Report from the Great Scale Model Train Show

This weekend, I attended my favorite quarterly event: the Great Scale Model Train Show in Timonium, Maryland. I discovered it a few years back, in the sense that Columbus discovered America: it was a giant entity full of people who knew it well, and I just sort of happened to bump into it. I don't think it's the biggest show going, but it's probably my favorite, and it has a lot going for it. The target audience has traditionally been the brass-buying, scale-model-building hardcore model railroader, but it's not so narowly targeted that there's no room for others, particularly children. The show is the most kid-friendly I've seen, and they do some wonderful grace-and-favor activities for kids that must cost them some coin, but that return nothing but good will - for example, they put out a gigantic rug and a big pile of Thomas trains, and let the kids play under the supervision of their parents; they also had a little table where enthusiasts took a lot of time helping little children build paper-plate dioramas with some of the less expensive components of the hobby, like trees and foliage. These activities delighted my children, and I suspect that they're the product of the same mind that conceived the show in the first place.

That mind belongs to Howard Zane, the successful entrepreneur who retired to spend his time building his model railroad and and running the show he conceived. Howard's one of those one-in-a-million minds that you find in the hobby once every couple of decades. He was trained as a graphic designer and worked for Raymond Loewy's firm; he went into the Army and became an aviator. After building a successful aviation business (I believe he repossessed airplanes), he retired. The show and his Piermont Division are his retirement activities. What background could better prepare a man for a role as a model railroading kingpin? He understands how businesses are run, how they grow, and how they fail; he has the artistic ability to conceive, design, and build beautiful things, and I was struck by the fascination his table of model structures exerted on my children. The power to create delight is or ought to be the essence of artistic ability, and it's nice to see it combined with a real business sense, because in the cottage-industry world of model railroading, you need real acumen to keep a small business afloat.

I suspect that acumen is going to make a big difference in the coming year, because I was struck by the thinness of the crowds. It was not as crowded as it usually is, and my own very imperfect survey of the brass tables suggested that things were not moving much, either. It's sort of in the nature of things that shows are markets, with each individual seller making pricing decisions, and word of mouth and the Internet providing such information sharing as there is; voluntary efforts like pricing guides certainly help, but pricing information is naturally dynamic, and hard to capture.

I think I’m in good company if I say that I really come to train shows for two reasons: one is to find discounts (hopefully deep discounts) on items I already want. Another is to find those items that I’m not able to get elsewhere – particularly brass. I find as I get more and more deeply involved in the “building" (kit and scratch) side of the hobby that I have a greater need for both discounts and assistance in getting increasingly hard-to-find items at lower prices. Both the brass market and the steam detail parts market are increasingly subject to the economics of scarcity, complicated by the economic situation, and it’s anyone’s guess what this will mean.

There are some differences between the two markets, however. While the supply of brass models does continue to increase slightly, the overall market size should be fairly stable. Short of a trip to the basement floor or a poorly executed house move, the supply of 1950-1990 era brass models isn’t going to decline much. It will fluctuate slightly as the models come in our out of the market, based largely on factors that are, strictly speaking, external to the market – the number of estate sales, for example. Detail parts, on the other hand, will get used up fairly quickly. And they are already becoming scarce. It’s not clear what parts Bowser will continue to make, but some of the Cal-Scale parts are already off the market, and prices are rising. I will give you an example, from this week’s GSMTS. I found a very nice Cal-Scale Hodge trailing truck, and inquired about the price. On being told it was twenty dollars (and knowing that Precision Scale charges $17 for an unassembled brass kit), I asked the dealer why it wasn’t sixteen dollars, the price scribbled on the label. He replied, not entirely politely, that I now knew what he paid for it. I put it back; I’m not yet so desperate that it looked like an appealing price, and to be honest, I’m not altogether sure that this isn’t simply overpriced. But one of my favorite detail part makers, Greenway, is pricing their Hodge trucks at $45, which may be a sign of things to come.
Is this a permanent situation? I don’t know. The steam kit situation is pretty bad right now, the worst, in fact, that it has ever been. When Bowser exited the steam kit business last year, the domestic steam kitbuilding industry essentially died, and the trade now survives on Ebay and at shows. The detail parts business was collateral damage. There will continue to be a demand for detail parts, of course, because people will still want to redetail ready-to-run steam power, and the supply of kits and kitbashable locomotives will probably not be exhausted for a decade or so – although I would guess that the prices will continue to escalate on Ebay. But even at this lower level, at some point the supply will dwindle. If the prices become high enough, Bowser might conceivably decide that the economics are such that they warrant market re-entry, but I frankly doubt it – their inventory was largely Pennsy and USRA power, and those two classes of engine were among the first the RTR market provided.

Given the stability in the supply, the situation in the brass market is a little different. That supply will diminish somewhat in growing years, but I would suspect that the course of nature will mean a lot of stuff that’s currently off-market will return as big collections are liquidated. I think some of this is already happening; you can look at the frequency with which the results of estate liquidations now appear on the sites of the bigger brass dealers like Dan’s Train Depot. But part of me suspects that the question of supply will take a back seat to the bigger issue of the overall condition of the economy. It has long been a truism that “brass will always increase in value,” but I wonder whether that’s true. I don’t know whether anyone who will discuss it has researched the matter, but I would bet that the buyers’ market has contracted – which confronts sellers who have a substantial brass inventory with a real problem. They’re a low-margin operation to begin with; cut your price too much, and you trim that margin to nothing; cut it too little, and your inventory sits, maybe losing value, maybe gaining it. That’s not a retailer’s dream.

I admit to being a bit of a jackal on the fence on this. I didn’t buy any brass this weekend; I can’t help but feel the prices are still just a bit too high. Perhaps I’m right, or wrong – I had a few desultory exchanges with vendors who responded to my request by allowing they might be able to go as low as $Y or $Z – but only a few of those seemed attractive, and none was attractive enough to move me. I hope that's not a feeling that's widely shared - because a lot of the businesses that sustain the hobby are low-margin operations, and lean years can hit them hard - and in a hobby that's heavily dependent on cottage industries, we will regret them if they go.