Re: InterMountain HO Scale Two-Bay Hoppers (Re-Release)-now Why Aren't There Production Kits?

Dennis Storzek <destorzek@...>

On Sat, Jul 24, 2021 at 01:19 PM, Andy Carlson wrote:
Charlie, I can see that as an industry consultant that you may believe packaging kits is more expensive than making RTR cars.
That is so wrong--anyone who has watched Rapidos' video visits to their Chinese factories can't come up with your conclusion.

None of that makes any difference.The problem is, those companies we think of as manufacturers, really aren't; they contract all their manufacturing out. As such, they have no direct control over their costs; they are at the mercy of what they are quoted. The Chicom manufacturers aren't stupid, they know that their costs are rising and if all they do is build the tools and mold the parts, the day will come where they start losing work to somewhere else. They recognize that their major advantage is their low cost of assembly, and for the last twenty years have manipulated their price quotes to "lock" their customers into a pre-assembled product. I recall Bill Wischer telling me that years ago he had tried to to split a run between between RTR and kits, and the prices he was given were within fifty cents of each other. Never mind that the contractor's costs likely were vastly different, this wasn't a cost plus deal, and what he was quoted was what he would have to pay. That fifty cents would only translate to a dollar on what at the time was a twenty dollar product, but the perceived added value to the customer of the pre-assembled model was five times that. Thus, it was simply not doable. Since China entered the model railroading supply chain, they have worked to totally change the character of the product, to their advantage.

Dennis Storzek

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