with helicopters for under $40 each, and I know of nothing from others that compares. People will buy what they want, but it sure looks like a lot of people are buying Menards, with price/value being the driving factor.
When I first started reading this thread, my feeble mind drifted back to a thread on ogauge forum where a man was trying to sell a $2000+ Lionel engine that had a certificate of exclusivity. Another person posted pics of his $1100 Williams engine that was identical except for the glued on Lionel plate. Engine cost was probably the same, the difference is what extra you can charge for the Lionel name on that same engine.
From a manufacturing perspective, it is a much better price point to buy your parts from a common manufacturer, such as China. The down side is that you loose some of your proprietary advantage which is usually tied to patents and licensing.
So if Lionel, MTH, Weaver, RMT et. al are buying from the same source, then you better have proprietary rights on the product tooling to prevent anyone else from marketing it. Good luck on that working out in China. If you are not advancing and controlling the product/technology of what you are building then you better have a superior distribution and marketing system. And of course not getting dragged into court and losing your business over patent infringement not withstanding.
Unfortunately for Lionel and others, if Menards steps into the showroom in China and has some designs drawn on a napkin for cars or buildings, then all that is left is to load the finished goods into their already existing business system as one more additional SKU. Just like another shovel or hammer. They are already in the distribution, sales and marketing business. Their overhead is already fixed. Any additional sales simply helps improve that overhead margin. Wal-mart could do the same thing if they wanted.
How toy trains fit into the home improvement business is beyond me, but word of mouth advertising can be priceless as is already evident. And if the product is hard to find on the shelf, then there is less product management and scrap disposal. And you have an item in your store that the other home improvement stores don't carry. Does that translate into additional foot traffic and sales of home improvement items?
In any business the key measuring point is inventory turns ratio. How fast can you sell your inventory (how much revenue does that shelf space generate versus something else you could put there). Next question is how little inventory can you keep in stock, aka just in time delivery. If that shelf space and store footage can pay back as good as lumber and nails on a per foot basis, you got a keeper.
I would imagine that their toy train sales will not determine the next Menard store locations, as much as population size and the market demand for their core business.
I just hope they stay away from children's cooking stoves and chemistry sets.
Maybe it's because Menards have a smart management team.
Roo.
Tim,
I think MartyE has hit the nail on the head why Lionel, MTH, Atlas and other train manufacturers have much higher selling prices than a Menards. It is the indirect costs not the direct costs that drive the prices higher for the train manufacturers. Let's say the Legacy Big Boy actually costs $500 to make in China. On top of the direct costs (China suppliers) they also have to pay pepole in their repair department, marketing department, research department, sales department and logistics people as well. If you add up these indirect costs and divide it by the number of people doing indirect jobs plus the matierials they need say another $500 of indirect costs per Big Boy. That makes the total cost of the BB $1000. Most retailers want to sell for twice the cost so $2000 average selling price on the BB. Retail list $2700 give a 30% discount. Now remember these train manufacturers only sell trains (mostly).
Now Menards also has direct costs as well as indirect cost (stores, sales personnel, advertising etc) but besides trains they stock tools, lumber, garden equipment, lawn furniture, appliances etc all of which share the indirect costs but for each item sold is no where near the direct material costs say $7 per model RR car plus $3 indirect costs so they can sell for $20 making their targeted 50%.
Of course these are SWAGs (Simple Wild _ss Guess) but I think you will get the idea.
JohnB
Some of you out there- and this isn't a personal attack- need to realize and accept that the traditional-size market is still a large and viable part of the hobby. If you don't like it, think it's stupid, whatever- don't buy it. But I, and probably others, get a little tired of the constant negativity towards it on this forum. Scale stuff isn't my thing, but I don't bash it...
I think its great what Menards is doing, they are filling a sorely needed gap in the hobby today. Most brick and morter hobby shops are long gone in many citys/towns. This hobby is sorely needing new blood and by bringing trains into thier stores during the holidays is the perfect segway to the next generation of modelers that will want those expensive highly detailed models. And to those that enjoy traditional size toy trains, they provide a cost effective way to add to ones collection/layout. Every hobby has its snobs, call them rivet counters or whatever you like. If its not for them, then its crap and nobody should buy it. I see any product that brings children or even adults into the hobby as a huge positive! I personaly enjoy both traditional trains and scale models. Traditional ones fit in my small train room, and scale trains look great on display and maybe one day I can run them. Mike
Quality like John says.
I don't own any Menards cars but find it hard to believe that for the lower price you're getting the same level of scale, detail and roll/coupler quality that you do with MTH Premier and Lionel Vision line.
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