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How does one start a model train company?

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Posted by jpg on Tuesday, July 30, 2019 12:56 AM
The best way to make a small fortune with a model railroad company is to start with a large fortune.
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Posted by riogrande5761 on Tuesday, July 30, 2019 6:03 AM

No reply from the OP.  Looks like we are back to the usual talking among ourselves.  Wake me up when the topic reverts back to a discussion with the OP.

Rio Grande.  The Action Road  - Focus 1977-1983

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Posted by ATLANTIC CENTRAL on Tuesday, July 30, 2019 7:07 AM

riogrande5761

No reply from the OP.  Looks like we are back to the usual talking among ourselves.  Wake me up when the topic reverts back to a discussion with the OP.

 

I think you scared him off with the opening line of your first post.......

Sheldon

    

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Posted by SeeYou190 on Tuesday, July 30, 2019 10:05 AM

Mjorstad
there’s also some significant gaps I’ve noticed

.

Frankly, I cannot think of any really significant gaps. There are some models that would surely be popular if made, but nothing that I would call "significant".

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I wonder why some of the manufacturers have not used Kickstarter to see if there is a demand for a new model. Put your idea out there, if enough people buy the Kickstarter, make the model. If not, refund the Kickstarter and move on.

.

It works great for those "significant" gaps in wargaming.

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-Kevin

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Posted by ATLANTIC CENTRAL on Tuesday, July 30, 2019 10:18 AM

SeeYou190

 

 
Mjorstad
there’s also some significant gaps I’ve noticed

 

.

Frankly, I cannot think of any really significant gaps. There are some models that would surely be popular if made, but nothing that I would call "significant".

.

I wonder why some of the manufacturers have not used Kickstarter to see if there is a demand for a new model. Put your idea out there, if enough people buy the Kickstarter, make the model. If not, refund the Kickstarter and move on.

.

It works great for those "significant" gaps in wargaming.

.

-Kevin

.

 

Well, the seriousness of the gaps depends on your modeling era, how fussy you are about detail, and you willingness to "hunt" for stuff made decades ago.

It has long been my view that the current business model has hurt the hobby as much as it has helped. There may be more variety, and it is way better detailed, but the "buy it now or miss it" factor has got to be turning some people away from this hobby.

I can make a long list of stuff that has never been made or never been made at a higher quality/detail level. How big those markets are is hard to say.

But three or four companies fighting over the market for Union Pacfic Big Boys is really stupid from where I sit. 

Back in the day manufacturers avoided excess duplication, today it is a silly game of one upsmanship. 

If I had an extra 10 or 20 million, I would get back in the model train business......

Sheldon

    

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Posted by BroadwayLion on Tuesday, July 30, 2019 11:05 AM

SeeYou190
Frankly, I cannot think of any really significant gaps. There are some models that would surely be popular if made, but nothing that I would call "significant".

Well, nobody makes a nice afordable model of an R-9 subway car.

ROARING

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Here there be cats.                                LIONS with CAMERAS

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Posted by riogrande5761 on Tuesday, July 30, 2019 11:42 AM

SeeYou190
 
Mjorstad
there’s also some significant gaps I’ve noticed 

Frankly, I cannot think of any really significant gaps. There are some models that would surely be popular if made, but nothing that I would call "significant".

Well, I'm guessing you are in the minority there!

Rio Grande.  The Action Road  - Focus 1977-1983

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Posted by IRONROOSTER on Tuesday, July 30, 2019 12:05 PM

ATLANTIC CENTRAL
But three or four companies fighting over the market for Union Pacfic Big Boys is really stupid from where I sit.

I agree, but they must sell well since someone is always making them.

Paul

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Posted by TheGamp on Tuesday, July 30, 2019 1:24 PM

BroadwayLion

Well, nobody makes a nice afordable model of an R-9 subway car.

ROARING



LION, I don't know if it counts as "nice" or "affordable", but if you're willing to work with an unpainted resin shell casting and provide the wheels, I know that Funaro & Camerlengo makes an R1-9 kit that runs about 50-65 bucks depending on where you look. And I saw one from Q-Car for about the same on eBay. 

I took a break from the R58 garbage flat I started working on, and am looking into designing my own R46A/B so I don't have to pay upwards of $1200 a pair on eBay. 

Bob
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Posted by ATLANTIC CENTRAL on Tuesday, July 30, 2019 2:09 PM

IRONROOSTER

 

 
ATLANTIC CENTRAL
But three or four companies fighting over the market for Union Pacfic Big Boys is really stupid from where I sit.

 

I agree, but they must sell well since someone is always making them.

Paul

 

But that is the question. Are they selling 10's of thousands or just the minimum profitable production run each time around?

As I have pointed out before, I have nine Spectrum Heavy 4-8-2's, how many people have nine Big Boy's? 

I have multiple copies of nearly every locomotive model I own, because that is how you build a realistic looking fleet for a moderately large layout.

I don't own even one Big Boy.........

Sheldon

    

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Posted by NittanyLion on Tuesday, July 30, 2019 3:20 PM

SeeYou190

Frankly, I cannot think of any really significant gaps. There are some models that would surely be popular if made, but nothing that I would call "significant".

Two groups that stick out like a sore thumb if you're a contemporary modeller are:

Virtually everything that has a CRYX reporting mark.  Walthers does make the Arcticar-type reefer in Cryo-Trans marks (http://www.rrpicturearchives.net/showPicture.aspx?id=3855738), but there's http://www.rrpicturearchives.net/showPicture.aspx?id=4175665 and http://www.rrpicturearchives.net/showPicture.aspx?id=4819917 as two types that aren't around.  BLMA's Tropicana reefers are close to the latter, but there's significant differences.

Viewliner II baggage cars (http://www.rrpicturearchives.net/showPicture.aspx?id=4272017) and their sister diners (http://www.rrpicturearchives.net/showPicture.aspx?id=5091519).  Amtrak has retired all of the Heritage bags and diners, leaving these two as the only type in service.

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Posted by trolleyboy on Tuesday, July 30, 2019 9:30 PM
This was Lifelike they started out as as you said a manufacturer of Styrofoam and plastic coolers. later they made Styrofoam simple gliders then they got into the trains and slot cars sets. All while still making the coolers
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Posted by trolleyboy on Tuesday, July 30, 2019 9:35 PM
Rapido actually bought two factories in China so they are the builder and designer. It was cheaper this way. You will remember all the big companies Intermountain etc that were having suppler issues in China because a factory closed. That factory closing effected so many train companies because unless you buy and run your own factory or factories like Rapido over there,you have to buy time in the existing factories.So basically all the manufacturers that shifted to China are having their product made in the same two or three factories,so when the one closed it caused a back log. So if you talk to Jason at Rapido it was expensive to buy the two factories but he now has a guaranteed maker and he does not have to wait in the que in teh other factories so he can get his smaller run odd prototype models out without having to go to Brass type pricing.
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Posted by PRR8259 on Tuesday, July 30, 2019 10:28 PM

Smaller run odd prototype models...Hah, lol, that's funny.

Little industry secret: those "odd prototype models" (I'm assuming you mean the Canadian ones?) have such a pent up demand that they outsell American prototype models by 2 to 1 or more.

I don't know actual production quantities, but I've been told "Canadian stuff sells!"

And I fail to grasp what is "odd" about RS-11's, FA-2's, C39-8's, and some exquisitely model passenger cars?

Respectfully submitted--

John

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Posted by SeeYou190 on Wednesday, July 31, 2019 6:39 AM

PRR8259
I don't know actual production quantities, but I've been told "Canadian stuff sells!"

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Down here in Florida, the hobby shop owners have told me that Canadian stuff flies off the shelves.

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So many Canadian Winter Residents have created a demand.

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-Kevin

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Posted by rrinker on Wednesday, July 31, 2019 11:06 AM

 WHat's 'odd' about those Rapido models are, many of them HAVE been done in the past, but the Canadian versions often have some prototype specific details that were left off the earlier models. So you may have been able to get all the RS011's you wanted, but if you were modeling a Canadian railroad, none fo them were correct without modifications. Rapido recognized a definite gap is the market and thus far are doing a great job filling it. That there are Canadians who winter in wamer southern areas of the US, and that there are plenty of US modelers who model Canadian railroads just means they also can sell plenty of product south of the border as well. Doesn't hurt that along the way they've made some otherwise unobtanium US road prototypes as well. And don't forget they have a whoel line of British prototype models as well. You don't often hear about those - not exactly sure how that business model works, if they just make them, or it's a sort of spin-off type of company.

 They're also doing things not previously done - laser 3D modeling of the FA and RDC to get them ABSOLUTELY exact? Who's ever done that before? "Eh, matches the drawings were were able to get, close enough." Not for Rapido.

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Posted by Mjorstad on Wednesday, July 31, 2019 8:31 PM

riogrande5761

No reply from the OP.  Looks like we are back to the usual talking among ourselves.  Wake me up when the topic reverts back to a discussion with the OP.

 

 

Don‘t worry-I’m still here!  I’ve just been a busy fellow is all.  But I have been reading all your guys’ comments and tips.  I do really appreciate them; there’s a lot of great insights and info here to work with.  So thank you!

 

I think I’m going to start poking around some more to different (smaller) companies. I reached out to BLI for some insight, but no response unfortunately.  I’ll just keep putting out feelers and see what feedback I can get from those in the industry.  

 

SeeYou190

 

I wonder why some of the manufacturers have not used Kickstarter to see if there is a demand for a new model. Put your idea out there, if enough people buy the Kickstarter, make the model. If not, refund the Kickstarter and move on.

.

It works great for those "significant" gaps in wargaming.

.

-Kevin

.

 

 

I really liked this idea-a Kickstarter would be a great way to get the first few projects off the ground!  I’ll have to hash out a preliminary business plan and once I get that, I’ll probably get a kickstarter, well, started.  Only problem is figuring out what each expense will be and how much.  Looks like I’ll be doing some research in the coming days.  Thanks again all!

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Posted by riogrande5761 on Thursday, August 1, 2019 6:30 AM

PRR8259

Smaller run odd prototype models...Hah, lol, that's funny.

Little industry secret: those "odd prototype models" (I'm assuming you mean the Canadian ones?) have such a pent up demand that they outsell American prototype models by 2 to 1 or more.

I don't know actual production quantities, but I've been told "Canadian stuff sells!"

Why just ask Jason of Rapido, he and to some degree Bowser, are the saviors of Canadian model train fans.  And as a bonus, Jason is throwing some of us guys "south of the border" a few tasty bones!

And I fail to grasp what is "odd" about RS-11's, FA-2's, C39-8's, and some exquisitely model passenger cars?

Respectfully submitted--

John

You, of course, have heard the saying "beauty is in the eye of the beholder".  That should be enough for you to grasp why some find certain trains odd vs. some not.  'nuff said.

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Posted by riogrande5761 on Thursday, August 1, 2019 6:35 AM

Mjorstad
I think I’m going to start poking around some more to different (smaller) companies. I reached out to BLI for some insight, but no response unfortunately.  I’ll just keep putting out feelers and see what feedback I can get from those in the industry.

 

It may be that you find model train company folks are reticent about sharing insights or inside info because they may view you as a possible competitor.

My guess is the best way to get real info and experience is to work for a company like ExactRail, Athearn, Rapido or the like as there is a lot of industry specific knowledge and processes they would know first hand.  

That knowledge and experience could make a difference between success and failure.  But as can be expected, they keep their cards close to their vests as they don't want to give away anything that could be used to compete against them or put them at a disadvantage in the same market place.

And of course if you went to work for a model train company, they would make you sign a non-disclosure agreement (NDA) which you would be bound to after leaving employment.  But you would still have learned a great deal and be much better prepared to start a company of your own. 

And of course it takes a lot of money - I've heard tooling can be six figures, or at least it used to be.  Then you have to get slotted into a manacturer who has the skills workers and equipment to manufacture quality models at labor rates that will allow you to sell models in the US and still make a profit.

Rio Grande.  The Action Road  - Focus 1977-1983

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Posted by SeeYou190 on Thursday, August 1, 2019 6:46 AM

Mjorstad
I really liked this idea-a Kickstarter would be a great way to get the first few projects off the ground!  I’ll have to hash out a preliminary business plan and once I get that, I’ll probably get a kickstarter, well, started.  Only problem is figuring out what each expense will be and how much.

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I don't know how you would get the word out to your audience.

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I think posting about your Kickstarter in here would violate forum rules.

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I always hear about interesting Kickstarters through friends. These things are completely dependent upon word of mouth.

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Good luck!

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-Kevin

.

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Posted by PRR8259 on Thursday, August 1, 2019 8:46 AM

riogrande5761--

I do ask questions of my friends at model train companies.

However, they are so...what's the right word for it..."concerned" regarding negative publicity that has actually occurred during the past that I have been specifically asked not to say anything at all that could possibly point to them, because people in online forums get very confused, misconstrue, and often get completely the wrong idea...That is even a little part of the reason I no longer participate in some other forums.  I have nothing to say that might not be taken the wrong way by somebody, so it's better for me to shut up and bow out.  My opinions weren't wanted there anyway when there are "favorites".

One manufacturer has expressly said that they don't want any comments made by me that don't come directly from them in the form of an advertisement or product announcement or whatever.

All I can say is general factual information such as "Canadian stuff sells".  For those who make it, it indeed sells very well.  There is a reason for the plethora of Canadian models in recent years.

I'm out.

Respectfully--

John

P.S. regarding model railroad manufacturers sharing secrets, with the possible exception of Rapido, one might as well be contacting the CIA for information.  They share with each other "don't make that, because we already have it tooled" (Atlas has a reputation for honesty and transparency and is good about doing that to save others from wasting their money) but that's about the extent of what they share.

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Posted by riogrande5761 on Thursday, August 1, 2019 10:17 AM

PRR8259

riogrande5761--

I do ask questions of my friends at model train companies.

However, they are so...what's the right word for it..."concerned" regarding negative publicity that has actually occurred during the past that I have been specifically asked not to say anything at all that could possibly point to them, because people in online forums get very confused, misconstrue, and often get completely the wrong idea...That is even a little part of the reason I no longer participate in some other forums.  I have nothing to say that might not be taken the wrong way by somebody, so it's better for me to shut up and bow out.  My opinions weren't wanted there anyway when there are "favorites".

 

The way I see it, it does help for people to be of like mind or on a similar page with regard to the forum to enjoy hanging around together.  Years ago I left another forum because it didn't fit my needs, but I wasn't bitter.  We just weren't compatible.  To quote the lyrics of Dave Mason song: "… So let's leave it alone 'cause we can't see eye to eye. There ain't no good guy, there ain't no bad guy.  There's only you and me and we just disagree.  You do what works for you. 

Here.  This is a "happy place" so some have migrated here, as long MR forums remain open.  The hobby has many aspects to it and the whimsical side is one of many and this forum leans that way.  Some forums fulfill other needs.  Do what works or doesn't work.  

One manufacturer has expressly said that they don't want any comments made by me that don't come directly from them in the form of an advertisement or product announcement or whatever.

Fair enough.

Anyway, I'm not sure what you are responding to since you didn't quote anything but my forum name I can only guess you are referring to model makers being tight lipped which the reasons are obvious enough to me that it doesn't require explanation.  

All I can say is general factual information such as "Canadian stuff sells".  For those who make it, it indeed sells very well.  There is a reason for the plethora of Canadian models in recent years.

I'm out.

Respectfully--

John

Yep.

P.S. regarding model railroad manufacturers sharing secrets, with the possible exception of Rapido, one might as well be contacting the CIA for information.  They share with each other "don't make that, because we already have it tooled" (Atlas has a reputation for honesty and transparency and is good about doing that to save others from wasting their money) but that's about the extent of what they share.

Yep.

Rio Grande.  The Action Road  - Focus 1977-1983

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Posted by garya on Thursday, August 1, 2019 10:17 AM

PRR8259

 ...because people in online forums get very confused, misconstrue, and often get completely the wrong idea.... 

You don't say

Gary

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Posted by Shreve Rail on Thursday, August 8, 2019 10:42 PM
Two suggestions for you: you could learn by ordering an order of Accurail 48 custom cars and see how much fun and trouble it is to design your project and then sell the cars. Minimum order is 48 units. Secondly contact the fellow who runs Digital Fox and see how he does it using Accurail as manufacturer. Good luck!
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Posted by Eilif on Friday, August 9, 2019 11:33 AM

Shreve Rail
Two suggestions for you: you could learn by ordering an order of Accurail 48 custom cars and see how much fun and trouble it is to design your project and then sell the cars. Minimum order is 48 units. Secondly contact the fellow who runs Digital Fox and see how he does it using Accurail as manufacturer. Good luck!

Just shooting the breeze here... but I wonder if this type of approach might actually be the best for someone entering the market.  Relatively low risk, but still a good way to experience designing and marketing a product without having to invest in new tooling.

Perhaps also purchasing a defunct company assets as well.  You'd have to ask around to see who and what might be available, but companies that make trains or accessories all the time and not all of them get bought up by bigger companies. 

Or there might be a company with unused or underused tooling.  Think of what just happened with Lionel getting underused mantua/MPC/Model Power tooling.

Not that these are all going to be "cheap" options, but I imagine they might be a great deal cheaper than getting into the cost and effort of having new tooling and production put in place.   I was baffled when I saw that "Value Trains" had invested in new tooling (which turned out to have some notable flaws) when tooling for teprototype they were making already existed.

Of course if your goal is to get a product out that doesn't exist, these might not be good options.

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