🚀 go-pugleaf

C. Dewick wrote:

> Jane Sullivan <jane@yddraiggoch.demon.co.uk> writes:
> 
> 
>>Is there any reason why Eureka models will not appoint a UK agent? I'm 
>>certainly interested in the Beyer-Garratt model (with DCC and sound) but 
>>I don't really want to go through all the hassle of paying import duty 
>>to the Post Office before they'll deliver a package from Australia. It's 
>>much easier for us in the UK to buy overseas models from a UK supplier.

Why sell direct instead of through a distributor?
Money - as a manufacturer you get a better and faster return selling direct.

Consider:
You have decided to be come a model manufacturer.
You are going to produce a model of the little known Bogroll & Flynn 
6-3-8+TF

It will cost you $ 100,000 up front.
You want to make 10% on your money for your time.
So you need to recover $ 110,000.
If the selling price is $ 500.00 you need to sell 220 models.

Now suppose you want to sell the models through hobby shops. They expect 
to receive a 40% discount AND want 30 days to pay. So now you are a 
bank. Add another 5% to your costs for this trouble.
You now need to recover $ 115,000 but your selling price to the stores 
is only $ 300. You now need to sell 384 models.
That is 75% more product.

If you think the market can handle that many models you can go the hobby 
store route. If you think you will have problems selling 220 models then 
you stay with the direct model.

Now I have simplified things a bit. The costs of having the mould made 
are more likely double my estimate. Producing the models, painting and 
packaging, shipping the product from the factory to you, and advertising 
will probably add the same again. And the price point is most likely too 
high for the market.

Try doing the math with a model selling at $ 199.99.

For unique, low production run models, the direct sales method gives a 
better (and faster) return to the manufacturer than the hobby store route.

Regards
Bill Dixon