Size Creep

Discussion in 'Getting Started' started by Mountain Man, Feb 22, 2008.

  1. Russ Bellinis

    Russ Bellinis Active Member

    They might have, my point was that you pretty much get what you pay for. We think prices have risen, but we forget that wages also rose. We long for the "good old days" when stuff was a lot cheaper, but we want all of the "details, bells, and whistles" of the newest model available.
  2. Mountain Man

    Mountain Man Active Member

    Unfortunately, the rise in wages, etc., is insufficient to account for the costs of today's MRR goods. Stagflation and the ever-shrinking value of the American dollar have great deal to do with it, but have you asked yourself why the nations that supply us with cheap goods have not taken over this market as they have most others?

    Historically, production follows the path of cheapest costs, pretty much the opposite of what we see here.
  3. boppa

    boppa Member

  4. lester perry

    lester perry Active Member

    OK this has been discussed many times in many ways. Buy if you get to the basic problem it is profit at any cost. I know the manufacturers have to make a profit , but at what cost. I will start with the new stuff. yes it has e lot of detail and runs smooth but that costs money to develop. the real problem is in the numbers if they make . the fewer they manufacture the more they can charge (supply & demand). If they make more they could charge less but end up with some on the shelf. where do you draw the line. I am not an economest but I can somewhat see thier reasons. where I have the trouble is the old reliables such as athearn blue box. the car that 10 years ago cost $3.00 now cost $10.00 ,it is the exact same car. ahd before you say cost look at atlas track. it used to be made in good ol U.S.A. Now it is made in China where labor is cheap there is no EPA do deal with and no stock holders to satisfy with huge profits. The price has doubled in the past ten years. it is the free market. they charge as much as we will pay. If it is too expencive don't buy it.
  5. nkp174

    nkp174 Active Member

    I'm generally steering clear of this thread. But this is a great example of infusing a non-political aspect into this discussion...

    10 years ago the BB cars ran $5.75. I know because I was purchasing around 2 BBs per week back then...and I still have plenty of boxes marked $5.75.

    Does anyone remember the price of gasoline in 1998? I do, it was around $1.10-$1.30. What is the price of gasoline now? $3+. What do gasoline and athearn BB cars have in common? They're made from crude oil. Their are three primary reasons that gas prices fluctuate...stability of crude supplies, refining capacity, and global demand for crude.

    The price of crude in 1998 was at a 50 year low...comparable only to what it was immediately before the crisis of the 1970s...around $15 per barrel. Last week it went over $100 per barrel.

    What does this mean? It means that the raw material cost going into a BB car has gone up to more than 6x what it once was. Additionally, that means there is more risk for athearn in producing them because they don't know how the market will respond to the higher prices.

    So the moral of the story?

    Athearn BB kits have become more expensive to us because they are far, far more expensive to Athearn to produce.
  6. Squidbait

    Squidbait Recovering ALCO-holic

    Since we've mentioned the "value" of a dollar, I thought I'd mention that I did some calculations on how much things cost in the 1950's to what they cost today.

    As you can see, while the cost of lumber hasn't really changed, we've got it pretty good for the "real" cost of locomotives and rolling stock, especially when you consider the level of detail and running quality compared between then and now.
  7. nkp174

    nkp174 Active Member

    Squidbait, excellent cost comparison! I knew that our purchasing power is greater now...incredibly so in terms of disposable income...but this is impressive.

    So since the CPI is the most common index to use...
    -I can purchase 4-5 Atlas turnouts for the (adjusted list) price of 1 in 1954.
    -The Bowser pacific (which was the K-11) currently lists for $ was $244 then...and it's a better product now
    -An Athearn box car was around $20

    We have it very, very good right now.

    Further, when I think back to 1998...the Spectrum 2-8-0s ran $70 at toy train hobbies...but did not include DCC or sound...Trainworld has them currently for $75 without DCC or sound. That translates to them actually being slightly cheaper now...this shows...back to the original topic of this thread...
    the creep is primarily in the growth of larger scales...On30 becoming the most popular indoor narrow gauge (previously it was HOn3) and garden stuff well as the quality of RTR items...low quantity, superb RTR diecast 2-10-4s, RTR athearn boxcars....

    EDIT: Lester, I totally agree with your a world filled with pricey RTR stuff...if it is too expensive, I just won't buy it. I think that the resin DSP&P kits for $60 a pop are beautiful...but with the unit cost being $85 once wheels, trucks, and couplers are added...I'll refrain from buying and stick with my $15 per pop scratch built cars.
  8. lester perry

    lester perry Active Member

    I fear that the savings of moving to China has been lost in these calculations of cost to manufactureing. I worked in an auto plant and the exact same car was being built in Mexico and sold for exact same price at same time. No I am not a United Auto Worker. I am an American that is a little bitter that we are getting raped by corperate America. who gets a wink from the Government. OK Iwill get off my soap box now shut up ad go play with my trains that were made in china.
  9. lester perry

    lester perry Active Member

    I know I said I would shut but it has come to my attention that it sounds like I am getting mad. I am not. getting mad is not in my nature. I appologize to all. this is not a political forum. so now I will shut up about made in china or korea or mexico or where ever.
  10. Russ Bellinis

    Russ Bellinis Active Member

    Another thing that factors into the cost of model railroad stuff now is that most of the pioneer manufacturers are either dead or retiring and selling off their companies now because the heirs are not interested in the company dad founded. Irv Athearn made most of his capital investments in his factory at preinflation prices. He started with the Globe f-7 locomotive. Then Irv died, the guys who bought the company from his widow not only paid for the direct assets of the company, but also paid for the value that Irv had added to the company. Inspite of increasing prices of the old models, they still had to develop new models to keep people interrested. New modellers want the latest Emd or GE locomotive that the prototype has just aquired. The most expensive part of production of plastic models is the cost of the dies to make the new models. In spite of the increases in price, Athearn's new owners were aparantly not getting enough return on investment, or they would not have sold the company to Horizon. I don't think they lost interest in the business because Horizon kept the previous owners and their staff on to continue to produce and distribute the models they were making. We may think the prices are exorbitant; but if you try to buy an existing manufacturing company, you discover that keeping the old prices is a guaranteed way to go bankrupt. Athearn came out with the r-t-r line of locomotives because they got so many complaints from "modelers" who could not install the handrails. They still offer blue box kits of locomotives. I didn't realise that until browsing through an Athearn catalog at my local hobby shop. My buddy behind the counter said the kits were still available, but they didn't stock them because all of their customers wanted r-t-r. The blue box locomotives no longer have the steel stanchions and handrails because the machine that bends up the stanchions was a custom design by Irv. The machine is broken and no one at Athearn knows how to fix it.
  11. Mountain Man

    Mountain Man Active Member

    I have a couple of different thoeries from what I have seen, based on certain observations, such as the rpice of plastic models climbing prior to the dramatic rise in oil prices.

    First, there is no compelling reason to manufacture MRR stock of of virgin plastics given the enormous market in re-cycled polystyrene.

    Second, I think we will find that costs from manufacturer's have climbed so much as the profit margins demanded by the hobby retailers.

    I heard a list of price breakdowns for a typical product on a documentary a few days ago; the bulk of the money goes to the wholesalers and retailers, followed by the factory. The raw materials people get the smallest chunk. So - cheap plastic and cheap Chinese albor equals major profits to wholesalers and retialers, that being your LHS.

    Lately, I've been trying a new tack with the LHS types: I tell them what I want, but I insist on seeing the products that offer the most value for my money. If they say they don't know which those are, I'm out the door because I know they have a very clear knowledge of their profit margin on every item they offer. OTH, if the salesperson knows his stuff, I'll do business and buy up some of the extras I wanted, too. We both win, but I won't buy something just because it "looks great", got a "great write-up in the latest issue of MRR or is the newest "must have".

    Other than food, shelter, clothing and Flextrack, there are no "must haves". :cool:
  12. KCS

    KCS Member

    Well, if I do get back into it and make a scale swap then I'll skip over 1:29 from 1:87 straight to 1:8. I've been doing a lot of research and although locomotive's and rolling stock are expensive track really isn't that much more expensive in 1:8 than it is in 1:29. An AristoCraft #8 switch cost's just as much as a 1:8 scale #8 but price depend's on what kind of material's used. Like lumber type if you use lumber or recycled plastic ties, steel rail or alum. and rail size plus mechanical part's for switch throws. Beside's, I like the idea of actaully getting to "feel" train physic's rather than just running :D

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