Post by jonklein611 on Feb 10, 2023 14:49:07 GMT -8
Dear Rapido Customer,
We're delighted to bring you the latest update from Jason Shron, our president. We're so delighted that we even created a logo for it. Over to you, Jason!
Thanks, Bobby. This month I want to talk about pre-orders. We all hate them. We at Rapido hate that we have to rely on pre-orders to make our products and you our customers hate having to commit to models one to three years before they actually show up. But they are a necessary evil. Here's why.
Back in the days of blue box kits, pre-orders were not needed at all. Because manufacturing was based on the idea of "one size fits all," the manufacturers could tool a model, inject thousands at a time, and churn out multiple paint schemes in each production run. The cost per model was low, the tooling cost was amortized (spread out) over huge runs, and there were no costly prototype-specific details.
More Prototype Detail
Over the last 25 years the hobby has moved more and more towards prototype-specific everything. We can't tool one RS-11 and just paint it in every railroad's colours. Instead, the moulds have numerous "body slides and inserts" designed and built.
Each body slide is steel tooling representing a whole new side, roof and/or end of a model; a specific railroad's details are included on it, such as regular door handles or knuckle buster door handles on a locomotive hood. Inserts are sections of the mould which can be replaced by a new section to get a variety of detail. For instance, we can use an insert for a grille on a locomotive side; we swap different inserts on the mould to get different grille styles, again according to each specific railroad.
Such complicated tooling costs a mint. For example, a simple F unit body mould can cost up to $15,000. Once you add all the slides and inserts, that cost can end up more than doubled!
Pre-Orders Positives and Negatives
Pre-orders are a way for manufacturers and stores to cut down on their risk. How else would we be able to determine how many models to make with each railroad's specific details? A Southern Pacific PA-2 has a completely different body from a New Haven PA-1, even though they share many common elements. We need to know in advance how many of each style to make.
We've also found that there are so many new releases coming out in our industry every month that excess inventory takes a long time to sell. Pre-ordering prevents stores and manufacturers from having too much money tied up in inventory. At Rapido we've found our inventory has been creeping up lately; we're now reducing how much we make for each product by a lot.
Finally, a strong early pre-order response to a project gives us the confidence to tool more prototype-specific detail that we did not think would be economical. See my 44-Tonner update below.
The downsides of pre-ordering are plenty. What if the manufacturer gets the details wrong when the model finally arrives? What if my interests change between when I pre-order and when I receive the model? What if this project is delayed by two years and by then I have to pay for a new roof and can no longer afford the model? What if there are quality control problems when the models arrive?
These are valid concerns. All manufacturers have been dealing with delays in production over the last few years so models that should only take one year to come out are sometimes taking three or four. This has been a huge challenge for the industry in terms of budgeting. If a model takes three years to come out, that means we're waiting three years from when we start paying the tooling costs to when we finally get paid by our customers. That's a lot of financing spread over a large product line...
What To Do About It?
While I can't speak for other manufacturers, I can share with you some conclusions that the Rapido team reached last week regarding this subject. Following the enormously successful Springfield Show - we're told it was the highest attendance in the show's history - the Rapido project management and public relations teams met for two days at a Middletown, Connecticut, hotel to do some strategic planning. Janet joined us as well, and we had a great time - including an operating session on Bill's gorgeous O&W layout! I should add that within five minutes, Dan Garcia had broken it.
While there are many prototype-specific details that we can't include in a model for reasons of economy or practicality, there are times when we could get it right but we simply made a mistake. See my note about the Union Pacific steam generator hatches in my January email update. Thankfully, all good manufacturers will do their best to correct mistakes when they happen. Similarly, all good manufacturers will endeavour to fix any quality control issues that come up. The Rapido team has tried hard on that front and I know many other manufacturers have as well.
At the show we had an unexpectedly enthusiastic response to our HO scale 44-tonner, and one of the main reasons was because we were launching the model with working samples rather than renders or very rough samples that didn't work yet.
At the meeting, we looked at our production and sales forecasts for the rest of 2023 and 2024. Several of our current projects have been delayed way beyond what we would ever consider to be normal. The HO scale D10, RS-11, RS-18u and RSC-14 in particular are coming out much later than originally anticipated, though I am glad to say they will all be here this year for sure.
The delivery delays have meant that a good portion of our models being delivered in the next 12-18 months have already been announced. We can thus slow down our announcements of products that have all-new tooling and wait until we are at the sample stage, like we did for the 44-Tonner. This will bring the announcement-to-delivery time down considerably. Of course, we still have new runs of existing tooling to announce, and those always have a shorter delivery time.
Pre-Order Discounts?
There are occasional products where we honestly don't know how they will do, such as the N scale TurboTrain or the HO scale BART train. In the past, we have announced these at a much earlier stage and provided a 5% "early bird" pre-order discount. We're planning to do more of these in the future. This allows us to gauge whether or not our customers actually want these models, and is particularly helpful with oddball models like the N Scale Rohr Turboliner. It also gives you an incentive to pre-order early: you know the model will take longer to arrive but you will get a discount and your price is protected.
Please Keep Them Coming!
All we ask from you is to keep pre-ordering. We need those pre-orders in order to know how many of each product to make. Never pre-order with a store that demands payment up front beyond a small deposit. That way, if the models arrive and you do need that new roof instead, or the N scale Cavalier arrives and the coaches are green when they were supposed to be blue, you can always cancel your order.
We're delighted to bring you the latest update from Jason Shron, our president. We're so delighted that we even created a logo for it. Over to you, Jason!
Thanks, Bobby. This month I want to talk about pre-orders. We all hate them. We at Rapido hate that we have to rely on pre-orders to make our products and you our customers hate having to commit to models one to three years before they actually show up. But they are a necessary evil. Here's why.
Back in the days of blue box kits, pre-orders were not needed at all. Because manufacturing was based on the idea of "one size fits all," the manufacturers could tool a model, inject thousands at a time, and churn out multiple paint schemes in each production run. The cost per model was low, the tooling cost was amortized (spread out) over huge runs, and there were no costly prototype-specific details.
More Prototype Detail
Over the last 25 years the hobby has moved more and more towards prototype-specific everything. We can't tool one RS-11 and just paint it in every railroad's colours. Instead, the moulds have numerous "body slides and inserts" designed and built.
Each body slide is steel tooling representing a whole new side, roof and/or end of a model; a specific railroad's details are included on it, such as regular door handles or knuckle buster door handles on a locomotive hood. Inserts are sections of the mould which can be replaced by a new section to get a variety of detail. For instance, we can use an insert for a grille on a locomotive side; we swap different inserts on the mould to get different grille styles, again according to each specific railroad.
Such complicated tooling costs a mint. For example, a simple F unit body mould can cost up to $15,000. Once you add all the slides and inserts, that cost can end up more than doubled!
Pre-Orders Positives and Negatives
Pre-orders are a way for manufacturers and stores to cut down on their risk. How else would we be able to determine how many models to make with each railroad's specific details? A Southern Pacific PA-2 has a completely different body from a New Haven PA-1, even though they share many common elements. We need to know in advance how many of each style to make.
We've also found that there are so many new releases coming out in our industry every month that excess inventory takes a long time to sell. Pre-ordering prevents stores and manufacturers from having too much money tied up in inventory. At Rapido we've found our inventory has been creeping up lately; we're now reducing how much we make for each product by a lot.
Finally, a strong early pre-order response to a project gives us the confidence to tool more prototype-specific detail that we did not think would be economical. See my 44-Tonner update below.
The downsides of pre-ordering are plenty. What if the manufacturer gets the details wrong when the model finally arrives? What if my interests change between when I pre-order and when I receive the model? What if this project is delayed by two years and by then I have to pay for a new roof and can no longer afford the model? What if there are quality control problems when the models arrive?
These are valid concerns. All manufacturers have been dealing with delays in production over the last few years so models that should only take one year to come out are sometimes taking three or four. This has been a huge challenge for the industry in terms of budgeting. If a model takes three years to come out, that means we're waiting three years from when we start paying the tooling costs to when we finally get paid by our customers. That's a lot of financing spread over a large product line...
What To Do About It?
While I can't speak for other manufacturers, I can share with you some conclusions that the Rapido team reached last week regarding this subject. Following the enormously successful Springfield Show - we're told it was the highest attendance in the show's history - the Rapido project management and public relations teams met for two days at a Middletown, Connecticut, hotel to do some strategic planning. Janet joined us as well, and we had a great time - including an operating session on Bill's gorgeous O&W layout! I should add that within five minutes, Dan Garcia had broken it.
While there are many prototype-specific details that we can't include in a model for reasons of economy or practicality, there are times when we could get it right but we simply made a mistake. See my note about the Union Pacific steam generator hatches in my January email update. Thankfully, all good manufacturers will do their best to correct mistakes when they happen. Similarly, all good manufacturers will endeavour to fix any quality control issues that come up. The Rapido team has tried hard on that front and I know many other manufacturers have as well.
At the show we had an unexpectedly enthusiastic response to our HO scale 44-tonner, and one of the main reasons was because we were launching the model with working samples rather than renders or very rough samples that didn't work yet.
At the meeting, we looked at our production and sales forecasts for the rest of 2023 and 2024. Several of our current projects have been delayed way beyond what we would ever consider to be normal. The HO scale D10, RS-11, RS-18u and RSC-14 in particular are coming out much later than originally anticipated, though I am glad to say they will all be here this year for sure.
The delivery delays have meant that a good portion of our models being delivered in the next 12-18 months have already been announced. We can thus slow down our announcements of products that have all-new tooling and wait until we are at the sample stage, like we did for the 44-Tonner. This will bring the announcement-to-delivery time down considerably. Of course, we still have new runs of existing tooling to announce, and those always have a shorter delivery time.
Pre-Order Discounts?
There are occasional products where we honestly don't know how they will do, such as the N scale TurboTrain or the HO scale BART train. In the past, we have announced these at a much earlier stage and provided a 5% "early bird" pre-order discount. We're planning to do more of these in the future. This allows us to gauge whether or not our customers actually want these models, and is particularly helpful with oddball models like the N Scale Rohr Turboliner. It also gives you an incentive to pre-order early: you know the model will take longer to arrive but you will get a discount and your price is protected.
Please Keep Them Coming!
All we ask from you is to keep pre-ordering. We need those pre-orders in order to know how many of each product to make. Never pre-order with a store that demands payment up front beyond a small deposit. That way, if the models arrive and you do need that new roof instead, or the N scale Cavalier arrives and the coaches are green when they were supposed to be blue, you can always cancel your order.
44-Tonner Update
As I said above, the response to our HO scale 44-Tonner has also been nuts. Here are some updates.
- Our last newsletter mistakenly showed both the O&W gray and maroon schemes. The gray ones are being produced now, and we will do the maroon ones in a later run. I promise... because Bill really needs both!
- We are on the hunt for photos of CN #1 in green paint. We've checked the usual books and internet sites. If you have any in your slide collection, please let us know!
- We've been inundated with requests for other paint schemes for the 44-Tonner. Rest assured we plan to do several runs of this model. If your preferred railroad is not in this first run, have no fear!
- We've been inundated with requests for other paint schemes for the 44-Tonner. Rest assured we plan to do several runs of this model. If your preferred railroad is not in this first run, have no fear!
- Some of the details on the samples we showed were mixed up between different phases. Please be assured that production models will have the correct details for each phase.
CPR 2816 Empress Price Increase
We expect to have our first samples of the new HO scale Hudson in April. Due to increases in material costs since we launched this project, we have to increase the price of the special edition 2816 Empress model by $50. This increase will go into effect on Monday, February 20th. If you want to avoid the price increase, please get your order in by then. Click here for more info.
If you have already ordered, you will get the model at the original price.
