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Post by bigblow69 on Jan 5, 2015 10:21:39 GMT -8
Will we see a decrease in MR products cost to consumers? It should cost companies less to make the product correct?
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Post by riogrande on Jan 5, 2015 10:29:06 GMT -8
Well, Athearn just more than doubled the price of the 40' Fruehauf trailers due later this year. Personally I doubt we'll see prices drop due to the price of oil; if anything it may slow down the increases a bit.
The biggest effect it has on me is that it saves me on fuel every month so I have a little more money at the end of the month, which is a big help right now as other expense have or will be going up this year faster than my salary.
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Post by atsfan on Jan 5, 2015 12:43:03 GMT -8
No way
Oil prices are a small portion anyway
Labor is up
So is profit probably
At best a temporary slow down in price increases.
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Post by valenciajim on Jan 5, 2015 14:36:58 GMT -8
ATSF fan, I agree. Probably the biggest impact is on the cost of transporting the goods. I also think that the oil proce reduction is not a long term phenomenon. The Saudis are flooding the market in an attempt to make fracking economically unfeasible. At some point prices will increase when the Saudis change their strategy. If I owned a Prius, I would be rushing to sell it at this point.
Also, the tansport companies probably hedged their fuel costs, so because they locked in their costs, they are not enjoying the full benefit of the oil price reduction.
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Post by sd80macs on Jan 5, 2015 15:56:17 GMT -8
If Oil prices skyrocket then the manufacturers blame oil prices, now that they came down they will blame something else. Fact is once prices go up and people still buy then they will stay like that so dont count on any drastic cuts in prices.
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Post by mlehman on Jan 5, 2015 18:15:07 GMT -8
Plastic is not the only cost due to oil that goes into models. Transportation of the finished product from factory to point of sale is probably a higher % of costs than the plastic to make it. The cost of inputs the factory needs to produce models may soften some, too, as oil is also a component of those costs. I doubt that we'll see it affect prices other than in a temporary slowdown to where prices tend to go, up.
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Post by atsfan on Jan 5, 2015 18:22:01 GMT -8
Do you notice air fare dropping ?
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Post by Brakie on Jan 6, 2015 2:11:51 GMT -8
If Oil prices skyrocket then the manufacturers blame oil prices, now that they came down they will blame something else. Fact is once prices go up and people still buy then they will stay like that so dont count on any drastic cuts in prices. Absolutely. Manufacturers will blame anything to jack their prices from the needed production material to the EPA to shipping. As far as labor some manufacturers complain every time the minimum wage goes up and the need to raise their prices while in secrete they are cutting labor hours by laying off workers and doubling the work load of the remaining employees.. |
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Post by riogrande on Jan 6, 2015 11:07:07 GMT -8
I imagine it feels good to vent and blame train and plane companies for being greedy people, but whenever someone with real in-depth knowledge comes along, they are pretty quick to disavow us of our notions. Fuel is just part of the equation most as some have pointed out. If Oil prices skyrocket then the manufacturers blame oil prices, now that they came down they will blame something else. Fact is once prices go up and people still buy then they will stay like that so dont count on any drastic cuts in prices. Absolutely. Manufacturers will blame anything to jack their prices from the needed production material to the EPA to shipping. As far as labor some manufacturers complain every time the minimum wage goes up and the need to raise their prices while in secrete they are cutting labor hours by laying off workers and doubling the work load of the remaining employees.. I know we are all cynical, but just ask Jason and he will tell you price pressures are very real on manufacturers. They aren't all greedy grinches looking to make any excuse to increase profits. Some of the major folks in the industry like Jason have been saying it's not a get rich job to make toy trains. |
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Post by Brakie on Jan 6, 2015 11:22:55 GMT -8
I know we are all cynical, but just ask Jason and he will tell you price pressures are very real on manufacturers. They aren't all greedy grinches looking to make any excuse to increase profits. Some of the major folks in the industry like Jason have been saying it's not a get rich job to make toy trains.
-----------------------------------------
And on the same subject he will not mention the number of units(meaning cars and locomotives) that a ton of material can produce.
I'm no stranger to manufacturing and know the production cost is held at a minimum.
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Post by riogrande on Jan 6, 2015 12:43:22 GMT -8
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Post by sd80macs on Jan 6, 2015 15:08:09 GMT -8
All I was saying is that manufacturers were blaming their increases in the past on oil prices that's all, now that that has gone down so should the price don't you think? Its like the big oil companies saying everything is costing them more so oil prices have to go up yet for the past years you have heard how each year they are making record profits compared to the previous year. sorry but if your rising prices because its costing you more then profits would stay pretty much the same in my eyes.
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Post by riogrande on Jan 6, 2015 15:44:57 GMT -8
I imagine someone with actual knowledge of how all the pieces factor in, again, like Jason Shron, should be able to put some reality to all the speculation. Until someone provides some real information, IMO, it's all guessing and we could be way off. Sometimes a little knowledge is only enough to be dangerous. That's what I say about myself!
Yes, on a surface level I'd think that if oil prices dropped and stayed down, that would help at least keep prices more constant in the face of other rising costs, such as labor. From what very limited information I know, it is reported that it is the labor costs primarily that have driven up costs of products manufactured in China, such as our model trains. How much of the over all manufacturing costs is affected by oil prices is not clear to me - it may only be a small part of it. If so, we may not see much effect at the consumer price level.
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Post by mlehman on Jan 7, 2015 8:53:37 GMT -8
Prices tend to go up, i.e. inflation, over time for lots of reasons. But the pressures to make them go down rarely happen...and you would probably not enjoy living in a society where prices are falling, i.e. deflation. That's started happening in Europe right now and is very worrisome for a lot of complex macroeconomic reasons.
Steady state is an ideal, but one rarely achieved. In the end, the perceptions of rising prices tend to get lots of press, because it covers up what is really going on, which is that most of the population in the US has seen little of the increased productivity and wealth that is enjoyed at the top over the last 30 years amid rising income inequalities. Of course, some say the wealthy haven't seen enough incentives yet to let the wealth this growth creates trickle down. I'd say you're just dreaming if you think that giving the wealthy more money is incentive for them to spread it around.
In the meantime, I enjoy those things I can afford like trains while waiting for the day when everyone shares in the wealth our efforts create.
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Post by bigb6flyer on Jan 8, 2015 12:26:46 GMT -8
Air fares and model trains do not ebb and flow on the price of oil. They change on supply and demand. Virtually every flight I do and commute on these days is full. Virtually every auction for every desirable item on EBay and in the hobby shop sells out. Until that changes, only then will you see price cuts. Ala when seats go empty and items like mth heritage units collect dust on shelves do the prices fall. Look at oil right now. Supply and demand.
Brad
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Post by Deleted on Jan 8, 2015 13:33:16 GMT -8
Air fares and model trains do not ebb and flow on the price of oil. They change on supply and demand.... Brad Thank you for that. I've posted the same thing a few times here, maybe 20% of people get it. The majority naively believe there is some secret "black box" formula linking input costs such as fuel, transportation, and labor with the selling price of a model. I own a small business that sells a product and my costs have gone down with the price of oil. Should I lower my selling prices when my buyers are willing to pay what currently I ask? If I did, I wouldn't be maximizing my profit. I would lower my prices if I were losing market share, and I raise prices when demand goes up. When you sell something, a car, a home, a model, you do not consider input costs (except that your overall sales must exceed your total costs, lest you go bust), you only consider what a willing buyer will pay and how many units you will sell at that price. I'm all for companies, model manufacturers included, mazimizing their profits. Because that's how they survive and grow and in the long run, keep prices down and the variety of models up. |
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Post by atsfan on Jan 8, 2015 15:46:55 GMT -8
Air fares and model trains do not ebb and flow on the price of oil. They change on supply and demand. Virtually every flight I do and commute on these days is full. Virtually every auction for every desirable item on EBay and in the hobby shop sells out. Until that changes, only then will you see price cuts. Ala when seats go empty and items like mth heritage units collect dust on shelves do the prices fall. Look at oil right now. Supply and demand. Brad Supply being a key factor. Airlines have cut back on seats in order to drive up the supply and demand curve in their favor. So have model train companies. They have cut way back on production, which drives up unit prices to meet fixed production costs. Not bad business. Not usally good for consumers. |
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Post by Deleted on Jan 8, 2015 16:11:31 GMT -8
Air fares and model trains do not ebb and flow on the price of oil. They change on supply and demand. Virtually every flight I do and commute on these days is full. Virtually every auction for every desirable item on EBay and in the hobby shop sells out. Until that changes, only then will you see price cuts. Ala when seats go empty and items like mth heritage units collect dust on shelves do the prices fall. Look at oil right now. Supply and demand. Brad Supply being a key factor. Airlines have cut back on seats in order to drive up the supply and demand curve in their favor. So have model train companies. They have cut way back on production, which drives up unit prices to meet fixed production costs. Not bad business. Not usally good for consumers. You can't back that up. Do you believe your own BS or do you just like stirring the pot? |
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Post by atsfan on Jan 8, 2015 17:25:25 GMT -8
Supply being a key factor. Airlines have cut back on seats in order to drive up the supply and demand curve in their favor. So have model train companies. They have cut way back on production, which drives up unit prices to meet fixed production costs. Not bad business. Not usally good for consumers. You can't back that up. Do you believe your own BS or do you just like stirring the pot? What ? Airline seats are not cut back? Model train production is not cut back? That is simple fact. The companies themselves have said they are cutting back to pre order only. If you want to believe otherwise go ahead. And it simple fact if production is down fixed costs have to be spread over a smaller amount. What does that do to pricing? Econ 101. If you want to sling harshness, move on. |
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Post by bigb6flyer on Jan 8, 2015 17:27:04 GMT -8
Air fares and model trains do not ebb and flow on the price of oil. They change on supply and demand. Virtually every flight I do and commute on these days is full. Virtually every auction for every desirable item on EBay and in the hobby shop sells out. Until that changes, only then will you see price cuts. Ala when seats go empty and items like mth heritage units collect dust on shelves do the prices fall. Look at oil right now. Supply and demand. Brad Supply being a key factor. Airlines have cut back on seats in order to drive up the supply and demand curve in their favor. So have model train companies. They have cut way back on production, which drives up unit prices to meet fixed production costs. Not bad business. Not usally good for consumers. ATSFFan, And DEMAND is the other factor. You make my case for me. As I said, it's supply AND demand. Yes providers of goods and services decide how much of a product to produce or provide (ie a model train, or a commodity like an airline seat or available seat miles as it's known in the industry or a barrel of oil). How they do this depends on the industry. Model train producers go to a preorder model to gauge demand and therefore production. Airlines cut unprofitable routes, put larger or smaller planes on more popular routes and merge to cut out excess supply and make operations more efficient. Oil companies cut production. Consumer demand will dictate the price after supply is established. Equilibrium will be established by the marketplace. In a capitalist system, producers will always try to maximize profits in a high demand environment. No one seems to complain about Apple charging $600 for an iPhone 6. Why? Because you got people camping out to get them and it's in high demand. BTW, Apple is way more profitable than any model train producer or airline in history, yet no one complains about their prices. Oil is used to produce and deliver that phone to you, yet no one seems to mind.Shouldn't they be lowering their prices to as a result of lower oil prices? Hmmmm You're argument for lowering prices because oil prices have fallen is like saying bread prices should go down because the price of wheat has fallen. If there is a high demand for bread and supplies are tight, prices for bread will remain high even if, say, the price of wheat goes down. |
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Post by Deleted on Jan 8, 2015 17:58:13 GMT -8
You can't back that up. Do you believe your own BS or do you just like stirring the pot? What ? Airline seats are not cut back? Model train production is not cut back? That is simple fact. The companies themselves have said they are cutting back to pre order only. If you want to believe otherwise go ahead. And it simple fact if production is down fixed costs have to be spread over a smaller amount. What does that do to pricing? Econ 101. If you want to sling harshness, move on. Overall more models are being sold than ever. The variety of what's available is today huge, making up for lower production per SKU. You're just throwing out another version of your tired "the hobby is dying" line. Every time people ask you for facts you go mumbling off, only to return the following week with more doom & gloom. So where's the proof that "Model train production is ... cut back?" Put your cards on the table. And "drive up the supply and demand curve" doesn't even make sense. |
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Post by peoriaman on Jan 10, 2015 10:50:06 GMT -8
What ? Airline seats are not cut back? My favorite airline is adding seats. They've switched to thinner, lighter, more upright seats that allow them to cram 143 seats into a 737 which used to hold 137 seats. A lot of effort to add a single row, but evidently they must have seen a need. Its cost them millions to re-equip the fleet. |
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Post by kentuckysouthernrwy on Jan 11, 2015 6:35:43 GMT -8
Do you notice air fare dropping ? Only in Malaysia. |
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Post by kentuckysouthernrwy on Jan 11, 2015 6:40:51 GMT -8
All these arguments being made and the examples shown, such as the airline seating, are coincidental to the oil price changes which are very recent occurrences. The issues cited are the results of plans put in effect quite some time before the price decline in oil. They might be fun to argue but get real. Very little ever goes down in price, these oil prices won't stay down. I'm sure enjoying it tho. $25 fill up vs $50 is great.
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Post by valenciajim on Jan 11, 2015 18:41:50 GMT -8
We don't have $25 fill-ups in CA. More like $45. eals have a new carbon use tax in CA that increase gas prices n my area by about tweleve cents a gallon as of today.
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Post by riogrande on Jan 12, 2015 7:57:39 GMT -8
I suppose the price per fill-up depends also on the size of your car and it's fuel tank. To fill up my Prius in Sacramento would be about $23 at current prices - just checked on the web. Our RAV4 would be about $31 to fill up. Here in Virginia, the RAV4 would cost $24 to fill up. While I miss California for other reasons, I wouldn't miss the fuel prices. I'd rather not have a gas guzzler because it leave me more money to spend on trains!  Speaking of tax, in England, when I was over there in December, prices were about $1.2 pound per liter. If I did my math right, thats about 6.8 dollars per gallon. According to a news article last year, British fuel is about 61% tax. Ouch. |
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Post by mlehman on Jan 12, 2015 8:56:09 GMT -8
SNIP Speaking of tax, in England, when I was over there in December, prices were about $1.2 pound per liter. If I did my math right, thats about 6.8 dollars per gallon. According to a news article last year, British fuel is about 61% tax. Ouch. Jim , Good point. For all the energy that goes into complaining about high taxes in the U.S., as well as high prices, it really is a low tax environment compared to just about any other country. Sure, one can cherrypick a few examples where this isn't so, but as a general assessment, it's pretty darn accurate. Fuel is an especially salient example. Except for a few major oil-producing states with policies that see them keep domestic fuel prices low, the U.S. barely taxes the stuff in comparison to any country in Europe, large parts of Asia, and virtually any country dependent on oil imports. Having come of driver's license age while living in Germany while dad was starring in the Cold War Games right in the middle of when the '73 oil crisis hit, you really harbored the monthly gas ration coupons that let you get gas at what was even less than Stateside prices (because there was NO tax). Run past your 200 liter allotment and you were paying German prices until the first of next month. I can tell you ~12 gallons of gas a week doesn't go very far in a '64 Belair station wagon when you're trying to chase girls the next air base over... As for the airlines not lowering prices at the drop of the hat now that oil has dropped, count up all years in this millennium when fuel prices were this low, then figure out how deep in a hole that puts your multi-million gallon monthly fuel budget... |
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Post by Brakie on Jan 13, 2015 19:26:15 GMT -8
We don't have $25 fill-ups in CA. More like $45. eals have a new carbon use tax in CA that increase gas prices n my area by about tweleve cents a gallon as of today. Gas was down to $1.71.9 and I filled my tank for $23.00..I usually put $20.00 worth of gas when prices was high. |
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Post by calzephyr on Jan 19, 2015 9:07:39 GMT -8
We don't have $25 fill-ups in CA. More like $45. eals have a new carbon use tax in CA that increase gas prices n my area by about tweleve cents a gallon as of today. Jim I know the feeling about the gas tax, but the elected officials know best!!! You might take note, I did not say our officials. I am thinking of moving out of California since they want to overturn Prop 13 also which allow most of us to stay in our homes. Larry |
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Post by riogrande on Jan 19, 2015 9:50:30 GMT -8
I lived in California when Prop 13 was passed - thats been a long time. I was not a home owner at the time but I can imagine that helps!
In New York state, I owned a house that was worth about 90k and the yearly property taxes were 4.5k it seemed pretty high!
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