Bachmann - why price increases are necessary

[dibber25]

A question for those in the trade as regards the Blue Pullman. If a new release of a complete set is financially unacceptable because of the end price of a full 6 car set, is there any mileage in replicating the Hornby setup with the Brighton Belle (or Javalin set)? i.e. sell say a 4 car set (the two driving cars plus one kitchen and one intermediate saloon) with a second coach pack available separately (and possibly produced in a smaller quantity than the main set in view of the price and also the space a full 6 car rake takes up) for those who wish to make it up into a full rake.

From memory, the coupling/electrical arrangement won't allow this. I think you need all the right cars, necessarily in the right order, to corrupt (slightly) what Eric Morecambe said.

CHRIS LEIGH

[giz]

From memory, the coupling/electrical arrangement won't allow this. I think you need all the right cars, necessarily in the right order, to corrupt (slightly) what Eric Morecambe said.

CHRIS LEIGH

I've run mine as a five car by leaving out one of the restaurants, it would also be possible to leave out the other one for a four car. The centre parlours can't be removed as they have handed non-conducting couplers at the centre of the unit.

[phil-b259]

From memory, the coupling/electrical arrangement won't allow this. I think you need all the right cars, necessarily in the right order, to corrupt (slightly) what Eric Morecambe said.

CHRIS LEIGH

 

In which case is it feasible to modify the electronics or the couplings for this to occur at a reasonable cost? Obviously a major reworking of the design is imposable but of its a case of only making a few wiring alterations and swapping couplers round it might be possible.

 

Of course this all assumes consumers are prepared to purchase a shortened set in the first place.

[robmcg]

Given a certain increase in new prices, and a predilection for enjoying the best 00 RTR steam BR-era models I have bought a few recently after trawling through various web offerings. Having spent up rather large, the rotary-bunker Garratt from Hattons and Heljan turned up in lightly weathered early BR well, well what can you do?

 

In my looking at ads for models one thing impressed me greatly, the quality of the detail on BR Standard engines, 4MT., 5MT and 9F... especially on some aftermarket-weathered examples of the Bachmann models, pity about the screw-fixed valve gear return crank but at often only £50-70 (or more maybe for a 9F) I could not help wondering about the likely price of these complex-detail engines.

 

You could argue that a 3F or 4F or dare I say it an SECR C or NER Q6 uses less labour input, I wouldn't know, but I suspect that BR Standards are time-consuming to assemble well, and applaud Bachmann (and Hornby, as some may have observed in relevant threads), for their continued production of RTR 00 models in an increasingly expensive labour market, also shipping and other cost rises.

 

I was looking for some pictures to illustrate my point about Bachmann Standard BR steam engine detailing and I think the best is exemplified by the 4MT 2-6-4T ... beset by indifferent or downright poor assembly at times the front of the engine was very 'kicked upwards', but most seem quite good, some better than others, so I offer this pic because it shows the BR 'age of sunshine' (or was that my youth), optimism, and such models can be bought for much, much less than £100... currently I just bought a new, straight, mint version with the extensive detail pack etc. for £70 from a well-know Ebay trader, his last one, it has been for sale for many weeks.

 

The edited pic is 80132 produced in green, and I painted it black and weathered it, the second pic is one of the seller's pics of 80032.

 

 

 

Cheers,

 

Rob

[phil-b259]

I've run mine as a five car by leaving out one of the restaurants, it would also be possible to leave out the other one for a four car. The centre parlours can't be removed as they have handed non-conducting couplers at the centre of the unit.

 

Interesting - so in theory Bachmann could sell a four car rake but make the two kitchen vehicles available separately (in a similar manor to the Brighton Belle unit).

 

Alternatively (and assuming its just a wiring / coupling alteration) maybe the 'split' between half sets could occur at 1/3rd of a six car set (i.e. between a kitchen car and the adjacent parlour) allowing another parlour + kitchen car combo  to be added later. The downside of this approch of course is that the couplings fitted to the kitchen +parlour in the set would have to be different to the add on coach pack which would complicate things and seeing as the whole point is to reduce the retail price this may not work.

[AngryMeerkat]

Sorry, I'd missed you were in the US.  I'd mistakenly assumed you were in the UK hence my comments.  Of course that means you are looking at it from a US perspective (income and taxes etc) so the results may be totally different to that for us in the UK.

 

There are some more interesting stats here including the Big Mac and iPad indices...

 

http://en.wikipedia.org/wiki/Purchasing_power_parity

 

If an iPad costs $499 (no tax) in the US the equivalent UK price would be $638.81, some 27.8% higher for a UK citizen purchasing in the UK on a UK salary and paying UK taxes.

 

Apologies that we have wandered off the original topic, but I spent years on calculating the correct market price in every country we sold our products.  Of course that was simple before the internet, but once the world opened up a whole new set of rules came into play.  Setting local pricing is a whole new challenge when with a few clicks of a mouse you can source a product from India, even though you are located in the UK or US.  

 

That really is a challenge with exclusive Distributor contracts...

 

I digress, lets move on….

 

Sorry to head back to this, but ref your iPad example:

 

Apple sell their products pretty much on a dollars for pounds price in the US and UK market. Just before Christmas I wanted a new iPod Nano, which retails here in UK for around £120 for the model I wanted. My Mrs went over to New York in November to do some Christmas shopping and got the exact same model, same spec, same colour, brand new for $120 which at the time was about £80.

 

Keeping with the electronics theme, but the opposite end of the spectrum. Microsoft released their new XboxOne games console in November last year. Release price in the UK was £429 while the release price in the US was (I think) $499. Same console, same spec, but the UK price translated to something like $680 at the time.

 

Comparing items across international borders and currencies should be done with extreme caution, there isn't a consistent pricing model to base any comparison on.

 

Mark

[JSpencer]

I personally don,t really set goals or limits on stock I buy. Although I did come close a few years ago when both Hornby and Bachmann produced there Pullman DMU and EMU sets plus a whole host of other items I fancied.

 

This year 4 locos caught got ordered from Hornby (Maybe a 5th once I know the numbers of a crosti). Bachmann propose 3 new models, so there may be one or two additional orders there (and perhaps a class 20 with sound). A Rapido NRM APT-E could add to the list..

 

So there is (or rather was) room for price increases. But even here there are limits.

 

Could I see myself spending £200 a loco? Only if sound is fitted (or it's a garret). I can afford it but the models which give me greatest pleasure today are not those which cost the most. Indeed it is often those I paid a modest price for and then enhanced.

[Mel_H]

[big Snip]

 

Not a good comparison, I'm afraid. The Spectrum K4 tooling has been earning it's keep for Bachmann for upwards of 20 years now.

 

A fairer comparison would be a newer Athearn Genesis model - say a SP Mountain - made in China, announced 2010, only just generally available: list price $299.98. Add $100 to that if you want DCC & Sound.

And similar for the new Walthers 0-8-0 tender engine; sadly, I can't afford/justify it...

[Jol Wilkinson]

A question for those in the trade as regards the Blue Pullman. If a new release of a complete set is financially unacceptable because of the end price of a full 6 car set, is there any mileage in replicating the Hornby setup with the Brighton Belle (or Javalin set)? i.e. sell say a 4 car set (the two driving cars plus one kitchen and one intermediate saloon) with a second coach pack available separately (and possibly produced in a smaller quantity than the main set in view of the price and also the space a full 6 car rake takes up) for those who wish to make it up into a full rake.

While that's a logical argument from a collectors/modellers perspective, would you care to bet your annual salary on what production volumes you should order for the different sets? 

 

If such an option looks viable, I am sure Bachmann would consider it. Of course the great intangible is knowing what the customer really wants (other than an O6). 

[Les1952]

Just a thought...

 

 

As disposable income hasn't risen by 20% this year then the 20% price hike means we most likely buy fewer models.

 

This in turn makes the bigger production runs less viable- less likely to move off the shelves quickly.

 

Given that Dapol (and DJM?) have very much smaller production runs than Bachmann and Hornby, might these smaller manufacturers actually gain market share (in a smaller market perhaps) from the rises?

 

The logic being we might be more likely to cut buying the second X or the third Y from a run of 5000 while still buying the only Z from a run of 300.....

 

As I said, just a thought

Les

[7013]

Certainly plenty of food for thought here, especially in the light of Hornby prices going up. Both Bachmanns and Hornby's prices I am sure are going to squeeze some people out of the hobby and seriously curtail the amount of models that will be bought by others. I will have to seriously consider what I buy in future as my income is pretty well fixed. I have already cancelled three pre orders and will probably only be able to afford one maybe two locos a year from now on instead of the average of three or four in the past.

One wonders what direction the hobby will take in the future, hopefully the future is rosey, and it may well be for some, for others it could be the straw that breaks the Camels back

[Doughnut]

As in many, many previous cases it's not what you're saying but the way that you go about it. Your post made it appear you'd disregarded the time and effort expended in crediting readers with a full and frank briefing so that it would reduce the likelihood of sensationalised irrelevancies. People were congratulating Bachmann on their approach and not necessarily the price rise. But in all such topics there's always someone who misses the point in their bid to say 'something'.

Fair enough!  I accept your point. But 20 % is 20 %..and it's alot! I speak as I find myself..and I am struggling to stay in this wonderful hobby of ours with price rises on this level.

 

Dave

[farren]

I can see this hurting some and my be forcing some out of the hobby. I know someone has already said that the second hand market could be a fallback though it could have been put more elegantly. It can be very disheartening and of putting seeing you long time dream locomotive out of your price range.

 

I have already decided to carry on buying the locomotives at a reduced rate 2to3 a year for now. But this price raise is just a short term solution. What Bachmann does next I think will be more important. Another 20% rise would very bad for the hobby if it happens in a year or two. As people's pay needs time to catch up. So I would settle for less detail. Maybe black fright locos to come with a nice bag of bits and transfers then just bang them out year in Year out then we can all do some modelling to a level of our liking.

[richierich]

I was reflecting on the comment reported from the Bachmann press conference concerning detail levels, and exemplified by the quote below items such as sprung buffers adding cost. We've seen a similar trend from Hornby to new tooling such as the new Mk2e carriage, to integrate what previously would have been separate detail parts. So as we can see this increases production costs in terms of tooling, production of parts, assembly, and hence increases the retail price. But within the market there is a trade off between the price and hence quantity sold. Yet the consumer expectation is for a higher quality, detail, paint finish etc. So you can start to see the dilemma the manufacturers are in to keep their margin and hence a profitable business, while keeping market share with a product that appeals to the consumer.

 

So for Hornby they have gone down the route of producing smart design and tooling, which can offer differing levels of detail, and hence possibly three brand / product lines, Railroad, Mainstream and a "Premium' i.e. DCC fitted, interior lighting or other premium features, so appealing to all of the market. This is not unlike what you see in the supermarkets like Tesco. Bachmann have yet to follow this route, instead offering one product line to appeal to all the market place. In the German model rail market, we see different brands, aiming at different sectors of the market.

 

Therefore we can speculate whether Bachmann may follow Hornby's approach, and offer a diverse product line to appeal to all sectors of the market. Or pursue a specific market segment. 

 

One interesting approach to the market was from Vi Trains. They produce models to a high detail standard, with many different detail parts, but the difference is these are left to be fitted by the end user. So a clever way to maintain the high level of detail using separate parts, yet remove these from the production costs. However the anecdotal evidence from this forum hasn't widely accepted this approach (although some modellers prefer this approach), but then it possibly depends on the confidence and attitude of the modeller to finish of the model.

 

So personally I think we're in for interesting times in terms of new tooling, models and pricing as the manufacturers try to keep the market happy. The days of models with the level of super detail such as the Hornby Diesels like the Class 08 / 09 / 30 / 31 / 50 / 56 / 60, Seacows, etc maybe over unless the market is willing to pay for this. Smart tooling can only replicate these features to a point. I personally prefer models to this higher level of detail, rather than buying a model to a lower level of detail, then using third party detailing parts, to try and equally a factory made and finished model, but that is my preference. Other people in the market may prefer a lower level of detail / finish. Interesting times. . . .

 

 

 

 

Although Bachmann are still committed to upgrading older models to ensure DCC compatability and NEM coupling pockets they are questioning what levels of detail the marketplace is prepared to pay for; opening doors and revolving fans would be prohibitive and it's surprising to tell that adding sprung buffers can increase the RRP of a loco by around £15.00, a feature which most customers would have no need or use of the feature as they wouldn't even operate as a real buffer would.

 

 

[bigherb]

Chris

 

I think Martyn's point was that if you are going to effectively write off tooling costs by not producing any more because production is expensive, then why not continue to write off the tooling (because production is expensive), produce some models and make a profit from them? In both cases you have written off the tooling costs, but if you actually produce something you can at least make some money!

 

Mike

The problem is there are only so many workers and so many hours in a day. If you can assemble three design clever models in the time it takes to assemble one top end model and you make £10 profit on the design clever and £15 profit on the top end model what would you make.

Figures are plucked out of the air to illustrate.

[Dunsignalling]

Interesting - so in theory Bachmann could sell a four car rake but make the two kitchen vehicles available separately (in a similar manor to the Brighton Belle unit).

 

Alternatively (and assuming its just a wiring / coupling alteration) maybe the 'split' between half sets could occur at 1/3rd of a six car set (i.e. between a kitchen car and the adjacent parlour) allowing another parlour + kitchen car combo  to be added later. The downside of this approch of course is that the couplings fitted to the kitchen +parlour in the set would have to be different to the add on coach pack which would complicate things and seeing as the whole point is to reduce the retail price this may not work.

Bad idea. I definitely wouldn't buy any so-called set unless I could be certain of getting all of it. As for adding to such a set at a later date, the industry just doesn't operate that way any more.  

 

Hornby's rather stupid policy has left some dealers and would-be buyers of Brighton Belles stuck with incomplete sets, probably because some customers have been buying certain cars only with the intention of using them other than as designed (e.g in a VSOE set).

 

The only way to ensure this doesn't happen is to do as Bachmann did and sell the complete set as a single item. Anyone for whom some cars are superfluous can always sell them on. However, I can't imagine why anybody would want them and doing so would make the remainder of the set virtually worthless for resale.

 

How on earth would anybody judge the relative demand for the basic set and add-on packs? It would be necessary to produce equal quantities and price the four car unit high enough to cover any losses incurred from unsold add-on packs so nobody would really benefit.

 

Producing the prototypical set and leaving any modellers licence to the modeller was the only sensible course.

 

John

[Silverstreak]

So we are now up to fourteen pages.  So really what have we learnt.

 

Surely just two things.

 

Prices are going up

 

and Mr Hubbard will never see an Q6 released on his watch

 

No real surprises there then

[Dunsignalling]

Certainly plenty of food for thought here, especially in the light of Hornby prices going up. Both Bachmanns and Hornby's prices I am sure are going to squeeze some people out of the hobby and seriously curtail the amount of models that will be bought by others. I will have to seriously consider what I buy in future as my income is pretty well fixed. I have already cancelled three pre orders and will probably only be able to afford one maybe two locos a year from now on instead of the average of three or four in the past.

One wonders what direction the hobby will take in the future, hopefully the future is rosey, and it may well be for some, for others it could be the straw that breaks the Camels back

My loco purchases probably average about 6 a year but it's been two or three years since more than half have been items that it would have really bothered me to do without.

 

I reckon that makes me half modeller, half collector (which I'm not entirely happy about). My income is likewise, fixed and I have already decided that, if necessary, I'll do without the "collector" items i "fancy" (and trade in existing ones) to ensure I can afford those that I want as a "modeller".

 

Whether I then regard my glass to be half-full or half-empty will depend on my mood!

 

I don't know what your "mix" is but, if I am honest, I already have more than enough in the cupboard to ensure continued enjoyment of the hobby for many years without buying anything else!

 

John

[ThaneofFife]

Why would the level of the increase surprise you? It is consistent with what Hornby did way back in January, so I think it would only be a surprise if you believed that Hornby are an evil empire always out to shaft the modeller, while Bachmann are saintly types unencumbered by the filthy world of economics! Whereas we now know that both groups were making losses last year.

 

A plc is probably under more direct pressure than a subsidiary, but loss-making isn't sustainable for either. And, interestingly, both now seem to have adopted a mixture of "design clever" and price increases - apparently similar levels of both - whereas we might have seen divergent strategies emerging. The latter are now left to Rapido and, maybe, DJM.

 

Apologies if that post comes across as egg-sucking.

 

Paul

Apology accepted as i really pay very little attention to Hornby these days....i always thought Hornby were more expensive in generic terms because they subbed out manufacturing whereas Bachmann was effectively inhouse unless ive hot that wrong? However in terms of materials shipping labour and other costs, Bachmann would have started out with the same chinese economy that Hornby did in recent years only Bachmann chose to set their rrps much lower than its competitors (was that down to the aforementioned inhouse production?) so i still wonder how you arrive at this level of rise in a year. maybe the workers are now so savvy they threaten to jump bachmanns ship with the threat of better wages elsewhere so rather than lose good staff Bachmann concede.....

 

oh who knows.there can be hundreds of variables to explain this away if you really have to find something to cling onto to singbthe praises of a price rise. i dont pretend to know the indiosyncrancies of the chinese model railway manufacturing sector. Speaking purely as a man of straw to me 20% in one big annual lump of disappointment on top of last years 15% just suggests a manufacturer out to now play catch up with the rest of the market maybe from worker pressure maybe from shareholder pressure. i dont know if thats driven by the economy or a new found desire to be on a level playing field as the competition in terms of pricing.

it does spell the end of the party in terms of great models at pretty easily affordable prices for the masses.

 

on the subject of now seeing some crazy prices on ebay i think this will only get crazier now.

[Jol Wilkinson]

ToF,

 

how about a bit more conjecture, which this thread is full of anyway.

 

Perhaps Bachmann set it's RRP's low in an attempt to put Hornby out of business. As it owned/came to own the manufacturing facility that put it in an even stronger position. 

 

Or,

 

Bachmann set lower prices and aimed for better quality to establish it's brand so that it could capitalise on that later. Hornby has become the bad boy of RTR manufacturers following Bachmanns performance so perhaps that is what they were after. A strong brand enables you to more effectively control prices, distribution, etc. 

 

Or,

 

Bachmann had a better vision of what would happen when the Chinese economy became stronger and decided to take advantage of the collector/modellers desire for as many models as they can afford. Have they created a desire in many people to want to buy models for the short term fix provided by the thrill of the purchase. 

 

Reading some of the posts in this thread it seems clear that, for some, the hobby is definitely more about buying/collecting (and possibly selling) models than creating a layout and obtaining the relevant stock to run on it. Clearly, a major (and possibly repeated) substantial price rise will hurt those collecting models for the fun of it rather more. And given the increase in the number of traders operating on ebay and online retailers/shops looking to get revenue from s/h then that isn't going to provide so much opportunity for those with a limited budget either.

 

Jol

[shunny]

I think the point here is that Bachmann have to have a viable business and to this end make money. A few people have said they will buy less because of this increase but from Bachmann's point of view this is not all bad if you buy 10 models and only 6 of these at present make Bachmann a profit then this year you buy 8 models but with price rise they make profit on all 8 they have increased the profits and long term viability of company.

[dibber25]

Apology accepted as i really pay very little attention to Hornby these days....i always thought Hornby were more expensive in generic terms because they subbed out manufacturing whereas Bachmann was effectively inhouse unless ive hot that wrong? However in terms of materials shipping labour and other costs, Bachmann would have started out with the same chinese economy that Hornby did in recent years only Bachmann chose to set their rrps much lower than its competitors (was that down to the aforementioned inhouse production?) so i still wonder how you arrive at this level of rise in a year. maybe the workers are now so savvy they threaten to jump bachmanns ship with the threat of better wages elsewhere so rather than lose good staff Bachmann concede.....

 

oh who knows.there can be hundreds of variables to explain this away if you really have to find something to cling onto to singbthe praises of a price rise. i dont pretend to know the indiosyncrancies of the chinese model railway manufacturing sector. Speaking purely as a man of straw to me 20% in one big annual lump of disappointment on top of last years 15% just suggests a manufacturer out to now play catch up with the rest of the market maybe from worker pressure maybe from shareholder pressure. i dont know if thats driven by the economy or a new found desire to be on a level playing field as the competition in terms of pricing.

it does spell the end of the party in terms of great models at pretty easily affordable prices for the masses.

 

on the subject of now seeing some crazy prices on ebay i think this will only get crazier now.

But if you read the original post by Andy, Bachmann have explained the idiosyncrasies of Chinese manufacturing and it has nothing to do with in-house or out of house manufacturing (in fact at one point Sanda Kan who manufactured Hornby also owned a stake in Hornby) nor does it have anything to do with playing catch up - other than Chinese workers playing catch-up with western ones. The staffing situation was explained, too, with Kader unable to retain staff which are recruited away by organisations which can pay more. There is also a Chinese government law which increases wages by 20% per year for the next five years. Bachmann can't escape any of this - and that has been explained.

[t-b-g]

All this talk of people being "forced out" of the hobby seems a bit melodramatic.

 

If people leave the hobby it will be because they choose to go, rather than that they are forced out.

 

My financial circumstances over the last few years have prevented me from spending any significant amounts on the hobby. I have purchased the grand total of 2 RTR loco in the last (approximately) 10 years.

 

I have still enjoyed the hobby greatly, building layouts from offcuts of wood. Using mechanical point rodding instead of motors and either building kits from my stash (the one that has been building up as I pick up things cheaply on S/H stalls) or I get out the plasticard and a drawing and make something from scratch.

 

This hobby can be either an expensive one or it can be quite economical and it is a matter of personal decisions and choice.

 

Anybody that feels that they can't manage to stay in the hobby because they can't afford 5 new RTR locos and will have to make do with only 4 is really just complaining that they want the supply of super detailed, low cost models to continue for ever.

 

As most of us don't have layouts where we can run more than one or two locos at a time, we really don't have to have have dozens to make a layout worthwhile and enjoyable. All we need is to design a layout to be operated by what we can manage to build/purchase to run on it.

 

If anybody really feels that they can only continue in the hobby if they can afford a continuous stream of new purchases, then I can't help but think that they might find an answer in looking at other ways of getting their enjoyment from model railways.

 

Tony 

[Andy Y]

An excellent post Tony. I'll be running a poll next week so users can respond on how an increase may affect their modelling/spending so it will be interesting to see what the balance is; although I'd guess that the majority will be fairly practical and pragmatic about it with a small reduction in purchasing rather than switching buying habits.

[Oldddudders]

Way back when, Cyril Freezer in RM sought to address the situation where a modeller had got a long way with the layout, and was undecided what to do next. His advice "Add a loco". Buying multiple locos in one year was an implausible concept for most of RM's intended audience of Average Enthusiasts.

 

I'm not sure all those seething about Bachmann prices have aired their layouts on here - as I haven't. But perhaps more attention to the layout, less to new RTR purchases, would keep them contentedly in the hobby? And the Layouts threads would be even more rewarding than now?