Price for DCC and sound engines going down

Model Railroader General Discussion (Model Railroader)
21

Great points.

Yes value is only determined by willingness pay.

However, cost to produce is a factor in the equation, as expressed in your last line.

As someone who has worked in this business, and actually manufactured and sold products in other industries, I can tell you that this industry, for the most part, is working at or near the lowest practical/profitable margins.

There are always those who find a “gold mine” opportunity, or short lived periods of high margins, but overall, this industry, and the whole “hobby” industry, is a cottage industry that works on the minimum reasonable return on investment.

Given that fact, prices on newly produced product are driven more by cost to produce than by the market. The market then decides if it was a good decission to product that item, at that time, with those features, at that quality level.

And that is where the current preorder business model comes in. It gives at least some indication as to if the market will support the cost to produce.

Prices on NOS are another story…

Sheldon

22

Antonio FP45–

I worked in the model train industry. I still have friends working for one importer.

They have very clearly told me that the percentage of full dcc/sound units pre-ordered is increasing with each and every run of locomotives.

That is a fact and not conjecture, and just so we are clear, they were at 55% full dcc/sound a couple years ago now. I do not know the current percentage, but it’s undoubtedly above 55%. The current percentage is a closely guarded secret and will vary from manufacturer to manufacturer.

Rapido, for one, only builds plain dc units to pre-order, and I think a dealer has to order 6 of them, or rather multiples of 6.

John

23

Bachmann is an abornality, they benifit from what others charge and ussually go a bit lower. Their wholesale price has ussually been lower to large buyers. Looked into buying direct once, back then min order was $10,000 and discount was 50% of list. Larger buyers got a bigger discount. They also didn’t care about who you were unlike others who would only sell to people with a brick and mortar presence, I wonder if that is still true of the others?

24

That is still true of most others. They want you to be a legitimate brick and mortar store.

You have to prove that you are a legitimate store or warehouse complete with tax number for your state in order to do business with most of the current importers or wholesale distributors. The basement sellers who sometimes were not legitimate dealers are on the way out.

In the past there have been those individuals who desired to buy a large quantity of trains for their personal use, and have tried to become “dealers”…Another trick: a friend of mine was a used car salesman (now dead and gone). He routinely used his business tax number to buy trains as if he was a train dealer. This was 20 years ago; he got away with it often, especially at Timonium.

A trick used to be: take a picture of somebody else’s hobby shop and submit it. Today there are less of them, and the importers actually check specifically for this trick.

To be clear: I’m not condoning these kinds of tricks; sometimes you don’t really know your friends that you meet in this hobby, at least till later when they surprise you by doing things you would not.

25

Bachmann is part of Kader, so they are one of the few brands that actually are the same company as the factory. And at this point likely the only large company where the factory and the marketing company are the same company.

This means at least some greater economy of scale than even Walthers, Atlas or Athearn have.

And surely a much lower total production cost than middle tier companies like Bowser, Broadway, Intermountain, and others.

MTH is closing or changing ownership, their market share in HO is questionable at best anyway.

Rapido has, as I understand it, invested in their own factory in China, but they are relatively small compared to Bachmann, Athearn, Walthers, Atlas, etc.

Bachmann also chooses to offer products at multiple “levels” of the hobby, a situation that many modelers have trouble understanding. And a situation others use to bash the company despite the constantly improving quality and value they have produced in the last 20 years.

So yes, Bachmann has a distinct advantage price wise, and generally they have shared that with the dealers who are able to buy volume.

Bachmann also has the resources to make the trains first, then sell them. They don’t have worry about “paying the factory” on delivery, they are the factory.

Requiring a retail location is pretty unrealistic these days of internet commerce. A business license and money should be the only require

26

Manufacturers and distributors have to walk a fine line between protecting their retailers and restraint of trade. The federal courts take a dim view of restraint of trade.

If I have a retail sales tax number, and a business address, and money in the bank, a potential seller of a product I want to buy for resale needs to be careful not to put restrictions or requirements on me that he does not apply to his existing customers.

I am not condoning some of the practices of years past, not those of basement “retailers” or manufacturers who looked the other way to make a few more bulk sales.

But that is not the situation with Bachmann.

As for the percentage of locos now being made DCC with

27

If you don’t have a bricks and mortar retail location you cannot add value to the manufacturer’s distribution system. Any manufacturer can handle online sales either directly or through Amazon.

Physical retail stores not only aggregate sales (which is where the wholesale discount is generated) they also provide marketing services which cannot be delivered online, by definition.

Even Tesla figured that one out.

28

So was the generalization at the start of this topic found true across the board (as implied in the topic title) or just Bachman? Has anyone noticed a trend for the higher shelf lines like Atlas, Athearn Genesis, Rapido and Intermountain etc?

29

Bear in mind that some retailers might be running a ‘loss leader’ promotion at certain times, or on certain slower-moving roadnames, or for older decoder types or models, which produces the effect of smaller differential between DCC-sound and “DCC ready” or straight DC.

I suspect we will see phenomenal price drops on 8-bit sound or ‘nonprogrammable sound’ if the technology improves in some of the ways that I see occurring. If TCS in fact works out how to do programming from open sound files using nonproprietary equipment, and then proceeds to support settable dynamic range for different effects, it may be ‘game-changing’ for many people for whom sound is now mostly a toy-train feature… leaving many of the older decoders obsolescent at best.

30

The first VCRs in the late seventies cost $4-500 and could only record for one hour, so to tape a two hour movie you had to use two blank tapes. By the early 1990’s you could buy a VCR (with a DVD player built in) that could record up to six hours for $149.

Re Bachmann, I bought a GN GP-30 back in 1988 for IIRC $32.50 at the LHS. It runs well, but is a bit of a “growler”, and because of it’s split-frame arrangement (similar to many N scale engines) there isn’t much room for a speaker for a sound decoder. I found TrainWorld had a sale on sound-equipped (Economi) GP-30s so I bought one and swapped out the bodies. Basically I got a new, better running motor, a good sound decoder, and 1" speaker in it’s own enclosure, for under $100. The engine now should be good for another 30 years.

31

Weird, tried to post reply and got forbidden notice. Worked this time but my long imput post is gone.

32

It might have thought you were trying to post too quickly after one already - like a double bounce on the submit button. It’s happened to me a few times. Sucks when you have a long reply and lose it.

Just happened to me with this post, but I was able to hit the back button and what I typed was still there.

33

It IS true that today’s dual mode decoders are way way better than the ones from the past when running the engine in plain dc.

34

That’s not what it does then – it flags you in red that ‘this post is identical to one already submitted’ … and I’ve never known it to make the post ‘already submitted’ disappear when it says that.

“Forbidden” is an indication that the stored login is no longer recognized. Likely when you go to the ‘sign in’ prompt to enter credentials it clears the page you were on “to give you a personalized browsing experience” or whatever – of course with no text in a reply window.

It has gotten to the point I can’t post more than a paragraph or two on a phone before the page shudders like a wet dog or blacks out for a moment and blanks everything I’ve typed. If you wonder why every time you come back, one of my posts is getting longer and longer, that’s the workaround: type fast on that clumsy keyboard, hit ‘submit’ ASAP, and then keep adding with the edit feature…

35

Well, I did not do a detailed study, but a quick check of Athearn Genesis retail prices suggested that the price gap between DCC w/sound and DCC ready is shrinking.

Prices have crept up, Genesis F units are now $600 for an A/B set with DCC/sound, $420 DCC ready.

But when prices were lower, that gap was still in the $180-$200 range for A/B sets. I seem to remember prices like $500 for DCC w/sound and $300 for DCC ready?

So as a percentage the gap has shrunk a few points.

I suspect that as DCC w/sound production volume is increasing, the cost of decoders is decreasing, and those prices are not going up as fast as DCC ready versions.

Sheldon

36

Yes, assuming you are using a DC throttle the decoder likes. One with relatively pure DC, extra no load voltage, and no PWM speed control.

My Aristo Train Engineer wireless throttles running at only 13.8 volts, not so much.

Sheldon

37

Yes. Answering Jim’s question above, I’ve purchased a lot this year and the price difference between Sound and Ready is about $80 for most single locos. (Athearn and Atlas) IIRC, it used to be about $100.

It seems the gap is shrinking because the Ready versions appear to be increasing in price faster than the Sound versions by a bit.

Speculation can explain the reason for that.

38

From memory back in 2009 I recall buying both DCC ready and DCC/Sound Atlas GP40’s (because they all had different road numbers). The street price I recall paying was $90 for the DCC ready and $150 for the DCC/Sound equipped. So that was about $60 difference street price 11 years ago.

Back then there were a couple of reasons I mostly avoided DCC/Sound loco’s: 1) there was a lot of complaints about the quality of the sound from the MRC and QSI decoders being factory installed, and 2) I had less disposable income and didn’t want to waste it on sound that was often panned by hobbyists. Even the vaunted Tsunami 1, with its better engine sound still got panned for motor control.

So not being interested 10 or 11 years ago in sound, I didn’t follow the price differnces as closely. Never-the-less, that is my anecdotal example. Based on that it seems the difference has held fairly steady. But …

I argue that there will need to be a MUCH more extensive price analysis to make a solid assertion that the difference between DCC ready and DCC/Sound loco’s has shrunk over the last say 10 years. Until that happens, I remain sceptical based on anecdotal evidence only. It is statistically insignificant. Shens.

39

Sure. I agree w

40

Agreed it is only ane