Model Train prices going way up.

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C

catt

Guest
Everytime a thread like this one gets started almost the first thing typed is the rant about cheap Chinese labor.It seems that nobody realizes that labor stays in China and all that product gets handled by US labor and incase nobody relizes it we ain't cheap labor.

Somebody has to pay for this and it will always trickle down to us the consumer.The prices shock me too,but then I remember I'm not working for $2.00 an hour anymore and neither is anybody else.

The next time you see something that you think is way over priced stop and think of all of the people who have helped get that product to you on this side of the pond (and remember they need to get paid too) and you may realize that it ain't as expencive as you first thought it was. :eek:

Ok,I'm getting down off the soapbox now. :D :D :D
 

sushob

Entrepreneurial Teen
Everytime a thread like this one gets started almost the first thing typed is the rant about cheap Chinese labor.It seems that nobody realizes that labor stays in China and all that product gets handled by US labor and incase nobody relizes it we ain't cheap labor.

Somebody has to pay for this and it will always trickle down to us the consumer.The prices shock me too,but then I remember I'm not working for $2.00 an hour anymore and neither is anybody else.

The next time you see something that you think is way over priced stop and think of all of the people who have helped get that product to you on this side of the pond (and remember they need to get paid too) and you may realize that it ain't as expencive as you first thought it was. :eek:

Ok,I'm getting down off the soapbox now. :D :D :D
Not quite sure what you mean. Are you saying the prices are high because of having to ship the products back to the US?
 

OldGettysk

Running the MC & Buffalo
Sorry fellows Corporate America rules everytime ! I just love outsourcing don't you !
 
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C

catt

Guest
Not quite sure what you mean. Are you saying the prices are high because of having to ship the products back to the US?
No I'm saying that labor costs money and there is a lot of labor between the ports and the warehouse and the distributor and the dealer and the customer.
 

sushob

Entrepreneurial Teen
No I'm saying that labor costs money and there is a lot of labor between the ports and the warehouse and the distributor and the dealer and the customer.
I agree that there is a lot of handling between the distributor, dealer, hobby shop, customer, and so on (I've learned that by doing it for the past two years), but it's the manufacturer that sets the MSRP. The retailers sell their products based on that MSRP, so it is important that it is high enough to cover all of those costs, but if a manufacturer starts to set the list price higher than a product is really worth (perhaps like the Empire Builder cars), the volume of sales drops...

The expense of overseas shipping isn't as much as most may think...most of the US's steel is imported. If it's cost effective to ship steel, it certainly isn't breaking the bank to ship model trains. You can get an awful lot of model railroad stock in a 1:1 scale 20' container ;)
 

HaggisKennedy

Coal Shoveler
I remember reading somewhere where a manufacturer said it was cheaper to ship stuff back to China to have it assembled and shipped back vs having it all done here in the states....

Kennedy
 

RexHea

RAIL BENDER
Everytime a thread like this one gets started almost the first thing typed is the rant about cheap Chinese labor.It seems that nobody realizes that labor stays in China and all that product gets handled by US labor and incase nobody relizes it we ain't cheap labor.
First, you always read that about Chinese labor because it is a fact and if you think that is not the major bearing on the cost, then why does Wal-Mart buy "made in China" low cost items. Oh, by the way, doesn't Wal-Mart have shipments from port: to warehouses, to stores? Why does their products stay reasonably priced? Turnover? Well, some of their items don't sell any faster than the essentials of MR.

I know for a fact that the only American handling of Walthers shipments are: unloading the container from the ship at the dock, delivery to their warehouse by truck while still in the original container, unpacking, and then US mail or equiv to the customer (LHS or direct) which we pay extra for. Doesn't sound like all the labor you mentioned and how much does that actually increase the price of one individual item of the thousands in that container. The whole point of containers is to lower the shipping cost.

We have always imported from countries that have low labor costs and there has always been the same amount of American handling. At one time, it was Japanese products, then Taiwan and Korea, and now the major area is China. When you say that American wages jacks the cost up, I am sure longshoremen, truck drivers, and warehouse men, would challenge the increase in prices of MR goods as a result of 4-7% COLA raises.

No sir! The bottom line is what has been said: Greed and that we are dumb enough to keep buying.
 
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speent

Member
My motto- "Never Pay Full Price"

There is always the same product out there for less if you look hard enough.
 

sushob

Entrepreneurial Teen
I remember reading somewhere where a manufacturer said it was cheaper to ship stuff back to China to have it assembled and shipped back vs having it all done here in the states....

Kennedy
I regularly talk to the owner of one company that is doing just that. The cost difference is staggering...
 

MKTMIKE

New Member
A little info on this discussion

I have owned my own shop in the past, and maybe I can shed some light on some of the processes which I have learned from the manufacturers I have dealt with.

Say a freight car tooling costs $50,000, sells for $32.95 retail, and the distributor buys it for $9.89, and sells to the shop at 40 off retail at $19.77, the manufacturer would have to sell 421 units just to pay off the tooling costs alone.

The normal process involves design, tooling, production of a prototype, checking the production process (overseas 3-4 times per year), and the final quality control check stateside (some companies do this and some may not) before general release to the hobby shops.

This may at least give some idea as to the general costs not even covered by that $9.89, which means that 5055 cars would have to be sold just to reach the break even point for tooling.

Also, the production process involves pad printing runs, and depending on how many colors in the decal determines the number of runs for each car. The more colors, the more expensive the run becomes.

After the decals and paint is applied, then the details can be applied, then trucks and couplers, and packaging and shipping can then be completed.

Most of the companies also have representatives to check before shipment since if the final product does not pass inspection, it is held up for correction until it passes the quality control check overseas before release to be shipped stateside. This is often why items are delayed for release over to your local hobby shop. I know it is frustrating, but at least we know the product will be as correct as the manufacturer can get it instead of sending over a sloppily done product.

There may have been items of importance that I may have not thought of, so feel free to add to these thoughts if anyone has information to pass on.

MKTMIKE
:)
 

RexHea

RAIL BENDER
My motto- "Never Pay Full Price"

There is always the same product out there for less if you look hard enough.
You are very correct, Brent. I only buy sale items from Walthers or use a discount web store after price comparison (except for small need-right-now items). This thing of paying inflated prices at an LHS just to keep him in the hobby business would put me out of business in the hobby.
 

RexHea

RAIL BENDER
Mike, I appreciate your breakdown of the process of manufacturing to the purchase of the consumer, but we can't forget that this manufacturing process is in China. The Chinese government subsidizes all industry, even those on foreign contracts and particularly those that export. So, much of the development process is covered by the government and the labor cost geared by the low pay scale. No doubt, if these products were made in the US we would could paying a lot more, even have some justification as to why. But, prices to rise as suddenly and in such a large amount over a short period of time for products made in a country such as China, is not justified.
 

modelbob

Administrator
I've pretty much kept out of this discussion, since I don't know enough about the manufacturing process to really determine all of the factors.

I will say that in my opinion, while prices have gone up in some cases, so has the quality. Things like DCC and much better detail naturally cost more. I think that the quality of models continues to get better and in most cases the prices are justified.

Sure, you can often find a product that lists for $400 on sale for $250, but that's nothing new. MSRP has often been an inflated value.

I think that we really can't generalize. Some stuff I see looks like a real bargain. In other cases it seems way overpriced. As an example, I've been buying a bunch of hoppers recently. Many of the Athearn Bluebox flavor cost me about $10 each. I did buy one Kadee that cost nearly $40, since it had a road name I really wanted. Before I buy any more of them, I'll need to convince myself that they're 4 times better than the $10 variety, or maybe 2 to 3 times better, since they do come with Kadee couplers and metal wheels, instead of Horn-hooks and plastic wheels. Still, it's going to be a tough sell.
 
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RCH

Been Nothin' Since Frisco
I think modelbob makes the most important point: you can't compare apples to apples in this case, because you're dealing with two different products. Now, if you compare the price of a blue box Athearn boxcar of 1990 with the same kit today, you'll find that the price has increased at a rate roughly consistent with everything else over time. But to compare the 1990 Athearn SD40-2 with the 2007 Athearn SD40-2 is flawed. There are differences in everything from the quality of the paint to the revised tooling to the motor and driveline used. If you compare the 1996 Atlas C30-7 to the 2006 Atlas C40-8, the differences are tremendous in terms of detail fidelity, detail scaling (handrail sizes come to mind) and the sheer number of detail parts added, not to mention the added DCC readiness components.

Today, many models come with factory-installed sound systems which existed in only a few forms in the early 90s. In this case, you'd have to compare something like a P-B-L brass Mikado to a BLI steamer and the brass model would far exceed the BLI model's price.

I think the original point made in this thread does apply to some manufacturers, but as a blanket statement covering the entire industry, I can't buy that. Walthers' Proto2000 line is way overpriced, considering they haven't made any upgrades to the same old models tooled ten years ago (I'm not talking sound units here). Why a GP20 cost $50 or so in the 90s and now costs nearly triple that defies explanation, unless the explanation is greed.

I also understand that people may not necessarily value the improvements made in models over the years and be awed that the Athearn Trinity 5161 costs three times what the Athearn PS 4740 goes for. If the difference is only the metal wheels and Kadee couplers (not to pick on you, Bob;)), then by all means only buy those when you have to! I'd rather have 40 or 50 superdetailed freight cars and a dozen scratch-bashed locomotives (none of which will ever operate in the coming decade) than 300 marginally detailed freight cars and 50 box-stock locomotives, so take my opinion with a grain of salt if you're not on the same page.

In the end, I don't think this is so much a hobby-wide trend as it is a modus operandi with a few manufacturers. I buy their products on ebay and buy the stuff I actually value at roughly MSRP from my dealer. That way the offenders only get the sale from the guy who bought it first and the others get the money directly from me.
 

Joe Daddy

C & SF, my obsession
I agree with Model Bob!

Still waiting for a specific example of sudden price hikes? I am just not getting the context, unless some are saying MRR hobby is just too expensive.
 

RexHea

RAIL BENDER
Joe, I don't think anyone is saying that the hobby is too expensive, just expensive with cost rising without obvious reasons. I see that you have been in the hobby since 2005, you can get the examples by comparing your receipts to todays prices from the same sources. Just use the ancillaries like track, kits, tools, paints, since locomotives have so many varibles. If you have some older Walthers catalogs, compare to todays.

I'll give you one for free: 36" Atlas Flex, (2004) 3.75, (2005) 4.35, (today) 4.65. This particular product required no new "tooling" nor has there been any change in design.

Some of us say greed, some say manufacturing cost, others say quality. Who knows, maybe all of the above, but the cost is getting higher regardless of reason.

Oh yeah: Nice Super Eagle! Ah, the good old days. ;)
 

HaggisKennedy

Coal Shoveler
I agree with Model Bob!

Still waiting for a specific example of sudden price hikes? I am just not getting the context, unless some are saying MRR hobby is just too expensive.
One example may be P1K F-3s. I was getting them for maybe $39.95 per A or B unit, maybe $49 tops at a big hobby store. That's not anywhere near what Walthers is charging for them now.:eek:

Kennedy
 

Trucula

Drum Driver
One thing about Walther's is , They deal with dealers that volume buy...and prices in the book are list prices...mostly because it's allot of work for them to deal out "one" item...They are used to big orders...Use this book as a guide and mostly you can get it from your dealer slightly cheaper when he orders his order.
 




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