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Premium hobby markets hold strong

By Nick Bullock
Published: December 21, 2011
It stands to reason that as hobby product manufacturers and distributors across the industry take a financial hit in this struggling economy, makers of more expensive products in the various categories would suffer the same fate—if not a worse one — as entry-level hobby product producers.

Instead, some have been surprised to see that sales of high-end hobby products in particular have better weathered the storm.

“Sales have actually increased,” said Fred Hill, co-owner of The Coach Yard, which sells high-end brass passenger trains starting at around $2,100. “It did surprise me. I wasn’t ready for it. I thought we’d have to cut back, but we haven’t cut back. We’ve expanded, and that’s because of the demand.”

Demand for premium products — such as brass trains, $300-plus die-cast models and $1,000-plus radio-controlled vehicles — has held steady in recent years, distributors said.

“Generally, if somebody is looking for a specific model that is in the scale that they want, they’ll still save up and managed to buy it as some point,” said Mike Bass, president of hobby product distributor Stevens International, which deals in plastic model kits ranging in price from less than $10 to more than $200. “… We haven’t seen the downturn in the higher-end models like we expected; they’re just a little soft, but we haven’t really seen the bottom fall out as everyone might have expected for the $100-plus model kits.”

Meanwhile, the supply of premium hobby products has slipped, said Katherine Stratton, president of b2bReplicas, which deals in a wide range of die-cast models, including a few high-end products.

“I think people interested in that kind of model are still buying them,” she said.

Brian Marsh, president of brass locomotive distributor Overland Models, agreed, saying that builders have been hurt the most, but demand for premium products has sustained. The result, he said, is less profit for companies such as his.

Because of reduced supply, Overland is making fewer models available to the consumer.

“We announce very limited numbers, because we don’t want to do too much too far ahead of time because the pricing is so ever-changing right now,” Marsh said. “We like to fix on a price, and by doing that we put ourselves in a real pickle sometimes.

“… I would rather be doing 500 pieces where today we’re doing a couple hundred pieces. We are selling the models out, which is our biggest target right now, but it leaves very little room for profit.”

In some ways, however, the consumer benefits from this, Marsh said.

“The positive out of it is that it’s a very limited number (or product released), but the collector is also getting a higher price,” he said. “It’s a bit of a double-edged sword.”

And if the consumer is happy, the retailer is happy, Hill said. “We only sell through retailers, and our retailer base is very happy with the products,” he said.