Reply to "New Licensing Deal for Lionel ERR Products"

RideTheRails posted:

So are they doing a BTO?  Seems kind of strange for the product involved. In the microchip/PCB/board business, the more you order(from the manufacturer), the better price discount you get.  Of course, you don't want to have to much of this type of inventory laying around.  Don't overthink my comment.  I'm very glad that they have stepped up to make the boards available.

Steve

The difference in parts costs from 100 units to 1000 units isn't as much as you might imagine.  Also, when you're getting boards assembled, once you do a couple hundred, the difference between the assembly cost between 100-200 and 1000 is also not that great.

Yes, there are some savings, but having hundreds of units in stock for a long time will eat up that savings in a heartbeat!  I think Scott is being pretty smart in gauging the interest and proceeding carefully with his ERR project.

I've gotten quotes for boards quantities from 500 up to 2000, and the difference in prices didn't justify sitting on inventory for months to place a larger order, on the order of 10% savings per board.

Scott's in a unique position as he actually uses some of the ERR products himself, so he certainly has a vested interest in the line continuing.  OTOH, the additional ERR products that don't get used in the 3rd Rail product line will have to stand on their own as far as volume and profit margin, so proceeding with some caution makes a lot of sense.

OGR Publishing, Inc., 1310 Eastside Centre Ct, Suite 6, Mountain Home, AR 72653
330-757-3020

www.ogaugerr.com
×
×
×
×
×