Disappearing discount due to Demand?

[shunny]

I noticed an advert for Hornby's H class in SR olive from Rails listed at £119.50 and thought that's the RRP which is very unusual for a them, then I checked Kernow and Hattons and they are all selling for £119, no discount on the RRP not something I have seen with the exception of commissioned Ltd Editions.

While checking this I noticed both Rails and Kernow have the Hitachi IEP in promotional livery listed at £267.99 again RRP Hattons don't appear to have any left.

 

This is not a moan or slating the companies they are charging RRP like many others in the UK just an observation that the reduced numbers made of popular models means even these large discounters feel they do not need to reduce prices to sell the stock. I believe they did discount these if pre-ordered but an interesting development and maybe one that will continue if Hornby continue to produce smaller batches that sell out prior to delivery.

 

My local shop Scoonie Hobbies has already told me that the J36 Haig is sold out at Hornby and Maud is close to this as well so might be worth ordering before they arrive if you don't want higher prices?

 

ps please don't fill this thread with "this shop has them reduced to £*** " thanks

[Oldddudders]

If true, this must be healthy for the smaller shops, who cannot readily discount so generously, and will find they are more competitive. If we believe the local shop is good for the hobby, then it is hard to see a downside except for those on a budget, and those who love a bargain.

[tomparryharry]

I think this has been noticed by quite a few RM webbers.

A classic recent event would appear thus:- The 72xx tank locomotive was a sparse beastie. You'd see it here & there, but not many. Suddenly, Hattons are putting them out (more than 10 in stock), but at a greater price than before. However... Perhaps there is no discount to give any more. If a model advances with greater quality & fidelity than before, it can or might wipe out any grey area of discount.

Do you want a full-fat model, or a semi-skimmed one? I'll always pay for quality, as long as the price is justified.

Ian.

Edited May 2, 2018 by tomparryharry

[woodenhead]

Well I for one think it's disgusting that they are charging full RRP and profiting out of it too.

 

If i can't get the new Hornby streamlined Duchess for under £80 with TTS when it comes out well I for one won't be buying it.

[woodenhead]

Like other's have said a move like this brings prices into line with smaller retailers who can't afford the deep discounting of the box shifters.

 

If you want the model you pay the price, you can wait and see if it doesn't sell or you can go without.

[Mike Storey]

If true, this must be healthy for the smaller shops, who cannot readily discount so generously, and will find they are more competitive. If we believe the local shop is good for the hobby, then it is hard to see a downside except for those on a budget, and those who love a bargain.

 

We must hope so. One grievance a year or three ago though, was that smaller retailers could not get their fair share of new models because the big boys were buying the vast majority. So non-discounting will work for them, but only if they can get the products in the first place?

[Dunsignalling]

More accurate matching of supply to demand will inevitably lead to less, or no, discounting.

 

Hatton's et al will know the quantities they'll be getting upon release. All they need to do is deduct the number they have pre-ordered and it'll be pretty clear whether they need to discount in order to shift the remainder in their preferred timescale.

 

Hornby dropped a brick by releasing follow-up versions of the 72xx, S15, D16 and a few other locos, too early, resulting in some heavy discounting from day one, of which I took full advantage. Since then, they have evidently got their production schedules and batch quantities under better control, making everything more predictable for all concerned.  

 

John

Edited March 30, 2018 by Dunsignalling

[Jol Wilkinson]

I think this has ben noticed by quite a few RM webbers.

 

A classic recent event would appear thus:- The 72xx tank locomotive was a sparse beastie. You'd see it here & there, but not many. Suddenly, Hattons are putting them out (more than 10 in stock), but at a greater price than before. However... Perhaps there is no discount to give any more. If a model advances with greater quality & fidelity than before, it can or might wipe out any grey area of discount.

 

Do you want a full-fat model, or a semi-skimmed one? I'll always pay for quality, as long as the price is justified.

 

Ian.

 

How do you justify a price? Surely it will depend on how much you want something.

[black and decker boy]

I think this has ben noticed by quite a few RM webbers.

 

A classic recent event would appear thus:- The 72xx tank locomotive was a sparse beastie. You'd see it here & there, but not many. Suddenly, Hattons are putting them out (more than 10 in stock), but at a greater price than before. However... Perhaps there is no discount to give any more. If a model advances with greater quality & fidelity than before, it can or might wipe out any grey area of discount.

 

Do you want a full-fat model, or a semi-skimmed one? I'll always pay for quality, as long as the price is justified.

 

Ian.

but the price we pay is set by Hornbys trade price plus a retailers mark up. Any 'discount' then being the difference to RRP. the fidelity of a model is reflected in the trade price. The scarcity of a model is reflected in the retailers mark up. A deep discount fire sale is a reflection that a manufacturer has a load of unsold stock and so reduces their trade price to shift it.

[The Stationmaster]

How do you justify a price? Surely it will depend on how much you want something.

 

Whether or not a price is acceptable to you always depends on a combination of factors and these vary from individual to individual but in the end they boil down to perceived value and affordability.   Overall, as others have already noted, the end of deep discounting in our hobby is a greater benefit than disbenefit as it helps smaller shops survive and I suspect it also helps the better managed 'manufacturers' as well - as long as they are attuned to the way the market now works and to what it looks for in new models and quality which will also bring an end to dumping and over production such as throwing Year 3 models into a sated market.

[ruggedpeak]

I suspect there are several factors here, including better planning by manufacturers. Retailers are being more sophisticated in their pricing, no longer discounting everything. It makes little sense to apply maximum discount to products that are expectd to fly off the shelves regardless of price - that's an unnecessary loss of profit.

 

Also remember all retailers are getting hit with major increases in business rates. Some boxshifters have considerable real estate, so will be paying a lot more in fixed costs.

[JSpencer]

How do you justify a price? Surely it will depend on how much you want something.

 

In recent past, with the start of increasing costs from China, Hornby seem to have sat on the same production amounts for new items as previous years. Leading to over producing which could not be shifted and started a cash flow problem for them, followed by knee jerk reactions to shift over new stock swiftly increasing the cash flow problem even more. Hornby satturated the market with so much cheap stuff that even much of that would not shift.

 

The fact that new items now seem to be sold out, indicates that make only what has been ordered (or there abouts). Sure they probably could have sold more in certain cases, but they cannot take the risk of unmoved stock (money sitting idle), or at least not until the cash reserves can support it (and its deemed more profitable to do so). Retailers see no need to discount while supply is limited and some people are prepared to pay it.

Discount tends to remain for re-runs and whether or not Hornby have calculated correctly or not the size of those production runs remains to be seen as over producing here was definitely causing cash flow issues in the past.

 

Bargains are really only short term gains for us consumers. Poor returns for Hornby et al eventually equals no money for new models. Reading between the lines, I see a few makes treading softly right now, leaving a field open for major shops to do their own commissions (which won't benefit small shops BTW).

[tomparryharry]

How do you justify a price? Surely it will depend on how much you want something.

 Price justification? Desirability, availability, affordability, that sort of thing.

 

There used to be a very clever formula for pricing mens magazines, which is 2 pints of beer, and a packet of cigarettes.  This is otherwise called " inconsequential spending."

 

The current formula is based upon a months subscription to things like Sky, etc. It's not entirely hard & fast, but it's about there.

 

People who make things at this level know to the absolute penny what the profit margin is. It wouldn't surprise me if Hornby made the original 42xx release 'Design Clever' on purpose. When the better versions came along, the fishing exercise is to encourage you to buy the later version as well. Furthermore, you'll pay Top Dollar for that also.

 

Call me cynical, but I know how much it costs to make a Penny, and sometimes it's cheaper than you think.....

 

With our example 72xx tank, what is it? What's it currently worth? How much does it cost? Well, it's available in either RTR, or a fairly rare kit, of sometimes various standards of quality. The brass model requires a good level of skill, and the whole ensemble will cost you about £250-ish. The whitemetal kit about £200 or so. I'm assuming here you're modelling in 00, for P4, about £20 more.

 

The current Hattons ploy is bang on the money. I don't like it either, but there it is.

 

By way of a comparison, you will notice Bachmann have jacked up the price of a mineral wagon to about £16:00. I've noticed the cost of the humble Airfix kit has also risen, by about 75%, in the last year. Strange that....

 

Happy modelling, everybody!

 

Ian.

[Dunsignalling]

Whether or not a price is acceptable to you always depends on a combination of factors and these vary from individual to individual but in the end they boil down to perceived value and affordability.   Overall, as others have already noted, the end of deep discounting in our hobby is a greater benefit than disbenefit as it helps smaller shops survive and I suspect it also helps the better managed 'manufacturers' as well - as long as they are attuned to the way the market now works and to what it looks for in new models and quality which will also bring an end to dumping and over production such as throwing Year 3 models into a sated market.

For me, new models attract varying levels of priority. Definite wants, more casual wants and things I'd like to have if there's money over after the "more important" stuff is paid for. 

 

In practice, I'm fortunate enough to get most of it sooner or later but rising costs are making me more picky about what goes onto which list.

 

Hornby's dumping did tempt me into extra purchases, though, a 72xx that I decided was as cheap as it was ever likely to be plus an additional S15 and 2P on top of my planned requirements. There was a fourth item, but I can't recall what the heck it was.

 

Money I wouldn't have laid out at all without the discounting, so presumably a win-win-win for me and both the Big H's..........

 

John

Edited March 29, 2018 by Dunsignalling

[Jol Wilkinson]

 Price justification? Desirability, availability, affordability, that sort of thing.

 

There used to be a very clever formula for pricing mens magazines, which is 2 pints of beer, and a packet of cigarettes.  This is otherwise called " inconsequential spending."

 

The current formula is based upon a months subscription to things like Sky, etc. It's not entirely hard & fast, but it's about there.

 

People who make things at this level know to the absolute penny what the profit margin is. It wouldn't surprise me if Hornby made the original 42xx release 'Design Clever' on purpose. When the better versions came along, the fishing exercise is to encourage you to buy the later version as well. Furthermore, you'll pay Top Dollar for that also.

 

Call me cynical, but I know how much it costs to make a Penny, and sometimes it's cheaper than you think.....

 

With our example 72xx tank, what is it? What's it currently worth? How much does it cost? Well, it's available in either RTR, or a fairly rare kit, of sometimes various standards of quality. The brass model requires a good level of skill, and the whole ensemble will cost you about £250-ish. The whitemetal kit about £200 or so. I'm assuming here you're modelling in 00, for P4, about £20 more.

 

The current Hattons ploy is bang on the money. I don't like it either, but there it is.

 

By way of a comparison, you will notice Bachmann have jacked up the price of a mineral wagon to about £16:00. I've noticed the cost of the humble Airfix kit has also risen, by about 75%, in the last year. Strange that....

 

Happy modelling, everybody!

 

Ian.

Ian

 

you said "I'll always pay for quality, as long as the price is justified" I was simply interested in how you decided upon a quality/price balance that was acceptable.

 

I only build models from kits and don't buy RTR - for several quite valid reasons that aren't relevant here - but do wonder to what extent peoples purchases are driven by discounting and hence better perceived value, given the heading of the topic?

 

Jol

[Legend]

Disappearing discount due to demand ? No I’d say supply . Quite clearly models are not supplied in the quantities they used to be, I’m thinking Sir William Stanier here. Hornby certainly seem to have scaled back production volumes . Might help even out the playing field a bit. Why go to Hattons if you can get it locally for same price, they can even test it for you,which given the state of QC in Hornby just now must be a plus.

 

Unfortunately cheap prices seem to be a thing of the past . Ironically I’ve got more things on preorder than ever , with a Barclays, J36 and Caley 812. Of these only the J36 was at a discount. Two of these should arrive this year , goodness knows when the Caley will arrive, so not exactly a huge outlay. The rest of the discretionary spend is on second hand . It’s a hobby after all , should be enjoyable . If you have to think twice or justify the spend to yourself , it’s gone beyond that.

[Dunsignalling]

Disappearing discount due to demand ? No I’d say supply . Quite clearly models are not supplied in the quantities they used to be, I’m thinking Sir William Stanier here. Hornby certainly seem to have scaled back production volumes . Might help even out the playing field a bit. Why go to Hattons if you can get it locally for same price, they can even test it for you,which given the state of QC in Hornby just now must be a plus.

 

Unfortunately cheap prices seem to be a thing of the past . Ironically I’ve got more things on preorder than ever , with a Barclays, J36 and Caley 812. Of these only the J36 was at a discount. Two of these should arrive this year , goodness knows when the Caley will arrive, so not exactly a huge outlay. The rest of the discretionary spend is on second hand . It’s a hobby after all , should be enjoyable . If you have to think twice or justify the spend to yourself , it’s gone beyond that.

Definitely supply, and not before time.

 

If a firm like Hornby persistently produces models in quantities that lead to a quarter of them having to be dumped for very little profit, their customers soon get wise and hang back from purchasing expecting more of the same. There was only one place that would have led if they carried on doing it. 

 

Cutting numbers and selling out more quickly at a better return should help ensure their survival/revival and mean new models come through quicker. If that means I can afford one locomotive fewer next year than this, so be it.

 

I buy the models I want, sometimes discounted, sometimes not. No hobby should ever interfere with providing the essentials of life so all such expenditure is discretionary. One may have competing desires but there's no "justification" required, just choices to be made, both between and within one's various interests. 

 

John

Edited March 29, 2018 by Dunsignalling

[tomparryharry]

Ian

 

you said "I'll always pay for quality, as long as the price is justified" I was simply interested in how you decided upon a quality/price balance that was acceptable.

 

I only build models from kits and don't buy RTR - for several quite valid reasons that aren't relevant here - but do wonder to what extent peoples purchases are driven by discounting and hence better perceived value, given the heading of the topic?

 

Jol

Hi Jol, good question!

 

For me, pretty much all of the things in my first sentence. Behind that comes a degree of historical relevance. For example, my main interests are around South Wales, and my locomotive purchasing (either kit or RTR) reflect that. On a slight tangent, Bachmann/Airfix/Mainline banged out the well known toad brake van. You could either make a brass model, or stick with the (quite honestly) substandard model.  Hey Presto! Here comes Hornby with a much improved model, to general acclaim. Furthermore, for just a few quid more.

 

I also do RTR, probably more than I ought. To that end, if I want to 'plug & play', there's the big Western tanks; a shortcut to relaxation. There is a pile of exotic kits, which I might get around to someday, and my whitemetal/brass outnumbers the RTR at about 2-1.

 

I'd guess anything is acceptable, if it's shown that the producer had tried to turn out a full-fat model. If Bachmann turned out a Toad brake van, I'd have a blessed good look to see what improvement to justify the inevitable price hike.

 

Cheers,

 

Ian.

[adb968008]

I think a point has been missed.

 

We used to preorder to lock in price.

In recent years that price hasn’t been honoured as the stock went up in price only to end up discounted back to the pre-order price anyway.

It made more sense to not pre-order and wait for the sale.

 

All that’s happened is a rebalance, you can safely pre-order knowing that your getting the best price, which will rise after release...

 

We’ve gone full circle..Until the next time.

 

The trend now seems to be towards deposits / prepayments.

My only concern is that model only works until a retailer goes pop and the modeller ends up a creditor.

[Butler Henderson]

Bachmann presumably have also cut quantities, given the adverse reaction to the "old body" on the new Ivatt tank chassis I expected to see them in sales but they have been noticeable absent to any discount beyond the normal 15%.

[The Stationmaster]

Ian

 

you said "I'll always pay for quality, as long as the price is justified" I was simply interested in how you decided upon a quality/price balance that was acceptable.

 

I only build models from kits and don't buy RTR - for several quite valid reasons that aren't relevant here - but do wonder to what extent peoples purchases are driven by discounting and hence better perceived value, given the heading of the topic?

 

Jol

 

I'm probably a slightly oddball in that I have hardly ever been driven to buy by discounting - my purchasing interest is basically in items which suit the railway scenarios and geographical area which interest me plus occasion (nowadays far less occasional) 'fun' items which i buy because they're 'rather nice' and I can afford them even if they are totally irrelevant to my main railway interest.  I have occasionally bought things because the price was very attractive but generally I try to support my local model shops (the nearest is 30 miles away) because they don't just sell r-t-r but supply other railway modelling needs as well or I buy at exhibitions if it's things not so readily available at those shops.

 

I have always been strongly against deep discounting because I am sure it was doing our hobby a great disservce and considerable harm although I'm obviously perfectly happy to take a small discount (say 10% on some items) if that's what a retailer offers me and that extends well beyind any r-t-r items in one case.  But I am absolutely sure that many modellers did only buy from the deep discounters and I'm equally sure that they came to regard such deeply discounted prices as the norm for the hobby which distiorted their preception of things as prices began to rise more steeply.

[sem34090]

My Opinion! Because I'm an opinionated B****** I thought I'd air it!

 

I generally model pre-grouping subjects these days, and as some of you will know I have begun 3D printing models. Some have questioned my logic with this, but it can be explained by the following:

 

I am at the very young end of the hobby, and as such have a very limited income.

 

As such, I can only afford to spend a certain amount on railway modelling. It's not a case of not being willing to pay x amount, or wanting things at unrealistic prices because I want fully-detailed models at next to nothing. I spent from announcement until just before the original release date saving up for a Hattons Barclay - A single one.

 

What frustrates me is that I, and others at my end of the hobby, are finding themselves priced out. I cannot afford the vast majority of RTR releases these days, and have relied on the box-shifter deep-discounts in order to be able to afford almost all of the RTR models I own. I also cannot afford the overwhelmingly vast majority of kits, and these are often much more expensive than RTR models these days. As such, my only options are second hand models (Though even these are gradually pricing me out), scratchbuilding (a skill I am slowly working on) and designing my own 3D prints to fit chassis I have managed to accumulate, as to buy wheels, gearboxes and motors is bl00dy expensive. A 3D Print at £20 including a £7 postage cost is manageable. RTR at >£100 is not. Kits at >£80 minimum are not. 3D printing also allows me to actually make some money too. I am not one for wishlisting, as I'd rather spend the time getting the model I want in my own way, but when I cannot afford pretty well anything that is available, other than the occasional RTR wagon. RTR Coaches? Forget it!

 

When a member of this forum (Linny - Skinnylinny on here) can produce 4-wheel coach kits for <£10 in laser-cut card, <£50 for a four-coach rake after the addition of wheels and other bits, then I realise that kitbuilding does not need to be expensive (The same 4-wheeled Stroudley Coach is £20< in resin form and £30< in brass form) and I begin to feel as if some people are actually making an effort to encourage the younger end of the hobby to make things. At the price Linny has quoted me for his kits (which will  be available in due course, possibly via Ebay) I can afford to get most of the set I require for the layout I'm building together for less than the price of a Bachmann birdcage.

 

As for RTR pricing? Having been fortunate to purchase a model at just under trade price (£50 for a brand new Hornby 'Exeter', bought through an unusual situation) I realise just how much some retailers, but in particular the manufacturers are raking it in. Another irritation is the fact that models sell out within days now, and announcements are often getting very close to release dates. This leaves young modellers like myself without any time to save up!!

[adb968008]

As for RTR pricing? Having been fortunate to purchase a model at just under trade price (£50 for a brand new Hornby 'Exeter', bought through an unusual situation) I realise just how much some retailers, but in particular the manufacturers are raking it in. Another irritation is the fact that models sell out within days now, and announcements are often getting very close to release dates. This leaves young modellers like myself without any time to save up!!

I think I can safely assure you £50 is way under trade price for an Exeter, indeed quite possibly any non-commissioned model with an RRP of £100.

Edited March 29, 2018 by adb968008

[phil gollin]

.

 

I find some prices ridiculous, eg £186 (discounted) for a 2-EPB repeat, £215 (discounted) for the future 2-HAP, and £250-odd (discounted)for the re-pop 4-CEP and new 4-BEP.   These make no sense and will drive people away.

 

Thankfully, the Southern Region is, at present, well supplied with small steam locos (O-class, H-class, USA, P-Class, B4 and Terrier) and ALL much more reasonably priced.

 

.

[robmcg]

I don't mind the disappearance of deep discounting, I would be very pleased if the production and sale of such as a Hornby Duchess or Bachmann H1 Atlantic ended up in a healthy profit for all concerned, happy sellers, happy buyers.

 

As a sometimes-trader in s/h items I sometimes feel sorry for commercial sellers, patchy quality control being the biggest issue. On the other hand some commercial sellers such a US one I just bought a Hornby Clan from are not deserving of unmitigated praise, the Ebay ad for this model described it as 'good condition' (albeit two steps and rear plate on tender missing) and status 'functional' but it doesn't go at all, so being in NZ there are considerable postage costs involved both ways for a return or refund. Result; unhappy buyer, unhappy seller. Cost to me US$192 which the sellers terms say will be refunded, we will see...

 

Just wanted to get that off my chest as am waiting for  R3509TTS 46235 Duchess from Britain, and am cautiously optomistic.

 

Overall I see no reason why everyone involved in production and sales should not make a profit and I think we buyers are very fortunate that there are companies out there trying to do just that. Modern RTR is to my mind simply stunningly good.