Market share, multi scale, and hanging on for the new year

by John Sipple

It’s the day after Christmas 2001 and the numbers on the holiday season haven’t yet come in. However, talking to manufacturers and dealers has confirmed what we already know: the general malaise of the American Economy is upon model railroading as well. We would hope that somehow the hobby would be spared, but that’s too much to expect. On the bright side, the market held its own better than many expected and compared to other commodities, at least according to early indicators and informed impressions.

Part of the reason for this may have to do with what the model railroading market has to offer. We are enjoying a cornucopia of craftsmanship in all scales. Not only do railroad modelers have more products in more roadnames to choose from, the general quality is also very good. My own special area is Large Scale where all the major players have introduced top quality models of all sorts. It’s a great time to be a buyer, since so much is available.

This year has been a big one for me, since I have had the chance to work in N, HO, On30, #1, A, H, G, and F scales. I like them all but have my greatest investments in HO and Large Scale. Apparently I’m not alone; I have run across numerous multi-scalers. No one scale can contain us because each scale offers something unique and compelling.

Another reason the model railroad world hasn’t suffered as badly as some other markets is because model makers have focused on what modelers want. A half century ago, when I first entered model railroading, it was a primitive world with very few products that were ready to run. That was okay because the TV didn’t have watchable programming until around seven in the morning and put up the test pattern around eleven at night. We worked closer to home and had fewer media distractions, so we filled our lives with arts and crafts. The craftsman kit marketed successfully to the buyer of 1951, but not to the modeler of 2001.

Today, perhaps half or more of the products on the market are ready-to-run. The Last Bastion of Kits — HO — has fallen hard for R-T-R. Of course, the secret to all manufacturing is Value Added. If you gather raw materials and turn them into something the consumer wants, you add value. In the wood products market, stands of trees are the rawest of materials. Logs are the next step, followed by rough cut lumber. Presently, the lumber is kiln dried and planed, another step up. When that lumber is turned into a house or a piece of furniture, it takes its final step.

In 1951, people would not have paid to have someone else assemble their kits for them, no matter how cheaply that service could be provided. Today, busy model railroaders buy R-T-R rolling stock so they can spend more time running trains. Since they are willing to pay for this added value, toy makers have stepped up to the challenge.

Along the way, interesting things evolve. Sam Clarke of Kadee Quality Products said of their own R-T-R fleet of PS-1 boxcars, “Quality control is improved. I think it’s harder to make sure everything is in a kit than to examine a finished car to see if it’s all there.” Modelers I’ve talked to say they’ve had bad experiences with molded parts that don’t fit as they should. They feel that ready-to-run cars force makers to get it right before it leaves the factory.

Then there’s the personal craftsmanship of the kit builder. Dick Yeager of Oregon Rail Supply says that many modelers get part way through a craftsman kit and want to fling it against a wall out of frustration. I suspected there would be an R-T-R backlash from diehard kit builders, but I couldn’t find any! All the old guys with toolboxes full of pin vises, mini clamps, and jewelers’ tools simply shrug and say they don’t care where the car comes from or who built it. All they want is a car that runs well and looks great.

The third factor in holding onto model railroad market share is related to Ready-To-Run, only it is provided by the retailers. We live in what has been described as a service-oriented economy where too often we have a hard time getting good service. I talked to hobby shop owners who had fairly good seasons, in large part because of the repeat business they enjoy. These are the guys who put your prospective loco purchase on a test track and let you see how it works. They show you how to clean and lube it, how to take it apart and put it back together. Of course, this service can’t be free, so you pay more for the product up front.

The mail order world has also learned this same lesson. I order some products via the Internet when I can’t get them locally. A certain mail order place promised to ship in three to five days but didn’t get around to shipping until after 12 days and a complaint I made to their parent organization. No, I won’t be shopping there again. On the other side, I ordered another product from a different company and received it in good condition by FedEx ground four days later. Obviously, they had actually put my package into the hands of the parcel company within hours of my phone order. I’ll be calling them again.

There is little doubt that economic woes will shake down product lines and knock out the weaker builders and sellers. If you are looking for bargains, adjust your thinking. Cheap isn’t what makes a bargain; quality and service for an affordable price provides a better definition. Identify the places that serve you with those qualities and patronize them. You can have the roadnames you want on the products you desire in the scale you prefer in the form you need. That’s why model railroading is hanging on. Have a Happy, Model Railroad-filled New Year!


John Sipple
Editor