Question/comment about loco prices

Lee,  Despite extremely low interest rates, the price of all goods is going up.  Not just gas.  Or what you get is smaller than before.  Like the half gal ice cream that is no longer a full half gal:-).

I think we are in the phase where China cost are no longer as cheap as they use to be, but companies haven't found or committed to moving to a cheaper labor pool.

Since the bottom line always needs to go up, and they don't seem to be able to trim cost (in fact cost are going up), the only other recourse is a price hike. 

What is interesting is that now that the MTH upgrade kits are out, I am doing a lot of PS-1 conversions.  I get to see a lot of 1997-2000 Korean and Chinese built locos.  They actually look better made to me then the 2010 stuff I see.  This is all just my opinion.   G

Yes prices are high and I am not happy about that, I guess what disturbs me the most is we seem to be getting less and less quality for our money. Of the last 5 Loco's I have purchased, 3,E-6's 1-K4 and 1 vision line hudson, three had to be returned for repairs and two of them had to be returned  more then once, I am now preparing another for return (thats going to be 4 out of 5). I know they are under warranty now, but when the warranty is expired they could start costing more money for repairs. I did not seem to have these problems with my older engines. I hope this is not a sign of things to come.      OMHO 

I feel that all of us of this forum love trains and yes there are more important things in life; however:

My take is that if you want something (have a passion for it) and have the money than the cost shouldn't be an issue.

Signed; the President of the "you can't take it with you club"

Peace!

The price wouldn't bother me as much if I knew the life of the engine would be like the old easy to repair ones have been. That's a lot of money for a life expectancy of just a few years. And just a few years fly's by quickly. Then we have an engine that needs a part you can't get.

"I think that in a world where a well-made, scale, conventional loco without sound synthesizers has a list price of $750, some of the Lionel and MTH Legacy and Premium offerings at around $1000-$1200 can't be considered to be terribly overpriced"

Well, people who can easily drop $1000-$1200 on a model (or is it "toy?") locomotive certainly won't consider it terribly overpriced.  And yes, I know that a large percentage of this forum falls into that group.  But everyone else is likely to just shake their head and find another hobby.

Well I'm not spending 750 bucks on a Bachmann engine I don't care how nice they think it is.
But Lionels refusal to offer an alternative to the high priced legacy engines is no different

Hey more power to them. You make your decisions as a company and hope you read the market right. If you don't then you find out the hard way.
I don't care if gas went up or Quan wants a raise sorry not my problem.
If Bachmann doesn't realize the attraction to their product line was value at a decent price then hey that's not my problem either . They can keep their stuff and I'll just keep my money.Problem solved

David

The only reason prices are high is because we as a collective continue to pay them.   If we'd stop paying prices would drop.   

--Greg

Don't worry...I doubt that you'll ever have to.  Forget MSRP and shop for the street price. Same applies to products from nearly all of the others.

I've seen you post that many times Allan and your right, but each time that MSRP goes up so does the street price.
The sole attraction of WBB is that they are good runners for not a lot of money.
Say the street price is $450? on that $750 MSRP engine. What can I buy with TMCC or Proto 2.0 for $450 ? on the street . Now they've killed a sale. I would assume that's the very reason the Mikado isn't being made.

I think Bachmann is missing the attraction their product brings to the O scale hobby
They keep raising the price and they'll find out.

David

I think about all of the ones who cry about the prices. Yet, most times they are among the first to rush out and pay the prices that they are crying about.

I have engines that are one hundred years old. With proper care they will more than likely be running for the next one hundred years. It does seem that the electronics and other components in the new engines are not designed to last more than ten years.

It would seem that if we all want trains that will last an extended period of time DO NOT buy anything made since Richard Kuhns and Jerry Williams retired.

It's not that I'm old-fashioned, I just prefer that my trains be made before 1932. Back in the day when the first thoughts were about quality. 

How does one define "reasonable price"?  Generally, that all depends on one's own circumstances.  What may be reasonable for me may be too costly for someone else or chump pocket change for another.

In light of the simple fact that costs for virtually everything have gone up and are going up across the board, it's unreasonable to expect that toy train manufacturers are going to be the exception.  Fuel costs, material costs, labor costs, production costs, shipping costs, etc.--all have spiked in recent times, and not just for those of us in the U.S.

There obviously does come a point where some will simply have to accept that they may already have all that they can reasonably afford.  That leads to decision-making time, or perhaps more careful planning for future purchases.  But, as always, there will also be some who are seemingly unaffected by increased costs for something they truly enjoy, or are at least willing to accept the costs.  After all, what is the price of contentment and happiness when it comes to a discretionary spending category like a hobby?

I have been back in the hobby about 4 years. I was amazed to see the advancements that had been made since my last stint in the hobby, although that was many years ago. Anyway, even though I was a little taken aback by the prices, I decided to go forward, and also to stay with command control stuff.

My first purchase of any note was the Lionel Conrail Lionmaster freight set they had a few years ago, which included A Legacy engine, 5 cars, a loop of fastrack and a CW80. All this for around the $500 dollar mark. Since then I have added to my fleet, which has been all Diesel power, at prices that although reasonably high, not bankbusters.

I would like to have at least one Legacy Steamer in my fleet, and of course, my tastes dictate that it would have to be one of the latest and greatest, but at nearly 4 times the price I paid for my Conrail set, for one engine, it's pretty much impossible for me to justify laying out that many $$$$. I am one of the fortunate, that if I do choose to get one, I could afford it, but at $12 -$15 hundred for one unit, my inner conscience starts to step in.

I know it costs the mfgs. a lot to develop the products we demand, and you should expect to pay a premium price for the "latest and greatest" but in my case, I think that "premium" price is a huge "STOP" sign to me.

REV

Allan

The only qualifier I would add is that affordability in terms of income may or may not be an issue. I can afford the bells and whistles and simply do not chose to go down that road. Another issue is a matter of personal valuation. "Is it worth what it sells for? "which is also very subjective with no right or wrong answer that applies to all.

Actually it is very simple, buy it or not buy it. I don't worry about things I can't afford. I buy what I can afford. See guys----easy.

I fully agree that affordability based on an individual's financial circumstances is by no means a sole determining criterion.  Obviously, other factors such as a personal evaluation of the costs/benefits come into play.

My own threshold for buying a train product is, for example, far lower today than it was as recently as a decade ago.  It's not that I can't afford the $1,000+ items if I really set my mind to it, but more a case of me employing the same "personal valuation" concept that you brought up.  These days, $500 for any single item is about my limit, give or take a few bucks.  For some others, that wouldn't even constitute a decent down payment.  The fact that I have just about all the trains I can comfortably (or perhaps not so comfortably) house, use, and enjoy has most certainly impacted my decision making, and I imagine that is the case for many other of us "old timers" as well.

Prices must go up.

I reached that point years ago when I purchased a then new Heritage 2-10-2 with QSI for a bit over 300. (Same as the BLI engines which for the first runs were quite robust and well worth the money)

When Walthers bought Heritage out and re issued the same engine, this time at 500+ I knew the writing was on the wall. The question then becomes how much train can you afford? Quite a lot if you stop making pre-orders and wait 7 months or so for them to hit the Bay or Forums for somewhat cheaper than MSRP.

I am well aware of engines approaching or surpassing 100 years old and still will respond to power on the track well enough. Heck, some of the equipment was restored with reproduction parts decades ago, when it was new then and was somewhat a pot stirrer between a all original versus a repro rebuilt.

If the price is right, I will get it when I am ready. Not by pre-ordering.

Now if the Company is seeing the pre-orders fall off, then perhaps it's time to import the factory to the USA, workers and all and make them here.

I have done a great deal of USA only purchases lately such as Ross Switches for example. Quite good if you ask me. I engage in another pursuit that goes through Ammunition which is pretty expensive when bought factory but very cheaply made yourself in bulk at home; Provided you know what you are doing and have the right stuff to do it safely.

My two cents.

Allan, how right you are. I'm at a point now where I can't run all my "newer" engines so I just don't need any more. I have almost every scale Milwaukee engine but didn't buy the Lionel 261 because I just can't justify the expense. I did buy my third like new K-line Milwaukee Trainmaster on E-bay because I got it for $150. I'm happy starting my new layout. That's my main priority. Don

Well, All I can add to this is that My steam engines are mostly Imperial Railking & the rest are starter set engines. (I run all steam except a couple galloping geese)

I can't begin to afford Premier MTH much less Lionel's prices. I am looking at the 10 Wheeler posted recently, that's a nice little locomotive.

And I'm not retired, My wife and I are both full time employed. Oh well.

"Problems in China: The Inside Story"

If you want to hear another view from inside the model train industry, please read this excerpt from the Rapido Trains, Inc. Feb 2012 newsletter:

Click here - scroll down to "Problems with China"  or - read on......

Problems in China : The Inside Story 

This situation applys to EVERY toy train company...we didn't just make this up!

If there is a common theme throughout this newsletter it is that "stuff has been delayed." We are not the only ones. Most model train manufacturers have experienced production delays, and here is why.
In January I broke the news on the CanModelTrains forum that another large model train factory in China had shut down, forcing 3000 people out of work. Whatever your beliefs may be about globalization, nobody wants to hear that 3000 people lost their jobs just before a big family holiday. This was just the latest event in the ongoing saga of manufacturing model trains in China .
A couple of years ago, Sanda Kan was purchased by Kader Holdings (the Chinese company that owns Bachmann Trains). Sanda Kan was the largest supplier of model trains in the world, and most of the trains made by North American and European manufacturers came out of Sanda Kan 's many factories in Guangdong province, China .
After initially telling their clients that nothing would change, Kader decided to dump the vast majority of their customers. Suddenly, about 50 model train companies around the world had no factory to produce their models. As you can expect, a form of panic ensued as everyone was scrambling to find a supplier. Our industry is what you could call "cash poor." We manufacturers make money, and then invest it in new tooling. That means that for all but the biggest manufacturers, a delay in production can cause serious cash flow problems as we don't have piles of cash lying around.
The result of Sanda Kan booting out their customers is that the existing model train factories found themselves with an onslaught of new clients desperate to get their models back into production. These clients also needed to start new projects to ensure that they don't run out of cash in the long term. No model train factory was, or is, anywhere near the size of Sanda Kan. The demand outstripped the supply - by a huge margin.
The industry is still recovering from the eviction of Sanda Kan 's clients. The January closure of one of the largest remaining suppliers in the industry will only add to our collective problems. This closure was caused in large part by the fact that model railroad price increases (averaging 10%-25%) have not kept pace with cost increases in China , and it is often difficult for the Chinese suppliers to stay in business while meeting the demanded price point from their major North American clients.
Our industry is currently tied to Chinese production, as southern China has developed the special skill set required to produce model trains. Bringing the manufacturing back to North America would cost even more due to very high start up costs and higher overhead, and there are no reliable model train factories set up yet in places like India . So I think we're looking at tough times ahead in our industry: more delays and even larger price increases.
Jason Shron President Rapido Trains Inc.

I think it's obvious folks, inflation is going through the roof on everything we buy. The only thing not going up is peoples income.

Lionel, MTH, Bachmann and all the rest are trying to make the most money they can on their products. We on the other hand are trying to get the most bang for our buck due to a drop in disposable income.

I'm doing ok as compared to many friends but it seem like I'm on a treadmill and I have to run harder and faster just to stay in place. I don't even wont to think what would happen if I stopped.

Don't get me wrong, I'm very happy for what I have, Like I said I'm doing better then most. At lest I can still buy toy trains, though at far less then what I did ten to fifteen years ago.

It just seems to a guy who is pushing sixty-four that the American dream is a train I may have missed.

If only my salary would keep up with all of these "reasonable" increases in every other area.  No offense, Allan but my buying power is shrinking with prices going up like crazy.  We get told how low inflation is but I'm not seeing it.  I hope this isn't the case for the rest of you but I have a feeling that I am not alone.

I agree Mario, at one time I didn't think much about plucking down some real money and buying a new locomotive. I didn't think about filling up the car for $100. Didn't think about going out to an expensive dinner. If we could just stop printing money things would even out a bit with the rest of the world. I'm retired now and we're doing fine but we do have to watch what we spend, but we're still having fun. That's the main thing. Don

My Lionel postwar is the same price today as I paid in the mid-1980s.

I didn't mean to imply that the increases we're seeing are "reasonable"--far from it in many cases (even though many are interrelated, with an increase in one area having a direct impact on increases in another).  I doubt that many would assert that the price of fuel, for example, is "reasonable" today, considering that the basic source is so plentiful on a worldwide basis and even domestically.

And I also agree that buying power for most or many has most certainly shrunk.  You can be quite sure that you're not alone in feeling the pinch.

Price increases are what they are.  In a recession many of us have had our buying power deteriorate and that changes what we see as "reasonable."

I imagine from the business point of view, many of the price increases we are seeing by manufacturers are what they regard as necessary to cover rising supplier costs and therefore "reasonable," even if they generate the "ouch factor" in buyers.

But my original point when I started this thread is that while a $750 list price scale conventional Hudson at first seemed overpriced, it actually is in line with prices for MTH and Lionel locos.  

IN FACT, I wonder if WBB is not escalating the price of the scale Hudson a bit faster than its other products to separate it from its semi-scale herd very deliberately.  I really imagine that in some far off corner of a Bachmann corporate offices, some business wonk is considering the first of WBB's O-gauge "Spectrum" series: 

                  scale Hudson, conventional           $750

                  add cruise and chuffing, etc.          $150

                  some "separately applied details"  $100

                                                                   $1,000

a locomotive arguably competitive with Legacy offerings: Okay, no ash pan glow, no whistle steam effect, but hey . . . a 15%-25% lower list price for a loco with more than the basics. 

>>I think it's obvious folks, inflation is going through the roof on everything we buy.<<

Not only are prices rising, but with many consumer staples, content is falling.

Check out cereal, paper products & canned goods over the past six months.  

In just about every instance where differences can be hidden, you're getting less at the higher price.   

Joe

Another facet of this dynamic is the rising cost of living to either a non existent or paltry cost of living increase in salaries. Many of my peers who are not retired report either frozen wages, or increase in out of pocket contributions to employer medical benefits, higher deductibles. Another is the diminished value of the currency. All of this squeezing of a flat income increase versus high commodity values make things like the increased cost of discretionary toy trains either pale in comparison and \or have a significant impact on it.

Another issue in affordability is the increased cost of the hobby might shrink the pool of potential buyers which then has led to the lottery catalog of preorders as well as losing the advantage of the more you make, the cheaper they are, hence more cost to the manufacturers that are passed along on a per unit basis. I honestly think they have put themselves into a Catch 22 situation of creating a diminishing pool of potential customers.

Yes, you are absolutely correct about that.  I have done some "comparisons" with food items I purchase frequently, and have definitely noticed a change in packaged quantities (but in the same size box or package).  All this within the past 10 months or so.

As this is a hobby and a low volume one at that the prices are going to escalate at a higher rate than commodity items. That's a fact of life and nothing can be done about it except not buy. One thing happens when new items become to high for the market. Lot's of people go to the used market driving the used prices up as well. If you have used to sell this helps with the price of a new model bring it's price more in range. I think the manufacturers deserve a reasonable profit and I for one think they make a pretty good product even though I can't always afford what they are selling. I don't agree with the idea that today's offering won't be around in a hundred years. There will always be a way to run today's trains. An electronic e-unit in place of the command control will put an engine in service. Electric RR boards will fit into just about every command locomotive putting it back in service.

Ron

>>>Another facet of this dynamic is the rising cost of living to either a non existent or paltry cost of living increase in salaries.<<<

What is becoming more widespread with smaller & medium sized employers (less then 1000) is paying annual salary increases in one lump payment..

Your base wage is frozen,  never changes and increases are tied to profits & performance evaluations.

In other words, depending on economic conditions, its possible to earn less in 2013 then you did in 2012..

Welcome to new America!

Joe

I really have to hand it to Lionel in their attempt at keeping prices competitive.  Their new Milw S-3 is list priced at $995.  They could be purchased, when they were still available, at somewhere around $900.  This price for a full featured, very detailed, Legacy controlled, large locomotive, is a real bargain.  Other 4-8-4's have found their costs going up to $1400 to $1600 for an engine that doesn't have all the newest features like the S-3's have. 

To me, Lionel has set a new mark in this day and age of inflation, to keep a highly desirable engine at what is a reasonable price.  I hope that the other manufacturers can come somewhere close to this cost on future large engines.

Paul Fischer

One way to counteract this that I am trying, is more activism on my part as a hobbyist. In other words, I arranged for samples of my collection in a display through the Librarian to be located in the next couple of months, at the local library foyer for about a month along with information on the TCA and membership applications as well as my phone #. We not solely the manufacturers have a larger role to play to bring more folks in to keep costs down. Just planning this is a fun extension of the hobby that I recommend to others to try and it costs nothing.

 >>really have to hand it to Lionel in their attempt at keeping prices competitive.  Their new Milw S-3 is list priced at $995.  They could be purchased, when they were still available, at somewhere around $900.  This price for a full featured, very detailed, Legacy controlled, large locomotive, is a real bargain.  Other 4-8-4's have found their costs going up to $1400 to $1600 for an engine that doesn't have all the newest features like the S-3's have. <<<

LOL,,  You're taking the example of one item and using it as the industry standard?

Your data sounds grasping.. Somewhat short of being scientific .

Joe 

One way I deal with the high cost of new products in O Gauge Trains is to attend the few train meets in the Tampa Bay Area.  I have had good success in finding Steam & Diesel Engines at what I can afford.  I agree with those who have posted that $500.00 is the limit I will go for a product I want.

The one exception is the Lionel Lionmaster Big Boy that I am saving for.  I hope to pick one up at a train meet for under $750.00.  The major toy train companies can charge what they believe will be acceptable to the market place.  Based on this Topic I believe they are mistaken in charging $1000.00 plus for Legacy and Primer Engines.  WBB may be pushing the price line for their products to the brink of diminish sales.

I believe Lionel is asking over $1800.00 for their Legacy Centipede.  Lets see if the market supports that price in this economy.  Good Topic.

Many thanks,

Billy C  

Or in other words, they implement a salary increase/bonus matrix where the performance expectations are formulated to the point where getting a salary increase or end-of-year bonus is next to impossible.

That brings up the value of TCA membership as a good way to do an end run around Ebay. I went to the local meet and picked up new stuff at reasonable ( not inflated) prices provided by my fellow hobbyists. I did some bartering as well. Its called taking care of your own. I highly recommend TCA as a way of getting rid of "middlemen".

Wow, that's amazingly close to the $1,200 list price of something like the Legacy locos in the new catalog.  Interesting.  I always knew the 700es were big buck items in their time - my Dad had told me his first car, an old Ford at the time, but a good runner, cost $75 in 1938.

Consumer prices in the 1930's in the midst of the national economic depression that is sort of interesting to use as a comparison of the cost of a 700E back then. Costs are inflating everywhere looking forward as one wag stated the national debt will reach $20 trillion by 2015 and if interest rates normalized to the same level they were in 2007 (5%), annual interest expense would be $1 trillion, or 45% of current tax revenue. One example cited in the link: "Best Steak 22 cents per pound Ohio 1935."  A 700E buys a lot of steak and that was not exactly a staple for meals in the depression. History may be repeating itself.

http://www.thepeoplehistory.com/30sfood.html

I have to assume the Importers have justification for raising prices and have no criticism in that regard---they know more about their business than I do.

But I have all the Southern, N&W and Clinchfield locomotives that I covet and need no more[admittedly they are an older generation of equipment without all the peaches 'n cream of todays jewelry].

I paid $170 each, including shipping, for a pair of WBB Ten Wheelers--the best buy and so far the best quality for the $ I have experienced in 25 years or more. I would pay a premium for a USRA Heavy Mikado detailed as a Southern Ms-4--but that is a long time mental block for the Importers and will not be produced so I hope newbies and the well-heeled can fill in for us po'folks and keep the Importers afloat.