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How many units of a model railroad product are needed for tooling to sell a run? Locked

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  • Member since
    September 2003
  • 10,582 posts
Posted by mlehman on Monday, July 27, 2020 12:29 PM

It is indeed a trade secret. Jason is more open than most about roughly where they're at on preorders. Not sure he posts exact numbers though?

The numbers will also vary widely even if they were discussed. A loco is a much higher ticket item than a freight car. Simple is cheaper than complex. Items that can be produced in multiple versions make a mold more able to produce future variants while some molds might produce an item that is essentially one variant to remain accurate.

Your question is a bit like asking how far you can push a string. Depnds on the string.

EDIT: I'm pretty sure Kevin's numbers were just picked at random as examples. It's more likely that a popular model like a Big Boy is closer to 2,500 in a run than 250,000. I suspect most runs of locos are likely well under 10,000 units. It's a point that worth making, because while there are economies of scale in manufacturing, in this hobby it's nowehere near large enough to expect lower pricing just because a unit is popular and sells well. These aren't Walkmans (do kids even know what that is?) or microwaves.

Mike Lehman

Urbana, IL

  • Member since
    January 2017
  • From: Southern Florida Gulf Coast
  • 18,255 posts
Posted by SeeYou190 on Monday, July 27, 2020 12:27 PM

You need to amortize the production costs into the run, so the number will vary from one model to another.

Setting price point is all internal to each company.

If you know a Big Boy will sell 250,000 units, the tooling cost can be spread out among many models. If you know a B&O EM-1 will only sell 100,000 units, the cost per model will be higher.

The maufacturer needs to set the price point high enough to cover these costs, but not so high to limit sales.

In short, there is no way to answer the question.

-Kevin

Living the dream.

  • Member since
    March 2020
  • 290 posts
How many units of a model railroad product are needed for tooling to sell a run?
Posted by Engi1487 on Monday, July 27, 2020 12:18 PM

One question I have begun asking myself is in order for a manufacturer to justify the need to tool a new run of locomotive, or for a new run of rolling stock or other product related to model railroading how many preorders of units of said product are needed to go ahead with tooling?

I learned about this when I started following Rapido Trains Incs newsletters, Q&As and other videos. In one newsletter in which they talked about the CN & CP ten wheeler 4-6-0 steam locomotives, the ones next in line after the Royal Hudson in their icons of steam line.

Jason Shron, the president of Rapido said in last Rapido Q&A said that they where conered at the lack of preorders for the CN H6, which where half of the preorders for the CP D10 ten wheelers. I am guessing this is because we want to see a sample of the D10 and how a smaller HO Rapido steam loco operates, do they will know how the H6 will as well.

They also at one point showed conerned abouit the preorder numbers for Rapidos HO scale Rohr Turbo liner, and how one scheme being the demonstrator only had about eight preorders. I am glad the Rohr Turboliner is a go and the head of the project, Jordon can see his dream come true of seeing this Turboliner being made in HO scale for the first time.

I dont know if my question is something manufacturers can answer due to legal confidentiality laws, but I am hopping for an estimate.

Edit Note as of Friday July 27th, 2020 - I am a bit overwhelmed with all the replies on this thread I started. I will need time to read through them all to reply to some. Thank you for commenting none the less, I do appriciate it.

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