Just looked at MTH catalog. Very nice. With the amount of offerings offered by MTH and Lionel two times per year, this hobby must be much much larger than speculated. Somebody’s buying all this stuff and not just those that follow the train forums.
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Compared to what? Other gauges, other hobbies?
A real interesting analysis would be what is in a catalog to what gets made. Then one could extrapolate items made a second or third time, what gets blown out etc. Not for me I am retired.
Joe Hohmann posted:Compared to what? Other gauges, other hobbies?
Strictly talking Ogauge (3rail)
Well, I get regular mailings from Chas Ro including lists of what's available at their shop. It's so extensive I have to wonder to myself who's buying all this O gauge stuff. The Trainland ads in the magazines is another barometer of sorts. It just shows that there's pretty much something for everyone. I'm glad to see what all is out there being offered brand new. And then there's Ebay and all the auction sites. Yep, people are buying.
romiller49 posted:Just looked at MTH catalog. Very nice. With the amount of offerings offered by MTH and Lionel two times per year, this hobby must be much much larger than speculated. Somebody’s buying all this stuff and not just those that follow the train forums.
I think the purchasers may be people who are newer to the hobby rather than long-time O gaugers who have been buying these offerings for many years. Aside from new (and somewhat obscure?) paint schemes, many of the (Premier) locomotive types in the catalog have been run repeatedly, so there's not much new that older people (like myself) don't already have... But newer hobbyists may be inclined to buy them. And, for reasons of space and cost, I now limit my purchases to just a few railroads.
MELGAR
Rod, the size of the catalog is not necessarily reflective of the size of the market.
If you take a listen to the new Notch6 interview with Andy Edelman (which is already on page 2, with only 88 views), he talks about what is very obvious to anyone paying attention to the hobby. Andy talks about how the focus of the manufacturers has turned from quantity to variety. He also talks about the success of the dealer sponsored special run locomotive program, of which many of those dealers post their offering notices here. And most of those posted here are production runs of 25 or 50. Maybe if it's a huge success, the run will be 100.
Recently there was a post from the LCCA about a special run Susquehanna locomotive in which only 25 are being made. In the post, it was said that a handful were still available. I got a huge laugh out of that, thinking to myself, the entire production run is only a handful. I wondered, how many out of 25 is a handful?
Can you imagine many years ago, the sales staff coming into a Lionel meeting just beaming with excitement, telling Joshua that they have committed orders for 25 of a product. He'd probably have rolled his eyes, and told them to go make some phone calls and get 3 zeros behind that 25 to make a run of 25,000 or be fired.
Even today, I'd be willing to gander that at least for Lionel, the production runs of one or two standard Lionel starter train sets probably exceeds the total number of all scale products added up all together for a single year.
So based on what Andy said, and the same being true for Lionel, big catalogs don't necessarily add up to large production runs. You can rest assured the manufacturers are doing their utmost to make sure the market isn't flooded with a product that cannot sell in a expedient fashion. And any product that fails to meet even these incredibly low production run numbers (as compared to years past) will undoubtedly be cancelled.
What quantity of an item needs to ordered before Lionel or MTH will put it into production?
Are the BTO numbers different for engines and boxcars?
If I remember correctly, during the Lionel Bankruptcy hearings a few years back it was estimated that the O Gauge customer base was approx. 100,000. I guess the court needed that estimate to determine the amount payable to MTH.
I think that MTH hit a home run with military flat cars with Howitzers on them and how they got Solido to make them,Solido is out of business and their dies are owned by Majorie of France,can any one shed lite on this.
Mikey
brianel_k-lineguy posted:Rod, the size of the catalog is not necessarily reflective of the size of the market.
If you take a listen to the new Notch6 interview with Andy Edelman (which is already on page 2, with only 88 views), he talks about what is very obvious to anyone paying attention to the hobby. Andy talks about how the focus of the manufacturers has turned from quantity to variety. He also talks about the success of the dealer sponsored special run locomotive program, of which many of those dealers post their offering notices here. And most of those posted here are production runs of 25 or 50. Maybe if it's a huge success, the run will be 100.
Recently there was a post from the LCCA about a special run Susquehanna locomotive in which only 25 are being made. In the post, it was said that a handful were still available. I got a huge laugh out of that, thinking to myself, the entire production run is only a handful. I wondered, how many out of 25 is a handful?
Can you imagine many years ago, the sales staff coming into a Lionel meeting just beaming with excitement, telling Joshua that they have committed orders for 25 of a product. He'd probably have rolled his eyes, and told them to go make some phone calls and get 3 zeros behind that 25 to make a run of 25,000 or be fired.
Even today, I'd be willing to gander that at least for Lionel, the production runs of one or two standard Lionel starter train sets probably exceeds the total number of all scale products added up all together for a single year.
So based on what Andy said, and the same being true for Lionel, big catalogs don't necessarily add up to large production runs. You can rest assured the manufacturers are doing their utmost to make sure the market isn't flooded with a product that cannot sell in a expedient fashion. And any product that fails to meet even these incredibly low production run numbers (as compared to years past) will undoubtedly be cancelled.
Exactly right. They set the bar for the built to order items, and if they aren't reached, they don't build them. I don't remember what it was a few years back, but Lionel did not produce one such item and some believed that it was because its minimum order was not reached.
With the starter sets, this is where they make their money. That is there bread and butter. If they can get 200-500 starter sets sold, then this opens the door for rolling stock and the potential to sell the built to order items. Most of us would agree that rolling stock probably makes up a great percentage of their sales, but there had to be something to start that ball rolling at some point.
Dave NYC Hudson PRR K4 posted:brianel_k-lineguy posted:Rod, the size of the catalog is not necessarily reflective of the size of the market.
If you take a listen to the new Notch6 interview with Andy Edelman (which is already on page 2, with only 88 views), he talks about what is very obvious to anyone paying attention to the hobby. Andy talks about how the focus of the manufacturers has turned from quantity to variety. He also talks about the success of the dealer sponsored special run locomotive program, of which many of those dealers post their offering notices here. And most of those posted here are production runs of 25 or 50. Maybe if it's a huge success, the run will be 100.
Recently there was a post from the LCCA about a special run Susquehanna locomotive in which only 25 are being made. In the post, it was said that a handful were still available. I got a huge laugh out of that, thinking to myself, the entire production run is only a handful. I wondered, how many out of 25 is a handful?
Can you imagine many years ago, the sales staff coming into a Lionel meeting just beaming with excitement, telling Joshua that they have committed orders for 25 of a product. He'd probably have rolled his eyes, and told them to go make some phone calls and get 3 zeros behind that 25 to make a run of 25,000 or be fired.
Even today, I'd be willing to gander that at least for Lionel, the production runs of one or two standard Lionel starter train sets probably exceeds the total number of all scale products added up all together for a single year.
So based on what Andy said, and the same being true for Lionel, big catalogs don't necessarily add up to large production runs. You can rest assured the manufacturers are doing their utmost to make sure the market isn't flooded with a product that cannot sell in a expedient fashion. And any product that fails to meet even these incredibly low production run numbers (as compared to years past) will undoubtedly be cancelled.
Exactly right. They set the bar for the built to order items, and if they aren't reached, they don't build them. I don't remember what it was a few years back, but Lionel did not produce one such item and some believed that it was because its minimum order was not reached.
With the starter sets, this is where they make their money. That is there bread and butter. If they can get 200-500 starter sets sold, then this opens the door for rolling stock and the potential to sell the built to order items. Most of us would agree that rolling stock probably makes up a great percentage of their sales, but there had to be something to start that ball rolling at some point.
I think Brian is right on. Very good explanaton. Dave is correct as well. Just my opinion.
Looking at some of the obscure road names shown for engines in the latest MTH catalog, for example, it seems only a handful of some of them would ever be sold. If, as Brian noted above that Andy Edelman said -- that the focus has turned from quantity to variety -- one has to wonder how it's cost effective for MTH or anyone else to produce multiple paint jobs for engines that sell in very low quantities.
It must be easy and cheap today to program paint machines (I suppose that's what's used) to paint different paint schemes, although it still must take a lot of extra time and effort to come up with the paint schemes and program those in. One would think the products could be made cheaper if fewer road names were produced.
But maybe it's necessary now to produce more obscure road names, given that the market is relatively saturated with the common road names. It would certainly be interesting to learn the rationale that has caused manufacturers to change their production criteria. In any case, as alluded to above, the increased variety being offered gives the illusion that sales are brisk, when it may have nothing to do with total volume being sold, and in fact may be a way to spur lagging sales. Just a thought.
In some ways, I think this is the golden age of O gauge railroading. The model technology and available variety of products is incredible. The O gauge hobby may have been larger post WW2 and in the 1950s, but it must be a pretty close second today. And given that Lionel, MTH, Atlas O, 3rd Rail and Williams are still in business, we have more active "manufacturers" now than when I was a youngster. One thing that has happened is that O gauge has lost market share to HO and N.
MELGAR
Definitely more active manufacturers, that is certain. Where MTH is doing really great is what they offer, the variety and in some cases, what Lionel hasn't. This has really been what I consider a strong point in their favor(says the guy that usually only buys Lionel). Why I don't(yet) is because of the lack of a real permanent layout as well as my operating system(Legacy ATM). Will that change, time will tell. I do want to expand who I buy from, been interested in 3RD Rail for about a year, just haven't done my homework and asked the questions yet.
The margins are what keep the manufactures operating. MSRP, verses Manufacture cost generally 400 %. verses dealer costs 10 to 40 % off MSRP.
According to 'Inter State commerce Commission' Law, any item in the catalog must be available for sale at least once. Or, it is not to be advertised for sale.
Keep in mind, China labor rates .4 to .40 cents per hour account for these great margins. Models made in S. Korea .80 cents per hour, for brass, thus their higher cost....
Obviously it is hard to judge the size of the market, but I tend to agree that in many ways the hobby is as good or better in some ways than it ever has been. I think we have to be careful when we talk about 3 rail o gauge and then compare it to the past, in its heyday of the 1950's-early 60's, It was seen as a toy more than a hobby IMO (and that is all it is, my opinion), while a lot of kids got trains as presents, lots were used around the tree, some found their ways to layouts, it still was a toy, and like many toys had a couple of years in the son with many families then 'disappeared'. Also, in the 1950's HO gauge, while gaining strength, was still in many ways in its early days, RTR train sets, rtr equipment, reliable equipment, was still to come later, to be in HO required someone to be a lot more of a craftsmen then doing 3 rail O, and N gauge didn't exist yet, so Lionel had an advantage, it could be run in relatively small spaces, was easy to use, and had all these neat accessories, whistles and bells, etc.
It is very different today. O gauge obviously, in 2 or 3 rail, doesn't have the size HO and N now have, HO and N are scale oriented, the equipment is light years from even what I remember growing up, and given they take less space and allow for more operation, and there is so much being made for it, they have DCC operation, so not surprising they are doing relatively well from what I can tell. On the other hand, 3 rail has advantages (I am leaving out 2 rail, it is like HO and N in being scale oriented but also takes up a lot of space, that hurts it. Scale engines can take wider curves, but the compromises 3 rail makes allows you to run them in tight spaces relative to what scale would take, the deeper flangers and truck mounted couplers allow O72 operation). The real difference as I see it is that three rail is no longer seen predominantly as a toy, these products are being marketed, with some exceptions, to adults or near adults. Sure, the Polar Express, Thomas and that kind of thing still are oriented towards kids along with the starter sets, but most of the market we are talking about are aimed at adult hobbyists. Whether they are recreating a power war 'toy train' feel layout, or hi rail/semi scale/scale, it is a hobby oriented approach. As a result, we have detailed engines with a wealth of features, scale equipment, track systems that are light years from tinplate rails, command control, as well as less scale/postwar recreation equipment. As a hobby, it therefore is probably bigger and more stable than it was in the 'golden age'. I could wish the market was bigger, it would mean likely, for example, the cost of new products would be less (smaller market=higher retail price/unit to account for higher per unit fixed costs), but it is healthy enough to support the vendors in it and the offerings. So is O gauge large? Not compared to let's say drones or fishing, but compared to where it once was, it is IMO.
As far as the future, I'll leave that to the threats that pop up like weeds after herbicides wear off....
I think the estimate of 100,000 is of "serious" hobbyists, not sales. Lionel may well sell hundreds thousands of sets each year, but most of those sales do not lead to people staying in the hobby for decades or life. The size of the market is perhaps a couple of hundred million dollars according to those same data, so unless most people are spending 2,000 dollars per year, the number of annual customers is well beyond 100,000.
Various estimates from years ago would project to Lionel's sales per year now at being about 70-100,000,000 and MTH perhaps half of that due to the great disparity in set sales. Atlas and 3rd Rail, as well as Williams are a small fraction of that. These are all rough guesstimates on my part. No one knows for sure as all the companies are privately held and need not reveal any data except to their bankers and insurers .
Other data. CTT once had well over 75,000 subscribers, now down to about 25-30,000, which I believe is also is where OGR is at. TCA has about 21,000 members, down by 1/3 from their peak of over 30,000. So even 100,000 may underestimate the number of serious hobbyists who buy something every year as most hobbyists neither subscribe to magazines nor join TCA. Just some personal speculations based upon publicly available numbers (court numbers are from about 15 years ago; magazines and TCA numbers are hard data from magazines/TCA reporting to members and the public).
Quarter Gauger 48 posted:
According to 'Inter State commerce Commission' Law, any item in the catalog must be available for sale at least once. Or, it is not to be advertised for sale.
And when a cataloged item is cancelled in this pre-order world of ours?
Rusty
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