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Behind the scenes at Bachmann


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1 hour ago, Oldddudders said:

Bachmann, unlike Canon, Nikon et al, is not facing a seismic drop in sales year on year. Market leader, by sales, Canon's Chairman recently told the Japanese business press that he expects the 19.4 million digital cameras (from all manufacturers) sold in 2018 to drop to 12 million in 2020. Some big names are going to have viability issues in holding their share of that figure. The smartphone we all carry has a lot to answer for. I believe sales in our hobby are much more stable than that, so there is considerably less imperative to offer press junkets. 

 

I think, in reality, you're both right. It's likely a combination of both size, with its relative marketing power, and market stability that dictate the imperative for press outreach.

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10 hours ago, maico said:

As I understand it, Hornby is commissioning, amongst others, Sanda Kan which Kader acquired in 2008 but remains a separate plant.

Sanda Kan was acquired by Kader, and 'events followed'.

https://thebusinessofmodels.wordpress.com/2015/03/27/Hornby-paid-0-5m-to-end-its-chinese-supplier-misery/.

 

Hornby is now sourcing from a selection of Chinese manufacturers, but not Sanda Kan.

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1 hour ago, Oldddudders said:

Bachmann, unlike Canon, Nikon et al, is not facing a seismic drop in sales year on year. Market leader, by sales, Canon's Chairman recently told the Japanese business press that he expects the 19.4 million digital cameras (from all manufacturers) sold in 2018 to drop to 12 million in 2020. Some big names are going to have viability issues in holding their share of that figure. The smartphone we all carry has a lot to answer for. I believe sales in our hobby are much more stable than that, so there is considerably less imperative to offer press junkets. 

 

Even if they needed the publicity, Bachmann, Hornby etc. simply aren't in a big enough market with enough money floating around to offer "press junkets". As Andy says, we might get a night away in Margate this year - that's it. Everything else is paid for by Warners.

 

Toy trains are a far smaller business than cameras, cars, mobile phones. I wonder how long it takes our entire industry to churn out 12 million locomotives? 

 

Our manufacturers are minows compared to Nikon, Canon etc. I doubt that the man in charge of marketing at Nikon ever ends up in the stores unloading a shipping container, but that's what happens at Bachmann when they get busy and it's "all hands to the pump". I doubt he spends their weekends manning a trade stand at a show attended by 3000 people either, but both Hornby and Bachmann teams do just that. Nikon have stand staff. 

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43 minutes ago, 34theletterbetweenB&D said:

Sanda Kan was acquired by Kader, and 'events followed'.

https://thebusinessofmodels.wordpress.com/2015/03/27/Hornby-paid-0-5m-to-end-its-chinese-supplier-misery/.

 

Hornby is now sourcing from a selection of Chinese manufacturers, but not Sanda Kan.

 

Thanks for the link to that article , the first one I've seen that brings the story all together . I had surmised parts of that, particularly the Hornby putting all its eggs in one basket bit and the fact that they were being starved of production capacity . The bit that's new to me is that Kader decided to dump its customers after initially promising no change .Changes in strategy happen in business when new facts emerge and new opportunities present themselves .   Hornby  was only one of their customers but the effect of that must have been calculated by Kader  possibly wanting an increase in market share world wide .  We know Hornby nearly went bust for  various reasons, but being starved of production and having nothing to sell must be the  major one .    Fascinating stuff . Didn't Hornby consider making a bid for Sanda kan itself? I can't remember now , but that would have been a huge investment for them. I really hope at some stage someone writes a book on model railway manufacturing since say 2000, it would be fascinating.  Looks like Jason Shron who is heavily quoted in article , has the inside track.  Interesting chart on labour rates too . The last time I costed something (not model railways related) from China  labour was about 25% of UK rates , although you could never really get a direct comparison because of differing practices in the companies . From the chart it looks like its about 30%. Of course we never know the labour content of a model , but it is clear bringing manufacturing back to the UK would still result in major increase in costs.

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Sanda Kan was completely independent from Bachmann in the same way that Waitrose and John Lewis are completely separate companies..... I have been told by one Hornby rep that he was in a shop at the same time as a Bachmann rep. He was discussing a new model with the shop owner, and said that he had no pictures to show at the time, at which point the Bachmann rep produced his phone, and showed him numerous images of the Hornby product...... 

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18 hours ago, AY Mod said:

 

Oh yeah, we've got pots of money and bags of time. Why didn't I think of that? 

I am sure a good accountant could lose the costs under 'fact finding' or some such, I mean it works for our politicians, but only for 'holiday' destinations and never anywhere cold.

 

A s for the time element, yeah that might be a problem.

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It’s a bloody long way to watch some folk build toy chuffers...and the air quality will do your lungs no good in the industrial parts.

 

I think fish and chips by “ dreamland “ in Margate is sufficient glamour to keep it rock and roll for Andy and Phil ;)

 

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1 hour ago, Legend said:

 

Thanks for the link to that article , the first one I've seen that brings the story all together . I had surmised parts of that, particularly the Hornby putting all its eggs in one basket bit and the fact that they were being starved of production capacity . The bit that's new to me is that Kader decided to dump its customers after initially promising no change .Changes in strategy happen in business when new facts emerge and new opportunities present themselves .   Hornby  was only one of their customers but the effect of that must have been calculated by Kader  possibly wanting an increase in market share world wide .  We know Hornby nearly went bust for  various reasons, but being starved of production and having nothing to sell must be the  major one .    Fascinating stuff . Didn't Hornby consider making a bid for Sanda kan itself? I can't remember now , but that would have been a huge investment for them. I really hope at some stage someone writes a book on model railway manufacturing since say 2000, it would be fascinating.  Looks like Jason Shron who is heavily quoted in article , has the inside track.  Interesting chart on labour rates too . The last time I costed something (not model railways related) from China  labour was about 25% of UK rates , although you could never really get a direct comparison because of differing practices in the companies . From the chart it looks like its about 30%. Of course we never know the labour content of a model , but it is clear bringing manufacturing back to the UK would still result in major increase in costs.

But don't forget that the situation was a bit more complicated than that.  Sanda Kan 2007 posted a huge loss considerably exceeding its revenues of US $ 104.2 million compared with the previous year which had shown a profit of US$ 11.5 million on broadly similar revenues.  Quite what went on at Sanda Kan to cause such a sudden and huge loss has never really been made clear but it was put down by the company  to 'adverse changes in market circumstances', and it left the way clear for Kader to step in and takeover its rival.

 

The only problem was that Kader then found itself slipping into loss making territory as far as model railway manufacture was concerned and they set about to reduce the losses.  The most obvious impact as far as the British market was concerned was that Bachmann's pricing strategy changed and that has succeeded in effectively transferring the profit they were making onto Kader's books which has helped Kader return their model railway manufacturing to profitability.  But clearly at some point earlier point Kader had also reviewed its various customers taken over from Sanda Kan and had shed quite a few of them (and perhaps increased prices to others??).

 

The stories about people seeing in one factory what was being made for someone else - including competitors - is quite believable as it goes on all the time in various factories in China.  Hence people from Britain visiting a particular factory to look a Brand X's new creation coming through the process have also come across items or components being manufactured for Brands Y or Z  and sometimes news has leaked out.  Plus the managers etc of the smaller Chinese factories talk to each other.  And - according to what I have been told - it is quite possible to see the same factory making items for a brand which has a good reputation for its products in Britain alongside products for another brand which doesn't have a quite so good reputation; basically the factories work to a specification plus there is a need for the 'brand' to maintain control over what is being produced in their name.

 

The big advantage Bachmann have is that they are directly involved with the factory which consistently makes their models and is under the same ultimate ownership as them which inevitably must improve communication and the willingness to act on feedback from the frontline brand/selling subsidiary.

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43 minutes ago, rob D2 said:

It’s a bloody long way to watch some folk build toy chuffers...and the air quality will do your lungs no good in the industrial parts.

 

I think fish and chips by “ dreamland “ in Margate is sufficient glamour to keep it rock and roll for Andy and Phil ;)

 

 

TBH, fish'n'chips in Margate sounds like a much better deal that sweet'n'sour dog in Guangdong. I know which I'd go for! :toclue:

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6 hours ago, Fireline said:

Sanda Kan was completely independent from Bachmann in the same way that Waitrose and John Lewis are completely separate companies..... I have been told by one Hornby rep that he was in a shop at the same time as a Bachmann rep. He was discussing a new model with the shop owner, and said that he had no pictures to show at the time, at which point the Bachmann rep produced his phone, and showed him numerous images of the Hornby product...... 

I can raise that with a quite a few stories.

 

In the Days before internet orders my late father frequently carried a box of another other manufacturers stock in his “van”,  to help one rep get an urgent order to a shop he was visiting, they would return the favour of course. He’d carry requests lists too from shops, if they’d sold out he’d act as eyes to help locate something another shop needed quite often.

 

We had 3 different reps round our house one night, as they were all in town, later went to the local station to watch a steam railtour.

Model Railways is a small hobby, practiced by enthusiasts.

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Are Hornby in profit again ?

 

Last time I looked Roco-Fleischmann made a significant 30 million euro loss and there were no buyers for the company...

 

Marklin-Trix made a small profit on a large turnover that was almost 3 times that of Hornby.

 

Nikon Imaging made an enormous loss 2 years ago but the company restructured and is back to a small profit, however their market share is shrinking as is the overall camera market. Medical equipment and other specialist areas keep them afloat. Diversification is clearly important.

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11 hours ago, 34theletterbetweenB&D said:

Sanda Kan was acquired by Kader, and 'events followed'.

https://thebusinessofmodels.wordpress.com/2015/03/27/Hornby-paid-0-5m-to-end-its-chinese-supplier-misery/.

 

Hornby is now sourcing from a selection of Chinese manufacturers, but not Sanda Kan.

 

A number of companies were listed in the article: Refined, Talent, Zindart, kader and Sanda, do you happen to know who Dapol uses ?

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1 hour ago, maico said:

A number of companies were listed in the article: Refined, Talent, Zindart, kader and Sanda, do you happen to know who Dapol uses ?

Not a clue . Have yet to buy any Dapol product, so don't even have an example to look at and see whether there is any resemblance to other maker's product. (I shall break my duck if the NBL DE type 2 looks the business when it goes on sale...)

 

It was very interesting when Hornby ceased to be supplied by Sanda Kan, and their steam loco mechanism construction on new introductions began to deviate from what had been a uniform pattern while with Sanda Kan, into three distinct groups, based on the evidence of those I have purchased.

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On 17/09/2019 at 21:33, maico said:

 

A number of companies were listed in the article: Refined, Talent, Zindart, kader and Sanda, do you happen to know who Dapol uses ?

A guess would take me to Shine Dew Industrial Ltd.(factory name: Biomone Industrial Ltd. ) as one source, along with a few other UK producers made in the same building.

 

http://www.shinedew.com/

 

There are others out there, an off shoot from Sanda Kan is SKmode, others not listed above includes Regalway, Donguan Shenzhen Mould, Rolland, Nanking Artko, hobby river, yanming (nameplates), zc, oriental (brass)..

 

google the names you’ll get insight into what theyve made and for whom, though you’ll quickly see HO dominates. 

 

One particular has an employee who likes sharing his cad work on linked in, and has more than once given away a secret.

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I would watch Jason Shron/Rapido closely for the health/trends in the hobby in North America and the British Isles. He does tend to cater to the premium end of the market but seems to be very sensitive to the Chinese manufacturing end where he has invested heavily.  Other factors such as the tariff wars and political uncertainties may impact all of this in the near future. 

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1 hour ago, autocoach said:

I would watch Jason Shron/Rapido closely for the health/trends in the hobby in North America and the British Isles. He does tend to cater to the premium end of the market but seems to be very sensitive to the Chinese manufacturing end where he has invested heavily.  Other factors such as the tariff wars and political uncertainties may impact all of this in the near future. 

Rapido trains is Canadian settled, so they don't have the trouble between US and China, look on their website, Markham Ontario Canada

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3 hours ago, autocoach said:

I would watch Jason Shron/Rapido closely for the health/trends in the hobby in North America and the British Isles. He does tend to cater to the premium end of the market but seems to be very sensitive to the Chinese manufacturing end where he has invested heavily.  Other factors such as the tariff wars and political uncertainties may impact all of this in the near future. 

Rapido owns their production line, and has a premium price to the consumer.

If he is a good sense of business as he is a showman, then i am imagining he has the highest margin in the industry, as presumably he has lowest cost and highest revenue. 

As he only makes what he can sell, and focusses solely on the market that delivers it...he has an optimum business as stock is minimal.

 

1. Cost management.

2. Price Margin

3. Optimum production

its a cautious predictable business model..and nothing wrong with that.

 

if that is true, then the very slow trickle of UK commissions, and absence of a UK market entry suggests the UK market is has one of more of the three factors I described out of balance...its a very cautious business.

 

So i’d see it as a canary in the cage, as far as warnings are concerned, but not leading the trend, trends require risk, and subsequent followers, not caution.

 

China's trade war should benefit UK modelling from a production cost side.. if US trains cost more and sales reduce, that will open up production capacity for UK (/ROW) production as UK imports are not subject to tariffs, of course the B word could cancel those benefits, and the combined effect could damage the UK, EU and US markets and i’m sure China & Canada are very sensitive to that too.

 

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12 hours ago, adb968008 said:

Rapido owns their production line, and has a premium price to the consumer.

If he is a good sense of business as he is a showman, then i am imagining he has the highest margin in the industry, as presumably he has lowest cost and highest revenue. 

As he only makes what he can sell, and focusses solely on the market that delivers it...he has an optimum business as stock is minimal.

 

1. Cost management.

2. Price Margin

3. Optimum production

its a cautious predictable business model..and nothing wrong with that.

 

if that is true, then the very slow trickle of UK commissions, and absence of a UK market entry suggests the UK market is has one of more of the three factors I described out of balance...its a very cautious business.

 

So i’d see it as a canary in the cage, as far as warnings are concerned, but not leading the trend, trends require risk, and subsequent followers, not caution.

 

China's trade war should benefit UK modelling from a production cost side.. if US trains cost more and sales reduce, that will open up production capacity for UK (/ROW) production as UK imports are not subject to tariffs, of course the B word could cancel those benefits, and the combined effect could damage the UK, EU and US markets and i’m sure China & Canada are very sensitive to that too.

 

We're getting a long way from Bachmann here but if the UK leaves the EU it will have no trade/tariff agreement with China.  So what then happens - are WTO rules applied, in which case the tariff on imported model trains will rocket?  Or does the UK Govt simply waive tariffs and hope the Chinese will do the same for UK exports to China?

 

Generally foreign entry into the production of UK outline models has been very limited indeed and recently solely by means of commissions with, I think, only two exceptions - Rapido's Birmingham 'bus and an N gauge 56XX where Revolution are giving a hand with research(?) and marketing etc.  Bachmann of course is a rather different business model where the Chinese owner of the business has marketing and development subsidiaries who are the 'one step removed' face of the company in the European and US market          So far nobody else from China has tried direct entry into the UK market probably because they are indeed cautious and very wary of the need for local marketing knowledge and skills.

 

Otherwise of course don't forget that no foreigner is allowed to hold a majority or controlling share in any business within mainland China - ultimately the control of the premises, in particular, will be in local hands and even subject, as experience has shown, to local Govt control and intervention.

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2 minutes ago, The Stationmaster said:

We're getting a long way from Bachmann here but if the UK leaves the EU it will have no trade/tariff agreement with China.  So what then happens - are WTO rules applied, in which case the tariff on imported model trains will rocket?  Or does the UK Govt simply waive tariffs and hope the Chinese will do the same for UK exports to China?

 

 

 

Without getting too political, if the UK were to wave tariffs on model railway imports from China under WTO rules it would have to do it for every other country as well. Theres no need to the Chinese to reciprocate. It could result in the market being flooded with cheap imports.... the fear in other industries is that cheap imports from around the world will undercut home-grown manufacturing and agriculture, effectively ending those industries.  

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On 16/09/2019 at 17:01, AY Mod said:

 

Most of that issue came with deliveries onwards after they left Barwell with couriers and postage giving advanced levels of shock testing. 

 

Ok no models were damaged during the making of this video but mabye the lack of notice to the orietation labels has a part to play espcially given the re use of previous packaging for shipping bit and bobs for outbound orders. 

 

I'd hate to be offloading a full 40ft with the wind and rain blowing in through those curtains. Been there done that.

 

Interesting Video though. fair play to Baccy for letting you lads loose.

 

image.png.f9abfa420556312bec70f33a1df8bd52.png

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51 minutes ago, D1051 said:

Did i hear some reference about the web site ? I've had an e-mail from the collectors club regarding an upgrade of site 23/9 until 1/10. 

Likewise. The Collectors’ Club area was the last part of the website I visit which displays the old user-friendly face. “The new website has been designed to mirror the look and feel of the old one…” Let’s hope.

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On 20/09/2019 at 10:41, JohnR said:

 

Without getting too political, if the UK were to wave tariffs on model railway imports from China under WTO rules it would have to do it for every other country as well. Theres no need to the Chinese to reciprocate. It could result in the market being flooded with cheap imports.... the fear in other industries is that cheap imports from around the world will undercut home-grown manufacturing and agriculture, effectively ending those industries.  

As far as I understand it, there are no tariffs payable on "toy trains" imported from China or anywhere else under WTO rules. And I fail to see why the UK Government would want to impose any—there is only one domestic producer of rolling stock (Peco). And where would the cheap imports of model trains come from (not China, obviously)?

 

It would be more logical for the EU to impose tariffs as they have several domestic producers to protect.

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