How many models in normal product run

[PM47079]

I was wondering if a Bachmann limited edition is just over 500 models,how many models would be in a normal product run. I was guessing possibly 1500, but would be interested in whether Bachmann and Hornby release similar batch amounts of standard releases?

[dibber25]

I was wondering if a Bachmann limited edition is just over 500 models,how many models would be in a normal product run. I was guessing possibly 1500, but would be interested in whether Bachmann and Hornby release similar batch amounts of standard releases?

Speaking generally and not with specific relation to Bachmann, production quantities and limited editons should not be confused. A limited edition - whatever the quantity - means that it won't be run again in that form or livery. You can have a production run of 500 if you think that's all you'll sell but it will be expensive to recover your costs, so you might do several batches of 500. You can do that if you haven't described it as a LIMITED edition. A production run will usually be several thousand but may be split into several different versions with differing quantities in each. The initial production run quantity will normally be decided by a combination of tooling cost, unit manufacturing cost, margin and price that the market will stand. Sometimes, if the end price comes out too high, you can reduce it by spreading the cost across a bigger production run - at the risk of producing more models than you can actually sell. It's a delicate balancing act, which is why you'll find some models sell out much more quickly than others. In the end there's no magic number - every model has its own level of sales and there's very little clue as to what that might be when you set out to plan a project. (CJL)

[PM47079]

Ah I see thanks for the extremely concise and interesting reply. I understand now a bit more how it all works. Glad I am not the one to try and work out what will sell and what won't!

[peach james]

The best advice I would have is go read through the Rapido newsletters, because Jason is far more open about this than his competition seem to be...

 

James

[34theletterbetweenB&D]

And a past datum: the 2007 NRM/Bachmann OO DP1 model first production run was - if memory serves - announced as 3,000, of which 500 were a special edition with display base and enhanced packaging, the balance of 2,500 sold in the then standard style Bachmann packaging. It was subsequently reported that the whole lot sold out on pre-orders within a fortnight from the announcement. (There has been production of versions since, quantities not known to me.)

 

A fairly rare instance of the numbers and sales performance becoming generally available.

[Stanley Melrose]

I suspect it's a question of what constitutes a day's production.  Think of it this way - the production line must be stocked with the parts necessary to produce a given number of models.  This is probably best done overnight or at least between shifts to avoid having assembly workers sitting idle while bins containing parts for one model are replaced with those for the next one and any assembly jigs and fittings are swapped.  In an 8 to 9 hour working day there are 480 - 540 minutes so organising each assembly task to take just under a minute would result in a day's output being around 500 units.  If the order is for several thousand units, that would mean 2 x several days' output but still assumes re-stocking of parts overnight or between shifts.

 

This would also explain why the notion that because the factory has produced a chassis with a combination of wheel diameter and spacing that this will be available for another model that might use these parts and perhaps also why there are so few spare parts available.  Everything will be produced in production runs of around 500 or multiples thereof and then the tooling goes back to stores or is scrapped.

 

Stan

[peterl]

at the risk of producing more models than you can actually sell. It's a delicate balancing act, which is why you'll find some models sell out much more quickly than others. In the end there's no magic number - every model has its own level of sales and there's very little clue as to what that might be when you set out to plan a project. (CJL)

 

Perhaps the producing companies should try doing some 'PROPER' market research!

 

Peter

[peach james]

Peter, by proper what do you mean? As I posted above, most of this ground has been covered by Jason in the various Rapido newsletters, including the #s that they define as being profitable to make. I think the current Rapids issue is mid car budd dome cars, which they would like to make more, but the market isn't big enough yet for them to retool the model they previously made. Rapido quote that they are looking at run sizes from 500 to 10 000 pieces, which makes sense. (And if I had a spare $100 000, I know what wagon I would order...). Jason has also covered a bit of the finances about making less detailed models (prime movers by Rapido), and how from the company's prospective, they don't make sense. They may from a modellers, but not from a company.

 

James

[34theletterbetweenB&D]

I suspect the potential for reliable market research is minimal. It is a small customer base, there's no truly reliable way of identifying and engaging with most of it at an economic cost, and a high proportion of the participants are 'unpredictable'. Trying to be polite with that last: what we may say we want can easily have changed completely in the interval before the finished model will be offered for sale. (Changed: modelling subject/date/region/location/operation; scale; hobby; circumstances; my mind; vitality.)

 

It is very noticeable that most of the RTR producers now have some kind of engagement process whether a club, website/forum, newsletter or other communication path; and I would imagine they are not doing this casually but as a way to get a handle on what the market response is likely to be. The problem is that those who are engaged cannot be assumed to be representative of the whole market. Should it happen that the incommunicative and thereby 'invisible' lurkers are interested in a new release in a significantly different proportion than the engaged group, it all goes horribly wrong.

 

Or as a former marketing director of my acquaintance used to remark ahead of product launches, 'the wheel is spinning, place your bets'. Seen it go both ways: an item that 'the customer base' repeatedly requested, goeth F-er-lop! big time; an item which was nearly cancelled because tests of customer reaction were so poor, suddenly took off like a rocket, and we didn't have sufficient production capacity for nearly two years.

[peterl]

I suspect the potential for reliable market research is minimal. It is a small customer base, there's no truly reliable way of identifying and engaging with most of it at an economic cost, and a high proportion of the participants are 'unpredictable'. Trying to be polite with that last: what we may say we want can easily have changed completely in the interval before the finished model will be offered for sale. (Changed: modelling subject/date/region/location/operation; scale; hobby; circumstances; my mind; vitality.)

 

Or as a former marketing director of my acquaintance used to remark ahead of product launches, 'the wheel is spinning, place your bets'. Seen it go both ways: an item that 'the customer base' repeatedly requested, goeth F-er-lop! big time; an item which was nearly cancelled because tests of customer reaction were so poor, suddenly took off like a rocket, and we didn't have sufficient production capacity for nearly two years.

You have it the 'nail on the head' there, but knowing your potential market does help. It is still possible to get it very wrong, that is the risk. But having got it right it does work.  I can confirm that from experience! Working from costs tends to cloud the issue. Companies need to find out what the market will pay. Demand will vary depending on the price, but don't assume that the cheaper it is will get you more sales.  Often the opposite is true!  See my signature re price!

 

Peter

[Andy Hayter]

There is one sure fire way of doing your market research.

 

Announce the model.

Ask for deposits (non returnable) or full cost.

Manufacture to that number (plus perhaps a few as spares)

 

Job done,

 

If that is the market that is being proposed, where I have to commit sight unseen, well I think I will be building even more kits.

[jjb1970]

There is one sure fire way of doing your market research.

 

Announce the model.

Ask for deposits (non returnable) or full cost.

Manufacture to that number (plus perhaps a few as spares)

 

Job done,

 

If that is the market that is being proposed, where I have to commit sight unseen, well I think I will be building even more kits.

 

Unfortunately it is the way the market is going, either via crowd funding or manufacturers who've adopted it as their business model. Not something I like but I can see the advantages to producers as it de-risks projects and in many cases manages their cash flow to a significant extent too. I bought the NRM APT-E (we all have our price) but it is the only model train I've committed to up front and paid a deposit for unseen and on the whole I'd rather buy models in my own time and take the risk of missing out.

 

On manufacturing, it needs to be remembered that because one producer needs a minimum order of X, or a margin of Y or costs of Z etc that this does not mean it is true for other producers. All companies have their own cost base, will have difference finance arrangements, different technical capability and efficiency etc and the various other differentiators between companies.

[The Johnster]

And that's not market research, it's just sales.  It isn't, for instance, trying to asses what the real demand for a product might be, and will either a) cause you to overproduce a product which is not suitably priced, resulting in you having to dump it on the market at less than production cost to try to recoup some of your outlay, or b) cause you to underproduce to the extent that your production run sells out almost immediately (easy to be fooled by this into thinking the product is a success; it isn't), months before the item is released (you have at least covered costs and made a reasonable profit, but not much because it is a limited run and you have argued yourself out of making more), while the punters snap it up and sell at a profit on eBay, which you've paid for.  Getting it right in such circumstances is pure luck, and your investors/backers will be watching like hawks...

[34theletterbetweenB&D]

... I bought the NRM APT-E (we all have our price) but it is the only model train I've committed to up front and paid a deposit for unseen and on the whole I'd rather buy models in my own time and take the risk of missing out...

 Interesting, I could have written that sentence with 'DP1, 'Ivatt Large atlantic', and 'Stirling single' substituted for 'APT-E'.

 

(My motivation for these aberrations, have built models of the first two from kits, neither completely satisfactory to me - tricky French Blue body colour and livery scheme, the crowded loco chassis and awkward balance respectively - and have often contemplated the 'how to' but never embarked on motorising the Kitmaster item. Difficult for a marketeer to make sense out of this eccentric behaviour.)

 

There is no other loco in the national collection that will again trigger this behaviour in me either. If we are anything like representative of model railway purchasers, then picking winners is largely guesswork.

[Zomboid]

I've bought one loco on pre order without seeing it. An Atlas RS11 - the only significance of that is that I had enough experience with Atlas to know that I would be getting a nice sounding, good looking machine which would run well.

So by the time I get it, we've had the EU referendum and the pound has significantly dropped against the US dollar costing me something like an extra £40 against the predicted selling price when I ordered it, and I take it to a Freemo meet where it runs like a 1 legged dog. (I think the track was extra dirty, as loads of grime came off the wheels at home later, and it's performed really well at subsequent meets that I've been to).

I'd do it again for an Atlas loco. I did something similar for a Bachmann RS-3, but I'd seen someone else's before, so that wasn't such a risk. Other manufacturers I'd have to consider their reputation - a new manufacturer I would probably avoid pre ordering from until I knew they made good products.

[Joseph_Pestell]

It's a bit easier these days with new manufacturers able to show 3D CAD renders and pre-production models. We get a much clearer idea of what the final product will look like.

 

I am more concerned with the financial stability of any new entrant.

[Dunsignalling]

It's a bit easier these days with new manufacturers able to show 3D CAD renders and pre-production models. We get a much clearer idea of what the final product will look like.

 

I am more concerned with the financial stability of any new entrant.

So long as you aren't being asked to put money up-front, does it really matter? 

 

John