Bachmann hike price's by 20%

[trkilliman]

When I read of the price increases last night I was more than stunned at the 20%. Most of what I feel about these huge increases has already been said. Like others I am amazed at the comments praising them for their honesty and forthrightness in laying it all bare. There have been other companies not related to model railways who have made huge price increases, and it has been their downfall. People can accept small annual rises but this huge increase will I think back-fire on them. It will be interesting to see if Dapol are caught in the same situation, or simply follow suit with price increases of the same level if they see those made by Farish are not too damaging to them.  I will be like others and really think "do I REALLY need this item" There will always be those who will buy a desired item whatever. A member of staff in a local M.R. retailer said he reckons some of their customers go without what most of us feel are essentials to buy the latest item. I was planning on a 64xx Pannier or two, a couple of Castles, and a couple of Granges. I actually have plenty of locos and rolling stock so may make the most of what I have. The Langley County body I have ready to go on a Hall chassis has suddenly become attractive once again...!   

[Chris in Prague]

A Union Mills 'Black Motor' 700 Class would just fit my 1961 start date for Cant Cove (and Penmayne) but can they be DCC-fitted?

I will pre-order one GF N from that well-known Liverpool emporium but I suspect it will (unprototypically) be the only one as I can diagram GF Bulleid Light Pacifics (of which I have a nice fleet) and, later, GF BR Standard 4MT 2-6-4Ts (of which I also have a nice little fleet) instead.

[Chris in Prague]

I have a pair of old GF "Castles" left after my sell-off which I will keep; one was bought detailed and, frankly, they are good enough models so I had not planned to buy any new "Castles" anyway. A "Grange" would be very useful for a Cornish layout but there is, indeed, the kit body to go on a Hall chassis available and that may well be the choice I make, in the future. Until then I have  detailed Dapol "Manor". As for a 64XX, I have one Dapol 14XX, several 57XXs (mainly GF but one DCC-fitted Dapol), plenty of 45XX and 4575s and 64XXs weren't seen in North Cornwall (but then neither were 14XXs, but mine will be just bought for preservation by Bodmin GWS) I may well pass on buying a 64XX new.

I noted the previous comment on Dapol Class 22s not seeming to sell well and as they were the diesel locos. most used in North Cornwall may well buy a pair of BR Blue ones at the current reduced prices to add to my three BR Green ones.

I'm very glad that I stocked up on GF Class 03s and 04s, last year! Plus one BR Blue Class 08 but, ideally, I would like a BR Green one, too. But, if prices do go up by 20% I may give that a miss, too, as, frankly, I don't NEED one.

I think a 20% hike in prices WILL result in lower sales as many N Gauge buyers seem to be retired people living on fixed incomes with increased utility bills to pay. Also, let's not forget that the only way governments can reduce their huge debts is to let inflation take off . . . Now is indeed time to buy!

[Stuart7358]

Hello all, new on the forum and havn't got around to saying Hi yet so sorry about that, but I saw this thread.... I have returned to N Gauge after many years and will admit I'm finding it an expensive hobby to get back into, so am buying second hand and new bargains to stretch my limited funds. I read the news of 20% price hikes with dismay and to be honest am wondering if I will be able to buy anything new in the future!

I know the quality and detail of models has changed so much since I last enjoyed the lure of N gauge but when the price of a new loco nears the £100 mark I get very nervous about spending my cash on it ans now there will/may be 20% on top!

I'm sure if the firm who I work for increased prices by that amount they would have no customers left as other firms snap up the business. But with just two big players in the UK N gauge market....

Perhaps Hornby have it right? - producing their standard range but also the Railroad range for those on a limited budget or who are less worried about fine detail. Perhaps Dapol and Farish could follow suit.

One last thought though, I read about the good work some are doing trying to encourage the younger people into the hobby - isn't a 20% rise in prices at least going to undermine this work and put some, or many, of these young people who are the future of the hobby off?

Stuart

[Dr Al]

Hands up all those who have bought the UM version since the Farish one was released. - I bet there are very few unwilling to pay the current c15% @RRP difference for the higher spec. The test comes in the next few years as the margin (we assume) will increase... Will sales of the UM version pick up again? Truth is we don't know and won't do for several years...

It's more complicated than that - how many haven't bought the Farish J39 as they have the UM one....is the UM one even available currently (UM do batches too)....etc etc. UM also have a firm following who would buy UM regardless of the detail issue etc just because of their solid running characteristics.

I know I haven't changed my UM model - though I've had it next to the Farish one and the UM shape and general dimensions are all very close (assuming the Farish to be correct).

Cheers,
Alan

[Sprintex]

Welcome to NGF Stuart :


Regarding these price rises, maybe I'm mistaken but aren't new locos still very much cheaper in real terms than they used to be, say in the late 70s to early 80s? 

When I was a teenager and my brother first went out to work (1982?) a brand new Minitrix loco was still a major purchase only to be made every three or four months, not something to just buy on a whim? Even at the height of our 6'x3' N gauge layout we had no more than half a dozen locos taking turns on maybe ten different trains. Have we all just got too used to cheap prices and fiddle yards or TMDs stacked full of engines not doing anything?

Personally I've only bought what I essentially NEED to run my layout with a decent selection and haven't found it too arduous so far. I have just two freight locos that will take turns on five different rakes of wagons, and my two HSTs and Class 91/DVT set will share the two rakes of Intercity coaches (yes I know I should have MK4s for the '91, but who cares? ). Biggest outlay on new powered items has really been on DMUs (2x108s and 4x156s), and even those I don't consider to have been exceptionally expensive considering you get a coach with it as well in a 2-car set. I would like more locos certainly, but in balancing life in general and a car hobby they can happily wait.

This is not to demean those who have numerous new locos by any means, especially if you have worked to get into such a fortunate position, good luck to you What I think we need to get away from is the expectation that every layout needs umpteen shiny new locos on it and every rake of wagons or coaches must have its own loco, because I certainly don't remember things being that way 30 years ago and was truly mesmerized to see a large exhibition layout with more than a dozen locos! 


Paul

[Roy L S]

Hands up all those who have bought the UM version since the Farish one was released. - I bet there are very few unwilling to pay the current c15% @RRP difference for the higher spec. The test comes in the next few years as the margin (we assume) will increase... Will sales of the UM version pick up again? Truth is we don't know and won't do for several years...

It's more complicated than that - how many haven't bought the Farish J39 as they have the UM one....is the UM one even available currently (UM do batches too)....etc etc. UM also have a firm following who would buy UM regardless of the detail issue etc just because of their solid running characteristics.

I know I haven't changed my UM model - though I've had it next to the Farish one and the UM shape and general dimensions are all very close (assuming the Farish to be correct).

Cheers,
Alan

Absolutely, UM has a loyal following of people who favour his approach and will continue to buy his products regardless. He produces in much smaller batches and I suspect would not be in a position to gear up for larger production even if he wanted to (which he does not seem to). In the past he has even told me he was reluctant to advertise too extensively for fear of emptying his stock cupboard too rapidly!

The UM J39 is not currentlly listed by him. Logically this is because of the Farish release although he has not said that. Whether one chooses to look through rose coloured spectacles or not, the Farish loco is a far superior product, there is no getting away from that. I for one have just sold my last complete UM J39 on ebay (I still have one in bits).

I think one also has to read the Bachmann brief a bit more carefully. Increases will not all be 20%, the examples they give illustrate this, the 00 E4 is going up "only" 10%. Given the smaller labour element of simpler models it is possible not everything will go up that much.

Let's also not forget UM sell direct, no middle-man, no dealer mark-up. Were he (for example) to decide to increase production significantly could he still do this?

I am not saying that UM will not to some extent be beneficiaries of the price-hikes but neither he nor his business model is the solution.

However as mentioned on another thread there are potentially simple cost savings to be had right now. The bits bags we find in almost all Farish locos now are likely put together manually at not insignificant labour cost. Do we NEED a spare scale wheeled bogie? I have dozens of them unused. Do we NEED a set of scale valve guides to fit for display - for most unlikely, do we NEED etched brass nameplates to go over very acceptable tampo-printed ones? Can those who want these bits pay seperately for them shipped in bulk to Barwell?

Another example. I am currenly scratch building a Reid J37 0-6-0 using a stripped Farish 4MT chassis as a base (DCC board removed). When altering the tender chassis I was astonished to find that the sand boxes and steps are all seperate fittings. Surely this is completely unnecessary with modern tooling techniques and can only add to labour costs?

Roy

[EtchedPixels]

I hope they keep doing the scale bogies for collector and didplay use. They are an excellent source of wheels for projects!

Alan

[Karhedron]

I wonder if the British modellers are  subsidiseing the American market as there has been no mention of American prices going up 

More likely that the much larger American market makes it easier to make economies of scale. Static cost increases (i.e. those that are not on a "per unit" basis) can be spread over much larger production runs.

[Newportnobby]

Let's also not forget UM sell direct, no middle-man, no dealer mark-up. Were he (for example) to decide to increase production significantly could he still do this?

Roy

That's a very good point, Les Roy

From my experience as a salesman for a manufacturer, the margin for each rung in the supply chain ladder is between 25-30% so is a very telling factor in Colin's pricing v Farish

[Chris in Prague]

Yes, U.S. prototype models are likely to continue to be far cheaper for a given level of detail because the market is far larger which enables FIXED costs to be spread over a much larger number of units and, once, all fixed costs have been covered there are only the variable costs to be paid which means far higher profits per unit sold. With, as I understand it, all manufacturers of British prototype models using short production runs, costs will only get higher per unit as both fixed and variable costs are likely to, at least, continue to increase with the prevailing inflation rate.

FIXED COST = A cost, such as rent, that is constant whatever the amount of goods produced (i.e. does not change with an increase or decrease in the amount of goods).

VARIABLE COST = A cost that varies depending on a company's production volume; it varies in direct proportion to the quantity of output. Examples are: labour, raw material, energy, transport. None of these are likely to decrease in real terms. (And, if production were moved to a lower cost location, then transport costs may be higher; so no overall decrease in variable costs.)

Apologies for the lecture!

The Hornby strategy of having two ranges: one with adequate detailing and accuracy, and another with higher detailing, may well work in N gauge, too, IMHO. It is a common product range strategy in other industries. Higher detailing is, anyway, only noticeable close-up. From a normal viewing distance, IMHO, old Graham Farish locos. and rolling stock look pretty realistic still.

[NinOz]

Actually Mike, No it isn't what Bachmann are stating at all; it is what some comentators wishing to bash Bachmann are stating based on their own assumptions of details not yet published and misinterpretation of what was in the statement released...

Other than a few examples (all 00 models) Bachman have not yet released any revised prices for this year let alone in 5 years time! They have said an average across all ranges of upto 20% this year (some will be a bit more, others quite a lot less) with unspecified rises likely in subsequent years.
This years large rises are stated as including a corrective element for previous factory cost rises not passed on to the customer and some rebalancing on certain products that were actually selling at below cost!

The spurious "20% year-on-year" which is being bandied around and used to extrapolate some of the ridiculous figures you and others are presenting is the Chinese STATE IMPOSED wage rise. Labour costs are estimated by the more reliable sources at between 35% and 45% of current cost base, so other things being equal that implies a 7-9% year-on-year increase at the factory gate.

Agreed.  Significant misunderstanding, misrepresentation and doomsaying about the mooted price rises.
The stated wage increase was to double the base salary in 5 years and on a simple increment basis is 20% of the current wage per year not compounded over 5 years to unsustainable levels.
Unless the cost of production is all labour (not feasible) then a 20% price hike this year is not just labour cost increases.  Posts elsewhere suggests a significant part of the price increase is due to changes in business and accounting practices within the parent company.

Amazing that some praise Bachmann for discussing the mooted price hike, we used to call the advance notice of significant changes to service and prices "damage control"; a common tactic of politicians in office.

Personally I will wait for the new pricing for each batch release to decide if I consider it value for money rather than get uptight about an unknown.

CFJ

[Chris in Prague]

Only for those really interested in economics:

"In the case of China . .  . wage increases have easily outpaced labor productivity growth."

"Foreign hourly labor costs are but one factor to consider in the overall labor cost equation. When deciding whether it is better to manufacture outside the United States, companies should also consider rising wages, lower productivity, difficulty with turnover [employees not staying], and relatively high labor market risks. Looking at the entire labor cost equation demonstrates the soundness of manufacturing in the United States."

http://acetool.commerce.gov/labor-costs

[Agrippa]

Personally I will wait for the new pricing for each batch release to decide if I consider it value for money rather than get uptight about an unknown.

CFJ

Yeah, no point about giving yourself a heart attack until actual details
become known. There used to be news announcements every few years
that a pint would go up to £1.50, £2.00, £3.00 etc , end of civilisation
as we know it.

People will probably  moan and groan and then carry on as before.

[Karhedron]

The Hornby strategy of having two ranges: one with adequate detailing and accuracy, and another with higher detailing, may well work in N gauge, too, IMHO.

In practice, Dapol do this already. A class 22 can be had for £99 at a certain Scouse box-shifter. A Hymek on the other hand can be had for £79. Both are BoBo locos with a pretty similar sphere of operation. The older and slightly less refined Hymek is £20 cheaper.

Dapol do not offer a defined "Railroad" category but their practice of offering older models at around the same price they were when first released does a similar job and offers a sliding scale. Dapol's business model is to recoup their R&D costs with the initial run. Since subsequent runs will only have to cover production costs  and profit margin, they can afford to insulate these from inflation to some extent.

Their plans to rerun some of their older tank locos at budget prices confirms this and will probably work out well for them. In spite of the known issues like pulling power, M7s still fetch very respectable prices on eBay suggesting there is a market for older models. Unlike the first batches, they should now be covered by Dapol's 2-year warranty meaning they can be bought with a bit more confidence.