Bachmann - why price increases are necessary

[Coombe Barton]

... or I get out the plasticard and a drawing and make something from scratch.

WOW! A modeller.

 

However did you stray onto this thread?

 

My last new RTR purchase was over 30 years ago, and last year I bought two items (a 14xx and autocoach) secondhand - both of which are now in process of butchery. I suspect that there may me many other like ourselves, somewhere.

[Clive Mortimore]

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 

Hi Tony

 

I agree with your statement. I have periods of unemployment where my hobby spending went to almost zero. I still had my models and my layout so I could still play trains. I also carried on modelling.

Plastic card is not expensive and the second hand chassis was a Xmas present.

[Coombe Barton]

My real concern at the moment Is now, for my magnum opus BLT, is how I can get together enough GW cattle wagons - I will need 20-30. The Coopercraft is rare (I have two in the kit stash both of which will need modifying for suspension and buffering. The other brass offering lacks suspension.

 

So do I learn how to etch, buy a GW riveting tool, cut up plasticard, or do something else. RTR is not an option.

 

I know that this is off topic for this thread, but the hobby is composed of more than collectors, and in response to Andy's survey - my answer will be that it won't affect me at all, except maybe for some Woodland Scenics stuff.

[Oakydoke]

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.

Mark

You have not accounted for....

the 20% VAT that's included in the UK price,

or the 8.875% NYC sales tax that isn't included in the New York price.

As source pricing is in US Dollars, the UK price will also include a currency hedging element and that's before you factor in that the cost of wholesaling and retailing (the overheads) is far more expensive in the UK, due to higher property rents, business rates etc.

 

On top of that there is indeed a mark up relative to what the market will stand, but it's far less than you suppose from just the retail ticket price of the goods.

[t-b-g]

WOW! A modeller.

 

However did you stray onto this thread?

 

My last new RTR purchase was over 30 years ago, and last year I bought two items (a 14xx and autocoach) secondhand - both of which are now in process of butchery. I suspect that there may me many other like ourselves, somewhere.

 

When you model the GCR in pre-grouping times you either make things yourself or give up!

 

One scratchbuilt wagon gives me more pleasure from the hobby than a hundred RTR locos but I know very well that not everybody feels the same.

 

Tony

[t-b-g]

My real concern at the moment Is now, for my magnum opus BLT, is how I can get together enough GW cattle wagons - I will need 20-30. The Coopercraft is rare (I have two in the kit stash both of which will need modifying for suspension and buffering. The other brass offering lacks suspension.

 

So do I learn how to etch, buy a GW riveting tool, cut up plasticard, or do something else. RTR is not an option.

 

I know that this is off topic for this thread, but the hobby is composed of more than collectors, and in response to Andy's survey - my answer will be that it won't affect me at all, except maybe for some Woodland Scenics stuff.

 

Wasn't there an article in RM about converting the old Airfix plastic kit into a GWR version?  Sorry it is a bit off topic but thought it might be worth a mention.

 

Tony

[Tony Burgess]

"Well done Bachmann"...are you serious? Do you send letters of congratulation to the big 6 energy firms every time they hike up the Gas & electric bills? 20% increase. What's inflation running at? What's the average payrise figure? Im going to leave this thread as I'm not sure which makes me more disconsolate....the thread headline or the responses!

 

Dave

Well I'm only still on the 30 April postings!  Someone else has almost certainly drawn attention already but with the £/US$ having strengthened by 5%, 8%? or so over the last year, and with Bachmann Europe contracted to buy from China in US$, doesn't the actual increase amount to 25% or more?

 

I'm of the opinion that these prices will lead to fewer sales.  And really discourage younger members into the hobby.  Bachmann is my preferred choice amongst the RTR manufacturers, and I wish them only well.  But managing any further decline in UK sales volumes will be far from easy.

 

For models of roughly the same quality etc, UK prices have been higher than US (yes, they pay a $ for the £ we pay, ie about 1/3 less expensive) and less than eg Germany (maybe 50-60% higher?).  I've never been persuaded this was all about market size and quantity of product run.  Commercial business usually charge what a market place will stand.  I believe Bachmann may well step back from this 20% position.

[Fenman]

Well I'm only still on the 30 April postings!  Someone else has almost certainly drawn attention already but with the £/US$ having strengthened by 5%, 8%? or so over the last year, and with Bachmann Europe contracted to buy from China in US$, doesn't the actual increase amount to 25% or more?

 

I'm of the opinion that these prices will lead to fewer sales.  And really discourage younger members into the hobby.  Bachmann is my preferred choice amongst the RTR manufacturers, and I wish them only well.  But managing any further decline in UK sales volumes will be far from easy.

 

For models of roughly the same quality etc, UK prices have been higher than US (yes, they pay a $ for the £ we pay, ie about 1/3 less expensive) and less than eg Germany (maybe 50-60% higher?).  I've never been persuaded this was all about market size and quantity of product run.  Commercial business usually charge what a market place will stand.  I believe Bachmann may well step back from this 20% position.

 

Intriguing: so you don't think it matters that Bachmann made losses on (some of?) their model sales last year? We also know Hornby made losses last year - big losses.

 

Your view is that the most important thing to these companies should be sales volumes, and if they make a loss on each unit they sell then it doesn't matter...?

 

An alternative perspective might be that if they make a loss on every sale, the fewer sales they make (assuming they reduce overheads too - like Hornby has just done) the better for the company.

 

But if those fewer sales actually generate a profit, the company might well still be in business next year.

 

Paul 

[The Stationmaster]

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.

 

I think what is likely to change is the 'acquiring' market - those who buy something because it is there but is of little relevance to their modelling theme or era but gets good reviews and becomes a 'must have', simply because it is there.  

 

The (true) collector market is rather different and usually follows a theme even if that theme happens to be one of everything Bachmann makes (including variants) or one of everything anybody makes for a particular railway and so on.  That market is also governed by available spending power but generally most UK collecting markets where prices are high tend to be populated by older people who can afford to be in them so might not change so much as the 'acquiring' market which appears to have a much wider demographic.

 

Many of us fall between two stools - I stock for the 'dream layout' scenario so if something comes along which fits that scenario and I can afford it I buy it.  I also admit to collecting NRM/Locomotion and Steam (Swindon) issues for the simple reason that I like them (usually), it supports the museums, and I can afford to do so (at present).  That might change of course if prices rise but equally it all depends on what comes into the market when and if I am faced with a choice the layout scenario purchase will win.

 

So a bit of a jumble of views but overall I can see the impulse purchase 'acquiring' market shrinking a bit (and maybe then recovering?) while the other market areas will remain fairly steady as long as price rises are not too harsh and provided we continue to get what we perceive as value for our money.  And I hope the poll will include that latter point as well as a addressing the more obvious issue of price.

[Andy Y]

Another factor which may introduce further variability into the pricing is that of the R&D tooling process; let's say the research elements are carried out in the source country with little change in the labour cost the manufacturer them moves on to Chinese labour in converting research/dimensioned CAD into tooling CADs which equates to a lot of hours which are facing the increases detailed above. Let's assume that the cost of metals for the tools etc and any machinery increases by the 20% too. What then is of importance is the size of the production run for each market. So let's say a UK product has a production run of 5,000 units whereas the US product has a production run of 10,000 units then the impact of the increases relating to everything before a model is produced for the UK is double what the increase may be for the US.

 

(Of course this doesn't have to be about UK vs US products but it could be any product which requires the same amount of R&D and preparation but has varying production run sizes.)

[trisonic]

And to keep this in perspective dept.

 

US Customs at Newark Airport confiscated a shipment of “fake” Gibson, Fender, Martin and Taylor guitars shipped from China, this week. At a cursory glance they looked good quality but looking closer most appeared to veer between the “unplayable” and the “playable with a lot of work”.

 

Yet, these guitars were going to be sold online at prices starting at $500.00.... and they would have sold. This is in a market where an accurate fake of the 3D logo on my Gibson ’58 “Flying V” sells at over $500.00 - just for the logo. It’s a strange world we live in nowadays.

 

Andy got it spot on in post #346 above.

 

Best, Pete.

[Philip Jackson]

maybe a subject for another topic, in order to cut down on costs for the end buyer, we have the option of purchasing the model as a kit of parts that only requires glue and / or screwdriver to complete, a bit like Dapol's coach kits?

[2ManySpams]

I think what is likely to change is the 'acquiring' market - those who buy something because it is there but is of little relevance to their modelling theme or era but gets good reviews and becomes a 'must have', simply because it is there.  

 

The (true) collector market is rather different and usually follows a theme even if that theme happens to be one of everything Bachmann makes (including variants) or one of everything anybody makes for a particular railway and so on.  That market is also governed by available spending power but generally most UK collecting markets where prices are high tend to be populated by older people who can afford to be in them so might not change so much as the 'acquiring' market which appears to have a much wider demographic.

 

Many of us fall between two stools - I stock for the 'dream layout' scenario so if something comes along which fits that scenario and I can afford it I buy it.  I also admit to collecting NRM/Locomotion and Steam (Swindon) issues for the simple reason that I like them (usually), it supports the museums, and I can afford to do so (at present).  That might change of course if prices rise but equally it all depends on what comes into the market when and if I am faced with a choice the layout scenario purchase will win.

 

So a bit of a jumble of views but overall I can see the impulse purchase 'acquiring' market shrinking a bit (and maybe then recovering?) while the other market areas will remain fairly steady as long as price rises are not too harsh and provided we continue to get what we perceive as value for our money.  And I hope the poll will include that latter point as well as a addressing the more obvious issue of price.

 

I agree Mike.

 

With a move to 7mm for my first solitary project has come a change in mindset. I can't afford the prices of all the things I'd like and so efforts have concentrated on:

~ reducing the scope of the layout so that less is required

~ learning to make more myself

~ moving away from impulse purchases of things because they are 'nice'

~ accepting it will be a long-term, slow burn project

 

It takes a lot of self control but the outcome has been learning new skills and being really happy with what I've achieved so far.

 

With my 4mm Southern collection I was fast becoming more a collector than a modeller and, until recent years, had got used to buying locos such as Spam Cans off eBay at ridiculously low prices - the lowest being £30 mint boxed. Prices have since been steadily going up and I don't think I've bought a RTR item 4mm in the last 2yrs. It hasn't however stopped me modelling. Surely there's more to being a railway modeller than buying as much RTR as humanly possible. 

 

In my own world, I'm still continuing with 4mm but will be taking a long hard look at the collection and weeding out all the impulse buys and thinning the quantities of stock down to reasonable levels. In a way the RTR price increases may be beneficial to my modelling budget as some items may sell for more than I paid for them during the time of low prices and plenty. 

 

Some of the language and demands used in this thread reminded me of the advice given in a couple of signs that were displayed in a South African township school in a very poor area.

 

The first regards wanting more and perhaps the price increases will make us all think more about what we already have and and less about what we don't have:

 

The second perhaps should be considered more by us all when we post on threads like this:

 

And on that note I'm off into the garage to work on the layout.

[Phil Parker]

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.

 

I'd agree. It's a bit like being forced out of driving because you can't afford a Ferrari. There are lots of models out on the second hand market and yes, they aren't quite as good as the very latest RTR but unless you are building museum quality, they will be of a similar standard to the rest of the layout. If you want to upgrade, all those bits from Craftsman and other cottage industry people are still out there and are now supplemented by the likes of Shawplan.

 

I can see that if you a re a collector who really must have every RTR model as it comes out, this is going to hurt. However for a layout, do you need everything? Perhaps this might cause people to look at the stock they need and target the purchases accordingly. OK, it's not the same fun as an endless collection of new boxes, but it is still fun to make things. For Edgeworth, I reckon we need 2 or 3 locos, 3 coaches and about 8 wagons. Lots of people have suggested they would like to build something similar so perhaps that's where the future lies.

 

Or, maybe, it will involve a spread of interests. Browsing eBay earlier, I notice that LGB locos can be bought for the same sort of money as a OO loco. An 7mm scale Ixion Hudswell Clarke costs £225, not that far from the eventual price of Bachy stuff which isn't surprising as the R&D is probably very similar, materials costs not that much more and the same amount of hand assembly. Maybe a resurgence in O gauge too then.

 

Also, to those predicting the "death of the hobby" - it existed back in the 1940s when you had to carve everything out of discarded Lancaster bomber parts* and Spam. It was just different. Anyone want to tell me that they wouldn't like to produce something to match Ahern and Denny?

 

 

*Lancaster bomb control panels featured on several layouts in old Railway Modellers. I've always wanted to build one in to one of my own but they seem scarce nowadays.

[Phil Parker]

maybe a subject for another topic, in order to cut down on costs for the end buyer, we have the option of purchasing the model as a kit of parts that only requires glue and / or screwdriver to complete, a bit like Dapol's coach kits?

 

Anyone got the moulds for K's kits? They were exactly this - locos that could be built with just a screwdriver. The chassis were a bit basic as they were built down to a price, but the concept was good.

 

In modern times, we have DJH starter kits. No soldering there and only glue assembly. The price is high as there is a lot of R&D to produce something so simple to build but if spread over a much larger number of units, this would come down.

 

 

We would come back to the problem that a lot of people simply don't want to make anything. I once wrote a 4 page article on pushing the bits on ViTrains models in to the pre-drilled holes as according to many posters on a popular forum, this was far too hard for them to do! I wonder if more people would be willing to learn if it kept the price down significantly on a RTR model?

 

 

[Smiffy2]

I remember in the late 50s it was the thing to scratch build using cut up oil cans. Really.

Mostly I miss metal toothpaste tubes, though. Lovely for tarpaulins.

[Fenman]

... For the time being I'm going to reappraise my 2000+ loco collection, almost certainly cancel my pre-orders and adopt a wait an see on each one made) 71000 on the cheap I understand, yet another Schools, Jubilee I will not...2012's 45659 Drake reproduced at 1991's 45552 Silver Jubilee quality but sold at 45593 Kolhapurs digital price I'll just laugh at. ... Don't panic, if you've got something to sell wait a few weeks it could be worth your while, let the lions eat each other.

 

Forgive me for this, but if you have a collection of more than TWO THOUSAND locos can I suggest that you might already have enough to keep you going for the time being? Unless your layout is very much bigger than anything I can imagine.

 

Assume a nominal cost of £50 each. 2,000 @ £50 = £100,000.

 

You could always flog one or two at the current inflated eBay prices, if you want to buy something new instead?

 

Paul

[Fenman]

I think he meant the year 2000 onwards..... i hope

 

 

Yes, I think you may be right! My mind was boggling.

 

Although he's now edited it to say "000+" collection. So maybe he did mean that he owns >2,000 locos. 

 

Paul

[woodenhead]

Let's get this all into perspective.

 

Model trains, it's a hobby, hobbies are generally expensive but it's the last thing you spend money on after your basic living costs if you have anything left.

 

If you normally buy 5 trains a year you can still buy 4 at the new prices and it won't cost any extra, in fact Bachmann have done you a favour as they are only releasing three new models in each gauge this year so that's three new ones and one from the existing lines you can buy.

 

As Tony G and others have said, there are plenty of ways to save money and at the same time raise your sense of accomplishment on your railways.

 

If we were talking about a rise in the cost of milk or meat I could understand anger and panic, but these are 'toys' at the end of the day.

 

We cannot expect high quality models at pittance prices, remember there is somebody in China putting these together. That person is not rich and exists in the same world as us with the same pressures to provide for a family in an inflationary environment. If the Chinese government want to improve living standards for its poorest paid workers then that sounds like it is doing its job.

 

Now I'll shut up and go back to contemplating my MRI scan on my brain tomorrow evening,

[Andy Y]

http://www.rmweb.co.uk/community/index.php?/topic/85287-Bachmann-why-price-increases-are-necessary/?p=1438832

 

Let's just leave the ranty hyperbole out of the topic please - I have asked before.

[Miss Prism]

Although I didn't agree with all the points made in #348, I don't think it merited being classed as 'ranty hyperbole'.

[Dunsignalling]

Wasn't there an article in RM about converting the old Airfix plastic kit into a GWR version?  Sorry it is a bit off topic but thought it might be worth a mention.

 

Tony

August 1978, by Brian Huxley. It also covers converting the old Hornby Dublo model (now made by Dapol on a plastic chassis).

 

John

[Butler Henderson]

To put the increase in perspective the new average price will represent a 2% increase in the cost of buying from a discounting box shifter, ignoring postage costs, compared to paying the old full list price in your non discounting local supplier. For example a £100 model on the old price list will be £120, which with 15% Bachmann fixed box shifter discount becomes £102. So it will be a case of having to pay slightly more than the old list price rather than getting the discount previously expected by many.

 

The three OO new announcements are on top of the various items awaited from last years, and before, announcment and I would imagine more than 3 new items will be released before next Marchs announcments, but probably not the 3 that are going to be announced.

[Butler Henderson]

Anyone got the moulds for K's kits? They were exactly this - locos that could be built with just a screwdriver. The chassis were a bit basic as they were built down to a price,

 

We would come back to the problem that a lot of people simply don't want to make anything. I once wrote a 4 page article on pushing the bits on ViTrains models in to the pre-drilled holes as according to many posters on a popular forum, this was far too hard for them to do! I wonder if more people would be willing to learn if it kept the price down significantly on a RTR model?

Add up the cost of paint, transfers, wheels, motor and gearbox and even at the increased price the ready to run models are still a good buy. As for fitting extras I noticed on my Bachmann Dukedog the instructions imply the vac pipes etc have to be fitted whereas they already are, leaving just the coupling hook and screw coupling to be fitted, a clear cost saving could be made without any additional or amended documentation being neeeded.

[Miss Prism]

Another factor which may introduce further variability into the pricing is that of the R&D tooling process; let's say the research elements are carried out in the source country with little change in the labour cost the manufacturer them moves on to Chinese labour in converting research/dimensioned CAD into tooling CADs which equates to a lot of hours which are facing the increases detailed above.

Good point, and although it could be argued that the tooling CADs will still be cheaper (albeit increasingly less so) if outsourced to China, I do wonder about the efficiency of the process, namely the amount of time being spent in the to-ing and fro-ing of iterative design information (and all the language difficulties involved therein). Bachmann's current style of development cycle has a lot to commend it, but the EP samples and their sometimes lengthy review processes must add up to a lot of time being spent by both parties reviewing and trying to understand each other's work. To this end, the early publication of design CAD visuals, as pioneered by Dapol in its DJM era, seems to be a more efficient approach, and maximises the chances of mistakes being picked up before the tooling CADs are finalised and metal is cut.

 

Dapol's current 7mm wagon avenue is a spectacular example of how not to do it. Putting rivets (etc) in the wrong place costs as much as putting them in the right place.