Re: Model Kits and the evolving New Reality

Armand Premo

Tim,Just look what happened to the prices of the P-2K line.It is not just increased labor cost but the loss of purchasing power of the US dollar..Basically the same models,tooling cost should have been recovered by now.......go figure. Armand Premo

----- Original Message -----
From: Tim O'Connor
To: STMFC@...
Sent: Thursday, July 18, 2013 8:10 PM
Subject: RE: [STMFC] Model Kits and the evolving New Reality

Jack Burgess wrote

> So, what happens to the hobby when wages go up in China and
> the cost of RTR doubles?

Quick calculation: If Chinese labor costs doubled tomorrow, it
would cost Apple about $10 more to build an iPhone they sell for
$500. I've heard it costs Bachmann about $25 to build a steam loco
they list at $399 .. Margins are good (and get better with higher
volumes), and labor is only a part of the cost. My guess is that
R&D is a large part of the cost of models now -- The better the
model, the lower the unit sales, and the higher the cost to

I will offer this evidence of a slowdown -- Athearn has brought
out many Beautiful models in the last few years, and they used to
sell out very quickly. Snooze you lose. NOW if you go on the web
site for Athearn you can find stuff still in stock that arrived
a year or longer ago. I've bought less for sure, that probably
has something to do with it. :-)

Tim O'

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