# What other model RR companies are doing to survive



## Cougar Rock Rail (Jan 2, 2008)

Hi all,

After reading this morning that Piko garden railway sales are up about 20% over last year, and their overall sales up about 12%, it is obvious they are doing something right. When they first came out with gardenrailway locomotives, they were very low cost but suffered due to poor wheels/power pickup/motor issues. So what did they do? Well they came out with improved wheels with good plating, ball bearing axles, and in their latest steam offering (see pic below) it has a 7 pole Buehler motor like LGB:

http://www.spur-g-blog.de/wp-conten...0-br64.jpg 

The price has gone up for sure, but it seems that people are willing to pay more for quality and Dr. Wilfer has obviously recognized that. The other thing he recognized was an opportunity in the standard gauge area, which is where he has been concentrating his efforts, whereas MLGB has been concentrating on narrow gauge. He expanded into that void very quickly.

Maerklin/LGB has also been doing much better. They just opened a flagship store in a train station in downtown Munich--I think this is a great idea. If you look at their recent RhB offerings they have been getting more accurate for the most part, and although they too had some Q/C & assembly teething problems when they shifted production back to Europe, they at least recognized they had a problem and have been trying hard to rectify it. For example with the E10 electric loco they recalled and upgraded the engines for customers (although they are now apparently power hogs) and for the new Allegra seem to have been doing much more testing before release. 
Here are some pictures of the pre-production Allegra:

http://www.spur-g-news.de/neuigkeitenlgb_2013_09_13.htm

One other thing I've noticed with MLGB is that the runs are much smaller, so it gives the consumer more of an incentive to buy it if they want it because there is a good chance they won't see it again or if so many years later.

So there are two companies that seem to be surviving and producing some great new products with some innovative marketing ideas and being responsive to customers--so it is possible even in these poor economic times.

Keith


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## Curmudgeon (Jan 11, 2008)

Interesting times, to be sure. 
With the minimum runs demanded by some PRC manufacturers, that has been an issue for some time. 
The original Sanda Kan used to run the minimum, ship what you wanted and bill for just that, factory floor stock the remainder until you needed it. 
Some manufacturers have different PRC factories and can get a better deal on minimums.....with the shrinking of the hobby, especially LS, and the broad range of scales to deal with, it seems to be especially hard hit. 
VERY smart move on the court appointed administrator in Germany to bring the tooling back. Now they can control how much they make in that instance. 
If ownership and distribution of a certain company does shift to the PRC manufacturer, they can actually make smaller runs. 
Pretty sure since they know what is ordered, how often, and what sells...plus the pricing at discounters, they will make only what will sell, and only as much as can be sold in a reasonable period of time. 

I think the days of 10,000 Shays is gone. Long gone.


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## vsmith (Jan 2, 2008)

I was interested in Piko's 0-6-0 version of their latest engine, right up until they stuffed in the price raising electronics that I wish were optional, not mandated, it took the $195 Mogul and after adding smoke/sound/dcc board now the dam thing is $375 !!! Sorry but for me but sadly thats just too much. 

I'm afraid that those of us on the lower economic rungs of the hobby are simply being cut loose from alot of these companies. 

MLGB has gone back to their old "if you can't afford our price you dont deserve one" attitude. Who knows where AC will land... 

Bachmann is the only company still actively trying to court the unwashed masses with the affordable Lil Hauler line, and who knows how long that will last. 

Overall its a very discouraging turn of events, other than Bmann, if I was just starting today, I couldn't afford ANYTHING new in this hobby.


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## Cougar Rock Rail (Jan 2, 2008)

I think the days of 10,000 Shays is gone. Long gone. 

10-4. The effect of the smaller MLGB runs can already be seen on Ebay, as some of the RhB locomotives (such as the Unesco Ge4/4iii) almost never show up and if they do they go for way over the original selling price.


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## Cougar Rock Rail (Jan 2, 2008)

I'm afraid that those of us on the lower economic rungs of the hobby are simply being cut loose from alot of these companies. 

I don't know if I agree with you there. IMHO there has just been a recognition that making cheap crap is not sustainable for either the manufacturer (at least those based outside the PRC) or the consumer. There has to be a shift of mentality to long term value and less purchases, instead of high volume low cost. Sure there will always be room for a low price producer, but it pretty much has to be from a China owned/operated company with the low cost labour, and that pretty much leaves Kader to fill that role.


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## chuck n (Jan 2, 2008)

I don't mind paying for a sound system, but I draw the line at having to buy an engine with DCC installed. I do not have any DCC and I don't intend to get into a new system, new to me. Chuck


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## Treeman (Jan 6, 2008)

The Mogul is still offered with out sound or DCC and it is not $195


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## Curmudgeon (Jan 11, 2008)

Posted By chuck n on 22 Oct 2013 12:52 PM 
I don't mind paying for a sound system, but I draw the line at having to buy an engine with DCC installed. I do not have any DCC and I don't intend to get into a new system, new to me. Chuck 
I really hope the Kader internet monitors are reading this and reporting it to the owners.

It is highly entertaining to read this stuff, here and elsewhere, where nobody wants this add-on garbage nor mandated dcc on-board.
Think back a while....had I or anyone else been arrogant enough to promote any type of electronics that would have been supportive of Radio/Battery only, the screaming that would have ensued.
You end up with hairball Quasinami, mandated.....you get some sockets wired for OEM products only (how does that plug-and-pray work out for you) , whole circuit boards of surface mount transistors to trigger items...that sometimes burn open, sometimes burned closed.....optical chuffs wired for inverted chuff...and the price increase for no cost electronics, as we were assured by folks with an agenda.

I would imagine the particular PRC manufacturers who want to monopolize model railroad production are scratching their heads at all of this.
Economy, yes, that affects sales. So does unwanted garbage.
Isn't just me as the voice of one crying in the wilderness anymore.

I wonder what percentage of the low-priced non-garbage equipped line sales are to the high-priced fully equipped stuff?

Paying for the privilege of removing it all removed me from the marketplace.

Sound systems...depends on what it is. If, like Quasinami, only usable with dcc, I'd much rather find something useful rather than cut it out.

But, that's my..........................OPINION.


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## Scottychaos (Jan 2, 2008)

Posted By Treeman on 22 Oct 2013 02:43 PM 
The Mogul is still offered with out sound or DCC and it is not $195 



I was curious, so I looked it up..
Piko mogul without sound or DCC, $239.99 at Trainworld.

Scot


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## chuck n (Jan 2, 2008)

TOC, that is the reason I stopped buying LGB engines. I didn't want to pay for MTS. Chuck


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## Cougar Rock Rail (Jan 2, 2008)

I don't mind if they offer both the DCC option and non-DCC option, as long as they don't give us some crap in between, as TOC was describing. 
For example, for the new Allegra, which is a three piece unit, has three operating pantographs, lighted destination boards etc., is a little more complicated, I don't mind paying for the DCC & sound version, since I know for me to convert it after will be a lot of work and probably not much difference in cost at the end of the day. For a simple locomotive, on the other hand, I like the way they just give you a plain interface that you can wire to any decoder. It's when they start adding all these crazy secondary circuit boards that it causes problems....


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## CliffyJ (Apr 29, 2009)

I'm with Vic, the $200-level is significant to me. I'd consider going over that line a little, but have been dismayed at the lack of detail in Piko's mogul. Just my opinion, but it seems too toyish to me. But maybe it's because Piko's new at this, and perhaps they'll improve their tooling over time?


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## Curmudgeon (Jan 11, 2008)

I think the biggest killer of end user usability was incorporating necessary functions into unnecessary circuit boards. 
Case in point, steam engines with flicker fireboxes and ashpans...putting the drivers imbedded into boards that, for size and location need to come out. Then, you not only get the privilege of removing all of t, but then to build or buy the necessary boards to restore basic functionality. 
They want you to buy their latest stuff, they add on so much stuff...including a monster MSRP...and can't understand why customers stay away in droves? 
I know about the pantograph stuff....Chris brings his LGB Euro loco by on ops sessions....but he usually ties the units down to keep from losing them in tunnels.


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## vsmith (Jan 2, 2008)

Posted By Scottychaos on 22 Oct 2013 03:00 PM 
Posted By Treeman on 22 Oct 2013 02:43 PM 
The Mogul is still offered with out sound or DCC and it is not $195 



I was curious, so I looked it up..
Piko mogul without sound or DCC, $239.99 at Trainworld.

Scot
It was $195 when it first came out, also its *not *the Mogul I want, its the 0-6-0 switcher version without the lead wheel and a shorter pilot.

It really ticks be off that to get the Switcher made out of the less expensive Mogul I would have to do some major surgery, all for an engine that Piko could easily offer in a non-sound basic version.


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## Cougar Rock Rail (Jan 2, 2008)

It really ticks be off that to get the Switcher made out of the less expensive Mogul I would have to do some major surgery, all for an engine that Piko could easily offer in a non-sound basic version 

...and no doubt they will...just wait a few months. MLGB has a habit of doing the same thing...offer the premium version first then a while later they bring out the plain Jane model.


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## armorsmith (Jun 1, 2008)

TOC 

SUPPOSE someone (like Barry) were to offer a drive consisting of basic fram, properly geared reduction and mid quality range motor, what might your price point be? 
Same for simple sound cards, mid capability and "full dressed" cards. Add ons for flickering fire box, etc for those looking to do a full featured engine. 
I am beginning to believe that the future of large scale, and quite possibly the hobby as a whole, is going to go back to where it was when I first enjoined the hobby back in the early '70s. There were the 'inexpensive starter sets, mid range RTR and kits, and the high end brass imports. There were also numerous small manufacturers of scratch building / detailing parts. Back then one COULD build / bash over time therefore reducing the required single purchase outlay. 
I still have the '76 commemerative 'O' scale box done by Irv Schultz (Athern?). 
I would love to see the ability to purchase different/better/larger/smaller whatever drivers and rework a B'mann ten wheeler so I could have something no one else has without breaking the bank. 

Bob C.


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## vsmith (Jan 2, 2008)

Posted By Cougar Rock Rail on 22 Oct 2013 12:42 PM 
I'm afraid that those of us on the lower economic rungs of the hobby are simply being cut loose from alot of these companies. 

I don't know if I agree with you there. IMHO there has just been a recognition that making cheap crap is not sustainable for either the manufacturer (at least those based outside the PRC) or the consumer. There has to be a shift of mentality to long term value and less purchases, instead of high volume low cost. Sure there will always be room for a low price producer, but it pretty much has to be from a China owned/operated company with the low cost labour, and that pretty much leaves Kader to fill that role. 
There's a difference between cheap crap and affordable quality starter trains. Bachmann for most of us was the point of entry into LS, and granted there earliest effort wanted for alot, but they still got lots of us involved. At least they are continuing to offer the Big Hauler sets and also adding the Lil Hauler lineup, all to get people to bit the large scale fish hook. LGB also tried with the Toytrain line which they stupidly killed off, and are now trying to reintroduce. We need new blood, and we are not going to attract very many if the public perception is that the entry fee is in the thousands of $.


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## Cougar Rock Rail (Jan 2, 2008)

We need new blood, and we are not going to attract very many if the public perception is that the entry fee is in the thousands of $. 

The last time I looked both Piko and LGB were offering starter sets at about the same price as years ago--in that $300 range, not in the thousands. I think the biggest impediment to getting new people into the hobby is the disappearance of the trains from the local hobby shops (and the LHS's themselves). Lots of people ask me, "Where can we buy something like this?", and unfortunately I don't have a good local option for them. When I was starting out, I drooled over the trains behind glass cabinets for ages before I bought anything...I think that is an important part of the hobby that needs to be restored. Obviously Maerklin understands this--they just opened a big store in the train station as I mentioned above. Seeing things online is not the same as seeing it in person. People will make an impulse buy in person, but I think it is less likely when shopping online, where they spend more time comparing prices. For LS you have to see it in real life to get the "wow" factor.


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## BigRedOne (Dec 13, 2012)

Well, and the fascination isn't there and probably never will be. 

Thanks for this thread, Cougar Rock Rail. 

I find myself questioning this: 

"One other thing I've noticed with MLGB is that the runs are much smaller, so it gives the consumer more of an incentive to buy it if they want it because there is a good chance they won't see it again or if so many years later." 

The counterpoint to this is the consumer may not find the right combination of model and price which works for them, and choose another scale, or a different hobby altogether. Also, short runs increase cost and reduce inventory - killing the impulse purchase sales, not raising them, since the window of opportunity is so short. Only the affluent can buy what they want when they want. 

I do buy on impulse in person, but I can't remember the last time I was motivated to do so. My closest shop with large scale and fair prices calls for a full day committed to driving ($100 of gasoline + tolls) - and then the tax is such a killer that mail order makes more sense. 

I worked in a hobby shop when I was in high school (my first job with a W2), and it's also a community where you would meet people, share skills, show off your work. A lot is lost with their demise.


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## chuck n (Jan 2, 2008)

What I would like in a new engine is a basic engine with a socket or sockets for sound and DCC. The manufacturer can sell the cards, most likely for less than third party sources. Chuck PS. Another thing I would like is a track/battery switch, like Aristo and Bachmann have and Accucraft and USAt don't.


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## Treeman (Jan 6, 2008)

Scot, do you consider the dealer you mentioned as the bench mark for prices?


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## NTCGRR (Jan 2, 2008)

Mike 
are you getting my e-mails?


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## vsmith (Jan 2, 2008)

Posted By Cougar Rock Rail on 22 Oct 2013 05:02 PM 
We need new blood, and we are not going to attract very many if the public perception is that the entry fee is in the thousands of $. 

The last time I looked both Piko and LGB were offering starter sets at about the same price as years ago--in that $300 range, not in the thousands. I think the biggest impediment to getting new people into the hobby is the disappearance of the trains from the local hobby shops (and the LHS's themselves). Lots of people ask me, "Where can we buy something like this?", and unfortunately I don't have a good local option for them. When I was starting out, I drooled over the trains behind glass cabinets for ages before I bought anything...I think that is an important part of the hobby that needs to be restored. Obviously Maerklin understands this--they just opened a big store in the train station as I mentioned above. Seeing things online is not the same as seeing it in person. People will make an impulse buy in person, but I think it is less likely when shopping online, where they spend more time comparing prices. For LS you have to see it in real life to get the "wow" factor. 
Yes with that "in the flesh" visual appeal, its very hard for people to relate to LS. Out here in the left coast one of the best introductions to LS was when Orchard Hardware Stores and later Costco, had Bachmann starter sets in their stores each Xmas, people would buy the sets for the Xmas tree but a few of them later progressed with those sets into the garden. But those sets disappeared with the economic downturn. I still feel its important to get starter sets, like the cheap Bachmann starter sets into Big Box stores like Target, Home Depot Costco Wallyworld etc, just to tempt folks to bit the LS fish-hook.


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## Scottychaos (Jan 2, 2008)

Posted By Treeman on 22 Oct 2013 09:58 PM 
Scot, do you consider the dealer you mentioned as the bench mark for prices? 




For the most part, yes.They have a large selection (except for USA trains!) and their prices are
usually very close to most of the larger on-line dealers..

Garden Railways Magazine is really the best "benchmark" for current prices IMO..
because all the major dealers advertise there..although they dont have their entire product line in the magazine,
so for some items, you would still need to check several dealer webpages to find the best price.

I also just checked wholesaletrains.com, and they show the same price as trainworld, $239.99,
but they have an interesting note on their page:

"Piko Minimum Advertised Price Shown"

wholesaletrains.com also has a "club discount" which will lower the price further..
I tried to log in to see what the discount is, but I have forgotten my password! 

Scot


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## jguettler (Apr 17, 2009)

Scot,

Wholesaletrains member discount is about 10% on the D&RGW mogul. It varies depending on the particular item.


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## Treeman (Jan 6, 2008)

We have the same price listed for the Mogul. If some one wants one send me an email.  [email][email protected][/email]


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## Amber (Jul 29, 2011)

Logically speaking, I really shouldn't be involved in large scale trains at all, I really can't afford them. Scratch building and parts bashing with stuff from ebay are about my only options these days. I still do what I can because I like the size of the stuff. Even HO scale has gotten expensive, you can't get the "blue box" Athearn stuff anymore, and that was always the best bargain for the money when it came to engines. It's really hard to keep kids interested in trains if the only stuff that's affordable won't run reliably. I'm sure it's the same with large scale, especially when you pay that much for something that isn't reliable and at least reasonably durable.


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## Garratt (Sep 15, 2012)

Interestingly, The available stock of Newqida coaches seem to have 'dried up'. 

Andrew


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