Good manufacturing-themed thread in YahooGroup NScaleKitbashing

[MichaelWinicki]

There still are plenty of options at the entry level, but with fewer and fewer people actually building, kitbashing and scratchbuilding models today, you need high-end RTR to satisfy those who wish to expand their attention to fidelity of the prototype in the hobby.

That's the one right there.

If I wanted to step in as an N-scale manufacturer, that's exactly where I'd go... High-end ready-to-run.

And that would apply across the board to loco's, cars and even structures.

Yes, cost has to be part of the equation but when it comes to "entertainment" it's not exactly the same rule that's applied to many other categories in our lives, i.e. the more something costs, the fewer the sales.

With entertainment oriented products, that rule becomes much more flexible. 

Yes, people will criticize the price no matter what it is... That's just how we're wired.  But there's a difference between criticizing and not buying. 

If manufacturers put out a very good quality product that fills a niche in the market, then there will be demand for it even if it's pricey.

[asarge]

Sorry to be a pain, but how does agreeing withthe thread that was linked to "not getting it?"

Bryan is answering the challenge of Ink's post quite nicely, but to answer you're comment specifically, it boils down to where Craig or the other Manufacturer's have limited resources that they fell are more profitably deployed elsewhere and not involved in buying up the Sunrise or Cal-freight detail parts. A part of the hobby that is decreasing in profitablity and labor intensive to get to market.

DRD is right, there probably isn't a model railroad marketing consrotium out there. Manufacturer's probably all have their pet projects, but simple math and sound business sense win out. UNLESS you have people who invest money in getting a project done and then it just might come to fruition. Guarantee you that's happening in a few cases right now. Hey,everybody's got a model they want to see get done and every one of us gets disappointed.

[Denver Road Doug]

This is me flogging my dead horse. Atlas needs to do the GP40-2W in N scale. I don't want a home built car or a one-off from a road that went away 40 years ago, just what the HO'ers are getting. How is it an SD26 is a safe bet in N, but a GP40-2W is not? If IM can do an SD40-2W in N, Atlas can sure as heck do the GP40-2W in N. That is all I have to add.

Can someone more enlightened than I answer that?

Heck, while we're looking for enlightenment....how about those REALLY esoteric locomotives?  You know, the GP38-2 and SD40-2?

LL/Walthers F'ed theirs up, (ridiculous) and Atlas has been wholly unimpressive with their release schedule for the GP38-2.   Of course Kato sits on everything and why it has taken till now for a mfg to hint at bringing another line of SD40-2's to the table is beyond me.  (not debating about whether it's good that IMRC is the one coming to the table or not, just sayin')

Sorry, that's kinda way off topic, and probably proving the OP's link correct in a lot of ways.  But still, the point is about mfg's doing the most common stuff...yet in this case...notsomuch.  And I'm not against having a GP40-2W either, FYI.

OK, please return to your regularly scheduled programming....

[Mark5]

GP-38-2: September 2006, July 2007, June 2008 (Atlas releases)

On the SD40-2, who says it will be IM that will be pouring the drinks?

Thread drift ahoy!

Mark

[bbussey]

Doug,

Mark beat me to it, but I don't know how you can say Atlas has been unresponsive on the GP38-2 when they released it three consecutive years for 22 paint schemes (and SEVEN years straight with a whopping 43 paint schemes if you count the GP38) and in all likelihood will be bringing it back before long.

[Iain]

I, for one, am glad that Atlas is doing the various shortline cars.  For instance, the fact that they are releasing the '32 AARs in NS with correct roofs just astounds me.  And while these cars can be used by anyone that models the era in which they existed, especially since kitbashing this car would be a lot harder than a GP40-2W.

My point here is that the 'one offs and shortline' boxcars can be used by everyone that models the appropriate era, whilst locomotives cannot.  GP40-2Ws are limited to certain roads, just as my hoped-for AS416 is.  For this reason we are liable to see the product that has the chance of higher volume sales.

[sirenwerks]

When Ford decides to make a specific car, do they announce it and only produce if X number of people pre-order it? Granted, they've got lots of capital, but their investors are taking risk in purchasing stock. Being in business, even a sole proprietorship, requires taking risk. The pay-off of risk is reward, which benefits the individual businessperson. That's capitalism.

There is an alternative to pre-order, actually two. Performing market research prior to announcement/release to better the 'odds' that a product is commercially viable, thus minimizing risk; and securing advance capital to move to the production stage - a loan, most likely. Of course, a loan granting entity will want to know that the manufacturer has done due diligence to ensure the product will result in a return on investment.

Of course there's no entity performing MRR research. If there were one, they would be selling the outcome. But that doesn't mean it's not possible for a manufacturer to perform market research. And it doesn't necessarily cost unseemly amounts of money, the manufacturer just has to know how to do so.

When a pre-order requires payment (even through the LHS), the consumer becomes an investor in the product, perhaps not in contract, but psychologically. It's no wonder they're disappointed when their investment results in naught. Pre-order would be more appropriate if there was a guarantee of the product being produced, on time and as specified.

[John]

I just wish Atlas would do some 90ton CSX coal hoppers. They are sitting on that tooling  ;D

[MichaelWinicki]

Of course there's no entity performing MRR research. If there were one, they would be selling the outcome. But that doesn't mean it's not possible for a manufacturer to perform market research. And it doesn't necessarily cost unseemly amounts of money, the manufacturer just has to know how to do so.

That's a solid point.

In the old'n days when there wasn't an Internet, market research was much, much harder than it is now.

Now it can be done for less than 4 figures.

I don't know if it would make the pre-order system obsolete, but maybe it would be part of the process that included pre-orders. 

What IM did a couple months ago when they gutted their pre-order list isn't necessary with today's market researching tools.

[John]

Of course there's no entity performing MRR research. If there were one, they would be selling the outcome. But that doesn't mean it's not possible for a manufacturer to perform market research. And it doesn't necessarily cost unseemly amounts of money, the manufacturer just has to know how to do so.

I thought Charlie Vlk does that?

[bbussey]

When Ford decides to make a specific car, do they announce it and only produce if X number of people pre-order it? Granted, they've got lots of capital, but their investors are taking risk in purchasing stock. Being in business, even a sole proprietorship, requires taking risk. The pay-off of risk is reward, which benefits the individual businessperson. That's capitalism...

Ford is a lot bigger than Atlas, and while not in the dire straits that GM and Chrysler have been in the last few years, they haven't exactly been raking in the profits either.

Free enterprise means that people can run their businesses as they see fit, despite how you want them to operate.  It's mind-boggling why you can't see that one obvious point.  When the business model becomes unprofitable, then the businesses will change the way they operate.  You always have the option of not purchasing their products if their business models are such an aversion to you.  Constantly bringing it up is not going to change the way the industry works while the current model is successful.  In fact, a simple comparison of the make-to-stock Atlas of the 1970s and 1980s (with the same 30 or so pieces of rolling stock/paint schemes/reporting marks available year after year) with the make-to-order Atlas of the 1990s and 2000s (with dozens more bodystyles and hundreds more paint schemes and reporting marks) shoots down your theories.

You're also free to start your own model railroad manufacturing company and put your beliefs to the test.   Then, at least you would have a common point of reference from which to base your argument from, and it would have more weight behind it.  Otherwise, deal with it and stop griping when you're unwilling to put some skin in the game.

[Hyperion]

When Ford decides to make a specific car, do they announce it and only produce if X number of people pre-order it?

No, but they do "announce it" at various auto shows in a concept form, pay attention to feedback, and then maybe at some point 4-6 years later actually release it to market, usually in a very different form.

MRR Manufacturers have tried that model too -- and someone already decried that method earlier in this very thread with the likes of various models we've never seen released because someone already claimed "dibs" by announcing it first.  So, sure, if you want to hold up the auto industry as the poster child so much, the manufacturers could start doing things their way.  They'll announce a new locomotive model and maybe in a half-decade or so (at best) we'll actually see it.  Oh, and it won't actually have all the features or specific appearance of that "prototype" they showed you.  Whoops.  

It's all good because you didn't put any cash down on it, but in the mean time every other manufacturer has avoided the product altogether because, unlike the auto industry there's no room in the market (for most items) to directly compete with someone if you see the feedback from their announcement was overwhelmingly positive.

Granted, they've got lots of capital, but their investors are taking risk in purchasing stock. Being in business, even a sole proprietorship, requires taking risk. The pay-off of risk is reward, which benefits the individual businessperson. That's capitalism.

That's a pretty big "granted" there, don't ya think?

If Ford were to utterly bomb on a car model, even at the crazy high prices it costs to engineer one today, it would amount to a tiny percentage of its market cap -- somewhere in the low single-digit percentages of actual tangible loss.  It's shareholders wouldn't be the happiest, but Ford would continue on as if little changed aside from a slightly-lighter wallet.  If your average model railroad manufacturer utterly bombed on one of its products, it would likely bankrupt it overnight or at least put a serious hamper on its operations for a great many years.

I agree that there should be a measure of risk involved.  But let's keep that measurement on par between the two.  

I'm fairly certain that the initial pre-orders for an item rarely, if ever, actually cover all the upfront costs of said product.  If that were the case every single run produced after that would be pure gravy and this business would be a heck of a lot more lucrative than I've ever been led to believe that it is, and I know where I'm putting my investment money.  We'd also be seeing a heck of a lot more re-runs of products as, apparently, that's where all the profits would lie.  Certainly the pre-orders are only being used to judge relative demand and the long-term prospects of the model to make money -- i.e. if you've got 1000 preorders for your first run you can be fairly sure you're going to sell a lot more over time than if you got just 10 preorders.  So, I would feel pretty comfortable in assuming that there is still a pretty good measure of risk involved in production, because even if one sold all its preorders, it wouldn't guarantee an actual net profit over time.

Of course there's no entity performing MRR research. If there were one, they would be selling the outcome. But that doesn't mean it's not possible for a manufacturer to perform market research. And it doesn't necessarily cost unseemly amounts of money, the manufacturer just has to know how to do so.

Since you seem to know how, I'm sure someone would be willing to pay you... if it's as lucrative a possibility and alternative as you seem to think that it is.  

Oh, and by the way, the internet, while cheap, is most certainly not a fair representation of the cross-section of the MRR market (to varying degrees based on subject/scale/etc).  For the same reasons as why things don't get made just because the 50 regular posters on this Forum want them to be.  Market Research is exponentially easier the larger and more homogeneous your market is -- the market for model railroading is about as small and disparate as could exist for a product.  Trying to get a feel for this market would be anything but easy and of questionable benefit, particularly considering the model that exists today of pre-ordering fulfills the exact same goal ultimately and costs nothing (normally for either party).

When a pre-order requires payment (even through the LHS), the consumer becomes an investor in the product, perhaps not in contract, but psychologically. It's no wonder they're disappointed when their investment results in naught. Pre-order would be more appropriate if there was a guarantee of the product being produced, on time and as specified.

If you're talking about pre-orders that require payment, I, for one, wonder what the big deal is as no major (or even 'minor') manufacturer requires any payment be made to them.  If your LHS does, you might consider looking elsewhere, as in all my years and many tens of thousands of dollars of purchases, I've never once put a down payment on a preorder from any of a large multitude of stores.  If the LHS or manufacturer is requiring no money down, as is the case 99% of the time, then what's the problem?  The manufacturer gets their "market research" (all it is at that point is an affirmation on your part of them asking - "If I made X product at Y price would you buy it?") and you're not out a dime.  You are also under no obligation to ever purchase the product.

Now, as an LHS you might not like this model as you could end up stuck with inventory that it turns out people don't actually want to buy -- but that's an LHS problem, and I haven't heard LHS' widely complaining about the pre-order model except for the fact that they can't just go out and buy models people want because they're only made-to-order on occasion.  So they either buy a lot of inventory to cover them between runs or they deal with unhappy customers who have no selection to choose from.

Pre-order would be more appropriate if there was a guarantee of the product being produced, on time and as specified.

Well, as you said, there's an inherent risk in capitalistic behavior.  If you want to become an "investor" in a product by pre-ordering it to get it to market and actually putting money down on it, you agree to take on the risk of it not being on-time or as-specified, but you take on the potential reward of getting that product you want actually made.  

 If you want the capitalistic tenent of the "reward commensurate with the risk being taken" as inkaneer put it, sometimes you may have to pony up some dough and put it at risk to get that shiny rare trinket.  You don't get to have it both ways and get 100% of the reward and none of the risk.

[sirenwerks]

Of course there's no entity performing MRR research. If there were one, they would be selling the outcome. But that doesn't mean it's not possible for a manufacturer to perform market research. And it doesn't necessarily cost unseemly amounts of money, the manufacturer just has to know how to do so.

I thought Charlie Vlk does that?

Does he? I've never witnessed any individual or entity openly querying a consumer base in a manner that would help manufacturers. Maybe I'm not on that mailing list though. Without primary data gathering or inside information, it would seem to be only educated guestimation though.

I'm sure larger companies such as Atlas and Kato - with their considerable volume - track sales of loco/freight car/structure models, road names, etc. and tie them together to eras and the like, and have informed information on sales of their products to their consumer base. This doesn't necessarily represent the broader MRR consumer base, just the base they have sales relations with, but it probably works well enough for them and they're able to grow using momentum.

The market research I was speaking to is like what we use in the nonprofit sector, to create programming - it is needs based. We identify a need (in MRRing, that would be the need for a specific model - like BLMA's upcoming flat) and gauge its potential (possible unit sales) and develop the product based on that knowledge. Then launch (manufacture and deliver), monitor (gauge current sales and consumer input), tweak (retool if necessary, gauge consumer desire for new schemes & re-releases...), rinse and repeat... it's a cycle. But the concept is based on listening to the consumer to create the product that, in large part, sells itself because it is what the consumer wants.

Market study can be done online these days, in person at shows, and through lists with minimal cost. It can openly solicit consumer needs/wants or gauge response to a specific product. It just has to be performed in a way that's not loaded to give the manufacturer the answer they (the manufacturer) want, but an answer that is honest.

[SkipGear]

Market research and statistics are not perfect. A great example was brought up today at work. HobbyTown is working on a national database of sales of all their stores so one store can look at what sells at other stores and decide if it would work for them. There was one trainset that we were trying to decide if we should restock today. Looking at national stats, total sales of this set for all the HobbyTowns in the US was 12 in the past year. Not exactly setting the world on fire. But when you look closely at the stats, our shop sold 9 of those 12. That blows the idea of following the pattern of the rest of the nation right out of the water. In so many cases, there is no rhyme or reason to why one thing sells and another doesn't.

[oakcreekco]

Market research and statistics are not perfect. A great example was brought up today at work. HobbyTown is working on a national database of sales of all their stores so one store can look at what sells at other stores and decide if it would work for them. There was one trainset that we were trying to decide if we should restock today. Looking at national stats, total sales of this set for all the HobbyTowns in the US was 12 in the past year. Not exactly setting the world on fire. But when you look closely at the stats, our shop sold 9 of those 12. That blows the idea of following the pattern of the rest of the nation right out of the water. In so many cases, there is no rhyme or reason to why one thing sells and another doesn't.

It's called "salesmanship" and customer service. People still sell products, or make people walk away "empty handed".

Nothing sells itself