The Cost of Our Hobby

[RBAGE]

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...

Understand.

 

Well, my point was that there are some prototypes which large organisations with large overheads will struggle to get a reasonable return from. Cottage industry kit manufacturers, with much lower overheads, can manage to make a living out of these marginal items. It seems that the large manufacturers are now eating into these marginal prototypes so there is nowhere for the kit manufacturers to go.

 

I accept that the likes of Bachmann can make whatever they want but if it's a product which they will struggle to sell and which might compromise profitabilty, their business will suffer and so will the hobby. 

[RBAGE]

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......'

Not at all.

 

However, I have visited scores of companies over the years for any number of reasons on behalf of my employer.

 

I don't believe that on any single occasion I got the complete picture with regard to the purpose of my visit.

[iamjamie]

[...] 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.

 

 

"... they weren't the best models..."!!! I think that this has something to do with it (as well as all the rising labour costs). The big companies have always survived with mass production that were good enough quality for the mass market. As time has gone on they've come under increasing pressure to produce a higher quality product, and I just don't think they've been able to be competitive in this market. With their current set ups they just cannot produce the quality models at the right price points. As people have already pointed out, bigger companies have lots more overheads that the smaller ones. The costs are much greater, the risks are much greater, the profit is less.

 

Switch to the new breed of model producers, who's costs probably work out a little less (the same, or even more in tooling, but much less in terms of overheads). Because of the pre-order system that's now becoming the norm, or perhaps the more sensible pledge system introduced by RevolutioN, the risks are greatly reduced, and there is a healthy return for the company to start development on their next model... and then the one after that!

 

The fact that these smaller companies are generally also model enthusiasts themselves, it becomes less about making a big profit and more about making a great model. I don't deny that they also must make a profit, but there's certainly less emphasis on it when a company isn't solely run by the accountants!

 

There's a middle ground between cottage industry and big companies, and that revolution has well and truly started... You can't deny there has never been a more exciting time for railway modelling. And for those that say the hobby will suffer if one of these big companies goes under, I don't think that's true. If anything the younger generations are much more clued up about this kickstarter style of doing things, instead of buying from Big Brother. Yes, we might loose a big ambassador to promote the model industry to those outside it, but they were never doing a very good job of that anyway.

[RBAGE]

The bottom line is that an organisation will always try to limit what is shared with the outside world and then only what is beneficial to the organisation.

 

That's the way people are.

[Arthur]

Not at all.

 

However, I have visited scores of companies over the years for any number of reasons on behalf of my employer.

 

I don't believe that on any single occasion I got the complete picture with regard to the purpose of my visit.

And you came away knowing nothing more than I, who have never visited them? Or was all that you did learn just spin?

 

You know more about these companies you visited than I, I suggest that Chris knows more about Bachmann and Hornby than you.

[RBAGE]

And you came away knowing nothing more than I, who have never visited them? Or was all that you did learn just spin?

 

You know more about these companies you visited than I, I suggest that Chris knows more about Bachmann and Hornby than you.

Short circuit in the crystal ball department there I think.

 

Yes, I'm sure he does but does he know the whole picture regarding the subject of cost increases? I think not. And that is my point.

[jjb1970]

The problems with the sort of pre-order system we now see are:

 

• if you miss a pre-order deadline you miss out, possibly forever, or pay what it costs on EBay. Now you may say "well all you need to do is pre-order", OK, what if somebody discovers the hobby after the 30th of this month and would love an APT-E? We're told it'll never be made again so future entrants just have to hope somebody else makes it or look for s/h
• We will see a lot less of the sort of cross support where manufacturers like Bachmann and Hornby can accept greater risk and lower returns from some projects (eg. coaches) as a result of a combination of making greater returns on other items and because they see it as being necessary to offer certain products to maintain their range
• If shops do not sell the high value stuff like locomotives then do not expect them to be there when you need ballast, scatter material, paint, adhesives etc etc

 

I am not against the new breed of suppliers and think they are doing great things for the hobby however for the hobby to thrive (assuming it can thrive) I think that these new suppliers have to be complimentary and supplementary to larger full range suppliers. Some may expand into full range suppliers themselves and then their business model will also change.

[Andy Reichert]

"... they weren't the best models..."!!! I think that this has something to do with it (as well as all the rising labour costs). The big companies have always survived with mass production that were good enough quality for the mass market. As time has gone on they've come under increasing pressure to produce a higher quality product, and I just don't think they've been able to be competitive in this market. With their current set ups they just cannot produce the quality models at the right price points. As people have already pointed out, bigger companies have lots more overheads that the smaller ones. The costs are much greater, the risks are much greater, the profit is less.

 

Switch to the new breed of model producers, who's costs probably work out a little less (the same, or even more in tooling, but much less in terms of overheads). Because of the pre-order system that's now becoming the norm, or perhaps the more sensible pledge system introduced by RevolutioN, the risks are greatly reduced, and there is a healthy return for the company to start development on their next model... and then the one after that!

 

The fact that these smaller companies are generally also model enthusiasts themselves, it becomes less about making a big profit and more about making a great model. I don't deny that they also must make a profit, but there's certainly less emphasis on it when a company isn't solely run by the accountants!

 

There's a middle ground between cottage industry and big companies, and that revolution has well and truly started... You can't deny there has never been a more exciting time for railway modelling. And for those that say the hobby will suffer if one of these big companies goes under, I don't think that's true. If anything the younger generations are much more clued up about this kickstarter style of doing things, instead of buying from Big Brother. Yes, we might loose a big ambassador to promote the model industry to those outside it, but they were never doing a very good job of that anyway.

 

Wow! So many great assumptions and so few historical proven facts.

 

Actually they were great models. Because they were strong, had modular parts and metal chassis you could drill into and modify without blowing away a bunch of electronics. You could actually kit bash them into something you actually wanted, and if substituting such items as Hamblings or Romford wheels, high ratio gears and adding details like handrail knobs, and turned parts and castings, made them pretty close to today's stuff for fraction of the price.

 

And the Revolution? A small enthusiast's new breed of non-business not caring about subsidizing "modellers" who want to buy extra copies of stuff based on their ongoing hard work for the least possible price. And even if if that were true, it all changes at the point where the first needed employee needs a living wage. . . . . . And some-one, somewhere needs a full blow manufacturing organization, just sitting around waiting for the "new" work to turn up unexpectedly so they can jump on it.

 

But's that's OK, because it's a revolution???   All minority choice exciting one-offs,  but no track, or OHLE,  no common place suburban coaches, plain wagons, 'cos they are not limited run, fast buck, products and the kickstarter model doesn't work for that.  Where are the completed layouts going to come from?

 

I think it's time to invest in credit card companies. . . .

 

Andy

[Dunsignalling]

Understand.

 

Well, my point was that there are some prototypes which large organisations with large overheads will struggle to get a reasonable return from. Cottage industry kit manufacturers, with much lower overheads, can manage to make a living out of these marginal items. It seems that the large manufacturers are now eating into these marginal prototypes so there is nowhere for the kit manufacturers to go.

 

I accept that the likes of Bachmann can make whatever they want but if it's a product which they will struggle to sell and which might compromise profitabilty, their business will suffer and so will the hobby. 

One reason the big boys are moving into "marginal" locos is simple - the annual wish lists tell them there is a demand for them.

 

Another is that many people who actually run what they buy will have accumulated more of the long-term big sellers than they really need and sales of such locos are more likely to be affected by price-sensitivity than ones that potential buyers don't already have. Even Hornby cannot live by R-number collectors alone. 

 

The problem for kit manufacturers is that many in the hobby won't build anything and consider one r-t-r loco in the bush to be better than two kit-built ones in the hand!

 

When it comes to picking prototypes to model, Bachmann aren't daft; the popularity of the S&D 7F, SECR C class, Dukedog, L&Y tank and Midland 1F provides clear evidence of that; Hornby have done more than get away with big, obscure locos like the P2 and Duke of Gloucester and their little J15 sells like hot cakes. 

 

OK, it's quite likely that one day, something will bomb, but the nearest to it that I can think of is Heljan's BRCW 'Lion' prototype which continues to be easily available at very big discounts more than a year after release. EDIT: And the Hornby 2-BiL.

 

People buy (or don't buy) models for all sorts of reasons, I already have more Adams Radials (1) than all my LNER locos put together. I have more than two dozen Hornby Bulleid Pacifics but wouldn't cross the road for one of their A4s with a twenty quid price tag (unless it was KIngfisher). Others go the opposite way (I gather the ultimate A4 collecting aim is to have all the locos in all the liveries!).

 

Bachmann has always made items that don't fit into the accepted "mainstream" and Hornby are moving (belatedly) into territory that has been demonstrated to hold promise. Both, as "full range" suppliers will have factored in the risks and opportunities of making things other than Mallard and Flying Scotsman.  

 

The newer, smaller entrants are the ones with most to lose if a model failed to sell, hence the different way of trading.

 

John

[iamjamie]

Actually they were great models. Because they were strong, had modular parts and metal chassis you could drill into and modify without blowing away a bunch of electronics. You could actually kit bash them into something you actually wanted, and if substituting such items as Hamblings or Romford wheels, high ratio gears and adding details like handrail knobs, and turned parts and castings, made them pretty close to today's stuff for fraction of the price.

 

Yes, you could be right. The underlying quality of the mechanics/basic construction probably was a lot better, and people like yourself were prepared to kit bash adapt and improve the model to get the finish you wanted. Unfortunately we appear to be in a trend that's moving away from that, where people seem to want the high quality visual finish out of the box. Whether that's because they can't be bothered, don't have the skills to do it... Who knows?

 

You say that minority choice one-off's aren't exiting? I think the complete opposite! Yes, perhaps they are niche products, but how great that someone is taking them on... They might never see the light of day otherwise, and with most of them we can follow the process and even be involved in it. What's more exciting than that?! 

[Arthur]

 

Actually they were great models....

 

 

Just which models are we talking about here? How far back are we going? Hornby Dublo?' Triang? Airfix? Mainline? Bachmann? Hornby?

 

If your definition of a great model is one which requires a complete rebuild, re-wheel, and improved detailing (and I've done plenty of that in my time) then yes, there were some great models in the past.......

[Legend]

Short circuit in the crystal ball department there I think.

 

Yes, I'm sure he does but does he know the whole picture regarding the subject of cost increases? I think not. And that is my point.

You will look in vain to see any detailed article or any negativity about costs in any model rail mag ,not just singling out model rail. However you might have thought the last editorial could have been written by Bachmann, all about Bachmann bashing,not a word on price increases which is probably the reason for it. Hardly balanced!

[Legend]

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......'

Hey stop stealing my lines!

[jjb1970]

I thought the MR editorial was well put. Yes it was very supportive of Bachmann but is there anything wrong with that? Not that long ago some of the people now so critical of Bachmann were seeing them as the shining light of the model railway scene and happily predicting the demise of Hornby and ripping anything Hornby related to pieces. A company does not go from being the manufacturer of the year, hailed for producing models of a terrific standard to being the villain of the hobby over night. Bachmann took quite a chance in doing the Blue Pullman, their DMU and EMU models are really quite exceptional (the 4CEP is a huge favourite of mine, a wonderful model) and they do some really terrific wagons and coaches. I'll admit that in terms of steam age I have a lot less Bachmann as my interest is primarily Southern with a helping of GWR but there is no doubt that Bachmann's steam age models are of a very high standard too. I think it is entirely proper for an editorial to basically say that OK prices are going up but just remember what Bachmann have done for the hobby and what they still provide for modellers.  I agree with the tone of their editorial in that Bachmann bashing has became just as tiresome as Hornby bashing was 12 months ago.

[Legend]

Sorry for being tiresome but as the subject is clearly headed you could have moved on. What changed to make them hero to villain in one year........2 astronomical price increases.

[jjb1970]

There is a simple answer to the cost of models. If they really are more than you are willing to pay or you do not consider that they offer value for money then find a new hobby or stop buying models. There are plenty of other hobbies, unfortunately few of them are cheap.

[chris p bacon]

Sorry for being tiresome but as the subject is clearly headed you could have moved on. What changed to make them hero to villain in one year........2 astronomical price increases.

The flip, side to this is they were selling stuff too cheap for too long which was to our benefit.

 

Out of interest when you go food shopping do you question every item that increases in price or do you pop it in the basket ? 

[stovepipe]

There are quite a lot of subjects in model railways that get a going over every now and again, and pricing is one of them, especially on an online forum. I don't think I would be writing editorials complaining about people having an opinion - that is after all what an editorial often is - an opinion. I do get tired of people saying how tiresome these subjects are - if people want to debate things, let them I say. It's part of people accepting (or not) the situation they find themselves in.

[Dunsignalling]

You will look in vain to see any detailed article or any negativity about costs in any model rail mag ,not just singling out model rail. However you might have thought the last editorial could have been written by Bachmann, all about Bachmann bashing,not a word on price increases which is probably the reason for it. Hardly balanced!

So; yet another opportunity to save money. You can stop buying magazines as well as stopping buying models.

[jjb1970]

The Bachmann price rises have been explained to death. Labour costs are rising in China, Kader have not been doing well financially, their factories can get make more money making products for other markets. Kader are not a charity, they exist to make a profit. Equally they are not a benefit society for British OO modellers , if HO markets in Europe will pay more for models then it is entirely reasonable for them to ask the question why they should sell to the British OO market for less. The price is what it is. If people don't like the prices then don't buy, it is that simple. Bachmann, Hornby et al will listen and note criticism of their product in terms of detail and quality but with regards prices I'm guessing the just ignore it all and the only thing that matters is how the market votes in terms of sales.

[Robin Brasher]

Unless a model is a" must have" model like a Maunsell Pull-Push set for my Swanage Railway layout people are not prepared to pay high prices and are prepared to wait until the prices come down.

This is evidenced by the bargains offered by companies like Kernow who are now offering huge discounts on 12 Hornby locomotives including an R3257 Hornby 2BIL for £59.99 saving £70.76.

[Dunsignalling]

Unless a model is a" must have" model like a Maunsell Pull-Push set for my Swanage Railway layout people are not prepared to pay high prices and are prepared to wait until the prices come down.

 

This is evidenced by the bargains offered by companies like Kernow who are now offering huge discounts on 12 Hornby locomotives including an R3257 Hornby 2BIL for £59.99 saving £70.76.

That would be lovely, if I had any use whatever for a 2-BiL in pre-nationalization livery. I note the reductions on BR ones are considerably less drastic.

 

Discounts of that size mean only one thing, Hornby massively over-estimated how many people want EMUs and have been stuck with loads of them.

 

It's a pretty safe bet that there won't be further batches of these produced any time soon.

 

John

[jjb1970]

Unless a model is a" must have" model like a Maunsell Pull-Push set for my Swanage Railway layout people are not prepared to pay high prices and are prepared to wait until the prices come down.

This is evidenced by the bargains offered by companies like Kernow who are now offering huge discounts on 12 Hornby locomotives including an R3257 Hornby 2BIL for £59.99 saving £70.76.

 

That is a solution, as there are plenty of discounts out there if you shop around. Kernow selling the blue/grey 4VEP was a great offer

[gordon s]

There are quite a lot of subjects in model railways that get a going over every now and again, and pricing is one of them, especially on an online forum. I don't think I would be writing editorials complaining about people having an opinion - that is after all what an editorial often is - an opinion. I do get tired of people saying how tiresome these subjects are - if people want to debate things, let them I say. It's part of people accepting (or not) the situation they find themselves in.

 

Well reasoned debate where facts and figures are available to all is always welcome.  The problem with these subjects arises when 'opinion' is often based on conjecture.  Unless you are a member of the Board of any of these companies, it is unlikely you will ever know the reasoning behind cost increases to the market place.  

 

As said earlier, it is always risk and reward.  Get it right and you can provide security and long term benefits to all staff and have cash to invest in future growth. Get it wrong and you could be in terminal decline.  No one sets out to achieve the latter, so any major business strategy decision will have been discussed extensively at Board level before implementation.

[ruggedpeak]

Just wait until the Fed puts up interest rates.................then model train price rises will be the least of your worries!