Mike Wolf's (fuzzy) vision of the model railroad hobby

I think models trains as a whole, don't interest kids they way they used to. Kids these days would rather have an I phone or whatever, the internet can take you anywhere, trains just go in circles.

I like trains now because I did as a kid, they were one of the best things you could have, even Atari was marginal as entertainment.

Not that its right....... it just is.

To a degree he's right about the chinese thing, America no longer has the manufacturing skills that it used to.

Having said that, I would have liked him to say " it would be nice to maybe be able to bring some manufacturing back to the States one day, right now it just isn't practical."

The overall tone of the comment "seemed" more that he didn't care. The irony is Lionel always takes the heat for overseas  o guage manufacturing. Mike Wolf pioneered it, Lionel had no choice in order to stay competative.

I know you said for another thread, but that article left me with a "bad taste in my mouth".

Purely my speculation, but I suspect he probably was considering the percentage of the population into the hobby and what percentage of folks that shop would need to be interested in order for the business model to be successful. 

As always is the case in these discussions, the volume isn't going to be there no matter how good a train set may be (only exceptions may be the Polar Express or Harry Potter).

The overlap of too many conditions has to be there, and it's a small overlap once you consider: a) customer interested in trains at all?, b) customer interested in whatever specific train made?, c) set can be made by manufacturer for price point (and it's associated profit) store requires to give it shelf space?, d) customer able to spend that kind of money on train?, e) customer willing to spend that kind of money on train?

Your mileage may vary.

-Dave

I would have to see/hear Mike's full comments to be able to determine if or how well his comments were recorded.  I don't know about the "father to son" tradition, but I do know that the major manufacturers have tried big box store sales (during the holiday season) in fairly recent years without significant success.  I also do not personally consider Hobby Lobby to be a "big box store" on a par with the likes of WalMart, Target, etc.

I also don't know about Chinese (or any other) workers being "better" than their American counterparts, but I do know that offshore production can, in most cases and with most any product, be accomplished at considerably lower cost than would be possible in the U.S.

Mike may be known for many things, but "fuzzy vision" about this hobby would sure not be on my list.

The toy train market has no place in big box stores. They have very strict standards when it comes to pricing, JIT ( just in time shipping ) and vendor returns. 

Lionel and MTH and all the other train makers are small potatoes when it comes to mfg. 

and trains are a small hobby and O gauge is even smaller. The thought of seeing O gauge trains in big box stores is just a dream that will never happen. Mike wolf has it right, just be happy we still have hobby shops. 

Wasn't Sears & Roebuck a "Big Box" store?!?!?!  He ought to know that S&R was about the ONLY place in southeastern Va (and in many other places) that carried trains at Christmas back in the 50s.

Secondly, there's a lot of folks (who are into trains today) whose parents never gave them trains when they were young, to ignore a large percentage of the population can only hurt sales (I didn't know there was a questionnaire one had to fill out to prove you had trains in your youth).

Up until the mid 90s, I thought Lionel had gone under, had no idea they were still around.  With that concept can you imagine the number of folks who've never heard of MTH???

If selling electric trains in big box stores was profitable Wal-Mart and Target the two largest retailers would still be selling Lionel. It was a bust for them, simple as that. I am amazed how many arm chair retail experts post here.

While it's good that Menards carries some starter sets around the Christmas holidays, try and buy a Lionel set there after January. 

Hobby Lobby stopped carrying Lionel several years ago.  And Hobby Lobby was both being praised for some lower Lionel prices and cursed for the perception of driving LHS's out of business.  Go figure.

Rusty

Yep.  Sears, Wards, Penny's, Goldblatts, etc.  All what would be classified as "big boxes" when compared to the smaller retailers of the day.

Most had full-time staffed toy departments year round.  The trains came out around Christmas shopping season and disappeared into the stockroom by the end of January to resurface next time, mixed with new stock.

Rusty

Maybe it's a fine line, but I consider a Department Store like Sears a little different (though the line is probably blurring more all the time) than HD, WM, TGT, etc.

As others have alluded to, there's infinitely more things to keep kids attention today than there were in the train heyday 50's. 

In 60 years, today's kids will lament for the good old days of an I-phone.  "All the current kids want to deal with is these pesky telekinetic link video games.  We used to get "texting thumb" from contacting our friends.  Now all they have to do is think it!"

(tongue firmly in cheek for that last paragraph if anyone thinks I'm actually trying to predict the future)

-Dave

He has a right to his opinion.

I don't go to big box stores looking for a train set, anymore than I would go to Hobby Lobby looking for a washing machine.

If you try too much being everything to everybody you ending being nothing to anybody.

I read the 3/4 page 'article' too.

I have also had the pleasure of meeting Mike and talking to him a few times. 

Mike has proven himself in this hobby/business. No one ever is right 100% of the time but he has a good average.

Not being in the Big Box stores boils down to one thing. Money. The Big Box store sets the price, delivery date (sometimes to the minute) and return policy on defects, unhappy returns (I changed my mind) and unsold returns. It's more than a very small company with a niche product can AFFORD to do.  Don't you think Lionel, MTH and WbB would love to ship 3000 starter sets to a single customer?? But the potential issues it could cause can impact a company like MTH. They  could not handle it in a timely or cost effective manner.

We face the same issues in the plastic model field. All the plastic companies left the big box stores because of demands that were harmful. Some of the Big Box guys are experimenting with placing plastic kits back in theiur stores but we are talking some stores and limited selection. Plus a item with a MSRP of $25 or so....not $300+.

We have a lot of great people in all the hobby fields.....I worked with many of them.

In my case, nothing could be further from Mike's view of the hobby. My father knew nothing of toy trains. His father died when he was just 5 years old, and he and his brother had to help support their mother from an early age.

I picked up the love of trains on my own when I was very young, and my parents were very supportive. When I was in my late teens, they essentially said, "OK, you can stop now", and I said, "Nooooo".

Then came my son, and while I tried to pass my love of trains on to him, to this day, there is no evidence that any of it has rubbed off on him. He would rather play video games.

Lionel, Marx and others always had their trains in the big box stores of the day. Sears, Wards, and Pennys used to do just what Menards is doing today.

Allan, you are right. In the overall picture of things, Mike has been one of the leaders in O gauge. As I said before, I do want to see, read or listen to the speech to get the full context. I don't believe that passing the legcay of toy trains from father to son is the reason why toy trains don't do well in "big box" stores.

That's just not true Rick. The truth is businesses just don't want to pay American level wages, when Chinese labor can be gotten so cheaply. Even with the shipping, it still translates into higher profit margins.

I am guessing here, but isn't Mike Wolf easily the most successful train businessman ever?  If Lionel does more business than MTH, it has to be the only train supplier doing so.

With that in mind, I am going to assert that Mike might be the most knowledgable person on the planet as to which train sells where and for how much.  Not that I care - I have way more trains than I need.

So the guy who, with a great team along side him, saved O gauge from oblivion by coming out with modern locomotive power, articulated steam locomotives, modern rolling stock, sounds, DCS, etc doesn't know what he is talking about?

I think the best way to understand Mike's answer is to better understand the world of retail operations first. Study the different retail models and then see what makes sense.

I do admire your passion for the hobby and would agree with you that every avenue should be tried to increase sales. However, if one area does not work it is time to move on to another that yields higher returns so that the business stays viable.

I would only question Mike's statement about fathers handing off the hobby to their sons as if it was a generations-long tradition. If the 'golden age'of toy trains was enjoyed by baby boomers like me (born 1950) I can say with some assuredness that not may of our fathers had toy trains in their youth. Sure they were manufactured by several companies, but millions of our fathers spent nearly their entire childhoods living in times of Depression and War. My father's favorite plaything in the 1930s was a ratty baseball glove (a righty event though he was a southpaw) and an oft re-covered baseball using electrical tape. Then our generation was not successful in 'handing down' the hobby to the kids in the 70's, 80's....  It is nobody's fault...just the way it was and is.

I've been to the Houston Tnplate layout for the last few weekends.  It is in Memorial city Mall near Target.  OK, I m a member.  But seems we have a lot of visters on a weekend.  Some families have become members.  Others come in every Saturday.  And most of these visters are male and female, train set age, with at least one parent.  And some REALLY know about 3R and/or REAL TRAINS. 

Sometimes I wonder if people are treating model trains of any scale like TV execs did with the 1960's STAR TREK:  Nobody is into it...........

Certainly glad that "most" are male and female!  What are some of the other choices?

When assessing an industry leader's marketing comment it may be best to see how their position statement would be applicable rather then critique it.

It is very common to subjectively respond to statements. However the tends to have a narrow local focus built on an individual consumer platform.

Mike is in business successfully dealing with the law of large numbers on an international playing field.  His world view of hobby commerce transcends our incidential experiences.

If my understanding of how to conduct myself as a manufacture in the train business differed from his I would consider Mike Wolf to be the paradigm.

Advice from an old saint, "Be quick to hear and slow to speak".

I found the article interesting in a number of respects.  Mr. Wolf spends a lot of the article touting his own success (not that there's anything wrong with that ).  The rest of the article seems to be thinly veiled sniping at the competition (a trademark of his for two decades or so ).  

I'm just glad both genders can get into trains!  

CheesieFan wrote:

"* I'll leave the discussion on Wolf's comments on why talk about toy train manufacturing returning to the U.S. is hype and why Chinese workers are better than American workers for another thread."

Oh I can't wait for that thread!

One of the most ridiculous questions asked of Mike was in a recent magazine article asking his opinion if he thought model train production would ever return to the United States.

I thought that question was hilarious! Here the interviewer is asking a CEO who has invested millions in factories overseas, how he feels about production returning to the US.

What did you expect him to say? Duh! Is he going to say, yeah, I'm just gonna walk away from all that I accomplished over there, all the money I invested and leave the buildings empty and the workers out of jobs, just so I can make trains in the USA. Yeah right.

Mike does such a fine quality job with his trains because he controls the production from beginning to end in his factories, not relying on contract workers and businessmen who sell out to the highest bidder to get the job done. I remember some of the comments from the brass train producers of how hard it is to get production done with some of those builders over there. So it's doubtful given all he has invested overseas, he'll be an advocate of production returning here to the US any time soon, he'd be committing financial suicide.  

Good Day Stewart,  

I totally disagree with the comment by Mr. Wolf: "The hobby has always been passed down from fathers to sons...which makes toy trains incompatible with "big box" retailing."

I think the real deal (railroads) started the interest in model railroading for many people! As long as there are railroads to run there will always be model railroading!

My father died when I was 10 years old. I started my love of the railroads and model trains when I started viewing the MKT freight trains passing through Broken Arrow Oklahoma in the 60’s and 70’s. I loved watching those big GP7’s and F3’s roaring through town. I remember most of the time the daily freight trains had 60 to 70 cars which were a great load for two engines. Many times when there was switching of hopper cars to the Coop grain elevator and I was allowed in the cab. Now that was excitement back then!

Regards,

Swafford

I think the reason that O gauge trains aren't often seen in big box stores is because they are made to take back their defective items for a refund. Train stores don't send product back to the manufacturers and demand money back. 

I also read the article in ctt-he states manufacturing of toy trains will not come back to the us.it is still cheaper to make trains in china even with wage increases.he also mentions the Chinese are excellent at performing tedeious and boring assembly line work than us.

I feel mike broke his own rules by flooding product on the market-I remember when mth dealers were only allowed 2 of each premier item from a catalog-causing high demand-now-how many times has the premier big boy been made since 1997.

now the electronics=proto 2 now proto 3.each new upgrade makes everything we have obsolete.look at ebay-over 75,000 o gauge items for sale.

there is also the price increase .a lot of us just cannot afford 1000.00 to 1500.00 engines any more-plus o gauge is very limiting-in the south it is really limiting-no attics or cellars.no wonder mth is going into other gauges.i met mike several times at ready to roll in maimi from 1999-2004 when mth items were hot.

just enjoy this hobby and be glad mike came when he did.just my thoughts.joe

While I would like to read the speech, and might not agree with some of it, from out here in nowhere, and not in that business, I will listen to the editor above who inquires, researches, and reports on the people and the business.   However, my dad did not pass trains down to me...he had few toys.  I discovered my nearby cousin's set, and because I was already hanging out at a RR station a short disctance from my house, I was hooked.

My brother never was, although he hung out at the same station, nor were any of his kids, although my brother tried to interest one.

I don't like a lot of the trains made by several manufacturers...but it is supply and demand...and somebody must be demanding what Wolf is making because Big Brother has not had to bail him out.

The running around in circles argument would stop if the train sets included the plans, switches, and track sections to make a point to point or reverse loop to reverse loop track plan. If they do not promote it, the trains will just keep going around in circles.

Andrew

Look at this from the point of view from parents who may want to purchase a train set for little Johnny. The first thing they do is look for the cheapest price. Scale does not matter. Manufacturers acknowledge this by proclaiming on the box "xxx  number of pieces" so the parents can do the Arithmetic and get the most "pieces" for their dollar. Usually, this means a cheap HO starter set.

So, Lionel is more expensive. It doesn't sell. Thus, no interest by the box stores.

I don't despair for the future of the hobby like some. These days, Thomas, and to a lesser extent, Harry Potter, Polar Express, etc. keep the new hobbyists coming. They are big box sales, but often bought by the father, grandfather, uncle, already in the hobby.

I think Lionel, for example is doing a great job in this area of O gauge, with their new remote control innovations. I think Mike Wolfe's vision for the hobby is quite different from that of Lionel and others. He is growing his company by selling into Europe and also selling HO. Bachmann also does this, but, Lionel's specific US targeted marketing is also working elsewhere in the world.

Add the Chuggington train line from Bachmann. Although HO scale it looks nice. And the TV show taught my grand daughter that steam engines run on coal and water and there is a difference between steam and diesel. She knows the names of all the car types.....not bad for a 3 year old!

I have seen these in Walmart and to be short, a total failure. They wont be doing that again.

The retail costs are simply out of reach of most people. It is actually cheaper and easier to buy a 3D engine for 20 dollars, download it and install to your computer to drive a replicated copy of a real world route such as Donner Pass, mile for mile on your table than to try and spend a thousand dollars for a cab forward and then several more thousands of dollars to build a layout to run it on.

I remember also the good old days of the department store, and the 5n10's (Five and dimes...) as well as the Mall Kaybee Toys with the wall of trains near the Counter.

However, you still went to a hobby shop if you wanted good couplers and good engines than the tyco crap that would not perform very well.

We are losing the Hobby Shop. One by one.

We are even losing Ebay, one by one. I am watching as a project a B&O EM1 engine that retails for 1500 dollars roughly and they fail to sell at less than 550 dollars because the Seller has a reserve of at least 600 with several dozens of People willing to pay/bid 450 or less, but a few will bid beyond 500.

Lionel came out with a christmas catalog this year. 2000 dollar engines and trainsets. It went into the trash can after a few minutes reading. You can only sell the Polar Express so many years before you need to move on with something else.

There is a collaspe coming. These forums will most likely become one of the very few avenues open to anyone wanting to buy trains from a shrinking number of people who pass on leaving behind collections that are sent to the dumpster. A case in point, there is a man who died recently and one of his engines is retailed at 1000 dollars. It is being offered at 300. It sits in the display case unsold at 300. It is one of the Reading T1's that are fought over because of it's rarity from MTH. I might just buy the thing and sell it for 500.

And that is where the hobby is now. When I look and enjoy model trains, I no longer see them as what they are. They have become $ amounts on model wheels rolling down the track that costs a certain amount of $ per switch and yard.

The way I see it.O gauge trains had gotten pretty bland.Lionel had the o gauge market pretty much to it self.2 things that hurt lionel was they didn,t make any new rolling stock for years.The second was the prices for the trains.I know that turned alot of people off.That is until the 1990s when a new company came along.And made waves in the o gauge train market.MTH came out with rolling stock that lionel had over looked.Lionel had to step it up and come out with new rolling stock.Just compair lionel trainsets before mth trains.And after mth trains.Lionel has come along way with their trainsets.Both companys have made alot of trains.I am glad mike came along.Thats my 2 cents worth.

Boscovs, a relatively small, northeastern department store chain, seems to have cut back on their selection of "O" gauge trains, and seems to have shrunk their toy department overall.

While there certainly are exceptions, myself included, I think Mike's statement about the interest in model railroading being handed down from father to son is generally accurate.

IMHO, in most cases where a child develops an interest in trains on their own, that interest would die out without at least some parental support.

Another thing to consider:

How many management changes have occurred at Lionel since 1993, the year that Mike Wolf began offering his own locomotives?

I've lost count...

Rusty

Anyone remember when Mike Wolf was quoted as saying that command control would never catch on,  back in the mid-1990s, and that MTH wouldn't be making it?  Or when he claimed to own factories in China so MTH's production was guaranteed?  No one's perfect, to be sure,  but those are statements that don't inspire faith in his infallibility or objectivity at this late date.

Pointing at one aspect ( father-sone) of the continuation of a tradition that is fading to a large extent is right and yet wrong at the same time. These are mechanical toys despite the insertion of electronics in them to make them more appealing, and one needs to walk in a big box store to see what sells and most of what sells is tied to television IE Thomas. What part of this generation has seen a living breathing steam engine? Who has taken a passenger train across country? Railroading once was a very significant percentage of the country's livelihood. No more station agents, waves from a caboose, grand stations, firemen, etc etc. We now have diesels that mostly look alike, a comparative small number of roads and they are not local ( Class 1's) have no public interaction. They have a shrinking relevance to what was once a more romantic era, as well as the reliance on imagination back in the day. A lot of kids live in their heads if you compare this to the hand-eye coordination of say, erector ets, chemistry labs, model trains, etc.

Its more than cost that is a driver of sales. 

CW, I agree with you. My son maintains interest today not because he got a Christmas set from Sears that wound up in a toy box but because he and I spent time together with my trains of which some became his and now he is passing that interest on to his son.

You all may recall that some of Lionel's demise in the 60's was the new generation management take over making junk and pushing trains out of the LHS and hardware stores into department stores at Christmas time.

That all having been said, MTH builds trains primarily for the adult scene and has developed his own cult following and he does fix what is not perfect out of the box.

He is slowly developing every Train market out there from European, to HO and still fills the tinplate hearts of America. Who knows what is next and whatever is said about Mike Wolf, it cannot be said he is NOT successful and I could only wish for his bank account.

My opinion is that Lionel continues on a 'legacy' of the past turning out junk at the bottom end, replicating the past for 'wanna be collectors' in the middle and overwhelming the pocketbooks of the adult market place at the top.

Lets see who wins out at the end. The MTH tortoise or the Lionel Hare!

All above written by a devoted ex-Lionel collector (1960- 1995) to an MTH DCS operator (1995-current). I never have never looked back and am now considering the sale of the few pieces of my boy hood Lionel that my father and I played with (1940-1950). My son and grandkids like the sound & control system better so lets just move on.

Wisdom comes with age I guess but I did my part in passing down two generations of what my father gave to me. Mike Wolf, you got it right!