The Cost of Our Hobby

[The Stationmaster]

The other obvious point is that to date neither Rapido, Oxford nor DJM have delivered any of the promised new models. Now clearly DJM Dave has a strong pedigree at Dapol and I do not doubt his models will be very good whilst the quality of the models Rapido make for the North American market is exceptional but the point remains that it seems bizarre that there is a body of opinion in the hobby who are venerating manufacturers who have not yet delivered anything of note to the UK market whilst vilifying manufacturers who have. And if talking prices, you can't ignore the different sales models (I'm sure Hornby and Bachmann would reduce prices if they only made what customers have ordered before production starts and only sell via a single source), if people want the alternatives then fine but don't complain when there are no more model shops and you have to order models months in advance on trust that it will be good. And DJ Dave has been quite open and honest in discussing inflationary pressures and that this will affect his pricing.

DJM has of course delivered the latest issue of the Kernow Well tank - which seem to have been well (sorry) received and has, I believe a new motor.  The O2 is getting very close.

 

But here we need to ask another question - these models come into the UK to be sold with whatever name they are sold with but where are they made?  The new Kernow Well Tank was made in exactly the same factory as the previous ones, I think the O2 is also coming from that factory and I could name (but won't)  other 'names' who have had models made/work done in that factory, one of which might come as a surprise.  Now there is obviously a difference in specification - very much down to 'the name'; there will be differences in research and quality of information supplied to the factory in order to produce the CAD - again very much down to the name on the box but the folk who put various brands together will be the same, they're just working on a  different model.  But then of course that is exactly what Sanda Kan did.

 

Provided the commissioner gets the right spec and exercises control over getting what he specified you will get differences in product but the factory is the same.  Same goes for Oxford of course because they factory they use has supplied Japanese 'names' for some years - so once again it is down to quality of research information, spec, and checking what is being developed is to spec.

 

And one other rather critical thing - don't forget that all these 'names'  are subject to exactly the same cost and economic impacts if they have a model made in China.  Which then leaves their final pricing down to whatever overheads they have 'at home' and how they run their financing plus, of course, how they behave in order to get established in the marketplace.

[jjb1970]

One of the problems with British industry in my life time has been a fixation on immediate profit and sales and insufficient focus on R&D, new product and capability development with the result that some once fine and proud companies became something of a joke as rivals in Germany, Asia and North America left them behind technically and offered products that we could not hope to match. Part of that was indeed focusing on building in ease of manufacture at the design stage to reduce production costs but it was much more developing superior products offering far better capabilities. I'm not drawing too many parallels between my experience with large power machinery and systems and making a model train but nevertheless I'd consider cutting R&D and eliminating back room staff involved in product development and quality to be a false economy if looking at long term prospects.

[Arthur]

Everybody starts small. Airfix was Class 31 and Prairie , Mainline the 4MT, J72 and Peak.The point is these people wouldn't be entering the market if they didn't think there was money to be made

As MIke (Red Death) said, and, if there isn't money to be made, then goodbye Bachmann, Hornby, Heljan, Dapol, DJ, Rapido, Oxford, Peco.....

 

I hope my pension funds aren't invested in any company not making money.

[chris p bacon]

I am in manufacturing. Mass production. I have worked in quality for 28 years within the same organisation. Involved with supplied component development from developing or low cost countries.

I am semi retired and doing well enough that I can afford virtually what I want in the hobby.

 

 

Interesting that in this post you are in Quality, and yet

 

. And remember, these R & D people or quality people or back office staff don't actually make any money for the organisation. It's people at the coalface that do that.

 

in this one you see them as surplus to the organisation. 

 

Well lucky for you they kept you on so you could amass a model railway empire.

 

Your argument seems very confused. you want manufacturers such as Bach/Hornby to produce a cheaper product but would you want the same level of detail as Rapido ? you cannot even with wishful thinking have the 2.

[RBAGE]

Interesting that in this post you are in Quality, and yet

 

in this one you see them as surplus to the organisation. 

 

Well lucky for you they kept you on so you could amass a model railway empire.

 

Your argument seems very confused. you want manufacturers such as Bach/Hornby to produce a cheaper product but would you want the same level of detail as Rapido ? you cannot even with wishful thinking have the 2.

Is there a problem with knowing the relative value of your position? Please don't think that I accidentally included my own activity as a service rather than a direct producer.

 

There was no luck involved in my services being retained for so long before retirement and then after retirement, by the same organisation which just happens to be the most productive and efficient in it's industry.

 

Now you are getting confusing. Are you suggesting that detail and value for money are mutually exclusive?

 

Sounds like you're running out of steam. 

[chris p bacon]

Now you are getting confusing. Are you suggesting that detail and value for money are mutually exclusive?

 

Sounds like you're running out of steam. 

Far from it, other manufacturers such as Rapido are quoted as comparison to Bach/Hornby but it is an entirely different product and how its sold.

 

I think you need to figure out what you want, whether its a cheap product made to a low price or whether its a quality item (if there's anyone left to check) that's made to a standard. There really isn't a middle ground, if say Hornby made a premium product and sold it cheaply they wouldn't last long as they'd run out of money when they couldn't subsidise the rest of the range that sold slowly. 

[RBAGE]

Far from it, other manufacturers such as Rapido are quoted as comparison to Bach/Hornby but it is an entirely different product and how its sold.

 

I think you need to figure out what you want, whether its a cheap product made to a low price or whether its a quality item (if there's anyone left to check) that's made to a standard. There really isn't a middle ground, if say Hornby made a premium product and sold it cheaply they wouldn't last long as they'd run out of money when they couldn't subsidise the rest of the range that sold slowly. 

I understand what you are saying and I agree (almost stuck in my throat) but my point is relating to the dramatic price increases, with more to follow.

 

We've discussed Bachmann's claim that they've been selling at a loss by the top man's comments don't reflect that.

 

We've discussed that material and salary increases are the cause but that can't be the complete answer.

 

We've discussed the increase in detail but there has been an increase across the board, even simple wagons.

 

There is enough space in the hobby to keep everyone happy but the recent sudden rush of new releases by Bachmann may well have overstretched them There failed 2013/14 range is testament to that.

 

Some of the activities of recent years what with duplication and gazumping product (the Midland Pullman as an example) hasn't done anyone any good.

 

The likes of Bachmann are now introducing prototypes which have less chance of the big sales of say an A4 or A1 or class 37. So the cost of return on their investments is reduced. 

 

Plus, the number of new releases with the limited budget of most modellers means that sales for each will be less. If modellers can only afford to buy 2 new models a year to suddenly release 5 new prototypes doesn't mean that the modeller gets a sudden surge in how much he can spent.

 

My criticism of Bachmann is that they have tried to do too much to quickly and it's the customer who will ultimately pay for that strategy. I might be able to afford it but others can't. Plus I don't really want to pay more than is necessary.

 

Bob 

[RBAGE]

An as for the slow runners. Leave those to the cottage boys who have less overheads and make beautiful kits.

[RBAGE]

As for the "railway empire". Yes I do have far more than I'll ever need and have more kits than I could build in what time I have.

 

Does anyone fancy an 0 gauge Martin Finney A3 and tender?

[chris p bacon]

 but my point is relating to the dramatic price increases, with more to follow.

 

 

 

The likes of Bachmann are now introducing prototypes which have less chance of the big sales of say an A4 or A1 or class 37. So the cost of return on their investments is reduced. 

 

Plus, the number of new releases with the limited budget of most modellers means that sales for each will be less. If modellers can only afford to buy 2 new models a year to suddenly release 5 new prototypes doesn't mean that the modeller gets a sudden surge in how much he can spent.

 

 

Now you see, I read your post and in it I see your point,  but also the answer in that if they are to sell less then the return needs to be greater for each unit.

 

Heljan have been producing some of the lesser prototypes in smaller numbers (Railbus - £120) and seem to have got it right, why shouldn't Bachmann produde smaller quantities which will inevitably cost more ? if they can sell them all then they have got their business model right, and they are after all in the business to make money.

[chris p bacon]

An as for the slow runners. Leave those to the cottage boys who have less overheads and make beautiful kits.

Yes, but you see if there was money in them they would already be making and selling them, but they're not.

[Revolution Mike]

We've discussed Bachmann's claim that they've been selling at a loss by the top man's comments don't reflect that.

 

We've discussed that material and salary increases are the cause but that can't be the complete answer.

 

We've discussed the increase in detail but there has been an increase across the board, even simple wagons.

 

You still seem to be labouring under what to me is a false premise ie that the increased labour costs can't be the answer.  Why can't they be the answer? All the evidence is that is exactly the answer.  The fact that some "simple"* wagons have also had price increases does not disabuse that notion.

 

* depending on what you define as simple...

 

Some of the activities of recent years what with duplication and gazumping product (the Midland Pullman as an example) hasn't done anyone any good.

 

The likes of Bachmann are now introducing prototypes which have less chance of the big sales of say an A4 or A1 or class 37. So the cost of return on their investments is reduced.

 

Well that is kind of inevitable in a finite market place...they can hardly only produce a very limited number of big ticket sales otherwise their business will die!

[Andy Reichert]

So you want less choice, fewer models produced but at lower cost per unit? Bit like the old days, one new model a year.

 

That's fine if you really want that but many would rather see a wide range of models avaiable, different prototypes covered and that comes at a cost.

 

But I grew up back when that model would be available continually, over many years, so as a youngster I could save up and eventually buy one. And cottage industries could invest in conversions that they could count on having an equally long life.

 

Imagine if Meccano had produced just straight girders for just one year and then just flat plates the next.

 

Andy

[chris p bacon]

Imagine if Meccano had produced ...............just flat plates

Your gravy would run off the sides....

 

And they couldn't go in the microwave.....

 

 

 

 

 

 

 

And I'll get my coat....

[sp1]

But I grew up back when that model would be available continually, over many years, so as a youngster I could save up and eventually buy one. And cottage industries could invest in conversions that they could count on having an equally long life.

 

Imagine if Meccano had produced just straight girders for just one year and then just flat plates the next.

 

Andy

Andy

You're right!

When I was young, and couldn't afford them!!, every toy shop had Hornby models! OK so they weren't the best models, but they were in the catalogues, and if you went to a local shop you had a very good chance they had one on the shelf.

[Andy Reichert]

Your gravy would run off the sides....

 

And they couldn't go in the microwave.....

 

 

 

 

 

 

 

And I'll get my coat....

 

You need egg on your bacon . . . .

 

Andy

[RBAGE]

Yes, but you see if there was money in them they would already be making and selling them, but they're not.

I meant that the slow runners could be produced as kits. As they had been for many years.

[RBAGE]

You still seem to be labouring under what to me is a false premise ie that the increased labour costs can't be the answer.  Why can't they be the answer? All the evidence is that is exactly the answer.  The fact that some "simple"* wagons have also had price increases does not disabuse that notion.

 

* depending on what you define as simple...

 

 

Well that is kind of inevitable in a finite market place...they can hardly only produce a very limited number of big ticket sales otherwise their business will die!

Is it a finite market? Or should the industry be encouraging fresh blood who will buy the big ticket sales.

 

A3's, A4's, Black 5's and the like are still selling after decades of production in various stages precision and detail.

[RBAGE]

And increased labour costs is certainly part of the increase but it's not the whole story.

[dibber25]

I've resisted posting on this thread as I'm aware that certain people are fed up with me banging on about cost, but I'm so happy to see someone other than me posting . Absolutely spot on sir!. I really commend this to the folks to Bachmann to read. They may increase prices but will ultimately sell less. I haven't bought BRM so no doubt David Haarhuus is on a charm offensive telling us why costs have to go up,no doubt with exploded pictures of parts. Sorry there are two sides to the story. It may cost you more to make but there are less people able to justify buying your goods, even if they have the means.

 

As to Model Rail, I was given a copy to read the editorial . Lots of mentions about Bachmann bashing, not one mention of increased prices ( twice in one year , by the way) And they do not take the manufacturers view? Unbelievable

 

Time we had a magazine representing the Model Railway Consumer not the manufacturer

Manufacturers have to make a profit. You should also read the features by Jason Shron in Model Rail, as he's explained the background to why model railway prices are the way they are, and the difficulties now faced by manufacturers. Model magazines don't represent the manufacturers, they tell the story as it is and present the facts. At times it's something that consumers don't want to hear (I'm none too thrilled about paying more for my models, either) but no amount of 'bashing' by magazines will force prices down when wages are going up by 20% per year for five years. 

There are two ways of looking at this and neither of them is very appealing:

Prices rise due to Chinese manufacturing costs going up - fewer people buy - next order is cut to match demand - price goes up because tooling cost has to be recouped over fewer sales - margins are slimmer - no money to invest in new models - long gaps between new releases - production quantities cut - frustrated customers miss out on short-run new products.

Prices rise due to manufacturing costs going up - fewer people buy - models are left on shop shelves - shopkeeper cuts prices to encourage sales, thereby reducing his already slim margin to zero - shop goes under.

CHRIS LEIGH

[RBAGE]

Manufacturers have to make a profit. You should also read the features by Jason Shron in Model Rail, as he's explained the background to why model railway prices are the way they are, and the difficulties now faced by manufacturers. Model magazines don't represent the manufacturers, they tell the story as it is and present the facts. At times it's something that consumers don't want to hear (I'm none too thrilled about paying more for my models, either) but no amount of 'bashing' by magazines will force prices down when wages are going up by 20% per year for five years. 

There are two ways of looking at this and neither of them is very appealing:

Prices rise due to Chinese manufacturing costs going up - fewer people buy - next order is cut to match demand - price goes up because tooling cost has to be recouped over fewer sales - margins are slimmer - no money to invest in new models - long gaps between new releases - production quantities cut - frustrated customers miss out on short-run new products.

Prices rise due to manufacturing costs going up - fewer people buy - models are left on shop shelves - shopkeeper cuts prices to encourage sales, thereby reducing his already slim margin to zero - shop goes under.

CHRIS LEIGH

Do model railway magazines no any more of the "facts" than the general, buying public.

[Revolution Mike]

Is it a finite market? Or should the industry be encouraging fresh blood who will buy the big ticket sales.

 

It is a finite market in that there only so many types of loco/rolling stock which you would like the big manufacturers to stick to an even more limited list...

[jjb1970]

Hornby offer the Railroad range for those on a tight budget. Some of the Railroad tooling is painfully old and basic but the newly tooled models are very good and are excellent runners. They're not as good as main range models but the Railroad versions of the DoG, P2, Hall, A1, Mk.1 etc offer nice, well finished models with very good running qualities for those not willing to spend for full fat Hornby and Bachmann models. A lot of the old Lima diesel tooling is also still pretty good and with the Hornby 5 pole motor bogie the running qualities have been transformed. Then there is second hand.

[Arthur]

But I grew up back when that model would be available continually, over many years, so as a youngster I could save up and eventually buy one. And cottage industries could invest in conversions that they could count on having an equally long life.

 

Imagine if Meccano had produced just straight girders for just one year and then just flat plates the next.

 

Andy

Fine, if all you want is a Jinty, a Princess and a B12. There seem now to be sufficient adult modellers with significant enough resources for the big RTR guys to have a different business model. It may, or may not, work in the long term.

 

You don't have to like it for it to be the case.

[Arthur]

Do model railway magazines no any more of the "facts" than the general, buying public.

They've probably got a better idea than you, when did you last visit any of the RTR manufacturers or interview their staff?

 

Of course, you'll just you say 'they're all in it together......'