I assume a fair number of you are like me on the Kadee email list and recently they announced a different business method. The “pre-order” system they’ve had for years is going away (that is, they’d announce a car, and if you wanted to be sure to get it you’d pre-order it, or if the LHS was confident it would be popular they would pre-order it).
Now Kadee is saying that you should sign up for their electronic newsletter (which I strongly suggest regardless) and they’ll anounce what’s new, it will be in limited quantities, and it’s every man for himself and the devil take the hind-most – my words, not theirs of course. What a “limited” quantity is, is not defined. To me it seems more like the distribution philosophy of some of the boutique resin car kit folks: “here’s our kit, we made 100, go for it.”
I’m not sure if it is (from my perspective) better or worse if you feel you really want a particular car. I know I passed up some pre-orders on cars that in retrospect I would have liked to have. One would think that it could have an impact on pricing, but again I’m not sure in which direction. We’ll know more after December when the change-over happens.
At least one hobby dealer I know thinks this is very ill-advised. Perhaps their feeling was they’d rather take the risk of pre-orders sitting on their shelves for a while but that way a larger overall quantity of cars could be made and they’d sell, eventually. There are after all different philosophies in the LHS retail world, too.
The other part of Kadee’s announcement was that while they appreciate and encourage suggestions about road names and paint schemes, some are of such limited interest as to be impossible for them to put into production from a financial standpoint.
Hopefully I have not mis-stated Kadee’s position here.
Broadway Limited, Rapido and some other manufacturers have been doing something similar for a long time. They do not commit to a production run unless they have sufficient preorders. I have seen some projects cancelled fro lack of preorders
The big companies like Walthers and MB Klein do their large preorders, so they have a sufficient supply.
G Paine,
Actually, what Kadee is doing is not what BLI or Rapido are doing.
BLI/Rapido picks a project and does most of the design work, then they announce it to the world and start taking pre-orders a year (or so) in advance. If the pre-orders are there, they start cutting the tooling. If the pre-orders are not there, they delay or cancel the project.
What Kadee is going to do is more like the Tangent model. Tangent designs, builds, and ships a product to their warehouse. Once they have it in stock, they then announce to the world and start taking orders; first come, first served. If it bombs, they are hosed.
There are pros and cons with both methods: BLI/Rapido Pro: Gives time for consumer to save up money for product, the most time for widest possible advertisement swath through hobby press, prevents making a economic loser, maximizes income.
BLI/Rapido Con: Consumers get ticked off by the long wait between announcement and delivery, or ticked off when product gets canceled, or get ticked off when long-forgotten orders start hitting their credit cards.
Kadee/Tangent Pro: Instant gratification for consumers.
Kadee/Tangent Con: Consumers can miss product due to it selling out before they find out about it; the company can leave money on the table by not making enough or get burned by making too many; and any major errors that might have been caught during the public announcement period are not corrected.
But I failed collecting 101, so I don’t buy much of anything I have to preorder. In fact, I have pre-ordered more from Spring Mills Depot (4 items, 20 pieces total) than all other manufacturers out there put together.
And with no plans to replace all the Blue Box, Yellow Box, Varney and Athearn tin cars, etc, etc, I am reaching the point where the layout does not need much more rolling stock.
As a business person I get it, but the shopping part of the hobby was nicer when they made the trains before they tried to sell them.
For years I only bought a single D&RGW cement hopper as the Kadee version matches the D&RGW prototype. But I have now backdated and have picked up some box cars that are good for the 70’s to mix in.
Kadee freight cars are mostly good for 50’s and 60’s era modelers although they do have a few with single, double and 3 panels stencils too (70’s and 80’s).
Not necessarily. As customers continue to demand lower prices and better products, margins get slim. Selling direct may be the only thing that keeps this hobby going.
We have already cut out most of the middle men distributors. That’s is where the typical discounts available today come from, that was once the distributor markup.
If you think for one minute that there is so much profit in these products that they can sell through a normal distribution network and still discount this stuff like TrainWorld or ModelTrainStuff does, you’re kidding yourself.
They can sell at those prices because they are buying direct from the manufacturer at the distributor price. Small shops can’t get that price on their smaller orders.
When companies sell direct they have a much higher cost per sale per item - they need to make more than when they sell cases to ModelTrainStuff.
Tangent only sells direct. Their prices would easily be 20-30% more if they sold thru dealers.
They are giving you most of the dealer markup, they are not being greedy.
I agree with Sheldon on this, generally. In order to stay in business, all enterprises have to continually think about what they do, why they do it, and how to improve on all processes and outcomes. Those that don’t get left behind…or get broke.
Gone are the days when 4000 of X can sit in boxes and have three or four removed each day to ship to the odd customer. Four years later, they still have 12 boxes, each with 20 of X in them.
I don’t mind waiting. You’d think when a man gets to geezer status and wants to maximize hobby time and potential that he’d be impatient, but that’s generally not the way it goes. I have lots of patience; there’s always something else to do. Too much, if you ask me.
BTW, I waited six years for the BLI Paragon 4-12-2, and about that long for my Sunset 2-10-4. The latter was by subscription with hefty ante up front, and the former was a wait-and-see until it became a go.
Well this is a bit of a change, and it has both it’s advantages and disadvantages. The only KD car I have is their log caboose kit. It’s currently a bit above my time, skill, and tools, so it remains mostly unbuilt. It is a great car, though a bit too common! Regarding KD’s ready to run stuff, I really can’t afford it right now! $40 a peice is worth it, but I don’t have that deap of a pocket. I usually head to the LHS with a single $20 bill! My grandpa has a few KD cars and they are GREAT! Best detail I know of!
After thinking about it, I guess I don’t have a problem with Kadee using the same approach as Tangent. I get Tangents product availability emails and it gives me a good chance to think through whether I want to splurge or not.
Kadee offeres excellent products in most everything the sell, I’m OK with them making a few bucks doing it.
Well,here’s the thing… A LHS can not compete with on line prices and why should I pay full MSRP for several cars when I can save some of my hard earned dollars buying from a on line shop or e-Bay?
Sure if there was a full stock shop nearby and I wanted one car that would be the best route because you’re not saving all that much after shipping.Bulk orders is where the saving is at and those bulk orders can including many things besides one or two freight cars…
I have a few Kadee cars. I doon’t collect anything, except to then remove it from the box and put on the rails. Mix a couple of kadee cars in a train full of Athearn and Accurail and the whole train looks more detailed. I’m not really concerned how they sell them, I will prooobably still find them through my usual methods, train shows and eBay.
As for preorders - I have yet to preorder anything. And I have yet to not be able to get something I want. Maybe I don;t get it on the day it arrives, but I’m never in that much of a hurry anyway. Either there are a bunch of people who preorder more than they need, or there are a lot of people who get buyer’s remorse before they even take the item out of the box, and on eBay it goes. And often at a substantial discount. The whole insistence on instant gratification for everything - I guess I am too old to get it. I’m like that with other things too. I don;t wait in line the night before to get the latest smartphoone, I keep using the one I have until it just doesn;t work well any more, then I walk in a store and walk right out with a current one, no waiting, no disappoooointment as the person in front of me got the last one in stock, etc. Same with cars, I keep driving it until it becomes uneconomical to repair. And I often buy used - my car is now 7 years old but it was optioned just perfectly, no giant LCD screen in the middle of the dash but it DOES have the performance suspension upgrade. Runs great, doesn’t cost me more than just normal routine maintenance - and it’s a blast to drive, my favorite car I’ve ever owned, so I plan on keeping it a good long time yet.I have no reason to get rid of it just because it’s a few years old.
We’ve been over this before. My local hobby shop seems to be able to afford 15% off special orders. No money up front. I’m retired, not wealthy, and not inclined to spend $8 shipping to save $6 or $7 on a freight car price. They also have the glue or tool I need from time to time. Getting to the store every other month or so is not a burden. I managed that when the closest store was 150 miles away.
A comment about this apparent evil word - “collectors”:
Several have made comments about collecting and collectors as if it is a bad thing or something negative. I’d like to remind them that not everyone collects just to have models sit on the shelves. Rather some have goals and aren’t in a position to take models out of boxes and run them. In my case I moved and had to tear down my layout. Because I want a nice environment for a layout, and don’t have tons of money to throw at contractors, my wife and I are finishing our basement ourselves, along side a number of other costly house rehab/upgrade projects. So naturally, there is no layout presently. I was an evil collector in prior years due to a number of other mitigating reasons but still had goals. I’m guessing there are quite a few other so called collectors who are in a transition period as well, which can last for years due to divorce, job moving or layoffs, unable to afford a home with space for a time, etc.
We have. What about the rest of us who don’t have an LHS? Even if we did, likely they wouldn’t have the car I need. So the above is moot for most of us. It’s just not practical. I’m much more likely to find the Kadee car I need for a good price on Ebay with a little patience. I go to a train show a couple times a year and hunt for deals there on Kadee or other models, but that’s not strictly a hobby shop run, but a tr
AFAIK, KD still sells some of their product through retailers. If a buyer can’t pre-buy their product, then perhaps this slightly increases the chance of customers checking their local store or heading to their local store to look if KD is sold out.
This is all speculation of course as I don’t know that KD has released any info about their wider distribution plans.
As for “collectors”, I’m not one and maybe they grab the car you want before you. However, in railroading, just as in nearly every hobby, they represent a significant and important portion of the buyers and their existance does much to contribute to the critical mass of sales that results in MANY more products and companies being present in the marketplace.
Those models sitting on the shelves (or packed away in boxes…) helped pay for the production of many of the products you are running around your layout.
