Something to Make the SPF's happy

[3rdrail]

Am I the only one that can see the difference in the business model of say General Motors and Ford and the part time basement provider of N scale merchandise?

I guess there are a lot of folks that would rather not have something at all if someone else isn't willing to risk their children's education and family home on whether or not they'll have the spare cash to buy one.

[inkaneer]

Am I the only one that can see the difference in the business model of say General Motors and Ford and the part time basement provider of N scale merchandise?

I guess there are a lot of folks that would rather not have something at all if someone else isn't willing to risk their children's education and family home on whether or not they'll have the spare cash to buy one.

If my memory hasn't failed me I think Henry Ford started in a shed behind his house and grew the company.  General Motors grew from assembling different independant car makers who started like Henry Ford.   They took the risks and reaped the rewards of their risk taking.  And there are probably hundreds if not thousands of people who also took risks in the hope of reaping the rewards but for one thing or another it did not pan out and they lost out.  That is the nature of market.  Not every plaground hot shot makes it to the NBA, only a few. What the advance reservation system does is foster the idea that a market consists of only those who are willing to advance reserve a product.  That idea is flawed from the very beginning.   Now I can understand why a manufacturer would want to lessen his risk by going the advance reservation route but that doesn't make it a feasible method of marketing.   As we have seen with the G39 and PCM's M1, all it becomes is an excuse for not making a particular item.   

[tom mann]

Guys, let's not keeping banging up on Bob.  Bob is producing lots of stuff that fills a niche.  He is understandably selective in what he brings to market, balancing expected sales with manufacturing time and cost. 

[TrainCat2]

As we have seen with the G39 and PCM's M1, all it becomes is an excuse for not making a particular item.   

I have to take issue with that statement. As stated before, the G39 is still in process. It's just NOT being done to the schedule that Jerry pushed for. Check your PM, I sent you a timeline. I should have a firm date & price by month's end. Guessimates are currently:
Run of 25  = $22 - $26
Run of 50  = $19 - $22
Run of 100 = $16 - $18
Without no idea what buyers are REALLY going to buy, the price has to be in the $22 - 26 range to cover the costs of all the brass parts, casting costs, and mins on decals. If I see advanced orders, the numbers drop the unit cost and I can pass that savings along. I feel I am getting beat-up for doing things in a way to save the buyers some money.

It is funny though in that when I announce brass and assign a part # that people can order it by (and without a price), I get many advance orders. That tells me that a) the item is wanted  b) people are serious about ordering  c) sets my priority list  d) drops the unit price because I can do bigger batches to amortize the costs.

Inkaneer, I see your point if I were an Atlas sized company. The way/reason PCM uses advanced orders is far different that I use them. I hope you can see that I use them only to help set priority of what gets valuable resources and even more valuable time along with passings savings along due to reduced unit costs.

[gunner]

There is a huge difference between Mr. Knight and PCM.  Bob responds to inquiries, provides updates on projects in public forums and actually produces the stuff that he commits to.  PCM has been caught lying to us, baiting us with goofy meters, and has recently been silent as to the status of ongoing projects.  You may not like the fact that low orders have put your pet project to the back, but the man working out of his basement IS producing product that satisfies his customers.  PCM has kept my pet project (H2a hoppers) strungout for a few years now.  I only want to buy every N&W hopper thay offered and would buy more if they could actually make them.

Remeber back when the M1 was first delayed due to changing factories?  Then there were not enough preorders?  Still not a sample of the production model available.  And recently every N Scale project has been delayed for reasons unstated.

If you have a problem with unknown pricing on future products, communicate with the manufacturer.  I have a good deal of interest in the GS drop bottom gons that trainworx announced.  They do not have a price available yet.  I figured out what my budget could stand and let them know the quantities I would buy based on price range.  My budget is not going to be blown out, and I will have a decent number of cars when they are produced.  I have recieved a favorable response to my order, as trainworx is also an "intouch" company.

Comparing the MRR industry to GM and Ford is not realistic.  The world of business has drasticaly changed in the past 100 years.  The people who created the auto industry forsaw a mass market possibilty for a product.  N Scale has been around for more than 40 years and there is still not a train in every household.  Look at the problems in the auto industry...., maybe preorders wouldn't be such a bad thing.  I work at the BMW plant in Spartanburg, SC.  Every car we make already has a customer name on it.  My 335ci can't be made until February at the earliest due to matching production to demand.  My company is making money, not negotiating away the contractual benefits of the retirees to stay solvent and has taken a responsible stand on employee benefits.  So what has GM and Ford done recently besides walked the bankrupcy tightrope?

Bob

[3rdrail]

It is now quite clear that some people really cannot tell the difference between Ford or General Motors and someone who has full time employment elsewhere and wishes to share his ability to make fairly esoteric models with other N scale modelers. I am not talking about Atlas, or Athearn or Walthers, even though these are infinitesimal companies when compared to Ford or GM, but guys like Bob Knight and Craig Martyn. They are not out to make their fortunes in N scale, but to share their abilities with others.

I had some money I was thinking of investing in an N scale model, but quite frankly, the ridiculous demands made by some modelers convinced me there was far less risk putting the money in stocks. I am sure everyone would like to eat filet mignon at hamburger prices, or drink Chateau Mouton Rothschild and E & J Gallo prices, but it won't ever happen. Nor will one get N scale rolling stock with individual metal grab irons and ladders for Parkway prices.  

[Chris333]

I will pre-order a couple G22's if you do them. 

[sparky]

It is now quite clear that some people really cannot tell the difference between Ford or General Motors and someone who has full time employment elsewhere and wishes to share his ability to make fairly esoteric models with other N scale modelers. I am not talking about Atlas, or Athearn or Walthers, even though these are infinitesimal companies when compared to Ford or GM, but guys like Bob Knight and Craig Martyn. They are not out to make their fortunes in N scale, but to share their abilities with others.

I had some money I was thinking of investing in an N scale model, but quite frankly, the ridiculous demands made by some modelers convinced me there was far less risk putting the money in stocks. I am sure everyone would like to eat filet mignon at hamburger prices, or drink Chateau Mouton Rothschild and E & J Gallo prices, but it won't ever happen. Nor will one get N scale rolling stock with individual metal grab irons and ladders for Parkway prices.  

Very well said, Gregg.  I just don't understand the ridiculous expectations and demands some people put on the cottage-industry type manufacturers we have in the hobby.  Personally, I'm grateful for the efforts of these guys.  The detail Bob puts into his etched products is outstanding, and I don't see any of these loudmouths trying to manufacture and deliver a product, much less stating that they have or will purchased anything.  Some people will find a reason to bitch no matter what.  It amazes me that with so many great people in this hobby and contributing to forums, the number of Asshats seems so disproportionate to the general population.  I don't mean this thread exclusively, but most of you guys already understand that.

[Walkercolt]

Dodge does wait for a pre-production order from me before they build my trucks to MY specs. I don't buy off-the-lot vehicles(never have and never will)...I always special order and put down a deposit.

[inkaneer]

Dodge does wait for a pre-production order from me before they build my trucks to MY specs. I don't buy off-the-lot vehicles(never have and never will)...I always special order and put down a deposit.

We are not talking about a special order.  We are talking about PRR G39 ore jimmies.  Knowing the PRR they were probably all built the same.   

[inkaneer]

It is now quite clear that some people really cannot tell the difference between Ford or General Motors and someone who has full time employment elsewhere and wishes to share his ability to make fairly esoteric models with other N scale modelers. I am not talking about Atlas, or Athearn or Walthers, even though these are infinitesimal companies when compared to Ford or GM, but guys like Bob Knight and Craig Martyn. They are not out to make their fortunes in N scale, but to share their abilities with others.

I had some money I was thinking of investing in an N scale model, but quite frankly, the ridiculous demands made by some modelers convinced me there was far less risk putting the money in stocks. I am sure everyone would like to eat filet mignon at hamburger prices, or drink Chateau Mouton Rothschild and E & J Gallo prices, but it won't ever happen. Nor will one get N scale rolling stock with individual metal grab irons and ladders for Parkway prices.  

The difference is that Ford and GM decided they could produce a car for X amount of dollars and could therefore sell it for Y amount of dollars.  They then advertized that price.   But we don't have that here.  And another thing we don't have is a car so unique that you only need one in a train.   Pennsy ran unit trains of these.   Can you imagine an Ntrak layout with a fifty car unit train of G39's.  I can't, not at $20.00 a car.   Like I said, the G39 would be a nice car to have but it is not a "must" car to have. 

[bsoplinger]

In general I dislike the "you gotta reserve it and commit to buy it before we'll make it" approach that seems to really have the N-scale industry by the throat. Now I know that Atlas, Intermountain, MicroTrains and Red Caboose aren't huge companies. But none of them use the threat approach. Sure, if they get few pre-orders they won't make as many, but they still make the models they've announced. The PCM way, not even getting into pre-production on an item until enough are ordered sits poorly with me.

The limited run approach sure has made more things available, well sort of available. The problem with the way Atlas et. al. are doing things in that if come January (or whenever) when the latest run of the XXX come out, if I don't buy in January (or maybe February if its a slow seller) I won't have one. Period. There isn't such a thing as store stock anymore. There isn't the budgeting and buying when the time is appropriate anymore. There is only the buy it today because it'll be gone tomorrow way. Of course the old way, the same dozen models always available and on the shelf for years wasn't very good either. But couldn't there be some midway between the two ways that could work?

However the way Traincat is describing he's doing things is more in the way of determining how many to make, not if he'll make it or not. And I can understand when its a 1 person show, spending your money on the thing that got bucku pre-orders vs the item that got just a few. Which means the other item gets made later not sooner. But it sounds to me like he's saying its still going to get made.

And when you're talking small numbers, the difference between a run of 50 and a run of 100 can be quite a difference in per item cost.

All in all, I can't complain at all about the way he's doing business.

Just my $.07 (adjusted for inflation) on the matter.

[inkaneer]

And when you're talking small numbers, the difference between a run of 50 and a run of 100 can be quite a difference in per item cost.

I disagree.  In resin casting the costs are first of all quite small as compared to plastic injection.  You make a master copy.  You do this once.  You then take that master and make your rubber molds.  Let's say you make ten of them.  Now depending on several factors each of these molds may be good for 10 maybe 20 castings or more before they need to be recycled.  So what is our per item expenses?  The resin to make each car [we're talking ounces here].  5-10 % for each mold and a small percentager for the master which can be used over and over and over and over.  So you buy a gallon of RTV rubber for about $30.  How many molds can you get out of that?  Maybe 10.  Now for resin, you buy a 2 gallon kit for about $100.  How many cars can you make with that?   Well let's assume each car required 2 ounces of resin.  There are 128 ounces in a gallon, that is 64 [128/2] cars for each gallon.  You have 2 gallons so that is 128 cars. Allow about 20% for defective casting.  Let's say we end up with 100 cars  So each car costs 100/100 or approx $1.00 in resin.  Now for the RTV.  Each mold costs $3.00 [$30/10]  and you can get 10 cars from each mold.  That adds $.30 to each car.  So each car costs  a grand total of $1.30 in per item cost.  Now double that amount to allow for extra like brake wheels, grabs, etc. or allow the modeler to add them as well as trucks and couplers of his own choosing.  The modeler will also paint and decal it.  We package them in a ten pack and ship them in USPS boxes with yesterdays newspapers for cushioning.  Buyer pays for shipping.  Now how much are you going to sell the car for?  Are you going to sell it for an amount that is equivalent to one for a car I can buy in a store that comes RTR with trucks and couplers and is assembled and painted?  [granted it will not be the same car but we're using it as a price comparison].

[Ed Kapuscinski]

Don't forget that the per-unit cost NEEDS to take into account the time needed for the creation of the mold.

Sure, it may cost the producer $2 to physically make the car, but what's the going model making rate? I have a feeling it'd take more than a few hours, and time like that isn't cheap, even if it is your own.

I know that it'd take a lot of cars to make my hourly rate worth it, and I'm just a lowly web developer...

[sparky]

Don't forget that the per-unit cost NEEDS to take into account the time needed for the creation of the mold.

Sure, it may cost the producer $2 to physically make the car, but what's the going model making rate? I have a feeling it'd take more than a few hours, and time like that isn't cheap, even if it is your own.

I know that it'd take a lot of cars to make my hourly rate worth it, and I'm just a lowly web developer...

Ed makes some good points here.  Also, don't forget that Bob is including etched details for the cars in the price.  And what about trucks and couplers?   Some of you guys just don't get it.  There's a lot more to this than material cost.  Are these guys supposed to work for free?  If you can make these cars for 2 bucks a piece, go for it.  I hope they turn out for you.  Obviously you don't think Bob (and others like him) should be compensated for their skills, talents, investment in equipment and materials, design and master building, and other related costs.  I've owned and helped run businesses for almost 20 years now.  I charge an hourly rate of $50.00 in my contracting business and $40.00 in my cabinet shop.  Do I make $50.00 and hour?  Not even close, not even when I'm doing the work myself and not paying wages.  How do you think I pay for shop rent, equipment, utilities, taxes, vehicle and business insurance, vehicle purchases and maintenence, gas, and the many other expenses involved in day to day operation?  When I get to the bottom line, I hope there's something left to reward me for the skills I've worked hard to develop and the risks I take in being a small business owner.  Believe me, I could make a lot more money working for someone else, but I wouldn't have the satisfaction and independence I enjoy.  Sure, my income looks okay on paper at the end of the year.  But when you divide that into 75-80 hour work weeks, it's much less impressive.  So, for those of you who think what Bob and Craig Martyn and Matt Gaudynski (FVM) are doing is so easy- why don't you try it.  I'd personally buy all the $2 and $3 freight cars you can produce- just let me know when they're ready to ship.  If you don't like the price or don't need an item, don't buy it.  But to go on bashing these guys and questioning their every move is petty and ridiculous.  I could go on and on, but I'll stop here before I get really pissed.

Oh, and let's not forget about a little thing called profit that drives the entrepreneurial spirit.  Profit is NOT a dirty word- unless you're a communist.