Large Scale Central

Aristo track price increase

Track and Trestles
#1

Hi all,

Holy bat poop, did you get that email, too.

Doubling the price! Now that is what I call WOW factor!

news from Lewis Polk said:
June 18, 2007 Greetings!

Who would have thought that copper would be the new gold…in value anyway.

I don’t know how to write this letter without the marketplace thinking we’re profiteering on the loss of a major competitor in the track business, but the truth is that copper prices have tripled in the past few years (Please see the copper pricing chart at the end of this letter). Copper is a world commodity and our contract pricing ran out.

Copper is 70% of the raw commodity that goes into our brass track and we can’t make up the differences in volume. The hard fact is that we are going to double the price of our track immediately or not be able to deliver track. This is the result of hard bargaining in light of the more than tripling of the commodity involved.

It’s inexcusable that we didn’t raise prices progressively and have to do a mid-season price change that we have never done in our past. It’s that or shut down our track deliveries totally. I realize the shock to the marketplace, but we have no choice if we wish to continue as a supplier of track. We had hoped that copper pricing would return to reality, but today’s world leaves commodity pricing irrational. If the commodity price of copper changes we will reflect the price changes on a quarterly basis in the future. Stainless steel pricing has been in the same mode and the price is doubling as well.

…


That was a bit of a shocker early this morning and it’s Monday, too!

#2

WOW , this may slow the LS train market growth .
Do you think alum rail and battery power will increase in sales because of this ?

#3
Dennis Paulson said:
WOW , this may slow the LS train market growth .
It might let some opposition into the market place and could be a sign that the cost of making other "stuff" in China is about to increase dramatically when China is forced to "voluntarily" revalue their currency to more realistic levels.
Dennis Paulson said:
Do you think alum rail and battery power will increase in sales because of this ?
Absolutely.
#4

Dang…what a bummer when I opened up Outlook this am:

now I will have to pay the old regular price for used track…maybe I should consider, hand laying???

Batteries make even more sense to me now, glad I got started that way!

cale

#5

The email from Lewis makes it sound like stainless will be cheaper than brass. Could it be the death sentence for the old fashioned way?

-Brian

#6

I’m definately glad that my indoor layout is essentially complete as far as track goes. And I have a good supply on hand for some of my other projects. At this point I can lay track for my 7 1/2" gauge for far less than “G” gauge stuff.

At the new announced prices it just may be cheaper to go aluminum rail and batteries.

Has anybody checked Charlie Ro’s prices on his track yet. Might pay to buy them out before they get a chance to follow suit. May also pay to check the dealers to get track before they get a chance to increase their prices. Even a few dollars interest on a CC is better than this sticker shock!

#7
brian donovan said:
The email from Lewis makes it sound like stainless will be cheaper than brass. Could it be the death sentence for the old fashioned way?

-Brian


Huh???

The way I read that email: Price of SS track doubles as well!!

LP said:
If the commodity price of copper changes we will reflect the price changes on a quarterly basis in the future. Stainless steel pricing has been in the same mode and the price is doubling as well.
#8

The more I think on this the less I buy what Lewis has said. The actual cost of the materials is only a fraction of the final price and even a 300% increase in materials should only raise the price 15-20%. I’m more incline to believe someone is profiteering somewhere. (Just my opinion)

#9

Just poking a bit of fun at the wild speculation to be. Like Warren said material costs are a small portion of the product price. Though a tripling in brass metal price and a doubling in stainless steel metal price will likely bring the cost of the two types of track very close to each other.

-Brian

#10

Before everyone starts screaming for Lewis’s head, just remember that garden railroad tracks have been known to dissappear overnight, sold for scrap metal value of the brass track.

Now I have to give Warren’s thought a go, with LGB going poof and leaving a big hole in the track market, I also wonder if there isnt a bit of opportunism going on here, but if USA raises thier prices as well along with Llagas, Sunset and all the other small suppliers then we are seeing a nasty change in the LS universe.

But of course if LP doubles the price of his track, and no one follows suit, or follows but not by much leaving price of their track competively less than A/Cs, then Louis could be left holding the sack…

#11

Most LS’ers that have been around for a while tend to be quite resourceful considering not many of us have deep pockets…there’s only so much money going to be spent regardless of price. Should the prices get too outrageous we’ll just find another way.

#12
Victor Smith said:
Before everyone starts screaming for Lewis's head, just remember that garden railroad tracks have been known to dissappear overnight, sold for scrap metal value of the brass track.

Now I have to give Warren’s thought a go, with LGB going poof and leaving a big hole in the track market, I also wonder if there isnt a bit of opportunism going on here, but if USA raises thier prices as well along with Llagas, Sunset and all the other small suppliers then we are seeing a nasty change in the LS universe.

But of course if LP doubles the price of his track, and no one follows suit, or follows but not by much leaving price of their track competively less than A/Cs, then Louis could be left holding the sack…


Vic, Vic, Vic,

Lewis left himself an out on that last scenario:

LP said:
If the commodity price of copper changes we will reflect the price changes on a quarterly basis in the future.
Looks like he went for short term contracts, hoping for falling prices.

BTW Llagas increased the NS rail because of the increased cost to them. I still got the old price, THANKS DaveG!

It will be interesting to see how eBay goes nuts. You should see some of the LGB auctions in the Fatherland!

#13

Well, folks are going ape-shit over here in UK already…y’see, we already pay 90% more for our Aristocraft track than you do in the USA.

And we don’t get the ‘buy four get one’ free boxes like you do either.

We’ll see how it pans out - my order for 40 length of 5ft track went in this morning before I knew about the price hike - which just MAY be illegal here in UK and Europe.

Making a profit is one thing.

Blatant profiteering, which is how it seems to many of us that I have been talking to today, is quite a different matter.

tac the humourless
Ottawa Valley GRS

#14

Doing a little figuring, this puts track at over $5 per foot. This is outrageous and as far as I’m concerned, unacceptable. I have to agree with Terry. Somebody is padding things a little too much.

#15

Been thinking this over…it will surely cut into my Used Track Purchase Power!

I own a Salon and Spa…we sell Hair, Skin and Nail Products…Our mark up is 100%…double what we pay(industry standard markup).

Last week a customer came in and wanted some shampoo and conditioner.
I sell it in two sizes…the 10.8 oz for $24/Bottle or in the Liter size for $49/Bottle…

She asked about the liter…I explained to her that it was like buying 2 and getting 1 for free…she opted to buy the liters and I cleared (there abouts, minus shipping and my handling) $50 profit.

Now I know that I could have held the liters, and sold her (over the course of 6+ mo.) 6 regular bottles and made $72(there abouts) profit…but needing the funds there and then…I chose to sell her on that day and reap that vs. selling over a course of time…or her changing her mind and wanting to switch to a “cheaper” brand…

Beyond all of that, she is a Great Customer who comes in every 4 weeks and spends her money with us. She is also faithful to refer and never misses an appointment…So she gets a deal, we take care of her needs, make the profit then and she’ll be back!

how I see this…I know that copper is thru the roof…but a doubling over the regular price???..if Mr. Ro did(will) increase, but lets say a 1/3rd…I know he’d sell a heckofvalotta track…

Increases come to all businesses, but dumping on those (overnight) who have built you…esp when you add to the equation that one of your biggest competitors goes poof and you now are the #1 track producer in the world…I smell a green eyed monster!

…oh well, it’s just the old Supply and Demand theory! Can’t fault an increase, we all have to do it, but I always consider my customers cost too!

cale

#16

Guys,

I’m glad I eat bread and not track for breakfast :wink: If it were the bread increase, I’d have to start eating rice!

#17

Quoting Robert Hanlon:

Never attribute to malice that which is adequately explained by stupidity.

or, in this case, market forces. From what Ive been reading it sounds like he’s caught at the end of a contract, and hasn’t incrementally increased prices since the beginning, so instead of incremental 5 and 10% increases every year, his hand is now forced, and he has the choice between two unpleasant things.

#18

Thats likely true Bob, but if the competition is currently paying market prices for brass and are still supply track for less, well… :wink:

#19

from the email-here is what it’s gonna cost you!

ART11096 72" STRAIGHT TRACK(12PCS) W 510.00
ART11097 54" STRAIGHT TRACK 416.00
ART11098 60" STRAIGHT TRACK (6) 256.00
ART11099 60" STRAIGHT TRACK(12PCS) 486.00
ART11100 CURVE TRACK 4’DIAM(12PCS) 92.00

just a few-almost swallowed my gum…

#20

When you reduce that down to the discount price it’s still over $5 per ft. I’ll bet you will see a huge jump in aluminum track sales. It’s currently cheaper than steel in the larger scales.

I’ve got some reengineering to do. I smell battery power on aluminum track for my 7/8ths stuff.