Farish stuff on the way

[Buzzard]

Are Farish deliberately making limited runs or are they underestimating how well these are selling ?

They've been doing the former for ages and possibly not researching properly how many of x is needed for a train i.e. the latter.

Take the Mk2 aircons in Virgin livery as an example.  You could get the RLO and BSO quite easily but you'd need 5 TSOs to make up a cross country rake and they might've not been made in multiples of 5 of the others.  The FO was similarly hard to get hold of.

RevolutioN seem to be taking the right approach in asking for orders before final production commences.  However if you order say 20 and after the order book closes you realise you actually need 21......  Your fault not theirs.

[Roy L S]

Let's not forget that Farish products will be a very small and in the grand scheme of things relatively unimportant part of what the Chinese factory produces.   

It is fairly well known that Bachmann do production runs of 1008 for each livery variant of Farish general releases and 504 for special editions. That's whether it is a 16T wagon or a loco.

I suspect the approach and volume produced has little do with them failing to do proper research or not knowing their market, they will have to make a call how much of their cash they tie up on a single product and for how long (as opposed to diversifying amongst a number). 3000 (say) Mk2s of any single variant would take a very long time to sell so from a business perspective better to sell out of what they do make and reorder more - a much more effective use of their working capital than having stock in the warehouse I'd think. Also allows for different running numbers.

RevolutioN are a totally different proposition, not least because they are not commercially driven, take a part (half?) payment up front and full payment before delivery. Thry don't therefore have the same working capital considerations.

Regards

Roy

[47033]

Roy,

Are you saying that Farish would do a run of 1008 of each coach in each livery ?

Jamie

[Mr PJ]

You just have to look at the shelves of my local model shop to see that it in reality it doesn't make business sense not to research your market.

All the TSOs are snapped up very quickly after they are released. Mk 1 or Mk 2 BSO's, and even many of the FO/FKs sit on the shelves for months - or more often years.
I bought their last remaining Mk2 TSO from the new batch and a BSO from the batch that came out last year - 5 quid cheaper of course...

That's crux of the problem - with  3-5 TSOs or so, roughly, to every BSO, its leaves loads of the latter that no-one wants to buy - so the market if full of surplus coaches that have got nothing to go with.

Cheers
Paul

[Roy L S]

Roy,

Are you saying that Farish would do a run of 1008 of each coach in each livery ?

Jamie

Hi Jamie

Yes, as I understand it that is the case.

Regards

Roy

[47033]

Roy,

If that's the case then that is simply ridiculous.   

Most trains would have had at least 4 or 5 times as many second class coaches as first class, brake coaches or buffets.   So why make the same amount of each......

No wonder all the second class coaches sell out in a month and the rest sit on the shelves for ages.  If that in fact is true, 1008 of each then that's plain crazy.

Jamie

[Roy L S]

Roy,

If that's the case then that is simply ridiculous.   

Most trains would have had at least 4 or 5 times as many second class coaches as first class, brake coaches or buffets.   So why make the same amount of each......

No wonder all the second class coaches sell out in a month and the rest sit on the shelves for ages.  If that in fact is true, 1008 of each then that's plain crazy.

Jamie

Hi Jamie

I suspect it may be to do to do with production slots and cashflow. There is only limited capacity in the factory and they need to produce the whole range of coaches and other items.

Then they have to decide how much cash they tie up in each one. Don't forget your working capital works more effectively for you the more quickly and frequently you turn your stock over and make a profit on that stock.

Regards

Roy

[Newportnobby]

Don't forget your working capital works more effectively for you the more quickly and frequently you turn your stock over and make a profit on that stock.

Surely that's what Jamie is saying, Roy.
Due to the composition of a rake there is far more demand for the 2nd class coaches and therefore the 1st class versions, having been produced in the same batch number, will sit on the shelves and not help working capital at all? To me, it only helps those who want the 1st class stuff as they are likely to be heavily discounted to shift them

[MikeDunn]

Mick,

Who actually owns them when they're on the shelf, hmmm ?

It's not GraFar ...

[Newportnobby]

I deliberately didn't mention whose working capital for that very reason, Mike.
I have no idea of retailers trading terms with Farish, but maybe some smaller shops are on a sale or return basis

[Roy L S]

Indeed, whose cash is a very fair point.

By the look of stocks at Barwell at least some is Bachmann's. They would of course argue (quite fairly) that over time re-runs of coach batches will favour those more common ones and with the benefit of a different running number each time. BUT there will be a wait while they fit in further production around all the other demands of production time. Those less common ones like Brakes and RMBs will sell at a slower rate to complement the subsequent releases. I feel quite sure all of this will be factored in to Bachmann's strategic planning.

At a purely selfish level (if you can afford to) the best strategy is clearly to buy what you "need" while they are available. Of course you may pay more, but then that's just demand and supply in a nutshell!

Roy

[Ben A]

Hello all,

When it comes to model trains, no factories will produce less than a thousand items to my knowledge.

And if a model is a new tooling, there is a need usually to increase that minimum run to about 3000.

This is if you want to factor in Chinese factory profit, UK manufacturer profit and UK retailer profit on top of the actual cost of raw materials, packaging, assembly and shipping.

Profit is usually calculated by doubling, so if the actual cost is X, Chinese factory price is 2X, UK manufacturer wholesale price is 4X and UK retail price is 8X.  And remember to include VAT, so the actual RRP including tax is 1.2 x 8X = 9.6X.

In short, if you pay full RRP on a model here in the UK then the chances are that's nearly ten times what it actually cost to make it.

Of course some retailers will take a hit on the mark-up in the hope of making up the shortfall in profit by selling in quantity, so may be selling at 6X or 7X (though they still have to add VAT.) 

And it's easy to go out of business if you undersell since you can very quickly run into a vicious circle of low cash-flow leaving you unable to afford to stock the latest models, meaning customers quickly start going elsewhere when they know they only have a limited time to find a particular item.

When Farish produce a new model like the Mk2As then some parts - bogies, underframes, wheels, couplers, possibly roofs, can be shared with just the bodyshells, interiors and glazing unique to individual vehicles.

So they have to produce at least 1008 of each sub-type.  Subsequently they can go on to produce 504 of a particular vehicle that's selling well (TSO say) but they would be unlikely to produce more than the minimum in a first run in case the model proves to be a poor seller.

Even when they know a model has sold well, any future production still has to compete with other models for a production slot.

And on top of that a lack of TSOs will also probably lead to some customers buying, instead, poorer selling FKs or BSOs (for s a significant, and no less important, sector of the market a coach is just a coach) so they are helping their retailers by holding off production of further TSOs.

This is somewhat oversimplified but gives a general picture.

cheers

Ben A.

[47033]

Thank you for that explanantion Ben, it certainly gives me an insight into what else is involved in the process.

I still can't help thinking something is not quite right when the TSO's sell out within a month of arriving in the UK, for the second time. I was just lucky enough to get 2 rakes on the first batch (374-710) and couldn't believe they ran out so quick. I was even more surprised with this second batch selling out so quick. I hear what Ben said about competing for scheduling with other models at the factory but these are a HOT seller, a double run of 1008 or treble even would probably still sell out in a very reasonable time frame. Who knows, I don't get to see the big picture. A retailer I use frequently had only 3 left (I needed 6) so I called them and they said they had another 30 on order with Farish.  Unfortunately Farish hadn't updated their website (shame on you Farish) and they were still showing due NOV/DEC.   

Something just wasn't sitting right with me so I checked the retailers website daily to find a week later the product had been removed. I called them and was told Farish had sold out and no more were available from them.  Panic set in as I tried to find another retailer with 6 in stock.  I could have found 6 from multiple vendors easily but with shipping to the US that wasn't economically feasable. I did manage to find a vendor, thankfully, so I have 6 of them (plus 2 FK's) winging their way across the Atlantic as I type.

The main lesson I've learned here is that with any MK1/MK2 second class coaches that are released I need to buy exactly what I want/need right away.  The first and 1/2 brake coaches can wait, the BG's though seem to sell like hotcakes too (probably because they help make up parcel train rakes or can go with any MK1, 2 or certain Mk3 rakes).  I still see no expected date for the release of the MK2f but maybe late next year might allow my bank balance to recover.  You can bet I've got a pre-order in for 12 of those Mk2f TSO's already.

Jamie

[DJM Dave]

More than a long way out Ben.

Factories will make as many as you want in general.
I've known it as low as 25 items for a brand new model.

However, this isn't economical to most.

Yes the Chinese like nice big runs, but in my past life that was as low as 200 models new from tooling.
My J94 special commissions are 200 per deco.

And deco samples can and will be supplied for decoration changed models, but it's up to the commissioning agent to ask for them or it will be usually done by photograph to save money (unless the bodies are suitably marked it will cost shipping, model cost and VAT too)

[Ben A]

Hi Dave,

You defintely know more about this than me plus you're used to dealing with the Chinese factories while my contacts have almost always been second hand.

My experience has always been that there is an expectation of a minimum order of at least 1000.

If that figure is wrong then yes, that could be a real boon to a project such as this.

cheers

Ben A.