Possible price increases?

[Accurascale Fran]

39 minutes ago, Michael Hodgson said:

 

Fran clearly has a better grasp of econmics than the Rt Hon gentleman at No 11. 

I'd nominate him for Chancellor but who would supply our new models ?  🙃

 

In fairness it's @McC who has the grasp of the economics at No. 11 Accurascale street, and thankfully we're not his first rodeo, so he knows what he is doing. 

 

It's heartening to see that our business model and fighting for better prices is resonating with the modelling public. At the end of the day, we cannot do it without the support of you all, the model buying public! It's a relationship which allows us to bring you more new, better, and keenly priced models in exchange for sales. We all win 🙂.

 

The proof is in the pudding too, with us making a profit last year (accounts about to be filed) and of course while we could've pocketed the cash, we chose to reinvest in more tooling and more staff. This means more models to add to the range! 

 

Cheers!

 

Fran 

 

[Black 5 Bear]

On 26/09/2022 at 22:34, jools1959 said:

Thank you for that, it’s much appreciated in these uncertain times.  Like I said, I hope sterling makes up ground and stops giving everyone the jitters.

The pound sterling is not really the problem, it is fundamentally the current strength of the dollar.

Coupled with the fact that the US currency is the global reserve of choice for trading of commodities including oil and gas.

You only have to look at global exchange rates to see that this is the case.

Markets are frequently volatile I'm afraid.

[Bucoops]

I'd like to personally apologise for the £ tanking - it's not Downing St incompetence, it's because I need some $$$ for an upcoming holiday.

[AY Mod]

50 minutes ago, Bucoops said:

I'd like to personally apologise for the £ tanking - it's not Downing St incompetence, it's because I need some $$$ for an upcoming holiday.

 

Don't spend it all, you can probably turn a profit when you come back that pays for the holiday.

[spamcan61]

2 hours ago, Black 5 Bear said:

The pound sterling is not really the problem, it is fundamentally the current strength of the dollar.

 

Partially; over the last month, roughly, GBP has devalued 10% against USD compared with 6% for EUR versus USD and 3% for JPY.

[TravisM]

As oil is valued by the barrel in dollars, if you get a strong dollar therefore the price of oil goes up, which then therefore increases the price of plastics amongst other everyday items.

[Michael Hodgson]

2 minutes ago, jools1959 said:

As oil is valued by the barrel in dollars, if you get a strong dollar therefore the price of oil goes up, which then therefore increases the price of plastics amongst other everyday items.

Yes, a bad idea to move to using plastic barrels instead of wooden ones.

[Bucoops]

1 hour ago, AY Mod said:

 

Don't spend it all, you can probably turn a profit when you come back that pays for the holiday.

 

Hopefully it will cover the cost of the travel insurance. As soon as you say America at the moment the NHS put a cardiac team on standby.

[andyman7]

The exchange rate is just one of many factors at play. The bad news it that the pressure on many of these factors is upwards, but the slightly better news in terms of the bigger model railway suppliers is that they are not like you and I going down to the post office and finding that our £ is worth less in $ today. 

 

Firstly, larger companies ought to be hedging their currency requirements to provide some near-term certainty if they are dealing in $; secondly, Bachmann (for example) is Chinese company with a large US interest so they will have much greater control of costs than if they operated in £. Hornby has significant European subsidiaries so will work in Euros as well as £ when brokering conversion to £. 

 

So whilst the exchange rate is a headache, it it one of many rather than the only driver of costs.

[McC]

On 27/09/2022 at 19:34, Phil Bullock said:

Another reason for asking could well be the pricing of Accurascale models…. Certainly at the most cost effective end of the market.

Absolutely. The trouble with model railway timelines tho are the length. Locking in any single forward is limited to a year while most projects take a lot more than that to deliver. Partly we launch so ‘late’ at EP / samples is to keep the risk of currency movement within that 12 month window if we can once we’ve fixed The prices. 
 

There is no easy fix though and certainly no one predicted the total implosion of the Pound as it has done. But it ‘should’ be a year from now before it directly starts impacting on retail prices in our hobby. 
 

on the flip side container prices are rapidly returning to normal so the ‘massive’ logistics costs are looking to be over for now. 

Edited September 29, 2022 by McC

[MOSS MONACO]

There's no quick fix on the horizon. If the BoE has to step in to the tune of £65B then the sensible assumption is that prices will have to rise or companies will go bust.. Not just trains, but also boats and planes. Woe is me! 

[Phil Bullock]

1 hour ago, McC said:

Absolutely. The trouble with model railway timelines tho are the length. Locking in any single forward is limited to a year while most projects take a lot more than that to deliver. Partly we launch so ‘late’ at EP / samples is to keep the risk of currency movement within that 12 month window if we can once we’ve fixed The prices. 
 

There is no easy fix though and certainly no one predicted the total implosion of the Pound as it has done. But it ‘should’ be a year from now before it directly starts impacting on retail prices in our hobby. 
 

Suspect it’s that strategy that had earned you rapid kudos in the field. Has meant that during initial phase announcements were delayed more than some have liked but robust pricing and delivery schedules has to be a winner. 
 

Long may it continue…

[Black 5 Bear]

19 hours ago, spamcan61 said:

Partially; over the last month, roughly, GBP has devalued 10% against USD compared with 6% for EUR versus USD and 3% for JPY.

Typical market volatility unfortunately, which is precisely how the exchange mechanisms and markets work. 

Government monetary policy aside, I can't help thinking that much of this is down to traders shorting currencies and the media whipping up yet another crisis.

 

 

 

[ERIC ALLTORQUE]

Doom and gloom,we have enough without discussing it here,we need a happy thread like where to park the motorhome so its not crushed when the asteroid hits........@McC is in control,lets leave it to the experts,we need an announcment other than dont panic.

 

[adb968008]

24 minutes ago, Black 5 Bear said:

Typical market volatility unfortunately, which is precisely how the exchange mechanisms and markets work. 

Government monetary policy aside, I can't help thinking that much of this is down to traders shorting currencies and the media whipping up yet another crisis.

 

 

 

Realtime media is indeed sometimes very damaging for the UK.

 

Edited September 29, 2022 by adb968008

[RedgateModels]

26 minutes ago, Black 5 Bear said:

the media whipping up yet another crisis.

 

This

[Phil Bullock]

30 minutes ago, adb968008 said:

Realtime media is indeed sometimes very damaging for the UK.

 

That’s what comes with an open democratic system I guess….

[MidlandRed]

46 minutes ago, Phil Bullock said:

That’s what comes with an open democratic system I guess….

Indeed - the opposite is covering things up or (like the Daily Mail recently) relegating the story.

 

However I don’t think you can blame the British media for the current problem - I doubt investors are pulling out of U.K. bonds because they’ve read about it in the media - the whole crisis is caused by lack of confidence in the market and the ability of the Government to pay back the debt it’s just created in the light of increasing interest rates to combat inflation - which will have to increase even quicker to counteract this inflationary budget!! You couldn’t make it up tbh!! 

 

Im interested to hear the comments @McC made about shipping costs - however the current issues with interest rates/inflation/currency volatility may surely cancel out any gains on shipping. 

I will be interested to see how Accurascale prices are affected over the next couple of years but it’s good to know they’re committed to ‘affordable’ prices and high quality/fidelity models. 
 

Is Accurascale based, trading wise, in the U.K. or EU? 

 

Edited September 29, 2022 by MidlandRed

[McC]

2 minutes ago, MidlandRed said:

I will be interested to see how Accurascale prices are affected over the next couple of years but it’s good to know they’re committed to ‘affordable’ prices and high quality/fidelity models. 
 

Is Accurascale based, trading wise, in the U.K. or EU? 

 

 

We will certainly try hard, and be transparent and open about it.

 

Accurascale is a UK limited company, registered in England, with distribution in the UK, and many team members based here too. 

[adb968008]

1 hour ago, Phil Bullock said:

That’s what comes with an open democratic system I guess….

There are many open democratic systems out there, but some have sense of national interest, though of course they are also owned by their own patriots, so will feel the pain they will inflict, directly, indirectly or by peer pressure. Perhaps that gives pause for thought about the interests, ownership and motivations of ours, that puts our national interests at disadvantage to others.

 

Edited September 29, 2022 by adb968008

[The Stationmaster]

Always interesting to have a poke around at Companies House and look at companies involved in the model railway business in their various ways.  Some very interesting stuff there apart from the £72,284 profit showing on Accurascale's accounts.

[MidlandRed]

55 minutes ago, McC said:

 

We will certainly try hard, and be transparent and open about it.

 

Accurascale is a UK limited company, registered in England, with distribution in the UK, and many team members based here too. 

Thanks - that’s good to hear, however understood you are in a competitive business so there will be times when for commercial reasons you can’t be completely open (eg recent discussions re class 37).

 

My query re U.K. based was largely to do with whether you were actually in Ireland - it doesn’t bother me so long as the excellent customer service/focus is there - I was thinking Ireland based would insulate you from current U.K. financial woes more but not the case as you’re based in Blighty!! 

Edited September 29, 2022 by MidlandRed

[MidlandRed]

34 minutes ago, The Stationmaster said:

Always interesting to have a poke around at Companies House and look at companies involved in the model railway business in their various ways.  Some very interesting stuff there apart from the £72,284 profit showing on Accurascale's accounts.

Interesting - that’s good - I wonder what ROI that equates to!! I guess interest on loans might change in future (loans to fund new models). 

 

[spamcan61]

17 minutes ago, MidlandRed said:

 

 

My query re U.K. based was largely to do with whether you were actually in Ireland - it doesn’t bother me so long as the excellent customer service/focus is there - I was thinking Ireland based would insulate you from current U.K. financial woes more but not the case as you’re based in Blighty!! 

Irish Railway Models is Accurascale's 'sister' company in Ireland, which generally deals with EU sales.

 

Update: more details available here, although I'm not curious enough to spend money to read the info ;-)

 

https://core.cro.ie/e-commerce/company/612131

Edited September 29, 2022 by spamcan61

[McC]

3 minutes ago, MidlandRed said:

Interesting - that’s good - I wonder what ROI that equates to!! I guess interest on loans might change in future (loans to fund new models). 

 

 

We also don't have loans, so no interest rate concerns impacting pricing.