Rep allocation of reduced production quantities

[GWR-fan]

When an EP is not available to view then a potential customer relies on the factory supplied computer image,  with the proviso that the image does not necessarily represent the finished article.  The image used by many retailers and even on the Hornby website of the current twin tender A4 showed the loco with valences fitted and even after the model was released retailer website still reflected the loco with valences.  Of cause those in the know realised that as it was a 1/1 representation of the loco as currently stored then the model would be sans valences.  Those in the know also were aware that the cab number and roadname on the supplied computer image did not reflect the state of the loco when it ran with valences fitted.  However,  very few are that knowledgeable and rely on a factory supplied image, usually not of the model but a computer generated image.

 

How is one to pre-order knowing that the supplied image may or may not reflect the actual model.  Some images are so realistic that at times it is hard to distinguish between a computer generated image and an actual image of the model.  Hornby has a history of the released model not exactly matching the image on their website,  an image used with permission by many retailer websites.  A recent class 60 release had the box artwork correct but the actual model livery incorrect.  There has also been much debate over the difference between a supplied image livery and the colour tone actually used by Hornby on their steam outline locomotives.  Quite often the livery on the released model appears washed out whereas the image on the website shows a full rich tone.

 

With Hornby pushing the hobby towards pre-ordering then surely it is incumbent on Hornby to be accurate in the images they use to advertise their products.  When a customer goes to a fast food store for a hamburger there is a marked difference in the size and quality of that burger in the advertising images than the actual product we purchase.  The advertising world is deceiving us and yet we continue to purchase these products.  Hornby wants us to pre-order a product based on possibly inaccurate images and limits production to only those pre-ordered numbers.  Retailers become merely a clearing house for pre-ordered items.  What is the point then of having a retailer?  Why not just pre-order from the manufacturer,  at least then the manufacturer has an accurate assessment of actual pre-orders and not duplicate orders lodged with multiple dealers.  Hornby several years ago drastically cut production numbers on a West Country Bulleid loco (was it "Wilton"?) leading to dealers not getting any of their pre-ordered stock or having their pre-orders slashed and aftermarket prices for the loco skyrocketed leading to a discussion back then as to the value of pre-ordering when the company would not even acknowledge the actual number of pre-orders for production.  I believe a rerun did occur but not for a long time afterwards

 

The hobby now is being driven into a frenzy of pre-ordering if we want an item irrespective of the buyer having any idea of the quality of the promised item.  The prudent modeller has generally awaited a release of a model or at least a favourable review in a magazine or website before actually buying an item.  If one awaits release now then the chances are that the model will be sold out long before the release date.

 

Hornby has regularly shot itself in the foot by releasing a second run of a model that is still sitting unsold on dealers' shelves.  Is the buyer responsible for a production mistake by the manufacturer?  Certainly a manufacturer would rely on a pre-order for production but should also be aware that past experience has warned buyers off pre-ordering.  I feel that if the manufacturer requires a pre-order then the company has a duty to produce exactly the item as depicted in a supplied image, otherwise a buyer is held hostage,  knowing that failure to pre-order almost certainly guarantees that the buyer will be forced to pay well above retail on an aftermarket site.  How many times have we read of store employees on this site bragging how many limited run models they have purchased at the store they work in only to onsell on an auction site for a profit.  Personally, any pre-ordering for the likes of say a locomotive should be quantity limited to one item per customer.  It does the hobby no good when insiders have an advantage over the general modeller.   

 

I will never pre-order because I have no faith that a released model will represent the item as depicted on a website image or if the quality will be satisfactory.  One cannot simply return a defective item for an exchange if there is no replacement available.  Hornby are celebrating a supposed 100 years of manufacturing and yet to date are unable to match production to demand.  Production these days with foreign contractors is unlike when inhouse.  These days a manufacturer has to contract out production,  usually bidding for a production time slot.  Production does not commence until every part required for the production number has been compiled.  Production then proceeds.  Reruns are not simply turn on the tap and another run commences.  The whole bidding process is required and the complete parts list compiled and then the rerun.  Thus when pre-orders only account for the production total then many miss out and the manufacturer loses not just a sale but potentially a loyal customer.

[Talltim]

I quite like the way the North American manufacturers Tangent and Moloco do business. They don’t announce anything until they have it in their hands. (And they have multiple clear close up photos of each item). For some items you do have to be quick tho.

https://www.tangentscalemodels.com

https://www.molocotrains.com

[eldomtom2]

25 minutes ago, shunny said:

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.

Presumably they have a fairly certain idea of how much the NR and Scotrail ones will sell, and are being more cautious to test the waters with the DRS and Virgin ones.

[mdvle]

1 hour ago, oleander said:

The amount of new locos beening offered has no effect on stock levels. each model will have a level set by the manufactor .

 

Meanwhile, in the real world it does.  A side effect of the combination of all the new models introduced in a year (and it's not just the 20 to 30 new tooled items OO is getting in a year, but an equal or likely greater number of re-runs) and how specific the models can be is that retailers now tend to find that a few weeks after release interest in buying the model drops off to almost nothing as the market moves on the to next release.  This means having inventory has become expensive, and potentially business ruining.  It is a difficult juggling act to have enough stock on the shelves for the casual buyer vs having so much that you risk financial ruin.  This is one of the reasons for the move to smaller hobby shops closing, as the bigger retailers have a bit of an advantage in trying to juggle things and greater cash flow to survive occasional mistakes.

 

1 hour ago, oleander said:

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.

 

The APT is a risky venture, and it is possible that if it wasn't being wrapped up in the halo of the 100th anniversary it may not have been made.

 

And I certainly wasn't suggesting it is expensive - if anything it is too cheap.  Compare a 5-unit APT at £395 vs £690 for the proposed Rapido Amtrak Turboliner 5-unit train ($750 converted to £, then added in VAT).

 

But it is still a 1 livery, relatively expensive product that run under wires for a short time period (unlike your HST example) - with the benefit of being somewhat iconic.  But still a risky move with a very significant investment by Hornby with at least 3 separate items having been tooled, and will be something that both Hornby and retailers will want to judge right.  Hence the (apparent) limited availability, so that people are aware if they really want it they can't wait for it to come and then get discounted 6 weeks later.

 

 

[mdvle]

1 hour ago, Talltim said:

I quite like the way the North American manufacturers Tangent and Moloco do business. They don’t announce anything until they have it in their hands. (And they have multiple clear close up photos of each item). For some items you do have to be quick tho.

https://www.tangentscalemodels.com

https://www.molocotrains.com

 

But they are also side businesses, the wages and living of the people behind those 2 are paid by full time jobs outside the hobby which changes the economics.

[mdvle]

1 hour ago, GWR-fan said:

When an EP is not available to view then a potential customer relies on the factory supplied computer image,  with the proviso that the image does not necessarily represent the finished article. 

 

If Hornby do move to a pre-order model then they really need to also move to having samples available prior to closing the order book (and ideally something better than a first EP so what is being judged is closer to what the final product will be).

 

1 hour ago, GWR-fan said:

Hornby are celebrating a supposed 100 years of manufacturing and yet to date are unable to match production to demand.

 

The UK market is currently in a state of change and it will take several years for things to settle down and everyone, Hornby included, to figure out the best way to proceed.

 

The solution may end up moving to the pre-order model, but Hornby isn't doing that (yet).

 

[dogbox321]

I think a few are going slightly off topic.

 

Last year, I did a thread on short supply of Network Rail Mk3's - R4909/10/11.

 

My thoughts are as follow:

 

1).  Short supply is a dangerous situation.   Firstly it means model shops will order "extra" to try to get what they want.  Second the customer will get peed off, if their chosen shop lets them down, and may even stick a finger up at Hornby.  Saying well if thats the case, I wont bother with Hornby anymore.  (Similar to when they tried direct selling), which actually they are!  R4909/10/11 were in stock on the website, whilst shops could not get them.  So effectively, if the same happens with products this year, then although Hornby "say" they now support traders, then if traders don't get the allocation they need, then if there is website stock, people will be FORCED to buy direct from the website.  

 

2).  If a company can sell for example 1500 units, but is actually only doing say 700 (the 2016 handbook is a useful reference stating that a normal run is 600-800 units), then that is a clear serious loss of profit.  I know supply chains can be complex and manufactures have to order components in etc., but surely no manufacturer is going to want to turn down, a significant order increase, even if you had to work with them, and say hold a selected few items back a little while to facilitate the larger production runs.  Surely motor, wheel manufacturers etc., are going to be happy to sell additional units too!

 

3).  With products like the APT, why not allow traders to place orders and work out a order quantity based on firm orders by a certain date and from that produce "this", plus some extra to round up to the next viable order quantity.

 

4).  To be honest, whilst I sympathy that estimating a production quantity is not the easiest thing to do, its ironic that for a company that is going to be 100 years old, in less that 7 days after announcing its catalogue, based on the initial feed about likely short supplies, it is highly likely that it is going to disappoint both traders and modellers by not being able to satisfy their orders/demand!  I don't think shareholders would be very impressed either, with a company that has seen its share price and profits drop considerably, unable to supply its customers with premium products that must have high gross profit margins.

 

I hope it can be a progressive and forward thinking company that can find solutions to these problems.  Its 2020, not 1920!

 

Best Regards,

 

C.

[mdvle]

4 hours ago, dogbox321 said:

1).  Short supply is a dangerous situation.   Firstly it means model shops will order "extra" to try to get what they want.  Second the customer will get peed off, if their chosen shop lets them down, and may even stick a finger up at Hornby.  Saying well if thats the case, I wont bother with Hornby anymore.  (Similar to when they tried direct selling), which actually they are!  R4909/10/11 were in stock on the website, whilst shops could not get them.  So effectively, if the same happens with products this year, then although Hornby "say" they now support traders, then if traders don't get the allocation they need, then if there is website stock, people will be FORCED to buy direct from the website.  

 

No manufacturer wants short supply, but oversupply is financially far more dangerous to a manufacturer than short supply.

 

A couple of days ago I posted about 2 guys in the US attempting to crowd fund a group of similar box cars that would share some parts but need a reasonable amount of tooling.  This is useful because as part of using IndieGoGo they have had to give us numbers - 6,000 boxcars divided up into 5 different(ish) model, for which they need $250,000.

 

Why do they need that much money upfront?  Because all the bills need to be paid upfront - design, tooling, production, shipping - before the models in arrive to be shipped to customers.   And if you are someone like Hornby, where retailers may not pay you for another several weeks (even though you have paid out this money to China already), it become very easy to see why oversupply - having paid for inventory nobody wants to buy - is dangerous.

 

Or, as they say in this quote from the IndieGoGo page, discussing the model train business in a generic way:

"Manufacturing is a capital heavy business, and everything is paid up front by the company and not recovered until models have been produced and shipped. Most of the time, one product's profits is a significant portion of the funding for the next product. Delays due to cash flow issues from lower-than-expected sales, receivables, and even external sources can cascade, delaying and threatening future projects."

 

Or, short supply is much better than oversupply.

 

https://www.indiegogo.com/projects/tall-pratt-truss-single-sheathed-box-and-auto-cars#/

 

4 hours ago, dogbox321 said:

2).  If a company can sell for example 1500 units, but is actually only doing say 700 (the 2016 handbook is a useful reference stating that a normal run is 600-800 units), then that is a clear serious loss of profit.  I know supply chains can be complex and manufactures have to order components in etc., but surely no manufacturer is going to want to turn down, a significant order increase, even if you had to work with them, and say hold a selected few items back a little while to facilitate the larger production runs.  Surely motor, wheel manufacturers etc., are going to be happy to sell additional units too!

 

So, what happens to the factory while you wait for these additional parts?

 

Do you pay the workers to sit and play on their phones?  Or does the factory say tough luck, you lose your production slot, try again next year as the start on the next project in the queue?

 

If you own an assembly factory your number one goal is to keep the factory busy for every working hour of every working day.  That means as best as possible keeping to the production schedule, which means yes they will if necessary turn down an order increase if it screws up their production schedule.

 

4 hours ago, dogbox321 said:

3).  With products like the APT, why not allow traders to place orders and work out a order quantity based on firm orders by a certain date and from that produce "this", plus some extra to round up to the next viable order quantity.

 

Perhaps timing?

 

The APT rumour is an interesting one given that it is not expected until December, which in a way suggests that Hornby may be planning on having it arrive in time for the Christmas shopping season.  If this is the case, then it means that Hornby will have to carefully work the schedule backwards from their hoped for arrival date, allow the shipping time, ..., time for manufacturing.  If you are working a schedule like that then it means you are booking a firm production slot late last year, and that allows no flexibility to suddenly add another 500 units at the last minute.

 

(to be clear the above is just guesswork on one possible explanation, not a fact)

 

4 hours ago, dogbox321 said:

4).  To be honest, whilst I sympathy that estimating a production quantity is not the easiest thing to do, its ironic that for a company that is going to be 100 years old, in less that 7 days after announcing its catalogue, based on the initial feed about likely short supplies, it is highly likely that it is going to disappoint both traders and modellers by not being able to satisfy their orders/demand! 

 

Some perspective please.

 

The only item that is likely to disappoint people at this point is Rocket, and even at that we still don't know the fully story on the non-collectors edition.

 

The other items are just second hand comments about possible short supplies, maybe.  And even if a Hornby rep did make the comments, there can be any number of reasons including just encouraging retailers and consumers to not play the wait and see game and hope for deep discounts - a practice that some on here still suggest.

 

4 hours ago, dogbox321 said:

I don't think shareholders would be very impressed either, with a company that has seen its share price and profits drop considerably, unable to supply its customers with premium products that must have high gross profit margins.

 

Shareholders (and at this point there is only one shareholder that matters given they own most of Hornby) are even less impressed when you end up filling warehouse with unsold inventory, and then selling it at a loss to make space in the warehouse, and then customers don't buy your next round of products because they are waiting for the fire sale in 12 weeks, and repeat...

 

In fact, you could perhaps make an argument that the previous Hornby management was replaced precisely because they were constantly ordering too much inventory and being forced to clear it out, with resulting disastrous results to the profits.

 

4 hours ago, dogbox321 said:

I hope it can be a progressive and forward thinking company that can find solutions to these problems.  Its 2020, not 1920!

 

Well, there is an answer - the preorder system combined with making announcements throughout the year.

 

Preorders allow you to base your production orders on actual demand.

 

Announcements throughout the year mean you can better keep the production pipeline flowing.

 

For example, take a look at Athearn.  Every month 5 or 6 announcements, a preorder date that is about a month later, and an estimate delivery date that is about 12 months later.

 

In this way they keep their production pipeline, and thus their cash flow, going on a regular basis month after month after month.

 

http://www.athearn.com/Articles/Hobbywire.aspx

 

 

[shunny]

One challenge already faced by Scoonie Hobbies was that their allocation of some product such as Mk2 in Drs and class 50 in GBRF were  all taken up before the catalogues have even arrived. So their issue is customer will buy a catalogue and like in previous years ask to place an order, to be told sorry you have to go elsewhere as we cannot get stock for standard catalogue items not marked as Ltd edition and not due to be released until next winter in some cases such as Drs coaches.

This system of pro rata allocation means big players such as Rails and Hattons still get the bulk and small shops loose business as quantity dictated by Hornby. So again customers question why they have none of some items to pre-order but Hornby website and Hattons can preorder, they are a small shop so are at the bottom of allocation list for quantities.

The worry is that if you say to some one I can get some of your order but not all do they next time place order elsewhere because they want to make sure they get everything and you loose all their business to an online retailer?

 

 

[Ouroborus]

Maybe Hornby decide on a production run that they are sure should sell, prior to the announcement.  Then look at the subsequent pre-order numbers coming in to guage the viability of a second run in 2021, 2022, 2023

[The Stationmaster]

12 hours ago, shunny said:

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.

First of all define 'limited'.  Simple answer is that we don't know what it is.  Chinese factory runs are normally in multiples of 500 (with a handful over that amount) and only likely to come down to that number when multiple livery versions are ordered, if you only order the one model/livery variant you will probably have to order at least 1,000.   But the second part of the question is what is the size of the potential market?   If the expected market is believed to be quite small than 500 might be the right number (if you can buy that few), but if the potential market is believed to be larger then do you order 1,000 or 2,000 i or whatever quantity you care to think of?

 

Inevitably if you are ordering in advance of release to the market and your business model is to improve sales while minimising unsold items but, very importantly, to head for profitability and a good return on investment/money borrowed for investment you are bound to be cautious when ordering items before they are announced.   And if you are to maintain your place in the market and deliver some of what it wants you are will advised nowadays to have some items in your new year's range ordered before you announce that new range.  And that works even better if you want to bolster your final quarter sales numbers - which looks to be a key ingredient at Hornby at present - if you announce in January and can get those models to market before your financial year ends.    

 

So it will pay Hornby in more ways than one to have some pre-ordered (from the factory) new items delivered before financial year end and it will be even better if they are sell outs, that's a good way to cheer up your shareholders.  And don't forget that at the moment an essential part of Hornby's management strategy is to cheer up their shareholders by an improved sales and financial performance.   Which, of course, also shows that the new management has a successful strategy.

[Georgeconna]

I did not order a rocket as I would perfer to see one in action first over points n all that jazz. I am not spending me money on a potential model that ain't capable of running over normal track work. My money is still in my pocket for now. If it's sold out then that's my tough luck but no doubt it will pop out again at some stage.

[Dungrange]

5 hours ago, mdvle said:

Pre-orders allow you to base your production orders on actual demand.

 

I agree with everything you said, but I think the problem is that many people don't fully understand the long lead times to production and the term "pre-order" can have has slightly different meanings when applied to different manufacturers.

 

Bachmann, are regularly criticised on here for the time that it takes them to get models to market from the date of announcement, but the obvious advantage of their approach of announcing a model early, is that they can use pre-orders from retailers to not only specify production quantities of individual batches of models but also to prioritise development resources.  When resources are constrained, then priority should be given to what is considered likely to be the most popular model (ie the one with most pre-orders from retailers).  However, in this instance, customers can place a pre-order at their local retailer or favourite on-line retailer without financial commitment. 

 

Companies like Revolution Trains take this a step further and use pre-ordering as the only way to ensure that you get a particular model.  The factory specify that the minimum order quantity is 1,000, so the order book for a particular model remains open until that number of pre-orders is reached.  The final number of pre-orders at the cut off date may be 1,472, so they order 1,500 models to be delivered in nine months time.  In this case payment, or at least a 50% deposit is paid up front, so placing a pre-order is a commitment.

 

Hornby, take the opposite approach of only announcing models when they are either in production or at least have a production slot booked, so that they can be fairly certain that an announced model is likely to be in the shops within the target 12 months.  In this case, although you can pre-order a model at a local retailer or favourite on-line retailer before it's delivered to the shops, it is already too late for this "pre-order" demand to be fed back to Hornby.  Hornby have already made the decision prior to announcement that they will produce, say, 2,000 models of XXX.  This decision was made when they booked their production slots last year. 

 

That therefore means that they need to split the batch when it arrives in whatever manner they perceive to be fairest.  If say 5% of all sales of Hornby models goes through Hattons, then it won't be unreasonable for them to assume that 5% of this batch should be allocated to Hattons - 100 models.  However, the sales through individual small local retailers may be just 0.1% of all Hornby sales, so it would be reasonable for these retailers to be allocated just two models each.  Who they sell them to is up to them.

 

The problem for small retailers is that once those two models are pre-sold, they can't get any more unless other retailers don't take up their allocation.  Hornby don't have other models to cater for any additional pre-orders.  It may be the case that half way through the year, Hornby are informed that retailers X, Y and Z don't intend to purchase any of model XXX and therefore these could be made available to other retailers, but there is no guarantee that will happen, especially not for models that generate a lot of excitement and pre-orders following announcement.

 

The only way out of this "problem" for Hornby, would be to move in Bachmann's direction and announce models before production slots are finalised, so that those who order within say a month of the announcement could be guaranteed to get their model, but that would mean announcing their 2021 range at the start of 2020 - or moving to rolling announcements a year in advance.

 

It would still mean that those who really want a model need to pre-order it, but it's not essential provided your willing to take the risk of missing out.

[Dungrange]

19 minutes ago, Georgeconna said:

I did not order a rocket as I would perfer to see one in action first over points n all that jazz. I am not spending me money on a potential model that ain't capable of running over normal track work. My money is still in my pocket for now. If it's sold out then that's my tough luck but no doubt it will pop out again at some stage.

 

I'm doing the same.  I quite fancy the model, but it is certainly not a core must have purchase, as it doesn't fit with any of my other stock and I have no interest in modelling the Rainhill Trials.  However, not all of Hornby's customers are railway modellers.  For many, the model will be purchased and put in a display case or simply purchased and kept in it's box as a collectable.  The Limited Edition model is probably primarily targeted at this market, although several railway modellers may well purchase this for the nostalgic box or the hope that it will be the more valuable version in years to come.

 

However, if I purchase a model of Rocket, I want to be able to run it alongside my other stock, so I'd like to see reviews of the model's running characteristics before parting with money.  If it sells out and I don't get one, so be it.  I suspect that Hornby may produce a further batch in the future, but if they don't, so be it.

[ruggedpeak]

As a customer I have to say that the excitement of the 2020 announcement is tempered by the fact there is no guarantee I will be able to get the items I want (primarily the NR and DRS coaches) without a lot of messing about. Having had 2019 pre-orders cancelled by a box shifter when the items arrived in the UK and had pre-orders cancelled by Hornby themselves in the past, the fun goes out of it chasing round for items that should have been in the post.

 

I think it is misleading to call Hornby pre-orders "pre-orders", they are more expressions of interest that might or might not be fulfilled to suit Hornby and/or the retailer. If it keeps happening some customers will find other things to buy/model. Proper pre-orders are from the likes of Accurascale, Cavalex and RevolutioN, where at least you know you will get the item ordered. So whilst the financial realities need addressing now this should not cause long customer alienation.

 

I agree with the comments above, Hornby need to find a solution as it leaves the door open for others to come in. The competition is there and can deliver the products ordered, the reality is Hornby can't right now if the items are popular. If pre-ordering was the only issue to think about, Cavalex would have the upper hand on the 91's.

 

 

[Legend]

Well I sought out a local model shop yesterday, there aren’t many around . The guy there told me he had been trying to get in touch with his rep . I apologised to him and said I’d ordered Rocket from Rails because I believed they were selling out . So it’s to be hoped that the smaller shops are protected and get some sort of allocation to sell . That’s what keeps them going after all. 

[Bernard Lamb]

There is nothing to prevent people from "pre-ordering" a model from several suppliers.

In a case of suspected severe under production I can see this happening.

Will we reach a point when the suppliers start to ask for a deposit?

There is nothing to prevent any customer returning or declining any model if it is not to the specification that they expect.

As the final details are vague I can see this happening.

I don't buy the "I want to se it running" comments. All stock runs to a respectable standard these days.

I do go along with the concerns about just what details a model will depict.

For example with the A2 variants "late crest" does not specify any details such as top lamp iron and number plate position.

There are detail variations that are more subtle than simply a different boiler and fittings and insignia.

If these sell out I can see further models being produced as is the case with the A3 and A4 classes to cover other variants.

Don't say they have not done that on the original P2, that is an exception to the normal level of models. A long past and best forgotten, period in the history of Hornby.

Oddly enough I get a banner advert from Hattons for the original W1.

Are they selling less well than other models or is it a case of the flavour of the weekend?

Bernard

[phil-b259]

14 hours ago, GWR-fan said:

When an EP is not available to view then a potential customer relies on the factory supplied computer image,  with the proviso that the image does not necessarily represent the finished article.  The image used by many retailers and even on the Hornby website of the current twin tender A4 showed the loco with valences fitted and even after the model was released retailer website still reflected the loco with valences.  Of cause those in the know realised that as it was a 1/1 representation of the loco as currently stored then the model would be sans valences.  Those in the know also were aware that the cab number and roadname on the supplied computer image did not reflect the state of the loco when it ran with valences fitted.  However,  very few are that knowledgeable and rely on a factory supplied image, usually not of the model but a computer generated image.

 

How is one to pre-order knowing that the supplied image may or may not reflect the actual model.  Some images are so realistic that at times it is hard to distinguish between a computer generated image and an actual image of the model.  Hornby has a history of the released model not exactly matching the image on their website,  an image used with permission by many retailer websites.  A recent class 60 release had the box artwork correct but the actual model livery incorrect.  There has also been much debate over the difference between a supplied image livery and the colour tone actually used by Hornby on their steam outline locomotives.  Quite often the livery on the released model appears washed out whereas the image on the website shows a full rich tone.

 

With Hornby pushing the hobby towards pre-ordering then surely it is incumbent on Hornby to be accurate in the images they use to advertise their products.  When a customer goes to a fast food store for a hamburger there is a marked difference in the size and quality of that burger in the advertising images than the actual product we purchase.  The advertising world is deceiving us and yet we continue to purchase these products.  Hornby wants us to pre-order a product based on possibly inaccurate images and limits production to only those pre-ordered numbers.  Retailers become merely a clearing house for pre-ordered items.  What is the point then of having a retailer?  Why not just pre-order from the manufacturer,  at least then the manufacturer has an accurate assessment of actual pre-orders and not duplicate orders lodged with multiple dealers.  Hornby several years ago drastically cut production numbers on a West Country Bulleid loco (was it "Wilton"?) leading to dealers not getting any of their pre-ordered stock or having their pre-orders slashed and aftermarket prices for the loco skyrocketed leading to a discussion back then as to the value of pre-ordering when the company would not even acknowledge the actual number of pre-orders for production.  I believe a rerun did occur but not for a long time afterwards

 

The hobby now is being driven into a frenzy of pre-ordering if we want an item irrespective of the buyer having any idea of the quality of the promised item.  The prudent modeller has generally awaited a release of a model or at least a favourable review in a magazine or website before actually buying an item.  If one awaits release now then the chances are that the model will be sold out long before the release date.

 

Hornby has regularly shot itself in the foot by releasing a second run of a model that is still sitting unsold on dealers' shelves.  Is the buyer responsible for a production mistake by the manufacturer?  Certainly a manufacturer would rely on a pre-order for production but should also be aware that past experience has warned buyers off pre-ordering.  I feel that if the manufacturer requires a pre-order then the company has a duty to produce exactly the item as depicted in a supplied image, otherwise a buyer is held hostage,  knowing that failure to pre-order almost certainly guarantees that the buyer will be forced to pay well above retail on an aftermarket site.  How many times have we read of store employees on this site bragging how many limited run models they have purchased at the store they work in only to onsell on an auction site for a profit.  Personally, any pre-ordering for the likes of say a locomotive should be quantity limited to one item per customer.  It does the hobby no good when insiders have an advantage over the general modeller.   

 

I will never pre-order because I have no faith that a released model will represent the item as depicted on a website image or if the quality will be satisfactory.  One cannot simply return a defective item for an exchange if there is no replacement available.  Hornby are celebrating a supposed 100 years of manufacturing and yet to date are unable to match production to demand.  Production these days with foreign contractors is unlike when inhouse.  These days a manufacturer has to contract out production,  usually bidding for a production time slot.  Production does not commence until every part required for the production number has been compiled.  Production then proceeds.  Reruns are not simply turn on the tap and another run commences.  The whole bidding process is required and the complete parts list compiled and then the rerun.  Thus when pre-orders only account for the production total then many miss out and the manufacturer loses not just a sale but potentially a loyal customer.

 

Don't complain if you miss out then!

 

Times have changed (and not just as regards model trains) - manufacturers ARE NOT going to go back to previous business practices which saw them make big losses or have capital tied up in models / parts sitting on shelves for months (or years on end) just so you can wait till you can inspect the product before making a decision to buy or not.

 

As any sane accountant will tell you they are wasteful (from a cooperate perspective)  practices to be consigned to the dustbin of history which do not provide good value for shareholders.

[Widnes Model Centre]

15 minutes ago, Legend said:

Well I sought out a local model shop yesterday, there aren’t many around . The guy there told me he had been trying to get in touch with his rep . I apologised to him and said I’d ordered Rocket from Rails because I believed they were selling out . So it’s to be hoped that the smaller shops are protected and get some sort of allocation to sell . That’s what keeps them going after all. 

 

We are already in a similar position. I placed my order within an hour of the announcements. I received an email later that day to say that our orders for certain loco's had been cut. I suspect that our orders would have been one of the first received by Hornby. We have already sold out of the Rocket LE on A pre-order. As the model shop nearest to the actual location of the Rainhill Trials this was a big disappointment.

 

None are available from a nearby shop in our town, already sold out on pre-order. But across the Pennines I can pre-order.

 

So did Yorkshire get a larger allocation than the old Lancashire? I hope not.

 

The Hornby Range Launch continues this week and for those Retailers attending I would presume that they have had certain loco's pre-allocated for them. I cannot see a situation where those attending earlier are able to order everything and leave others with nothing.

 

One a personal note. Great to see Hornby attracting so much interest with their announcements. Any shops that don't want their Rocket LE? I wanted one for myself

[gc4946]

I've started pre-ordering not knowing if shops will get their allotted share - so far this year I've pre-ordered the R3810 standard edition Rocket pack and R3702 Hornby 0-4-0ST Peckett "Daphne" (I knew a relative with that name) because I know previous versions quickly sold out and my preferred loco is in an attractive lined maroon livery.

[Talltim]

14 hours ago, mdvle said:

 

But they are also side businesses, the wages and living of the people behind those 2 are paid by full time jobs outside the hobby which changes the economics.

That’s as may be, but as a selling technique it works on me. I see something from one of the bigger companies and think, “that looks good, I’ll get it when it comes out”

In the meantime Tangent or Moloco release something and I buy it. When the bigger company’s model comes out I’ve already spent my money!

[The Johnster]

21 hours ago, phil-b259 said:

 

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

Well, age is only a number, but I've got a higher number than most people, though probably an average number for an RM Web contributor (I'm the high end of 67, and will be within two years of my biblical allotted span in just over a month.  The tick of the clock is getting louder, and I'm becoming increasingly wary of chaps in long hooded black cloaks in case they're hiding a scythe and an hourglass in there...). In these circumstances I am less willing to pre-order an item than I might have been a decade ago as I've had a bit of a warning shot fired across my bows lately regarding my health and cannot allocate money to spend on stuff that a) I don't know I'm going to be around to collect, and b) don't know how long it's gonna take to turn up, a situation I expect to become more of a factor in my planning over time, and certainly not less.

 

Sorry if this is a bit morbid for a Sunday afternoon, but I'm just being realistic.  We are told that the hobby is an ageing one (mind, I've been listening to this for more than half a century) because the disposable income required to service it is the preserve of retired types who have paid off their mortgages and got rid of the kids, and I'm only a poor pensioner in a rented flat (cue violins).  The hobby does consist to a very significant extent of this demographic, though, and I feel that the pre-order system, while convenient for the manufacturers who have to plan ahead, is less convenient for their customers who may not have so much 'ahead' to plan!

 

The manufacturers have to make a profit to survive, and in this sense the real customers, who will vote with their feet and their wallets, that have to be satisfied are not us, but the shareholders and investors who back them.  I don't like this, but it is I feel the reality of the situation...

 

So, for me, and probably many others as well on this site, this is how age, and the length of time between ordering and deliver, come into it.  It's bein' so cheerful as keeps yer goin', yer know.

[phil-b259]

54 minutes ago, The Johnster said:

Well, age is only a number, but I've got a higher number than most people, though probably an average number for an RM Web contributor (I'm the high end of 67, and will be within two years of my biblical allotted span in just over a month.  The tick of the clock is getting louder, and I'm becoming increasingly wary of chaps in long hooded black cloaks in case they're hiding a scythe and an hourglass in there...). In these circumstances I am less willing to pre-order an item than I might have been a decade ago as I've had a bit of a warning shot fired across my bows lately regarding my health and cannot allocate money to spend on stuff that a) I don't know I'm going to be around to collect, and b) don't know how long it's gonna take to turn up, a situation I expect to become more of a factor in my planning over time, and certainly not less.

 

Sorry if this is a bit morbid for a Sunday afternoon, but I'm just being realistic.  We are told that the hobby is an ageing one (mind, I've been listening to this for more than half a century) because the disposable income required to service it is the preserve of retired types who have paid off their mortgages and got rid of the kids, and I'm only a poor pensioner in a rented flat (cue violins).  The hobby does consist to a very significant extent of this demographic, though, and I feel that the pre-order system, while convenient for the manufacturers who have to plan ahead, is less convenient for their customers who may not have so much 'ahead' to plan!

 

The manufacturers have to make a profit to survive, and in this sense the real customers, who will vote with their feet and their wallets, that have to be satisfied are not us, but the shareholders and investors who back them.  I don't like this, but it is I feel the reality of the situation...

 

So, for me, and probably many others as well on this site, this is how age, and the length of time between ordering and deliver, come into it.  It's bein' so cheerful as keeps yer goin', yer know.

 

But I still don't see the problem.

 

If health issues mean you find you do not wish to go through with your purchase then pretty much all retailers will let you cancel said pre-order without charge. If on the other hand things work out well then you are not denied a model you want through it selling out by pre-ordering.

 

As I said before - if the time frame between ordering and delivery gets too large then the price will probably have gone up - and retailers are legally obliged to get your consent before taking payment. If paying by card then card expiry issues may also come into play.

 

The only real issues with extended delivery times and pre-ordering is where non refundable deposits are taken but the product takes ages to appear - but such arrangements are rare and even where they do exist (such as the D class from Rails of Sheffield) then many retailers will exercise their discretion with refunds if the worst were to happen.

 

In short all this worrying over pre-orders is a smokescreen - at the end of the day you are simply worried that you may not be able to enjoy an announced model due to the length of time it takes to reach the shelves. That has NOTHING to do with the process of pre-ordering models, but is rather the natural human desire to not miss out on something you like.

 

 

[GWR-fan]

4 hours ago, phil-b259 said:

 

Don't complain if you miss out then!

 

Times have changed (and not just as regards model trains) - manufacturers ARE NOT going to go back to previous business practices which saw them make big losses or have capital tied up in models / parts sitting on shelves for months (or years on end) just so you can wait till you can inspect the product before making a decision to buy or not.

 

As any sane accountant will tell you they are wasteful (from a cooperate perspective)  practices to be consigned to the dustbin of history which do not provide good value for shareholders.

 

Stating that a business model has changed is not complaining, it is pointing out that not all are prepared to pre-order.  I recall not so long ago when GBP100.00 was the limit many would spend on a new model.  Now a coach can cost as much and GBP200.00 is now not an unusual price to ask for a model.  Some crowd fund sight unseen and some pre-order sight unseen, while others prefer to see what they are buying before handing over money.  I will never complain that I have missed out because apart from a sale I would not purchase a new model loco as I see no value in having the latest and greatest retooled model when I already have more than enough to satisfy my needs.  For some time now I have downsized to pre-owned models and only when I consider them to be value.

 

When a new start private company is able to offer pre-order without resorting to outside crowd funding and actually satisfy the demand and yet Hornby celebrating one hundred years of existence cannot even satisfy its actual pre-orders in just hours after the release of a new model then there is definitely something amiss with the Hornby financial structure.   I see little point in spending hundreds of thousands of pounds researching and tooling a new model simply to limit production numbers.   We waited a generation or more for an air smoothed Merchant Navy,  only to see a very limited release and now some two years or so later we finally see two further releases announced.  No doubt these will sell out quickly.  also, what happened to the 42XX, the 52XX and the72XX locomotives?   In a typical business model when demand exists you satisfy the demand.  Making an announcement and finding yourself unable to meet the demand will damage the relationship a customer develops with a manufacturer.  Is Hornby to become like a Danbury Mint or another of those manufacturers who cater exclusively for the collector market?  What is the point of releasing a catalogue when many of the items are unavailable to purchase by the time the catalogue finds its way to a hobby store?  Pre-ordering through a dealer network implies that a dealer will actually be able to place an order.  Given that other than those who knew beforehand what was to be released, most were not aware and yet it seems within hours of release even big dealers were unsure that their pre-orders could be satisfied.  Unsatisfied demand and empty shelves is a pathway to extinction.

[phil-b259]

4 minutes ago, GWR-fan said:

 

When a new start private company is able to offer pre-order without resorting to outside crowd funding and actually satisfy the demand and yet Hornby celebrating one hundred years of existence cannot even satisfy its actual pre-orders in just hours after the release of a new model then there is definitely something amiss with the Hornby financial structure.   I see little point in spending hundreds of thousands of pounds researching and tooling a new model simply to limit production numbers. 

 

Comparing Hornby with private companies (as opposed to PLCs) is not comparing like with like - the former is not under pressure to follow 'best business practices' as the City experts demand.

 

In the case of PLCs, City traders and shareholders believe you make the greatest profit by

(i) Restricting supply so there can be no discounting and margins remain high.

(ii) A continuing series of new products to excite the market.

 

The old school method of actually keeping large stocks or re-ordering are practices of the past and signify new management is needed to improve stockholder value. This attitude is why so many companies end up being bought up by hedge funds, venture Capitalists and suchlike, however good the returns are, the 'City' believes there is much more money to be made by 'streamlining operations'

 

Hornby themselves have fallen victim to such firms before and it nearly killed them - so a keeping the City onside is quite critical

 

Take a look at retail and you will find those providing the greatest returns for shareholders are those who respond quickly to market trends and sell out quickly.  This is particularly obvious when it comes to 'Fast Fashion' as its known with nimble companies (admittedly mainly internet based) only procuring limited stocks which sell out quickly. Traditional retailers which try and have plenty of a certain item to sell are being outmanoeuvred and in many cases going bust.

 

Model railways are no different - it is in Hornby PLCs financial interest to keep product prices high - making them hard to come by or sell out quickly is a sure fire way of doing this. They know that there is unlikely to be very much by the way of direct head to head competition amongst manufacturers as the size of the model railway market is too small for such things to do anything other than reduce the financial return of both parties. If you sell out of  then you can make another a year or two later and be fairly sure they will sell out quickly too - all of which makes the financiers very happy.