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

glennac Aug 10, 2015

  1. RBrodzinsky

    RBrodzinsky Staff Member TrainBoard Supporter

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    On the home page, click on "Advertisers ". You will see a current list, with links to their pages.
     
  2. Ike the BN Freak

    Ike the BN Freak TrainBoard Member

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    Not so, I've reserved items at hobby shops without ever having to give my up CC info. Besides, the shops that have taken CC info, none of them charge until they are ready to ship you the item.
     
  3. Grantha

    Grantha TrainBoard Member

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    I think that preorders are a necessary evil in the hobby. In order to be able to get manufacturers to produce models that likely will have lower demand it is necessary. The hobby has never had such a wide variety of models available.
    I currently have some hoppers on preorder that I have been waiting for about 5 years. At least it feels like that. Nonetheless, without the preorder system these cars would probably not be produced.
     
  4. ken G Price

    ken G Price TrainBoard Member

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    This because these are made by individuals and not made by established model train companies.
    Do you believe, that if Atlas started to make engine and car shells with 3D printing, they would not paint and decal them, while also offering non decorated shells the same as they now do?
     
  5. Rossford Yard

    Rossford Yard TrainBoard Member

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    I apologize for me earlier comment coming off a bit snobbish. There are many reasons customers are reluctant to pre-order besides lack of funds, most touched on here. For some, like uncertainty and anger against a manufacturer who repeatedly has delays in bringing projects to market. On another forum, IM is being taken to task for this.

    Maybe I am too understanding, or just lucky that I have been inconvenienced only occasionally, and generally love the products, and am willing to let time, patience and higher prices function as workarounds. Or, just manage to sort of naturally avoid the ones that give me problems. In truth, most of the new MR products are very good and very consistent, not that you would ever get that impression on any forum where we usually discuss faults, not praise products.

    But my point was, while the producers theoretically want to sell to everyone, they probably have a practical limit, where the cost of wooing the reluctant buyer, who wants to maintain the right to not buy, or retain the availability until it is convenient for them, exceeds any benefit of the maintaining extra stock, making too many extra, etc. Or, the right to see the product beforehand, which of course seems reasonable. Of course, with Atlas and Kato, and maybe BLMA and FVM, I have little trouble buying sight unseen, whereas others with less proven track records cause concerns. In the end, quality product trumps most concerns. Thus, the pre-order system.

    To reduce product uncertainty, I wonder if, since the producers do test shots of shells, instead of doing one for the home office, could they do several, complete with paint, maybe 25-100 which would "tour" around to many regional LHS and train shows, where the buyer could touch and feel and see run? Of course, the cost of making these samples would have to be figured into the final price of the locos somehow and/or could be sold off as collectors items. Again, the question is, how much cost would be absorbed in the marketplace? It might not be worth it to Atlas, but for IM, or any new manufacturer/producer, it might be a significant gesture and add to sales. They have probably calculated this out, but maybe someone would take a chance to make a splash.

    Just throwing out a few ideas, since Pud asked, and since customer frustration is a real issue for enough to cause anger against some producers.

    Inkaneer,

    Thanks for the reply. As to surveys, I think most think they could only be a supplement. As you mention, most N scalers do feel a commitment on a pre-order and would only back out if absolutely required by job loss, etc.

    And, I wonder if it really does underestimate the market, except for maybe new products. The 400LHS, 7-8 major distributors and the producer all have the ability to "add X%" to their actual pre-orders based on their experience and knowledge of the market, no? While some underestimating may occur, perhaps on purpose to make sure they don't get stuck with too many extras, I doubt you can get a system that gets it exactly right, every time, including website and FB surveys. As the Trainworks trucks show, a better than expected product ups it, and a poor one reduces it.

    And, there are always second runs, where the complaints about being shorted from the same LHS and distributors probably gives a pretty good picture. So the producers are supposed to take a big risk on the first run when there is an easy workaround.....make some more in a few months or year! And, don't use Kato as an example. They announce without pre-orders, make what they want, and don't offer reruns for a long time, for whatever reason, and I see folks complain about that, too. No system is perfect.
     
  6. Adrian Wintle

    Adrian Wintle TrainBoard Member

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    3D printing doesn't solve much at the moment. Yes, it can give a bodyshell at somewhat less than the cost to create tooling and injection mould it, but it would require more cleanup/finishing to get it to the state of a good high-pressure injection mould and the material isn't as stable, rigid, or durable. There is still the cost of the chassis and mechanical elements and, of course, the finishing, detailing, and decorating. I would expect that, for the near-mid future, it is still better to produce things the 'old-fahioned' way for normal consumers.

    Adrian
     
  7. umtrr-author

    umtrr-author TrainBoard Member

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    Another data point...

    Looking through my late father's estate of HO Trains, besides the usual brand names, there are names on price stickers that you don't see anymore:

    - Woolworths
    - Grants
    - Korvettes, Two Guys, Caldor (for those of us in the Northeast, and in the case of Two Guys, Southern California for a while)
    - Sears
    - Montgomery Ward

    How many thousands if not tens of thousands of pieces of equipment did those large retailers take into the distribution chain? I suspect that adding the volume of business of the top one hundred model retailers and e-tailers today would not even equal what one single medium sized Woolworths did. The legendary Two Guys' After-Christmas Sale had several aisles' worth of material, probably 25,000 pieces of stuff. We no longer have that distribution channel for model trains (yes, of far lower quality) and the visibility that afforded to thousands of potential customers. On the other hand, considering what mass market retail looks like now, I doubt that the manufacturers could survive anyway.
     
  8. jpwisc

    jpwisc TrainBoard Member

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    They are all listed HERE.
     
  9. Rossford Yard

    Rossford Yard TrainBoard Member

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    George,

    I have always thought some bigger retailers, probably Hobby Town, could make a one shops in each large metro area a train specialists, but have other stuff on sale on the web, or store kiosk, etc. Or, maybe that function is just taken over by Amazon or similar now. Visibility seems to come from train shows.

    Of course, wherever the location, the goal of the is to avoid those big sales of excess stuff. The market is reduced, shopping patterns are changing. I doubt Sears is going to change its struggles by adding the MRR line. Not sure what the answer is to keeping MR in front of the general public, but that is a separate, oft discussed topic on forums, too.
     
  10. Ike the BN Freak

    Ike the BN Freak TrainBoard Member

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    Issue with Hobbytown is that they are independent franchises. Which is why some stores have amazing selections of trains, and others have a few token pieces of Bachmann stock around.
     
  11. BarstowRick

    BarstowRick TrainBoard Supporter

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

    To answer the OP's question. NO!

    It used to be the proprietor at the LHS I frequented would ask me what I was looking for and keep me advised as to any new productions coming out. If it was Kato he new I'd buy it without wanting to see it first and or test track it. Anything from other manufacturers, I'd want to see it first, test track it and evaluate it before buying it. I still do.

    I won't commit to buying something NEW that I can't see, can't test track and or evaluate it. I will not Pre-Order... Period.

    Lucky for me there are those who will make such commitments and we finally get to see various runs of locomotives, freight cars, passenger cars and the likes.

    From what I've seen and experienced most of the production runs are based on what the CEO's and CFO's thinks will sell. Our input and wish lists are usually of no consequence to them. Go figure.

    That's my two cents.
     
  12. fifer

    fifer TrainBoard Supporter Advertiser

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    If anyone wants to know why the hobby has gone this way and why ,if items sell out immediately, they don't re-run them ASAP, One would only have to ask the companies accountant.

    IMHO
    Mike
     
    gcav17 likes this.
  13. Maletrain

    Maletrain TrainBoard Member

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    If somebody will post the e-mail addresses of the manufacturers' accountants, I would sure like to ask them why they don't do prompt reruns of things that sell-out pronto. Perhaps they are afraid that they accurately estimated the demand with the first run and nobody will buy another one?

    This is still looking to me like a risk-adverse mentality looking for maximum profit now without regard to growing, or even sustaining the customer base for the future. So, the customer base would continously shrink until nobody is willing to manufacture anything for the few remaining customers. Thank goodness Bachmann and Atlas have not gone completely over to this dark side, at least not yet.
     
  14. Point353

    Point353 TrainBoard Member

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    That's the question.
    If manufacturers are going to take advantage of 3D printing by being able to produce models on demand, in (very) small quantities and without having to wait until they accumulate enough (pre-) orders to satisfy the requirement for a minimum production run, will they be willing to do whatever set up is necessary to paint/letter those models on, essentially, an individual basis? And, if so, how much might that cost compared to having it done on a more mass-production basis?
     
  15. gcav17

    gcav17 TrainBoard Member

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    Ah yes, that just might make some sense. How much money is wasted on preorder setups, dies, mfg, and so on. Since the goal of business is 0 tax, how much research is written off? And our we suffering for that? Sometimes I do wonder if there is some one in a little office saying do this, but don't do this. The projections predict it will cost to much in taxes.
    Heaven forbid a company make an actual profit.
    Which I understand, but then again do not. Perhaps there is more to this preorder game than we know. I mean waiting five years for something to be produced seems a bit extreme to me. Maybe it's the China syndrome? How many plants are there over there making things for MRRing? And who, gets priority. And I still wonder what will happen should another plant shuts down. .
    Perhaps Mr. Graf could get us some insight on this. ? Of all the people on here I would think he might be most helpful.

    Sent from my SM-G900V using Tapatalk
     
  16. gcav17

    gcav17 TrainBoard Member

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    As for companies doing 3d printing. And laser jetting paint schemes. I don't think anyone will do that for quite sometime. I just don't see it as a feasible alternative when injection molding is done in seconds.
    Now if a small start up could do that, they could be successful. Depending on how much time they want to commit to developement..

    Anyhow, we are stuck in this hobby with preoders, limited supply, and higher costs. IMO.
    Until the interest in the hobby picks back up and sales of low to mid quality products increases revenue, we are stuck with what we receive.
    Now, perhaps what we really need is to convince them to start producing more than just a majority of West coast roads. Not saying stop, but hey, spread the love....

    Sent from my SM-G900V using Tapatalk
     
  17. rrjim1

    rrjim1 TrainBoard Member

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    The reason I had very little inventory is really simple, you pay taxes on the items you have in stock.
     
  18. Rossford Yard

    Rossford Yard TrainBoard Member

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    I wonder if we would really be satisfied with the answer? They would give the company line, but many here seem to think they should spend more money, take more risk, etc. for our purchasing convenience. Would the answer, "We think that's the best way to protect profits" change anyone's mind?
     
  19. jpwisc

    jpwisc TrainBoard Member

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    I think some of us would be satisfied with the answer and some... not so much. There are armchair modelers and armchair manufacturers. The reality is we as the customer have no skin in the game. We assume 0% of the risk if a product doesn't sell. Yes we will be impacted, but we can still sleep at night and know our bills are paid. If manufacturer X doesn't sell enough of a product, they could have to scale back future productions, possibly lay off employees, miss mortgage payments, or even shut down all together.

    If anyone thinks it is just that easy to design, produce, distribute and sell N Scale products, PLEASE: throw your hat in the ring and release some N Scale items. A friend an I were going over the numbers on producing some small parts to sell and I will be happy if the concept generates enough cash flow to make it worth while. We'll see.
     
  20. Puddington

    Puddington Passed away May 21, 2016 In Memoriam

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    Well; I can only tell you why we don't....

    Let's assume that new project "x" sells 3000 units for it's initial offering; that 3000 units is broken out between 9 road names and 4 road numbers per, plus an undecorated version - that's 37 sku's.

    Those 37 sku's represent 9 full set up's and 36 partial tampo set ups on the painting line, plus whatever variations are needed of road and name specific parts in assembly.

    If each sku sells equally (which they never do) then you sold about 81 units per sku and 320 per road name.....

    Your costs are based, at least in part by your volume; you sold 3000 pieces on the first offering..... how many will you sell on the second? 3000? Not likely....
    Despite what many think, the vast majority of purchasers will buy right away; not all by any means but most. To think you will sell an equal number on round two, especially soon after the initial offering is almost always a serious error.... we know; we've been there.

    So; you now have to consider running a smaller run; smaller in overall volume; thus changing the cost side of the equation and smaller in the volume per sku; again affecting costs (factories don't like smaller run and have upcharges for them in many cases) Not only the factory costs are higher, but your raw material costs could be too; the price for 3000 motors is better than for say 1500..... the smaller volume will almost always come at a higher cost per unit; are you willing to accept a lower margin or will you raise the price...? Did you save enough good selling road names and schemes for run two...?

    In addition; production capacity is not endless; your small run will not be as attractive to factories as a larger run; you may have to move other planned production to for the second run it; is that a good idea...?

    Our model has been to plan second runs after a suitable "cooling off period"... time for the initial model to sell out; get known in the market and time to build up a demand again.

    In a perfect world you could go back and run small runs whenever you wanted to; 3D technology and other new methods may make this a financial reality some day but right now, in most cases, the technology and supply chain realities make this a problematic way of doing business.
     

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