I knew you would take the passenger train analogy too literally.
Altas was slow in the detail department, but early with the much better driveline.
Things I would buy that we will likely never see, even with preorders:
Accurate detailed early piggyback flat cars, like the 40’ cars the B&O built from wagon top box car frames, or the ones the New Haven built.
B&O heavyweight passenger cars that were rebuilt into “smooth side streamliners”.
A WESTERN MARYAND Pacific, heck, we can’t even get a reasonable B&O P7, as built or as modernized. I would by a couple modernized P7’s. But we a tripping over K4’s?
Like Kevin, I was all in for some undecorated ALCO PA’s, I placed my preorder with a major retailer…but the Proto2000 ones I have are plenty nice enough. Some more of them will show up on Ebay…
No, what I said was that the pre-order concept is a “sign of decay” in the model railroad hobby. For how many years did the hobby thrive without pre-orders? 50? 60? 70?
Manufacturers may take a lack of pre-orders as a lack of interest, but what is really means is a lack of interest in pre-orders. As I said earlier, build it and we will buy it.
Yes, it thrived for 50 years without pre-order but it was also a world of “here’s your 40 boxcar” that didn’t depend on incredibly granular market research and a customer base that will sink all of their claws in you over the most minute flaws.
York1,
If you know that shipping a container of model trains from China to North America has absolutely nothing to do with any postal organization, then why did you bring it up?
Sheldon,
Um, of course I took it literally as you wrote it that way. “But as the grumpy old men sit around and talk about the hobby dieing, and a handful of them ask “how can we get new people interested?”, I would submit this one simple fact. Be it online or in a store, the fact that a beginner cannot easily buy a locomotive and a matching set of passenger cars all at the same time in the same place, is a discouragement to new people.” What else can that mean? The hobby is dying because newbies can’t buy entire passenger trains with matching engines all at once is what it sounds like to me.
Yep, Atlas sold the first real quality drive. The updated Atlas Roco drive and the Atlas Kato drive are superb even today. But I still wouldn’t say they were leaders in detailing like Bachmann or Life-Like. Atlas models of the 1970’s, 1980’s and 1990’s were, other than their drives, not much different from Athearn BB’s in part count.
Early TOFC cars are unlikely in today’s market, but possible. At Springfield this year, I bought a resin NH 17200-class cast steel flat from Speedwitch Media that I plan to convert to TOFC service just like the NH did (I even have the plans). 30 years ago, it was impossible to get any early TOFC (well, other than Athearn’s).
B&O converted heavyweights will be a problem, but they could happen. After all, the NHRHTA partnered up with Rapido to make the totally unique-to-NH stainless steel passenger cars. We’re making the 4th car type with Rapido right now. Why not get the B&O historical guys to make the same deal as the NHRHTA did? I assume they have more members than we do. It’s possible
I’m not sure what the problem is. If you’ll go back to my posts, you’ll notice I didn’t discuss containers. I talked about shipping and mailing packages.
First post:
Second post:
Maybe the confusion is that I mentioned “shipping”. By “shipping”, I meant the mailing of packages.
I believe it was Seneca who said, “Qui non proficit deficit.”
“Who does not advance falls behind.”
It’s very true in a hobby where other entities are part of a wide negotiation of ‘quid pro quo’, also known as ‘the market place’. I agree with Paul that a hobby has to advance, or to evolve, if it is to continue calling itself successful. If it has bankers and private investors, they’ll want a return on what they put into it, and that means profit, or dividends at the very least. No model company of any description will be able to do that unless they keep their ears to the ground and adapt to new wants from their customers, investors. AND their suppliers/assemblers. If there are no investors, and it’s a small enterprise, then just the customers and suppliers.
The companies that seem to be getting the nods and the attention, not to mention the patronage, are those who insist that they need pre-orders before they do the cash outlay for tooling and assembly. That is part of the ‘quid pro quo’ process between prospective customers and them, the importers. It seems to be working.
I don’t know how much longer Bachmann, Athearn, and Atlas will continue to do bulk purchases on a whim and on a prayer. And Intermountain, Accurail, Scale Models,… I suspect they might have to tighten up quite a bit over the next 12 months, given what this year has been like.
York1,
This thread is about the production cost of model trains and how many units does it take to make production worth it. Lastspikemike brought up shipping as an added cost to making model trains, which while true, is about $1.00 or $2.00 per unit no matter if it’s a $50 boxcar or a $600 steam engine. Then he talks about mailing individual items from Rapido in Canada to addresses in Canada. That has nothing to do with production costs, either, but rather it is an end-user cost which is off-topic for this discussion about manufacturer costs.
Then you brought up the Universal Postal Union and how nations like the US and Canada are subsidizing mail delivery from China. The reason why that doesn’t make any sense is that Chinese-made model trains are _not mailed_from China. They are shipped by private cargo companies by either boat or air freight. They always have been. Bringing up the cost of mailing something from China in relation to the production costs of model trains makes no sense because no model train production run has ever been mailed to North America. They are shipped, not mailed.
If high end, strictly limited run companies continue to grow and expand their product lines and are thriving, then so be it. But if that were the future of model railroading, then all manufacturers would do it. The hobby would be totally pre-order.
The fact that one or more strictly limited run companies may be thriving is a sign of decay in the overall model railroad hobby because it signals a turn to niche markets which reduces the overall interest in the hobby by the vast number of model railroaders who just want to shop based upon what is available.
Your example of the 1200 stainless steel diners, of which 300 went unsold, is a good example of the problem with pre-orders. By definition you can infer that
richhotrain,
Sorry, but pre-orders are not a sign of decay. It’s a sign of change, sure. But decay? Explain Rapido then. They started with limited runs in 2004 and hired their first employee (Bill Schnieder) in 2009. They now have 15 employees not named Schron and right now are looking to hire two more. Or explain Tangent, Moloco, ExactRail, Arrowhead, and the other high end, strictly limited run companies that continue to grow and expand their product lines. If it was decay, why are they thriving?
Build it and they will buy it is not true. If you make the wrong thing or too much of the right thing, you’ll lose money, I promise you. For example, the NHRHTA ordered 1200 stainless steel diners to get the best deal from Rapido but we only had pre-orders for 800. In the last 8 months, we have sold maybe another 100 or so. We still have ~300 stainless steel diners to go at $140 MSRP each (and we’re selling them at $120). When are “they” going to buy the rest? Because we have around $42,000 worth of inventory sitting in a storage locker just waiting for them…
Paul,
If high end, strictly limited run companies continue to grow and expand their product lines and are thriving, then so be it. But if that were the future of model railroading, then all manufacturers would do it. The hobby would be totally pre-order.
The fact that one or more strictly limited run companies may be thriving is a sign of decay in the overall model railroad hobby because it signals a turn to niche markets which reduces the overall interest in the hobby by
I think missing from the discussion so far is the question: How quickly does the company need to sell-out the product?
Seems to me that pre-orders are merely capturing an interest a buyer might have for a product during a short window, and the company wants to capture, produce , and sell the product during that short window.
Interests change. Not with standing the fact that most purchases are probably made simply because the customer likes the product…not because he needs the product. So the company who produces enough stock to sit in inventory a number of years is able to sell product to the buyers who change interests or happen across the product and see it simply for being attractive.
Maybe more capital is needed to produce and hold the inventory?
Just seems like the current preorder process is limiting the product to capture buyers’ interests that exist only during the short pre-order window.
Naturally the company wants to ‘sell out’ as quickly as possible; that’s obvious good business if that can be done at satisfactory margins. The pre-ordering serves as a gauge of general interest; it fails somewhat if a large and relatively ‘connected’ interest group … let’s say the old B&O Yahoo Group … gets every one of its members to pre-order a locomotive with front-firing stoker, because they have the interest, but no one else really wants one. Not only might you have a slow-moving time with ‘the rest’ but the opportunity cost of making that locomotive instead of something else can also be counted as ‘lost’.
Abother way to use pre-orders is in a sort of DMM sense. Many Ronco-style ‘teleproducts’ are entirely paid for by the down payment plus S&H, so even if the customer makes none of the time payments you’ve at least broken even on your direct costs. I wouldn’t be surprised if the pre-order accounted for much of the out-of-pocket cost right up to shipping the first batch. If anyone remembers the Monorail model of contract-manufacturing ‘custom’ computers… it’s applicable, too.
As a note, manufacturers seldom profit directly from any appreciation due to scarcity. No author benefits in the least when his railroad book on the steam locomotive goes to $850 a copy from ‘rare book’ dealers who smell fan blood. What does work is the artificial element of perceived exclusivity that goes with a certain kind of scarcity: no availability at a sellout or fire-sale price. Mass marketers have a fairly fixed schedule to discount products sequentially to recover the TVM of the ‘investment’ in inventory, and often rational expectations makes price-makers wait for the big sale to get the most for their money. If a company can weather this trend they may get more absolute return on their investment, particularly w
You are correct, they miss lots of sales because they make no effort to keep product available for when people want it. Does it take more capital? Yes. Should they work toward higher margins to support this? Yes.
Is this necessary for every product, No.
I hate the product hunt, just like I have no interest in buying/selling as a secondary part of the hobby.
I simply think that the preorder process is a reflection of companies that are thinly capitalized, IOW, they don’t want to put too much of their own money at risk. I get it. Its not a complaint, its reality.
If we’re talking about a specifically featured item in a specific roadname, the issue isn’t really about pre-order, the issue is that the producer is considering making something that has an inherently narrow market. A risky item. Sure, gauging how narrow that market is by allocating it to pre-order process is way to avoid producing something that relatively nobody cares about.
OTOH, Athearn seems to produce diesel locomotives that have many specific road name details. They even produced the GP40P-2 (passenger service GP40-2) which was about 4 locomotives ordered by the SP for commuter service in CA, and then inherited by the UP. Athearn produced the steam generator equipped original version in SP paint, the de-steamed freight conversion version in SP paint (which is a faded paint color to reflect non as-built years of service), and the modern freight version with ditchlights in UP paint. I don’t recall a huge pre-order marketing survey. They just designed and built them, IIR
I’ve only been in model railroading for two years, so I’ve never yet myself pre-ordered anything. I have an excellent model railroad store less than an hour away which has a huge selection of N Scale. So far, I have gotten everything I’ve needed or wanted there.
There was a certain BNSF Kato locomotive I wanted. The store said they had pre-ordered several, so they put my name on one of them. I didn’t pay anything up front. I probably would have been able to just purchase it when it came in, but this made sure they didn’t sell all of them before I got there.
Several months later, I noticed they still had two of that locomotive on the shelf.
I always believed Kato wanted preorders to know how many to produce. I didn’t realize they may be considering if they would even produce that model based on demand.
John, I think that is an important distinction. There is a difference in placing an order with a company to ensure you get a copy of a model that they are going to produce anyway…quantity maybe undefined…as opposed to ordering something that may not be produced at all if they don’t get enough orders. I think the latter is the frustrating example.
Interesting discussion. For the record, I did not mention shipping by mail. I pointed out that it can cost a lot to send one unit between two cities in Canada (which would be a direct sale by Rapido to me, for example). Whether Rapido chose to use Canada Post, its captive courier Purolator or an independent courier service that cost would be significantly higher per unit than shipping 100 units to my hobby store. Now add up the individual costs of 100 customers picking up their own unit from said hobby store and you will understand why Amazon works. I actually enjoy personal shopping at my hobby store though so the cost to me of picking up my unit in person is negative, less than zero.
The main costs of shipping are the labour costs: packaging the unit for safe shipment, packing units into containers, unpacking units at the end of the shipping process, placing units into temporary storage, repacking for shipping domestically, and then unpacking for retail display while you wait for someone to invest the sunk cost of attending your store to decide whether to buy it not. That explains why pre-ordering works. By waiting for the last step to occur first none of those shipping costs is expended until the sale is verified.
As has been pointed out, the main cost of actual manufacture is labour but in the countries where these assembly costs are incurred those costs are very low, astonishingly low. To understand just how low consider that not one of those workers could afford to buy one of the model locomotives he or she is assembling. In fact, my guess is those workers are baffled by the fact that anyone would hire anyone at any price to do the job he or she is actually doing. Baffled.
Henry Ford’s greatest “invention” was to build an expensive product cheaply enough that his own workforce could buy one. The assembly line was a clever idea that made that feasible but it was the fact that his workforce did buy their own product made it work.
I was the one who got off topic, not you. I believed I was making an addition to the issue of shipping, but obviously I upset some by getting off topic. I need to watch myself.
I think it’s pretty optimitic to think that after the initial sales demand is met, there is enough unmet need to cover the costs of stocking items long term. This would assume there is a group of modelers of a specific prototype who aren’t paying attention to product announcements or who will be joining the hobby to model that specific prototype.
It’s not that this might amount to a few dozen units. It might. But that’s a justification for running a close-out sale more than it is to stocking that item for several years. With ebay, etc, there’s little incentive to warehouse for this niche demand that could more affordably in most cases still provide the model for those who either were asleep at the wheel or not present during the briefing the first time around.
And that’s just for ONE product. The fact of the matter is the mfg’s want to clear out old stock constantly to make way for the new. That’s where the capital comes from to build the future stocks. Inventory turns are what bring profits, not warehouses full of product with little remaining interest from buyers.
I wouldn’t think that astute and experienced companies would end up with “warehouses” full of unwanted products. They would really not understand their business very well if they missed the market that badly.
I think that interests change over a period of, say, three years, and people run stuff on their layouts that don’t neces