KR Models business model etc

[Colin_McLeod]

As suggested by @Roy Langridge in the 4DD thread:

 

For pities sake, can somebody who wishes to talk about KRM’s business model/ethic/comms please create a dedicated thread for it.

 

 

New thread. Please keep it civil, and if possible, non repetitive.

[black and decker boy]

Cheap & cheerful. Accuracy based on “looks about right.” Crowd funded. Fairly charmless as a business.

 

Not a problem to some but grates when advertised as something better than produced.

 

said as a potential customer for the The Scunthorpe Hunslet Bo-Bo, torpedo, Palbrick and DHP1. 4DD was an option but current EPs put me off. I’ll have a 40 if it’s a better model than has gone before.

 

i won’t buy up front from KR. I’ll buy if model is decent and still in stock at a retailer. I won’t lose sleep if I miss out, life’s too short (same applies to be Accurascale / SLW / RevolutioN etc).

[black and decker boy]

Just to add. I am excited by some of KRs proposed models so want them to hit the market and be a good quality / spec.

 

built down to a price / built without close scrutiny of the prototype really does put me off though, hence I’ll wait for delivery to make my decision 

[jjb1970]

Personally I don't like crowdfunding or paying up front without knowing what I will get. I don't like it in any case, but to even consider going down that route I'd need a very high degree of confidence in the supplier. At the moment that probably means Accurascale, Rapido, Revolution, Realtrack and SLW in British outline RTR. However, most of those companies do not use that particular business model and make products available to buy in the normal way. This is just my personal view and it may well be meaningless for the rest of the world, but I don't need model trains, I want them. These models are not cheap, and there are already more models that I would like (not need) and which can be bought to keep me occupied for a lifetime. So if I miss a model release because I don't pre-order or join a crowdfunding scheme it's not such a big deal. There is now the concept of 'buyers remorse' which is a clever bit of spin to encourage people to buy up front, but an alternative form of buyers remorse would be to pay up front for something and then find that what is delivered is not what was claimed. I should say, this is not just about KR, I feel the same about this particular sales model regardless of supplier.

On KR, my advice would be to put more effort into R&D and get the product right. As Stationmaster pointed out in another thread, under promise and over deliver is a good way to make happy customers, but over promising and under delivering can very quickly cause serious reputational damage. If you want to be seen as sitting at the quality end of the spectrum then you need to make models that justify such a claim. Which nowadays basically means matching companies like Rapido and Accurascale, and KR are clearly not in the same class as those companies. If you want to offer a lower grade value oriented product there's nothing wrong with that, in fact I still think a new-gen 'Railroad' type of product (like the Hornby Crosti 9F and Mk.1 coaches) would find a lot of takers and fill a useful slot, but sell such products as what they are. If people pay up front for models sold as accurate, detailed models, have features like working valve gear etc then that's what should be delivered.

If models are sold by retailers then people can make their own decision whether or not to buy based on what the model looks like. If people see the final product and are happy with it then buy it. We all have our own idea of what is 'good enough' and clearly the KR Fell is good enough for some. In that case buy it and enjoy it, why does it matter if anyone else considers it unacceptable? However, if people are asked to pay up front on trust then to me a manufacturer needs to repay that trust by making the effort to get it right.

[phil gollin]

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This is rather a pointless thread.

 

The same old moans.

 

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[Legend]

Has to be said it’s full of negativity .

 

I get the issues over the Fell . I think some of the issues in the early days were lack of transparency in this new company which unfortunately emerged just as DJM disappeared . The cynicism has carried over . 
 

On the plus side , didn’t the GT3 win model of the year?  The Consett wagons seem to be going down well . 
 

The main advantage in KR as I see it was that they were bringing models to the market that no one else was, at least up until they announced Expressions of Interest in a 40 .  And I think that’s a good thing .  You wouldn’t have these models otherwise . Oh I know someone else will say someone would have produced the Leader etc , well where were they ? 
 

I don’t particularly like crowdfunding and I get the uncertainty over what the final outcome will be , but if it’s a way of getting a new model , that no one else will produce and I want , then I’d still be tempted , having assessed the financial risk . But then I’m one of those people that are happy if it looks like what it’s supposed to be and runs well . 
 

A mainstream model like the 40 is a departure for them and I think will be high risk , because someone’s going to compare it to the existing model and there will be a legion of critics out there.

 

How about a nice Glasgow Blue Train , would be a great thing to announce at Model Rail Scotland , and starved as we are of Scottish models , I think that would get a much more favourable reception.

Edited January 7, 2023 by Legend

[Markwj]

KR have asked for expressions of interest in the 40 but are they going to be asking for payment up front? Has this occurred with every model so far? I have no idea about their cash flow but as they build up and sell the portfolio of models would they get to the point they can fund the model development without asking for full payment up front. I don’t think a deposit is unreasonable.

[Colin_McLeod]

57 minutes ago, phil gollin said:

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This is rather a pointless thread.

 

The same old moans.

 

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The purpose of this thread is to keep those 'same old moans" away from the threads pertaining to the individual models.  That's the point.

[jjb1970]

9 minutes ago, Colin_McLeod said:

 

The purpose of this thread is to keep those 'same old moans" away from the threads pertaining to the individual models.  That's the point.

 

That, and like any other social media or internet content - if people don't like it go and find something they do like. Nobody can read every thread on RMWeb, there will be plenty of threads and posts to suit the interests of any model rail enthusiast. So no need to waste time on threads people don't like. Especially when the nature of the thread is obvious from the title.

[The Stationmaster]

Several points here -

 

1.  (Perhaps unusually) I like to know something about a company i am dealing with, especially if I am being asked to finance their business.  Thus I expect to find  a website, or advert, which shows their postal address, preferably in the UK (and definitely in the UK if this is where their main market is).   If they are handling my money I am also going to be reassured to some extent, by the fact that they are registered at Companies House and at least will, at some time, have short form accounts which I can look at.  Additionally, and importantly, if they are registered in the UK I am reassured that they will be trading in accordance with UK consumer protection law.  Iif they are using an overseas address I can probably find out what sort of protection customers have from the laws of the country where they are registered.  If they don't show any address at all I'm inclined to wonder why not - what don;t they want their customers to know?  Promises from somebody who takes my money are one thing - legal consumer protection is something very different.

 

2. If you base your business model on using your customers money to finance the development of your products you very quickly have to produce, and the continue to produce things which will justify that way of financing your business.  Thus you need consistent quality and consistent standards in respect of detail - unless you do that you can forget ever seeing any of my money.  But I don't like this way of buying in any case because as far as Im concerned if a business hasn't been able to finance itself - apart from start -up using, say  crowd funding -why should i have faith in a business which its owners don't seem to be prepared to finance?

 

3. Price .  Prices are moving rapidly upwards in today's world and if you are competing for a customer's money you have to meet their perceived expectations of value in relation to what they pay.  For example - from their website - a KR Palbrick retails from them at £50, plus £23 for shipping - which compares poorly with wagons of similar size from either Rapido or Accurascale or even Bachmann.  DHP 1 costs £166 including shipping if bought from KR which while the loco cost itself is only !   £133 brings the total purchase price well into the area occupied by some far higher spec models.  yes we all receive value differently but inevitably some of us will compare anybody's models of anything with thise made by others.  Incidentally KR's 'shipping' charges seem remarkably high compared with everybody else.

 

4.  Response to customers and advice.  recently another comany showed a CAD image of a model they are intending to produce.  There was a very obvious dimensional error which was very quickly being mentioned here on RMweb.  some one from/associated with the company responded rapidly and is not only sorting that problem but using RMweb as a conduit to obtain further information.  That company is not the only one to do that while some companies do the same but not in the public glare and are happy to seek advice from trusted sources.  But if a concern doesn't use advice which is freely offered at the right stage in the process what are likely end customers to think about them?   KR responded well to advice and information about the Consett wagon but seemingly ignored information which would have corrected some glaring errors on the Fell and there are now apparent errors being pointed out on the 4DD.

 

5.  Responding to advice is one thing but the fact that there can be glaring errors in the first place points to a variety of problems.  These can start with poor or inadequate research, poor specification to the designer (an important thing when dealing with China where 'face' matters when it comes to dealing with errors), poor or limited checking of CADs to ensure they reflect the spec, and - at worst - the need to pay (in some way) for subsequent and expensive alterations to tooling which would be unnecessary if the earlier stages were carried out properly.  If this sort of thing continues over, say, a succession of models it would indicate to me that a concern either doesn't care or is very poor at learning any lessons from its past experience.  That would make me very dubious about investing in any of their future projects.

 

Put all of these things together it is difficult to avoid the conclusion reached by Bernard Lamb.   But even more worrying for me is that the 'structural' issues I've commented about above in relation to KR's business are not difficult to correct.  And I think that. by now - even after starting from scratch with the GT3 - they've had enough time to recognise and deal with those issues

[Nova Scotian]

I think the comment on "the worst of capitalism" is a bit... off... the owner isn't going to be diving into piles of gold coins for doing runs of a 500-2000 niche model locomotives at a time. Hornby's revenue at 39m GBP is barely a sneeze for larger companies, energy, oil and gas, automotive etc.

 

It's going to be tough being in a crowdfunded market following on from DJM. A lot of trust was broken there, and I haven't seen efforts from KR to alleviate that as per comments above about companies house, addresses etc - this was all missing early on.

 

The abrasiveness with which they engaged with potential customers early on really put me off too.

 

However, GT3 was a good product, bar the upside down leaf springs... Fell not so much.

 

I really like Bellerophon, and could even see myself splashing out on the DHP1. However, I don't want them enough to get past my annoyance at how rude they were early on, how difficult to contact, and how dismissive they've been. People who have met them in person say that they're actually quite nice, so maybe I just need to line up my next UK trip with Warley or similar.

 

I'd purchase Rapido, Accurascale, Revolution and Realtrack all before KR Models given my limited funds. While I don't really "connect" with Rapido's communication style (the videos), I can't fault them on their approach to customers, their love for the hobby and the work they put into their product. They're good people.

 

As we've seen there are enough people out there willing to put their qualms aside to put money upfront for the products they really want. So the business model works. I can't imagine they'll become a powerhouse, but as long as they keep doing smaller runs to limit their risk, and coming somewhere near expectations, there'll probably always be enough people willing to put 160 GBP down for something they can't/won't make themselves.

[Pteremy]

2 hours ago, The Stationmaster said:

For example - from their website - a KR Palbrick retails from them at £50, plus £23 for shipping - which compares poorly with wagons of similar size from either Rapido or Accurascale or even Bachmann.

 

The website is not clear now - but when I paid (20 months ago) it was £60 for a triple pack (including postage).

[The Stationmaster]

2 minutes ago, Pteremy said:

 

The website is not clear now - but when I paid (20 months ago) it was £60 for a triple pack (including postage).

So we can presumably add  'lack of clarity on their website' to the other structural issues?

[Pteremy]

Yes - but that is hardly a unique characteristic!

[D9020 Nimbus]

The class 40 could be KR's biggest risk to date. Bachmann have relatively recently re-tooled the Farish class 40, and for all anybody knows could be looking at producing a new 40 in OO—for all anybody knows it might appear in the quarterly announcements at any time. Accurascale have been producing a number of EE diesels too.

 

The shipping costs seem excessive on the face of it—where are they shipping items from, Canada perhaps?

 

I didn't think any model shops carried KR Models.

[Helmdon]

1 minute ago, D9020 Nimbus said:

 

 

I didn't think any model shops carried KR Models.

Rails are selling the next GT3 run

[AY Mod]

1 minute ago, D9020 Nimbus said:

I didn't think any model shops carried KR Models.

 

Pre-orders for some items can be made through Rails of Sheffield for better risk mitigation.

[johndon]

A little bit of positivity...

 

So far I've no interest in any of their other products but but the Consett Iron Ore wagons are very, very good indeed with KR having listened to feedback and changed the EP accordingly (I will freely admit to being one of the most vociferous critics of the original EP of the wagons).

 

Dimensionally, they are bang on, they are missing a couple of very small handrails (but so is one of the much more expensive kits that were available of the wagon), are missing an air pipe and have some holes in the interior sides that shouldn't be there (2 minutes per wagon to fill in) but other than that, I think they are very impressive, especially for the price. 

 

Once they've been weathered and those small details added, they fit in very easily with the kit versions that have been the only option for these wagons till KR came along.

 

 

[rembrow]

2 hours ago, The Stationmaster said:

So we can presumably add  'lack of clarity on their website' to the other structural issues?

No lack of clarity, the website covers sales to both Nth America and UK, so prices quoted do not show any sales tax/VAT. When you put in an address it prices for your tax jurisdiction, and I was quoted £60 incl VAT and £4.95 postage.  

[The Stationmaster]

5 minutes ago, rembrow said:

No lack of clarity, the website covers sales to both Nth America and UK, so prices quoted do not show any sales tax/VAT. When you put in an address it prices for your tax jurisdiction, and I was quoted £60 incl VAT and £4.95 postage.  

Pretty unclear to me   Say I order a 'Belleropohon' - it gives me a price - with no indication whether or not it includes VAT (the price is in GB £ so if it doesn't include VAT it should say so).  Then at checkout it adds £33 with no indication of what that amount is for, and  then it adds another £23 for postage.  We've been here befoore with KR not including VAT in its UK prices and the legality of doing that without explaining that is what is being done is very doubtful.  

https://www.asa.org.uk/news/to-include-or-not-to-include-vat-in-stated-prices.html

But no doubt using a Canadian address (I see they do now show an address) is probably their excuse - and it is an excuse for failing to explain the elements of their pricing because they might well take the view that if they showed the full price it might not encourage folk to buy.   If Rapido, another Canadian based concern, can price properly in the UK market why can't KR? 

 

It's  a bit like booking a flight with Ryanair where you find by the time you've finished that their '£5 bargain price' is actually going to cost you about £30 because it excludes just about everything apart from sitting on their aeroplane.

[rembrow]

19 minutes ago, The Stationmaster said:

Pretty unclear to me   Say I order a 'Belleropohon' - it gives me a price - with no indication whether or not it includes VAT (the price is in GB £ so if it doesn't include VAT it should say so).  Then at checkout it adds £33 with no indication of what that amount is for, and  then it adds another £23 for postage.  We've been here befoore with KR not including VAT in its UK prices and the legality of doing that without explaining that is what is being done is very doubtful.  

https://www.asa.org.uk/news/to-include-or-not-to-include-vat-in-stated-prices.html

But no doubt using a Canadian address (I see they do now show an address) is probably their excuse - and it is an excuse for failing to explain the elements of their pricing because they might well take the view that if they showed the full price it might not encourage folk to buy.   If Rapido, another Canadian based concern, can price properly in the UK market why can't KR? 

 

It's  a bit like booking a flight with Ryanair where you find by the time you've finished that their '£5 bargain price' is actually going to cost you about £30 because it excludes just about everything apart from sitting on their 

I placed Bellerophon in my cart, without using my KR account, went to payment and changed the default country from Canada to UK, without inserting any other address or payment details, the values changed to £160 for dc ready incl VAT and £4.95. So as I say, not a problem. I get a similar issue when ordering from Accurascale as the initial price is without relevant sales tax until you insert country of destination.

[chris p bacon]

13 minutes ago, rembrow said:

I get a similar issue when ordering from Accurascale as the initial price is without relevant sales tax until you insert country of destination.

 

That is not the experience I have had so checked. Just looking at locomotives, the prices displayed  clearly state 'inc vat' 

Edited January 7, 2023 by chris p bacon
typo

[rembrow]

13 minutes ago, chris p bacon said:

 

That is not the experience I have had so checked. Just looking at locomotives, the prices displayed  clearly state 'inc vat' 

Not when you order the item, I've been caught out a few times when placing an order, with the initial price being tax exclusive, without showing that it is.

[chris p bacon]

12 minutes ago, rembrow said:

Not when you order the item, I've been caught out a few times when placing an order, with the initial price being tax exclusive, without showing that it is.

Again, I've not had that issue. Are you using a VPN? it could be their site has no idea of your location.

 

I just tried ordering again (class 30/31 page) and the price clearly states 'inc VAT'

[frobisher]

50 minutes ago, The Stationmaster said:

Pretty unclear to me   Say I order a 'Belleropohon' - it gives me a price - with no indication whether or not it includes VAT (the price is in GB £ so if it doesn't include VAT it should say so).  Then at checkout it adds £33 with no indication of what that amount is for, and  then it adds another £23 for postage.  We've been here befoore with KR not including VAT in its UK prices and the legality of doing that without explaining that is what is being done is very doubtful.  

https://www.asa.org.uk/news/to-include-or-not-to-include-vat-in-stated-prices.html

 

Mind you of course, that only applies to and is enforceable on UK companies...