Model Train prices going way up.

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Trucula

Drum Driver
Does anyone know why prices of HO Model Trains are going so high?
Allan.

Couple factors could be the answer:
If your looking at new items just out, it's technology..better design, DDC, sound ect.
And stuff in general: It goes along with fuel prices!...energy to produce, ship and own a business....it flows down hill to all of us when fuel is up, not just trains but everything from a jug of milk to new homes.

One thing I have found as long as new stuff comes on the shelf, the items that came out a year or two before tend to decrease...Like the Broadway LTD. M1 a guy in our club just purchased...$113.00! with sound and DCC..Two years ago when it came out it was like $299.00. Gotta be a bargin shopper nowdays! ;)
 

jbaakko

Diesel Detail Freak
Mhmmm, it pays to wait now. Sound & DCC are the killer, but RTR is upping the price a bit too. Demand for non-kit items has gone up considerably.
 

HaggisKennedy

Coal Shoveler
If you look at the descriptions of RTR stuff, you see a lot of "separately applied details". That's labor, despite how cheap it is over in China or wherever. And that adds to the cost.

Kennedy
 

sushob

Entrepreneurial Teen
Don't forget that plastic is derived from oil. Rising oil prices mean the cost for raw materials has gone up too. My family's machine shop also does plastic injection molding, and plastic costs have gone up double-digit-percentiles over the past year.
 

conrail92

Member
Athearn RTR dont require any assembly at all. and It relativly cheap and good quality, And if your handy enough I have seen some amazing things done too some cheap Athern BB but that requires alot of work.
 

modelbob

Administrator
Don't forget that plastic is derived from oil. Rising oil prices mean the cost for raw materials has gone up too. My family's machine shop also does plastic injection molding, and plastic costs have gone up double-digit-percentiles over the past year.
So, without giving away too much confidential info, roughly what percentage of the model's cost is the materials? I always figured that you're paying for the model makers skill in making the mold and casting the model and painting and shipping and advertising etc, etc. I pretty much figured that actual materials were pretty incidental, maybe on the order of 25 cents or so, and even if the material costs double it wouldn't raise the price that much.
 

sushob

Entrepreneurial Teen
So, without giving away too much confidential info, roughly what percentage of the model's cost is the materials? I always figured that you're paying for the model makers skill in making the mold and casting the model and painting and shipping and advertising etc, etc. I pretty much figured that actual materials were pretty incidental, maybe on the order of 25 cents or so, and even if the material costs double it wouldn't raise the price that much.
Depending on the material, weight of the shot, and the complexity of the operation (some can run unattended and drop in a box, others require manual removal, trimming, or have to be placed on forms to cool), a shot can range from 25 cents to probably an average of 50 cents. Keep in mind most models require multiple shots...usually one for the body in polystyrene, one for the parts and details in polystyrene, and one for trucks and wheels in Delrin (acetal). Then add metal axles, screws, stamped or cast weights, paint, ink, purchased couplers, packaging, etc...

Still, you're right in that much of the cost is labor for design and construction of the mold, and not in materials, but when you buy a 1000 pound box of plastic and the price goes up 20 cents a pound, it takes a lot of 25 cent shots to make up for it. It's not so much the 'brand' or 'manufacturer' you see on the box that foots the bill for increased plastic costs...it's whoever is actually doing the molding. Some companies do their own molding, but most have parts molded by a separate company. In the case of the 'major' brands (I really don't think they qualify as manufacturers anymore since all they do is design and sell a product...everything else is done in China), I have no idea what they spend.

By far labor accounts for the largest chunk of change in manufacturing, and as it was already said, today's RTR cars with extra detail parts require a heck of a lot more assembly labor than kits or older RTR models did. Even so, the major brands are making more than they need to on some of the newer products, and the 'Made in USA' companies have a hard time pricing items to sell, and still make business sen$e.

Oh, Bob, have you gotten any of my PMs? I haven't heard back.
 

sushob

Entrepreneurial Teen
Athearn RTR dont require any assembly at all. and It relativly cheap and good quality, And if your handy enough I have seen some amazing things done too some cheap Athern BB but that requires alot of work.
We're talking about manufacturing costs, and the assembly the manufacturer has to do, not assembly by the consumer. :)
 

grande man

Bonafied Grande Nut
I think some of the price increases have to do with the fact that there is demand for more detailed/sophisticated models. We live in a society where many folks have the $$$ to buy expensive toys. The manufacturers are providing the product.

Manufacturers are also driving prices up by offering limited edition models. This tends to eliminate cheap, surplus product.

There are still deals to be had though. We've never paid more than $55 for a non-sound P2K loco. LGM's new QSI equipped P2K unit was on sale for $99 at Trainworld (they are $89 now!). Stewart models can be had on ebay for decent prices. They require detailing (half the fun ;) ) but are absolutely first rate in regard to smooth performance. We just added sound to two of our Stewart B units for $50 each. Sure, it's not QSI, but they sound fine and add realism to the layout. P1K units run well, look pretty good, and can be had online very cheap.

Shop around. You'll be surprised what is out there. If we had been looking at spending retail on everything, the Platte Canyon Sub would be a very different railroad (or would not have happened at all).
 

modelbob

Administrator
Depending on the material, weight of the shot, and the complexity of the operation (some can run unattended and drop in a box, others require manual removal, trimming, or have to be placed on forms to cool), a shot can range from 25 cents to probably an average of 50 cents.
Yes, but if you're talking about manual removal, trimming, etc, that's all part of labor. I was just considering the materials themselves, the actual plastic, which may well increase in price as oil prices rise. Granted, labor and all that will too, but for the moment I was only wondering how much a 20% increase in the cost of plastic would raise your material costs. If the material itself only costs 50 cents, then even a 50% increase in material cost would only raise the price 25 cents.

Then add metal axles, screws, stamped or cast weights, paint, ink, purchased couplers, packaging, etc...
Yes, and all of that obviously keeps going up.

By far labor accounts for the largest chunk of change in manufacturing, and as it was already said, today's RTR cars with extra detail parts require a heck of a lot more assembly labor than kits or older RTR models did. Even so, the major brands are making more than they need to on some of the newer products, and the 'Made in USA' companies have a hard time pricing items to sell, and still make business sen$e.
I guess it's all relative. I do know that for example, while I think the new Empire Builder set by Walthers(?) looks fantastic, I just can't bring myself to pay nearly $50 each for passenger cars. By the time you get 8 or 10 cars together, and a couple of units at $150 each, you're close to $1k. I can't spend that much for one train. Heck, I probably can't spend that much on the whole model railroad, at least not in a single year.

Oh, Bob, have you gotten any of my PMs? I haven't heard back.
Yeah, been busy herding other cats, like the broken photo gallery. I'll get to that one of these days... :)
 

Joe Daddy

C & SF, my obsession
Please, an example of higher prices? I see heavy discounting everywhere I look on many things, both at the LHS and the web. A year ago, getting a BLI/P2K ddc/sound locomotive was over 300 bucks, less than half that price on many things now. Example I paid $268 for P2k 0-8-0 last year, today, same locomotive on sale from Walthers at $179 new.

I just don't see the point of this thread.

Joe Daddy
 
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conrail92

Member
"We're talking about manufacturing costs, and the assembly the manufacturer has to do, not assembly by the consumer. "

Sorry i missed that.
 

sushob

Entrepreneurial Teen
I guess it's all relative. I do know that for example, while I think the new Empire Builder set by Walthers(?) looks fantastic, I just can't bring myself to pay nearly $50 each for passenger cars. By the time you get 8 or 10 cars together, and a couple of units at $150 each, you're close to $1k. I can't spend that much for one train. Heck, I probably can't spend that much on the whole model railroad, at least not in a single year.
True that! Again, they're pricing them much higher than they really need to in order to turn a profit. I guess it's so they can offer a decent discount to their dealers. Then they'll show up on other sites for a reasonable price, and the dealer can advertised it as being a 'huge discount' off the MSRP. I guess it's sort of like a department store pricing a $10 item at $20, just so they can advertise it at 50% off a few weeks later to generate more interest. Advertising is game afterall...

Yeah, been busy herding other cats, like the broken photo gallery. I'll get to that one of these days... :)
:) No problem. I just wanted to make sure they went through, as Outlook has been throwing a fit for a couple days and I was afraid I may have missed something. I was thinking of maybe having something available in HO, something in N, and a gift certificate, so the winner could choose based on their scale or preference. If you think it's doable, I can at least start writing the general fine print while we work out the details.
 

HaggisKennedy

Coal Shoveler
Bob wrote:

> I do know that for example, while I think the new Empire Builder set by
> Walthers(?) looks fantastic, I just can't bring myself to pay nearly $50 each
> for passenger cars. By the time you get 8 or 10 cars together, and a couple
> of units at $150 each, you're close to $1k.

As a GN modeller, I'm buying 16 cars to assemble the 1956 Summer 'Builder. Also a couple of the F-3s, to go with the two Genesis F-7s I already have.

Even so, I'll be missing one car; Walthers isn't offering the through baggage/mail car.... That may have to be a brass job....

Kennedy
 

OldGettysk

Running the MC & Buffalo
I have to wade in on this .I worked in the plastic industry for 18 years. Yes indeed plastice is derived form oil. But toy manufacturers usually buy the cheapest plastic they can get thier hands on. we use to sweep our floors constanly from the resin that was leaking all over or just plain spills. You know who use to buy these floor sweepings? Thats right Toy manufacturers. when I saw this I would not let any of my children put any of thier toys in their mouths even though I 'm sure they were filtered. It still gave me the creeps. And who do you think makes these trains and toys . Labor is their cheapest commodity. So the next time you purchase something just think about how it got there . Profits is what runs Corporate America not kindness to the consumer !!!!
 
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RexHea

RAIL BENDER
Just since I have been back in the hobby, I have seen huge increases in the retail cost of our hobby. Take a look at the price of Atlas flex. As the popularity has grown, the price of flex has gone up +25%.

Manufacturing costs? Come on fellows. We are talking about products mostly made in China. The largest overhead cost in almost all manufacturing is labor and a high skilled Chinese worker's yearly wages is about what you would make in a week and I doubt that it requires that much skill to make MR assemblies. Besides, many Chinese companies do exactly what Japan used to do and farm out much of the assembly to Mom and Pop huts and are paid just enough to keep from starving.
Material cost, even with oil prices? It can't be that much of a factor with such small quanities being used per item. (I think Bob was hitting on this.) Oh, let's not forget that China's government subsidizes all areas of manufacturing.


Transportation? Well, there are thousands of items in one shipping container, so an increase in shipping per container would break down to how much per item? Pennies-- maybe!

Supply and Demand? Hmmph! It certainly isn't demand and the supply doesn't seem interrupted.

Complexity of manufacturing? Let's take the drive/valve rod assembly of a steam engine. If all you did all day, 8 hours a day was to assemble this with proper jigs and tools, it would be as easy as buttering your toast.

Competition? Hmmm! That is a possibility, since there doesn't seem to be that much of it at the manufacturing end.

The next time you are in Wal-Mart, look around and find some of the plastic-made items that are made in China and have some complexity to them. Look at the price, physical size, and amount of materials, both plastics and metal. How about looking at TV's, DVD's, and other electronics that is filled with engineering research and design, expensive manufacturing machinery, and requires the same import duties, shipping, distributing, and etc. Now, tell me how that compares to a box car or even a locomotive, or worse: a 1955 Chevy or a Caboose ground throw.

No, we are being screwed as in any other area with the tag of "for recreational use." Who is it? Why is it? The LHS tells us that he can not pay his bills. So, is it the Distributor? Who? Why?
 
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Brakie

Member
Guys,The BEST way to beat the high prices is to BUY AT DISCOUNT..There are several good low price on line shops to choose from just be sure to shop around..:D
 




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