Paul3 I will also try to inject some retail reality here. I work in small retail, namely a used bookstore. We've been keeping track of all the books people ask for at the store since Thanksgiving last year. So far, people have asked for over 475 different titles in the past 8 months. Of those books, only 25 have been for requested more than once. I wish someone would tell me just how I'm supposed to stock all these items in advance so that any customer that comes in or calls my shop can buy it when they want it. Believe me, I know how much money I'm leaving on the table. My Excel file can tell me. But it's impossible for me to stock every book ever made. I only have 1250 sq. ft. of space. As it is, we have around 30,000 books in stock at any one time, which is a drop in the bucket compared to what comes out every year. How can I stock items I know are going to sell before my customers even ask for it? Oh sure, I stock the bestsellers and ones that multiple people have asked for; IOW,the most popular items. But how am I to know to have a copy of "Wallace: The Underdog Who Conquered a Sport, Saved a Marriage, and Championed Pit Bulls - One Flying Disc at a Time" 10 months after it came out? The same thing applies to a hobby shop. There are thousands of SKU's that come out every year. This is not 1988 anymore, when there's Athearn and Atlas and Stewart and that's about it. Go find an old Walthers catalog from those days. It's mostly European equipment. It was easy...yes, easy...for an LHS to stock a hobby shop. There wasn't much choice. It wasn't, "Do I buy F7's or GP7's?", it was "How many F7's & GP7's do I buy?" And people would come in off the street and just buy 'em because that's all there was to buy...anywhere. Every hobby shop in the USA had practically the same inventory because there was so little to buy. Today, it's a little different. There are so many new products that come out every year that it's impossible to stock it all...unless you're M.B. Klein. Paul A. Cutler III
I will also try to inject some retail reality here.
I work in small retail, namely a used bookstore. We've been keeping track of all the books people ask for at the store since Thanksgiving last year. So far, people have asked for over 475 different titles in the past 8 months. Of those books, only 25 have been for requested more than once.
I wish someone would tell me just how I'm supposed to stock all these items in advance so that any customer that comes in or calls my shop can buy it when they want it. Believe me, I know how much money I'm leaving on the table. My Excel file can tell me. But it's impossible for me to stock every book ever made. I only have 1250 sq. ft. of space. As it is, we have around 30,000 books in stock at any one time, which is a drop in the bucket compared to what comes out every year. How can I stock items I know are going to sell before my customers even ask for it? Oh sure, I stock the bestsellers and ones that multiple people have asked for; IOW,the most popular items. But how am I to know to have a copy of "Wallace: The Underdog Who Conquered a Sport, Saved a Marriage, and Championed Pit Bulls - One Flying Disc at a Time" 10 months after it came out?
The same thing applies to a hobby shop. There are thousands of SKU's that come out every year. This is not 1988 anymore, when there's Athearn and Atlas and Stewart and that's about it. Go find an old Walthers catalog from those days. It's mostly European equipment. It was easy...yes, easy...for an LHS to stock a hobby shop. There wasn't much choice. It wasn't, "Do I buy F7's or GP7's?", it was "How many F7's & GP7's do I buy?" And people would come in off the street and just buy 'em because that's all there was to buy...anywhere. Every hobby shop in the USA had practically the same inventory because there was so little to buy. Today, it's a little different. There are so many new products that come out every year that it's impossible to stock it all...unless you're M.B. Klein.
Paul A. Cutler III
I will repeat, we could see this coming back then, We could see the discounting coming. My owner and I knew then it would be "go big or go home". ANY retailer in any industry must understand and know his market and have the right size store and enough capital to be effective - business has been that way forever.
Was it a little easier to be a well stocked train store in 1975, maybe so. But there were more products then than you realize. Plastic lines - kit and RTR - Athearn, Roundhouse, Train Miniature, Model Power, Mantua/Tyco, AHM, Bachmann, Cox, Revell. Craftsman lines - Quality Craft, LaBelle, Silver Streak, Roller Bearing, Northeastern, Huff & Puff, Menzies, E&B valley, Durango press, Central Valley, BevBel, Ulrich, Walthers, Westerfield.
And those were just the big names.
Locos - Athearn had about 200 different item numbers, no counting the dummy versions.
So don't try to discount the selection of products back then. I still say, that with all this "limited" production, at any given moment, there is not a much more available right now as you think compared to back then.
Sure, if you "grab" stuff while it is available, the selection in the last 20 years has been 10,000 times what it was in the 20 years before that. But at any given moment, how much can you find? That's all the bigger your store needs to be.
Back then, MB Klein had EVERYTHING, well it seemed like it anyway. So did Gilberts, Caboose Hobbies, Corr's in DC, and so on.
Point remains, you have to have it to sell it. It was that way when I sold hobbys, and when I sold MATCO TOOLS, and I shop in stores who have stuff. I drive past ones that don't.
Sheldon
Paul3 The same thing applies to a hobby shop. There are thousands of SKU's that come out every year. This is not 1988 anymore, when there's Athearn and Atlas and Stewart and that's about it. Go find an old Walthers catalog from those days. It's mostly European equipment. It was easy...yes, easy...for an LHS to stock a hobby shop. There wasn't much choice. It wasn't, "Do I buy F7's or GP7's?", it was "How many F7's & GP7's do I buy?" And people would come in off the street and just buy 'em because that's all there was to buy...anywhere. Every hobby shop in the USA had practically the same inventory because there was so little to buy. Today, it's a little different. There are so many new products that come out every year that it's impossible to stock it all...unless you're M.B. Klein. Paul A. Cutler III
Paul,I don't think anybody is suggesting a shop needs to stock everything.. A shop does need to keep current up to date stock.
Your book shop is not a hobby shop where the newest car or locomotive is wanted by your customers..
Not in stock..I walk out as a unsatisfied customer and a on line shop gets the order and that plays havoc with your bottom line.
As a small business owner you should know how important it is to have customers returning to your shop time and time again.
If I keep returning to your book shop and never finding what I want how many times do you think I will be returning? Not very many before I would simply write your shop off.
Larry
Conductor.
Summerset Ry.
"Stay Alert, Don't get hurt Safety First!"
cuyama Burlington Northern #24It was an obligation when I pre ordered those models, and now I won't ever see them because they'll sell out quickly especially those IM NP two tone green F3's... it'd costed me $140(w/o shipping) 2-3 months ago when I placed a pre order I hate to inject reality into this thread, but I don't believe that those shipped yet. How do you know for sure that you won't receive them? Incidentally, you may be working with the wrong dealer if you are paying in advance and then not receiving pre-ordered N scale items. How often has this happened to you? I have pre-ordered N scale locomotives many times from Brooklyn Locomotive Works and have always received the items. Payment hasn't been charged until the items shipped. As it happens, BLW is still accepting no-cost-until-shipped reservations on the Loewy Scheme IM NP F-3s in all the road numbers.
Burlington Northern #24It was an obligation when I pre ordered those models, and now I won't ever see them because they'll sell out quickly especially those IM NP two tone green F3's... it'd costed me $140(w/o shipping) 2-3 months ago when I placed a pre order
I hate to inject reality into this thread, but I don't believe that those shipped yet. How do you know for sure that you won't receive them?
Incidentally, you may be working with the wrong dealer if you are paying in advance and then not receiving pre-ordered N scale items. How often has this happened to you?
I have pre-ordered N scale locomotives many times from Brooklyn Locomotive Works and have always received the items. Payment hasn't been charged until the items shipped. As it happens, BLW is still accepting no-cost-until-shipped reservations on the Loewy Scheme IM NP F-3s in all the road numbers.
Sheldon, how many times has BLI backed out of a loco? I know IM backed out of F units a couple years back due to the lack of pre orders. Foobie models exist in N, my BN GP15-1 based off a UP loco, my Kato BN set based off UP cars, my CC BN exec. set has the wrong kind of dome. they're everywhere, so I share those concerns.
Brakie that's spot on, I'm lucky I got my only BN F unit for $40.00 rather than what they go for currently.
SP&S modeler, 1960's give or take a decade or two for some equipment.
http://www.youtube.com/user/SGTDUPREY?feature=guide
Gary DuPrey
N scale model railroader
Layout Design GalleryLayout Design Special Interest Group
Burlington Northern #24N scale not so much, Z scale probably just as bad if not worse of than N.
Having model in N for the last 6 years-I recently got fed up and returned to HO-I can understand your view on prepaying /pre ordering since with N its buy it now or lament later.
N Scale been around for 50 years and still treated like a redheaded stepchild by the manufacturers.
ATLANTIC CENTRAL Paying for your preorder would not solve the problems of companies like Broadway Limited who announce stuff and never make it, or who take years to follow through, or better yet, take years and then still get the model wrong by taking short cuts, and simply don't care, like BLI did with their Pacifics.
Paying for your preorder would not solve the problems of companies like Broadway Limited who announce stuff and never make it, or who take years to follow through, or better yet, take years and then still get the model wrong by taking short cuts, and simply don't care, like BLI did with their Pacifics.
How often has that occurred with BLI?
Just curious.
Rich
Alton Junction
Burlington Northern #24 Ok, we seem to have wandered from pre orders to LHS's and discounts. Guys my LHS carries bare bones MRRing stuff, Bachmann train sets, MP and a couple atlas kits, and scenery supplies. there is yet to be seen anything made for a local(past or present) road name(NP, GN, BN, UP, and BNSF) there are no Kato or atlas loco's, there are no N scale vehicles or any other items I need/want . I try to support my LHS as best as I can but most modern hobby shops are not geared or equipped for model trains(the ones that I've been in) the NP museum in toppenish had far more stock MRRing wise than my LHS did. Also My LHS offer no discounts, so I can't say anything on that. I really want to pay up front for my models. I do it for my video games and it has yet to fail me. It was an obligation when I pre ordered those models, and now I won't ever see them because they'll sell out quickly especially those IM NP two tone green F3's... it'd costed me $140(w/o shipping) 2-3 months ago when I placed a pre order, if I would've been able to put money down on my pre order it would be guaranteed that I'd be a proud owner of them. another thing is that HO scalers and O scalers have almost every model in every scheme available to them, N scale not so much, Z scale probably just as bad if not worse of than N. I am very careful what I wish for.......
Ok, we seem to have wandered from pre orders to LHS's and discounts. Guys my LHS carries bare bones MRRing stuff, Bachmann train sets, MP and a couple atlas kits, and scenery supplies. there is yet to be seen anything made for a local(past or present) road name(NP, GN, BN, UP, and BNSF) there are no Kato or atlas loco's, there are no N scale vehicles or any other items I need/want . I try to support my LHS as best as I can but most modern hobby shops are not geared or equipped for model trains(the ones that I've been in) the NP museum in toppenish had far more stock MRRing wise than my LHS did. Also My LHS offer no discounts, so I can't say anything on that.
I really want to pay up front for my models. I do it for my video games and it has yet to fail me. It was an obligation when I pre ordered those models, and now I won't ever see them because they'll sell out quickly especially those IM NP two tone green F3's... it'd costed me $140(w/o shipping) 2-3 months ago when I placed a pre order, if I would've been able to put money down on my pre order it would be guaranteed that I'd be a proud owner of them. another thing is that HO scalers and O scalers have almost every model in every scheme available to them, N scale not so much, Z scale probably just as bad if not worse of than N.
I am very careful what I wish for.......
Gary,
A few more thoughts.
What's a video game? Just kidding, but I have not played one since the 80's, not my thing.
While the selection in HO may be much better than N scale, there are a lot of models not made in HO as well - just ask any B&O modeler about all the passengers cars and locos that have never been correctly modeled.
The topic of preorders is directly linked to hobby shops, discounts, and the general marketing approach in the hobby today - it is all one issue.
I never have pre-ordered anything and don't plan to start now. You want me to buy anything, then you'd better have it in stock. My buying habits date from the Jurassic period. What can I say!
NP 2626 "Northern Pacific, really terrific"
Northern Pacific Railway Historical Association: http://www.nprha.org/
Hobby shops that don't have much stock go out of business. I don't care what their business plan is.
I remember one store that opened up in a strip mall in Northern Virginia. The store was 6 times the size of most hobby stores. But he only had 1 item every 1-2 feet of shelf space. Literally, there would be a one boxcar by itself, a foot or so away was another. Same for structures, etc. He lasted 6 months and was gone.
I have been to hobby shops that were two rooms each less than 8x10. They were quickly gone also.
OTOH having old and new stock seems to work well. One hobby store that was about 1000 sq ft or so had lots of old stuff and lots of new stuff. His store was so packed that it was hard to walk down the aisles. The top shelves were above your head. Some of it was 20 years old, but a lot was less than a year old. Store only went out of business because the owner died.
Just-in-Time inventory might be great for your car dealer's parts department, but for a store dependent on drop in customers, it's a no go. Look at Toys R US - everyone of their stores that I have been in are chock full of stuff. Sure they'll special order stuff for you if you want something particular that's not in stock, but they have a lot of stock on the shelves to chose from.
Enjoy
Paul
BRAKIE ...Common sense business will teach one needs to retain and grow his customer base. You can't do that if you have nothing in stock or if your stock dates back to the Jurassic age.
...Common sense business will teach one needs to retain and grow his customer base. You can't do that if you have nothing in stock or if your stock dates back to the Jurassic age.
Unless of course one is in the business of selling dinosaur models......sorry I couldn't resist .
But more on topic, I completely agree. I do my best to support my LHS and the hobby shops in the towns and cities that I visit for business and pleasure. It's quite a let down when you visit a hobby shop with the "itch" to buy something and there really isn't much of anything on the shelves.
Happy modeling all!
Don.
"Ladies and gentlemen, I have some good news and some bad news. The bad news is that both engines have failed, and we will be stuck here for some time. The good news is that you decided to take the train and not fly."
ATLANTIC CENTRAL You can't sell what you don't have, and you don't need an expensive store front to take special orders. Sheldon
You can't sell what you don't have, and you don't need an expensive store front to take special orders.
The modern Business 101 teaches that you don't need a full inventory-of course we know the bottom lines of new hobby shop that follows that teaching usually ends up continually in the RED and the shop ends up closing simply because they have low stock and usually nothing of great interest.
Common sense business will teach one needs to retain and grow his customer base..You can't do that if you have nothing in stock or if your stock dates back to the Jurassic age.
LHS don't carry masses of inventory any more because it's a problematic business model, not because the manufacturers force them to preorder. In the old days they didn't either, but both distributor and LHS were glad to sit on mountains of stuff after the initial order. Nowadays, they can't afford that "luxury" disguised a a poor business model. The importer wants to cash out to start the outlay for the next run, not fill up a warehouse full of overstock.
What constitutes a massive inventory?
Have you ever run a hobby shop?
PS - for as long as they last, I will keep shopping at the ones with the "massive inventories". I suspect they are the ones that will last. When I worked in this business in the 80's, we could see this coming - our view was that you would need to "go big or go home". And so it is.
Fred,
A few thoughts.
Tooling costs are actually down adjusted for inflation - BUT, the models today are way more sofisticated - so it kind of a wash. In the old days, regardless of money, tooling took time. Now with CAD operated CNC it is done instantly.
Agreed, the market for each product is smaller, for a long list of reasons, more prototypes to choose from as time marches on, more models offered, more informed/diverse customer base, etc.
When production was actually controlled by the companies who are now just importers, they could work on smaller, quicker turn around times for batches, tayloring supply to demand. Long lead times of overseas manufacturing do make that more dificuilt - and tie up more money.
The big question is, are you right about the changed attiude of the customer base? I'm not so sure. It seems to me that the "modeler" half of the customer base is more demanding than in the past, not less.
Now the "casual" market, the collectors, many of them just buy whatever their favorite manufacturers make this year - very strange from my view.
But, I am the guy who does not own a BIg Boy, K4, GG1, UP FEF, NYC Hudson, Challenger, or PRR anything.
I do agree about pricing - EXCEPT, we have generally cut out the middleman, so there is ample markup at least at the basic 20% to 25% discount level.
Bachmann, Walthers, Athearn, Bowser, Intermountain, and others are using the preorder to help measure demand, but are still generally making trains to stock shelves. But others are simply "order takers" for production yet to be funded or started.
Maybe stuff like "fancy name train passenger consists" should be made on a "preorder" basis, but I still think this is all bad for the future of the hobby.
As per my first post, these products do not exist in a vacuum. Without all the support products there is no demand. Without a sense of being able to reach some level of completion, many people will simply not risk investing in this hobby. Lack of product to buy will, and I suspect has, scared people off - new and experianced alike.
As for the working capital thing, I know I'm a hard nosed capitalist, but if you can't stand the heat, get out of the kitchen.
Looking at the Athearn business model, a product line with lots of depth and breath allows sales of one product to support slower moving products without giving up the profit when previously produced items sell to new customers later on. Horizon does not have "blowout sales", neither does Bachmann, and both companies have consistant pricing policies that allow dealers to buy direct at a good discount - not a discount that changes based on their cash flow needs that week.
But the BLI business model has so few products, just repeated over and over as demand builds back up, offers no cash flow cushion between "runs". BECAUSE, they sold off cheap the products that could have increased their depth of inventory, making their product line more interesting to more people more of the time. They needed more money in the first place and have not made any effort to change the way they do business.
- the great proliferation of new models means each run sells in far smaller quantities than would have been true when there only 5-10 new models a year. With smaller quantities to amortize the tooling and die costs, sales predictions have to be more accurate. The proliferation of new product also means that most LHS no longer have the capital to buy substantial quantities to stock for shelf (speculation) sales. This is self-defeating in the long run because it is spec sales that make the profit for the LHS.
This is an interesting view, because I know of shops who have large stocks of product, bought that the lowest available market price, sold at attractive discounts, but NEVER do they have the "blowout sales" of older product. They simply wait for it to become rare and still wanted, and they get their original FAIR price. One such shop in particular, not real far from me, has hundreds of Bachmann Spectrum locos in stock all the time. Some have been on the shelves for years, maybe a few even a decade. But all the new stuff is there too - waiting for those "spec sale" customers like me.
No pricing games, good selection, and obviously successful based on the constant flow of customers and new product on the shelves - next to that old product someone will want one day soon.
If they can do it, others can too.
I think pre-ordering depends on the company. I pre-ordered a BLI heavy pacific from their subsidiary Factory Direct Trains. I did this in good faith to increase the likelihood that the unit would be produced. I paid full price ~ $245 when the unit arrived. I had to send it back for a manufacturing defect and got it returned at no charge except for postage and my trouble. Now I see them on another internet seller for $159.95 and its not even a year later. I do not think I'll be pre-ordering from BLI again.
I think you've summed up the tensions between what we'd all like to see as modelers and the business realities of today's world. Model railroading may be a hobby to most of us, but everyone in the supply chain above us is captive to various market forces, good and bad. Those folks have to make a buck to keep the trains coming, pure and simple.
jmbjmb mlehman I suggest that is exactly what the preorder process is designed to ascertain. If someone doesn't order something now, there's unlikely to be a significant unsatisfied demand in the immediate future. Totally disagree with that statement. The idea that only those who are willing to preorder is the total market is false. Even on here there are many of us, myself included, who have been burned by the preorder concept and refuse to do it again. That doesn't even begin to include all the unknown number of people who would by something if it were on the shelf. When I was a kid, trains were on the shelf and readily accessible. Meaning kids wanted them, leading to some them growing up to be model railroaders. If kids today don't see product on the shelf, how will they even know the hobby of Model Railroading exists?
mlehman I suggest that is exactly what the preorder process is designed to ascertain. If someone doesn't order something now, there's unlikely to be a significant unsatisfied demand in the immediate future.
I suggest that is exactly what the preorder process is designed to ascertain. If someone doesn't order something now, there's unlikely to be a significant unsatisfied demand in the immediate future.
jmbjmb,
Well, those kids might have heard about trains on that internet thing. I hear it's all the rage these days. Then there's still the tracks on the way home from school or at the local grade crossing...
Yeah, I can remember all that stuff on the shelf. I couldn't afford most of it. Not much has changed for the kids of today, unless by luck of birth, you ended up in a particularly affluent household.
Seriously, I was not implying that only those who pre-order should get trains. This is not North Korea. Besides, I think sometimes the idea of pre-ordering as strictly something the consumer does or they miss out is a bit wrong to begin with.
True, you have folks like me who order something and will most likely pick it up when it arrives. We don't risk any money.
Then there are the folks who come through a shop and say they're ..."really looking forward to that new BLI CZ..." which the shopowner makes note of. Depending on what's known about that customer, they might show up after the shipment arrives fully expecting to find "his" CZ cars. The owner knows this and will often takes the risk of not disappointing the customer, even though there's no firm commitment.
What this really comes out of is the number of items ordered for spec, or speculation, as noted above. The store knows he has a handful of firm orders, a couple of maybes, and he's located in a suburb of Demver. I'd say it's a no-brainer, order a dozen CZ consists and see what happens.
Most of the time, the answer is not so clear. But shopowners know how much inventory they can afford to carry and how much of a special run he's likely to sell. His orders for spec are also preorders. In fact, if that storeowner didn't preorder, all you folks that really want to see it, hold it, before you buy would really be up a creek without a paddle.
But it's also a very important point about preorders. Many of those items preordered in every run are for store spec stock!
So what's that tell you? Stores are the ones making the choices about what they stock or don't stock. If you want to point fingers, there you go. It's not the importers, who are simply trying to turn their product so they can go back and build more.
So do we demonize the LHS owner? I don't think so. He's simply trying to keep his accountant happy about that bloated inventory. If you have a wall of kits and you don't care if any of them ever leave, then you might be a model railroader. If you have a wall of RTR you're hoping to sell, then you're in a position where you may be an over extended LHS owner.
Mike Lehman
Urbana, IL
There are several significant changes over the past 20 years that have probably changed the model locomotive market permanently.
- the initial upfront investment (mostly dies and tooling) to bring product to market has sky rocketed. This has a particularly adverse affect on under-capitalized importers. It means all possible revenue from a production run must be generated quickly so that the capital can be replaced (or paid off) via actual sales.
- model railroaders in general no longer have the patience to wait years and years for the locomotive they want to be produced (or build their own). If the engine they really want is not available, they will usually buy a substitute - to "have something to run". This encourages frequent, small production runs of new models.
- repainting and redetailing locomotives to get the desired model is rare. Just wait for the paint scheme and model you want to be produced. Which again puts the pressure on for a constant supply of "new product" - or at least new paint schemes and changed details.
- nobody wants to pay retail. A 20% discount from retail has become the new starting point for price. With LHS margins being squeezed, capital for deep stock is further reduced.
- the increasing costs of production, shortage of capital, and pressure on pricing means that misjudgements are far more deadly than they used to be. Produce too many models that don't sell for months or years, and there is no recovery for that importer/manufacturer.
The safer bet - even if you leave profit on the table from speculation sales - is to just produce what you know will sell. This is happens in housing downturns, too. The 1st thing to disappear from the market are new "spec" homes. Spec homes that don't sell quickly all too frequently take small builders under.
just my thoughts on a repeat subject
Fred W
ATLANTIC CENTRAL But Mike, almost everything you said "assumes" all the customers that will want a given product are: Active in the hobby right now. Know they want the product. Can afford to buy the product now. It is my view that these manufacturers miss TONS of sales because there is no standing inventory to shop from. And that this deminshes the quality of the hobby, and thereby shrinks the market.
But Mike, almost everything you said "assumes" all the customers that will want a given product are:
Active in the hobby right now.
Know they want the product.
Can afford to buy the product now.
It is my view that these manufacturers miss TONS of sales because there is no standing inventory to shop from. And that this deminshes the quality of the hobby, and thereby shrinks the market.
Sheldon,
I suggest that is exactly what the preorder process is designed to ascertain. If someone doesn't order something now, there's unlikely to be a significant unsatisfied demand in the immediate future. Should that turn out not to be the case, and something becomes a hit as it sometimes does, then you order another run. BLI's California Zephyr is a good case of that. I ordered what I wanted for the first run based on info passed on through the historical society, got a 20% discount through my dealer, then had to listen to all the gnashing of teeth from those who took the "wait and see" local who couldn't comprehend that BLI would somehow overlook their anticipated demand.
NittanyLionI'm looking at it from running a business. They can't run on common sense
And that's the problem with today's business..They get so wrap up in Business 101,102 and 103 they forgot the common sense business basics that mom and pop knew..
At any rate you just can't expect your customers to pre order or make a deposit if your QC is questionable.
Maybe businessmen need business common sense 101?
ATLANTIC CENTRAL So from where I sit, the more product that is "in stock", the bigger the selection of roadnames, prototypes, etc, the more oppertunity there is to grow the hobby and the industry and thereby sell more. "just in time" works in some industies, it is not working well in this one.
So from where I sit, the more product that is "in stock", the bigger the selection of roadnames, prototypes, etc, the more oppertunity there is to grow the hobby and the industry and thereby sell more.
"just in time" works in some industies, it is not working well in this one.
I have to disagree with you on this one. Product that is "in stock" is inventory sitting, costing money. Yes, smaller runs now, but if that's what's ordered that's what you build and a little more. But do you build stuff so that it's gonna sit if you want to make money? Probably not. Having been in a low margin business (food distribution) how does a grocer make money and earn a reasonable return on investment? By increasing turnover. But the same issue applies in higher margin lines like model RR products. Inventory that's sitting is capital not earning.
Your argument could just as easily cut the other way. The higher rate of return brought about by higher inventory turns of limited runs may in fact be what is sustaining the model railroad industry. Cut margins more be reducing inventory turn or otherwise letting stock sit and that's a recipe for making things even harder on an already struggling industry.
Personally, I agree with you on what I'd like to see, but I can't agree that's the most prudent business plan. The fact that we've had relatively few failures, despite all the gloom and dooming the last few years, is indicative of industry health. Is it healthy enough to renounce modern business practices and return to the past ways? I kind of doubt that myself. I'd rather they keep pumping out limited runs and staying alive than risk collapse by reverting to past practices. Of course it was reassuring that you could go to the LHS and buy that fat-bodied Athearn loco in the same road number it's borne for the last decade. But we all expect more than that nowadays and I don't think the slow inventory turn model addresses that except through the rose-colored glasses of nostalgia.
I also suspect most of us that take the "good price" approach versus the all-too-often fallen short and unfulfilled anyway "best price" angle don't bother registering a contrary opinion on this topic. I suspect we're the silent majority, because if someone else didn't buy all those trains, how are you gonna end up with any remainders to pick over?
It's kind of interesting to see folks stand up, pound their chests, and declare they'll never pre-order anything. To each his own. If there's something I want, I usually pre-order through my dealer and get a substantial discount. In general, there's no reason for a deposit and they are rarely asked for in the industry, because of the negative reaction. People somehow think if they can't keep an eye on the hands of the supplier at all times, they'll get robbed.
It's been my experience that the vast majority of those in model railroading as a business are good honest folks, despite the fact that reactions on these lines we tend to read here treat everyone as if they came from the wrong side of the track via prison.
Obviously, some new outfit promises the sky for only a small downpayment, then I'd be leery. Most of my dealings with preorders are with established, reliable vendors. If I order the latest run of Genesis Rio Grande F-units, I know what I'll be getting. Who's kidding who about this being risky business and why, I'm just not sure.
That Blackstone thing worried me the first time around the block, but turned out well. Hundreds, if not thousands of narrowgaugers regularly preorder the next item from Blackstone to ensure we'll get it. We may not all be the sharpest knives in the drawer, but Blackstone delivers regardless, even if it's a new model no one has seen yet. Risky? Hardly, or maybe some folks lead sheltered lives and stuff like that going wrong suddenly keeps them up at night? Well, an asteroid could hit, too, I suppose.
Then there's the idea that we all get the lowest prices because we don't preorder and wait out the buyers to vulture over the remains in hope what we want is covered. Well, if you do only spend at deep discount and don't mind taking the leftovers or just doing without, that's cool. Your expectations are low and easily satisfied. But increasingly, calling the numbers for production has gotten tighter and tighter. Yep, for those item that are misjudged and ordered in excess, yes there will be some nice prices, but on a relatively small selection of items. If you're trying to build after a prototype along some rather specific lines, you may not live long enough for everything you need to eventually come up on the cheap.
OK, even from a business standpoint here is the basic problem with preorders in this business.
A model train locomotive or rolling stock is not a "stand alone" product. You need track, structures, scenery, controls, etc, etc, to build a model railroad.
Part of the motivation to spend any of this money is based on a reasonable assumption that you will be able to get the parts as you need and can afford them - at least the major parts and pieces.
The groecery store does expect you to "preorder" milk, they just assume you will come in and buy when you need it.
If more and more of the pieces of the "Model Railroad Puzzle" become harder to obtain, fewer people will have the desire or confidence to invest any money or time in the first place.
And if the models of interest to them are seldom available, they will become more discouraged.
This leaves the sale of model trains to a smaller customer base, weeding out the more serious "modeler" types in favor of those who just radomly "collect" expensive RTR models of locomotives. To be VERY blunt - if this hobby was only about "COLLECTING" RTR model trains, I would not be in it, and the 3-4 thousand dollars I have spent nearly every year for 40 years would be in my bank, or in some other hobby.
A smart industry would want the largest possible customer base.
Right now it is locos and cars, but what if this preorder thing gets to structures, track, control systems?????
Personally, I'm glad I already have a large percentage of the locos, cars, track, controls, etc, etc, that I need. Because this type of market would be very discouraging to me otherwise.
Fact is model trains have ALWAYS been producted in small batches - the only difference now is the marketing. Today each production run is "unloaded", first at higher prices to willing takers, then at lower prices to the bargin hunters.
In the old days retailers and manufactuers held the line on prices, and always had good inventories of product for customers to choose from. Smart busiensses are not always run based on some fomula learned at Harvard Business School.
Truth is, you can't have your cake and eat it too. If you want selection, then the super low discounts will not work.
Many of you complain about the demise of the Local Hobby Shop - but this is what did it - heavy discounting, preorders, sold out production runs that leave nothing to "display" or "sell" on hobby shop shelves, and no profit margin to support inventory.
Personally, I partly blame companies like BLI and MTH for bringing the "highrail collector mentality" to HO, which plays on the "limited edition" idea to sell this years products.
Be careful what you wish for......you just might get it.
ah, I see that thus far the response to that thought has been negative. I was not trying to compare games and trains, I was comparing practices.
Ok, what if Model makers did have 5 sample locomotives for the one you'd like to pre order. Say a popular locomotive on your home road, 5 sample models of said loco for customers to see and one for MRR to do an early review way before to release(gaming companies do this, I.e Game Informer magazine).
My money was where my mouth was and still is there, but real life usually has other things in mind so MRRing has to take a backseat. I can see why some are hesitant to put money down though, a good example is atlas' Dash 8-32BWH that was supposed to be released in Jan. but remains as elusive as bigfoot.
Keep in mind though putting money down on the pre order is optional. Thank you for your contributions so far guys.
I don't mind pre-ordering advanced items. I prefer that the manufacturers keep the eta info as up to date as possible. When my stuff comes in at my LHS I try to pick it up asap so that he can pay his bill on time with my actual money. I don't order things that he has to pay c.o.d. when they arrive. There are some things that I want to actually see before I buy, about 35% of my total purchases and if I miss out on them it helps me control the budget.
Mine doesn't move.......it's at the station!!!
BRAKIE NittanyLion BRAKIE Let's let business 101 be business 101 and use common sense instead. Common sense is often flawed and built on bad data. There's a reason Business 101 exists. For example, I'm in the space business. Common sense would tell you that you should mass produce (or at least order more than two) probes, rovers, and what have you to take advantage of economies of scale. But, in practice, that fails because the demands of every mission are so unique that you have to build from scratch almost every time. Common sense says "build a Mars rover just like the one you just built, it'll be cheaper, but put life detection sensors on it!" Real Engineering says "You've changed the mass, center of gravity, and power demands. Swapping in a $250,000 sensor is going to cost us $9 million. And it still might not work." What's that got to do with buying model trains? The modern age bean counters has ruin a lot of things and some came up with terrible ideas such as requiring a deposit.Thankfully calmer heads with common sense prevailed in all but a few instances and no deposit is required.. Common sense in purchasing models today requires modelers look before commenting dollars and Business 101 isn't needed for that.. Far too many models today suffers defaults from wrong details to shoddy workmanship.
NittanyLion BRAKIE Let's let business 101 be business 101 and use common sense instead. Common sense is often flawed and built on bad data. There's a reason Business 101 exists. For example, I'm in the space business. Common sense would tell you that you should mass produce (or at least order more than two) probes, rovers, and what have you to take advantage of economies of scale. But, in practice, that fails because the demands of every mission are so unique that you have to build from scratch almost every time. Common sense says "build a Mars rover just like the one you just built, it'll be cheaper, but put life detection sensors on it!" Real Engineering says "You've changed the mass, center of gravity, and power demands. Swapping in a $250,000 sensor is going to cost us $9 million. And it still might not work."
BRAKIE Let's let business 101 be business 101 and use common sense instead.
Let's let business 101 be business 101 and use common sense instead.
Common sense is often flawed and built on bad data. There's a reason Business 101 exists.
For example, I'm in the space business. Common sense would tell you that you should mass produce (or at least order more than two) probes, rovers, and what have you to take advantage of economies of scale. But, in practice, that fails because the demands of every mission are so unique that you have to build from scratch almost every time. Common sense says "build a Mars rover just like the one you just built, it'll be cheaper, but put life detection sensors on it!" Real Engineering says "You've changed the mass, center of gravity, and power demands. Swapping in a $250,000 sensor is going to cost us $9 million. And it still might not work."
What's that got to do with buying model trains?
The modern age bean counters has ruin a lot of things and some came up with terrible ideas such as requiring a deposit.Thankfully calmer heads with common sense prevailed in all but a few instances and no deposit is required..
Common sense in purchasing models today requires modelers look before commenting dollars and Business 101 isn't needed for that..
Far too many models today suffers defaults from wrong details to shoddy workmanship.
I'm looking at it from running a business. They can't run on common sense.
Back in the dark ages, PFM made some decisions about which loco to produce at their captive factory in Japan on the basis of customer requests.
The customer had to take the initiative and send a letter to PFM expressing their desire to purchase (fillintheblank) When enough requests came in to justify a production run, they made it.
Note that they didn't say, "We're going to produce Podunk and Northern 4-6-6T #10. Preorder now to get one."
OTOH, I'm one of those who wants to see the actual model before the card gets swiped - and no North American importer is likely to produce anything I might have a desire for. So, to me, this is simply an academic exercise.
Chuck (Modeling Central Japan in September, 1964)
I have pre-ordered twice and paid in full at the pre-order.
In both cases it was for small run items that the importer was selling direct only, so I was fairly sure they would not be discounted after delivery (in both cases they have not been).
In both cases I got a significant discount.
In both cases I had high trust for the importer.
In both cases I really wanted the item and did not expect to see anything similar later on. In one case I have been correct, in the other a similar product was offered, but for a different prototype at roughly the same price, so I still preferred what I got.
I have a short of list of items in S scale (less than 10) that I will pre-order if they are ever offered - all motive power which I doubt I will ever have the time to scratchbuild. Otherwise I wait until it comes out.
In a perfect world, everything I want is sitting on the shelves at my LHS at what I think (and the dealer thinks) is a fair price. Until then we all have go with what is available and seems best for us at the time.
Good luck