Hi All,
Interesting points.
John brought up Jim King only producing scale as a comparison to
Lionel.
You really can't compare the two. Lionel is a large mass marketer and
needs to keep the cash flow going in order to compete and continue.
Don't forget, they were successfully sued a few years back by MTH.
Samhongsa's exit from model train manufacture was a result. Lionel
really has to be careful from a risk point of view. Scale
considerations that appeal to a small market are real risks.
Jim King limits his runs to 100 and sometimes has difficulty moving all
his product. This has been shown a number of times when he has appealed
to the list to buy out the last few items of a run. If I recall
correctly, I believe Ron Sebastion bought out the last 10 70 tonners as
a show of support. Note the number of 100. That is only 100 fine
scale items and there is some difficulty selling out.
Jim is smart and also does not move on a project unless he has enough
orders from both dealers and direct. He can't afford to have money tied
up in projects that may not sell out. Producing things scale means a
small market.
I still have all of Jim's old stock that I drag to shows. People look
at it and would buy it if the price was right. Like everyone else, I
can't take a loss but there will come a time. One convention I sold two
waffle cars at a significant loss at the end because I was tired of
dragging them around. What does this mean? I believe that the scale
marketplace is not as large as we would like to think or hope.
Does this mean that the market can't improve? I can't answer that. I
can only deal with the present. What I can tell you from my experience
is that I only produce 30 of each kit. That is the magic number. None
go to dealers as they have never expressed an interest. I do sell out
and I have seen my kits change hands before being built.
How does this relate to Lionel? If Lionel chose to address these
concerns that I have seen for between 30 to 100 people who MIGHT buy
their scale offerings, then they would lose on that investment.
O Scale 2 Rail market is way larger than all S, period. All the recent
Canadian steam locos that Sunset has recently produced have sold out in
2 rail long before 3 rail. Atlas was smart to come out with the 2 Rail
stuff.
These are simply my observations and you can flame away if you desire.
cheers,
Andy Malette
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