I WAS about to start a new poject and thought about purchasing some Athearn GP9’s but here is what I found. On average if you work hard when it gets around to raise time you may get 5% on a good year keep this in mind.
I purchase the Walthers catalog every two years and went to use it to price 4 GP9 dummies and 2 powered from Athearn. About 5 minutes into the research I noticed that I was reading the 2002 catalog. I put it down and grabbed the 2004 (both are red) and went to start my pricing. Wham what a difference. Here are some reults:
If I get a 10% increase in pay over 2 years there is a bigger price increase over the same time period. Athearn has put out the same F7 and GP9 for years! Unless I am reading the catalogs wrong and I know they are list prices someone is gouging someone here. People can talk about production cost etc. etc. but when production cost increases greatly over the cost of living raises of the buying public then something has got to give and it will be finding another hobby.
The World’s Greatest Hobby that no one can afford!
I could get political here but I won’t. bottom line is inflation is based on what the market is willing to withstand. Nothing is linear nor proportional within economic growth of a “capitalist” system. Eventually the market will realize nothing is selling so that should in turn bring prices down.
Try 1 to 2% every year for the last 10. Hmmmmmmmm!
you just can’t get ahead!..it’s a plot I tell ya!..and even if you gripe about it…they always have an answer…well we know our prices went up…but have you seen the cost of fuel these days to ship our product??..or …we must keep our prices in line with our competitors…somebodies gett’in mighty rich and it sure isn’t me…you got a 5% raise this year?..must be nice!..they gave me a 3% and the year before that we got a 0%…(except for the really cheap plastic cup they gave out that had the company logo on it)…I think i’m using it now for cleaning my paint brushes…the only “light at the end of the tunnel” is my SP GP9 going into my layout’s hidden staging yard area…
I find it very difficult to believe that Athearn’s costs have skyrocketed to the point where 15% to 35% price increases are considered justifiable. I wonder if it’s a combination of rising costs plus a decline in customer purchases as Athearn now has much more competiton to contend with than it did in the 80s. As corny as this may sound, I would not mind paying these inflated costs if Athearn had improved the gears and drive trains and eliminated the "infamous growl! I’m very sure most of us would agree. Top it off, parts availablity??- well that’s another thread.
I’ve purchased Athearn’s since I was a teen in 1978. However, after two more Athearn U-33s and a Santa Fe FP-45, I will not be purchasing any more Athearn locomotives. The only reason I’m getting these units is that the roomy interiors make DCC/Sound installation a “tad” easier. The U-Boat’s “extra wide” hood is not as noticeable as it is on Athearn’s EMD hood models.
I’ll be sticking with the “PAKS” Group
(also affectionately known as the 4 Tops! - Proto, Atlas, Kato, Stewart)
I’ll keep buying them…though most of my purchases are swap meets and eBay…the lod mechanism’s don’t bother me that much. And really, the complaints about Athearn running gears seem to be directed at the noise and such…but…I seem to read alot about P2Ks cracking gears and Kato’s burning up circuit boards…that makes me go…hmmmmmmm
The unfortunate reality is that prices do rise and so does overhead. As Brothaslide can attest as a small business owner, CA is a tough business climate with regards to labor costs, taxes, etc…leading the nation in business costs I’m sure.
Athearn Genises I will buy but not regular Athearn locos. As for the cars, thats another story my layout will be filled with them. Lets hope the cars dont get to the point where we cant afford them too.
There is a way to fight this. A lot of people just blindly pay the sticker price and complain. This is something I refuse to do. I am always looking for ways to streatch my hobby bucks and locomotives and rolling stock are no exception. I search and dig until I find what I want at the price I want to pay. Granted this generally means I have to fix this or that, or effect repairs to another thing. But I view my self as a craftsman of model railroading and thus find it no sweat to do such things becasue it is well in my abilities to fix them, most often times quite inexpensivly as well. Maybe its just due to my isolated location, but I wouild like to see more of this sort of thing happen.
Guys,I know it popular to trash and bash Athearn…But lets not forget the other manufacturers that have risen their prices as well…The costs of our great hobby as shot through the roof and beyond but let’s not be foolish here…Who is really to blame? We are…After all we ask for better detailed engines and cars and that my friends came at a cost as somebody has to be paid for putting those details on.Same as building those great RTR cars that many of us love so well so you see who is really to blame.
My best advice is to buy at the best price that you can find…
Now if you want a cheap hobby then buy a quality fishing pole,some hooks,sinkers and a small tackle box ,buy some bait and head out to your favorite lake or river.You see you only need to buy fishing license once a year and bait as needed.
To some extent Model Railroading is as expensive as you make it.
Choose your era and prototype. You don’t need to buy every loco and car that is made.
Also how much equipment do you need. You problably don’t need as many loco’s and cars as your prototype has/had. Even if you freelance you can set limits. Once you have enough, you don’t need any more, unless you are just a collector.
You don’t need everything right now, a better model might be available latter. Conversly, you don’t have to buy the new one, if the old one is adequate for your needs.
I sometimes wish I followed my own advice. I have not inventoried my collection, so don’t really know how much I have. Its somewhat over 100 locos and over 1200 cars.
I own more of some loco types than my main prototype (the Western Pacific) did. I also own many lettered for other roads.
Back to this price thing. I remember when I trashed Dad’s Rivarossi Berkshire back in the early seventies, I was about 13 or 14 at the time. Anyway feeling bad off I went to the LHS on Mount Pleasant to see what the cost would be. I left the engine with them looked around and went home. Several days later I got the call “The engine was declared dead”. So off I went again remebering I had seen a Hudson for what I thought was $30. No it was $69. Put that in todays terms and I can honestly say I would not spend that kind of money on “old” Rivarossi Stuff. This brings me back to my original statement. The market will only go as far as we let it. Problem being most companies are making limited runs turning this into a collector’s market. This could really damage the hobby for the majority of us.
I think the main causes have been missed. When Irv athearn ran the compnay he kept prices artificially low and provided the most dependable and realistic engines of the time and as a result the hobby grew. I hope the man is in heaven and he is primarily responsible in my opinion for HO being what it is today. Then it was sold and the new owners rasied the prices to recoup their investment and resold recently so the same scenario occurred. Now Athearn is run with an eye on the “return on investment” instead of the “Return on the hobby”. As others enter the market above Athearn pricing it only needs to stay below their pricing to remain the “cheap” alternative. Anticipate further increases in pricing.
hhhmmmm… Like a dog trying to catch his tail, each time he tries, he may get a little closer but the closer he gets the more he realizes that where it’s attached stinks!
hhhmmmm… Goin’ ta work day in and day out (tryin’ to catch our tail). Gettin’ an annual raise (gettin’ closer to catchin’ that tail - so we think). The economy (what our tails are attached to) stinks!!
hhhmmmm… The first house that my wife and I wanted to buy 35 years ago cost $24,000 - 2 bdrm on a half acre with a few fruit trees. Now all the homes in that area are selling for 1.5 - 2 million. Think about it… you can barely get a decent car now for $24,000.
Ther is no connection between the inflation rate and the costs of any individual item or service. The costs for some increase much faster than inflation. Others actually decrease in cost. In real costs my latest $1500 computer is a better value than my first $1000 computer bought many years ago. My $17,000 "02 Saturn has a lot more features (AC, Power stearing, power breaks, power windows, AM, FM radio/CD player etc. also more room, more powerful engine) than my $2500 '74 Toyota (AM Radio) had. Their fuel economy is the same.
The bottom line is what’s important to a company. Without a profit its difficult to stay in business. They also need money to development new products and/or improved products to keep them competative in the future. Somtimes a higer price on one product will subsidize a lower price on another.
It’s still a shock to see a model kit I paid $1.50 in the 1960’s reissued at $15.00 or $20.00. I suspect that some of the higher pricing is because they think the can get it. They are usually right. Most buyers are comparing the price with the prices of later kits.
Others are buying because of nostalga. The want to build the model again, and an unbuilt original is a collectors item costing over $100 if you can find one.
Ok I guess to the point. Value for the Dollar. When it gets to the bottom line does a 20 or 30 percent increase make me want to go out and buy a product that has not changed in 30 years the answer is no. Do I have to have a new loco or 2. No Lets just say there are better ways to get people to buy your product. Something like MARKETING. Yes it does have everything to do with inflation. It’s all about where you get the most value for your entertainment dollars and where you spend them. If Model Railroading out prices itself compared to that of VCR/DVD players which have dropped in price to $59 there lies the problem. VCR and DVD manufactures lower their prices to sell millions of them along with the extras like tape and movies. Athearn could learn from them by selling loco’s cheaper or slightly raising prices and then selling cars and their scenery. The whole industry would benefit from the move. Instead they raise their prices greatly and kill the hobby from the inside creating ill feelings to their customers.
Equating VCR sales to HO train sales isn’t going to work because of the demographics. 100,000,000 homes in the US alone have VCRS and they all do the same thing. I’ll gauruntee 100,000,000 home don’t have trains. Nor do the homes that have VCRs have different versions, brand names and functions. So after the first big push when they were $500.00 and up and videotapes were $25.00 each the market finds cheaper ways to produce them to reach the next tier that in essence say’s. "I’d pay $400 for that but not $500. Eventually it reaches the point that the only market left is the low end commodity market. Don’t lose sight of the fact that Irv Atheran never rasied his prices when he owned the company. If he intorduced iit in 1960 for $20.00 it stayed $20.00 in spite of inflation or costs. There was a lot of catching up to do in that regard. My last point is whois holding the gun at our heads telling us we have to buy a product? Apparently there are sufficient people out there that BLI thinks a $420 F unit will sell. There is absolutely no logic being the driving force behind train purchase or comsumption that I can see.
I’m sure some bolt counting person with way too much money is out there and will be quite happy with his $420 F unit. He’ll sit there in his easy chair with Nike $250 tennis shoes on . I think there are a bunch of people out there that will say ok you want to much for your products. $150+ locos and $40 box cars will have even a smaller market than they have now to the point that more people will leave the hobby. From what I see the attitude is so what.
Have you looked at the $ lately. The dollar has weakened by between 15 and 25% against most major currencies in since Sept 2003. Any imported product particularly from Europe will go up in cost in the USA without the importer making a dime extra. This does not bode well for list pricing in any hobby with a lot of imported products. I know Athearn are “made in the USA”, but are the components that they are assembled from made in the USA? Any US based manufacturer has an enormous advantage over importers right now. Importers are having to raise prices, so domestic makers should really be able to grow at the expense of foreign manufacturers. On the other hand, they may decide to put prices up in line with the importers and make more profit. We shall see. The 2004 Walthers calalog prices wer more than likely printed before the Dollar drop, so we may be in for a tough ride.
Now to turn the tables and play devil’s advocate. How many $10 list price box cars must a hobby shop sell a day to be profitable? 10, 50, 100 a day? Let’s say at 40% profit . Then figure what the manufacture makes off their wholesale to the middlemen and hobby shops. Makes the $410 BLI F unit seem ok… But then wait I still can’t afford 1 little lone the 4 I really want to buy. Add to this a shrinking customer base , the I model this or that road and boom compound the problem. I bet the hobby shop I frequent doesn’t sell 100 Athearn anythings a month. They have had the same inventory since the middle ages. So here is the fine line of how to keep happy customers with out killing their pocket book and still putting food on the table.
Maybe they should sell model locos for $5.00 each and make up te difference on volumn[:o)]
In recent issues of “O Scale Trains” magazine John C. Smith (Pecos River Brass) discuses his experiences developing, manufacturing, and marketing model RR locos and cars. His products are “limited run” but the principles apply to "mass market " items too.