The future of model railroading.

[MountainMan]

Your analysis is very good; however, I forsee other problems with the possibilities that you have mentioned.

First, the garage craftsmen need to bring in a certain income to offset their expenses and make a profit sufficient to keep them working, cover insurance, shipping, etc. The more advanced the items being constructed, the greater the cost. Working in brass requires a mini-machine shop. Working in resin or plastic requires high quality molds. Making laser cut kits requires a laser, which isn't cheap.

Garage craftsman kits are not cheap, and are not intended to be cheap. Typical cost is $30 per car when trucks, couplers, paint, and glue are included. Today's craftsman kits are intended to build high quality, highly detailed models. The savings comes in because it takes the customer significant time to build and finish a kit. I don't think I have ever completed more than one kit in a month. Approached in this fashion, a $40 a month hobby budget can work. OTOH, I will never build more than about 40 cars and a handful of locomotives and 20 structures in my foreseeable future (same was true for most model railroaders in the early '50s).

As for tooling costs, lasers, quality molds, photo engraving, lost wax casting equipment, and even 3D printers are far cheaper than cutting steel dies. Typically, less than $10K is needed for the tools to get started in producing low quantity craftsman kits for each of the production methods. Because of the comparatively low up-front investment, production runs of 50-200 items are entirely practical.

Second, the people have to advertise, and that is a decent expense that must also be covered by revenue, and yet these backroom manufacturers do not have the advantages of large scale production runs to hold down unit costs.

If you only produce 50 cars of a particular prototype (common run for a resin kit using 2 sets of molds), advertising can be as simple as an announcement on several specialty modeling forums. If you produce a model of a PRR box car from 1888, announcing on the PRR and Early Rail groups will probably sell out a run of 50 in short order. Advertising beyond getting the word out to likely customers is not needed.

Lastly, with the shrinkage of the Chinese factories, the magazines will lose their primary sources of advertising income, and will be forced to raise their rates to the backroom outfits to maintain themselves viably, and this inflationary spiral will boost the entire range of costs to the modelers.

I agree, the magazines are losing advertising revenue when compared to the past. Internet ordering already has taken away the 2-4 page spreads of the big mail order companies of the 1980s and earlier. If you notice, Model Railroader has reduced its content to keep the approximate same ratio with its advertising. Many cottage manufacturers take out a small blurb that simply gives their web site address and maybe a sentence or two about what they produce. And since Model Railroader charges more than the other magazines, and is perceived to have fewer craftsmen modelers in its readership, the advertisements tend to be in the other magazines. Magazines (like newspapers) are in trouble across the board - the old business model just isn't working that well.

The problem area for which there is no solution to emerge yet is model locomotive production. I doubt that locomotive kits are ever going to come back - although I would like them to. The skill levels to build a good-running and nicely detailed kit are quite a jump for most beginning model railroaders. Low rate production locomotive kits would (and the very few that are made do) cost more than today's plastic production at list price. So I don't see locomotive kits coming back up until Chinese production ratchets up another $200 or more per locomotive.

just my thoughts
Fred Wright

[b]Cannot read - yellow color is illegible.