Lionel Prices

+1 !

Lionel is in business to make money-they care less about your opinion of their prices.

Don't buy it if you don't like it.  Simple. 

If you really examine thisLUXURY HOBBY Lionel needs to satisfy (cost) several areas of their business. for example:

Rate of financial return for investors.

Higher than average warranty return.

Dealer profit. (they need the Higher margins to keep Brick and mortar stores open).

I think Mike Regan and his group have done a nice job balancing the cost with keeping this hobby moving forward. What do you think would happen to the hobby if Lionel goes out of business?

Like everyone else, I hate the insane high costs of this hobby! But, I have changed the way I shop. I now buy used, eBay and auctions for the things I want. I have almost skipped the Train store completely (except Menards).

Just a thought.

quote:

What do you think would happen to the hobby if Lionel goes out of business?

I do not wish ill on Lionel or any of the other manufacturers.

If Lionel goes out of business, the hobby will do just fine.

If Lionel goes out of business, the hobby will do just fine.

I guess that depends on what your definition of "just fine" is.

Was it "just fine" after the hobby lost K-Line?

I believe the hobby is poorer for a small company like Weaver having gone out of business.  And, yes I know, some of their products may eventually be remade by other companies but it is not the same.

Lionel would have a much bigger impact.  First, there is the name recognition which extends beyond the hobby itself.  Then there is the loss of the product innovation and development Lionel does such as Lion Chief and Lion Chief Plus, FasTrack, the ZW-L, LCS, and TMCC-Legacy (the first command control system for O gauge).

I agree with most here on the rising price of todays trains  but this is not the place to single out a particular manufacturer over money. An unstable market dictates price more than we realize. When I say unstable market I don't mean slack train sales but rather high gas prices, high raw material prices, high insurance etc. These all play a role in the end product.

I used to buy quite a few items each year from Lionel, MTH & (then) K-Line, but have been pretty much forced out of the market in the most recent years.  In Lionel's current catalog, for instance, you will find both the VERY spartan "Design Your Own Boxcar Contest" boxcar & the highly decorated Lionel 115th Anniversary boxcar sharing $85 list prices.  How is that?  The "DYOB" car looks like something from a starter set.  I know that lower production quantities compared to 50, or even 15, years ago mean higher prices, but the point is that I can't afford to buy what I would like to... not that intentionally desire to "vote by NOT buying" as many here suggest.  

quote:

Was it "just fine" after the hobby lost K-Line?

We are still here, aren't we?

How many people dropped out due to K-line or Weaver's closure?

Was is nice to have these companies? - sure.

But the hobby has survived without them.

Without doing quotes. If new comes out of the box(s) unfit to use. It's Junk.

Yes the prices are high, but if you want the item buy it if not don't buy it. This constant whining with every catalog release is getting old. 

Also so stop talking about msrp, nobody pays msrp. If you pay msrp then it is your fault, find another dealer if that is the case. 

This is is a hobby with reasonable costs compared to other Hobbes, like collecting gold, cars, etc. if you can't afford it then don't buy it. 

This thread is giving me a headach with all the stupefying comments, I'm moving on. 

Ding. Ding. Ding. Ding. Ding. Give that man a prize (sorry it's just the winning DYOB) for calling it like it is! 

I have a new litmus test before I buy most new train items today.  Namely, how much do I expect an item to sell for here on the forum after I own it for a few months?    That'll do WONDERS for tempering one's short-list of new items to buy.  

Case in point:  Who wants to place a bet on how many folks would buy one of Lionel's recent S-2 switchers in factory new MINT condition at $475+ here on the forum in a few months?  Even if you back out a few bucks to cover no warranty coverage as the second owner, you're still up there in nose-bleed territory.  Just ain't gonna happen.  So why pay that much the first time?  

I said this a few weeks ago when Lionel's 2015 Vol 2 came out, and it seems very appropriate to repeat here as well.  The new Lionel price structure is built on a house of cards. They're counting on folks selling current trains and then rolling the proceeds into new purchases so as to (hopefully) achieve smaller amounts of "net new" cash outlaid.   So if you need to first sell an existing loco on your roster for $500 to feel better about spending $1400 for a new FEF-3, they're hoping you're thinking you only really spent $900 to get that new prized train.  

That's a scary place to be. 

David

P.S.  That's as simple as I can state it without giving David1 (see the above post) more of a headache!!! 

You know, comparing these two companies is like comparing apples to oranges: Lionel derives its profit solely from its train sales, while Menards is a hardware/home store selling a diversity of products. They don't have to appeal to fickle model railroaders to make a profit and maintain their livelihood. I think this is obviously reflected in their pricing models.

Yeah but on the other hand, if you purchase an upscale engine for $1200 and keep it for 10 years (20 years? 30 years? potentially longer for some one younger like me and discounting any discussion about the life expectancy of these items), the effective cost is just $120 a year, $10 a month. I spend $120 easy each month eating out. In this case, where has my money been better spent?

I think the issue is when people think in terms of resale or secondary market value -- this is a hobby for enjoyment, not an investment vehicle. You'll never be able to recoup the costs of these items, however, 10 years of entertainment at $120 is a pretty good value.

Well yes and no. Remember the OP posted about a 6464 boxcar, long lost in this thread. Lionel didn't have to invest a cent in new tooling other than a paint stamp. Besides Menards you have RMT producing similar items as well as MTH Railking. Not sure if Atlas is still doing Industrial Rail but that would be in the same league. Menard himself is a pretty savvy businessman. I doubt this is a loss leader item.

I still have trouble understanding anyone who would buy an item they thought was too expensive then complaining about the price but then the world is getting weirder and weirder all the time.

Pete

Actually, if you're using that argument, check out cost increases after Lionel moved production to China during the years when the CPI and inflation remained flat and import prices dropped..

Joe

Yes I'm sure this has been Lionel's grand plan all along: **** near go out of business in the 70's and 80's, somehow survive the 2008 economic collapse, move everything to China and in full cahoots with the Chinese communist regime bring America to its knees by gouging us on over priced box cars.

Here's the version I like. Lionel is in business to stay in business and their current business model -- as already pointed out in a couple of good posts -- is high end, high detail and high feature stuff. I have plenty of discretionary income but Lionel's Legacy steam engines are still too steep for me. The good news is that someone is buying them and that means they will eventually be available at a lower price on eBay or this forum. In the mean time there's a ton of stuff available at much lower prices and readily accessible via the internet! We are lucky to have this hobby in it's current state. Without Lionel's survival, MTH and the availability of cheaper labor in China we could easily have no hobby at all.

I never put much faith in cpi calculators.  They can be manipulated to tell a story based on the agendas of those creating them.  Since in 1953 our money was based on silver, I think that silver value is a far better medium for comparison, and far easier for comparison purposes, not to mention a bit harder to manipulate.

For example, if you take the 11 silver 1953 half dollars that it took to buy a 6464 boxcar in 1953 and buried them in 1953 and dug them up today, and assuming that they are so worn that there is no numismatic (collector) value, you could look at the melt value of those coins and find that those 11 half dollars have a melt value of $63.06 today (10/19 - it actually went up to $63.18 since I started writing this post).  All of the non-licensed traditional sized boxcars I have bought in recent years have averaged around $60 after tax.  The price really hasn't changed when you look at a common method of comparison (silver).  The value of our money is what is changing, and the crime of it is that when the value of our money decreases, we effectively take a pay cut.

Andy

Stephen, the "enjoyment factor" is very real.  And since this is pretty much a hobby based on disposable income, enjoyment is a big part of why we spend what we spend in this hobby.  It's all relative.

But when you break things down on a monthly basis like that, it's a bit like a car salesman asking you, "What can you afford each month as a car payment?".  And in doing so, it distracts the buyer from thinking about whether he or she is getting a good deal on the price of the car.  Same thing happens when you're building a new home.  You want a whole-house integrated music system?  Contractor quotes you $15K.  You're thinking, "Sure... it's easy to amortize that extra $15K over the life of the mortgage.  It may only cost you a few $$ extra per month in the mortgage payment."  But that whole-house music system may have only been a $10K product.  So you just overpaid $5K for it.  Come to think of it, the entire mortgage industry is based on this kind of thinking!!!    Ever wonder how much MORE money (i.e., interest) we spend on a 30-year mortgage (run to full-term) vs. the actual cost of the home?  It's a staggering number.  Might even be downright depressing. 

Best to stay focused on the price of the product -- especially for non-essential, disposable income items like toy trains.

David

Ahhh... now that's a VERY slippery slope argument.  And eventually brings us to where we are today in MANY industries.  Take professional photography for example... just to make my point.  Your argument could easily suggest the professional photographer "overcharges" for his/her services, because that's all he/she lives on.  But the photo-enthusiast who just likes to photograph -- and oh by the way has a spouse whose income pays all the bills of the house and their lifestyle -- can almost give away their services because they don't "need" the income to build a strong photography business model.  This line of thinking has nearly decimated the professional wedding photography industry as we knew it, since many younger brides now expect photographers to "do it all" for prices that only friends and photo-enthusiasts can do while their spouse supports their everyday lifestyle with their corporate salary.  It's just not a sustainable business model in its own right.

I agree... that's not the consumer's problem.  But it does illustrate how disruptive some of these non-traditional business models can be.  Ideally, it's always much better when company divisions can support themselves.  Not a good idea when one company division lives off the profits of a much healthier division of the company.

Not to get too far off topic... but you get the idea.

David

I agree, we shouldn't stray too far off topic, but to clarify my comment is not an example of a slippery slope fallacy. I was just trying to point out that Lionel and Menards have fixed costs associated with running their businesses and that Menards, being larger, can spread those costs across more products and does not need to rely exclusively on one type of product to keep out of the red. Regardless of the the fixed costs of a business, your photography example has an underlying culprit: the wide-spread proliferation of cheap DSLR and high-quality printing services which has enabled individuals to take it on as a hobby instead of making a career out of it. Memory is cheap, burn through dozens of photos to a good one and then do some editing on Photoshop or freeware software. It's not so much the people that are the issue but rather a revolution in technology, the accessibility not the spouse with a "corporate salary". And that disruptive technology has a potential analog in the model railroading industry in 3D printing. 

No argument there, Stephen.  The technology is a HUGE part of the "disruptiveness" I was referring to.  It's a double-edged sword.

David

i was only comparing catalog prices.

i'm sure there were discounts in 1953 as well.

we had Lionel growing up and i'm positive my dad never paid full retail for anything.

cheers...gary

There is no such thing as a cheap hobby. The thing to do is shop around. The good deals are out there.

I buy a Lionel Christmas Boxcar every year and that's all.  I have enough locomotives and rolling stock.  It seems most of the engines coming out now are reissues in PS3 or Legacy.  I've upgraded my PS1 steam to PS2 and my diesels to ERR CC.  I am modeling in the 50's, so I have no need for buying modern rolling stock.  Yes I hate the price of a 6464 boxcar is approaching the century mark and if it reaches that point I believe I have enough Christmas boxcars.  There is a time when enough is enough. Beside, there is the secondary market of good used equipment on the OGR for sale site.

anyone ever notice it is only a few that are the complainers!

David, there is a tipping point at which many of us would "want" an item, but find the price unaffordable or unacceptable.  You continue to offer the misdirected "if you don't want it, don't buy it" argument.  The companies we patronize should take into account the number of sales they will lose once the price of a product hits a certain point.

As for this thread, if you don't like it, don't read it.

What about other manufacturers sourcing trains from China like MTH, Atlas and Williams by Bachmann?  Do you consider their products overpriced junk?  Someone noted a 150% price increase by Bachmann in the last few years - that seems like a pretty steep boost to me.  Atlas has a $679 0-6-0 switcher that doesn't come with Legacy electronics and sound - would you consider that a great deal at list? (Atlas stuff doesn't have a high mark-up, so if it can be found discounted it might be 10% on a good day).  MTH has offered extremely short EMD Blomberg trucks under their F units and Geeps, as well as Alcos and Baldwins on short AAR Type B 2 axle trucks until a few years ago - were they selling junk when a key component was undersized for more than a decade?

From one here who used to be a large supporter of Lionel  and is good friends of a past president/COO of Lionel now has reversed that. With the pricing in their catalogs, what a joke! I vote with my wallet, don't order a track pin and buy only on the secondary market through here, friends and through fellow club members. 

$650 retail for a diesel, $600 to $700 for a regular steamer -thank you very much but I am not interested. Let's not talk about $2,000 engines!

I'm glad someone else started the topic but wanted to express my view. I am very happy promoting the hobby at shows, giving advice to hobbyists,etc but I do let folks make their purchase decisions at those shows. It is theirs.

Thank you.

To put in another way, you don't go into a hobby to save money. 

Any company that consistently brings a product to market that doesn't work out of the box is selling overpriced junk. When Lionel was Made in Michigan nothing left that building without being tested. 

So true. A gallon of milk today at Wegmans is $2.17.  That comes out to 25 cents a gallon for 1953 comparison. The most consistent actual price found in a Google search is 90-94 cents per gallon.

That must explain my crappy-running, coffee-grinder American Flyer MoPac PA's, or that the Flyer California Zephyr set used metal couplers that once the coating wore off, shorted out the train on the two rail track.

All made in Michigan...

Rusty

Much of these high priced trains will later be sold for blowout prices.  Look at the increased prices for Lionchief Plus, wait and you may find one for less money.  Yes, Menard's has really great prices.

I'm going to play with my used affordable trains…NOW…!!!

10-4 on that one. Tin because the $30 engine is easily repairable, super vintage cool and has lasted for 50 years already.

Menard's has great prices. Menard's also doesn't have to provide service and parts for locomotives/transformers/accessories/switches/electronic control systems, as wll as support a dealer network. So far they haven't had to pony up much to design/produce anything beyond basic freight cars and tubular track - practically no R&D to speak of on their part.

Menard's is filling a niche - so far, they're selling things for less than Lionel (and MTH, and Bachmann, and Atlas - everyone in the toy train game right now).  They're not bellying up to the bar and funding anything that's new as far as electronic technology/locomotives/accessories.  I'm glad folks can get bargains for certain train items - I liked getting Industrial Rail cars when they came out because they were inexpensive and filled my needs at the time.  My hunch is if they want to remain the go-to source for inexpensive trains, Menard's won't offer a full line of train items - that would add an entirely new level of costs that would most likely drive up their costs tremendously.  In this instance I'd like to be proven wrong - under $150 diesels that were bare bones simple and needing little in the way of maintenance would be nice, rugged switches - perhaps they could be the new Marx as far as offering basic/dependable/affordable trains.  In this day and age, I don't think that's in the cards.

Williams offered a good product at a fair price. Bachmann has changed the line. Yes they did a nice upgrade by adding sound but it raised the price. Maybe Menards will slide into that spot.

To the German Commander:

NUTS!

Around 10 years ago or so during the Holiday season Menards offered Lionel starter sets and a few Menards exclusive Lionel rolling stock. Then they started contracting out for low end rolling stock and scale type buildings. Now they have moved to near scale rolling stock in size but not detail available year round and very soon tubular track. They certainly have been moving in the right direction.

   Bill T.