Cost of N Gauge Models in Context

[maridunian]

My apologies if this point has been made before, but we do have a specific problem in the UK that bears heavily on anything we buy from abroad:



Basically, we're paying almost twice as many pounds for the same thing as we did 10+ years ago. This shows up in RTR models made overseas, but also things like Shapeways prints (and P&P costs) etc.

Mike

[Roy L S]

The Farish rolling stock is just simply very poor value, it may have a little more finesse but not at close to double the money compared to Dapol.

I have not bought a single Farish item over the past few years at release, only bought when they are dumping the unsold stock at a significant discount via the box shifters retailers.

There is simply no point in repeating the same basic message expecting others to change their minds. As has been repeated ad-nauseum, value is an entirely subjective matter and your opinion is simply that, an opinion.

My view of value is different and "value" does not mean the same thing as "cheap". Farish models are very good quality highly authentic models and with that comes a price. I am looking forward to being able to get my hands on the Thompson coaches, based on my NGS Thompson BGs they will be exquisite and I am happy to pay £35 plus for that. I couldn't get anything of similar quality made at anything close to that price.

Roy

[Rabbitaway]

I am very aware of the difference between value and cheap

As PLD said this is my opinion along with a number of others posting here

There have been many businesses fail because of overpricing and not adding value because they do not understand what value means to the majority of their customer base.

As I have said before Bachmann in my opinion has a poor business culture, with examples being shutting customers out of their exhibition stands unless you pay to join their club, no online profile and restrictive business practices. As the leading manufacturer this behaviour is not helping promote the hobby. Bachmann need to modernise their practices to meet the changing retail environment and this change will only accelerate as we come out of Covid-19. Just look at what others are doing eg Hattons on YouTube, high engagement by Revolution on social media etc. They are building brand loyalty and support through modern retail practices. We all know Ben, Mike, Joel and Simon from the other manufacturers, now who again is the face Bachmann engaging with customers through various media platforms!

Therefore the experience and customer engagement with the company adds value as well as the product itself. The hobby is a leisure activity and it is the experience of involvement and engagement that we value, is it not?

May be a better statement is that Bachmann as business offer a poor customer experience with regards to value,  with high prices being one of the factors amongst others as as noted above,  in my opinion of course

A lot has changed since the days when Graham Hubbard ran the business

[joe cassidy]

Quality can be measured by estimating the manufacturing cost of a product.

Such analysis is possible even for something as simple as a sheet of paper.

Best regards,


Joe

[PLD]

Quality can be measured by estimating the manufacturing cost of a product.

Such analysis is possible even for something as simple as a sheet of paper.

Best regards,


Joe

So you reckon an Austin Allegro was twice the quality of any Japanese car of the era!
In Manufacturing cost, you're measuring production efficiency, workforce productivity, economies of scale and a whole raft of other facets, but certainly not "quality"...

[njee20]

Quality can be measured by estimating the manufacturing cost of a product.

Such analysis is possible even for something as simple as a sheet of paper.

Best regards,


Joe

But how does that work in practice?

You say they use a less subjective method, so is the cost of manufacture for goods known and published? Let's be clear that's not the same as quality though, you can pay a lot for a poor quality product.  It sounds like you're applying some pseudo-maths to try and validate a concept which is still just as subjective as "value".

To reuse the previous example what is the "price/quality ratio" of Peco and Farish wagons? Is there an optimum or a baseline? Are there categories?

I really can't get my head around that making any sense in reality.

[Roy L S]

I am very aware of the difference between value and cheap

As PLD said this is my opinion along with a number of others posting here

There have been many businesses fail because of overpricing and not adding value because they do not understand what value means to the majority of their customer base.

As I have said before Bachmann in my opinion has a poor business culture, with examples being shutting customers out of their exhibition stands unless you pay to join their club, no online profile and restrictive business practices. As the leading manufacturer this behaviour is not helping promote the hobby. Bachmann need to modernise their practices to meet the changing retail environment and this change will only accelerate as we come out of Covid-19. Just look at what others are doing eg Hattons on YouTube, high engagement by Revolution on social media etc. They are building brand loyalty and support through modern retail practices. We all know Ben, Mike, Joel and Simon from the other manufacturers, now who again is the face Bachmann engaging with customers through various media platforms!

Therefore the experience and customer engagement with the company adds value as well as the product itself. The hobby is a leisure activity and it is the experience of involvement and engagement that we value, is it not?

May be a better statement is that Bachmann as business offer a poor customer experience with regards to value,  with high prices being one of the factors amongst others as as noted above,  in my opinion of course

A lot has changed since the days when Graham Hubbard ran the business

I would have to agree that the Bachmann customer experience and engagement could be improved based on my own interactions of late. I miss the times when the ever knowledgeable chief designer of N at the time (Colin Allbright) would stand in the public area at TINGS and make himself available to talk about products, I enjoyed those conversations and it made me feel valued as a customer. Now a quality customer experience comes with a price label - collectors club - to see the latest products you have to go into the "secret" area. That said it's not my business to run.

Roy

[joe cassidy]

Estimating the manufacturing cost of a competitor's product is not rocket science.

You need to have an idea of the cost of raw materials/components, number of staff, cost of energy, scrap rate, overheads (more difficult) and production volumes.

There was an article on the internet about the manufacturing cost of Beats headphones, perceived to be a "quality" product.

[dannyboy]

I think everybody ought to agree to differ on this. 

[PLD]

Estimating the manufacturing cost of a competitor's product is not rocket science.

You need to have an idea of the cost of raw materials/components, number of staff, cost of energy, scrap rate, overheads (more difficult) and production volumes.

So...

All other factors being equal, if Manufacturer A has a different Electricity supplier and pays 10p per more per KWH, that magically makes their product a "higher quality"??

or

All other factors being equal, if Manufacturer B uses BP fuel instead of Tesco in their delivery van, does that somehow make their product a "higher quality"?

[njee20]

Estimating the manufacturing cost of a competitor's product is not rocket science.

You need to have an idea of the cost of raw materials/components, number of staff, cost of energy, scrap rate, overheads (more difficult) and production volumes.

So it's still totally subjective then... 

What is the ratio then? I'm genuinely interested in this concept, not being facaetious, it just seems grossly flawed! You're talking about replacing "value" with a proxy for profit margin, where you guess half of the equation. Rather than saying "that's good value", do people say "that has a higher price:quality ratio?".

[maridunian]

Interesting it can be said that Bachmann are the leading manufacturer, yet they're not getting it right?

They came from nowhere, convinced people that (cheap) details invisible to the naked eye matter more than (more expensive) mechanical resilience, limited production and priced for rarity. Kerching!

Mike

[joe cassidy]

What I'm trying to explain is that it is possible to establish a baseline to compare the cost per unit for Farish and Dapol.

I would like to ask Snowolflair to help me.

thanks


Joe

[cutting42]

What I'm trying to explain is that it is possible to establish a baseline to compare the cost per unit for Farish and Dapol.

I would like to ask Snowolflair to help me.

thanks


Joe

I have some involvement in manufacturing and there is simply no way that you as an outsider can estimate to any level of useful accuracy what the unit costs for Dapol and Bachman are. To get even close you would essentially have to develop a fully costed business plan with the same staff level, salaries, suppliers, geographic variances, pensions, loans and a thousand other items.

To what point? It is irrelevant, what are you going to do with that information, show it to Dapol and tell them they are too expensive? I am sure they have heard folks tell them that already.

Prices are not set by manufacturing cost, they are set by what the market will stand. If you can make and deliver the products under the market price then you will make profit. If you can't then you need to persuade the market to pay more by adding value added features or branding or go out of business.

Even Revolution who are supplying at close to cost have some profit built in, they have to, to cover warranty and errors along the line. I would expect them to also cover their expenses for travel, storage etc etc. However I suspect that they are the closest you will ever get to a raw cost per unit cost if you look at their early bird pricing.