Trade New Products

[Rob Pulham]

JLRT Class 08?

I must admit I tend to justify the cost of kit building by the amount of hours worth of pleasure I get from the kit. So a complex kit in my mind works out very cheap if I have to spend lots of hours building it to end up with an excellent model, the price per hour's entertainment just keeps falling.

 

[Dikitriki]

JLRT Class 08?

I must admit I tend to justify the cost of kit building by the amount of hours worth of pleasure I get from the kit. So a complex kit in my mind works out very cheap if I have to spend lots of hours building it to end up with an excellent model, the price per hour's entertainment just keeps falling.

I'm not sure I entirely agree with that. I can think of some kits where everything is wrong (a certain Fairburn comes to mind), and the time taken to correct is horrendous. By your argument, this will be really good value on a ? per hour basis. However, on an absolute time taken basis, I'm losing the will to live. If it wasn't for the fact that I need a Fairburn, and there is no other route, this particular model would remain unfinished. I'm viewing it as a challenge, one that extends my skill set, me versus the model, and I'm bl**dy well going to win.

I think that for your argument to be valid, you would have to start with a list of kits worth building, and I'm not even beginning to start that list

From my perspective, I always cite Martin Finney's Duchess, and MOK's 8F as great kits. Absolute joys to build, pretty expensive, but much more importantly for me, the quickest kits I have built, just because they all go together and there are few extra parts that need fabricating.

Back on topic, somewhat guiltily, I liked what I saw in JLTRT's 08, but a ?500 cost all in is admittedly off-putting. As it happens, I have a MMP one in my box, so I'm not considering purchasing another. My wallet might see the light of day for his G2 though

Richard

 

[Phill Dyson]

JLRT Class 08?

Some of us actually build kits for the end result rather than the pleasure of building them............then again maybe I have been building the wrong kits :laugh:. I personally think that JLTRT diesel range in general have struck the right balance between ease of construction & prototype accuracy, the thing that puts me off them is the price.

Phill

 

[Rob Pulham]

JLRT Class 08?

[quote=""Rob Pulham"":2ls6ysvk]I must admit I tend to justify the cost of kit building by the amount of hours worth of pleasure I get from the kit. So a complex kit in my mind works out very cheap if I have to spend lots of hours building it to end up with an excellent model, the price per hour's entertainment just keeps falling.

I'm not sure I entirely agree with that. I can think of some kits where everything is wrong (a certain Fairburn comes to mind), and the time taken to correct is horrendous. By your argument, this will be really good value on a ? per hour basis. However, on an absolute time taken basis, I'm losing the will to live. If it wasn't for the fact that I need a Fairburn, and there is no other route, this particular model would remain unfinished. I'm viewing it as a challenge, one that extends my skill set, me versus the model, and I'm bl**dy well going to win.

I think that for your argument to be valid, you would have to start with a list of kits worth building, and I'm not even beginning to start that list

From my perspective, I always cite Martin Finney's Duchess, and MOK's 8F as great kits. Absolute joys to build, pretty expensive, but much more importantly for me, the quickest kits I have built, just because they all go together and there are few extra parts that need fabricating.

Back on topic, somewhat guiltily, I liked what I saw in JLTRT's 08, but a ?500 cost all in is admittedly off-putting. As it happens, I have a MMP one in my box, so I'm not considering purchasing another. My wallet might see the light of day for his G2 though

Richard[/quote:2ls6ysvk]

Sorry Richard, I entirely agree with you but I wasn't very clear in my post . I meant a good quality but complex kit, like MMP, Finney (I hope a Finney Duchess finds it's way to me next year ) and MOK justifies paying a more at the outset for quality and then the price coming down by the hours of enjoyment building it - Like you I don't regard battling with a kit to be much enjoyment. I do get immense pleasure from the building, but now I hope to get equal pleasure from the running once I have some where to run them.

Even though the MOK Standard 4 is a bit late for my modelling period I have been very tempted.

 

[Simon Dunkley]

JLRT Class 08?

Just a thought, but it's possible that Pete Waterman charges what he does because when he puts the cost of development and production against the projected sales volume, this is what he comes out with, allowing for the fact that he is a businessman and will want to see some form of return on his investment. This may also apply to limited run projects by other organisations such as the Blue Pullman in 00: I see no reason why not.

In either case, if the product sells in sufficient numbers at what some consider to be too high a price to make it commercially viable, complaining/commenting on the price is not going to change the manufacturer's policy one iota. Generally speaking, the cheaper price option is either mass-produced in tens of thousands (at least) or requires more time to be input by the purchaser: how much do you value your time? Let me illustrate with a short tale.

A few years back at a G1MRA meeting I was discussing a very nice model which was for sale with its maker. I was not in the market for it, but did ponder on the price. He kindly told me. I asked if he would consider swapping for 8 scratchbuilt and weathered wagons, as it would take me about a week each to build them, and their combined value on a per-hour basis for a 40 hour week, paid as a professional craftsman, would be slightly above what he was asking for his livesteam railmotor. He complained that his creation had taken 16 weeks, and most of those were more than 40 hours, so how was this fair? Quite simply, I value my time more than he did - in fact, if he had sat down and done the sums, he was paying himself (if he could get a buyer*) less than the minimum wage at the time.

*The loco was for sale as someone had asked him to build one for him, without first discussing a price. The price asked, far too low considering the work but actually all that anyone was prepared to pay, was 4 times too high for this gent (used to the prices of batch-built locos in 16mm scale) who promptly scarpered and left the poor man with a very lovely model but no income for his troubles. Moral: agree a price and get a deposit...

I agree, though, that work should not be put into a kit because parts are simply wrong: in such a case, it should be returned to the vendor with a request for a refund, even if a start has been made on it. (You cannot do this if the fault is your own, i.e. poor workmanship.) Failure to get satisfaction here then leads one onto the local trading standards people. Maybe if more people did this, there would be fewer poor manufacturers out there, and less grumbling elsewhere?

 

[djparkins]

JLRT Class 08?

I suppose what I was trying say earlier in this thread could be summed up more succinctly with the following observation.

MMP is 2-3 months away from launching 14 new wagon kits which I consider to be a step-up from even our Mk.1 coach kits, in terms of detail. Hearts and Souls have been poured into them.

It is then, frustrating to say the least, that much of the debate about them will not be about how good [or bad!] or how detailed or accurate [or not!] they are - but will be on the 'how complex are they' or 'how long do they take to build' level and will not move past that. Debate purely at that level can tend to put people off the kits who are possibly quite capable of building them, as they are led to believe they are harder to build than they actually are.

They are just kits - that people can choose to buy or not, as per their preference. They will be out there for those that want them and can be ignored by those who don't.

When I look at plastic kits or many of the RTR wagons for example, I cannot get past the thick solebar flanges & W irons, the integral leaf springs, the lack of full underframe detail and the lack of pinning holes in the brake lever guides - to name just 10% of the things that jump out at me! But I fully accept that for many this is simply not a problem. In turn, it is surely possible for those people to understand that there are those of us for whom these are real issues. In a small way, MMP is just trying to produce kits for these modellers - thats all.

I hate pop music. I want to listen to something that challenges me far more - but I fully accept that there are many [most] people who love it and need the 'hook line' that it gives. The one thing we can surely all agree on though is that it is pointless asking any musician to change the style in which they play. They cannot do it - any more than a kit designer can!

Regards,

David Parkins

 

[djparkins]

JLRT Class 08?

I agree, though, that work should not be put into a kit because parts are simply wrong: in such a case, it should be returned to the vendor with a request for a refund, even if a start has been made on it. [/quote]

Well Simon - you wouldn't get a refund from me outside of the courts on a started kit! I would argue my case with Trading Standards!!!

Regards,

DJP

 

[lancer1027]

JLRT Class 08?

Hi David, thanks for posting , i have to agree with you totally. I for one am not an expert in soldering (far from it ) However i have built one of your MMP class 47's. It is a very good kit to build. It was fairly straight forward in construction and with the coloured diagram and instructions made it a pleasure to do. I also must say that yes, as i am not that good at soldering i did find certain parts a nightmare but that is not the fault of the kit it is my lack of skill. I eventually overcame these "issues" with a "put it down and come back to it after a few days when you have a fresh look on it" and is'nt this all about modelling , learning what you can and cant do , practice more and hopefully over a period of time you get better

Rob :wave:

 

[djparkins]

JLRT Class 08?

Hi David, thanks for posting , i have to agree with you totally. I for one am not an expert in soldering (far from it ) However i have built one of your MMP class 47's. It is a very good kit to build. It was fairly straight forward in construction and with the coloured diagram and instructions made it a pleasure to do. I also must say that yes, as i am not that good at soldering i did find certain parts a nightmare but that is not the fault of the kit it is my lack of skill. I eventually overcame these "issues" with a "put it down and come back to it after a few days when you have a fresh look on it" and is'nt this all about modelling , learning what you can and cant do , practice more and hopefully over a period of time you get better

Rob :wave:

Thanks Rob, Appreciated.

DJP

 

[Jordan]

JLRT Class 08?

Just a thought, but it's possible that Pete Waterman charges what he does because when he puts the cost of development and production against the projected sales volume, this is what he comes out with, ...

In either case, if the product sells in sufficient numbers at what some consider to be too high a price to make it commercially viable, complaining/commenting on the price is not going to change the manufacturer's policy one iota.

I've seen it posted somewhere I'm sure that the "mark-up" on JLTRT kits is 25%..? Which I'm not going to argue with; it does suggest the production costs for his kits must be quite high (approx ?300 per kit?). I'm no businessman, just possibly more guilty than some of complaining about prices!! Obviously there are people out there able to afford these kits (and pay someone else to build them!) so JLTRT won't worry one jot about the likes of me, as you say. I do just wonder if the 'profit margin' (and hence the price) was cut a bit how many more kits might sell... restoring the profit made? As I said I'm no businessman so it probably doesn't work like that at all...

I know one thing; This thread is certainly making me see the price of MMP kits in a new light... :scratch:

 

[Simon Dunkley]

JLRT Class 08?

I agree, though, that work should not be put into a kit because parts are simply wrong: in such a case, it should be returned to the vendor with a request for a refund, even if a start has been made on it.

Well Simon - you wouldn't get a refund from me outside of the courts on a started kit! I would argue my case with Trading Standards!!!

I doubt I would ever take you to court: the parts would fit and there would be no need.

If part way through building a kit, the bringing together of, say, two sub components is impossible due to demonstrable design deficiencies, then the kit is at fault as it is not of merchantilable quality, and the manufacturer should be asked to account for this.

I know people who have built things and commented that it was obvious the components had never been assembled by the designer - etched detail on the inside face of a solebar inlay (there were handed tabs to fit into slots, but some detail was specific to one end of the vehicle).

 

[28ten]

JLRT Class 08?

Jordan, I believe the cost of development is well in excess of ?20k for the CAM and CNC

 

[djparkins]

JLRT Class 08?

I know one thing; This thread is certainly making me see the price of MMP kits in a new light... :scratch: [/quote]


And our mark up is way, way, way above 25%!!!

 

[Jordan]

JLRT Class 08?

[quote=""Jordan"":16ynl246]I know one thing; This thread is certainly making me see the price of MMP kits in a new light... :scratch:

And our mark up is way, way, way above 25%!!![/quote:16ynl246]
Now you tell us... :lol: :lol: :lol: :lol:

 

[Simon Dunkley]

JLRT Class 08?

I do just wonder if the 'profit margin' (and hence the price) was cut a bit how many more kits might sell... restoring the profit made? As I said I'm no businessman so it probably doesn't work like that at all...

Well, in a way it works exactly like that: working that margin against demand is how any business makes money in a cost effective manner.

The 25% mark up you mentioned seems quite reasonable to me - it is certainly a lot less a markup than you will have paid for many items in the past, however, determining this and the final price is a difficult balancing act. So if a loco kit costs ?500, and there has been a mark-up of 25%, then it cost ?400 to produce it (?100 is 25% of ?400), and there is no way that it can go on the market for ?200. Even if the 25% you have heard reflects the final price, the kit still cannot drop below ?375.

It is not just aboout recovering the invested funds, but recovering them over a reasonable period of time. So, if you were to set up a new business and have loans to pay for equipment, you would want to pay that loan off as quickly as possible (reduces the total amount of interest paid) but to do it all in the first year would be difficult if you had to invest in major tooling, as you also need to generate income for yourself and your staff. You also need to make use of the tooling, which means you have bring out new models at regular intervals to generate the return to pay off the next stage of the loan, and so on. So you work out how many widgets or whatever you are likely to sell over a specified time span (hoping that there will be a good rush when the product goes live) and divide the development costs by that number. On top of this, you add in the real physical production costs (including staff salaries if you wish), and then you have your base cost.
Right, now add in your margin, which is to pay you a salary and also to pay things like your heating, rental/mortgage, plus what you are paying off on your business loan, and you end up with a price.

If you have underestimated demand, then you make more money and could have priced lower, maybe increasing sales and getting the same overall return, but if the margin is 25%, then a 10% reduction in price (using the hypothetical example of ?500 above) requires a 25% increase in sales volumes to generate the same "profit", profit being the money available to pay back loans (including dividends to share holders) and to invest in the business.
If yoou have overestimated demand, then it can be bad news very quickly...

Now, OK by all accounts Pete Waterman is a very welathy man and probably has not had to raise the finance via a bank, but he became wealthy by being a businessman, and he will run JLTRT on business lines. Not speaking for anyone in particular, and certainly not David Parkins (mentioned here solely as his range has been brought up for comparative purposes) but many in our hobby are cottage industries, doing things all by themselves on a part-time basis and often because they wanted something for their own needs, and found batch production to be an effective way of achieving this. If they priced as a full-time business, many would put their prices up, I am sure.

One of the reasons David's kits are priced as they are is his considerable experience in designing and producing components, not just for model railways, either. Quite simply when you buy one of his kits, you are paying very little money for a lot of detail and an enormous amount of expertise. I suspect that his activities in sales to military modelling subsidise his model railway output in ways no one has fully quantified.

Hope that helps.

 

[28ten]

JLRT Class 08?

[quote=""Jordan"":2tk1ed5w][quote=""Simon Dunkley"":2tk1ed5w]Just a thought, but it's possible that Pete Waterman charges what he does because when he puts the cost of development and production against the projected sales volume, this is what he comes out with, ...

In either case, if the product sells in sufficient numbers at what some consider to be too high a price to make it commercially viable, complaining/commenting on the price is not going to change the manufacturer's policy one iota.

I've seen it posted somewhere I'm sure that the "mark-up" on JLTRT kits is 25%..? Which I'm not going to argue with; it does suggest the production costs for his kits must be quite high (approx ?300 per kit?). I'm no businessman, just possibly more guilty than some of complaining about prices!! Obviously there are people out there able to afford these kits (and pay someone else to build them!) so JLTRT won't worry one jot about the likes of me, as you say. I do just wonder if the 'profit margin' (and hence the price) was cut a bit how many more kits might sell... restoring the profit made? As I said I'm no businessman so it probably doesn't work like that at all...

I know one thing; This thread is certainly making me see the price of MMP kits in a new light... :scratch: [/quote:2tk1ed5w]

Hi Jordan :wave:

I used to have a 'business mind' :lol: :lol: etc. etc. and if you are right a 25% mark-up doesnt seem to be a large margin/mark-up - yet I must admit I dont know what the industry standard is for such - so that mark-up sounds, from previous experience of other industries, very reasonable.

You are right though, if they price were lower there may be a higher sales turnover, yet I am not sure how big the 7mm (e.g diesel) market is, I would like to think that the ease of build USP - and a lower price - would attract new converts to our little world, which would help us all, manufacturers, punters and traders alike (perhaps just wishful thinking).

Cheers :wave:[/quote:2tk1ed5w]
put your business mind back in gear and think price elasticity :laugh:

 

[Simon Dunkley]

JLRT Class 08?

Incidentally, it cost Factory Records more to produce the 12" single "Blue Monday" by New Order (due to the sleeve design being far ahead of the times in terms of getting it printed cheaply) than they could sell it to the record shops.
They severely underestimated the demand - it has sold slightly less than 1,000,000 copies....

And what has popular music to do with this thread? PW...

 

[28ten]

JLRT Class 08?

Barriers to market entry or simply 'risk aversion' ?
Anyway as we have drifted way OT I thought I would post this old shot of the Tank filler and walk way on the MMP class B tank. Challenging but not impossible......

 

[Simon Dunkley]

JLRT Class 08?

Barriers to market entry or simply 'risk aversion' ?
Anyway as we have drifted way OT I thought I would post this old shot of the Tank filler and walk way on the MMP class B tank. Challenging but not impossible......

If it had been impossible, you wouldn't have been able to show us the picture...

Neat workmanship.

 

[djparkins]

JLRT Class 08?

One of the reasons David's kits are priced as they are is his considerable experience in designing and producing components, not just for model railways, either. Quite simply when you buy one of his kits, you are paying very little money for a lot of detail and an enormous amount of expertise. I suspect that his activities in sales to military modelling subsidise his model railway output in ways no one has fully quantified.

Hope that helps.[/quote]

This is developing into a fascinating thread.

It is true that we gain a volume advantage on some buy-ins and tooling due to our four ranges coming under one company - 'David J. Parkins' [MMP is just a range name]. In total we have approaching 700 products across the ranges, something like 500 etching photo tools in production and many hundreds of casting moulds.

MMP is less than 15% of our turnover but 80%+ of the hassle. In no other range do we get specific requests in any number to split kits or supply bits for kits purchased secondhand or simply to explain things. If I did not love railways there would be no MMP - we certainly don't need it to live comfortably!

Having said all that I will not let any one product subsidise another. I look at the costings for every single kit [or group of kits with things like the Mk.1 coaches] and they must all be viable within themselves or they simply do not get repeated as project types.

If there is another way to be a model kit manufacturer I've not found it in over 30 years of experience - and I know of no other 7mm mfr. who has either - not if normal market forces apply to them!

On a note of humour - our worst selling kit ever was in the old PWP [later RJH] range. It was the Mk.3 Sleeping Car, which I advertised at the time as the ideal kit for insomniacs - I sold ONE. Mind you,I did more than get my money back on it when RJH purchased the range! It does explain though why there is no Sleeping Car in our current Mk.1 range of kits!

Regards,

DJP