This isn't a car I would buy, but then again, it isn't what I am looking for (and facing 4 years of tuition at a conservatory for my son, including a new instrument that will cost what a medium priced car does these not, not likely to be able to afford, either). It looks like a finely detailed model that by its very nature appeals to a certain segment of the community. With low volume things like toy trains, it is unlikely this is gouging or represents ridiculous margins and profits, to tool something like this, the design work, the building of the tooling to make it, is very expensive and fine details make it even more expensive (put it this way, a boxcar at its simplest is a plastic box with wheelsets put on it, but as you put details on, it becomes more expensive). This is a fixed cost, that costs the same whether you make 10 or 10,000. If it costs 10 grand to build the tooling, and you sell 10 cars, each would carry a 1000 dollar premium to break even (assuming that is the only cost, it wouldn't be).This is a very broad example, but the problem Atlas faces is that even if instead of targeting let's say 10 sales, they target 100 units, there is still a premium of 100/car.
Conventional wisdom would be if they charged 50 bucks a unit, they would be able to sell a lot more and break even on the costs,but there are problems with this.For one, it may not be possible to make something detailed in those kind of numbers, and secondly, even with a lowered price they may not be able to sell enough.
Given the size of the toy train market, I think this represents low volumes on a highly detailed unit, not gouging.
This as compared to the Iphone, that sells for 650 bucks and costs 140 bucks to manufacture (labor is about 30 or 40 bucks of that, most of it is the custom chip sets), that has crazy high margins, and they sell millions of them a year.
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