More exciting news about Bachmann K4

[peteski]

$230????? Looks like I have to wait a while.

With the MSRP of $400 (ok, $399), what kind of discount on a brand-new and highly-requested model did you expect?

[delamaize]

$230????? Looks like I have to wait a while.

Almost all new, sound equipped, Steam locomotives are in this price range. Why are you surprised?

[victor miranda]

well, at some point it simply is 230 dollars.

I have been known to spend nearly 800 dollars on a loco.
and while that may be bragging... it is not a price I like.

if you have in mind getting a second....
it is another 230 dollars

how many times will one do that before it hurts?

If one is painful, the second will not happen.

victor

[asarge]

at $230, they at least get a resonable, but not heavy margin.  That's not bad for new tooling with a somewhat limited market.

[victor miranda]

at $230, they at least get a resonable, but not heavy margin.  That's not bad for new tooling with a somewhat limited market.

ummmm, I suspect this post is a cause for a lot of reasoned disagreement.

if the b-mann J is worth 100 dollars and I feel I am being generous with that number
and  if  ( big IF there)... the loco is worth same 100 dollars without the electronics...
you are telling me that I can't get a sound system for less than 130 dollars...

I suspect that if I want a sound system,
 I can get a better sound system for less than 130.

ah well, you can have the sound for 130.  I'll await seeing if the mechanism is worth the 100 side of that.

victor

[Puddington]

What you are forgetting Victor is the cost of tooling - I'd wager between 60K-80K in tooling, plus development and design costs, all in; about 100K....

So; depending on the financial model you use for the pay back on tooling you can easily see how a new to market item can be msrp of $ 400.00 while a similar but older model on it's second or third production run could come in lower.... it's all in where you assign the tooling costs. Some model railroad company's assign 100% to the first release when establishing msrp - prudent, because no second run is ever a sure thing. Assign the tooling costs to the first run, take your chance with a higher msrp and be done with that cost forever. Some amoritize it over the first and future runs; probably a safe bet if it's a GP or a PS1 boxcar; multiple runs are likely but a PRR steam engine.... bigger risk.

Second runs (and 3rd....) are not necessarily cheaper msrp than a first because the tooling is paid for; they are also usually much smaller runs and the extra margin helps offset the smaller run quantity and (oh  no, dirty words coming) help the company make a profit.

I have no earthly idea what tooling model Bachmann uses but you have to assume soem significant tooling amount is in the over all cost and thus the MSRP of the K4.... tooling ain't cheap.

[victor miranda]

Hi Puddington,

when I tried to talk tooling costs I was told I know nothing.
when I presented numbers to back up my thinking I was told I know nothing.
when I explained that there is darned little to miss on the cost of tooling and amortizing those costs
I was told I know nothing and so
I decided that a lot of folks do not want to hear about costs and implied profits.

buuut if you want to talk tooling costs we can.
I promise I can add and divide pretty big numbers.

please note I did state "worth" and did not consider the company's costs nor profits.

the berk has all the same features as the k4.  the berk cost 188 at my favorite train store.
You are telling me that the rate of inflation for last year was 20 percent?

.... I had not considered the profit margin into my thinking....
lets assume that inflation is 5 percent...?
so the difference between the berk and k4 is 15 percent?

so if we assume the berk is sold at some profit...
the k4 has a built in margin (also called profit) of 15 percent more than the berk.

ok.

.... I expect I hear some one say; victor, you know nothing...

it is still 230 dollars to buy.
right now I don't think I need a sound equipt  k4.

I am very curious about what I might be buying in a few years.

victor

[towl1996]

if the b-mann J is worth 100 dollars and I feel I am being generous with that number
and  if  ( big IF there)... the loco is worth same 100 dollars without the electronics...
victor

One hundred dollars for a new loco?    Is that what you're saying?

I usually complain about the prices of most of the newer model railroad stuff, but in this case, if this turns out to be a good runner, I think the price is fair. And rest assured, if I get a klunker, I'll keep returning it until I get a good runner. I'm not going to settle for anything that performs worse then what Bachmann had running in their video. 

[Puddington]

We made pre wired telephone poles in HO scale four years ago. When, 18 month later we went back for a repeat order the cost to manufacture was 260% higher.... 18 months, 260%.... The cost of labour alone in China is rapidly rising. The cost of tooling has followed that trend; now, not 260% but a significant amount and it continues to rise.

The cost to design, tool and manufacture our model trains has dramatically risen. Add to that the detail and "unit specific" demands the market has developed a fondness for and the fact that all of that requires more assembly labour and results in more sku's selling smaller individual quantities and it's not hard to understand how a 2013 steam engine might have listed for an MSRP of $ 260.00 while today's K4 is $399.00 - doesn't surprise me at all.... as a consumer I don't like it but I understand it.....

[victor miranda]

I can accept that costs have risen 260 percent.

the K4 has no profit margin at all now.

ok

that leads me to speculate about the margin of the berk.

it is still 230 dollars I am not likely to pay any time soon...

[victor miranda]

One hundred dollars for a new loco?    Is that what you're saying?

I usually complain about the prices of most of the newer model railroad stuff, but in this case, if this turns out to be a good runner, I think the price is fair. And rest assured, if I get a klunker, I'll keep returning it until I get a good runner. I'm not going to settle for anything that performs worse then what Bachmann had running in their video. 

Hi towl1996,

that sounds like a plan.  the postman always gets paid...

the 100 dollar figure is a number that is based in reality.
(the price of either a 4-6-0 or the N&W J)
and as puddington mentions it may not be realistic.
I did not see an alternative number proposed.

so for the moment I'll stick with an electronics free loco being worth 100 dollars or less.

when b-mann makes a loco with all the smooth rolling ease of a Kato FEF
I may be willing to move the bar...

victor

[Puddington]

... but the Berk is a second run...? Yes; if so then the margin may well be greater than the K4 due to how Bachmann accounted for tooling costs... don't know.... if it's a first run Berk then maybe it's a inventory issue and they'll sell for a lower gross margin....don'y know either....

[victor miranda]

far as I know there was only one run of the bachmann berk.

[bbussey]

Another possibility — the Berk didn't sell as well as expected, so more of the tooling cost for the K4 is being amortized in the first release.

I've suspected from the beginning that Bachmann is beginning to load more of the tooling/development costs in the first release of their recent models.  It makes little sense to have such high MSRPs if not trying to pay off the tooling quickly.

[Blackout]

Even though I want it, will still have to wait after the initial rush.  I'll let the big ballers be the testers. See if it turns out like the infamous berk.  Hanging back and see if I can acquire one later for a reasonable (or least less inflated) price. I will only stretch so far to pay for the dcc bells & whistles I dont even plan to use.