Open­ing the box £26

Model Rail (UK) - - NEWS - Richard Foster

I’ve been quite lucky that, in the last month or so, some par­tic­u­larly thought-pro­vok­ing e-mails have landed in the Model Rail in­box. It cer­tainly makes writ­ing an ed­i­to­rial eas­ier when some­one else gives you the in­spi­ra­tion!

This month’s ‘Open­ing the Box’ was in­spired by an e-mail from reader David Phillips and his view on the in­creas­ing use of ‘pre-or­der­ing’ as a way of sell­ing model trains. He’s in the fi­nan­cial po­si­tion where he can’t pre-or­der a model and finds that, by the time he’s saved up enough for what he wants, such as Hornby’s Peck­ett 0‑4‑0ST (be­low), the ini­tial run has sold out and is no longer avail­able.

David’s sit­u­a­tion is not an un­fa­mil­iar one. As we’ve said be­fore, rail­way mod­el­ling is an ex­pen­sive hobby. We all have wish lists of what we want to build or buy if money were no ob­ject. Un­for­tu­nately, it is.

Even the wealth­i­est mod­eller is lim­ited by what he or she can af­ford to spend on a model rail­way. And, of course, it is a hobby. First, we have to put food on the ta­ble, pay util­ity bills and so forth. Buy­ing a model lo­co­mo­tive is a lux­ury that we can’t all af­ford, es­pe­cially as prices are on the in­crease.

The profit mar­gins in man­u­fac­tur­ing and sell­ing model trains are not huge. Mod­els are ex­pen­sive to de­velop and ex­pen­sive to make, and a man­u­fac­turer will look to max­imise the re­turn on in­vest­ment in new tool­ing.

Model shops are also a key link in the chain. Whether a large, on­line ‘box shifter’ or a lit­tle shop on your lo­cal high street, they will need to take a cut of the RRP on the box. Both man­u­fac­turer and re­tailer play small but im­por­tant roles in their lo­cal economies, as they em­ploy peo­ple and use ser­vices. Nei­ther man­u­fac­turer nor re­tailer can af­ford to have prod­ucts sat on shelves.

Model man­u­fac­tur­ers are caught in a Catch-22 sit­u­a­tion. So what do they do? Do they pro­duce a lim­ited num­ber that sells out and leaves some mod­ellers, like David, dis­ap­pointed? Or do they pro­duce more and hope that they will all even­tu­ally be sold?

It’s a tricky one. When you pro­duce a model, you have an idea that de­mand is there but you don’t know for def­i­nite. There’s no way to test whether a model will sell or not - you have to go with gut feel­ing.

With in­ter­na­tional mar­kets in such tur­moil and with a cus­tomer base that’s not grow­ing, I’m of the opin­ion that you’re bet­ter off pro­duc­ing a small num­ber in the knowl­edge that you’re go­ing to sell them all. If de­mand is still there, you can then pro­duce another batch, know­ing that you’ve al­ready cov­ered your pro­duc­tion costs with the first run. If it takes longer to sell out the sec­ond batch, you should, at least, be mak­ing some profit.

Please keep your cor­re­spon­dence com­ing, as it’s great to hear your news, views and up­dates on your projects. We do read every let­ter and e-mail that we re­ceive in the of­fice with great in­ter­est and strive to, wher­ever pos­si­ble, re­spond to all of them. I look for­ward to hear­ing from you!

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