Kevin Strong said:
“Which is it? Without the price increase they’re gone, but if they don’t sell they’ll eat the ones that don’t sell and come up with cheaper ones later?”
A manufacturer used to widgets that cost them $20 to produce and sold them for $50. Now their widgets cost them $50 to produce. Obviously they can’t sell them for the same $50 or they don’t make any money. That’s the “without the price increases, lots of manufacturers won’t be here for long” part. They have to raise the prices to keep up with increased production costs.
If the $80 widgets sell, then they’ve got a market and they can bring the next widget out at $80 as well. If the market decides that $80 is too much to pay for a widget, then the manufacturer has lots of widgets sitting in the warehouse. Sitting on those (or blowing them out at $60 so to at least recoup their investment) isn’t going to hurt them too much. It’s not healthy, but by itself, it won’t put them out of business. However, the next widget they produce can’t sell for $80. They’re going to have to adjust their production costs so that they can afford to sell their widgets for less than $80. That’s the “…respond in kind and release the next loco at a lower price point.”
The buyer decides what the market will bear in terms of costs. The manufacturer then has to adjust what they make and how they make it to meet those limits. However, the buyer has to be realistic in their expectations of what they can get for the money they’re spending.
Later,
K
Boy, you edit your posts more than just about anybody. Good thing I save the important ones, they make highly entertaining reading. In fact, we might not get to run too many trains next week…the guys will be ROFLFAO.
You make less sense with this stretched explanation than with the one (quoted) and deleted.
Sure they have to cover costs, and turn a tidy profit. “You stupid Americans…playing with toys while we industrous Chinese are busy making money”.
So, QE!, 2 and 3 affected what THEY think our once almighty dollar is worth, so they raise the price. Fewer folks buying, so they raise the price. Cost of materials goes up, and labour, so they raise the price.
And every time a new 1:20 loco comes out, it gets a new electronics board. So far, they’ve all been different.
So, we’re supposed to buck up, pay the piper, and swallow hard?
Or just stop buying altogether?
Plastic shelled loco for $800 street, sorry.
You can buy one.
If all I had available was that or nothing, and everything else was broke, I’d pull the railroad up before I’d spend that much money.
“the buyer has to be realistic in their expectations of what they can get for the money they’re spending.”
Agreed. Instead of complaining, maybe folks should just stop buying. Pick up something used, fix it, no more money crossed the pond.
Last new engine bought by one of my operators was a Meyer (if you don’t know what a Meyer is, ask and I’ll tell you). I don’t think he’s the happiest of campers with it, but I do believe he’ll not buy another new engine.
Maybe we could get Morrison to send in an article on how to re-boiler a Connie. Or change it’s scale.
I’ll tell ya, the nicest engine I have is a K-27, and it isn’t brass, and it isn’t 1:20.3.
It’s 1:22.5, and I prefer it over the others by a long shot.
Oh, and keep your day job.
TOC