Intermountain is Cancelling Reading F7's and more

[CBQ Fan]

That would be a challenging weathering job for Mr Mann.

I don't approve of the trucks at all.  Not to scale, not even one bit.  And I don't think that is the correct color black nor white!

[Walkercolt]

Guys, automobile makers are cancelling models, as well as eliminating 100 year-old name-plates from their lines. There will never be the announced V-8 Camaro. Offical, period. The plant that did build Corvette bodies has been closed and a boat-builder is contracted to make any future bodies, if there are any more made (which might not happen). Hey, when I wanted my Zenith color TV 27 years ago, I had to put down a deposit and wait 3 weeks for it. Nobody in 5 states had one, and it was just a common 20" color TV (that lasted 23 years). We are returning to a "limited production" market for quality products. If you want a good stereo amp, place your order with one of 6-10 companies, send a hefty deposit, and maybe next year, you'll get it. Yes, now you can walk into a Wal-Mart and get a "SONY" big-screen HDTV. But you won't find that model for sale in a video store, and I promise you, it won't be as good of picture quality or last as long as the video-store models (and I don't mean Best-Buy or Ultimate Electronics).
 
I've started a new "tiny business" of my own. As you may know, the drug companies can't give your doctor pens, tissues, note-pads etc. anymore. Now they will have to go buy them. Well, I got ahold of a guy who purchased all this stuff for almost nothing. I can sell a Dr.'s office a gross of pens for $10 and make money. I can sell a $1.19 box (wholesale by the case) of tissues for .40, and they don't have to warehouse them(where???). I've already sold $3000 of stuff to 5 of my doctor's alone, and I'm hitting more Dr.'s office managers. Why can I do this? Because the drug companies had already bought and paid for these advertising give-aways. The "surplus guy" bought them as scrap. He sells them to me and makes money and now I sell them after marking out some names, and make money. You can't do that in the model railroad business and stay in business.

I had the "capital" in savings for "start-up". It was hundreds of dollars. IM was likely looking at 6 figures. YOU wanna invest your IRA? I'm sure they'd be interested. :

[Mark5]

I love thread drift!

[sizemore]

Seriously some of you have sand in the Vag over someone else's opinion. Get over it.

When I worked for -probably the largest name train shop in the mid-atlantic, they'd buy a ton of IMRC products. They didnt care if it was the 15th number in a series. What happened later was that the stuff would sit on our shelves and we'd have a fire sale. The argument that some items are on their zillionth run and isnt cancelled says nothing. I go to many shops up and down the eastern seaboard, and I see old IMRC stuff everywhere. It's not until the past couple of years where they have been selective in purchasing because even fire sales don't work sometimes!

The whole malarky on X run of products for generating a profit, I dont really buy into it. Especially now when it boils down to shells, paint jobs that really make the model. A cast frame is easy to produce. Most of the "guts" are standard items down to the trucks.

Personally I think it boils down to sales model and price point to make a profit. Kato produces few roadnames, but a high quantity of the respective roadnames to give you a price point of 60-70 samoleans. Atlas on the other hand produces lots of roadnames, and produces the market demand of each roadname. Proof in point. How many Atlas locos can you find on shelves, from two, three or four years ago? You can find a slew of Kato products ranging from two to five years! Algoma Central SD-40's anyone?

I feel the argument that a certain type of model produced affects profit is a hefty argument, not the lack in preorders for roadnames. Again Atlas as an example. They produce X numbers of a certain type of locomotive, 50% maybe Santa Flush, 20% maybe Union Pacifier, and the last 30% maybe broken up among the 4 other roadnames that actually had the locomotive.  

If Atlas has their sales model and Kato has theirs, WTH is wrong with IMRC? It's horrible business practice to promise something, and not follow through. When was the last time Atlas or Kato said "Nuh uh, we're not making this because of lack of preorders?". Some smaller guys maybe, but not Atlas or Kato and if they do it's not on the scale of the IMRC debacle. We're on the 5th or 6th run AT LEAST of the F-7 so they've made their money back (supposedly). Why not just follow through produce enough to satisfy the preorders? I'm sorry but the preorder argument doesnt fly when you're on your zillionth run of a particular type of model and have gotten your development costs back. Whats another 150-200 peices when all you're worried about now is manufacturing costs? You in the back, did you say profit?

And lets talk about the middle man. When you say preorder it starts at the distributor and hobby shop. It's not a direct correlation to the market that wishes to purchase, IE the modeller. Yes the modeller influences it, but ultimately it's the hobby shop that has to hock it to the streets. I know many of the larger shops, that regardless of the number of preorders they have from "the modeller" they still order X number of peices (always above the preorders from you clownshoes!), so that there is stock for the storefronts.  

In the end everyone is just guessing including myself, until we know what the distributors and LHS ordered, and how many IMRC intended to produce as well as their sales model it's all speculation. Like I've said the preorder explanation is kinda hogwash, amortization of dev costs is an argument but weak at best.  

And the 2010 SS and SS(2) models come with a 6.2 ltr V8.  ;D

The S.

[bbussey]

Once again, assumptions are being presented as absolute on what is profitable and what is not without full knowledge of the facts.

Regardless of whether the production costs are paid for or not - you still have to amortize the setup charges for each production run across the said production run.  To over-simplify the point: if the model is priced so that IMRC makes their desired profit at 100 pieces or greater, yet the advance reservations come in at 50 (which doubles the per-unit cost), it is not feasible to run the product.  They announce the MSRP ahead of time, so they are "locked in" as far as what the maximum per-piece cost can be.  Without being totally aware of all of the facts, the arguments concluding with "IMRC should have run the product anyway" have no weight.

Aside from the setup costs, paint masks (of which almost every locomotive has) add to the cost.  It's not simply a matter of "they're running 5,000 F-units already so why can't another 50 Reading units be included."

And again, since the overwhelming majority of the cancellations were of schemes that had been released previously (many multiple times before), I really don't see what the issue is other than beating on IMRC for sport.

You folks do realize that the production-by-reservation method allows for more diversity in models and paintschemes, correct?

[sirenwerks]

You folks do realize that the production-by-reservation method allows for more diversity in models and paintschemes, correct?

I believe that would only be the case if a manufacturer started a carbody production by announcing ALL roadnames and paint scheme variations the carbody was ever painted in at the beginning of said production. That way you at least have the chance that the carbody/roadname/paint scheme combination you want, if enough other interested parties register their interest with you. Now that type of pre-order system makes sense, kinda.

That's not the way the pre-order system works though, consumer does not have input in terms of voting with dollars as the theory is put forth. Instead, the consumer is subject to a system that presents candidates in a wholly random process of selecting roadname and paint scheme combinations? And ultimately the decisions are made by humans who have their own interests/fears at heart. There may be solid evidence that a run of XYZ road would sell out, but that little voice of doubt in the the marketing managers other ear may have him choose a tenth run of ATSF warbonnets instead.

As far as "assumptions being presented as absolute without full knowledge of the facts". that's what's known as interpretation. Since companies represent themselves in ambiguous ways, how else is the consumer to define a corporate action? This thread is riddled with input by several manufacturer representatives who have obvious conflict of interest in defending the pre-order system as it stands. How is their insider knowledge is no more important than the perception of the consumers whose product has been cancelled?

[bbussey]

You folks do realize that the production-by-reservation method allows for more diversity in models and paintschemes, correct?

I believe that would only be the case if a manufacturer started a carbody production by announcing ALL roadnames and paint scheme variations the carbody was ever painted in at the beginning of said production. That way you at least have the chance that the carbody/roadname/paint scheme combination you want, if enough other interested parties register their interest with you. Now that type of pre-order system makes sense, kinda.

Nonsense.  The consumers at large couldn't afford to purchase every scheme they desire AT ONCE; the manufacturer couldn't afford to produce that many schemes simultaneously; the sub-contractor wouldn't have the capacity to manufacture such a volume in a timely manner.  Using your suggestion - how many prototypical roads/schemes are there for the `37 AAR 40' Boxcar?  IMRC has released 63 to date - announcing 63 schemes at once, which by the way is not nearly the total of prototypical schemes available to produce, is what you would suggest?  That is totally impractical on a number of levels.

That's not the way the pre-order system works though, consumer does not have input in terms of voting with dollars as the theory is put forth. Instead, the consumer is subject to a system that presents candidates in a wholly random process of selecting roadname and paint scheme combinations? And ultimately the decisions are made by humans who have their own interests/fears at heart. There may be solid evidence that a run of XYZ road would sell out, but that little voice of doubt in the the marketing managers other ear may have him choose a tenth run of ATSF warbonnets instead.

The consumers may not have as much input as you'd like regarding the pool of schemes to choose from, but they most certainly have input regarding what gets produced, or not.  Reservations determine that issue.  Democracy in action doesn't mean every single consumer (or voter) gets what he/she wants.

As far as "assumptions being presented as absolute without full knowledge of the facts". that's what's known as interpretation. Since companies represent themselves in ambiguous ways, how else is the consumer to define a corporate action? This thread is riddled with input by several manufacturer representatives who have obvious conflict of interest in defending the pre-order system as it stands. How is their insider knowledge is no more important than the perception of the consumers whose product has been cancelled?

You're entitled to your interpretations, as you are your opinions.  You are not entitled to your own set of facts simply because the truth is in conflict with your worldview.  The bottom line is that the current system works better than the system you prefer, otherwise the majority of the manufacturers wouldn't employ it.

Ask yourself this:  how many new models have debuted in the 2000s decade (during which the reservation system has been in full force), juxtaposed with the 1990s (when quality models became the norm but reservations were just starting to take hold)?  How many new models has Atlas released in the 2000s, juxtaposed with the 1990s?

[inkaneer]

Once again, assumptions are being presented as absolute on what is profitable and what is not without full knowledge of the facts.

Regardless of whether the production costs are paid for or not - you still have to amortize the setup charges for each production run across the said production run.  To over-simplify the point: if the model is priced so that IMRC makes their desired profit at 100 pieces or greater, yet the advance reservations come in at 50 (which doubles the per-unit cost), it is not feasible to run the product.  They announce the MSRP ahead of time, so they are "locked in" as far as what the maximum per-piece cost can be.  Without being totally aware of all of the facts, the arguments concluding with "IMRC should have run the product anyway" have no weight.

Aside from the setup costs, paint masks (of which almost every locomotive has) add to the cost.  It's not simply a matter of "they're running 5,000 F-units already so why can't another 50 Reading units be included."

And again, since the overwhelming majority of the cancellations were of schemes that had been released previously (many multiple times before), I really don't see what the issue is other than beating on IMRC for sport.

You folks do realize that the production-by-reservation method allows for more diversity in models and paintschemes, correct?

Well I will disagree, especially with that last sentence.  What is the difference between basic engines?  Here I am talking about a model with an undecorrated shell.  Seems to me that the cost for producing that base model is the same no matter what road name or paint is applied to it.  They could sell that base model to people and they do.  I doubt very much that Charlie Vlk gets painted and lettered shells that he has to first strip then paint.  So the paint is a separate cost feature apart from manufacturing the basic model.  That being the case it should be easy to amortise the fixed and variable costs of of painting a given railroad across the number of units painted in that scheme.  Thus those railroads that have a large built up demand will cost less than those RR's with little demand.  To illustrate, let's assume that the fixed costs for painting a locomotive scheme is $1,000 and the variable costs are $5.00 per engine.  We will do 1,000 UP engines but only 200 NKP.  How much does painting add on to the cost of each locomotive?  Let's do the math, shall we?  For the 1,000 UP engines the cost per engine is $1.00 of the fixed cost plus $5 of the variable cost for a total cost of $6.00.  For the NKP the cost is $5.00 of the fixed cost and $5.00 of the variable cost for a total of $10.00.  So the NKP engine costs $4.00 more to paint and should therefore be priced at least that much higher [probably more to allow for profit].  Granted the figures are arbitrary but the model allows for a greater market participation.  Those who want undecorated models to paint in their own favorite scheme, while those who like the popular brands don't have to subsidize the less popular schemes and those with the less popular schemes, although they have to pay more, can have their schemes done too.

[sirenwerks]

I believe that would only be the case if a manufacturer started a carbody production by announcing ALL roadnames and paint scheme variations the carbody was ever painted in at the beginning of said production. That way you at least have the chance that the carbody/roadname/paint scheme combination you want, if enough other interested parties register their interest with you. Now that type of pre-order system makes sense, kinda.

Nonsense.  The consumers at large couldn't afford to purchase every scheme they desire AT ONCE; the manufacturer couldn't afford to produce that many schemes simultaneously; the sub-contractor wouldn't have the capacity to manufacture such a volume in a timely manner.  Using your suggestion - how many prototypical roads/schemes are there for the `37 AAR 40' Boxcar?  IMRC has released 63 to date - announcing 63 schemes at once, which by the way is not nearly the total of prototypical schemes available to produce, is what you would suggest?  That is totally impractical on a number of levels.

You've discovered the absurdity you support then, because what the pre-order system you advocate for allows a manufacturer to announce a model and set an arbitrary deadline for its release, but actually release it once sufficient numbers have been ordered. Basically, you support a poor-man's marketing plan, based on promise by the consumer, not on research performed, and this is the important part, BEFORE MAKING THE ANNOUNCEMENT that would prove adequate interest in a model to warrant its profitable production.

Why would announcing 100 models (roadname/paint scheme variations based on one physical model, for arguments sake) at once be so absurd if the announcement includes the open caveat that orders are accepted directly and that a model will only be produced once X number of a specific model have been ordered? At least that way, a true market controlled by consumer rather than gatekeeper is created. In the current system a producer might choose, say, 10 roadname/paint scheme variations to start a product run and that choice may be completely random, based on assumptions the producer has made without supporting fact. In my everyman-for-himself, all-at-once system, it is based on true capitalistic democracy, rather than whim. Not only that, but it would provide for a more accurate gauge of re-running previously released models, all based on market want.

At least in my system there's transparency. Of course it gets muddled when you start adding gatekeepers like LHSs and the middlemen like Walthers. When IMRC states they're going to release X on Y date, they should understand there will be disappointed consumers when they go back on that promise. To reserve means to set aside, in essence to guarantee a consumer will get his model. Canceling a model flies in the face of the reserve system. And to the consumer it really doesn't matter what the excuse is. And again, the consumer is always right.

[Mark5]

Whatever the reasons are that IM got themselves into a situation where they had to make mass cancellations - it's bad marketing. As far as I'm concerned, their credibility is damaged.

Now, I'm moving on. ;D

Mark

[bbussey]

... At least in my system there's transparency. Of course it gets muddled when you start adding gatekeepers like LHSs and the middlemen like Walthers. When IMRC states they're going to release X on Y date, they should understand there will be disappointed consumers when they go back on that promise. To reserve means to set aside, in essence to guarantee a consumer will get his model. Canceling a model flies in the face of the reserve system. And to the consumer it really doesn't matter what the excuse is...

And yet, your argument is disingenuous since you know specifically that the reservation system in this industry does not mean to "set aside" and have the models made regardless of whether the reservations adequately cover the costs or not.  You, as well as every other N scale consumer, also know that this system has been in place since the 1980s.  So presenting your argument as if this is a new development that has sparked your outrage is not doing so in an honest fashion.

... And again, the consumer is always right.

A statement that you continue to employ, from which one would infer you believe applies to your argument as well - an indication that you have summarily dismissed any position on the matter that is different from your worldview.

There are two reasons not to further continue this debate.  The first is that you are not open to any position that deviates from your own.  The second is that any such debate is academic, since the system in place will continue to be the standard for the foreseeable future.  If you can devise (or have devised) a different system where the manufacturing process and cash flow are not impacted by unsold inventory, the consumer gets everything he/she wants, and is practical for both the manufacturer and consumer, feel free to present it here for review.

[bbussey]

Well I will disagree, especially with that last sentence.  What is the difference between basic engines?  Here I am talking about a model with an undecorrated shell.  Seems to me that the cost for producing that base model is the same no matter what road name or paint is applied to it.  They could sell that base model to people and they do.  I doubt very much that Charlie Vlk gets painted and lettered shells that he has to first strip then paint.  So the paint is a separate cost feature apart from manufacturing the basic model...

Since you are unaware of all the costs involved, as well as the manufacturing process, how can you present any such argument?  You do not take any chassis modifications or bodyshell tooling that have to be amortized into account.  You make assumptions on the production quantities of schemes in a given run when you have absolutely no idea of what they are.  Your assumption that the painting/printing process is somehow done by another contractor than the one who does the molding and casting is odd, as is the inference that undecorated motive power is readily available to paint/print.

It's understandable that people are disappointed when a model they would like to see produced is canceled due to insufficient interest.  However, if the current system - which has been in place for decades - was not serving the consumer base sufficiently, it would have been modified long before now.

[bobcat]

Bryan,

Have you ever heard the following saying? 'Never try to teach a pig to sing; it wastes your time and it annoys the pig'.

[inkaneer]

Well I will disagree, especially with that last sentence.  What is the difference between basic engines?  Here I am talking about a model with an undecorrated shell.  Seems to me that the cost for producing that base model is the same no matter what road name or paint is applied to it.  They could sell that base model to people and they do.  I doubt very much that Charlie Vlk gets painted and lettered shells that he has to first strip then paint.  So the paint is a separate cost feature apart from manufacturing the basic model...

Since you are unaware of all the costs involved, as well as the manufacturing process, how can you present any such argument?  You do not take any chassis modifications or bodyshell tooling that have to be amortized into account.  You make assumptions on the production quantities of schemes in a given run when you have absolutely no idea of what they are.  Your assumption that the painting/printing process is somehow done by another contractor than the one who does the molding and casting is odd, as is the inference that undecorated motive power is readily available to paint/print.

It's understandable that people are disappointed when a model they would like to see produced is canceled due to insufficient interest.  However, if the current system - which has been in place for decades - was not serving the consumer base sufficiently, it would have been modified long before now.

The costs to produce the basic model are the same no matter what road it is painted in.  What I gave in my post was a basic, no frills model.  Now if you start to add something else to the base model, say for instance, a phase III shell as well as the Phase I shell then you have another base model [as far as the shell].  A manufacturer would have to determine how many phase I's, II's and III's they could sell.  But the basic mechanism and its associated costs remain the same for all three phases as well as any other variation. The manufacturer should know their cost to produce that model.  What they have to determine is how many customers will want to buy it and at what price.  It may be that an insufficient number of customers will want to buy it. Or a manufacturer could just build the phase I shell and then take orders for the II or III phase shells.  It may well be that the customer demand will be insufficient for the phase II model so the manufacturer does not make it but does make the phase I and III shells.  So it doesn't matter where you draw the line between the basic model and the variable items.  All it does is determines which costs are amortised over the entire run and which are amortized over just a portion of it.  The same is true of paint schemes.  And I did not assume that the painting and printing is done by another contractor although it can be.  Atlas and Micro trains will custom paint any scheme on any of the cars they make.  All you have to do is order enough of them and pay for it all.

[Frank Amato]

Have you ever heard the following saying? 'Never try to teach a pig to sing; it wastes your time and it annoys the pig'.

I heard it as "Never wrestle a pig..."