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 Post subject: Airfix economics
PostPosted: Thu 19 Feb 2015 14:37 pm 
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Reading the topic below on the BBMF set and Ratch’s reply about the slow boat from India got me to thinking (I know, you can hear the gears grinding and smell the burning all the way over there) about Airfix and their current situation.

1) We know that their current product offerings are at least as good as, and often better than, those from their competitors.

2) We know that those competitors often charge more – and a lot of the time much more – than Airfix do for products that are often worse.

3) Further we know that there are frequent delays either while they sort out issues in the far-flung factories or while the products are on the slow boat from China or India

So is there now not a case that says that Airfix may be as well moving their production closer to home but charging a bit more for their products?

I’m not an expert in toy manufacturing or economics – my expertise is more in the 1:1 scale versions but the quality of their recent offering would seem to justify a slightly higher price (we all moan when they hike the prices but what’s the alternative?) The market has proven to be elastic enough to support manufacturers charging higher prices than Airfix does for kits. And it would do away with a lot of these frustrations during the delays.

In the longer run, it seems to me that the far-flung manufacturing may do them more harm than good.

What are others’ opinions.

Dan

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 Post subject: Re: Airfix economics
PostPosted: Thu 19 Feb 2015 14:49 pm 
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I personally don't care for the character of the new slide-mould kits from Airfix, Trumpeter, Hobby Boss, etc. :puke:

I'm hopeful that Airfix could have a line of the original moulds marketed as a "vintage" or "classics" series so I can still obtain the original mouldings but with new decals. :love:

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 Post subject: Re: Airfix economics
PostPosted: Thu 19 Feb 2015 14:52 pm 
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Paula & Dan wrote:
In the longer run, it seems to me that the far-flung manufacturing may do them more harm than good.

Far flung production certainly contributed to the demise of the toy manufacturer I worked for. Having assets tied up on the high seas doesn't help cash-flow :!:

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 Post subject: Re: Airfix economics
PostPosted: Thu 19 Feb 2015 19:13 pm 
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I have felt for sometime that Airfix are under pricing some of their new tool models and that they could ask more for them and they would get it. However the frenzy of Airfix sales late last year and early this year only served to devalue their own product line, which was a short term gain at God knows what cost. From the outside looking in, I would have to guess that the accountants rule the roost in Margate and I would not be surprised to see fewer new releases next year and a harder working of the existing tool bank. But after all that rambling, I do have to agree with Dan that Airfix could ask a higher price for the more recent tools.
Edit : Dan, if I have to pay £60 for a Shackleton I shall be blaming you :lol:

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 Post subject: Re: Airfix economics
PostPosted: Thu 19 Feb 2015 20:09 pm 
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I certainly agree some of Airfix's recent releases are excellent value for money.
When I actually saw the new Defiant sprues in the flesh, I couldn't believe it was a series 2 kit, it would still be very good value if it was series 3.
Not only are some of new tools as good, if not better, than much more expensive kits, you also have various "gift sets" that usually give you decent savings on the individual items contained.
I've bought the BoBMF & D-Day Sea Assault sets, & if you include all the accessories they probably work out half the price of the individual kits.
Even the Do17/Defiant Dfd saves a couple of quid + free paint (others might bin it, but I think it's OK), glue, stand, etc, yes you only get one decal option for each but they are different from standard releases & include full stencils.
Only Airfix themselves will know exactly how much overseas production has affected sales, is it a significant reason for lapsed release dates last year & how many customers both trade & individual have cancelled orders due to unavailability/late delivery.
As has been stated in other threads, the "bean-counters" now appear to have a significant say in Airfix's future & I think they will decide what end of the market to target & whether to move production.
For the moment I'm just glad we're getting such excellent kits at such good prices & long may it continue.


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 Post subject: Re: Airfix economics
PostPosted: Thu 19 Feb 2015 21:17 pm 
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What I'm saying is that I would be prepared to pay a premium for them to move production back to Britain out of Asia if only to ease the production and shipment issues. But only if they keep turning out high-quality kits.

So I'll pay £60 for a Shack but only if they make it in Britain to reasonable quality and bring it to market quicker!

Dan

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 Post subject: Re: Airfix economics
PostPosted: Thu 19 Feb 2015 21:31 pm 
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I agree with what you are saying, outsourcing production to the far east means you have to carry a large buffer stock at home to meet demand but also you need the space to hold the next lot of stock when it arrives on mass. Hence the move from Margate to a distribution centre where they can rent extra space when they have stock bulges and reduce costs when stock shrinks and they need less space. The trick is to avoid the situation of an empty warehouse or one that is overflowing. History suggests Airfix/ Hornby will either end up overstocked or end up as they did at Christmas 2013 with certain lines still at sea, the latter the more likely event as the bean counters hate large inventories. Changing the ERP system may only add to delays in the system .

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 Post subject: Re: Airfix economics
PostPosted: Thu 19 Feb 2015 22:03 pm 
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I would like to see Airfix sort out their pricing , some sets like the sea assault are under priced but others like the king Tiger are over priced .Both the air and the sea assault sets are worth the higher air assault price but the king tiger with out the second more common turret is only worth a series two price. New mould series two kits are worth at least £9.99 not the current £7.99 I know that higher prices will always upset some but Airfix has to be viable. I would love to see production return to the UK but would the price be to high?

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 Post subject: Re: Airfix economics
PostPosted: Thu 19 Feb 2015 22:05 pm 
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Paula & Dan wrote:
What I'm saying is that I would be prepared to pay a premium for them to move production back to Britain out of Asia if only to ease the production and shipment issues. But only if they keep turning out high-quality kits.

So I'll pay £60 for a Shack but only if they make it in Britain to reasonable quality and bring it to market quicker!

Dan

:thumb: What I'm saying is I can only see Airfix moving production closer if their accountants recommend it & I really can't see them consulting us on the issue.


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 Post subject: Re: Airfix economics
PostPosted: Thu 19 Feb 2015 22:23 pm 
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To be honest, I think there will come a time when the cost of producing in India and China and then shipping stuff here will be more than it is to move the manufacturing back to the UK.

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 Post subject: Re: Airfix economics
PostPosted: Thu 19 Feb 2015 22:30 pm 
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Series 1 and 2 kits seem to be marketed on the stack 'em high, sell 'em cheap philosophy and presumably sell by the shed load. More sophisticated kits and sets are at proportionately higher prices. Given that modellers generally baulk at the more expensive items (despite this being one of the cheapest hobbies going) I'm not surprised that they keep the lid on the price structure. There were plenty of comments about the price of the Blenheims, Lightnings, C-47 etc, including on this forum. If it's broken they will fix it, but I doubt at the moment that it's actually broken.

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 Post subject: Re: Airfix economics
PostPosted: Thu 19 Feb 2015 22:52 pm 
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hewman100 wrote:
To be honest, I think there will come a time when the cost of producing in India and China and then shipping stuff here will be more than it is to move the manufacturing back to the UK.

I think you've hit the nail on the head Ian, production costs are far more pertinent to this than shipping times, if wages &/or overheads in the far east increase then production might be moved, but it might not be to Britain.
If Airfix read this thread & see people "complaining" new tool kits are too cheap, they may increase prices, but it would be to increase profits, rather than subsidize start up & increased production costs in the UK.


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 Post subject: Re: Airfix economics
PostPosted: Sun 29 Mar 2015 23:45 pm 
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I respectfully dissent

Airfix needs to keep its prices as low as reasonably possible. I live on a fixed income and can't pay Tamiya and Hasegawa prices for kits. Airfix and Revell of Germany are keeping lots of us in the market. It is important to remember that airfix's roots lie in affordable kits for pocket money. For families under pressure from the economics of the times, a pound or euro price increase in prices can kill a hobby. When petrol prices went crazy a few years ago, I had no money to buy models or anything else but the basics in life. I almost had to sell my collection when I had a problem with my hearing aids. I can just imagine how hard it must be for hard pressed europeans who are living under 10 percent unemployment. The hobby must remain affordable for youths and families to buy. The man on the corner, the child at Woolworths and the parent remain the heart and soul of the market for airfix. This hobby needs airfix to keep prices low so that they can afford to buy the kits. If the mass market can't afford to buy kits then the hobby will die along with Airfix and the other kit makers.

Therefore I respectfully dissent and offer the minority opinion.

Airfix's roots are in the bagged kit, the basic spitfire or hurricane, the mass produced planes that flew across the living rooms of millions of homes in many nations. Airfix must remain true to its roots.

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 Post subject: Re: Airfix economics
PostPosted: Mon 30 Mar 2015 00:57 am 
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I'm with you Me163.
But overheads in India and China are going up. Transport costs are going up. Problems with quality control are costing Airfix money. How many sales did they loose by the withdrawal of the Swift, or due to the exaggerated problem of the 1/24 Typhoon canopy.
It will soon be more economical to make the kits nearer base. There may still be problems with quality control, but they'd know faster when a truck load from a nearby factory arrives with the first issue, rather than when a ship arrives after 6 months with the whole production run. [I'm probably not putting that too well]

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 Post subject: Re: Airfix economics
PostPosted: Mon 30 Mar 2015 01:00 am 
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Hi ME163.

At some points you are right and at others you are wrong imho.
Prices should always reflect what you get.
YES (new) Tamiya kits are expensive no doubt about that, but you get quite another feel of quality and a product you can enjoy just by looking at the presentation in the box.
And you know if you do your best work, the model will be near perfect build straight from the box. Today people say the fit is almost too good, because there is no room for paint on some parts needing to be pressed together to make a working unit.

The new Airfix kits are great and I love them, but I would NEVER buy them in a bag just to keep the price down, I love my parts unbroken thank you.
The main problem is people complain about new and great Airfix kits getting a higher price tag, instead of focusing on all the old, basic, ready for retirement, kits going for near as high price tags.
remember Airfix are getting better to let old tools die and make new tools since the Hornby takeover. But it cost money to do so.

Low price have a strange backside.
In my local hobby shop I was told he had a hard time to sell the new Revell 1:48 Bf-109 kits when they came out because the price was equal to some 1:72 kits.
People thought the kits must be rubbish to sutch a low price.
So as you can see you can't please all even if the price is low.

If you think the price for a model kit is high, then compair with a PC or Playstation game.
People buy what they want, you just have to make them want it in the first place.
And I think Airfix is doing just fine with that in my household.

Jesper.

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 Post subject: Re: Airfix economics
PostPosted: Mon 30 Mar 2015 01:19 am 
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fred wrote:
It will soon be more economical to make the kits nearer base. There may still be problems with quality control, but they'd know faster when a truck load from a nearby factory arrives with the first issue, rather than when a ship arrives after 6 months with the whole production run. [I'm probably not putting that too well]

You can't quality control to quality, you can only design to quality and check the specifications are followed. And why can't Airfix make quality control where the kits are made? It don't have to take 6 month before they find a problem.
I know China can be a problem, because they only do as specified, but then make the specifications better and sharper. That is the only way to do it. And remember a trial run in China and the product produced is always flawless. Not so when you have given the green light to go on.

jesper.

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