Lionel ignoring the mid-market for motive power?

I was in El Centro for 13 years!!!  Those summers get hot hot hot.  Quite a shock for an east coast kid.  This year I moved to West Virginia, just in time to experience the worst winter in a decade, so from super hot to super cold!  Maybe it'll eventually warm up enough that I can go to the basement without having to wear a jacket and cap!

Lionel must be very careful in the way it markets its products. Since Kader-Bachmann-Williams is the only company that owns their own manufacturing facility they will always be the price leader in conventional trains. All the other companies are just "middlemen" importers that subcontract their products out. Can they compete with Williams?

Just look at the Williams Scale Hudson that you can find for around $350.  Add about $100 worth of electronics (at best) and a few extra detailing features and there's your $2500. Lionel Legacy Hudson.

 

Looks like my next project is to start researching L/TMCC upgrades, or maybe even DCS upgrades if I end up moving to the dark side.

Apparently you still missed the 12 LionChief Plus steamers 4 Mikados, 4 Pacifics & 4 Hudsons MSRP $430. I have one on order for $310 and we have discussed these engines last week a lot here. They will pull their weight, at Lionel 2 of them pulled 20 standard cars each no problems.

 

There are 2 steam sets, 0-8-0 MSRP $430 & a Berkshire for $400.

 

 

The selection of great and affordable locomotives is huge if you are willing to buy used or NOS.  Whole collections of new and nearly new equipment are going to the auction block every day.

 

If you happen to run conventionally, opportunities to get things cheap are almost limitless.  And, with a little practice and advice from forum members, restoring and fixing these units yourself can be very rewarding and satisfying.

 

Some people, like myself, have neither interest nor wallet for buying new items from catalogs.  MSRP, as is the case with Williams, is a fantasy world.  I buy used and get more bang for my buck.

 

With regard to control systems, today's hottest innovation becomes tomorrow's denigrated system.  Today's Vision Line Bog Boy will finally appear on the used market when Lionel catalogs its new and improved Remote Viewing Big Boy.

In reading the above posts, i see many comments suggesting that "no one pays retail", or that MSRP is not the real "street price", and imply that we should buy from the discount suppliers.  While not saying that the discount suppliers don't have a place in the market, many of us only have the local (for me meaning within a 100 mile radius) shop to actually see the product, have it checked out before taking delivery, etc.; these shops simply cannot exist without selling at or near MSRP.

My point -- How many of you suggesting purchasing from the discount retailers are the same as those who post woes and lamentations when a local hobby shop goes out of business? Just a thought,but remember you can't have it both ways.

jackson

 

Best statement yet

Most Hobby shops in my area may charge a bit less than catalog price. Sometimes the owner will let me pay 6 months layaway with 10 to 15 percent off the price... really helps the pocketbook. Problem is he cannot get everything released in the latest catalog, or it may sell out quickly. Then I have to order via the web.

 

Interesting have not heard from the people buying the high dollar stuff. I remember paying over 1000 dollars for rare brass engines in HO. Took me a while to save for them. When I look what I got for the price, the signature releases are a deal.

 

The orange box is still a powerful draw for folks.  I too was reluctant to purchase a Williams engine at first because I felt like I was getting an "off brand".  Not only was I fully converted when I first saw it run so exceptionally well, but it also dawned on me that Williams is producing pretty much exactly what I want from an O gauge locomotive in 2014--bulletproof operation and a minimum of ancillary stuff.  They've taken all the best parts of the PW/MPC Lionel experience and added a dose of awesome.

 

We'll see how LionChief Plus goes.  I like what I've seen so far, so I've got one of the Mikes on order that I'll run conventionally.  If it knocks my socks off, the big L will get me back buying at that price point.

 

Anecdotally, a good friend bought his son a Lionel starter set in 2011, and this year were looking for a new locomotive--helped him pick up a barely-used Williams GP9 for around $85 off eBay.  Runs like a top, and they couldn't be more pleased.

Good point! I also support my LHS, buying probably 90%-95% of my hobby purchases there. They are close to MSRP, some items discounted a little more than others. The give ma a bit better discount on pre-orders and I can pay them down before delivery, makes it easier on the wallet.  I have talked to the owner about the prices and he has to pay more for a lot of items because he has to go through a distributor. If they don't have something I try to order it from them.

 

I do my best to help keep them open so I have a place to go look at trains! They are basically the only O gauge shop in town, they have a good selection of stuff and are also the closest to me. There is one other very small shop in town that has some O gauge, they are 30 minutes away. They charge above MSRP on many items. There, you have to order almost everything as they stock very little in store. Only been there once.

 

Only things I purchase elsewhere are things my LHS doesn't have and can't get. Maybe a used item or two from a forum member or ebay every now and then. I have not had good luck with used stuff, especially from ebay, purchases there for me are fading fast. So, most of my purchases are new and from my LHS.

 

If you have one, I also highly recommend supporting your local hobby shop or train store. If you have one and don't support it, you may not have one much longer and that might be something you regret someday.

LETS all take a trip on Peabody's WAYBACK machine to the 1960s; I was considerably younger and recall looking in the Lionel catalog at those $65 GG1s.  I knew that there was no way my family would shell out that kind of money.

 

So what happened, only the wealthy could afford those engines; I felt left out, angry and soon abandon Lionel. I was not alone because Lionel went out of business or was resold to the cereal  guys soon thereafter.

 

Fast forward to today, Lionel adopts a "build on order" scheme that pretty much cuts out the middle buyers; and will make them angry again though 50 years later!

Guess what happens next . . . .

 

 

 

 

this was my experience and my feeling as well

 

Legacy Station is having a MID level train sale as we speak. Lionel close out Mid level engine mostly, enjoy, spend all your YORK money.

 

www.legacystation.com/lionel-special-diesel-closeout

"I was not alone because Lionel went out of business or was resold to the cereal  guys soon thereafter."

 

That's not what happened. Lionel's sales dropped because trains were no longer the premier toy, not because they were expensive.  They were even more expensive in the 1920s, 30s and 40s than they were in the 1960s, when they made less expensive products.  What happened to Lionel is television, HO, slot cars and the vanishing romance of railroads and passenger travel.

I am amazed the LionChiefPlus steamers were not offered as low cost Legacy steamers in the $300.00 to $400.00 range first, or able to pick up its signal at least!! 

 

 Don't get me wrong, I think LionchiefPlus is a great idea and will be ordering one.

 

Art

"I was not alone because Lionel went out of business or was resold to the cereal  guys soon thereafter."

That's not what happened. Lionel's sales dropped because trains were no longer the premier toy, not because they were expensive.

 

Lionel stopped being the "premier toy" because price was a factor! There were other facts as well but money is usually a prime mover in consumer decisions. No?

Lionels were always expensive. Even during their 1950's heyday. I don't have the source in front of me, but a common comparison was that the typical high-end Lionel set equated to two weeks' salary for the avarage middle-class worker.

 

Better yet, pull out an old Lionel catalog from that era and run those prices through an online inflation calculator.

 

---PCJ

And Lionel kept cheapening the trains and cutting back on selection until there was nothing left to cheapen or cut back on.

 

Rusty

When I was a kid Lionel was too expensive for us.  We bought Marx mostly and I was very happy to have them, but even at five, I knew Lionel was "the Cadillac of toy trains" as my grandfather called it. We didn't know too many people who had Lionel or Cadillacs, for that matter.  All my friends had Marx, like me, if they had trains - and most did.

I find it strange to hear it argued that Lionel will go out of business (like it did in 1969) because it's products are too expensive.  Lionel, in addition to being by far the largest dollar volume supplier in this boutique market, is also the low cost leader. At least for sets and entry level stuff. They provide sets for far less than Williams, Atlas and MTH, that even rival HO sets in price.  They are decent quality, unlike the cheapest sets of the late 1960s.

 

An experienced hobbyist may not be interested in these sets any longer, but sets are the largest single market in O gauge three rail.  Lionel is trying to keep prices down with Lion Chief sets, and now Lion Chief Plus locos.  The fact that some of us cannot afford the high end stuff they're making is not a rationale for complaint or their demise.  I never had any trains as a kid because even Marx was too expensive.  It didn't make me resentful of Marx or Lionel.  Your mileage may vary. 

 

Do any of us predict that Mercedes, Cadillac and Lexus are going to go out of business because they don't make their cars at Kia, Chevy or Toyota prices? 

Do any of us predict that Mercedes, Cadillac and Lexus are going to go out of business because they don't make their cars at Kia, Chevy or Toyota prices?

Unfair and unreasonable analogy; luxury cars vs. toy trains. or rather Mercedes, Cadillac and Lexus as Lionel verses "what" as Kia, Chevy or Toyota? The "what" is the issue here because there is no what.

 

Cars are a necessity toy trains not so much. The point that has escaped is that Lionel's built to order marketing scheme is great in the short term for Lionel but not so great in the long term for the hobby as it cuts out the middle and middle consumers.

We must

The point is that these "high end" trains that you refer to all use the same Chinese quality components as the economical Williams line, plus a small bit of extra detail and remote control electronics. Cadillac would go out of business if it was just a re-bodied Chevy but it stays in business because you get a higher quality engine, drivetrain and many standard options. Does high end mean just high end prices or is the product  that much higher quality?

The following was posted on another forum (mostly HO), thought I'd add it here:

 

The truth of the matter is that Bachmann is a China based company, vs. say Athearn or Walthers, who are American based importers. The principals are the same people who acquired and shut down the facilities that manufactured for American importers such as Atlas, and Athearn.

They are not marketing to "prototype" modelers. They routinely mark up their products knowing they will sell at 50% of MSPR or less. They are savvy business people, but could care less, about accuracy, for they know that it doesn't matter to their market.

 

I haven't looked at the new Lionel catalog as I'm pretty sure whatever they have inside is out of my reach at this time.

 

Out of 10 engines I own only 1 was above $600, and I'm having drive train trouble with it now.  That's too much to pay for something that breaks down after a few hours of running time at medium to low speed.

 

On the other hand I have 2 steam engines that were pieced together using various makers parts and I "run the dog" out of them.  They are my best runners, may not look as pretty but they keep going and are easy to work on/service.

 

My focus has changed from brand new to items made 10-20 years ago.  Nice items can be had for cheap and upgraded with new electronics for lots less than these new pieces.

"they will always be the price leader in conventional trains."

 

I like Williams and have a whole bunch of their postwar repros (F3s).

 

My apologies for sounding like a broken recording, but Lionel's starter sets are priced way below Williams, and the variety in the MTH and Lionel catalogs makes Williams look like the fringe player in the three rail world that they are,  and have been.  Williams makes some nice products for the conventional operator, but they are not competitive in terms of value for money in many market segments, IMO compared with Lionel and MTH. 

 

As someone pointed out on another thread, the current production Williams steamers (few, as in almost none, that they are) are not much less expensive than the new Lionel Lion Chief Plus locos, or Rail King,  yet their sounds are much inferior and less varied, they have no low speed capability,  and they don't have a remote or command capability built in.  Thus I do not see Williams as serious competition for Lionel and MTH, the two by far largest and most successful vendors,  who also have much more extensive and functional dealer networks.  I haven't looked at the latest Williams catalog, but others seem to see it as if the product line is on a not so healthy diet.

"The point that has escaped is that Lionel's built to order marketing scheme is great in the short term for Lionel but not so great in the long term for the hobby as it cuts out the middle and middle consumers."

 

However, another point is that the build to order marketing scheme affects less than 1% of Lionel's products in the catalog.  Why focus only on the high end handful of products and act as if that was all that was in the catalog?  There are plenty of locos (Legacy, Lion Chief Plus, conventional) that have selling prices under $500, or even under $250.  In fact, the vast majority of locos in the catalog.  There is a small minority of high end stuff over $1,000.

 

Lionel was fabulously expensive throughout its history, until the late 1960s when their prices moderated and quality deteriorated.  Lionel's prices are still high, but the equivalent of the 1960s starter sets are reasonable quality and moderate to low prices.  There are about twelve Lion Chief Plus locos with most of the features most of the consumers want, which undercut the prices of other vendors in most cases.  I cannot agree that the absent middle of the market comments are supported by the actual product line-up.  They may not be making what any given individual wants at that individual's ideal price, but there's something in these hundreds of pages of catalogs for 95% of consumers, I'd guess.

 

 

I'm with the few who say buy used and upgrade them and detail them.
If you can afford they expensive stuff, fine with me.
If you can not, then I think you should try to get creative or get out of the hobby. 
The stuff I buy used is the top of the line stuff that someone else bought new and drove off the lot.

My attitude is that if I need to go though the hassle and use a warranty, then I got suckered and did not do my homework.

Can not really think of anything in this hobby that I bought new or used and did not eventually modify, rebuild or do minor repairs.
All part of the maintenance routine.
Similar to what I have read about real steam engines. With the exception of a few models most spent more tine in the shop than actually running.
But with the exception of that windup alarm clock I took apart as a kid, I have yet to find a electo-mechanical  machine that I could not repair or make better than OEM specs
I guess I was born for this hobby.
And a heck of a lot cheaper than restoring antique motorcycles that was my previous hobby. 
FMH

Different strokes for different folks. Just because you don’t have a use for it doesn’t mean others don’t.  

 

I don’t know if Lionel understood it when they developed Lionchief, but it’s a simple way to bring O Gauge into condominium living.

 

I see it as a great addition for people who primarily run Conventional displays and don’t need all the bells and whistles of  a Command control system. I run eight simple loops on a 5 x 8 display (maxium amount of space available) with three post war zw’s. No bells only whistles and then only on six of the eight trains. Theoretically I could add four Lionchief engines, add four bells, improved sounds,  every train could blow it’s whistle and eliminate one zw.

 

I think LionChief will allow Lionel to grab in an entirely new segment of a previously untapped consumer market; Condominium and apartment dwellers. The only stupid part on their part may be in not proceeding with a massive commercial campaign to let people know about it. That and that there’s no Milwaukee Road or Southern Railway in the Lionchief line; but I’ll start that discussion in the P!$$ & M0@N forum where this thread belongs.

 

The middle market is well served by both MTH and Lionel.  I've bought three locos this month, it being a rather special time for me (see below).  A Legacy Mohawk - they can be had for $750, a Premier 2-8-0 (they run around $600) and a Lionchief Plus Hudson at just over $325 - frankly at that price I consider it below the mid market.  

 

I really think the company letting down the "mid market" is WBB.  They have always been the "back to basics" company that served the "not high end" part of the market, and I think they are letting that market down but not being competitive.  They have raised prices a lot in recent years: their semi-scale Hudson ($429) lists at the same price as Lionel's semi-scale Hudson which has good sound and Lionchief Plus.  Both can be had at discounts by shopping around in the $300-$325 range.  WBB needs to get good sound into its locos and some sort of remote like MTh has with starter sets or Lionchief.

 

I have bought all my scale legacy and TMCC steam engines on the used market Most at about 35-50% off the street price when new. You can get some really good deals if you take the time to look. 

 

If you really like the scale sized steam engines there is a way to do it and stay within your budget. I even bought a VL UP genset for $350.00 a couple of years ago on the ogr buy/sell board. 

From reading these posts it's obvious "middle" means different things to different folks - fair enough, but it does make intelligent discussion of the subject somewhat difficult.

 First are we talking about MSRP, street price, price used, blowout price, or what? To me MSRP should be the common number as it stays consistent and is not influenced by anyone's personal purchasing preferences.

  Second what is the middle range in actual numbers? This depends on a number of variables including personal income, discretionary income, stage in life, type and number of family and individual hobbies; in the postings here i've seen everything from $200 to $1000 being called middle. To give some real meaning to this discussion we need some consensus, something i don't expect here.

 My own version of middle is a NEW engine (steam, diesel, or electric, scale or well detailed traditional sized, with TMCC and sound) with a MSRP in the $400 to $700 range (Maybe to $800 for large well detailed engines). But that is only my opinion.

   However, i will reiterate we need to give some common meaning to "middle" before this conversation can have any real meaning.

 

jackson

IMHO mid range would be $300.00 to $1000.00.  I also think Lionel and others are missing a large market by not selling steam engines that can handle 0-48 curves. Some of us just do not have"big" layouts.  Also I think people that can handle big engines would buy small engines if they were compatable with the rest of their roster (think Legacy or DCS). I am talking about 4-4-0s, 4-4-2s, 2-6-0s, 2-8-0s even some more 2-8-2s. (I am aware that some of these have already been manufactured, I purchased some.) Any of these priced below $1000.00 would have broad appeal if they were scale and not "traditional". They should also consider 0-4-0 and 0-6-0. None of these locomotives are in the new catalog. In addition to 0-48 curves I have terrain features that preclude anything longer that 19 inches.  So there is a price range for mid size and a length requirement for "mid size". I just can not run a train on my O Scale layout with a Big Boy pulling a consist of double stacks, but I am still very content with my layout. I can't run a scale Supper Chief with an ABBA followed by a nine car consit, but my "Daily Excitement" pulled by an Atlantic hauling a baggage car and one coach hauls passangers from point A to point A in a reliable manner.

Douglas 

I can remember when people thought Lionel/MPC was pricing itself out of the market when they were asking $250.00 for a 2046-based Hudson with the "Mighty Sound of Steam."

 

How times haven't changed.

 

Rusty

Pretty much my thinking as well, somewhere in the $400-$800 MSRP range. Then one could reasonably expect roughly 10% off this price give or take a little. $1000 & up I would consider my high price range, and also too much for me for one engine. Most everything I have purchased (and all of it has been new and diesels) has been in the $270-$450 range street price. May have one Lionel diesel that was close to $500 or slightly above, can't remember for sure. All others have been MTH. All purchased from my LHS, they will allow a 10% discount for pre-orders, less for in stock items.

In the 2014 Signature edition there is a Baltimore & Ohio GP9 diesel locomotive powered in 2 numbers and non-powered in 1 number. The scheme used is one of the earlier paint schemes. This is a Legacy diesel. This is an early diesel era model.

 

There is also a Baltimore & Ohio Steam locomotive, but it is LionChief Plus.

 

 

Andrew

I'd say there are 4 types of buyers out there, and it's tough for any one of the manufacturers to fully cover all 4 types.

1.  Christmas (seasonal) operators - buyers of the Polar Express, Hogwarts, and RTR sets.

 

2.  Serious hobbyists - buyers of expensive, detailed scale models

 

3.  Conventional operators - for any number of reasons, just stuck with conventional stuff.  Simpler and nostalgic.

 

4.  Hybrids like me - started with conventional, don't have the space or wallet for scale, but picked up some semi-scale TMCC along the way. 

 

I think the 4th type is the smallest market segment.  LionChief Plus does a nice job of covering types 1 and 4 while also providing an interesting alternative without a big outlay for equipment to type 3.

 

Overall, in looking at it this way, I think Lionel has done a remarkable job of providing products for a diverse market.

I order one, I have a bunch of non powered B&O or I would have order the other ones offered.