Model pricing

[D605Eagle]

At what price will you say no? An interesting letter on the model railway express website about the price of the Bachman C-O-T got me thinking about this subject. At what point will the price seriously effect sales? We've had a few new models in the last few years sold in very restricted numbers at high prices, but did they sell enough to pay the cost of the moulds and make a decent profit? In the long term, would selling a lot more of a model with a lower margin make more money that a restricted few with a very high margin? Discuss....

[Oakydoke]

The NRM commissions are a special case as it's intended that there should be a worthwhile return for the museum as well as Bachmann. I think it would be a waste of time for the NRM if they only made a small profit from the enterprise.

What a good cause too!

 

I doubt if any of the other limited runs, particularly the shop and society commissions, would have seen the light of day if they hadn't been marketed in this way.

[34theletterbetweenB&D]

So many factors aren't there? Assuming that the individual is in the happy position of having discretionally disposable income, (and I well remember a time when I was 'boracic' in my young adult years - a mortgage rate that rose to 16% really hurt) it probably comes down to how good the return on the cash outlay is perceived to be.

 

Our happy band of OO RTR manufacturers are now churning out models of 'things I have always wanted', and most of them to a standard that exceeds what I can do for myself from kits. The price asked (it seems to me) is in the range of what many people fairly casually spend in a week, pushing up the value of brewery and tobacco shares, or watching groups of people moving a ball around, or tarting up a rapidly depreciating asset, or having their hearing impaired by exposure to something with a beat, etc, etc.

 

The NRM's DP1 model was a 'must have', and if their current production had been something worth having from my perspective, it would have been ordered when announced. So it comes at a higher price; supporting the NRM which is consistently a delight to visit, is a worthy cause. Would I still buy general production railway models if the price rose to the levels typical for German RTR? Probably, if they were the right items and good enough to justify the price. But I would still spend the same hobby budget in a year, so it would be a third or a quarter of the number of items I might have purchased at prevailing UK prices.

 

That brings us to how much demand there is for further improvements in the quality of models. Personally I would pay more to obtain superior mechanisms. The exterior appearance of the models we are now getting satisfies my requirements (looks right, most practical detail represented, doesn't make my kit built and adapted items look too awful) so my preference would be no increase in price to improve matters further there.

[D605Eagle]

Thanks for the replies. Heljan have been very generous to us (class 15 preservation society) buy donating ??5 for every D8233 limited edition sold. I don't think that has been done before by a manufacture? I think another thing that comes from the more varied models albeit at a higher price that its easier to get the more of the models you need to model a particular location at a particular time especially if its post war. Unless your modelling a large engine shed or busy mainline station, in reality you don't need that many locos. I think a good indication of when a manufacturer has not produced enough of a particular model is the price difference between list price and what they are fetching on ebay Heljan Falcon models spring to mind. I'm sure they watch that too. I suppose that is a great deal of help to them. The last thing they want is hunderds of unsold models lying round.

Jim

[Kenton]

that a lot of kits are now in effect redundant.

 

I could not agree with that less - for one main reason.

the statement disregards the pleasure gained out of building a kit and especially so if that kit is in brass

 

In fact as far as I am concerned I still happily pay more for a kit (even more for a quality kit) than I would for a RTR model. This is because I know the kit is going to give me many more hours of pleasure than what remains a bit of mass produced plastic from China. That is even more the case when that mass produced RTR loco doesn't even meet my basic needs and is just another copy of a previously over sold loco that I have little interest or desire to own.

 

Of course there are many out there who will never build a kit and get probably just as much pleasure of purchasing a RTR loco as I do out of building kits. Even ifit is yet another one dictated by the manufacturers' designs on our hobby.

 

On price - as with kits, there are many that are overpriced - yet they still seem to sell - so someone has enough money to think it worthwhile.

[The Fatadder]

I could not agree with that less - for one main reason.

the statement disregards the pleasure gained out of building a kit and especially so if that kit is in brass

 

In fact as far as I am concerned I still happily pay more for a kit (even more for a quality kit) than I would for a RTR model. This is because I know the kit is going to give me many more hours of pleasure than what remains a bit of mass produced plastic from China. That is even more the case when that mass produced RTR loco doesn't even meet my basic needs and is just another copy of a previously over sold loco that I have little interest or desire to own.

 

 

Completely agree with what your saying with kits, looking at how much enjoyment (in time) you get per pound its very good value (just wish there were a few more decent kits available for the kind of things I model.) With RTR the amount of modelling enjoyment I get out of a new purchase is quite limited (more so now that I'm getting rather tired of repeating the same 3 minor tasks over and over.)

That said I guess I'm something of an oddity in that I dont actually care that much about running trains, its more in the process of getting there.

 

As for the rising prices of RTR, so long as the quality keeps rising to match the price I dont mind how far it goes. At the end of the day when looking at what stock is required for a layout you rarely need more than two of any given class (and most of the time a single loco would serve). If the price went above what I could currently afford, it would just mean buying one new Class xy instead of a couple of versions for the same working.

[Kenton]

There are always going to be those who prefer kits, and I too get a significant amount of pleasure out of building them. Where the difference lies from my experience and talking to others, is where the RTR item is of such a good quality it saves costs/time by using/adapting it over a kit, this clearly has had a significant impact on sales for kit producers, and not just in 4mm.

PMP, sorry last post did come over a bit heavy really should have been more tounge in cheek - I do accept you were talking more about the RTR market than about the kit building market.

 

I am probably in the minority here I don't think I would ever buy a RTR model above a kit - if I could find a quality kit and it was not priced beyond reach. That is because I personally gain nearly all my modeling pleasure out of constructing the kit. When I get to the end I get very little pleasure out of running it or in knowing it is perfect in detail. I would never make the comparison in detail or quality to that of a RTR model - because to me a RTR model in all its accepted quality remains at heart a plastic toy.

 

Now that attitude does not mean I would not buy a RTR model, I do and am quite content to operate them (generally with little interest in further detailing or changes). I would guess that if I had the space and interest in a large roundy roundy layout I might also enjoy just watching trains go round.

 

One of the most significant impacts on the sales of kits IMO is the continued difficulty in making an easy price/value comparison between a real quality kit and a box of rather useless bits. The price paid very rarely reflects the quality. Where as in the RTR market the quality is arguably of a consistent standard and steadily improving.

[Ravenser]

It's a complicated one.

 

- In a number of cases - including City of Truro - the expensive model is actually a specialist subject and until recently would not have been thought comercially viable at all. A high price to recover costs over a relatively short run is essential. On the other hand these are models with "wow" factor - iconic locos that would normally have been demanding kitbuilds . Beattie well tanks, Truro, DELTIC, Falcon, Kestrel , the LMS twins, Leader all fall in this category. Small short lived classes like 14, 15, 22, 23, 41 are one notch down . I've got an A1 Models kit for a Baby Deltic , and I'm probably not going to build it, 'cos it's grim. Twenty quid's worth of whitemetal ballast weights ...

 

City of Truro may actually have the biggest potential market of all the "one -offs" - WR 1957-61, plus specials/railtours to elsewhere, an ideal steam special loco for D+E modellers (you don't have to run a 12 coach train) and a useful medium-sized loco for GW modellers 1903-31. That must cover a fair percentage of the hobby, who can justify running it

 

- Actually , locos can still be had quite cheap. My recent new purchases have been a 57 (Bachmann stand, 40 quid); a 153 (??65) a 66 (new, discounted from a retailer (??59) a 158 (??67) and a medium sized tender kettle (??50 - Bachmann again).

 

A quick look through Hatton's listing shows a lot of new locos available in the ??40-??75 bracket. These are new generation models

 

And if money is very tight, observation suggests that many traders stands at shows are heaving with secondhand Lima and Hornby from about ??17-??25 a

 

loco. You couldn't get those models that cheap 10 years ago

 

- Kits cost a lot more. We don't have threads about how people can't afford etched brass and whitemetal kits .... As for Gauge O.... So if you really want the loco, people will pay for it. However the conspicious consumption multiple collector may have an issue.

 

- If you look at what locos cost , in terms of cost in hours worked at average earnings 20, 30, 40, or 50 years ago , locos now are much cheaper. If you took the prices for handbuilt brass locos in the past , and translated them into modern money , they'd be pretty high

 

Basically if you must have the latest release in the first 6 weeks, you'll pay for the privilege . If you can wait 9-12 months , you can pay a good deal less.

 

If I buy the Bachmann ROD immediately , it will cost me into 3 figures. On the other hand , Super Ds can now be had for ??75-??80

 

We are still a very long way from having to pay Continental prices , thankfully

 

 

[Burkitt]

I think the anomaly in RTR pricing is Hornby's range of older products originating from themselves and Lima. They seem to be similarly priced to much newer and higher quality locos from both Hornby and Bachmann. It also seems odd that no official distinction is made between the quality of an ex-Lima 66 and the excellent new 56, for instance, which could lead to confusion. There may be an argument for Hornby introducing a three tier range, with the recent super detail products at the top, older models in the middle and the budget Railroad stuff at the bottom of the pricing spectrum.

 

Paul

[Andy C]

RTR have as a rule been cheaper than an equivalent kit, thats truer now than say ten years ago, and certainly in the past fifteen years the quality has been of such an improvement that a lot of kits are now in effect redundant. DJH's range of BR Standards for example. I've just bought an 4mm scale etched kit which was designed in the 80's, (NB it's a good kit) and that has cost me including wheels ??160+. It's a simple 0-6-0 branch line type tender loco. I still have to buy motor and gears and paint transfers, so really that's pretty much ??200. RTR pricing? Bargain!

 

 

 

 

And thats not including the time taken to build it.

 

Ive stopped looking at MRE too often because some of the uninformed opinion / views expressed there wind me up too much. This RTR pricing "debate" on there is a case in point where folk with not the slightest idea of R and D, tooling, shipping costs etc berate the manufacturers for trying to turn a modest profit on what they produce. Add to this the fact that the Chinese are no longer as cheap labour as they used to be.

 

Its brought to mind an incident at Manchester show about 4 years ago where I was summoned to sort out a complaint from a visitor regarding a "dispute" between a himself and a trader. He had approached the trader who was selling a DJH standard tank at some ridiculously low price (??75 rings a bell) and offered him ??40 for it. Trader politely tells him no. Punter then tries to say he has a legal obligation to bargain with him for it. trader says no and its already at a discount take it or leave it, hes not making anything on it anyway, he just wants to liquidate some stock, and whilst hes prepared to break even he doesnt want to make a loss. Punter then starts creating a fuss to say the least and enter me stage right to sort him out.

 

We all want something for nothing - who wouldnt - but at the end of the day if you want the manufacturers to continue with their ambitious and quite exciting developments, then you have to pay for it. Of course if they have got their sums wrong and we all stop buying RTR because of the price (and ipso facto we cant afford the kits as well as PMP has quite adeptly pointed out) then be prepared to scratchbuild. I'd love to seee some of those scribes on MRE do that - especially the ones who complain that modern RTR models are too well detailed

[Caledonian]

I think the anomaly in RTR pricing is Hornby's range of older products originating from themselves and Lima. They seem to be similarly priced to much newer and higher quality locos from both Hornby and Bachmann. It also seems odd that no official distinction is made between the quality of an ex-Lima 66 and the excellent new 56, for instance, which could lead to confusion. There may be an argument for Hornby introducing a three tier range, with the recent super detail products at the top, older models in the middle and the budget Railroad stuff at the bottom of the pricing spectrum.

 

Paul

 

That I think is the real problem and as a good example on Friday I treated myself to the latest Hornby Black 5; absolutely lovely and unlike my others this one is going to be ex-works without weathering. However; running number (and positioning of the top-feed) aside its exactly the same as the first one I bought three years ago.

 

Now the shop (Rolling Stock in North Shields) did it for a very reasonable ??102, but the RRP is actually ??121.99 - not far short of the all new Clan and more than the incomparable A3 at ??112.95

[edcayton]

Watching this one with interest. I'm surprised that nobody except AndyC has mentioned scratchbuilding.I have only done a couple of loco's and tbh they were cr*p, but I was dead chuffed at the time. I have to say that in my view the modern rtr's are far better than anything I can do and represent an absolute bargain.

 

My point about kits is that they DO cost a lot, and my worry is what if I c*ck it up? I notice on here that quite a few people get part built kits, take them to bits and start again!

 

I also have great admiration for those who bash old rtr's into something different. The reason I bought a second B12 is that I REALLY want a Claud!

 

Ed

[coachmann]

I said on RMweb over two years ago that as far as RTR went, we have never had it so good. The 'City of Truro' looks like a bargain to me, but then I've spent much of my life handling kit and scratchbuilt locos that would have cost three or four times that amount once painted. In all probability, the detail and performance would not have matched that of the NRM model either!

 

In fact, I have just looked at one of my painting & lining price list dated 2001 and paintwork alone in GWR lined green with black frames was ??130.00. GWR 19th Century livery with red frames would have been nearer ??200.00. Rather puts things in perspective doesn't it.

[gwrrob]

I said on RMweb over two years ago that as far as RTR went, we have never had it so good. The 'City of Truro' looks like a bargain to me, but then I've spent much of my life handling kit and scratchbuilt locos that would have cost three or four times that amount once painted. In all probability, the detail and performance would not have matched that of the NRM model either!

 

In fact, I have just looked at one of my painting & lining price list dated 2001 and paintwork alone in GWR lined green with black frames was ??130.00. GWR 19th Century livery with red frames would have been nearer ??200.00. Rather puts things in perspective doesn't it.

 

Quality costs Larry.How long would it have took for you to paint and line City of Truro in that livery.

[Guest Moria]

It's an interesting debate. I totally agree about the disposable income part, but then again I think theres something else as well. When I was a young-un... sorry back to reality... no seriously, since I have been modelling the whole premise has changed to I should have what I want now. As a kid / teenager, my disposable income was very low, and a new Hornby 3 rail loco was very costly, but my disposable income was not on a month to month basis, it was what could be saved over the course of 3 /6 even 12 months for that new loco, and often, I could afford something by having already saved for 3 / 6 months when it came out. Disposable income now seems to be what's available this month and if that's not enough then it's too expensive. (of course, in my day.. cough.. there was only a new loco every 6 - 12 months which helped).

 

I'm not sure that will change anytime soon, but it's always going to cause an imbalance, because even when all the old duffers like me have gone who are used to saving, the imbalance will still be there between the older and younger.

 

Honestly, I don't think that's helped by the batch production we have now, but in some respects, that's part of the chicken and egg of I want now vs modern manufacturing to keep costs down.

 

Secondly, I think some of the problem with disposable income is that in years gone by, the ranges were so small (by comparison) that you HAD to build kits or scratchbuild, especially buildings, trees, scenery, even a lot of stock and sometimes track and as a result there was more cash around for the locos etc. It's amazing how much can be spent on the getting it easy and now of shaking the box for scenery etc, and inevetably (sp) that kit/scratchbuilding improved until you were actually building at a standard that looked good.

 

Maybe I am completely wrong, but in my mind, disposable income is the key, but in many ways we destroy our own disposable income in the hobby by shaking the box ('cause we want it now), and until there is equality between the disposable income of young and old (which will never happen) I believe there will always be the complaints of it's too expensive now.

 

The only caution in my mind is that we need the younger modellers to continue the hobby and so perhaps the more interesting question is not.. when will YOU stop buying but when will the entry costs of the hobby kill the hobby, because today, in this day and age of instant gratification, very few going to start as I did, by saving and kit/scratch building when comparing results of those efforts with modern shake the box, it's too depressing, which it was then, but then we had no choice so we had to keep going and get better.

 

There needs to remain an entry level into the hobby to satisfy the newcommer, and whilst Hornby have their range of cheaper cost, its at reduced quality (though not by a lot) of the latest efforts, but again the instant gratification wants the latest and greatest.

 

I think the question therefore is not how much is too much, but what can we do to get people into the hobby and keep them happy until they can affford what they want and produce the next generation of modellers and to that point, I cannot emphasise how much I think ranges like scalescenes card buildings, Superquick etc really can help, but these ranges are almost always not known about until someone is in the hobby... these are the ranges we should be using to promote the hobby.

 

Oh and in case no-one realised, yes, I'm a grumpy old cynic

 

Regards

 

Graham

[Guest dilbert]

The RTR manufacturers fully understand market pricing and the economics of product development and sales.

 

One of the issues here is the value of the pound against other currencies - a weak pound when importing into the UK only complicates things further.

 

In the months ahead, sterling is going to come under more pressure unless measures are announced to effectively scale back the public spending deficit.

 

Paradoxically, a bout of inflation would probably help, but this is not a long term cure either.

 

Keep to the basics, set a budget and spend within that budget. Not so far back there was noise about the supposed psychological barrier of the ??100 loco would limit sales - scrying the oracle, the ??200 price tag barrier is not too far off.

 

...dilbert

[D605Eagle]

Very interesting replies. Thanks guys!

[coachmann]

How long would it have took for you to paint and line City of Truro in that livery.

I would allow 5 days for the job at the outside. I could paint three GWR Castle's in that time. Pre-group commisions rarely paid their way.

 

Those who seem to depend on Hornby and Bachmann etc to produce their every need have done well for low prices over the years. And so to expect that any D&E loco that has been around a couple of years should automatically be re-tooled is asking a bit much IMO.

 

Modellers models are high on the agenda too.....By this I mean everyday locos that were to be seen across the British railway system. Why should Horn/Bach take the risk of producing some of these locos when they would have little appeal to people who would not know of their "importance" in the scheme of things? Surely a risk deserves a price premium until we modellers show the proprietory manufacturers that we will make their investment in us worthwhile. Just a thought, but how much would you pay for your plain black J15, J37, J6, L&Y 0-6-0 etc etc?

[Pennine MC]

 

The only caution in my mind is that we need the younger modellers to continue the hobby and so perhaps the more interesting question is not.. when will YOU stop buying but when will the entry costs of the hobby kill the hobby, because today, in this day and age of instant gratification, very few going to start as I did, by saving and kit/scratch building when comparing results of those efforts with modern shake the box, it's too depressing, which it was then, but then we had no choice so we had to keep going and get better.

 

There needs to remain an entry level into the hobby to satisfy the newcommer, and whilst Hornby have their range of cheaper cost, its at reduced quality (though not by a lot) of the latest efforts, but again the instant gratification wants the latest and greatest.

 

I think the question therefore is not how much is too much, but what can we do to get people into the hobby and keep them happy until they can affford what they want and produce the next generation of modellers and to that point, I cannot emphasise how much I think ranges like scalescenes card buildings, Superquick etc really can help, but these ranges are almost always not known about until someone is in the hobby... these are the ranges we should be using to promote the hobby.

 

 

Thoughtful post Graham. Picking up on this bit, I do think that newcomers put off by the (apparent) high costs of locos and stock should look, or be steered into looking, a little beyond the obvious. A point (in fact the exact words) I used in another thread a week or so ago:

 

You dont have to buy everything the minute it comes out and you dont have to buy new - this year, I've picked up no less than three HJ 27s for less than ??50 each (two new, Hattons reductions, and one s/h but like new), and a Bachy 20 (again s/h but immaculate) for ??25

[Guest jim s-w]

Hiya

 

Didnt the 10000 and 10001 models sell out? They were significanly more expensive than CoT. There will always be enough people prepared to pay for quality or even more so exclusivity.

 

Make something good enough and people will pay for it. The biggest car sales in europe go to the Ford Fiesta and yet they still make and sell Aston Martin's dont they?

 

I have said before, something can be stupidly expensive and yet a real bargain. At the same time something can be really cheap and a total rip off.

 

Dont think loco and think train. Even if CoT costs ??150 stick 10 coaches behind it and what is more expensive? How about a 9f with 50 minerals behind it? Railway modelling is a braod church, you can do it cheaply if you want to or you can spend ??????'s. Its up to you. As long ans manufacturers make money they will keep producing models, simples.

 

Cheers

 

Jim

[Guest jim s-w]

 

The only caution in my mind is that we need the younger modellers to continue the hobby and so perhaps the more interesting question is not.. when will YOU stop buying but when will the entry costs of the hobby kill the hobby, because today, in this day and age of instant gratification, very few going to start as I did, by saving and kit/scratch building when comparing results of those efforts with modern shake the box, it's too depressing, which it was then, but then we had no choice so we had to keep going and get better.

 

 

Hiya

 

Where has this idea come from that newcomers to the hobby are young or have to be? Kids have train sets and they always will and a few of them progress from the train set to the model railway but lets be honest its a tiny minority. The train set does sow the seeds for later life but the majority of newbies are older(men with disposable income. If under 15's never had a model railway again in their lives it would not be the death of the hobby but if ONLY under 15's did it sure would be.

 

Cheers

 

Jim

[Karhedron]

I think that the above discussion shows there is no "right" answer to the question of what the price of a product should be.

 

I model in N gauge rather than 00 but I do model the WR. If CoT got scaled down I would be seriously tempted, even at the price quoted for the 00 version. But that is for a 1-off loco that I appreciate is a bit of a celebrity. I would not consider paying that for the forthcoming 3MT (fortunately I am spared that choice as the price is more reasonable ).

 

It is worth noting that batch production has altered the economics of things slightly and subsequent runs are often cheaper than the original. I am not sure if the same applies to Ltd Eds (have there been more runs of DP1?). Basically you try to sell the first batch at a high margin to the "must have" crowd this covers the R&D as well as some profit. If it sells well then you churn out another batch slightly cheaper. The R&D is payed for so the remaining margin is now just profit and you have the advantage of now snaring the "nice to have" crowd. Repeat until interest wanes by which time you have another model in the works.

 

Companies do not make guesses with this. It is a fine art and I think they know their game pretty well.

[Pennine MC]

Companies do not make guesses with this. It is a fine art and I think they know their game pretty well.

 

Aye, if only more people would simply accept that...

[birdseyecircus]

Thoughtful post Graham. Picking up on this bit, I do think that newcomers put off by the (apparent) high costs of locos and stock should look, or be steered into looking, a little beyond the obvious. A point (in fact the exact words) I used in another thread a week or so ago:

 

 

 

Quite right Ian. Newcomers first see the city centre stores charging near or full price - it's this factor alone that may put many off. As the month's or years go by they may buy a mag that lists the local specialist model shop /box shifters/collectors fairs and model shows.

Hornby are to be congratulated on the Railroad range, but even some of the loco prices in the range make me think.

 

Paul

[coachmann]

Basically you try to sell the first batch at a high margin to the "must have" crowd this covers the R&D as well as some profit. If it sells well then you churn out another batch slightly cheaper.

I'm not sure this would work. If a limited edition initially retails at ??150.00, and then the second batch retails cheaper, the initial purchasers would feel cheated and rightly so. End of limited editions!

 

Better to launch a limited edition at ??150, then launch the second batch at ??175.00! No one feels cheated and there will be more early birds for the next limited edition.

 

LG