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Something to consider, folks, about model car kit production!


Art Anderson

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Time was, way back a few decades ago, that model companies, such as AMT, MPC, and Revell, that those companies might well keep a molding machine busy for days on end, producing just one model car kit, but that was back in the 1960's until well into the 1970's.  Why?  Because their product lines were much smaller, and the total number of model car kits from all manufacturers was merely a fraction of what its become since then.  Time was, back then, when there were perhaps only 50-75 different model car kits in 1/24-1/25 scale available on any given day of any given year.  But now, let's fast-forward to today:  There are what, at least a couple hundred model car subjects on the market world-wide on any given day, any given week, of any given year--something like that at least. That number (or something along those lines) necessarily dilutes the market for any one individual kit, save for that new, HOT model that hits the shelves, that EVERYONE seems to have to have.  Now, consider this:  A modern injection-molding machine can squeeze out a complete model kit in about 90-120 seconds, kit after kit after kit.

Now, while any new model car kit simply has to sell upwards of one hundred thousand units just to pay off the tooling costs and leave a bit of profit dollars in the till--reissues of older kits, while they add to the profitability, do not sell anything like the numbers of a newly tooled kit--hence many production runs of older kits being reissued, tend to be in the 8-10 thousand range--thus that same mold press that squeezed out a new kit can be used, with tooling changes and the necessary setups, to produce any number of existing model kits yearly.

Add to this the very simple fact: With very few exceptions, any existing model kit being reissued, will not generate anything like its sales when that kit was a new release--the production run of most reissues might be 10,000 kits or so (but with a large enough "tool bank", a model company can stay profitable by doing reissues, along with their expected new releases which come out several times a year--a typical run of a reissue might be 7-10,000 kits, based on demand, but that's a lot smaller than the demand that a newly tooled kit needs to generate.  So what am I really saying here?

Such kits as the AMT '49 Ford Coupe have been around nearly as long as many model car builders have been alive--that one was first issued in the late summer of 1962 (I was there then, as a newly-minted 18yr old!), and that one in particular being a fairly popular subject has sold decently every time it's been reissued (and I've lost count as to how many reissues it's seen since 1962, seriously!

 

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Hi Art. 

Some here know the business of kit production, and how the market has changed. I understand the business pretty well, and as you noted, using the tool bank and existing resources keeps the lights on and the molding machines busy, while pumping profit, since tool has been amortized and depreciated in most cases.

Plus, some great old kits that are new to buyers that aren't eBay/show/fleamarket hunters are made available. Always funny that noobs come here to post about a kit that is a reissue, but brand new to them. Some complain, want a new tool. :huh: 

I want the businesses around, not just the tools. Good efforts by companies have been sunk by lack of sales, or over-engineering (AM, others). The want lists of lame cars that pop up are hysterical. People would pass on a 1:1 priced at new retail of a kit for many of these dogs. Same people won't buy resin, despite not that much more expensive. Your Black Widow and 59 Biscuit were the only games in town, as were the 300's, MGB/GT, Don's 59 Brougham,...25-30 years later, we have only a few of the list kitted. 

Always funny when people post faceplant memes, etc. when business case brought up. You've put numbers on it, so can't dispute it. I'd like to see the split of Sci-fi to cars with Round 2,

Happy New Years Art. Come south to see the doc again.  

L

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Good point, Keyser! I wonder what the actual biz model for most model manufacturers is ... what items do they really make money from, that subsidizes lower-selling kits? I'd be willing to bet dollars to donuts that companies like Revell make far more money from military models than from model cars. You see far more military and sci fi models being made "All New" than anything else, so does that mean that profits from those markets support, say, model car kits? Someone who writes articles for publication needs to email companies like Round2 and Revell to see if they'd be willing to do an interview, methinks.

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Another point about modern pricing: I remember buying model car kits in the 1980s, when I built models the most, for an average of about $5.00 - to - 8.00. Going to an online inflation calculator, it says that translated into today's dollars $5 = $14.65 and $8 = $23.43. Just for kicks, average the '80s prices to about $6.50 = $19.04. That's about the price I'm paying for many models online (not including shipping and handling), or it's about the price that I'm paying at Hobby Lobby when I use their 40% off coupon. Sure, the better and newer kits are going for more like $25-30 new. But I think that the numbers suggest that modern prices aren't way, way off traditional prices when you use an inflation calculator.

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100k kits might have been the payoff point in the 1960s, but model kits are $2 anymore either.  I also am dubious of that figure based on how much of the tooling was covered by the Big 3 as Promos that were later converted to kits.  Based on what the wholesale prices of Revell kits are, and what the acknowledged cost of a tooling, it seems like around 25k kits would be the pay off point.  That's about 2-4 kits off each tool, depending on how well each version sells.  I mean it's not like Revell is taking a loss on kits from that first run of a tool, they're profit is built into the wholesale price.

If 100k kits was the "magic" number, niche players like Belkits, Beemax, Ebbro and the like would be out of luck.  I don't care how much people like that Mk1 Escort Rally kit, they ain't selling 100k of them...ever.  The more niche the kit, the higher the price is to make it pay for itself. 

I also suspect Revell doesn't make nearly as much from the IPMS crowd as you might believe.  Certain tools have produced wildly regarded kits like the Stearman, but Revell has the same reputation for...uhh...lackluster attention to detail in the military realm as they do in the Automotive side of things.  Plus there are a LOT more options in the military genre from companies I doubt most people here (unless they also build armor/aircraft) have even heard of...

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One of the biggest factors in the cost of new plastic kits is the cost of oil (and its by products). Not only is plastic an oil based product, but when fuel oil for trucks, and freighters to get them across the pond when ballistic a year or so ago it was just to be expected that the costs would eventually trickle down to us having to pay more. You have to realize that even though the U.S. based model companies are basically owned and run by modelers they're still in it for a profit no matter how much they love modeling, they love eating and supporting a family more. And it's kind of like letting a genie loose from its bottle, once it's out there it ain't going back. 

Very seldom have I seen a larger company that's raised it's prices due to operating costs ever go back to the original price even if costs do go down, kind of like all those people who are complaining about the cost of their insurance going up because the companies are blaming it on the Affordable Care Act, they're going to be in for a surprise when they find out the insurance companies aren't going to lower their rates if it gets appealed, that ship has already sailed.

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Are you asserting that we, as kit consumers are in a good position, all things considered? A decent variety of subjects is available and while not perfect, the selection is pretty good. Considering that kit companies are subject to market forces too, not everyone is going to get everything they want. I think that's the point the OP is driving at. Hopefully he will clarify what his conclusion is.

Edited by Dodge Driver
Added last two sentences.
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I can't complain about the cost of today's kits in my own personal situation, because I think of what was available and the quality of such when I started building back in 1978. IIRC, new tooled kits were something like $2.50 or so? Now I didn't know any better, but I look back at what was offered, and kinda cringe at what I thought were cool kits at the time. Out of proportioned bodies, lack of assembly coherency, etc were what we had to deal with back then in a number of kits. 

Now, we have a whole range to pick from and that's including the reissues some of which haven't been seen in many years, and I'd say we've never had it so good. I say lets enjoy what we have for the moment----------demographics are changing, and dare I say the modeling landscape may not be quite the same 10-20 years from now. 

I'm not saying it's all gloom and doom, I'm saying that there will be new things coming along........some will like it, some won't. ;)

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I agree with Bill. Back in the day you bought what was there or nothing at all. Now if you can find the right donor, between the aftermareket, eBay and very generous people on this forum, I find you can build just about anything. I also agree with Art when he says (at least that is how I understood it), the model companies are bombarded by requests whereas before they built what they pleased. So that a whole 'nother business perspective. That is my 2 cents.-_-

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Okay. Let me see if I understand this? Reading mainly landman's, but others too, comments above. We need to quit bombarding the model companies with what we'd like to see? Okay, I'm sure I'm not getting the point. Right? This thread really doesn't tell me a thing. The statistics on how many kits needed for a model company to break even. Where do these statistics come from? And how up to date are they?

All I know. If the model companies offer a kit and I like it. And I have the money, and the willingness to spend it for what the model costs. I will buy the model. That's all I can do. Do I really care about what, how or why the model companies are making money? Not really. I'm sure that they've got smart people who know the business, and have that figured out. If they don't? They will adjust their costs/prices, or go out of business. So far, rather than going out of business, they keep offering more and kits that I'm interested in buying.

If you would have asked me ten years ago about where our hobby was going? I would have figured it withering on vine. Ready to die. Boy was I wrong! With the resurgence of the number of old and new kits coming out in the last few years, I feel we're now living in a second Golden Age of modeling. Round 2, Revell and the others, must be making some money for them to continue doing what they're doing.

Scott

 

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 Someone who writes articles for publication needs to email companies like Round2 and Revell to see if they'd be willing to do an interview, methinks.

Actually, what needs to happen is that those of you who want to read an interview with modeling company personnel should email or write the Editors of the magazines you read and let them know of your interest in that subject.  

As a regular contributor to the two largest model magazines, I stand ready to do an interview with any in the industry, but from what I am told, there is very little interest in this subject from the readership of the magazines.  Personally, I think this is wrong, but my opinion doesn't really count, it's the opinion of the overall readership that matters.  

So please, let the Editors know with a note.  (Posting your comments on a forum thread won't be effective; I don't know any magazine editor these days that has the time to read forums for reader feedback.  Sad but true.) 

TIM 

PS - I had finally talked one of the magazines into letting me do an article featuring an interview with Revell executive Roger Harney, who was getting ready to retire after a 57 year career with Monogram and Revell.  Sadly, Roger passed away unexpectedly just a couple of weeks before we had agreed to meet and do the interview .  TB

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...As a regular contributor to the two largest model magazines, I stand ready to do an interview with any in the industry, but from what I am told, there is very little interest in this subject from the readership of the magazines.  Personally, I think this is wrong, but my opinion doesn't really count, it's the opinion of the overall readership that matters...

 

Frankly, I'd be VERY interested in a long, in depth interview with YOU. You've been a fixture in this hobby for as long as I can remember, and you had a successful real-world career in the car biz too. I'd like to know the whole story.   

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Frankly, I'd be VERY interested in a long, in depth interview with YOU. You've been a fixture in this hobby for as long as I can remember, and you had a successful real-world career in the car biz too. I'd like to know the whole story.   

I third that (is that correct terminology?).

Scott

 

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Just a quick note, the notion that the cost of oil has any impact on the cost of model kits is just not founded in fact. The cost of raw material in a kit is insignificant, for car kits it's literally pennies per kit

In most cases the packaging costs more than the plastic!

The really significant costs are in the tooling. In a few of our kit the decal sheet is a lot more expensive than the raw plastic!

Even though modern machines cycle shots pretty quickly, for us, machine time is a significant contributor to cost - our kits can have 5,6 or 7 tools and energy costs in Guangdong Province are quite a bit higher than in Indiana! So it's conceivable that the cost of running the machines will be as great or even greater than the cost of the styrene pellets that go into the machines!

Dave

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I, for one really enjoy the interviews with model company personnel. Revell,  AMT, Round 2 and me of the other larger companies (Tamiya) have been reasonably well covered. Who I would like to hear from are the people who were behind companies like Galaxie Limited, Polar Lights (funny car and Nascar era) and Accurate Minitures. Why did they do it, why they chose the subjects they did and to what degree they were successful (or not).I think I have a good idea about most of this but would like  to know what went wrong between the initial idea for the polar light kits and the finished product. Specifically, I have all the PL NASCAR and FC kits but when I pull them out and look at the bodies I just go what the heck happened here and put them aside again. All these wonderful intricate subjects spoiled by the poor bodies.This may not be on topic but like others have said I also was not sure of its goal.

  

 

 

 

 

Edited by monza77
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Just a quick note, the notion that the cost of oil has any impact on the cost of model kits is just not founded in fact. The cost of raw material in a kit is insignificant, for car kits it's literally pennies per kit

In most cases the packaging costs more than the plastic!

The really significant costs are in the tooling. In a few of our kit the decal sheet is a lot more expensive than the raw plastic!

Even though modern machines cycle shots pretty quickly, for us, machine time is a significant contributor to cost - our kits can have 5,6 or 7 tools and energy costs in Guangdong Province are quite a bit higher than in Indiana! So it's conceivable that the cost of running the machines will be as great or even greater than the cost of the styrene pellets that go into the machines!

Dave

Thanks Dave for the honest, current prospective of what is involved with model kit production. Sure hope things are going well for you and everyone at Moebius!

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