what's it take? concept to package?

[Erik Smith]

So, if it costs $350,000, how many units does Revell need to sell?

If they profit $5.00 on a kit, that's 70,000 units?!?!? To break even?!?! I can't see that happening. What is the wholesale cost? How much do they make on each kit? The math doesn't seem to add up.

Even if they make $10 per kit - PROFIT - they would need to sell 35,000 units? Wow.

Edited October 25, 2013 by Erik Smith

[charlie8575]

So, if it costs $350,000, how many units does Revell need to sell?

If they profit $5.00 on a kit, that's 70,000 units?!?!? To break even?!?! I can't see that happening. What is the wholesale cost? How much do they make on each kit? The math doesn't seem to add up.

Even if they make $10 per kit - PROFIT - they would need to sell 35,000 units? Wow.

I suppose with re-issues and such, it's possible, but it could become a VERY long-term investment with a hope of at best, breaking even, given that kind of pricing.

Charlie Larkin

[Greg Myers]

So ya gotta wonder about all the wisdom being thrown about on this thread. Let's just take for example the Revell's Kurtis Midget kits,where they spent well over 10 years in development and it was only issued once ? Do the math.

Edited October 25, 2013 by Greg Myers

[Erik Smith]

So ya gotta wonder about all the wisdom being thrown about on this thread. Let's just take for example the Revell's Kurtis Midget kits,where they spent well over 10 years in development and it was only issued once ? Do the math.

Something doesn't add up. Maybe I'm way off estimating how much they make per kit, but it can't be more than $10 if Hobby Lobby can sell them for $15 (40 off coupon, and I don't think Hobby Lobby is giving them away even with the coupon).

[Brett Barrow]

With such subjects as the Kurtis Midget, I suspect that it took the loss of mass merchants as buyers for model car kits in any sort of quantity for that to happen--I rather doubt it took 10 years to develop that kit, for example. Having been in the position of developing diecast models (Johnny Lightning 1/64 scale) for a few years, it was often both amazing and frustrating to see the limitations on what we might bring to market, based on such expectations as expressed by buyers from the big chain stores. In fact, many of the model car kits we've seen these past 4-5 years simply would not have happened had model kit manufacturers had to "toe the mark" with some toy department buyer in Bentonville AR.

Art

Well, most of that time was spent shelved or on the back burner, so it wasn't 10 years of continuos development, but the concept and initial research and drawings were done together with the 48 Ford woodie.

[Art Anderson]

Well, most of that time was spent shelved or on the back burner, so it wasn't 10 years of continuos development, but the concept and initial research and drawings were done together with the 48 Ford woodie.

That certainly makes sense, Brett. In a way, what you say here goes along with my firm belief (based a good bit on experience, BTW) that when the big chain stores (you know, the "-marts") were the major buyers for new releases--their computer-addicted numbercrunchers could never wrap their buying heads around anything that wasn't already a proven seller (at least in theme or concept) over the years for them.

Art

[Art Anderson]

So, if it costs $350,000, how many units does Revell need to sell?

If they profit $5.00 on a kit, that's 70,000 units?!?!? To break even?!?! I can't see that happening. What is the wholesale cost? How much do they make on each kit? The math doesn't seem to add up.

Even if they make $10 per kit - PROFIT - they would need to sell 35,000 units? Wow.

Uh, it takes a LOT more than 35,000 sales of a new model car kit just to put its tooling expenditures back into the company bank account, trust me on that one.

Art

[Erik Smith]

Uh, it takes a LOT more than 35,000 sales of a new model car kit just to put its tooling expenditures back into the company bank account, trust me on that one.

Art

I am not doubting anyone's numbers, Art. I just don't have a clue how much any of this costs or how many kits even get sold. I do know I still see kits that were "limited" or "only 3000" still on the shelves from 2 or more years ago, so those kits aren't selling too many per year.

If it takes a lot more than 35,000 - is that more like 100,000? Just to break even on the tooling? No advertisements or sales reps or?...

Are model companies non-profit?

[Brett Barrow]

That certainly makes sense, Brett. In a way, what you say here goes along with my firm belief (based a good bit on experience, BTW) that when the big chain stores (you know, the "-marts") were the major buyers for new releases--their computer-addicted numbercrunchers could never wrap their buying heads around anything that wasn't already a proven seller (at least in theme or concept) over the years for them.

Art

You're exactly right. It was the loss of Walmart as a principle buyer that allowed Revell to try something different and release the Midget kits. It was one of the first projects the new Revell/Hobbico ownership group began work on after they took over.

I've said ever since it happened that the loss of Walmart and the big-box-stores was one of the best things that has ever happened to modelers. we're getting unique kits that we would have NEVER gotten during the big-box years. You think we would have ever gotten a 50 Olds (now 2 with the "custom" version out) 52 and 53 Hudson Hornets, low-end base-model 2-door post 57 Chevy 150's and Ford Customs, 55 300 and 56 300B's... shall I go on?

[Bob Turner]

So ya gotta wonder about all the wisdom being thrown about on this thread. Let's just take for example the Revell's Kurtis Midget kits,where they spent well over 10 years in development and it was only issued once ? Do the math.

Considering both kits are still in Revell's catalog, & each kit has multiple version choices, (with part & decals variations in the kit), I'd say they are selling well. If they weren't, Revell wouldn't keep them in the catalog.

It was established in this thread that they spent over 10 years in limbo, not in development. Forget doing the math, try to do some basic reading & comprehension before spouting off illogical & inaccurate comments.

Also you might consider keeping in mind that during that 10 year time period, Revell was sold twice, first to Jody Keener, (who later bought Lindberg), in a highly leveraged sale that left little/no money for development or new tooling, (remember all the reissues during that time period?), followed by a sell to Revell's employees as Jody ran out of money, with the same result. It wasn't until Hobbico bought out R/M that there was money for kit development again, & we started seeing some newly tooled kits, some that had been in development limbo for a good while.

Some of us can indeed do the math, & read & understand things, & have some actual knowledge of the hobby outside of our own focus.

[Greg Myers]

& have some actual knowledge of the hobby outside of our own focus. yes , a lot of that going around lately

[Casey]

Considering both kits are still in Revell's catalog, & each kit has multiple version choices, (with part & decals variations in the kit), I'd say they are selling well. If they weren't, Revell wouldn't keep them in the catalog.

I thought someone here with some distributor knowledge said they've both been discontinued, but your comments on the distinction between development time and actual time spent working on the kit are spot on. Most of us will never know what goes on behind the scenes and what was planned but never came to be, and we usually don't end up finding out until years later. If we're lucky, a few of the kits eventually beat the odds and end up on store shelves, like those Brett mentioned a few posts earlier.

[Mark]

I thought someone here with some distributor knowledge said they've both been discontinued, but your comments on the distinction between development time and actual time spent working on the kit are spot on. Most of us will never know what goes on behind the scenes and what was planned but never came to be, and we usually don't end up finding out until years later. If we're lucky, a few of the kits eventually beat the odds and end up on store shelves, like those Brett mentioned a few posts earlier.

I haven't looked at Revell's website lately (as I already have as many of each Kurtis midget kit as I want), but as I understand it the Offenhauser version is still available while the V8-60 has been dropped. I figured the V8-60 would go away first; more of the top cars were Offy-powered, and the hardcore midget enthusiasts hold the Offy in higher esteem.

[Brett Barrow]

Both are discontinued now, but there is still stock in the supply chain.

They were good sellers when they came out (just like most new models) then tapered off after that (just like most new models).

The Midgets were someone at Revell's personal pet project, I don't think they ever expected them to set the world on fire, but since there were two versions, they're splitting the cost between two variants. That's pretty much a standard requirement these days for a new-tool car kit, they need to get multiple variants out of one basic tooling. There are a few exceptions, like I doubt they'll be able to get two versions out of the new re-worked Sizzler dragster, but based on the buzz it's getting it should sell well on its own.

[Brett Barrow]

I am not doubting anyone's numbers, Art. I just don't have a clue how much any of this costs or how many kits even get sold. I do know I still see kits that were "limited" or "only 3000" still on the shelves from 2 or more years ago, so those kits aren't selling too many per year.

If it takes a lot more than 35,000 - is that more like 100,000? Just to break even on the tooling? No advertisements or sales reps or?...

Are model companies non-profit?

50,000 is the break even number that usually gets thrown around. But that could mean 50,000 over several variants , take the 57 Ford Custom for instance, they would only need to do 25,000 in the stock form, then 20,000 of the Fireball Roberts version, 5,000 Model King Police cars, there's your 50,000 right there. All those versions were designed and tooled up from the start. Now there's very likely another variant that was designed but not fully tooled (like a Ranchero or wagon) that could be done in the future for relatively little money since the design work and bulk of the tooling was already done.

[sjordan2]

For those who are in the know, are the costs of car models amortized over a manufacturer's wider spectrum of model kits such as aircraft and armor? Are some car models issued at a possible loss just for a brand to keep their hand in the game?

[Bennyg]

Surely the cad plans from the factory would be the go for model companies. I thought that's what moebius used for the prostar and lonestar. Also, tamiya is about to release the laferarri at about the same time as the real one hits the road, not many of those exist and is still undergoing testing in real life so it surely would be a lot of computer trickery helping.

Ben

[gtx6970]

Even if they make $10 per kit - PROFIT - they would need to sell 35,000 units? Wow.

Given the costs to produce a kit from scratch to reality remains un-disclosed at this point.

But, I have my doubts the manufacturer makes anything near $5 per kit .

Manufacturers sell in hundreds or even thousands of kits per order to wholesalers . They make there money on bulk orders

[Luc Janssens]

One would think that 3D scanning would reduce some of the need for extensive photographs...

Dunno, but maybe it's cheaper to send an actual car to China and throw in a exploded view for the parts breakdown.

The only question would be, if the car would be a total loss when the Chinese engineers are done with it

[Greg Myers]

Yep

[Art Anderson]

For those who are in the know, are the costs of car models amortized over a manufacturer's wider spectrum of model kits such as aircraft and armor? Are some car models issued at a possible loss just for a brand to keep their hand in the game?

I cannot imagine any model company deliberately putting out a model kit of anything knowing that it will be a money-loser. After all, certainly in the US, the three plastic model kit companies located here are definitely not even close to "Fortune 500" size by a long, long way. Pretty much, certainly in today's marketplace, a model car kit has to stand on its own financially. Given the relatively small size of model companies, that's really the only way it makes any sense to tool up a new model car kit.

Art

[Art Anderson]

50,000 is the break even number that usually gets thrown around. But that could mean 50,000 over several variants , take the 57 Ford Custom for instance, they would only need to do 25,000 in the stock form, then 20,000 of the Fireball Roberts version, 5,000 Model King Police cars, there's your 50,000 right there. All those versions were designed and tooled up from the start. Now there's very likely another variant that was designed but not fully tooled (like a Ranchero or wagon) that could be done in the future for relatively little money since the design work and bulk of the tooling was already done.

Especially so, IF the tooling was designed from the get-go with other body versions in mind.

Art

[Tom Geiger]

Dunno, but maybe it's cheaper to send an actual car to China and throw in a exploded view for the parts breakdown.

The only question would be, if the car would be a total loss when the Chinese engineers are done with it

In the 1980s when guys would complain about accuracy of the new releases I always said that when I took over AMT I was going to put a garage door into the design department and park the friggin car in there until they got it right! Now, as you said above, the guys doing the work are in China. Probably be cheaper to fly a pair of them here to do the measuring.

Then again, remember that China is becoming more prosperous and they love American cars. Won't be long before they can just go measure a '57 Chevy locally.

[KingSix]

If Tamiya made something other than Euro/ Asian cars, bikes , like say, American Muscle or Vans or trucks, I'd gladly pay the extra cash for the Tamiya kit. There isn't one American kit manufacturer that can hold a candle to what Tamiya puts out ( being a Patriot it hurts me to say that, but it is a fact ) Maybe someday the American kit manufacturers will realize this and act accordingly ..

[Erik Smith]

If Tamiya made something other than Euro/ Asian cars, bikes , like say, American Muscle or Vans or trucks, I'd gladly pay the extra cash for the Tamiya kit. There isn't one American kit manufacturer that can hold a candle to what Tamiya puts out ( being a Patriot it hurts me to say that, but it is a fact ) Maybe someday the American kit manufacturers will realize this and act accordingly ..

Tamiya has done American cars - Mustang and two Jeeps. I have not had any, but remember there being some issues with the accuracy on the Mustang???

Also, Tamiya, Fujimi, and Aoshima are successful in their home market - and that market obviously prefers some odd ball cars…well, they seem odd to us, but are popular items in Japan. Very different market.

Edited October 31, 2013 by Erik Smith