Large Scale Central

Interesting comments from MTH/Mike Wolf on G scale, LGB, Aristo

General Discussion
#1

http://youtu.be/uytEWnXhOsk

Interesting, go to 20 minutes in.

Yes, no MTH #1 scale printed catalog, but online one. Basically no #1 scale soon.

He calls #1 scale a niche market many times.

But listen to his comments on LGB, how starter sets fuel sales… never do get how LGB lost the market, since they never stopped making starter sets, but interesting.

More interesting on his take on Aristo’s demise, because they had no control system of their own, possibly because Crest makes it? Strange, the only thing selling hand over fist was the Revolution system.

Very interesting the “take” from the president of MTH…

Greg

#2

That is interesting Greg.

It makes sense that starter sets fuel sales and interest in the hobby. I would say the problem with large scale is the price. The next step after the starter set is to have your train go somewhere so that means track. I think it is hard to justify the average $100 price of a typical LGB car from a dealer.
Large scale is a niche market due to cost and the size of area needed to have a decent RR compared to the smaller scales. The alternative for more space is to head outdoors which scares many would be large scalers. I once had a hobby store owner tell me how hard it is to maintain a garden RR? He also had pink LGB boxes in his front window. Pink because they were over priced and had been there so long the sun had faded them out.
The MTH Pres. also commented on the dangers of over producing in the niche market. If product outstrips demand you have a glut of product which drives the price down. Even worse is no one buying at all or slow sales which I think is what happened to Aristo. The recession certainly didn’t help. Remember when Aristo started selling direct which cut out the middle man the dealers. That wasn’t a good move. I don’t agree that Aristo failed because it didn’t have its own controller. LGB went into Bankruptcy and they had an amazing albeit expensive system of its own with its MTS.

It is a balancing act. make enough NEW product that people will pay top dollar for it but not enough to flood the small niche market and all the while keep a close eye on quality control and be ready to move on what people want.

I think larges scale is a niche market but it is going strong. The last train show I attended I saw alot G scale under the arms of happy RRers.

#3

I’m beginning to have my doubts about even the starter sets having any impact. Look what happened to Bmanns Lil Hauler sets. Low price and a great way to get into large scale …and they flopped, badly. Why? Lack of advertising or exposure in kids markets for one. The other is that for the most part, the LS market today has shifted away from the past’ emphasis on small locos and cars. Today its pretty overwhelming that the demand is for larger full size trains. This is in both narrow and standard gauge., but by default that also means much more expensive equipment. Its a death spiral, demand locks out starters due to lack of space and funding for products which gets more expensive and only accessible to a smaller market that just gets smaller every year. I don’t know where we will be in 10 years. Its kind of scary.

#4

Greg said

Yes, no MTH #1 scale printed catalog, but online one. Basically no #1 scale soon.

That is a pretty big leap to say that Greg. No where does he say no #1 scale. Not even implied. Also new product since this interview.

He does say niche market a lot so to run a catalogue of any type would take , what? , 1000 copies as a minimum run? That equates to dollars. Better spent on tooling or any of the other sundry biz. requirements.

Aristo did the same thing with a online catalogue. Personally I like that.

On starter sets though I don’t quite get it as he is saying that is what LGB did best to promote sales / hobby, but he has to my knowledge never done it. Strange!

#5

What is your definition of soon? I take soon to mean within a year. No new product, just old product with new road names, unless you can point me where it shows a new product.

I got the part about a catalog costing money, he stated he did not print one to save money. Clearly #1 scale is not pulling it’s weight like the other scales that DO get a printed catalog.

He does indeed talk about MTH doing starter sets in O, and I could not quite fathom how he connected the demise of LGB with his rise and O scale starter sets.

Like I titled the thread, interesting comments.

My personal opinion is that he is way off the mark of why LGB went out of business, and even further off the mark with his comment about a reason for the Aristo failure was that they lacked a control system of their own… quite the opposite, the only thing left of Aristo, owned by Lewis, and still very successful is the Revolution system, has always sold like hotcakes.

Greg

#6

I think Vic hit the nail on the head. Maybe some of it has to do with the idea that bigger is better. The hobby seems to do very well in the UK. Maybe because things are smaller and more affordable and maybe because the younger generation is around it more and shows the interest. When you look at prices for some of the kits like swiftsixteen etc… they are very affordable, even after adding the exchange rate. Then compare the price of a kit in the US and your looking to spend over $100. Sometimes I wish I was into the UK railroads because of the affordability. It seems like Live Steam is doing well even in the US. New engines are being produced and they are not cheap…

I also think the younger generation is more interested in there cell phones and computers. Look at what parents buy them for Christmas… the new iphone, Ipad and the x box. All high priced items. Some of the blame can be on the parents. If they can afford the Ipad then they could afford the trains set. Tis might be the place to start getting our younger kids and adults involved more and off the technology. .

#7

His starter set comments are strange. MTH does not offer any in G scale. I guess their V1000 switcher is the smallest engine they make. You would need something small/cheap to have a starter set and they have none. USA seems to be doing well with just re-paints of what they’ve made before, MTH could at least do that. They have the molds for it, so just a matter of making them. Maybe if their F7 re-paints they are supposed to bring out sometime will sell well and fuel more re-paints anyway.

#8

I’m no MTH expert, but it seems that the engine runs are quite far apart. I base this on how there seem to be none, and then when they come in, there’s a ton, to the point where MTH goes direct like their PA set, if I remember right.

(speculation, making fewer, larger runs should save the company money in the long run if it has the cash to fund a bigger run and be able to wait longer for the return).

Also, I think us old timers believe the F series is the best all time seller, but I heard recently that for USAT, it is the GP7… interesting.

Regards, Greg

#9

Jerry Barnes said:

His starter set comments are strange. MTH does not offer any in G scale. I guess their V1000 switcher is the smallest engine they make. You would need something small/cheap to have a starter set and they have none. USA seems to be doing well with just re-paints of what they’ve made before, MTH could at least do that. They have the molds for it, so just a matter of making them. Maybe if their F7 re-paints they are supposed to bring out sometime will sell well and fuel more re-paints anyway.

They did at some point offer a starter set, there was a set that had the bizarre 20 ton switcher, a freight car, caboose, track and power pack, and the last was with the full diesel switcher, car and caboose, track etc. the latter is still available thru shops.

#10

I have to differ with you(Greg) on larger runs. Although they save initial money, in the long run it may not be the best business decision. I think that was one of Lewises downfalls. He did large runs and had them silkscreened in China. Two problems occurred. 1) when there was a design or manufacturing problem such as weak gears, he was stuck with a huge inventory he could not afford to eat. 2) How many people want a UP or Conrail GPXX? Once the intial surge of those desiring that particular Road name or loco or rolling stock, he and dealers were stuck with with slow moving inventory. The main reason he went to inhouse sales was to reduce this inventory. Even with huge discounts, dealers were hesitant to buy inventory that historically had been slow moving. Charlie seems to have partially solved this problem by making smaller runs and doing his own silk screening. If he sees he has a slow running road name, he just prints another for fresh inventory.

#11

"…Very interesting the “take” from the president of MTH… "

hmmm based on the snippets provided in-my-humble-opinion the Pres. of MTH spends to much time in the clouds (maybe he relies too much on internet gossip).

I’ve been no fan MTH since their products reminded me too much of mainstream lionel toy trains and their engine smoke is so toxic I would have to stay well away from their booth and immediate others at the LSTSs I was lucky to attend '01-'04.

In my ‘eyes’, the Revo was technically a ‘Crest’ product and is found under that banner now, BUT due to the corp. banner it was constantly presented under, it was a AristoCraft controller !

doug c

p.s. “…Remember when Aristo started selling direct which cut out the middle man the dealers. That wasn’t a good move…”

That said (too often imho lol), then Accucraft/AML’s lifespan is limited since they sell direct via both their eStore and own ebay acc’t !??

#12

[Youtube]http://youtu.be/uytEWnXhOsk?t=17m46s[/Youtube]

Go in to 18:00

#13

Nicely put Doug C, saved me some extra typing. (http://rhb-grischun.ca/phpBB3/images/smilies/3.gif)

#14

I keep hearing about the manufacturers abandoning the dealers. Isn’t it that the dealers abandoned the manufacturers??? One could count on your hand the number of dealers who have more than $5-6000 in inventory for customers to view. Here in upper NY there is vertually no place to see or purchase G scale trains. A couple will order if you ask for a particular item and have drop shipped. I can do that directly myself.

I find it interesting here that the biggest complainers here are small retailers that have no inventory. nor do they support the hobby with local advertizing, events or rent space at shows.

In NY we have two train stores in Buffalo, one in Rochester, 2 in Syracuse, one in Utica, and Lantz’s. I have never seen a single one at any train show independent of scale. That in it self speaks how dealers support the manufacturers and the hobby.

#15

Back in the late 1990’s-early 2000’a, I visited several LHS’s and the complaint from them, when questioned about their paucity of large scale was, “Why should I carry it, when all you large scale guys do is fondle it, then go order the stuff online?”

Perhaps at least some of the fault lies with us?

#16

Steve, yes I think everyone has a certain amount of blame on that one. But around where I live there were, maybe still are, 2 shops that carried LS. One was LGB only, and the prices were insanely high. So much so, that I had seen the same boxcar on the same shelf for over 4 years. The other was about 10% over list. No, I didn’t typo, he was over list price on all his large scale. He had a nice inventory of stuff, but I am not paying over list for anything.

The toy store downtown used to carry LGB, but almost all of it European stuff. I never was fond of the Stanz, so I didn’t compare his pricing with list nor with on-line retailers. The last time I was in there, they had switched to O gauge.

And a long gone hobby shop, that I used to frequent quite often, had large scale, and I purchased quite a bit from them. I am willing to spend a bit more then I would on-line to keep a place like that around. But, alas, it didn’t stay around.

Going to direct sales might be beneficial for the manufacturer, but not for the dealers. And its dealer fliers and email adds that spark interest in a lot of folks. I think (JMHO) that if a manufacturer were to sell direct, they should not sell at such a low price that the dealers/retailers cannot make a profit also selling the product. Or, the manufacturer could only do direct sales for parts (like Aristo ever actually had any) and for purchase of locomotives and rolling stock, “see one of our approved retailers in the links below”.

I have mixed feelings about starter sets. Yes they can get someone interested and get them started. But if it is such low quality that it doesn’t work, or doesn’t work for long, the buyer could get put off about the hobby and go into some other hobby. So starter sets are a balancing act between price point and quality. If the manufacturer gets it wrong, it can cause him more harm then good.

#17

Steve Featherkile said:

Back in the late 1990’s-early 2000’a, I visited several LHS’s and the complaint from them, when questioned about their paucity of large scale was, “Why should I carry it, when all you large scale guys do is fondle it, then go order the stuff online?”

Perhaps at least some of the fault lies with us?

I’m not so sure about that, Dave makes a good point, some LHS I knew were extremely stubborn when it came to pricing, even with full knowledge that online sellers were eating their lunch, they still wouldn’t budge a penny on price. The shop where I got yelled had right up till the day the owner died several NIB Bachmann and LGB items that were several years old (1st generation Shays, Climaxs, lots of 2nd gen Big Hauler sets) all of them for the full MSRP, despite the fact that they were years out of date and had been usurped by newer and better models, nope wouldn’t budge an inch and god help the poor schmuck whom tried to argue for a discount. All of these sets did get sold during the inventory clearance in the months after, but alot were still there about 2 months before the final day, most all of it got sold right near the very end when they were blowing everything out the door. So the fondlers were probably just being smart shoppers in the long run, I know it hurts LHSs but if they refuse to deal with a changing market place there’s only so much you can do because in the long run its as much their responsibility to move with the market and not be so stubborn.

#18

My LHS (1 hour away) doesn’t stock large scale stuff because even his supplier has higher prices than what it can be had for online. He doesn’t seem overly interested in chasing down cheaper suppliers due to “the hand full of guys in that scale.”

As for starter sets, they appeal to some and not others. In N, HO & G I have bought 1 starter set and that was a Christmas train to run around the tree. I didn’t buy it for the set though, just the loco it came with. I sold off the rest.

Terry

#19

There was one shop here in Spokane, that sold bikes and Lionel trains. I foolishly ordered a set of switches, expecting to be treated as I was treated at the shop where I usually did business. My usual shop didn’t handle Lionel, simply because of a gentleman’s agreement not to step in the other guy’'s pond.

Needless to say, I was flabbergasted to be charged 10% over the Lionel catalog price. I paid, because I needed the dang things for my 0 gauge layout in the basement, but I never went back. They went out of business a year later.

#20

The supplier issue doesn’t wash for LS. Traditionally, dealers bought directly from the manufacturers. Manufacturers although gave larger discounts for quanitity purchases always sold oneseys to the dealers. Suppliers like Walthers were used for the accessories, scenery, paint, tools ect. this differs from HO and N scales. Stan once tried the supplier issue with me. When I asked what suppliers carried USAT and Aristro, he begged off stating hed did not have time to order from each manufacturer and walked away from me.