If you were starting a new rtr manufacturer...

[Compound2632]

13 hours ago, mdvle said:

the only market that now matters (post 1995).

 

That's a very bold statement. Can you offer any evidence (not opinion) to support it?

 

My interest is in post 1895 - but not by much - am I an irrelevance in the market place? Hardly, as I have bought and will buy RTR where it is relevant to my interests. 

 

I should also point out that I am not recreating the railways of my youth (I'm not that old!) nor am I particularly tempted to do so. I don't think I can be the only one.

[billbedford]

Those who can do. 

Those who can't teach. 

Those who can't teach write endless threads about what they would do if they were in charge. 

[Legend]

Who currently owns the Tri-ang brand ?  Its not Hornby .  Hornbys masterstroke is that everyone knows the name Hornby . Theres a fair few know Tri-ang , although obviously dormant for 50 odd years in model railways , but that could be a way in , especially if targeting the value market.  If you were introducing a new range and the name was available at reasonable cost it might be worth it. 

 

Maybe the margin isn't just in locos and rolling stock but in  track and the whole system . How much money do they make on track and the basics ? Probably not much from folks on here , but if you were targeting the whole model railway market,  possibly . Track isn't inexpensive . Is it the straight platform section thats a basic molding , dates from 1962, with a facelift in 78 but sells for £6? Got to be margin on that . £1 for 6 inches of track?

 

A new entrant would need something new , a gimmick . With Mainline it was detail and they majored on it in their first catalogue . Compare a Mainline J72 with the concurrent Hornby J83 and remember the wow factor at the time !  How about a track system with proper sleeper spacing , still sectional but completely new .  That would get us all talking about it, attract attention. You need something that will distinguish a new range from others . 

 

But I still think its unlikely that someone will come in and manufacture a full new range in one go .  Hattons/ Rails/Whoevers next will continue with commissions and pick off models.  But maybe new ranges are appearing , just much more subtly . Look at what Rails are doing supplying point motors, is it DCC Concepts they are partnered with?  Maybe next there will be a station system , then a range of signals , a turntable etc etc . So not a new range with a big splash , but gradually entering market and eroding Hornbys total system . And the thing is , Hornbys actions are probably whats triggered this .  

[Kris]

17 minutes ago, Legend said:

Who currently owns the Tri-ang brand ?  Its not Hornby . 

I believe that it is owned by Charles Shave (or at least was in 2017). Depending what you read he appears to be based in either Hong Kong or mainland China. 

From what I can see it appears to me that he was more interested in the name and the ship models made by Tri-ang than in the railways. 

[phil-b259]

Ultimately the biggest problem with this thread is the opening premise.

 

To recap, we are asked to assume that an unnamed individual / organisation has a large but unspecified amount of money to invest in the model market and what models should they make.

 

Now the first rule of any ordinary business investment is fix a figure as to how much money you have to invest. The second rule is to thoroughly understand the target market, and the third rule is to target that investment to give the greatest financial return.

 

These factors have effectively been airbrushed out of the equation - yet they are going to be fundamental for any company looking to enter the market and will be what determines not only which models to make but how many projects to have on the go at once.

 

Yes in a fictional world we can pretend that the conditions are right for the introduction of a large range covering the entire spectrum detail wise, but that is simply not credible if you take time to study what has happened in the real RTR model world over the past decade or so. Yes its a complex picture, but the the best return on investment is in the highly detailed segment.

 

As such though a new entrant may well ask the hobby for its preferences to help determine exactly which models are likely to generate the biggest return, that process is not going to result in the huge number of models / range implied by Joseph.

 

Now thats not to say that we couldn't be asked to speculate as to which models might be successful for a new entrant - but such a question needs to come without the preconditions Joseph has listed in terms of sheer number of models, detail levels price or the 'taking on Hornby' agenda.

 

It is also stated that due to the Hornby / retailer issues there is definitely a large hole in the market to fill. Again this is not bourne out by a proper analysis as although there are short term problems, there is the very real risk that in a few years Hornby will have bounced back from their problems and take on this new entrant with vigour.

 

While direct duplication works in other business sectors, it has been proven to not provide significant benefits to modellers while at the same time depressing the returns generated from each model. Taking on Hornby with mundane stuff like a railroad 66 or a highly detailed steam loco is not going to end well and it would be a brave / foolish businessman to shove money in that direction compared to other areas where there is less risk of a poor financial return.

 

 

 

 

 

[mdvle]

3 hours ago, phil-b259 said:

To recap, we are asked to assume that an unnamed individual / organisation has a large but unspecified amount of money to invest in the model market and what models should they make.

 

Other than the having us decide the models, this is in a way a description of Accurascale.

 

They splashed onto the UK scene in January 2018 with their first UK item (24.5 ton coal hopper), which at that point was at the CAD stage.

 

And here we are today, more than 3 years since that date (and probably about 4 years since they decided to enter the UK market and started researching their first item).

 

So we can see what segment of the market is viable, and the product mix.

 

Key to note - they haven't gone head to head with Hornby...

 

 

[Joseph_Pestell]

9 hours ago, Dunsignalling said:

Really?

 

If that did turn out to be the eventual scenario, and Hornby (as they inevitably will) subsequently introduce models you want/need to create the layout you are building, you would go without just because you had to buy direct from them? 

 

 

100%, yes. And I see that others are doing the same.

 

9 hours ago, Dunsignalling said:

 

 

TBH, all retailing is currently in a state of flux, and the only thing that those who make their living from it can be certain of, is uncertainty. We notice how it affects those outlets and traders we deal with, and would greatly miss if they were no longer there, but the same applies in almost every field.  

 

 

 

Yes, that is totally true. It was already happening and Covid lockdowns have accelerated the process greatly with increased profits for the likes of Amazon.

[mdvle]

5 hours ago, Compound2632 said:

 

That's a very bold statement. Can you offer any evidence (not opinion) to support it?

 

No, because I didn't say that - you have selectively quoted my statement to entirely change what I said.

 

 

 

[Dunsignalling]

4 minutes ago, Joseph_Pestell said:

100%, yes. And I see that others are doing the same.

 

 

 

[phil-b259]

6 minutes ago, Joseph_Pestell said:

100%, yes. And I see that others are doing the same.

 

 

How many others?

 

Consumer Boycotts (which is what you are taking about by refusing to buy from Hornby if they adopted an 'online only must / buy from us direct') have a patchy record in forcing change - besides which they work best when the subject is emotive / human related (e.g. Apartheid) and involve large multi-nationals (e.g. Barclay's). I really cannot see it making the slightest difference to Hornbys strategy nor encourage others to step in and duplicate Hornbys products simply because you cannot by Hornby in model shops.

 

 

[Joseph_Pestell]

4 hours ago, phil-b259 said:

Ultimately the biggest problem with this thread is the opening premise.

 

To recap, we are asked to assume that an unnamed individual / organisation has a large but unspecified amount of money to invest in the model market and what models should they make.

 

 

The figures are out there for anybody that wants to take a look. Five minutes on the internet should be enough.

4 hours ago, phil-b259 said:

Now the first rule of any ordinary business investment is fix a figure as to how much money you have to invest. The second rule is to thoroughly understand the target market, and the third rule is to target that investment to give the greatest financial return.

 

 

I'm not sure is there is any such thing as an "ordinary business investment". Anything to do with model railways is certainly not ordinary. But the basics of what you have written are, of course, absolutely right, motherhood and apple pie. The people who have the best understanding of the market is retailers. But Hornby wants to by-pass them.

4 hours ago, phil-b259 said:

 

 

These factors have effectively been airbrushed out of the equation

 

Where???? Yes, I have not gone into the management accountancy aspects because I don't think most RMWeb members would find it a "good read". But that is rather a different matter from airbrushing.

 

4 hours ago, phil-b259 said:

 Yes its a complex picture, but the the best return on investment is in the highly detailed segment.

 

 

Is that proven? Everybody thinks so but we don't have direct evidence.If it is true, why are Hornby making losses (accepting that could be in other spheres)? Why are they re-issuing some fairly crudely detailed wagons from 30 years ago (Electrotren)?e of it for Hornby.

4 hours ago, phil-b259 said:

It is also stated that due to the Hornby / retailer issues there is definitely a large hole in the market to fill. Again this is not bourne out by a proper analysis as although there are short term problems, there is the very real risk that in a few years Hornby will have bounced back from their problems and take on this new entrant with vigour.

 

[Vistisen]

I think I would try to do something different. I would try to combine computer games and models. What about a range of trains ( simple and robust) fitted with small cameras, combined with a simulated real world computer game? You can drive a train in a physical world environment, but see it in an augmented reality. The real objects can include both rolling stock and buildings, and these are composited with computer generated images, possibly being shown in 3D via VR headsets. I think that kids (of all ages) would enjoy playing with it. Even serious modellers might find a use for it, either as a method of trying things put before really building them, or using it expand the scope of their layouts. You could for example physically model some of the platforms of a large station and be able to see, and interact with the rest of the platforms, having to wait for other trains to clear signals before a real model can get a path to the main lines. Or possibly have a train that runs into a fiddle yard and stops, but then turns into a 100% simulation where you can drive the train on to another station, either in the simulation or another ‘real’ model at the other end of the fiddle yard.

Edited May 24, 2021 by Vistisen

[Legend]

1 minute ago, Vistisen said:

I think I would try to do something different. I would try to combine computer games and models. What about a range og trains ( simple and robust) fitted with small cameras combined with a simulated real world computer game, so that you can drive a train in a physical world environment, but see it in an augmented reality. Where the real objects which can include both rolling stock and buildings can be composited with computer generated images, possibly being shown in 3D via VR headsets. I think that kids (of all ages) would enjoy playing with it. And even serious modellers might find a use for it either as a method of trying things put before really building them or using it expand the scope of their layouts. You could for example physically model some of the platforms of a large station and be able to see, and interact with the rest of the platforms, having to wait for other trains to clears signals before a real model can get a path. Or possibly have a train that runs into a fiddle yard and stops, but then turns into a 100% simulation where you can drive the train on to another station, either in the simulation or another ‘real’ model at the other end of the fiddle yard.

 

Getting dangerously close to computer simulation there Vistisen . I used to do that years ago , model layouts I'd seen at exhibitions , join them altogether to form a route and drive my train . Trouble is you don't need model railways to do any of it .   I used Trainz because it was easier to build the layout / landscape than MS Train Simulator at the time . I must admit I've lost track of who does what now .

[Joseph_Pestell]

4 hours ago, phil-b259 said:

It is also stated that due to the Hornby / retailer issues there is definitely a large hole in the market to fill. Again this is not bourne out by a proper analysis as although there are short term problems, there is the very real risk that in a few years Hornby will have bounced back from their problems and take on this new entrant with vigour.

 

 

 

Not is....., will be.

 

As I asked earlier, if you are a retailer who is going to lose 30% (or more) of your turnover because Hornby won't supply you:

1) Do you do something about it?

2) Do nothing and see your business fail?

 

No-brainer to me.

4 hours ago, phil-b259 said:

 

 

Again this is not bourne out by a proper analysis as although there are short term problems, there is the very real risk that in a few years Hornby will have bounced back from their problems and take on this new entrant with vigour.

 

 

 

This does not look like a short-term problem. Hornby got into this position a couple of years and then the new management made firm and binding commitments to a "level playing field". Yet he we are again!

 

I accept that things have moved on a bit in retail from 30 years ago but my mantra stands. In this industry we need shops. If Hornby destroy their retail network, they can not come back from that. They have their own subsidiary, Jouef, to prove the model. REE and Mistral have pretty much wiped them out in France. And Lima/Rivarossi has not done much better in Italy

4 hours ago, phil-b259 said:

While direct duplication works in other business sectors, it has been proven to not provide significant benefits to modellers while at the same time depressing the returns generated from each model. Taking on Hornby with mundane stuff like a railroad 66 or a highly detailed steam loco is not going to end well and it would be a brave / foolish businessman to shove money in that direction compared to other areas where there is less risk of a poor financial return.

 

 

One of the oddities of our little world is that there is scope to avoid duplication. How many different variants of Black 5 are there? How many of those have Hornby produced?

[Vistisen]

6 minutes ago, Legend said:

 

Getting dangerously close to computer simulation there Vistisen . I used to do that years ago , model layouts I'd seen at exhibitions , join them altogether to form a route and drive my train . Trouble is you don't need model railways to do any of it .  I used Trainz because it was easier to build the layout / landscape than MS Train Simulator at the time . I must admit I've lost track of who does what now .

Very true, but the difference is now that you can actually fit cameras inside OO gauge trains,  Even before that I have tried putting a go-pro camera on an open flat wagon and running it arround on my branch line, it gave a very different perspective on things.  

Edited May 24, 2021 by Vistisen

[Joseph_Pestell]

19 minutes ago, phil-b259 said:

 

How many others?

 

Consumer Boycotts (which is what you are taking about by refusing to buy from Hornby if they adopted an 'online only must / buy from us direct') have a patchy record in forcing change - besides which they work best when the subject is emotive / human related (e.g. Apartheid) and involve large multi-nationals (e.g. Barclay's). I really cannot see it making the slightest difference to Hornbys strategy nor encourage others to step in and duplicate Hornbys products simply because you cannot by Hornby in model shops.

 

 

 

I agree. But that does not change my decision in this regard. I will stand up for what I think is right.

[Dunsignalling]

Is there any real difference between Hornby moving toward selling direct and a new entrant doing so from the word go?

 

In any case, it's quite feasible that your putative Hornby-beater might follow suit, or if it turned out to be one of the existing big retail fish there's no guarantee they'd be willing to supply the minnows. 

 

I buy a lot of Hornby, not out of brand loyalty, but a pragmatic recognition that, in order to amass an even half-decent selection of Southern models, at least 95% of them will have to come in red boxes.  

 

John 

Edited May 24, 2021 by Dunsignalling

[phil-b259]

Just now, Joseph_Pestell said:

 

I agree. But that does not change my decision in this regard. I will stand up for what I think is right.

 

I don't think anyone (including me) is saying you shouldn't stand up for your beliefs.

 

However a distinction has to be made between what you or I believe should happen and what actually happens in the real world including an appreciation that what you hold dear may not be considered important by the majority.

 

Its a lesson lost on many that immerse themselves in politics and who then wonder why radical polices get rejected come election time.

 

 

[phil-b259]

9 minutes ago, Dunsignalling said:

I buy a lot of Hornby, not out of brand loyalty, but a pragmatic recognition that, in order to amass an even half decent selection of Southern models, at least 95% of them will come in red boxes.  

 

 

Indeed - and I would suggest that is the stance the majority of the model railway buyers take.

[Joseph_Pestell]

4 minutes ago, Dunsignalling said:

Is there any real difference between Hornby moving toward selling direct and a new entrant doing so from the word go?

 

 

Yes, I think that there is. Hornby have got where they are from being supported by retailers. There should be loyalty in return.

6 minutes ago, Dunsignalling said:

 

In any case, it's quite feasible that your putative Hornby-beater might follow suit, or if it turned out to be one of the existing big retail fish there's no guarantee they'd be willing to supply the minnows. 

 

 

No, there is not. Wholesaling can lead into cashflow issues. Interesting to note that Hatton's abandoned it very quickly. But that may have been tied up with the QC issues on the 66. I simply don't know.

 

It could indeed be that if such a project were to be launched by one, or even a few retailers, they would refuse to supply the smaller outlets. That's exactly why I suggested that a large number of retailers should get together and create an independent commissioning company which they would all have shares in. 

[D9020 Nimbus]

Online selling direct by manufacturers is common in many markets — not just in the UK. Atlas in the US for example. Also there are cases where manufacturers have taken a stake in an existing retailer or started their own retail operation.

 

Airfix did have a plan to create a comprehensive range — they just never had the time or the money to do so (and it was said at the time that the main reason for their demise was the financial drain caused by Meccano). Palitoy lost interest after a change of ownership.

 

You only need to build a comprehensive range if you're starting off in a new scale — TT for instance. Bachmann now have a comprehensive range — if it was feasible to challenge Hornby on "railroad" models, they would be doing it. To me, it seems Hornby Railroad is a place to recycle old tooling — Hornby have access to a lot of this, notably from Lima; a new entrant doesn't.

 

Quite simply, I don't think there's an opening for a new OO RTR manufacturer — at least not in the Railroad sphere. O-16.5, as suggested by others, is probably the best bet; Bachmann and Peco/Kato have 009 pretty well sewn up. There might be a market for TT, given the smaller houses nowadays, but establishing it would be tricky — Berliner-Bahnen tried starting a US range and went bankrupt (remains bought and developed by Tillig — who haven't tried to grow much beyond their home market).

 

Personally, there might be a gap for a new UK N gauge manufacturer — more likely it would cause Bachmann to spring into life as they did when competition with Dapol was at its height (and anyway they are getting more products out now: 8F, revised 31, class 40 in the last few months) — and anyway there is Sonic Models, while Revolution Trains are doing a fine job in bringing diesel and electric era prototypes to market in their own way.

 

Hattons are financially sound and they've been around a long time—I'm sure they can take care of themselves (and judging from their adverts, I think the answer is "second-hand").

[Joseph_Pestell]

6 minutes ago, D9020 Nimbus said:

Hattons are financially sound and they've been around a long time—I'm sure they can take care of themselves (and judging from their adverts, I think the answer is "second-hand").

 

I very much doubt that secondhand can even begin to replace the turnover of not having a lot of new stock, not lease because you have so much less of it to sell. There are also many people who just won't buy secondhand.

 

Declaration of interest: I do buy some S/H from Hatton's and I find that they are very good about describing any problems.

[Hal Nail]

45 minutes ago, Joseph_Pestell said:

Is that proven? Everybody thinks so but we don't have direct evidence.If it is true, why are Hornby making losses (accepting that could be in other spheres)? Why are they re-issuing some fairly crudely detailed wagons from 30 years ago (Electrotren)?e of it for Hornby.

 

I'm not claiming to be right or wrong here as I don't have the facts, but I got the impression on the Heljan 25 thread that they claimed the cost is mostly in the labour involved with added detail, when refuting someone's suggestion that a motorless should be a fraction of the cost.

 

The move to China was for the cheap labour and that's not in banging out mouldings, its the individual extras. Hornby tried to introduce design clever to avoid adding detail because it isn't as profitable.

 

I suspect manufacturers have been pressured into the detailed route because that's what people want, not because its a greater relative margin.

[Joseph_Pestell]

3 minutes ago, Hal Nail said:

 

I'm not claiming to be right or wrong here as I don't have the facts, but I got the impression on the Heljan 25 thread that they claimed the cost is mostly in the labour involved with added detail, when refuting someone's suggestion that a motorless should be a fraction of the cost.

 

The move to China was for the cheap labour and that's not in banging out mouldings, its the individual extras. Hornby tried to introduce design clever to avoid adding detail because it isn't as profitable.

 

I suspect manufacturers have been pressured into the detailed route because that's what people want, not because its a greater relative margin.

 

If you are making a large number (rare these days), labour cost is definitely the main element in the final price of the loco. That's why firms outsourced to China. On shorter runs, the development costs / tooling might occasionally outweigh the labour cost. Labour costs in China have increased greatly since decisions were made to outsource there. Hence, for example, Roco's decision to open a facility in Vietnam.

 

As you say, motors are not a factor. Most are probably costing 50p locally which is not much in the context of a £180 loco. 

[Dunsignalling]

54 minutes ago, Joseph_Pestell said:

 

Yes, I think that there is. Hornby have got where they are from being supported by retailers. There should be loyalty in return.

 

No, there is not. Wholesaling can lead into cashflow issues. Interesting to note that Hatton's abandoned it very quickly. But that may have been tied up with the QC issues on the 66. I simply don't know.

 

It could indeed be that if such a project were to be launched by one, or even a few retailers, they would refuse to supply the smaller outlets. That's exactly why I suggested that a large number of retailers should get together and create an independent commissioning company which they would all have shares in. 

Retailer groupings work pretty well in generalist fields, like groceries or hardware, but I doubt they would in as specialised a trade as model railways.

 

Let's say you could get (say) a hundred small/medium businesses to join forces to commission models. If they were spread out between John o'Groats and Lands End, I can imagine deciding what to commission would get very interesting and take so long that somebody else would always beat them to market. One way it might work would be for individual commissioners to cross-supply each other, but that's a very different scenario to what you propose.

 

Models that will sell like hot cakes in some areas will gather dust for a decade in others. My "local" retailer retired during lockdown and the shop closed, but his perennial gripe with Hornby had been their keenness to lumber him with loads of LNER stuff. Over many years he'd learned the hard way that his average local demand for such things consisted of two Flying Scotsmen in the twelve days of Christmas, a Mallard on the 29th February and next to nothing else, ever, except to specific order.  I suspect they tried to force-feed northern shops with SR and GWR models in a similar fashion! I would have loved to hear him trying to explain why, of the non-corridor Thompson coaches, he only wanted brake thirds in BR crimson livery.....

 

 John

Edited May 24, 2021 by Dunsignalling