[Doug]

As I was looking for a Christmas train to help decorate my tree - and yes, I think that it may be fun and a good excuse to bring a train into the living room - I was noticing some massive price differences between the US and the UK markets.

I was looking at Bachmann trains. The LGB Coke train doesn't really interest me. But Bachmann have a great range of G-scale trains in their Spectrum range.

I did come across a rather nice loco that I may add later to my garden layout. A model of a loco that was made in the US and exported all over the World as late as the 1950's. It could fit in to virtually any type of theme if decorated suitably.

Bachmann Spectrum G 2-8-0 Consolidation 81295

1:20.3 Scale 2-8-0 Narrow Gauge, Outside Frame Consolidation

Features include: DCC ready, LED headlight, smoke generator with on-off switch, NMRA polarity switch, load-synchronized LEDs in firebox and ashpan for realistic fire glow, precision can motor, die-cast gear box, metal frame, complete backhead detail, fully operational Baker valve gear with Johnson bar, numerous separate detail parts and chemically blackened machined metal wheels.

In the USA, this loco is selling for $220 (£107.14). Shipping price to me $91 (£43.32). Total: $311 (£150.46)
MSRP: $799.95 (£389.58)

In the UK, this loco is selling for £355 ($727.40). Shipping price to me is about £20 ($40.99). Total: £375 ($768.39)
MSRP: £451.85 ($925.84)

Now I do understand about the size of various markets, supply and demand and all that. I did economics at varsity. But if these items are all made in China and if a manufacturer can move large quantities of goods around the world in containers, why is there such a difference in price in one place compare to another?

I do understand that the USA model is tax free at £150.46. Lets add 20% tax to it (£180.55). Lets add a 30% mark-up to that (£234.72). It still is £140 less than the UK retail price. What's up?

I'm sure that I posted something similar last year when I was reviewing the American articulated logging locos. I'm sure that the justifications for such differences in price must have not sunk-in.

 

[neil_s_wood]

It's something I have wondered about too. I also noticed this same phenomenom when looking at the increased costs of Continental outline in the UK. You are only a hundred miles or so from Germany yet paying twice as much. Extra middlemen maybe? In Ozz we have the same problem where anything model rail is twice what you would pay in the USA or Germany. UK outline is a bit better at 50% more. Some shops can do better. Maybe Richard has some information on this as he has a shop and stocks European and US goods.

The postage doesn't seem to bad though. I was recently quoted 81 quid postage for an underground ernie train set from Hattons. I cancelled when I heard that.

 

[Richard Johnson]

QUOTE (neil_s_wood @ 13 Dec 2007, 08:09) <{POST_SNAPBACK}>It's something I have wondered about too. I also noticed this same phenomenom when looking at the increased costs of Continental outline in the UK. You are only a hundred miles or so from Germany yet paying twice as much. Extra middlemen maybe? In Ozz we have the same problem where anything model rail is twice what you would pay in the USA or Germany. UK outline is a bit better at 50% more. Some shops can do better. Maybe Richard has some information on this as he has a shop and stocks European and US goods.

The postage doesn't seem to bad though. I was recently quoted 81 quid postage for an underground ernie train set from Hattons. I cancelled when I heard that.

*** I don't think you can make a general rule as to cost vs source. For example as a club member we chacked this issue a year ago in regards to Hornby loco's at one shop here in Perth. When we checked out of 20 loco's compared 13 were at or slightly less than Hattons prices while others were up to 50% more. Other shops were all considerably higher with an average of perhaps 25% higher than our benchmark of Hattons, with some as high as 50% more. Wagons and accessory items on the other hand are often much higher. Generally Neil the East coast is charging MUCH more than the West Coast for loco's - I was shocked at Melbourne and Sydney prices for everything model-wise last time I visited!

In my own case I think we are actually as cheap or cheaper then UK in some lines and ditto for EU products - We are rarely significantly dearer, and never dearer than the US recommended retail.

ESU can be a problem as margins are never generous and ex factory costs are too high - but we do try and for example our ESU speakers are equivalent. We export a lot of our own brand products to other resellers and keep a close eye on this, and I don't believe UK retailers are overcharging in the case of our LED's and MASTERswitch products etc...

In accessory areas we can be both better and cheaper than USA, but it is not easy to do that.

My take on this overall:

Price can be held close in some items because of direct distribution ie: maker to retailer. Freight, tax and local costs still have an influence though.

Old style 2 tier distribution: Bachmann and Hornby often use international distributors who will certainly create a hugely inflationary added margin between brand and retailer - this is the biggest problem. I think that this problem also affects EU models distribution significantly.

Cost of doing business: UK and AU costs are higher for premises and overheads than USA, but not higher than the core EU countries.

Tax: Local taxes are higher in AU and UK/EU compared to USA

Cosy arrangements: US distribution mainly uses a series of distributors and retailers, however some distributors also sell direct through an owned retailer. This gives these companies a real price edge that standard retailers cannot begin to compete with. This to me is totally wrong as it is killing off many of the local retail stores completely, and makes a mockery of the price structures set by the manufacturers. I'm all for competitive and "global" pricing but its impossible with these cosy "under the counter" arrangements

Overall though Dougs example is really extreme (Bachmann G scale) and is just wrong - it shouldn't happen! I'm surprised at its huge differences. Bachmann need to look at and globalise this issue much better, such extremes do them real harm as retailers will not show loyalty ever with a disparate arrangement like this!

Regards

Richard
DCCconcepts

 

[neil_s_wood]

QUOTE (Richard Johnson @ 13 Dec 2007, 12:30) <{POST_SNAPBACK}>Generally Neil the East coast is charging MUCH more than the West Coast for loco's - I was shocked at Melbourne and Sydney prices for everything model-wise last time I visited!

Regards

Richard
DCCconcepts
I have noticed this. I bought a couple of Hornby items from a Perth based outfit called Corgi clearance house or discount warehouse or something like that and the prices were comprable to UK prices. I got the impression that a few stores in Melbourne were buying from places in WA.

 

[Sol]

In my American modelling days, Southern Models here in South Australia was the importer for Life Like Proto 1000 & 2000 range of locos, etc.
One such Heritage 0-8-0 tender loco which was sold for USA$225 would have cost me around A$375 plus postage if I imported from the States but local shops who was getting them from Southern Models & selling them for under A$200. In asking about this, the story was the Souithern Models imported them direct from China, not via the USA distributor.

Like others in Australia, some Hornby locos can be cheaper locally & others from say Hattons.

Now Bachmann in Australia is a different story all together - in most cases locos here are at about 50% dearer than if we import them from Hattons, etc including postage.

Loyalty to local hobby shops can only be stretched so far.

 

[Doug]

I think the issue here could be middle-men. Just add one or two, each adding their percentage and you end up with the prices you see.

Importers, distributors, agents. etc.

I'm sure that the older generation of modellers who go down to their local model shop or order online from a trusted source like they have done all their like are not aware of this, but the younger generation will not put up with it. It is just as easy to order products from Texas than it is from the British Midlands. It comes down to price in the end and looking at this, Texas is cheaper.

 

[Brian Considine]

QUOTE (Doug @ 13 Dec 2007, 08:03) <{POST_SNAPBACK}>I think the issue here could be middle-men.

Importers, distributors, agents. etc.

No, not really, we buy "European" brands from both distributors & direct from the manufactures & there is virtually nothing in it one way or the other. Often we see items advertised by well known internet retailers at only a few % more than we could actually pay for them direct from the manufactures - and that's taking into account the maximun discounts available.

Most products have always be cheaper in the US & probably always will be - ijust look at the situation with cars for a non-model comparison.

Dealers in the US are probably able to purchase their stocks at less than their UK/Euro counterparts, take into account the illegality of evading import tax/VAT & there is your answer.

Not really fair on the smaller UK dealers, most of whom are content to make a reasonable margin, but then again I don't remember any lessons at school that said life was fair !

 

[neil_s_wood]

So Brian, if thats the case how come so many UK Continental outline dealers have such high prices. Are they cashing in big time?

I wont mention any names but you can guess who I am referring to.

 

[Brian Considine]

QUOTE (neil_s_wood @ 13 Dec 2007, 21:25) <{POST_SNAPBACK}>So Brian, if thats the case how come so many UK Continental outline dealers have such high prices. Are they cashing in big time?

I wont mention any names but you can guess who I am referring to.

Got it in one Neil !

 

[neil_s_wood]

QUOTE (dbclass50 @ 14 Dec 2007, 17:31) <{POST_SNAPBACK}>Got it in one Neil !
I thought so. That really is shocking.

cheers mate

Neil

 

[Gary]

Remember that those who act as both distributers/importers and retailers normally have to stick to a RRP to have any credibility on the distribution side.

Happy modelling
Gary

 

[pedromorgan]

Perhaps this is a good time for mee to ask, Brian when are you going to sort out the euroscalemodels website? there is an absoloute killing to be made here! there really isnt a good well illustrated UK based continental website. there are a few high priced box shifters but if i just want a bog standard PIKO hobby loco. i want to see a picture before i buy it and i want an honest review. there is nowhere i can go.

One retialer i used to go to with my father i used to be able to walk away with a couple of box cars with my pocket money but then they went all up market and the last time i went in there there really wasnt much for less than £100. I cant impulse buy in there any more. it has taken the fun out of it.

Peter

 

[Brian Considine]

QUOTE (pedromorgan @ 14 Dec 2007, 14:00) <{POST_SNAPBACK}>Perhaps this is a good time for mee to ask, Brian when are you going to sort out the euroscalemodels website? there is an absoloute killing to be made here! there really isnt a good well illustrated UK based continental website. there are a few high priced box shifters but if i just want a bog standard PIKO hobby loco. i want to see a picture before i buy it and i want an honest review. there is nowhere i can go.

One retialer i used to go to with my father i used to be able to walk away with a couple of box cars with my pocket money but then they went all up market and the last time i went in there there really wasnt much for less than £100. I cant impulse buy in there any more. it has taken the fun out of it.

Peter

Hi Peter,

The lovely Pam is working on the website at the moment - we have some idea's & hope that we will be able to use some excellent reviews, including some information about converting the Faller Road System vehicles into 4mm ones. Especially with some news we heard earlier in the week we really do need to get ourselves into gear.

Hopefully, early next year & before Nurberg.

Regarding the Piko Hobby Loco - just pick one off the GM website that is in stock & we will sent it on approval. You will not be dissapointed for the money !

 

[7113]

Looks like I'd better work on my bit then.

Regards

 

[pedromorgan]

QUOTE (dbclass50 @ 14 Dec 2007, 16:53) <{POST_SNAPBACK}>Regarding the Piko Hobby Loco - just pick one off the GM website that is in stock & we will sent it on approval. You will not be dissapointed for the money !

I will take you up on that offer after christmas when i find out how much money i have left!

Glad to hear the website is comming on. i really dont know what i can do to help but if there is anything tthen do let me know.

Peter