Rep allocation of reduced production quantities

[shunny]

I was in Scoonie Hobbies today and they advised me that several products have been allocated to reps to in fixed quantities to split between shops. Some are obvious such as Tin plate and anniversary editions but others are odd to say the least. The class 50s in GBRF and class 60s in DB red but not the Colas. The oddest were the coaches such as Mk3 in LNER and Swallow executive as well as DRS and Virgin but again not Network rail.  The APT is also the only new tooling on the list so looks like production numbers already fixed prior to announcement.

This has been done by rep based on shop previous order quantities but would suggest very limited runs on some deliveries this year but it appears shops won't getting further stock. 

[The Stationmaster]

Which might suggest that in order to achieve timely delivery Hornby had already ordered fixed quantities from the factory(ies?) before announcing these models.  And that retailer orders for those which will be rationed exceed the quantity being manufactured while those which are not rationed have not yet been ordered by retailers in quantities which match or exceed the number Hornby has ordered from the factor(ies).  

 

In some respects it is a good sign because provided the quantity ordered from factories by Hornby will turn a profit, plus return on investment, for them it definitely means some positive numbers to go into the accounts where items are being rationed.  Equally of course even where items have not been rationed the number sold could also potentially mean some positive numbers.  The downside is - as happened in the past when Hornby rationed supplies to retailers - is possible customer disappointment and a loss of faith in pre-ordering because most of us consider it to be the way to make sure we get what we want.  And it does of course illustrate all too well the problem 'manufacturers' such as Hornby face in trying to match the size of their order at the factory gate with the level of demand from retailers and end customers.

 

So somewhere between the devil and the deep blue sea for Hornby but in present circumstances that will no doubt be more than outweighed by the potential positive impact where it matters in sales figures and the accounts.  However what Hornby now need to avoid like the plague is their past mistake taking the in initial shortfall and consequent shouts as a measure of continuing demand and then over-producing in Years 2/3 with the possibility of adding to the pile of unsold stock - another tricky balancing act for them.

[oleander]

I ask some in the Know on the APT if it was going to be a limited run and they said no.
If Hornby are going to do limited runs they should advise a cut off date for pre orders like US manufactors do .
My self I like to wait and see what the model is like if possible.

John

[NoggintheNog]

The UK market seems to be heading the way of the US.

 

Models announced, dealers take preorders, company makes preoders plus a few.

 

Essentially, if you want a model for the most part you have to preorder it.

 

Hornby are about 1 step away from that now. 

[spamcan61]

28 minutes ago, oleander said:

If Hornby are going to do limited runs they should advise a cut off date for pre orders like US manufactors do .
My self I like to wait and see what the model is like if possible.

Everything is a limited run since production moved to China, batch sizes fixed in advance and that's that, unlikely to be a second run of anything unless the 'manufacturer' is convinced there's enough demand to sell them all.

 

I won't order things 'blind' either so that does really limit me to what's available second hand (thankfully the bulk of second hand stuff I buy on eBay is genuinely 'as new', which says something about how much use many toy trains get...)  or buying 'end of line' from the box shifters.

Edited January 11, 2020 by spamcan61

[cessna152towser]

I no longer pre-order stuff.   Waited five years for the Bachmann RFB ordered in 2013 and it finally arrived in 2018 just as I was on the point of cancelling - and meanwhile the price originally quoted had almost doubled.   I am not getting any younger and a lot can change in five years.

[JSpencer]

1 hour ago, NoggintheNog said:

The UK market seems to be heading the way of the US.

 

Models announced, dealers take preorders, company makes preoders plus a few.

 

Essentially, if you want a model for the most part you have to preorder it.

 

Hornby are about 1 step away from that now. 

 

The downside of that is that everything aanouced at the start of 2020 would only appear from the start of 2022. The time it takes to organise the production run in the factory.

 

Agree their current strategy gets stuff out for 2020 but can lead to over or under runs.

Edited January 11, 2020 by JSpencer

[Ouroborus]

Another thing to consider - insufficient supply for the preorders means the second hand (market value) rises, means the second run can command a higher price.   The trick would seem to be to make just enough to satisfy demand, or failing that, make sure you don't wind up too many customers through failing to deliver their pre-orders.    Once a customer starts to think 'what's the point of a pre-order?' you've got a problem.

[The Stationmaster]

41 minutes ago, Ouroborus said:

Another thing to consider - insufficient supply for the preorders means the second hand (market value) rises, means the second run can command a higher price.   The trick would seem to be to make just enough to satisfy demand, or failing that, make sure you don't wind up too many customers through failing to deliver their pre-orders.    Once a customer starts to think 'what's the point of a pre-order?' you've got a problem.

It can also create the ordering distortion which has already, I'm told, sometimes occurred.  That works like this - as well as ordering from Retailer A I also order from Retailer B, and if i really want to make absolutely sure I might even also place an order with Retailer C.  But I only want one of what I have ordered so the less cute retailers who don't watch their drop out rates on pre-orders all order my item from the manufacturer and the manufacturer looking at retailer orders gets a false impression of the demand so aims at that level for both this production and future production of similar items.

 

So, apart from leaving a couple of retailers with unsold models eating up their capital, this 'make sure in times of rationing' approach can backfire on 'manufacturers' who misread demand unless they are keeping a really clse eye on how the market responds through actual sales rather than what is pre-ordered.  Potentially a dangerous path for the industry.

[oleander]

The biggest grip I Have with pre order and Whalters in the US are the worst for it,
You read through a rail mag and see a brand new loco. You think I like that , not to bad ,good review I will get one. You head off with your cash to your local model shop and ask if they have it. First thing you hear is thoes dreaded words. Have you pre ordered . you say No as you have only just heard about the loco. Shop keeper say sorry sold out.  can not get any more. Yet the loco not been out a month.
I hate the way the hobby is heading with this pre ordering crap.
A limitted edtion loco or crowd funding ,ok far enough . But regular run of the mill loco like any APT. You should be able  to walk in to a UK hobby shop and see one after its come out.

 

John

[melmerby]

16 minutes ago, oleander said:

 You should be able  to walk in to a UK hobby shop and see one after its come out.

 

John

Those days went years ago

The days of the Hornby (Triang) Jinty & Princess sitting on the retailer's shelves for years waiting for customers and the factory keeping stocks so they can immediately replace any sold by the retailers are a distant memory.

From the manufacturer's point of view it's a welcome change as it doesn't mean money tied up in stock for years.

 

The ideal number IMHO is the number hoped to be sold within a fixed period + a margin in case of underestimation.

To get that right is a black art and the manufacturers rarely manage it!

Things move fast in retail and if you want it, buy it, before it disappears.

[phil-b259]

4 hours ago, oleander said:

I ask some in the Know on the APT if it was going to be a limited run and they said no.
If Hornby are going to do limited runs they should advise a cut off date for pre orders like US manufactors do .
My self I like to wait and see what the model is like if possible.

John

 

EVERYTHING is a limited run these days!

 

With production outsourced and subject to 'batch production' at 3rd party factories its simply a question of how limited.

 

For items in the mainstream range Hornby may well commission a batch of say 3000 - but if that item turns out to be popular amongst retailers and there is demand for 4000 then obviously said item becomes an unofficial limited edition.

 

Now for some of Hornbys 2020 range, design is still being done and batch numbers have yet to be finalised - and in that case if Hornby (and retailers) see an item will be popular then there may* be able to increase the number of models made.

 

*(note the word 'may', because as with all outsourced production the ability to vary terms depends on the specifics of the outsourcing contract)

 

However if the design for a 2020 model has been completed, and production is underway or imminent then, even if it has proven popular when announced, Hornby are UNABLE to increase the number of models produced. This creates an accidental / unofficial limited edition and in such cases retailers will be rationed or may miss out.

 

This compares with a batch of 1000 models that will be expressly marketed as a 'Limited Edition' in Hornbys publicity and is what we, as buyers more usually expect when we see the words 'Limited Edition'

[phil-b259]

4 hours ago, cessna152towser said:

I no longer pre-order stuff.   Waited five years for the Bachmann RFB ordered in 2013 and it finally arrived in 2018 just as I was on the point of cancelling - and meanwhile the price originally quoted had almost doubled.   I am not getting any younger and a lot can change in five years.

 

I don't see how age comes into it (or the length of time between ordering or delivery) comes into it.

 

Most retailers don't force you to buy if you pre-order and in any case trading standards require that you explicitly have to give consent if they wish to charge a higher price.

 

Equally if you pay by card and the card details change / expire the retailer cannot process the order without your consent giving you the opportunity to pause and decide if you really still want the model.

 

With todays 'batch production' methods, if a model proves popular it will sell out on pre-orders (or shortly after) and you will miss out. Yes it might not be that popular and there still be plenty of stocks available after release - but you cannot guarantee that will be the case.

 

Putting in a pre-order is thus basically an insurance policy - it usually costs you nothing but can be vital if the worst (as regards you, the consumer is concerned as regards model popularity)

[eldomtom2]

30 minutes ago, phil-b259 said:

However if the design for a 2020 model has been completed, and production is underway or imminent then, even if it has proven popular when announced, Hornby are UNABLE to increase the number of models produced. This creates an accidental / unofficial limited edition and in such cases retailers will be rationed or may miss out.

 

This compares with a batch of 1000 models that will be expressly marketed as a 'Limited Edition' in Hornbys publicity and is what we, as buyers more usually expect when we see the words 'Limited Edition'

The distinction, which has perhaps been lost, is that with a non-limited edition a second batch can always be made if it's considered viable - making an explicit limited edition commits Hornby to not doing that.

[mdvle]

2 hours ago, oleander said:

The biggest grip I Have with pre order and Whalters in the US are the worst for it,
You read through a rail mag and see a brand new loco. You think I like that , not to bad ,good review I will get one. You head off with your cash to your local model shop and ask if they have it. First thing you hear is thoes dreaded words. Have you pre ordered . you say No as you have only just heard about the loco. Shop keeper say sorry sold out.  can not get any more. Yet the loco not been out a month.
I hate the way the hobby is heading with this pre ordering crap.

 

You / the hobby have a choice.

 

We can go back to the good old days of plentiful stock - as in the days when there were maybe 2 manufacturers who maybe offered a total of 5 new tooled items in a year - as in you bought not necessarily what you wanted, but what you chose from the limited availability of choices.

 

Or you can accept the current reality, where we currently have 8+ manufacturers offering 20 to 30 newly tooled items a year - with a choice of accurate models that those 30+ years ago couldn't have dream off - but the side effect with all that product and choice carrying expensive inventory can be dangerous as the consumer is tempted buy the latest new item rather than what is on the hobby store shelf or in your (expensive) warehouse.

 

2 hours ago, oleander said:

A limitted edtion loco or crowd funding ,ok far enough . But regular run of the mill loco like any APT. You should be able  to walk in to a UK hobby shop and see one after its come out.

 

But the APT is anything but "regular run of the mill"  With a RRP of £395 for the five car most retailers are going to be careful with their order numbers, and Hornby will (guesswork on my part) also be somewhat careful as it is easy to end up with rather expensive non-selling inventory on more expensive items.

 

 

[Bernard Lamb]

58 minutes ago, eldomtom2 said:

The distinction, which has perhaps been lost, is that with a non-limited edition a second batch can always be made if it's considered viable - making an explicit limited edition commits Hornby to not doing that.

Bur there is nothing to stop them doing another run that is just a teeny weeny bit different.

The blue and white striped box with the Duchess being a good example.

From what I hear of the take up that idea  could have a long life.

Bernard

[RAF96]

My local shop had not had the 2020 catalogue delivered yet, although oddly it was on the shelves in Tesco and WHSmith, so they rang Hornby to pre-order a Rocket for a customer only to be told they were already sold out. 

 

The other odd thing they are only scheduled to visit Margate to put their an usual annual order in this Monday, so how is the average model shop supposed to cope with a chaotic system like that.

 

The Rocket is only one of hundreds of new items so I would like to see the business model that enables a range to sell out before the retailers get a chance to bid their orders.

[Robin Brasher]

I expect that they will do some more runs of the Rocket sets. Last time Hornby produced Rocket sets they did not sell particularly well in the UK but they sold well overseas. I think that Hornby made a lot more Rocket sets last time.

[MikeParkin65]

1 hour ago, RAF96 said:

My local shop had not had the 2020 catalogue delivered yet, although oddly it was on the shelves in Tesco and WHSmith, so they rang Hornby to pre-order a Rocket for a customer only to be told they were already sold out. 

 

The other odd thing they are only scheduled to visit Margate to put their an usual annual order in this Monday, so how is the average model shop supposed to cope with a chaotic system like that.

 

The Rocket is only one of hundreds of new items so I would like to see the business model that enables a range to sell out before the retailers get a chance to bid their orders.

Surprised my ‘local’ - quite a large well known business also hadn’t received the catalogue (or the Airfix) yet. Bought some bits and pieces from him to make up for the lost sale of catalogues which I then bought from WHS. 

[andyman7]

The other factor is that if retail prices are to be maintained, Hornby needs to try and avoid excess stock. We've all got very used to deep discounting in years past but it is toxic to the long term health of the business. There will always be the odd item that gets over ordered and marked down but in general once people know that stuff will only be available for a limited time and will sell out they are more inclined to buy straight away than hold back - and smaller retailers benefit too becuase their margins aren't eroded by the box shifters.

 

If you want an item and haven't (or don't want to) preorder, the key is to be on the ball when it actually comes out - the bush telegraph that is RMWeb will do that for you - and then get on the phone to track one down. Don't just leave it at Rails, Hattons, Kernow - make the calls to the smaller or less high profile retailers and in most cases you will get one. Maybe not at a discount, but at least at the list price. Yes, one or two items will always prove elusive but I have found that with most in demand releases this can work as long as you don't hang about.

[mdvle]

1 hour ago, RAF96 said:

My local shop had not had the 2020 catalogue delivered yet, although oddly it was on the shelves in Tesco and WHSmith, so they rang Hornby to pre-order a Rocket for a customer only to be told they were already sold out. 

 

The other odd thing they are only scheduled to visit Margate to put their an usual annual order in this Monday, so how is the average model shop supposed to cope with a chaotic system like that.

 

The Rocket is only one of hundreds of new items so I would like to see the business model that enables a range to sell out before the retailers get a chance to bid their orders.

 

Both, or only the limited edition?

 

There are 2 version of Rocket on offer as announced.

 

R3809 - £190 - limited anniversary edition with certificate and Tri-ang style boxing, only 1500 units.  Not available at Hornby.com, and I expect any retailer wanting to order any would have needed to be quick at that quantity.

 

R3810 - £180 - seems to be a regular version of Rocket, in Hornby packaging, still available on Hornby website and so I assume to available for retailers to order.

[mdvle]

So the Rocket thread indicates the R3810 is sold out at some retailers, still available at some, though the limited edition will take luck to find at this point.

 

But this is partially a reflection of the delivery date - next month.  If it arrives on time that essentially means it either has already shipped from China, or needs to leave in the next week (so already made just at worst being boxed - Chinese NY is January 25 which means most of China will be shut down by the middle of next week as the 3 week holiday period starts.

 

This means Hornby would have needed to place the order say October last year, and so would have needed to guess at quantities.  Yes, selling out sucks, but it is the lesser of the evils for a manufacturer than sitting on unsold product.

[Andy Hayter]

I always thought that the whole point about genuine limited editions (as opposed to normal releases that stock out quickly) is that they should sell out quickly.

 

Otherwise it is just like the cr@p peddled by companies like Danbury Mint and others.

[oleander]

2 hours ago, mdvle said:

 

You / the hobby have a choice.

 

We can go back to the good old days of plentiful stock - as in the days when there were maybe 2 manufacturers who maybe offered a total of 5 new tooled items in a year - as in you bought not necessarily what you wanted, but what you chose from the limited availability of choices.

 

Or you can accept the current reality, where we currently have 8+ manufacturers offering 20 to 30 newly tooled items a year - with a choice of accurate models that those 30+ years ago couldn't have dream off - but the side effect with all that product and choice carrying expensive inventory can be dangerous as the consumer is tempted buy the latest new item rather than what is on the hobby store shelf or in your (expensive) warehouse.

 

 

But the APT is anything but "regular run of the mill"  With a RRP of £395 for the five car most retailers are going to be careful with their order numbers, and Hornby will (guesswork on my part) also be somewhat careful as it is easy to end up with rather expensive non-selling inventory on more expensive items.

 

 

The amount of new locos beening offered has no effect on stock levels. each model will have a level set by the manufactor . I am not on about going back to stock levels of old were stuff was all ways avaible due to varstly over stocking.

For non limited edition models  and by that I mean a stated run in the catlog you should be able to view the model when it is realised . 6 months later and its sold out far play . Sold out before it comes out ,that bad for the hobby.

I am Happy we have lot of manufactors making great models . Expensive inventory about the same give or take a bit as  it was back in 1980 once inflation has been factored in. So in real terms not much  has change . Prices go up fact of life.

The Apt is run of the mill, The price is were it should be £395 x1 loco. x2 dvt. X2 coaches . Its called a train pack they cost more .A hst twin pack is £290 MK3 £35 each so £395 for 5 items .By run of the mill I mean its not a limited edition ,certified ,special box etc model. Retailers are normal carefull. They also know if they dont have it they can sell it.

 

[shunny]

I can understand Rocket selling out but the why the DRS and Virgin Mk2 coaches are so limited yet the Network rail versions and Scotrail are not seems odd. If factory slots are an issue either produce less liveries or split the run evenly between the various liveries? Even stranger is the fact both Drs and Virgin are the first time the Mk2fs have been done in these liveries yet the other 2 are second runs.