Pre ordering is stupid at best. A picture can be deceiving. I won’t buy anything (minus building ) unless it’s in my hands and I can see it first hand. Pre ordering just gives manufactures more reason to build only on request which limits more and more of what you can get at the LHS.
It’s ok Atlantic. My wife keeps telling me I don’t need DCC. She says I can use DC and still have the same amount of fun. I finally ran DCC the other day and never going back to DC so she lost lol. I’m sure I’ll be paying for it though!
Some time back a similar discussion on the Atlas forum and when I voice my concerns I was told by Paul Graf that they(Atlas) order extra as replacements should the need araise and they carry a line of repair parts…
I agree pre ordering is a joke and leads to “buy it now” feeding frenzies…
From the hobby store owners I talk to, they can’t get the inventory. So, it’s not the LHSs trying to avoid inventory. Your post is right, it’s the mfg, but also the large distributors like Horizon and Walthers–whose business is stocking. The internet stores are even worse as they are built on a business model of JIT–that’s one way they give us cheap prices.
One way to help fix this is to not preorder. For some reason guys keep buying locos sight unseen. And for sound locos where things are so subjective it really makes no sense if you’re concerned about quality. You got hit with bad product and little or no inventory to back it up. If you got to try the product out before you bought it, would you have purchased??
Since the average cost per loco or car have gone up significantly in the last 10 to 15 years, mfg unsold stock becomes a bigger issue. 15 years ago, my average acquisition cost of a loco was probably around $60, today it’s more like $150(more with sound). For psgr cars I paid around $15, today more like $45. My salary hasn’t tripled since 1996. I doubt that total industry sales have tripled in the last 15 years as well. That means that each unit represents a higher percentage of sales and cost.
Richard
Richard, I agree completely, I just want to remind you and everyone of an important point.
You CHOSE to buy locos with the added features of DCC and sound, like choos
There are 2 ways of looking at customer-supplier relationships. One is, “I’m the customer. Read my mind, produce what I want. Then, maybe I’ll buy it if I get a good price. And it better meet my expectations that you the supplier helped set. Until then, I’m sitting on my hands. I’m not using my time to assist you in gaining greater profits.” Pretty much standard American consumer practice.
The other mode - that I learned in my Deming courses and still believe in - is to partner with chosen suppliers (and their chosen suppliers). I have seen partnerships succeed in getting special runs of locomotives with slightly modified details and new paint schemes that would probably never have been produced otherwise. And most importers got their start through one guy taking the lead for a group, and getting a particular engine produced that most of the group would like to buy.
The hated pre-ordering, as I said in an earlier post, is more of a tool for the retailer than for the importer/manufacturer. I know of only 2 importers that make a go/no-go decision based on quantity of pre-orders. As those with experience in hobby shops have pointed out, the great variety of products makes it difficult for the retailer to know just what to stock. Since he can’t stock it all, the pre-orders give the retailer a better handle on what is likely to sell to his clientele. For the consumer, the pre-order is a guarantee that one of the run is his, and that bigger than expected sales won’t leave him without the model he really wants. The downside, as many including the OP, have pointed out, is the real possibility that the product doesn’t measure up to expectations.
Yes, by pre-ordering, by serving as a prototype evaluator, by providing prototype information, by investing in an importer or manufacturer through deposits, etc., you are reducing risk in the supply chain, and quite possibly enhancing profits. Is
I have pre-ordered twice directly from an importer. They are both small operations and only sell direct. Both times it was for items I really wanted, that were small runs, offered pre-order discount, and have not been discounted after arrival.
But that’s the exception. Mostly I wait for it to arrive. There is more available even in S than I can use even within my era (the ever popular 50’s). So I pick and chose from what’s available now.
Several years ago Con-Cor announced the Burlington Zephyr set in HO scale as a very limited run by pre-order only. One of our club members just had to have one, so he pre-ordered and paid Con-Cor’s full MSRP.
He waited almost a year to get the model. When it finally arrived the motor went up in smoke within five minutes. Con-Cor’s offices are in Tucson, Arizona, which is only 70 miles away, so he phoned them and drove to Tucson to get it repaired.
They gave him a replacement, which was the last one they had in stock. He then drove 1/2 mile to a local hobby shop, and saw 5 of them on the shelf for $200 less than he had paid.
Needless to say, he was not a happy camper about that. And Con-Cor subsequently made a second run of the model, so it was not really a limited run, collector’s item as advertised.
If “they” say it’s collectable, it’s not - these are big boys toys, some will have value later most will not. No one can predict the “future” value of anything, especially something as trival as model trains. And history tells use 99.5% of this stuff is like a used car - value drops exponentially as soon as it hits the street.
ConCor has no control over what other retailers sell their products for. But all manufacturers in both the direct sales and wholesale business are going to protect their dealers by not discounting - that is all a given to anyone who knows even the sightest bit about business.
They replaced it - customer should be happy.
It is in the best interest of ConCor and the the hobby as a whole to match the supply to the demand as closely as possible. This makes the most money for them and fosters future interest in their products. This is largely the question/problem discussed in this thread. There is no “benifit” form a limited production run that does not fill the demand.
This may explain the answer I got when I called my local hobby shop and inquired about Atlas sets. The answer was along the line of “I can order one for you but there are only two that are not discontinued.” I wonder if he really meant that his distributer only has two sets to choose from in remaining stock?
There is one item that was not mentioned in this thread but does have a serious impact on business’s inventories is the tax that the federal government places on them. Companies in all fields have reduced inventories because of this. They stock only the high moving items and leave out the slower moving ones.
What federal inventory tax? I’ve looked and can find no such reference. I can only find references to inventory valuation methods as they affect cost of goods sold (i.e. what you subtact from revenue to arrive at gross profit).
Inventory costs money to carry, period. That’s a fact of business life. The faster you can turn inventory, the more revenue you generate. The quicker it goes from the loading dock to the customer’s hands, the less warehouse space, labor, heating, lighting, real estate, etc. you need and your expenses are minimized.
'Course, the problem with retail is that you need a certain level of inventory to carry on business. However, the principal of rapid inventory turns still applies. However, this whole thread was about manufacturing and not retailing.