Will Snubbing the Pre-Order System Get Us the Products We Want?

One of the topics that seems to be getting little attention here is how customer uncertainty about quality affects the number of pre-orders. I have seen items that I would like to buy multiple copies of (especially in "data only" paint schemes), but have found that those are almost always sold-out FIRST (with a few exceptions for things I do NOT want, anyway). If people are hesitant to commit to buying multiple copies until they have the ability to examine ONE, then they pre-order system will seriously underestimate the amount of "run" that will sell quickly. So, yes, I think that actually happens, and I think it affects both manufacturer bottom line and, in the long term, the number of hobbyists that form the manufacturers' customer base.

So, while the SHORT-TERM strategy for not going out of business quickly might involve pre-orders for small companies, it is also damaging the company in the long-term with respect to growth. And our hobby along with the "business."

In addition, I am willing to pay a higher price for an engine I buy at a LHS after a visual inspection and a test run, than I am willing to pay on pre-order, especially Internet pre-order where I may not even know where the vendor is located.

So, I do believe that a purely pre-order business model would eventually kill model railroading. And I doubt that the manufacturers care, because the same factory can make profits making other things just as easily. And the customers will, for the most part, find some other hobby to support Chinese industry.

In these economic times, about all I can suggest is that the part of the manufacturing process that is actually interested in model trains try to get a better feel for the REAL market. One way to do that might be to have staged manufacturing, with pre-ordered first runs at a lower price because they involve less risk, with PLANNED follow-on production of at least one more run, with a higher price, to fill the remaining demand. I think that makes incentives that pont both customers and vendors in the right directions.

 

My own favorite way to purchase is through woo woo woo woo woo woo's system. I put my selections into their notification system, and they let me know a few hours before it goes on sale.

If there is something coming out that I really, really want (for instance, when Kato brought out their ATSF modified F-3s), I place a pre-order with a retailer that "guarantees" I will get one (assuming the manufacturer actually produces enough to fill the order). But for everything else, I use the woo woo woo woo woo woo system. I don't know how they figure their own pre-orders from the notification requests, but I seem to always get what I want, while at the same time having the option to not buy it right away if money is tight that month (ended up only getting 2 of the 4 MT undec baggage cars, but I am sure there will be more chances in the future). Note that the closest brick and mortar hobby shop is a 3 hour drive away for me, and has a tiny stock of N scale, so I am most likely buying on the net in any case.

Note to Kato- I want more of those ATSF F-3 B units, when you have the time...

 

To answer your question if I ever ran a business, I am assuming you meant a small sole proprietorship. The answer is no, I did not. I was involved in management of small manufacturing/construction business but not as a CEO. Our biggest bugaboo was, as is the case with most businesses, capitalization. So it doesn't take a great leap of faith to transfer all that to the model RR manufacturer. One thing that was different was we owned our production facilities and had control. We tried out sourcing with poor results. The quality suffered, specs were not obeyed and as a result product was not delivered on time. We cared about that.

But we have moved away from the intent of the original post. Does the pre-order system work? I say it doesn't for the reason I listed earlier. Namely, the pre-order system under estimates the market. There could be viable products that never see the light of day because a lot of people don't pre-order. So the company announces it is cancelling the project. Other producers, seeing that, decide they won't do the project either. So we all lose. So the pre-order system is like a cancer that infects the model RR market. The PCM/BLI Pennsy M1 steamer is a good example. PCM/BLI announced it and took pre-orders. Then it announced it did not have the pre-orders to do the project. Nothing happened, for ten years, nothing happened. Now BLI says they are going ahead with the M1. What changed? Did they all of a sudden get those pre-orders? I doubt it. I bet they had them all the time but they went with other projects knowing they could come back to the M1 because they had already poisoned the well. No one else was going to take the chance to produce a locomotive that another company said did not get the necessary pre-orders. So for ten years BLI stonewalled the model RR market. No one would touch a M1 or any other PRR locomotive. Produce a K4? No, and the reasons given were many and varied but the real reason was risk avoidance.

The pre-order system is here to stay as long as producers stay on a risk avoidance business model. The successful businesses were the ones who had visionaries unafraid to "launched out into the deep" and take on risk knowing full well that they may fail. But they saw profit as the reward for risk taking which economic theory tells us it is supposed to be. Today, however, risk taking is shunned. Today producers want the reward of profit without the risk. Its like eating your cake and having it too.

If you want to see the end of the pre-order system quickly, it is simple. Flood the producer with pre-orders then don't buy. That producer will go down but others will hopefully see that risk avoidance for what it is, illusionary. Drastic to be sure and I personally don't agree with it but something drastic like that is sometimes what is needed. Will that happen? I doubt it. In my travels I have met a lot of N scalers and they are genuinely nice people who would not consider doing it. So it is what it is. The pre-order system, like it or not, is here to stay.

 

There is a big difference between the pre-order system and your story with the developer planning the mall. In the pre-order system the final customer has to commit. With the developer he is not asking the final customer, i.e. the shoppers, to commit. Now if a model RR producer would go to distributors and ask them to commit to purchasing a certain number then you would have a parallel with the developer. In fact I have heard this is what some companies do. As long as the distributors commit to the number needed to make the project viable then the manufacturer should be happy. I would think the distributor would know the market better than the manufacturer just as a large retail anchor store would know its demographics better than some developer.

 

I have only Pre-Ordered twice so far. One was some special box cars and flatcars Civil war era from MT. They came in right on time. The other is those ghost Shays that always seem to be on a pre-order list for years now. Right now, they are supposed to be out the first quarter of 2016. Will they be This time??? Don't know. I know a lot of folks on this forum and others too have been waiting for some time now for them. Some have waited for over 6 years now!! I have been waiting for a couple myself before i pre-ordered them. Sometimes it doesn't work for Pre-orders and sometimes it does. While waiting for Atlas to get off there A$$ and make the Shays we as members of this forum and others around the Model Railroaders have voiced a concern that Atlas wouldn't ever do them and that "other" companies would do a Shay for us. I think that Bachmann was noted as they make a shay in HO scale. Don't know if that will ever happen but if there is enough interest they would, i think. Sometimes we have to stop whispering and start shouting for what we need. Just my 2 1/2 cents......

 

I've commented on this issue, in the past, and agree with you.
The result, however, seems to be that certain manufacturers will get offended by the suggestion that their product quality might be anything less than A1 - worse, they incorrectly perceive those comments as some sort of a personal attack. They claim to be doing the best they can and, if there is a problem, they'll do the best they can to resolve it.

I do this, myself. The problem is that the LHS seldom gets new engines in "on spec." They'll get them in if I express an interest in it and then only the exact number I might want. If, after the locos arrive, and the "visual inspection and a test run" detects a problem with any of them, there are no "extra" locos in stock to choose from instead. Also, since the manufacturer likely built just enough products to fulfill their pre-orders, there are no replacements available to exchange for the defective item found at the LHS.

How does that work for those items where the manufacturer is struggling to find enough demand for the initial production run, let alone a follow-on run? This is especially an issue for those manufacturers who don't have their own production facilities and need to meet minimum production quantities imposed by a subcontractor.

 

I think it's just a plain simple fact that people don't want to preorder something have no idea what it'll be like.

I think manufacters should get out the message better of what exactly they are putting out if they want more preorders. Drawings and pics are nice, but videos (Atlas S2) and even let people run them (DC, DCC, and even DCC sound) at shows and such. Let the people know that if they preorder this THIS is what they are getting.

 

OK, don't ask me how the posting system here turned K L E I N into "woo woo woo" Let me assure the folks at woo woo woo woo woo woo that I did not write it that way. Something strange in the internet ether today?

 

Nothing strange in the ether - just one of the "charming quirks" of this forum.
If a particular dealer - no matter how popular - isn't among those who advertise on (and thus support) Trainboard ( http://www.trainboard.com/highball/index.php?forums/advertisers.155/ ) , then any mention of their name (let alone a link to their site) risks getting automatically and unceremoniously censored. Various euphemisms are thus employed to refer to such dealers, such as the "the train store in MD" or "Pete in NJ" - you get the idea.

 

Yet, the action of "auto-censor" can be puzzling to a newcomer.

FWIW, I placed my most recent order with Trainworld - a Trainboard advertiser.
One of the Kato locos came through in a cracked plastic box.
The item was among several others well inside the package, so it had to have gone in that way - rather than being the result of damage incurred in transit.
The story I got was that the loco must have been in a display case - out of the box - and the box alone got cracked wherever it was being stored. IMO either someone stepped on it or something quite heavy fell on it.
Regardless, it's been several months, now, but I've yet to receive a replacement box.
So much for trying to support the cause.
I've yet to have any such problem with "the train store in MD."

 

No mis-communication that I'm aware of - and certainly no flaring tempers.
When last I spoke with them I was under the impression that they would send out a replacement box.
It's the standard plastic jewel case Kato always has available in their parts department.
I'll call Trainworld, again. If that doesn't succeed, we can look into a third party intervention.
I have bought from them in the past without issue, prior to the Trainboard affiliation, so this "oops" was unexpected and a bit coincidental.

 

"We have very good reason for what we do. Also, in the past a few folks thought they were cute in posting workarounds.....:

My apologies. Figures I would break the rules in the first few posts on the forum. Fine with me if you delete the posts, especially 148, which I did not intend as a "workaround", but obviously is.

Tom D

 

I've never given my credit card info when preordering.

As for the "quirk" with the auto edit, I hate how it edits K l e i n, being its a person's name, look at Fred's site where he does N scale passenger proto/model info.

 

Which makes it a "survey"! No CC info means no committment. Skip the middlemen. Just put a 'survey' on the manufacurers website.

 

I guess we are slightly digressing from the original posts regarding the pre-order system... so let me get back to the topic.
As I said before, it is not a good idea to snub the manufacturers. The message would be contrary to what we would like them to know.
They are more apt to make LESS models available if they deem there is little interest in N scale for items they are proposing.
Some of the model delays (and cancellations) we are presently observing are likely weak responses for the pre-orders.

 

I don't know who is supporters and not. Is there a list somewhere on site that has the list of supporters?