Bachmann Branchline announcements for 2015/6

[Ozexpatriate]

It happened with lgb and many bemoan the higher price putting off new starters.

This is why Hornby has a "RAILROAD" range and why Mr. Kohler talks about the importance of traditional train sets. Hornby's execution there is uneven, but the intent is clear.

 

We might see more emphasis on the Bachmann Jr. range or more likely something in between that and their regular range, if the price point makes sense.

[Dunsignalling]

There is a perfectly logical outcome of the interplay between Bachmann's need to make their products profitable and some customers' reluctance to pay increased prices.  

 

1. Work out what price they need to charge in order to make the required return on the proposed product.

 

2. Work out how many of them their customers will be willing to buy at that price.

 

3. Make that number.

 

Something else follows inexorably from that; a switch to making models to subscription/pre-order only in order to make 1,2 and 3 work efficiently.

 

It is pretty much how Rapido work but, if an established manufacturer adopted a similar policy, it would fundamentally change the way the r-t-r end of the hobby functions. If copied by other players (and, if Bachmann did it successfully, others would almost certainly follow) it would destroy most of the retail trade.

 

Venting our feelings on here is one thing, but If enough purchasers cease to buy Bachmann models at the prices they need to charge, this WILL come to pass.

 

I am beginning to think it may, one day, become inevitable. The only question is, how soon?

 

The other likely scenario is even worse, a complete withdrawal from the model railway market.

 

John  

[Jeff Smith]

Most of Bachmann's US models are very much at the trainset end of the market - on a par with the ex-Lima Hornby Railroad in terms of complexity etc. They don't compare with the Bachmann UK stuff which is generally better detailed and more complex. However, more to the point regarding the British models, I spent the whole of yesterday morning with Bachmann's Dennis Lovett and much of what we talked about was the issues of price and availability of supply. The two are at least partly linked, in that the Chinese factories will produce the items for which they get the most money. If you want the production slot, you have to pay the price. There is also a move to European-style pricing - that is, the factory expecting the same prices for British models as they get for the European models which are produced by the same staff on the same machines.

CHRIS LEIGH

Chris- the On30 locos I have are not basic by any means, all DCC equipped for less than $100 each. They come with exploded diagrams and several alternate parts such as lamps, chimneys, bogies, etc. Because of the scale they are larger than OO with plenty of exterior detail and substantial die-cast parts. However there are some train set HO locos as well.

[Ozexpatriate]

1. Work out what price they need to charge in order to make the required return on the proposed product.

 

2. Work out how many of them their customers will be willing to buy at that price.

 

3. Make that number.

 

Something else follows inexorably from that; a switch to making models to subscription/pre-order only in order to make 1,2 and 3 work efficiently.

 

It is pretty much how Rapido work but, if an established manufacturer adopted a similar policy, it would fundamentally change the way the r-t-r end of the hobby functions.

This is largely how the North American market is working today.

 

If copied by other players it would destroy most of the retail trade.

Not necessarily. It hasn't destroyed the retail trade in the US. I place my pre-orders with my semi-local shop. (It's about 20 miles or so away.)

 

Unfavourable trade terms by suppliers and an retail stores who do not have an internet presence are what will have a greater impact on the retail trade.

[Legend]

Good one Oz! (Referring to post 475)

 

Making a profit is not evil. Companies are not evil. But we all know they are not just there to provide models out of the kindness of their hearts. If companies get a sniff that they can make more money and they think the market will stand it they will charge the max. Hornby did it for years , now it appears Bachmann think they can do the same and even more.

 

My point is if we just say oh well that's the price , then you can expect prices to gravitate up. There needs to be more price resistance in the Model Railway market. We seem unique, we will accept any price on the basis it would cost us much more to make it ourselves, and when products are delivered with dodgy QC we fix it ourselves! Surely a unique band of consumers!

[Legend]

Most of Bachmann's US models are very much at the trainset end of the market - on a par with the ex-Lima Hornby Railroad in terms of complexity etc. They don't compare with the Bachmann UK stuff which is generally better detailed and more complex. However, more to the point regarding the British models, I spent the whole of yesterday morning with Bachmann's Dennis Lovett and much of what we talked about was the issues of price and availability of supply. The two are at least partly linked, in that the Chinese factories will produce the items for which they get the most money. If you want the production slot, you have to pay the price. There is also a move to European-style pricing - that is, the factory expecting the same prices for British models as they get for the European models which are produced by the same staff on the same machines.

CHRIS LEIGH

And going a little further that Kader expect the same margin on UK models as European ones which I'll bet is the real reason for price increases of 20% and 15% year on year. This is not the European market though with the disposable income or standard of living of Germany, Netherlands, Benelux countries for instance. This approach will price them out of the UK market.

[Ozexpatriate]

There needs to be more price resistance in the Model Railway market. We seem unique, we will accept any price on the basis it would cost us much more to make it ourselves, and when products are delivered with dodgy QC we fix it ourselves! Surely a unique band of consumers!

Hardly unique. Apple fan boys and girls are willing to pay top dollar for the latest Apple gadget, whatever the review says.

 

I think the suppliers have actually demonstrated a resistance to increase prices due to their recognition of the price sensitivity of the British market, which is fueled in part by a long 'make and mend' culture that probably dates even further back than post-war privations.

 

The evidence of this is higher prices for comparable quality in other markets - particularly in Europe and even in the larger US market.

 

Liliput v. Bachmann Branch-Line prices are a great example. A H0 Liliput 2-6-2T is £260 compared to a 00 45XX at £95. (Current prices.) Why is this? We have to presume both were made in essentially the same factory conditions by the same manufacturer. Is one brand subsidizing the other? Is the Liliput model priced at what the market will bear?

 

But to your point, people probably shouldn't buy products they won't really enjoy owning, arguably at any price.

[Dunsignalling]

Good one Oz!

 

Making a profit is not evil. Companies are not evil. But we all know they are not just there to provide models out of the kindness of their hearts. If companies get a sniff that they can make more money and they think the market will stand it they will charge the max. Hornby did it for years , now it appears Bachmann think they can do the same and even more.

 

My point is if we just say oh well that's the price , then you can expect prices to gravitate up. There needs to be more price resistance in the Model Railway market. We seem unique, we will accept any price on the basis it would cost us much more to make it ourselves, and when products are delivered with dodgy QC we fix it ourselves! Surely a unique band of consumers!

What degree of price resistance emerges in the UK model railway market will determine the business model that eventually emerges. 

 

We, on here, may think we can judge what might happen, but the number of contributors to this and similar threads represents a drop in the ocean (albeit a vocal one with definite opinions) for the trade. There are so many permutations of peoples' reactions to higher prices that how the market might move is very unpredictable.

 

A few examples that I've heard/read:

 

It costs what it costs but I have the cash and it's earning nothing in the bank.

 

I've got the cash but there's no way I'm paying that for it.

 

It costs what it costs but I only have the same amount of cash so I'll buy less and be more selective.

 

I'm willing to forgo detail in return for cheaper models (but bear in mind they'll still be dearer than they would have been a few years ago).

 

They are all too expensive so it'll have to be really special for me to buy one. 

 

They are all too expensive so I'll start making my own.

 

They are all too expensive and I already have more models than I can fit on my layout anyway.

 

 

Conclusions: 1. It's anybody's guess how it will eventually pan out overall.  2. It may not be how I would like it to be when it does settle down.

 

It could be anything from no change to either of the scenarios I outlined in post 484. Whatever happens, the only way prices will drop by very much is through a drastic reappraisal of specification. Design Clever by whatever name you wish to attach.

 

I think a reduction in output to match the demand from that segment of customers who are willing/able to pay the asking price (or something near it) is far more likely.

 

Why?

 

If (for example) Bachmann were to dumb down the specification of whatever coach follows the Hawksworth Auto-trailer sufficiently to shave a tenner off the cost of making it, many potential buyers might shave £20 off their perception of what it's worth. 

 

Personally, I think it unlikely they can or will change their minds significantly over pricing and the final batch of Presflo wagons (to cite the model that has attracted the most flak) has probably been made. The first releases were probably sold at a loss (20 of them to me) and they won't be able to cut the new price by enough to satisfy their critics so they just won't make any more.

 

John

[Roy P]

Is it true to say that in the grand scheme of things, railway modelling / model railroading is a bit of a niche hobby? British outline is a small part of that. I have always considered Kader to be a fairly large player in the more general realm of plastic moulded goods.

 

Maybe it’s just me (and Pat Hammond) that has any interest in the life and times of our “toy makers”, but looking at Bachmann Europe’s genesis from the days when Kader were producing models for Palitoy (the Action Man people) to Branchline celebrating its 25^th year as a stand-alone brand, one could be forgiven for wondering how they’ve actually lasted so long in such a fickle market.

 

Back in 1996 I had just moved house and was a stay at home dad with a young son. Money was seriously tight. I bought litlle’un a Hornby train set as you do and began looking at some of the other stuff available at the time. The new to me BRM had run some reviews of Bachmann products (J39, A4 and Ivatt tank) and I figured it would be nice to own one or two. When Tony Wright said of Bachmann’s worked over ex-Trix A4 – “Bachmann won’t be able to make enough of them”, I saved up for a “Union of South Africa”- £65 from Puffers of Kenton.  At the time £65 was lot of money to me and I treasured the thing. A Mk4 coach to extend the lad’s IC225 was about £15 from the Harrow Model Shop. Further additions were fairly few and far between back then. Things got better. For the last few years, if there has been anything that either of us really must have, there’s been a way to get it.

 

It’s now 2015 and we’re discussing Bachmann’s pricing policy. If we figure that the prices have doubled or more in the last twenty years with more to come, I need to remember that £150 means no more to me now than £65 did then. I just need to make similar judgements….. and maybe treasure the things again. As Combe Martin said (or shouted?) a couple of pages back “You don’t have to buy everything”.

 

If Bachmann (and Hornby) expect us to pay more for their products then ownership has to have some sort of aspirational aspect to it. Like an Andy Y photo of an NRM Special does. When a company the size of Kader is supplying goods, they may expect a greater return than they should from a niche market. If they then produce fewer products to cover less demand then their returns may reach a critical level if they can make more cash producing plastic combs.

 

 

Then what?

 

Maybe a niche market needs a niche manufacturer. One capable of producing what the customer wants when they want it. Over to Dave, Jason and Taff!

And Bachmann Europe? I have been and remain a serious fan of their products. I and Little’un (now 22 and bigger than me!) have around 200 of their locos and units between us. I really don’t fear for them in the short or medium term. I like what they do and I can’t see that changing any time soon. However, if the market continues to contract (what does Hornby think?) then the niche manufacturer will take a greater proportion of the discretionary purchases which at the end of the day all hobby purchases are.

 

If Kader has a change of heart and decides to make plastic sporks for KFC then the Barwell operation has enough talent to possibly go it alone as another niche supplier sourcing from whoever they wish. That’s for the distant future.

 

 

For now a steady flow of what takes your fancy is expected from many directions. So buy what you really need and look out for the “Lollipops” as “Dunsignalling” (may I call you John?) put it.

 

Just for the record, the latest project I’m involved with (With not enough space for me and my son to have separate layouts) is based fairly closely on a particular time and place. Very little appropriate stock is available RTR. Some of the kits aren’t all that either. Just a couple of Scenecraft items to help us along. Should be interesting. That isn’t stopping me from awaiting the next Bachmann Collectors Club magazine with hope for another lollipop. I admit to being a collector of sorts though quite why the people who bank role the hobby should be considered second class citizens escapes me. I wouldn’t tell anyone how they should enjoy their chosen hobby; I just hope that they can.

 

RP

[Jeff Smith]

I just had a look at the Kader website and was astounded at the size of the operation - 400 toolmakers!!!! It takes in third party work which obviously it has to balance with it's in-house work. There obviously is a lot of commonality and read across, things like motors and wheels, probably bought-in, but advantages in bulk buying etc. It makes me wonder what the work split is between the UK and China. Does the UK merely supply the outline drawings and let China produce the production drawings, in which case common components will be used. Or does the UK actually produce production drawings - does this add value or cost?

[darren01]

The thing is last years when Bachmann said that the price where to go up by 15%, this did not happen, as some of their models went up by almost 50%!

Pill box brake van was around £12.95 shot up to £24.95, I can not see how they can justify this.

I don't want buy everything Bachmann makes as I manly buy BR/SR stock, looking at their site today they have more pillbox coming out and have put for the price TBA, so it looks like they will go up again this year?.

I brought one when they first came out at £12.95 and looking at them now they have gone up by 92% (if my maths is right) so what happened to the 15% price increase they where banging on about last year?

I do understand that workers in china what a better standard of living and I do not begrudge them that, but I do feel that Bachmann are trying to squeeze as much out of the market they can get.

It will be interesting to see what price they place on the up and coming pill box guard van later this year, I would not be surprised to see them going for more than the dreaded Presflo when they hit the market.

[Ozexpatriate]

The thing is last years when Bachmann said that the price where to go up by 15%, this did not happen, as some of their models went up by almost 50%!

Pill box brake van was around £12.95 shot up to £24.95, I can not see how they can justify this.

I am confused by the repeated references to a 15% price increase as though it is legislated somehow.

 

For me the most important part of Bachmann's price warning from May of last year was this:

From tomorrow through to 1st May 2019 there are wage increases dictated by government which will come into effect roughly at an increase of 20% per annum for those five years meaning that wages will effectively double from around £3/hr to £6/hr. It will probably cost employers another £1/hr to cover the mandatory free medical insurance and pension rights their employees will now have.

With wages doubling over five years, we can at least expect costs (and prices) to double (100% increase) over the same period.

 

Labour is the most expensive part of the cost of making a detailed model. Raw materials are much less important but we have been told they are increasing. Notwithstanding the cost of plastics (irrespective of the price of oil and plastic pellets) I very much doubt that raw material cost for metals - particularly that used for magnets in motors will do anything but increase.

 

Nobody likes price increases, but a 50% increase (combining price increases last year and price increases this year) shouldn't come as a surprise.

[Legend]

I am confused by the repeated references to a 15% price increase as though it is legislated somehow.

 

For me the most important part of Bachmann's price warning from May of last year was this:

 

With wages doubling over five years, we can at least expect costs (and prices) to double (100% increase) over the same period.

 

Labour is the most expensive part of the cost of making a detailed model. Raw materials are much less important but we have been told they are increasing. Notwithstanding the cost of plastics (irrespective of the price of oil and plastic pellets) I very much doubt that raw material cost for metals - particularly that used for magnets in motors will do anything but increase.

 

Nobody likes price increases, but a 50% increase (combining price increases last year and price increases this year) shouldn't come as a surprise.

It's not a surprise , just not accepted! Actually debate on £70 auto coaches is irrelevant , as if it's a year away it will actually come in at £80-£85!

[Fenman]

... Arthur Anderson is alive and well as Accenture ...

That's not right. Arthur Andersen were auditors who set up an in-house consultancy business. Problems raised by the auditors were referred to their own consultants who charged massive money to solve them. All the big auditors did this.

 

Some people then raised concerns about potential conflicts of interest. Regulators pressured the auditors who finally, reluctantly, agreed to divest their consultancies.

 

Arthur Andersen then split into two completely separate companies, independent from each other. The consultants company then fought an acrimonious legal battle for the right to keep using the Arthur Andersen brand name. They lost, and came up with Accenture instead. Shortly after that the Enron scandal exploded, and the Accenture people couldn't believe their luck that they were not called Arthur Andersen.

 

Arthur Andersen the auditors ceased to exist. They surrendered their US auditing licences (before they would anyway have been taken away). And, as you point out, many people lost their livelihoods.

 

Paul

[darren01]

These figures have been taken from the press realise that Bachmann made last year (30 April 2014)  just to give an example of how much Presflo have gone up old price £12.75, price increases then £15.95, Now £27.95 .

These model have not gone up by 20% but far more than that

Sorry I should have said 20% price increase in my last post.

[PaulRhB]

This is why Hornby has a "RAILROAD" range and why Mr. Kohler talks about the importance of traditional train sets. Hornby's execution there is uneven, but the intent is clear.

 

As do Piko and others in Europe but it's not universal and Hornby are the only ones doing it here. Considering the grumbles about the partial retooling of Bachmann locos here and in other threads would it be popular if they reissue the J72 with the old split frame as a junior version?

(Yes I know that won't happen)

[Legend]

As do Piko and others in Europe but it's not universal and Hornby are the only ones doing it here. Considering the grumbles about the partial retooling of Bachmann locos here and in other threads would it be popular if they reissue the J72 with the old split frame as a junior version?

(Yes I know that won't happen)

But why would they do that? Split frame is old technology, it's probably less expensive and you would certainly get economies of scale having one chassis covering several locos. The older chassis on locos may cost more to manufacture as technology has moved on.

 

A Railroad range should not be interpreted as a dumping ground for old versions of models. It should be a dimensionally accurate model, with a limited amount of mouldings, as simple as possible, no major assembly required. but with a good standard of decoration. The Hornby Mk1 is the ideal example. I have 8 of them now and prefer them to Bachmann versions. Less derailments and rogue uncouplings!

[cromptonnut]

44-0041 Bachmann Scenecraft Rail over River Bridge would be a useful addition to my layout but at £54.95 each rrp, and probably needing 4 or 5 to make a decent bridge, I'll stick to the Peco bridge sides and a bit of plywood.

 

Some of these prices are quite eye-watering.

[Mark Dickerson]

Most of Bachmann's US models are very much at the trainset end of the market - on a par with the ex-Lima Hornby Railroad in terms of complexity etc. They don't compare with the Bachmann UK stuff which is generally better detailed and more complex. However, more to the point regarding the British models, I spent the whole of yesterday morning with Bachmann's Dennis Lovett and much of what we talked about was the issues of price and availability of supply. The two are at least partly linked, in that the Chinese factories will produce the items for which they get the most money. If you want the production slot, you have to pay the price. There is also a move to European-style pricing - that is, the factory expecting the same prices for British models as they get for the European models which are produced by the same staff on the same machines.

CHRIS LEIGH

Presumably the same factories are also producing large numbers of train sets for the US (beyond what the UK market can demand, although I've always wondered why Bachmann didn't make something for e.g. Argos) which makes them viable. I'm also aware that the US market's prices have also shot up (as Jeff Smith points out in #465, but those discounts might be telling). I merely make the point that if costs increase at this rate there may need to be some variation in the price structure if we're not going to end up with a much more rigid preordering system. 

[Jol Wilkinson]

And going a little further that Kader expect the same margin on UK models as European ones which I'll bet is the real reason for price increases of 20% and 15% year on year. This is not the European market though with the disposable income or standard of living of Germany, Netherlands, Benelux countries for instance. This approach will price them out of the UK market.

This link;

 

http://www.ons.gov.uk/ons/infographics/standard-of-living-in-the-european-union/index.html

 

while supporting the claim that the UK has a lower standard of living index for a couple of the countries you mention, shows that we aren't far behind Germany and ahead of most European countries.

[Combe Martin]

Referring to posts 493 and 497 above, your still ignoring that Bachmann discovered that they were making a LOSS or at best BREAKING EVEN on some of the items they were selling.  That's why the price of some items has risen by more than 20%.

 

Also, whilst you'r correctly quoting Bachmann's current RECOMMENDED RETAIL PRICE for a Presflo as £27.95, what sort of price are you quoting for originally.  If you bought one, it must have been from a retailer, the likelihood is that it was a DISCOUNTED price.  You cant compare the two.  Hattons current discounted price is £22 !

 

You don't say when (what date) the (probably discounted) prices were £12.75 and £15.95  .   If £15.95 was the price about a year ago before Bachmann announced that they'd have to put prices up, then adding 20% last year (£3.19) to make £19.14, then 20% this year (£3.83) to make £22.97 sounds about right !  

 

Alternatively, if you don't even like Hattons discounted price, they also sell the Dapol Presflo too.  These are priced at £9 - £11, or there's also the Dapol kit at £5.40 !

 

 

 

Edited to add a few more prices.

[PaulRhB]

But why would they do that? Split frame is old technology, it's probably less expensive and you would certainly get economies of scale having one chassis covering several locos.

Hence the

[Jol Wilkinson]

The thing is last years when Bachmann said that the price where to go up by 15%, this did not happen, as some of their models went up by almost 50%!

Pill box brake van was around £12.95 shot up to £24.95, I can not see how they can justify this.

I don't want buy everything Bachmann makes as I manly buy BR/SR stock, looking at their site today they have more pillbox coming out and have put for the price TBA, so it looks like they will go up again this year?.

I brought one when they first came out at £12.95 and looking at them now they have gone up by 92% (if my maths is right) so what happened to the 15% price increase they where banging on about last year?

I do understand that workers in china what a better standard of living and I do not begrudge them that, but I do feel that Bachmann are trying to squeeze as much out of the market they can get.

It will be interesting to see what price they place on the up and coming pill box guard van later this year, I would not be surprised to see them going for more than the dreaded Presflo when they hit the market.

Darren,

 

they don't have to justify a price rise (see my post #468). Do Apple, BMW, Panasonic and all the other leading brands in their sector do it?

 

You are the one that has to justify whether you see their products as good value or not, to justify buying it or not. If they continue to sell items at a loss then they (Bachmann) have to justify to their shareholders why they have done it. To support your pastime might not seem like a good enough reason.

 

Arguably these large and very unwelcome price rises are largely due to charging too little for too long. That may have been due to poor management, poor accounting, trying to create and maintain a foothold in the UK market or a variety of other reasons. Whichever it is, Bachmann have presumably decided that they cannot sustain it further.

 

If, has been suggested elsewhere, they have limited manufacturing capacity and can use that to make models that they can sell at higher prices and profits in other markets such as Europe and the USA, then frankly I don't know why they bother with the UK.

 

Jol

[Mark Dickerson]

A Railroad range should not be interpreted as a dumping ground for old versions of models. It should be a dimensionally accurate model, with a limited amount of mouldings, as simple as possible, no major assembly required. but with a good standard of decoration. The Hornby Mk1 is the ideal example. I have 8 of them now and prefer them to Bachmann versions. Less derailments and rogue uncouplings!

I agree, but suspect that the new-chassis J72 (etc.) will become the nearest thing we get from Bachmann. The irony of course being that the US market effectively has an extensive "basic" (and no doubt highly-profitable) Bachmann 00 range with Th*mas...

[TheSignalEngineer]

This thread seems to have completely lost its way.