Rapido Open Letter in the new MR Magazine

[scoobydo]

I just got my copy of the new MR for April and it had an interesting letter about the state of Pre-Ordering in the train industry.
I am one who disliked the whole pre-order system, but the letter was pretty well written and definitely made me think about the smaller companies.
I still think the larger companies should be able to make overages, but I know have a better understanding of the matter.

Just wondering what everybody else thought about it.

 

[PEIR]

I didn't see the letter but Jason is quite open with his thoughts and inner workings of his company. If you know what you can sell and how much money there is to work with why over produce and tie your funds up when you could be doing other projects. Jason even got me to buy passenger cars for an era I don't model.

 

[Railphotog]

Best to keep in mind that all of these models that require preorders are relatively expensive, in the range of over $100.00. Remember Athearn diesels when readily available didn't cost half that much. So having a bunch of inexpensive models produced would have been a whole lot cheaper than doing some two hundred dollar ones.

 

[MRLdave]

I look at pre-ordering as a sort of voting system....not the best system by any means, but a functional one. It lets the manufacturer know what to expect....if they offer a product in 5 roadnames, and and 4 sell multiple runs and one fails to sell any, they'll probably drop the poor seller. Products seem to sell best early on, then taper off as people move to even newer items. If it isn't going to sell, small manufacturers can't afford to sit on several hundred items, or sell them for 70% off just to get rid of them.

As long as I don't get charged till my items are on the way, I don't mind pre-ordering. And I figure if placing an order will guarantee that the product gets produced, then I'm all for it. The only downside I see, is if the product turns out to be a lemon, you may have it in your hand before you find out.

 

[MGWSY]

I look at pre-ordering as a sort of voting system....not the best system by any means, but a functional one. It lets the manufacturer know what to expect....if they offer a product in 5 roadnames, and and 4 sell multiple runs and one fails to sell any, they'll probably drop the poor seller. Products seem to sell best early on, then taper off as people move to even newer items. If it isn't going to sell, small manufacturers can't afford to sit on several hundred items, or sell them for 70% off just to get rid of them.

As long as I don't get charged till my items are on the way, I don't mind pre-ordering. And I figure if placing an order will guarantee that the product gets produced, then I'm all for it. The only downside I see, is if the product turns out to be a lemon, you may have it in your hand before you find out.

But most Manufacturers do sell at 60% - 70% off retail. Distributors sell items to shops anywhere from 40% - 55% off retail, the Distributor buys from the manufacturer for 55% - 75% off retail. It all depends on the manufacturer.

 

[scoobydo]

I suppose my only concern is that you do not know what you are going to get like it has been mentioned.
Obviously, companies have reputations and some are better than others, but until you have that item in hand, its a toss up.
I'm also very fickle when it comes to engines. One month I'm really wanting something and the next I have another idea in mind.
I'm pretty impulsive in my buying habits and that seems to not work in this industry with the new stuff.

 

[nephthyr]

First I have to say I didn't read the letter and therefore dont have a good understanding of how pre-orders work per se, so correct me if i am wrong but I dont like having a placement list, which in effect means that If I am last on the list then I may end up not getting my item, assuming there are more people on the list than items manufactured.That stinks! It makes it difficult to get what you really want!

 

[scoobydo]

First I have to say I didn't read the letter and therefore dont have a good understanding of how pre-orders work per se, so correct me if i am wrong but I dont like having a placement list, which in effect means that If I am last on the list then I may end up not getting my item, assuming there are more people on the list than items manufactured.That stinks! It makes it difficult to get what you really want!

I was under the impression that the pre-orders were just a gauge to see the ballpark of actual models made. For instance, if there was 200 pre-orders, then they would make say 225 or so models. Maybe I'm wrong, because I have also heard that some companies only make the pre-order amount.
I can understand not wanting to blindly make a certain amount, but a percentage over is a good idea.
I guess demand is king and if we want change then our buying habits are what needs to change.
However, our buying habits are dictated by what companies do.
A vicious circle I suppose.

 

[diburning]

Most companies will manufacture more items than the pre-orders. If for example, Atlas got a 2845 pre-orders for a BL20GH. Atlas will most likely manufacture about 3500 so that the people with the initial pre-order will get them, as we as manufacturing enough for hobby shops.

If Atlas only made as many models as there are preorders, then the hobby shops will have nothing to stock their shelves with.

The exception is Overland. Overland's brass models are made in limited runs to keep their prices high (for example, the brass 3GS21Bs. They only made a handful (less than 20) units to keep the prices high, and also because most people are not brass collectors so they wouldn't pay such a high price for them anyway)

 

[MGWSY]

Most companies will manufacture more items than the pre-orders. If for example, Atlas got a 2845 pre-orders for a BL20GH. Atlas will most likely manufacture about 3500 so that the people with the initial pre-order will get them, as we as manufacturing enough for hobby shops.

If Atlas only made as many models as there are preorders, then the hobby shops will have nothing to stock their shelves with.

The exception is Overland. Overland's brass models are made in limited runs to keep their prices high (for example, the brass 3GS21Bs. They only made a handful (less than 20) units to keep the prices high, and also because most people are not brass collectors so they wouldn't pay such a high price for them anyway)

Well its up to the hobby shops to preorder extra stock for their shelves. If atlas made 2845 to fill preorders then they would likely make an even 3000 as some orders still do come in after the deadline. But most manufacturers will not make a lot of extras for fear of them not selling. There is a whole process of how many extras to make based on roadname and how well previous models sold.

 

[diburning]

Keep in mind that the hobby shops don't order directly from the manufacturer.

Most of them order from Walthers, Horizon, or both, or some other distributor.

Distributors like Walthers probably have a maximum number of pre-orders from the manufacturer. The Atlas gensets are listed at Walthers as sold out advance reservation, delivery date TBA. The status was changed to "sold out" before the pre-ordering closed. Pre-ordering is usually done by the modeler who reserves the item through their hobby shop or dealer, who reserves it through their distributor. If the shops want extra stock for their shelves then they may order more, which kind of throws off the idea that the manufacturer uses pre-orders to see if theres any interest in a model.

 

[MGWSY]

Well I can say that one thing I noticed with the distributor that I go through is they want less and less items sitting on the shelf and to ship everything they have preordered for the hobby shops that have preordered before the deadline. Now its up to he hobby shops to order extra stock before the deadline and even if they order 6 - 12 extras of something chances are people will order between the deadline and arrival date leaving no extras to have on the shelf. Now for an example. the atlas GP40-2L in CN and Guilford from my distributor are all sold or oversold meaning somebody isn't going to get any. The distributor still orders them hoping the manufacturer orders more then preorders and they can fill all orders or that some places flat out cancel them leaving extras to sell, if not then there WILL be people not getting what they ordered. Think of it like how airlines oversell seats on a plane then if everyone arrives they say there are no seats left and your stuck on standby. LOL

 

[ChevelleSSguy]

I saw that ad in Model Railroader as well and it was an eye opener for me as well.

 

[LATX]

I have to say I'm very impress with the open letter and it shows some insight in the business I'm glad I preorder LRC

 

[eTraxx]

But most Manufacturers do sell at 60% - 70% off retail. Distributors sell items to shops anywhere from 40% - 55% off retail, the Distributor buys from the manufacturer for 55% - 75% off retail. It all depends on the manufacturer.

"Back When" .. mid 80's I managed a Railroad Hobby Shop in Texas. We purchased from the whole-seller at 60% of Suggested Retail. Ordering direct from the manufacturer (Bowser if I remember) was 50%. Everything else was up to the dealer for markup.

 

[NYW&B]

I was under the impression that the pre-orders were just a gauge to see the ballpark of actual models made. For instance, if there was 200 pre-orders, then they would make say 225 or so models. Maybe I'm wrong, because I have also heard that some companies only make the pre-order amount.
I can understand not wanting to blindly make a certain amount, but a percentage over is a good idea.
I guess demand is king and if we want change then our buying habits are what needs to change.
However, our buying habits are dictated by what companies do.
A vicious circle I suppose.

Having been in the hobby a great many years, I am constantly surprised at just how accepting current hobbyists are to the pre-order mania of the manufacturers. Whereas it used to be that the hobbyists dictated the hobby's needs, now it is the manufacturers.

With regard to steam, the manufacturers are increasingly tending to produce only locomotives honestly intended only for basement-filling layouts, or collectors, and at ever increasing high prices. The only choice the hobbyist is offered now is whether or not the item will be made at all, through the number of pre-orders received. And...you will also find that the several of the manufacturers are not running pre-orders, plus 10%. Rather, what you are getting is typically pre-orders MINUS 5%, or so, to assure everything will be sold out on arrival. I have been stuck twice in recent years on items I pre-ordered near, but certainly well before, the manufacturer's actual order cutoff date and still didn't get the model!

The buying sight-unseen thing is another dangerous aspect to me, especially when the pre-order price may be set at $350 to $500. How do I know the model will be good or fully accurate? As a result, I'm no long in the market for ANY locomotive being offered, or planned. If something does come up that I absolutely can't live without, I'll either wait for the 50% off sale, or find it on eBay at a substantial savings AFTER it's been thoroughly reviewed in a couple of the magazines.

NYW&B

 

[tomustang]

If anyone has ever worked in a manufacturing plant before they know how the system works. Rapido is just trying keep there butts profitable by the best means and that is making sure they can cover the complete building process (design/mold making/employees/all the way down to keeping the lights on) before throwing any money into work they want to do.

 

[LATX]

Well to be honset this is my first pre-order and it is thru Rapido-Trains for the LRC but you have to think of the big picture as Jason says and a lot modelers on here say to. A lot has messed the industry of modeling up from taxes to manufactoring to da recession. And it is sad that it is this way. Back in the "GOLDEN DAYS" (I can't actually say I remember due to I'm only 24) but I have read about it. Companies like Lionel and American Flyer (yes I knw that O and S scale, it jus for referance) made it cheaper and produce large numbers of models to get people minds off the bad times. Now when you actually look at the hobby there is a lot of stuff it completing against. For instance PS3,Xbox,Wii and computers. And also there is a lot of other manfacturers prdoucing the same model with cheaper prices and details added on already. I.e Walthers Amfleet 1 vs Bachmann Amfleet 1 passenger cars.

 

[malletman]

One also has to remember that back in the "good ol days" of Lionel, AF and Athearn, the stuff was made here in the USA, including most or all of the tooling. Now its all in China and only at a couple of different factorys. So production time must be booked well in advance. Tooling bought, paid for and produced well in advance. Lionel and Athean used to produce thier tooling in house and produced the trains in house. So it was easier to control production times and costs of shipping stuff from Asia to the USA that we deal with now. I know with Bachmann products, the quality control is all over the place. I can pull 4 engines from thier boxes at the LHS and not one will run the same as the other, and one might not run at all. The plastic train industry is becoming much like the brass industry. You preorder well in advance, wait patiently (hopefully lol), then pray the model runs right when you get it home on your layout. And much like the brass industry of years ago, sometimes you get a real winner and sometimes you get one with issues that either you get to fix as its to difficult to aquire a replacment, or you send it back and again wait for it to be fixed. The letter was a well written and very open responce to what any company producing model trains in todays economy face and deal with to get a model from an idea to on your layout. I would love to see an open letter from a modern day brass importer to the issues they face. Matt out at Train and Trooper had a production run of ET&WNC ten wheelers made for thier shop. I would love to hear some insight to what it took for him to make that project happen.

 

[zoegraf]

I just got my copy of the new MR for April and it had an interesting letter about the state of Pre-Ordering in the train industry.
I am one who disliked the whole pre-order system, but the letter was pretty well written and definitely made me think about the smaller companies.
I still think the larger companies should be able to make overages, but I know have a better understanding of the matter.

Just wondering what everybody else thought about it.

I personally don't care for the pre-order system. I tend to have problems with it such as getting product with defects such as poor assembly or with lettering and heralds askew. Usually the maker will replace it or the hobby shop will take it back, but it's a headache especially when there are none left to choose from to replace it.
I used to wait for stock to arrive in the hobby shop and head over immediately. Then I would go over the particular model that had just been released and pick the best one out of the batch that had the best alignment of logos/heralds/numbers. The employees in the hobby shop have no problem with me doing this wearing my magnifiers.
I'd have no problem with pre ordering, but lately there has been inconsistency with the quality control of the products especially when it comes to the application of the numbering, heralds/logos and assembly. I usually have no problem with tweaking the assembly part of it, but there is nothing I can do with the askewness.
It seems to be a gamble when pre ordering for me, but a gamble I'm willing to take so far with some products. I ordered a brass diesel once and was very disappointed with the alignment of the striping, and the cab numbers being askew. One wouldn't expect that after paying over $1000.00 for a product. I wish they offered the option of just painting it so I can decal it myself.