Disappearing discount due to Demand?

[Chris M]

I've no idea of what the LGB market it like for the rest of the world, but I would be surprised if the British outline market was big enough for Chinese copies.

There is no rtr British outline stock from LGB or any other G scale manufacturer (but there is rtr 16mm and gauge 1). The copies are of what I think is German stock. Sales of G scale worldwide are very low compared to the smaller scales.

Edited April 1, 2018 by Chris M

[Butler Henderson]

I tired pre-ordering 2 Bachmann locos recently to lock-in what I thought was the price before stock arrived........only to find that twice, with two different shops, both increased the pre-order price a few weeks before stock arrived ! and would not even honour the price (it wasn't just a couple quid either)...so I for one will not pre-order again as the prices seem to increase willy nilly anyway so id rather wait till its in stock and then see if I want to pay the price.

Beats me why, limited editions and one offs excepted, people pre order Bachmann items. The lowest price on a Bachmann pre ordered item will be 15% off the price Bachmann quote at the point of release - you save absolutely nothing pre ordering, by waiting you may eventually find the item reduced further and/or post free and by not pre-ordering you will not end up with lemon if the model has errors; remember their first and second attempts at a 37, wonder how many have those merely because they pre-ordered them whereas if they had waited for it to be released would have realised it was not worth the money,

[Oldddudders]

Beats me why, limited editions and one offs excepted, people pre order Bachmann items. The lowest price on a Bachmann pre ordered item will be 15% off the price Bachmann quote at the point of release - you save absolutely nothing pre ordering, by waiting you may eventually find the item reduced further and/or post free and by not pre-ordering you will not end up with lemon if the model has errors; remember their first and second attempts at a 37, wonder how many have those merely because they pre-ordered them whereas if they had waited for it to be released would have realised it was not worth the money,

I’m sure it all comes down to the individual and his/her ‘need’ for the item. Wishlists and post-announcement threads are awash with tales of how this model or version would/will make someone’s life/layout complete. For those people, pre-ordering is a necessary precaution, and price may be secondary to supply. Others may be prepared to wait and see, recognising that they may not die in a ditch for want of that model, and loving a bargain.

[bike2steam]

There is no rtr British outline stock from LGB or any other G scale manufacturer (but there is rtr 16mm and gauge 1). The copies are of what I think is German stock. Sales of G scale worldwide are very low compared to the smaller scales.

 

Sorry, I think you misunderstood what I was trying to get at. I know LGB is not British outline, just a comparison in international demand between the two types ( LGB, and British rtr OO gauge), but still it's not important.

[Big James]

Talking from personal experience I didn’t set out to start collecting BR south eastern stock. But I’ve always had an interest in the railways of Romney marsh. Due to spending many happy weekends and summer holidays down that way growing up. But with the recent rise of limited runs and the feeling of now or never. I’ve started collecting stock for a one day layout based down that way. But I’ve still gotta complete my current layout before thinking of the next one. Even if I’ve got a germ of an idea in my head.

 

Big James

[Andy Hayter]

Beats me why, limited editions and one offs excepted, people pre order Bachmann items. ....................

 

The problem is how do you identify a limited edition or one off in advance.

 

Was the Bachmann C Class in SECR full fat livery a limited edition - probably, but I don't recall any advertisement saying so.

Was the Hornby Wainwright H Class in SECR livery a limited edition - no - or a one-off?  Possibly only time will tell.

 

But both were sold out pretty much on release.  I do sympathise with the caution about pre-ordering against unknown and uncommitted sales prices, but all shops I have dealt with have always given me the option to cancel once the price was known.

[The Stationmaster]

Perhaps, but is the way Hornby operates these days significantly different to how commissioners do things, albeit on a much larger scale?

 

John

 

One significant difference is Hornby's attitude to commissions although at present it is far from clear what it is or is likely to be next month let alone next year.  Bachmann seem happy, once again, to accept both development commissions (e.g Rails Caley 812) as is Oxford and Dapol whereas Hornby seem to have steered clear of that market area for some time.  Prior to the arrival of the current regime Hornby were not only actively seeking what are probably best called 'redecoration/minor detail (within existing tooling capability)' commissions but were reportedly prepared to work to a lower quantity than their past threshold of 1,000 off.

 

That situation has changed at least twice since the new regime arrived but they are at least proceeding with some (?all) of the previously contracted work although I don't know if they are still seeking new work in the way that they were a year or so back.  Quite why they've decided to drop business which would seem to be effectively risk free (in financial terms) for them I don't know but it does seem a bit like cutting off their nose to spite their cashflow face.

 

The trick of course for anyone in the business is to do what they're best at and undoubtedly in the context of the UK market knowledge of that market and the ability to research product for it is best done in the UK.  What then varies between various concerns is where the specification is turned into drawings and design - Hornby and Bachmann do it in the UK and are probably the only firm (apart from some Dapol items?) where that happens.  Everyone else (unless Hattons have changed their approach for their latest models?) puts the design work out to a factory in China although perhaps Heljan does some of its own design in Denmark?  But the key then for everyone, and where Hornby is no different from anyone else, is that approval of final design then of early printed and EP items plus livery samples is done in the UK.  Virtually everybody except for some items from Dapol (and maybe Heljan for part of the work?) has their production and the most critical stages leading up to it outsourced to somewhere or other but subject to approval at various stages before giving the green light for production.  The only difference with Bachmann is that they area subsidiary company of the one that does the manufacture while Oxford has a financial interest in at least one factory in China (possibly more than one).

 

 

So when it comes down to it almost everyone selling 4mm scale British outline locos and rolling stock is commissioning/contracting out (albeit as an internal contract in some cases) various, often critical, stages in getting a model from the initial idea to a delivered product but some do more detail work than others as part of the process.  And in some cases commissioners are effectively working through two levels of contractor with the first being a UK 'manufacturer' and the second being a Chinese factory where the model is actually made.  (And there is of course also a Canadian manufacturer getting increasingly involved in the British market but, again, the actual production takes place in China.)

[Dunsignalling]

Beats me why, limited editions and one offs excepted, people pre order Bachmann items. The lowest price on a Bachmann pre ordered item will be 15% off the price Bachmann quote at the point of release - you save absolutely nothing pre ordering, by waiting you may eventually find the item reduced further and/or post free and by not pre-ordering you will not end up with lemon if the model has errors; remember their first and second attempts at a 37, wonder how many have those merely because they pre-ordered them whereas if they had waited for it to be released would have realised it was not worth the money,

 I don't intend to get caught out the same way with "Beachy Head" in the way I was with the "Bluebell" version of the C Class, which was supposedly a normal production item and was never publicised as anything else. What prompts me to pre-order is when I specifically want "Locomotive A" rather than just "a locomotive".

 

That was, admittedly something of a freak occurrence, and for most other things your strategy will be fine and dandy so long as Bachmann don't decide to follow Hornby's lead in "adjusting" their batch sizes to more closely reflect immediate demand. If they ever do, the 15% "standard" discount won't last five minutes.

 

The models nobody else wants are always the cheapest, but that's not much help if you don't want one either..........

 

John

Edited April 1, 2018 by Dunsignalling

[The Stationmaster]

The problem is how do you identify a limited edition or one off in advance.

 

Was the Bachmann C Class in SECR full fat livery a limited edition - probably, but I don't recall any advertisement saying so.

Was the Hornby Wainwright H Class in SECR livery a limited edition - no - or a one-off?  Possibly only time will tell.

 

But both were sold out pretty much on release.  I do sympathise with the caution about pre-ordering against unknown and uncommitted sales prices, but all shops I have dealt with have always given me the option to cancel once the price was known.

 

I suspect that once again we get back to the individual purchaser and their perception of 'want' (or even 'need') when a model is announced for future production.  The only thing which might make a difference if something is announced as a limited edition is that it might incentivise folk to get their order in quick and that in some cases it might make people order from more than one retailer.

 

It was suggested to me by one of my 'local'' retailers when ordering a couple of locos recently that it was good idea to get the order in now so that he stood a better chance of not only accurately ordering what he knew he would sell but he'd also stand a better chance of getting sufficient examples of one of the models I had ordered.  No talk of 'limited edition' but considerable expectation on his part of the model being popular and of demand for it being high.  My only hope is that as a smaller shop he will be supplied with what he actually orders instead of being rationed because the 'manufacturer' got their numbers wrong. (a good way to get the numbers right is of course to total up the pre-orders and order accordingly from the factory - just like Hornby used to do in another time).

[jjb1970]

I guess a lot depends on what people want, how important a release is to them and in some ways how important models are to them. I pre-ordered the NRM APT-E, but that's the only pre-order model I've ordered and I very rarely bother pre-ordering models slated for regular release. I have missed one or two releases I'd have liked but remarkably few and personally I'd rather take that risk and just opt out of pre-ordering. I've never gotten involved in any crowd funded projects either. If these things work for others then great, I'm certainly not on any sort of crusade or banging a drum but my preference is to not go for it. If I miss releases then c'est la vie, it's not like there aren't plenty of other models I can buy.

[Bobo01]

Europe is very different, however, many still make their own.

 

It may be a surprise here, but Brawa and Hornby are still supplied by Sanda Kan.

(Sanda Kan folded in 2012, but there is a new entity founded in 2015).

http://www.sdkmode.com

 

There are many other entities in China (regalway, refined, SDK, shine dew etc) as well as Piko, Kader, Oxford, Rapido etc), and those outside China such as Fuggerth (Hungary), Roco (Vietnam etc), Vi-Trains (Italy) and many more, even our own Dapol still manufacturers in Wales.

 

I suspect in the future Chinese manufacturers will become suppliers of parts direct to the market, and model shops will change from rtr specialists, into 3D printing and chassis assembly operations from those parts.. though the 3D tech needs to come along a bit more first, and include fine grain printing in colour.

 

But wholesaling from China to the UK already happens, look at ebay you can buy 100 painted figures for <£20 or buy 5 from Presier for the same price. There’s one manufacturer making Ho/OO electric lit signals, street lights etc for £2-3 each selling on ebay.

I suspect it will end like Rover.. let the distributors fail, acquire the toolings for pennies and commence direct sale of models and parts to the market. What will struggle is accuracy on rtr and probably few new toolings..but then they won’t need new toolings as commissioners are mopping up the last viable ones right now for them.

Yes, a living manufacturer is very important

[JSpencer]

Was the Bachmann C Class in SECR full fat livery a limited edition - probably, but I don't recall any advertisement saying so.

.

The Bachmann C in full fat SECR livery was a standard production run.

But It was the first RTR loco in full fat Wainwright SECR livery. Before then there was only an N class in SECR grey (not as pretty!) and the Wrenn R1 which fetched silly money and is hardly a serious representation of Wainwright's livery on that loco (it is clearly and loosely based on a photo of 69 in K.Marx book about Wainwright).

And the Bachmann C loco in question is preserved.

These three factors (1st accurate RTR model in said livery, pretty and preserved) lead to a sell out (it was cheaper back then too).

 

Since then, there has been the Simplified Wainwright livery C class (which is still pretty), a terrier (which sold cheaply in the end), 2 H class (one out later in this year), 2 P class due in May and another terrier... So those people just wanting just a pretty SECR are probably satisfied.

Edited April 9, 2018 by JSpencer

[adb968008]

Wasn’t their a second run of the simplified livery on the C class ?

[Dunsignalling]

I suspect that once again we get back to the individual purchaser and their perception of 'want' (or even 'need') when a model is announced for future production.  The only thing which might make a difference if something is announced as a limited edition is that it might incentivise folk to get their order in quick and that in some cases it might make people order from more than one retailer.

 

It was suggested to me by one of my 'local'' retailers when ordering a couple of locos recently that it was good idea to get the order in now so that he stood a better chance of not only accurately ordering what he knew he would sell but he'd also stand a better chance of getting sufficient examples of one of the models I had ordered.  No talk of 'limited edition' but considerable expectation on his part of the model being popular and of demand for it being high.  My only hope is that as a smaller shop he will be supplied with what he actually orders instead of being rationed because the 'manufacturer' got their numbers wrong. (a good way to get the numbers right is of course to total up the pre-orders and order accordingly from the factory - just like Hornby used to do in another time).

I was under the (possibly mistaken) impression that Hornby's starting point for deciding batch sizes has been based on the level of dealer pre-orders for at least the past year.

 

If it is the case, pre-ordering (and more to the point, not pre-ordering) will have repercussions for all would-be purchasers.

 

Might Bachmann's decision not to produce several previously announced items have been based on similar calculations?

 

John

Edited April 9, 2018 by Dunsignalling

[JSpencer]

Wasn’t their a second run of the simplified livery on the C class ?

Not as far as I am aware but they did do a club special limited edition grey one.

[JSpencer]

I was under the (possibly mistaken) impression that Hornby's starting point for deciding batch sizes has been based on the level of dealer pre-orders for at least the past year.

 

If it is the case, pre-ordering (and more to the point, not pre-ordering) will have repercussions for all would-be purchasers.

 

Might Bachmann's decision not to produce several previously announced items have been based on similar calculations?

 

John

Almost certainly.

 

When I worked in the Signalbox back in the 90s, we would get list from the manufacturers, go through it, advertise the lot and from the first pre-orders, estimate how many we were likely to sell (with a dose of product and market feeling thrown in).

In those days, Hornby at least were expecting us to give them our orders quite early and doubtless their production runs were based around that.

 

To be accurate, you probably need about 6 months to determine how many should actually be pre-ordered and made. But 6 months is a really long time and could cause heavy delays in a production schedule for an item due for release very soon (I suspect there is some number crunching going on right now at Hornby HQ for the Nelson as this is due soon, but they may have all the pre orders in yet).

 

Pre-orders are great for estimates on all new releases of a new class. And the first should normally sell out (unless it is duplicated). I don,t think Hornby looses money here.

Things get more complex on re-runs (same loco but different number). Especially as cost has gone up and pre-orders will be a lot less. I suspect here Hornby and others will have a harder time shifting stuff.

The problem is further compounded by reruns being more numerous than all new models in the catalogue. Even if the tooling is paid for, extra runs are going to be smaller so higher set cost per unit for the re-run.

 

In past, shops had more space to slightly over order as prices were cheaper and there was a good chance to sell them. Now it must be a very tough calculation. If the expense rerun from last is still sitting on the shelves, they will be less inclined to order a further rerun.

 

With Bachmann limited discount, pre-orders are highly recommended for the first release. But not needed for a rerun. Both of those statements are probably on the verge of changing though.

 

Hattons do dozen of their new exclusives at once and I cannot remember seeing them do a re run. Will that change with the P and Barclay ? There are still plenty of liveries for both. Time will tell.

[adb968008]

Back in the 90’s Hornby was manufacturing in Margate though.

 

Pre-orders would move from the sales managers office to the production managers office and they could all meet in a room, huddle and do logistics and shuffle the production of parts, ordering of materials and plan labour shifts accordingly.

 

I suspect now it’s a case of “contract to make x qty of Y models”., which month to deliver them. Asking to swap production slots, ramp up / ramp down seems to be difficult. Presumably because the Chinese manufacturers meetings to production of parts, ordering of materials and plan labour shifts accordingly isn’t based on consumer demand for their product but the bulk buying of parts to assemble all their contracts to meet all customer requirements globally over the course of a year... and of course once they have ordered shuffling around quantities / schedules etc becomes much more difficult without impacting contracts to other customers... so the slot and quantity is what it is, and a repeat order goes to the next year... assuming that’s not already full.

 

I assume the only choice the manufacturer has is a short window to desire a years production and if pre-orders look poor, to cancel that desire before contracts are signed if the initial take up doesn’t look good.

 

I wouldn’t have imagined the complete desert of Pecketts in the last 18months was by choice.

..speaking of which it looks like the wait is nearly over, 2 of them are showing as on their way.

Edited April 9, 2018 by adb968008

[Forester]

The Bachmann C in full fat SECR livery was a standard production run.

But It was the first RTR loco in full fat Wainwright SECR livery. Before then there was only an N class in SECR grey (not as pretty!) and the Wrenn R1 which fetched silly money and is hardly a serious representation of Wainwright's livery on that loco (it is clearly and loosely based on a photo of 69 in K.Marx book about Wainwright).

And the Bachmann C loco in question is preserved.

These three factors (1st accurate RTR model in said livery, pretty and preserved) lead to a sell out (it was cheaper back then too).

 

Since then, there has been the Simplified Wainwright livery C class (which is still pretty), a terrier (which sold cheaply in the end), 2 H class (one out later in this year), 2 P class due in May and another terrier... So those people just wanting just a pretty SECR are probably satisfied.

 

What puzzles me is that with all these (now precious) SECR locos, someone goes to the trouble of actually making coaches in SECR livery (Birdcage) to run with them, no one else is ever likely to repeat this given the small size and limited appeal of the SECR, so you would have expected them to sell out instantly. Yet astonishingly they are now beginning to go to further discount and sales.

 

Just another example of how difficult it is to guess which models will sell out.

 

A mug's game, really.

[Jol Wilkinson]

What puzzles me is that with all these (now precious) SECR locos, someone goes to the trouble of actually making coaches in SECR livery (Birdcage) to run with them, no one else is ever likely to repeat this given the small size and limited appeal of the SECR, so you would have expected them to sell out instantly. Yet astonishingly they are now beginning to go to further discount and sales.

 

Just another example of how difficult it is to guess which models will sell out.

 

A mug's game, really.

 

Perhaps that's because a significant number of people will collect "unusual" pre-group locos, but don't want the carriages as they aren't actually modelling that railway or period.

[Dunsignalling]

What puzzles me is that with all these (now precious) SECR locos, someone goes to the trouble of actually making coaches in SECR livery (Birdcage) to run with them, no one else is ever likely to repeat this given the small size and limited appeal of the SECR, so you would have expected them to sell out instantly. Yet astonishingly they are now beginning to go to further discount and sales.

 

Just another example of how difficult it is to guess which models will sell out.

 

A mug's game, really.

Doesn't surprise me in the slightest. A lot of the people who buy locos in pretty liveries just like locos in pretty liveries.

 

I doubt that more than a quarter of them have any real interest in the SECR. 

 

John

Edited April 9, 2018 by Dunsignalling

[robmcg]

It is my considered opinion that the age of new tooling for steam outline at least is not going to make money for large players like Hornby because essentially the market is saturated, and new models are not 'light and day better' than older ones. Niche players might still have success with models of more esoteric engines.

 

When I use the phrase 'make money' I mean in the context of a Hornby or Bachmann sized company with quite high sales numbers.

 

The end of discounting and longer time-frames for sales will help of course. I presume that is what Barclays are thinking. 

[jjb1970]

I think that there are two factors at work for these nice pre-grouping locomotives that mean the accompanying rolling stock is unlikely to be anything like as popular. One is that many people who are modellers or layout operators buy them because they look nice or have a limited interest in the locomotives. The second is that there are plenty of collectors who are only interested in collecting locomotives, I never understand why collector is a pejorative term to so many modellers as without the collector market we'd likely see a lot less releases (especially of quirky types). However that could change if these releases do stimulate an interest in pre-grouping layouts.

[Dunsignalling]

It is my considered opinion that the age of new tooling for steam outline at least is not going to make money for large players like Hornby because essentially the market is saturated, and new models are not 'light and day better' than older ones. Niche players might still have success with models of more esoteric engines.

 

When I use the phrase 'make money' I mean in the context of a Hornby or Bachmann sized company with quite high sales numbers.

 

The end of discounting and longer time-frames for sales will help of course. I presume that is what Barclays are thinking. 

 

I think the phrase "quite high sales numbers" is the crux of the matter, as I feel we are seeing a definite movement away from chasing market share and volume for their own sake.

 

The indications are that both the major players are developing a position where they aim to make only as many examples of each item as will sell at or very close to full price.

 

Heavy discounting, which is rapidly ceasing to be the norm, will only re-emerge in cases of serious miscalculation of demand, becoming a mechanism only for shifting stuff that those who model or collect to a theme don't want to less-selective participants in the hobby. This is, I would suggest, why large retailers long-noted for price cutting are increasingly moving towards commissioning models, thereby establishing greater control over their own margins.  

 

The flip side of trying to avoid over-supply is that it increases the likelihood of under-supply, and pre-ordering will become ever more necessary if one is to be sure of securing specific versions of popular models.

 

Like it or not, I think we will, in future, have to commit to purchasing items we "really, really want" rather earlier than we have been accustomed. 

 

John

Edited April 11, 2018 by Dunsignalling

[Andy Hayter]

What puzzles me is that with all these (now precious) SECR locos, someone goes to the trouble of actually making coaches in SECR livery (Birdcage) to run with them, no one else is ever likely to repeat this given the small size and limited appeal of the SECR, so you would have expected them to sell out instantly. Yet astonishingly they are now beginning to go to further discount and sales.

 

Just another example of how difficult it is to guess which models will sell out.

 

A mug's game, really.

 

 

 

Firstly, I see no signs of discounting in my limited experience.  The Hattons price this morning is exactly the same as I paid on receipt of my nearly 5 year pre-order.

 

Secondly you might be surprised that they did not sell out immediately, but perhaps Bachmann are less so.  My best guess is that they produced around 2500 SECR C class in various liveries.  They have probably taken into account the Hornby and the Rails Terrier releases as well as the Hornby H Class.  Possibly also the Hattons P class releases.  Notwithstanding Jol's comments about people buying locos but not stock to go with them, I could well imagine that Bachmann have produced more SECR birdcage sets than SECR liveried C class locos.  The simple reality is, we don't know how many have been made, so the fact that there are still some on the shelves says little except that they have produced more than there is an immediate sale for.  With 2 Hattons P Class versions to appear in the coming couple of months, that excess could well disappear very quickly or maybe not.

 

But I do agree that double guessing the market is a mug's game.

[JSpencer]

What puzzles me is that with all these (now precious) SECR locos, someone goes to the trouble of actually making coaches in SECR livery (Birdcage) to run with them, no one else is ever likely to repeat this given the small size and limited appeal of the SECR, so you would have expected them to sell out instantly. Yet astonishingly they are now beginning to go to further discount and sales.

 

Just another example of how difficult it is to guess which models will sell out.

 

A mug's game, really.

 

While I agree with your comments, I have not seen the SECR coloured versions of the birdcages goto further discount yet (but will be happily corrected so I can get a second cheap set ;-) ).

 

I do think that these days with Bachmann:

A/ not stating how much the thing will cost until several months before release

B/ limiting the discount the retailer can apply for a period

that they are not optimizing all the orders they can get.

 

The end result is that new release stuff is not selling and just sitting there.