A rant and a proposal...

Discussion in 'HO Scale Model Trains' started by Canopus, Mar 30, 2006.

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  1. pgandw

    pgandw Active Member

    My turn to chime in and rant:

    There will likely be decline in numbers of model railroaders in the near future as the "boomer" generation loses their eyesight, health, and life. Follow-on generations are not entering model railroading in the same percentages because of a lack of exposure, many more competing hobbies, and other reasons. In fact, magazine circulation and some other numbers indicate the decrease in absolute numbers has already started.

    At present, being a craftsman is not "in". A hobby that engages your brain with minimal skill with hands is what is popular today - could change tomorrow. This attitude favors RTR and operating trains instead of building them.

    In the good old days, where everything had to be built from kits and useful tools were not within the reach of many modelers, very few layouts ever progressed beyond the Plywood Pacific stage. How many remember cutting flex track and gaps with an Atlas track saw? Took a lot longer than a press of my rail nippers. In the '50s, very few middle-class households owned power circular saws, electric jig saws, battery powered screwdrivers, and so on. Building just the benchwork took a lot longer when the boards were cut with a hand saw, the screw holes were drilled with a hand drill, and the screws driven by hand. Owning more than 5 operational locomotives meant you had far too much leisure time on your hands to have built all those kits. The reality is that because of RTR, a far higher percentage of layouts now get well beyond the Plywood Pacific stage, and many more large layouts are built. I can remember reading in the '60s that a layout with 17-20 turnouts was the most a model railroader could reasonably hope to build and maintain.

    Because the number of operational layouts is increasing (even though the number of MRs is decreasing), the market for RTR (and high end at that) is sustainable at least in the short term. If the RTR market does crash - and I hope it doesn't even though I'm not a fan/buyer of much RTR - then model railroading will again be a craftsman's hobby with very limited availability of anything. A lot of folks will drop out of the hobby because of the perceived skill/time requirements.

    If you want to kitbash and modify locos, there is plenty of reasonably-priced out-of-production on eBay. And that's where I go. But you are not going to get up-to-date kits with accurate body shells and top-of-the-line mechanisms for less than today's high end RTR prices. The cost of today's plastic locomotives is in the tooling, not the materials. Any savings in labor gained by not assembling and adding details to an RTR will be more than lost in counting parts for the kit, writing assembly instructions, replacing lost/missing kit parts, assisting modelers who got in over their heads, and reduced sales over which to spread the tooling costs.

    my thoughts, your choices
  2. spitfire

    spitfire Active Member

    Well Canopus, you're certainly entitled to your opinion, but allow me to offer an explanation of why things are moving in this direction you don't like.

    The thing is, people have clamored for more detail and the manufacturers are merely obliging what we, the modellers, have asked for. Does it cost more? Of course. But speaking from experience the cost of detail parts can really add up too. In the end the price can easily net out the same, so it's more a question of do you have the time, skill and inclination to do your own detailing, or not?

    I think choice here is key as we don't all have the same skill level or free time etc. Others don't have the money for super detailed engines. It all about choice.

    Same goes for sound. Until Broadway Limited came along with factory sound, we had to pay hundreds of dollars for 3rd party soundboards and then either solder them in place ourselves (talk about worrying that you're going to ruin an expensive piece of equipment) or pay someone else to do it.

    When Broadway Limited brought out their sound-equipped loco's they flew off the shelves and now the other manufacturers are doing the same. I don't know if you've noticed or not but there is now almost always the choice of sound equipped or not.

    Again it's all about choice.

    You say there's nothing to do to a super detailed engine except weather it, but who would risk that. Not you maybe, but there are plenty of others for whom weathering is their favourite part of the hobby.

    And once again... it's all about choice. And part of choice is not seeking to dictate to others. Want sound? Buy sound. Hate sound? Buy sound-free. Like to detail? By a Stewart kit. Find them too hard? Buy RTR.

    No need to get all steamed up about it LOL!

  3. ezdays

    ezdays Out AZ way

    Oh Val, that's too much humor to handle, or is that a grab iron?:D :D

    But, just one comment from me. Having been in manufacturing all my working career, I can tell you that manufactures don't just go out and start building stuff without knowing there's a market for it. Clothing manufactures don't just suddenly decide that short shorts or bell bottoms or string bikinis are suddenly "in", they don't dictate fashion, consumers do. So goes it with automobiles and models. Someone "invents a cheap way to add sound, and it sells, the rest of industry has to follow suite or look at dwindling sales. Evolution has a lot to do with it as well, but the bottom line is, they will furnish whatever the consumer market dictates. If wind-up engines happen to be in demand, you can be sure we would have our share of wind-up motor-driven engines, high tech ones of course.

    I don't know of any product that manufacturers made just because they "thought" there was a demand... Well, maybe except for the Edsel.:rolleyes: :rolleyes:
  4. Triplex

    Triplex Active Member

    And even in N scale: the new Athearn Challenger, only with sound!

    I sure hope this trend doesn't increase in N in the near future - I'm hoping to get into it, and I want quality engines, but not with extra features.
  5. Canopus

    Canopus Member

    To be honest I find your opinion slightly questionable, even though you are in manufacturing. While nothing you've said is really wrong, you've omitted a lot. What about the aftermarket detail companies? Are they "wrong" about the market? If so, how are they still here?

    Really it's not down to where the demand is, demand is not important. It's money that's important - the market with the highest profit margins is where innovations in the industry occur to bring a better product with lower manufacturing overheads. Heck, there might be 50 million people demanding one product they'd each pay 1 buck for, and 2 people demanding a product that they'd pay 500 million dollars each for - any sensible business would choose the two buyers over the 50 million buyers, because the profits are higher.

    It's about time we stopped being so vane and realised that what motivates these big companies is not us, but our money. If we were to stop buying RTR units, and only buy undecorated locos, detail bits, and shells, they would be forced to manufacture those in order to continue to take our money off us. When a manufacturer thinks about "demand" he's actually seeing it as a bunch of people saying "what I'd pay for is a...".

    Yes, these companies are big, but they're not that big. What would make any one of these companies truly big would be to cater to every single possible person, in every single possible market, and innovate in each market to minimise overheads and maximise profit. There's a reason why they aren't doing that, and in my opinion it's because they're not quite as smart as what you give them credit for.
  6. ezdays

    ezdays Out AZ way

    I am somewhat confused by your answer, it seems a bit disjointed. Profit is the movtivator, and the market dictates that. In your example, I'd much rather sell 50 million of a product that I can make twenty-five cents each on, than 2 at 500 million each that I can only make two or three million each on, or have the potential to loose a bundle on each one. You see, you assume that everytime someone sells something they make a profit, the higher the price the bigger the profit. That's not always the case. No one intentionally goes into business to sell a product with the intent of loosing money. That's the goal, not to make people happy, but to sell something for more than it costs to manufacture. Anyone who does is usually referred to as a non-profit organization, and sustain themselves on other ways.

    I stand by what I said, all manufactures live by the same set of rules, if there isn't a market for what they have to sell, they go sell something that there's a market for, that includes aftermarket manufactures as well. That's basic marketing 101.

    There is always a market for something, but a manufacturer has to weigh how good that market is for them, period. It seems as if you are upset with big manufactures because they don't address you market, probably because it is limited. We had a very sucessful business making custom and semi-custom products that the bigger companies couldn't compete in.

    I have to ask whether your statements here in this thread are a matter of opinion, training, or experience? Don't get me wrong, your opinion counts, just that you really should have some training and/or experience to back it up with.
  7. Canopus

    Canopus Member

    You only assume you'd make 3 million from a 500 million dollar sale, but I never specified a profit margin. I merely said you had one group of people willing to pay 50 million from 50 million places, with 50 million individual package destinations, and 2 customers who were prepared to fork out an enormous some of money. I was implying a larger profit margin in the pair of 500 million dollar sales.

    By saying that these companies are only making what we ask them to, we're making several errors. One, we don't specify who "we" are, and if there is anyone outside of "we". Two, what percentage of the buyers actually make requests. And three, there is no indication of how many people make requests that are ignored. Manufacturers have to assess each potential product line, comparing them together to get an idea of relative profit margins. Obviously, the one that ends up getting chosen will be a median between demand and profit, but ultimately, if you stop calculating profit by a one month period, and calculate long term, they will always be choosing the product which will give the best long term returns on the initial investment.

    Market research is in place to work out what we want, but I'm seriously sceptical about how sound this research is - they'll obviously be able to observe buying trends, because it'll be the first thing they notice. But beyond that, do they really know for sure what the majority of us want to see made? Or do they just know what the majority of the people who fill out their "suggest a model" form want? What kind of demographic are these people? Isn't catering to just these people limiting business somewhat?

    There are a few "obvious" models any manufacturer with a little knowledge (or a lot of knowledge) about railroads will know to produce. F units, class 1 railroad locos starting with the ones that were produced in the highest numbers, and famous locos like GG1s, big boys, challengers, and DD40s. Branching out from there requires more knowledge the more specialised it becomes. Getting into SW1001s, C430s, and other such locomotives that are either obscure to class 1s or just produced in low numbers is an area where an acute sense of what is saleable and what is not comes in. Since the model railroad manufacturing industry cannot do pilot runs, and the closest thing is a limited edition, one has to wonder if the limited scope of their market research is the reason why releases have been so cautions, sporadic, and haphazard. Some manufacturers seem to just come out of the woodwork with a really random locomotive that makes no sense at all, just to test the market in different areas as a bit of a gamble. Others appear to look at "conversion value" of products to appeal to people like myself who modify and convert.

    I think we can safely hold accountable the lack of reliable market research as the reason why we only ever see predictable releases and occasional unpredictable releases. Erring on the side of caution, buying trends have told them that subtle upgrades in detail = more sales, and greater "buy me" power when the model is sitting in a glass cabinate in a model shop. There was no asking involved, the demand was one of purchasing, not requesting. The saw this and jumped on it, and the more they jumped on it, the more sales they made. Hence the exponentially increasing amount of detail we see on each new release from the major manufacturers. Each new model has a feature that's better than the one before. It's typical of a market of it's type. One that works by going bigger and better wherever experience has taught them that going bigger and better will help sales. This is probably all old hat to you, but I'm just making clear my understanding and theories on it.

    True, I'm not as experienced as some. I've studied the market long and hard, looking for that untouched goldmine that I could exploit and become a millionaire entreproneur. I've set up a few resin moulds, sold a few parts that nobody made but everyone needed with some success. And it seems to me that any gap in the market is a potential money spinner, what's required is just the ability to judge how much of a money spinner that gap could be. Obvious things like a low cost high accuracy replacement shell for athearn's F7 appear to me all the time, and sometimes less obvious things like a BQ23-7 replacement cab for converting Atlas's B23-7. So far I've only pondered the "what if I invested in producing these?", but I believe I have at least a little more insight into the market than most hobbyists, simply by the amount of thinking about it that I've done.

    I've found in all my research, that ebay is a good barometer for market gaps. Seeing how much people will pay for a rare out of production model of something obscure is a good way to know roughly how bad people want that loco or car to be produced.
  8. ezdays

    ezdays Out AZ way

    I will make one last reply, because obviously my fingers aren't as nimble as yours, and my eyes are pleading for some rest afer reading your replies. :rolleyes::rolleyes: Somehow I skipped mindreading 101 when I went through school. You "assumed" a large profit margin in your example. In the real world you assume nothing. In the real world, 100 million dollars in contracts guarantees you nothing, and failure is as big a possibility as a large profit. I'd rather fail at trying to make something that sold for a dollar than with a couple of contracts that total 100 million.

    But that being said, I'm not going to play semantics with you over who "we" are, sounds too much like a former president we had. :D Just let it be said that all manufactures of any products from airplanes to autombiles to soap and even model railroad equipment has to follow the basic rules of marketing or have the resources to withstand the consequences. If your are so sure that there are those large manufactures that don't know what they're doing, and that there is a market big enough to corner, by all means, go for it. I can assure you that they've been there already and decided against it because they owe it to their shareholders and personnel to make a profit. A smaller manufacturer could indeed slip in and do what they can't. Notice I said, "can't", not "won't". Believe me, I've done more than surf the internet for marketing data and on how to run a business. I've been there and done that well enough to make a decent living from it.

    Come back and challenge me again when you can say that you've actually sucessfully been there yourself for a while. Good luck, It you have enough energy and passion, turn them to good use, it would be a shame to waste all that.:wave::wave:
  9. Canopus

    Canopus Member

    It's just one after the other - according to you I'm a graduate of the school of telepathy, I'm former president Bill Clinton, I'm about to get sued for damages caused by making a long post, and that I shouldn't challenge your godlyness until I've performed the initiation rites. :rolleyes: There's no need for you to be so silly.

    This is a MODEL RAILROAD FORUM, so lets get things back in perspective here. We're just model railroaders, not business gurus or entreproneurs. You don't like the fact that I have a little fun ranting about how it is when I possibly don't completely understand the complex business model because I'm just an ordinary person? Then maybe you should start up a business forum and talk about it on your level there to satisfy your need to discuss it in depth beyond just simple theory and speculation, but right here I'm going to carry on with my uninformed rant about manufaturers, whether your eyes and fingers can keep up with it or not (sorry).

    I'm not saying I'm right, because I might not be, but until someone actually comes up and proves me wrong, I'm just putting in my 2 cents, and just because you disagree doesn't mean I'm going to roll over for you and change my opinion. I'm not "challenging" you, this isn't a childish contest where one side wins and the other side loses. Debates can seem like competitions, but only if you confuse "correct and incorrect" with "win and lose". It's up to you to practice the self restraint to prevent yourself from doing that.

    So far you're only pushing a "point" over a rough number in what was a poorly constructed example on my part, which I put in to just try to get across the fact that a business will choose whichever avenue has the most profit in it. That's the most basic fact of the way a business operates. A business is but a mere stalegtite growing on the dripping water and leached calcium of profit. But naturally you have to read into it and tell me all about how I'm assuming this that and the other, and how that means that I don't know what I'm talking about. Because sonny jim I need some experience under my belt before I can come talking to papa like I'm older than he is. :p

    Well let me ask you something; Do you run a major model railroad equipment manufacturing company? Can YOU say you have the experience in that field to say that my theory is wrong? Or are you going to continue to point at my 50 million and 500 million example and hold that up as being the reason why my opinion is flawed? Because I screwed up an example? You've done business in manufacturing or something like that, to the extent that you could live off it, ok, but the manufacture of one thing is totally different to the manufacture of another. I myself actually live off of modelling, that's my job, I make, paint to a high standard, and then sell for a profit, on ebay. Part of that is identifying what will and won't sell. I've also made, like I said, resin casting moulds, which I've used for making components to sell at exhibitions and shows, and did quite well off it. That may even be closer to a model manufacturing company than what you were manufacturing, that still doesn't mean I truly know more than you do, because until I actually run Athearn or Atlas or whoever, I'm never going to know for sure. But why should I need to do that to have a bit of a harmless debate, a harmless rant? That's clearly a rediculous suggestion. "Hey start up your own multimillion dollar company before you add your 2 cents to an internet forum, lest you be incorrect!", I'm sure put in this context you can see how that isn't going to work here.

    My theory still stands. Manufaturers of model railroad equipment have unreliable market research in the field of what customers would like to see manufactured that hasn't been manufactured by that company already. This is just a THEORY, I said it was a theory from the beginning. Pardon me if it's not A+ business school material, but like I said, I'm just an ordinary model railroader, posting on an ordinary model railroad forum with his silly gripe about the way it all is and how I'd like to see things change.

    In fact, things don't even have to change, just a little more catering to my kind of modelling would be nice. Even if it's some aftermarket company, I don't care, I'd just like to see some form of this hobby that isn't headed down the route that the big manufacturers are. This doesn't make me ignorant of the market unless you can actually point out the statistics and research that show otherwise. I know that businesses only do what makes them the most money, I know that, that was the point I was trying to get across, but just because a business only does this in one way, doesn't mean there aren't other ways they can be doing it that they simple haven't explored or considered. They may not have the resources to take the risk, and may not have the kind of research to allow them do proceed safely. Who truly knows. The way I see it, they've found themselves something that works, and stuck with it. They're not willing to expand because they're fine how they are. I bet the CEOs have themselves a nice house, pension scheme, and car, why change when the future of the company is secured and your life is good? Seems reasonable to me.

    Maybe I've gone over the top with my rant, but heck at the end of the day I've enjoyed putting my thoughts down and that's all that counts. We're never going to change anything on a forum anyway, so what does it matter? (unless of course, they use the forums for "market research" :thumb: )
  10. caellis

    caellis Member

    Well at least he got one thing correct in his opening post... he said he was going to RANT!
  11. spitfire

    spitfire Active Member

    No, that is not all that counts, at least not around here.

    At the Gauge what counts is a friendly, constructive and supportive atmosphere. You've had your say, repeatedly, and now what I see is this thread degenerting into an argumentative waste of bandwidth.

    I am reccommending that this thread be locked.

  12. Canopus

    Canopus Member

    I don't mean to criticise the job you're doing as a moderator but...

    You're recommending this thread be locked because it's not friendly, constructive, or supportive, and it's degenerating into an argument. You seem to be attributing this to me, yet when I look over my posts, I don't see anything where I did anything but add my 2 cents, have the rant that I said I would have, and even suggest that the co admin use less of those belittling remarks he used, and that he not consider the debate a "contest"!

    I don't see any of what you describe anywhere else either. So far everyone has been quite civil. If you want me to back off from this discussion then I will, just lets leave this thread open and let everyone have their say. Please?
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