I agree. We're well past what I'd describe as Stage 1, now. It should be quite clear that while many manufacturers believe in their choice of this route, it has made a LOT of consumers very unhappy. Despite all attempts to do so, there is no pretty wrapping paper for this method of doing business. One hundred years ago, business people were bold, decisive and took risks. Today, all kinds of effort is expended trying desperately to avoid taking ANY risk. Quite a change in mindset. There are no guarantees in life, especially in business.
There are 2 major things one needs to know about businesses now-a-days... 1) It is easier to ask for forgiveness than permission. 2)Privatize gains, socialize losses. JMS
If a manufacturer sits around the 'round table' in the mornings and discusses making models of "A" "B" "C" & "D" and then throws 'preorders' out there as feelers to judge the interest in them...its a recipe for disaster. If the results come back with little or no interest via the consumer detested 'preorder' system...and the manufacture scraps plans for any of them...who really loses ? The modelers may pout for awhile because they didnt get what they wanted but they lose absolutely nothing...because they have absolutely nothing invested. The manufacturer on the other hand loses a ton...the monetary lose of 'nonproduction' alone will close some doors. Manufactures may believe that 'Preorders' are the latest and greatest and everyone wants that...right ? WRONG !!! Live by the 'Preorder"...die by the 'Preorder'. c'est la vie
What I find to be truly humorous is every time we have one of these discussions, some manufacturer comes in and throws out the standard "how would you fix it?" Umm. I did NOT break it. I was not in on the decision. Not my mess. Let him who made the choice, clean it up. If that's how you wish to do business, do not complain when this type of discussion flares up.
I do believe we are. What did they use before pre orders anyway? A question for any moderates out there. How bad would it be if we did call out the MFGS that self abuse with pre orders? I do find it unfortunate though, that a manufacturer has to rely on pre orders to determine whether or not to make something. But I feel someone failing to find backing is an excuse. Just recently, I ran into an author of children's book. Look up "The Nitch" by Satyrus Jeering. This guy published on his own. It takes approximately the same amount of cash to make a book as it does to build locos. He scrapped around for monetary support. Artists. Publishers. Leather backings, etc etc. He then put the books together at his own little shop. All on his own risk. They sold quick because it was not like any other children's book. (Their is more to it than just the book.) Point being, children's books is a tougher market. More risk to many variables. He has successfully accomplished his goal and now has more ideas he can use. And will expand his works. HE TOOK RISK folks. Built a unique book of quality. It sold.. And has been a success. It's not impossible to succeed on your own people........ Sent from my SM-G900V using Tapatalk
Yes...but our opinions arent worth a plugged nickle to manufactures...unless we preorder something...oh well.
And, I will keep scratch/ kit bashing what "I WANT' until the manufactures build what I think is worth my $$$. If all model RR companies went out of business tomorrow... I could care less!!! It may make some people leave the hobby... but, people like me(who can pretty much build what they want... even if it takes more time and effort) will not blink twice. Not attacking... just sharing my 2 cents. JMS
I believe there is one fundamental reason behind the pre-order system. Okay, actually two fundamental reasons. The first is a lack of adequate capitalization and the second is risk aversion. They are related. Most new business failures are due to not having the capital to see the business through those rocky periods that all business experience where income is reduced but costs continue. Negative cash flow is the term used. Back in the day when I was doing my academic studies we were told that a business model should have the cash or access to cash to cover basic expenses through the first five years. That is a lot of money which very few people have available. The solution was to have access to lines of credit from banks or investors but that came with its own problems. Usually the bank or the investors wanted to recoup their money first rather than reinvest it to grow the business. Risk aversion is the fear of committing everything to the business. One might be tempted to say it is a lack of commitment to the project but it is more than that. The fear of failure haunts many of us and is probably the number one reason that entrepreneurs makeup a small portion of the population. The pre-order system seeks to reduce the fear of failure by presorting those projects according to their economic viability. Or does it? So along comes this idea of the preorder system which seems to be the panacea to address these issues. Ideally the pre-order system functions as a market research tool gauging the market as to what will sell and what will not. So we concentrate on what our 'market research' tells us will sell. Coupled with that we employ 'out sourcing' the part of the process of bringing a product to market. Again, ideally expenses are kept low as outsourcing means you only need to pay for activity that you actually use. You don't have to support a entire factory as your costs are only the amount of time you use to run your product. You could out source everything and have essentially a turn key operation or you can keep somethings in house (design, packaging, painting, etc.). On paper it all sounds and looks good. But not everything is on the paper and what isn't there can be formidable. You have effectively given up control of those activities to whomever you out sourced. You have no control over your destiny because you out sourced that. Your priorities are not necessarily shared by whomever you out sourced to. Things happen and deadlines slip. Expected delivery dates come and go and are replaced by new dates which come and go as well. Reputations (yours primarily) suffer to the point that your expected delivery dates are meaningless. People abandon the system by not pre-ordering. The "I'll believe it when I see it" attitude is kindled and grows.
The pre-order system is the natural bi-product of the current manufacturing system. Most companies that we identify as manufacturers are NOT manufacturers, but marketers. The manufacturers are the companies in China and elsewhere that actually make the product. Manufacturers MAKE things. For the most part, nowadays the North American and European companies are designing and MARKETING products manufactured by other companies. Those companies in China and elsewhere are contracting for large scale production- once the contract is signed, there is no going back and deciding to only produce 1000 instead of 3000, because orders from hobby shops are lower than expected. Now, there is nothing wrong with this, but the system has evolved to where we as consumers no longer have any direct contact with the manufacturer at all. And the MARKETERS have little direct control over the factory in which their product is being manufactured. They may not even own the tooling, so the timing of a second run of a hot seller may be under the control of the contracted factory. The few real manufacturers out there (I am thinking Kato and Micro-trains, both of which, if I understand correctly, still manufacture their own products) do a whole lot less pre-order, and have the option to do multiple runs of items that sell well- so once every few years, there is another run of ATSF warbonnet F units, or Shell tank cars, or whatever. If they decide to put particular tooling on the injection molders for an afternoon, that is what happens, whereas the marketing companies may have to buy 2 weeks of production because the company to which they have contracted production only runs batches in much larger quantities. They do make mistakes- one I have noticed is that when Kato brought out their modernized ATSF F-3s (that look like F-7s with high fans), customers bought more B units than they anticipated- so they ran out of B units long ago, but you can still find A units on sale. And I am not sure that MT produced enough undecorated baggage cars in the first batch- those seemed to sell faster than most of the decorated versions. But with control of the production, both companies can fix those problems in a future run- Kato could run a higher proportion of Bs (or sell in A-B sets) and MT can produce more undecorated baggage cars whenever their production schedule has an opening.
Preordering such items is completely unnecessary as these are freely available from multiple manufactures. It's funny how vociferous a discussion this has become for a practice that is not widely engaged in. Who asks for money up front anymore? No one I know of. So this is a straw man. Preorder, pay later? Sure, as explained, this tells them about how many they need to plan & make. Delays? A whole different topic that does merit discussion and has its own recent thread. Point being, preorder is not as scary as its often made out to be. I've preordered the Kato ATSF F7 freights & Bluebonnets and did so months ago. No commitment, and I've planned ahead for the CC charge when it comes. I also preordered the recent BLMA Beer Cars which ended coming out a year & a half later. Either way it wasn't the end of the world and my preorder was a vote for "Yes! Please make this item!" If the curmudgeons don't wish to cast their vote, and a highly desirable item fails to appear, then C'est la vi. But then the hobby is less for it. Again, prepayment is not the issue any longer. And Delays are another topic. But as long as my favorite manufacturers require a sense of the market first, then I'm going to support my desired items with a preorder vote of "Yes!"
Another reason is that some manufacturers seem to be living hand-to-mouth, from one new project to the next, without any other source of a regular stream of income - what used to called cash cows. Companies such as Bachmann, Atlas and Kato all sell a line of track, for which the development/tooling costs are presumed to have been amortized long ago and which (barring unforeseen consequences) can be depended upon to sell at some continuous steady rate. Similarly, several manufacturers have a portfolio of previously tooled models that they can reissue periodically to generate income. For example (and with nothing against them), Micro-Trains "milked" the tooling for the original 40' boxcar for decades. Companies whose models are produced on a one-and-done basis - "get it now because we'll never make it again" - forego that opportunity.
The discussion is about any need to pre-order. Inkaneer is smack on with his analysis of why it is being done. So, feel free to keep on. It's only propping up a shaky system, which can very easily altogether collapse. I wonder what those who had guts and dared would have to say, if they could come back and see us today... It's those who stepped out and made it happen who shaped the world of consumer goods we know today, not the fishing promoters we know now.
We aren't going back to those good old days when all the manufacturers made whatever they announced. But remember that new products were slow to be released... and what you got was what ever the manufacturer felt would sell... whether proto or fantasy. Personally I prefer not to rely on pre-order... but the difference is more prototypical models and more often new product announcements. I don't feel many of the items we currently have would have been produced under the old system. Sent from my SM-G530T using Tapatalk
Inkaneer, Yes, I think your analysis in post #270 is essentially correct. The only solution I can think of is one of us winning $100 Mil after taxes in the lotto, so we could devote much of it to MRR manufacturing! If I won, I would probably make an offer for IM or one of the others and try my best to produce products as we want them, and how we want them delivered, and I wouldn't care if I lost a large chunk of it (although, my heirs might have me committed......) However, in the real world, undercapitalization and risk averse are the way most of us are. Coupled with a love of model trains, it is what it is when some small guys try to become mfgs.
