Is Pre-Ordering Really Necessary?

[Talltim]

On the subject of the Rails van, why didn’t they base the size of the production run on the number of pre-orders (with a deadline of course)? As it was they just wasted the price of the magazine adverts and have sold fewer than they might have done

[Guest JiLo]

51 minutes ago, Talltim said:

On the subject of the Rails van, why didn’t they base the size of the production run on the number of pre-orders (with a deadline of course)? As it was they just wasted the price of the magazine adverts and have sold fewer than they might have done

Most probably cost, and the timing of production slots at the factory.  They already pay for monthly adverts  

[Chris M]

The ideal would be to produce just the right number to meet demand but of course nobody has got crystal balls. My view is simple - pre order if you really, really must have an item . If not then wait and see what offers come along. I've only pre ordered a couple of times and then only when the item is on the boat. It's good to do this if you think something just might sell out but I think it is very rare for anything to be completely sold out before it is physically available.

[scottystitch]

11 hours ago, Philou said:

...... whereas putting your pizza in a cold oven and then heating to the right temperature will mean by the time the crust is cooked the rest will have been burnt to a crisp. Result? Missed supper - again!.....

 

Cheers,

 

Philip

Should one ask how one knows?.......

[billbedford]

1 hour ago, Talltim said:

On the subject of the Rails van, why didn’t they base the size of the production run on the number of pre-orders (with a deadline of course)? As it was they just wasted the price of the magazine adverts and have sold fewer than they might have done

 

Because it was a trial for the production method as much as anything else. I suspect that they were actually assembled and painted in China which would mean that slot in the factories would have to be booked well in advance of production.

[melmoth]

1 hour ago, billbedford said:

 

Because it was a trial for the production method as much as anything else. I suspect that they were actually assembled and painted in China which would mean that slot in the factories would have to be booked well in advance of production.

 

I understood that the production was entirely UK based...

 

"Rails is leading the way and innovating for model enthusiasts. These models have been researched, designed and produced solely in the UK."

 

 

[AY Mod]

1 hour ago, billbedford said:

I suspect that they were actually assembled and painted in China which would mean that slot in the factories would have to be booked well in advance of production.

 

Melmoth has linked to the appropriate content but it's worth re-inforcing that the whole of production, assembly and decoration of this model has been carried out in the UK.

 

The size of the runs was based on optimisation of the materials used in the manufacturing process, it would have been unprofitable to just add a few more to a run.

[Philou]

@scottystitch

 

Humph ...................... !

 

Cheers,

 

Philip

[D9020 Nimbus]

Rails really had no way of estimating how popular this model would be as in many ways it is a "first". The magazine adverts would be booked in advance before they knew how many would be sold. Some retailer exclusive models hang around for years...

[Bernard Lamb]

20 hours ago, RJS1977 said:

 

From the manufacturer's/retailer's point of view, no it might not be a pity (although of course they can still wonder how many more they would have sold if they'd done a longer production run).

 

From the point of view of the purchasers who missed out, it is of course a pity.

But could they have produced any more?

Economically?

Some people who appear to know what they are talking about say no.

A story from work.

A Salesman beat his target by 70%.

He came into the office for a meeting with the Sales Manager expecting to get a pat on the back if not a large bonus.

The MD was present at the meeting so the Salesman though it was his lucky day.

Instead he got a right bollocking and was told that he had cost the company a lot of money as extra material had to be purchased at a premium price and overtime had to be worked in the factory in order to fulfil the contract on time.

Maximum profit is made by seeing through a plan.

When dealing with the bottom line sentiments about the punter do not count.

Bernard

[Andy Hayter]

At a simple level if the number produced consumes the raw materials needed to produce the planned quantity, to produce another, say, 100 might involve purchasing a 45 gallon drum of the magic liquid used in the process.  Worse, you might have to purchase a minimum pallet load of 4 drums worth.  If the material has a shelf life, that could prove very expensive.  As Bernard has said, sticking to the plan can sometimes be the way to profit while all other ways lead to loss.

[RJS1977]

I understand where you're coming from - but the example you gave isn't directly analogous in that the salesman effectively sold items the company didn't have, meaning the company had to produce more in order to fulfil its commitments (and if their suppliers were aware of that, they may well have bumped their prices up knowing the company had no choice but to pay them).

 

What I was saying is that if a model sells out on pre-order, the company has almost certainly underestimated demand and may well have sold more if there were more to sell. 

 

Of course part of the problem is because the models are now (mostly) made in factories half way round the world over which the manufacturers have little control. If a company owns its own production line, it has more opportunity to reschedule its production if one model is selling well, and another isn't.

 

[Ouroborus]

Sticking to a plan might be wise, but it may also be foolish in the face of changing conditions.  You don't maximise your profit by blindly continuing to do something.

[adb968008]

On 08/08/2019 at 20:21, Bernard Lamb said:

But could they have produced any more?

Economically?

Some people who appear to know what they are talking about say no.

A story from work.

A Salesman beat his target by 70%.

He came into the office for a meeting with the Sales Manager expecting to get a pat on the back if not a large bonus.

The MD was present at the meeting so the Salesman though it was his lucky day.

Instead he got a right bollocking and was told that he had cost the company a lot of money as extra material had to be purchased at a premium price and overtime had to be worked in the factory in order to fulfil the contract on time.

Maximum profit is made by seeing through a plan.

When dealing with the bottom line sentiments about the punter do not count.

Bernard

Sounds like bad management, rather than a bad sales guy.

I think we must have worked at the same place, as the next chapter of the story I recall is...

 

And then the salesman put his achievement onto his linkedin profile, quit for a competitor, that gives him a better bonus for hitting targets.

 

Meanwhile Sales in the next 18month decline as the old sales guy eats your lunch, and as a new guy needs to be hired, needs to build his leads, understand the product, build relationships, rebuild the channel and turn it into opportunities, whilst needing being rescued from a hole a couple of times along the way too. MD takes a vacation in Bridgend, Wales rather than Bridgetown, Barbados.

 

The solution is the MD spending money on a stock management system that gradually reduces SKUs to Zero when an item is sold out rather than gutting his overachieving sales guy. 

Edited August 12, 2019 by adb968008