The "Gathering" WIP thread

Models and Toys Related to Five Star Stories

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Hydra Mirage
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Post by Hydra Mirage » Wed Jan 26, 2005 8:46 pm

There are some good points.
But this is all mute if Volks are doing well.
Though it seems like the new fss kit market has all but dried up.

Of course there are costs. But cranking the price per unit up will not fix this.
They need to find a better equilibrium.
They are losing business to recasters, fact.
There is still a demand, fact.
They could easily re-release older kits at a reduced price, this would cost NOTHING extra in terms of sculpting time etc. (not sure about licensing, but they probably retain the license to sell older kits with the original negotiated percentage). As far as storage and factory space goes, recasters have the same issues.

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Post by KOG » Wed Jan 26, 2005 8:47 pm

Hydra Mirage wrote:This is basic.

1) Would you agree that there are more recast sold than originals ?
2) How many more x2 x3 ?

Therefore as long as there is at least x2 recast kits sold. Volks could reduce there price by half and still make the same money whilst competing with the recasters.
I think there are far more recast kits sold than originals.
As stated above I think it's more like x3 to x5 more recast kits.
OK. Let me see if I can illustrate my point here.

(note that these figures are arbitrary)

1) Let's say a certain FSS kit costs $200. Let's say that same kit costs $75 per unit to produce, factoring in everything from materials and labor to distribution & etc.

If 5 copies of the kit are sold at $200, the manufacturer makes a profit of $625.

Let's break it down, shall we?
Cost = 5x$75=$375
Sales = 5x$200=$1000
Profit = $1000-$375=$625

2) Now what if said FSS kit is slashed in price to $100, but 3 times as many units are sold?

Cost = 15x$75=$1125
Sales = 15x$100=$1500
Profit = $1500-$1125=$375

Using this simplified model, you can clearly see that slashing prices and increasing sales is NOT a viable option. The manufacturer would have to sell almost SIX TIMES as many units, just to match the profit they would make with less units sold, at $200 apiece.

Recasters are able to offer the lower prices only because their "costs" are much, MUCH less.

Now, this is a very simplified model of course... and if an econ major wants to offer some corrections, then go for it... but I think this does illustrate the basic principles involved.

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Hydra Mirage
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Post by Hydra Mirage » Wed Jan 26, 2005 9:01 pm

Thanks for the excellent example KOG.
$75 manufacturing cost per kit ? That's the same as a recast to buy !
I would guess that a Volks recast by Volks would cost a lot less to manufacture. In fact this is crucial. If they reduced their manufacturing (ie. just sell a good kit from an existing mold in a plastic bag and cardboard box) they would make A LOT more money by reducing their price.

But I get your point.
Last edited by Hydra Mirage on Wed Jan 26, 2005 9:02 pm, edited 1 time in total.

John F. Moscato
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Post by John F. Moscato » Wed Jan 26, 2005 9:02 pm

ditto what KOG said.

Plus, don't forget that Volks can't necessarily package their kits in a baggie, even if they wanted to: they're a liscensee, and they have to do what the liscensor (Nagano/Toyspress) requests or approves.

Beyond that, it has to be underlined immensely that Volks isn't raking in the dough by making these obscenely-expensive little gems, they're just catering to a niche market, with all the prestige that the true fans probably expect of it, including myself.

Think of it like selling luxury automobiles: they're expensive, luxurious... Something that is always desired and sought-after by the masses, but obtained by the few. People like and want cars like Ferraris mostly because they are NOT common, or affordable, they are a status symbol. Even if tomorrow, a commie car manufacturer would start producing cheap replica ferraris at half the price, would you really want one as opposed to a REAL one? Moreover, would the usual Ferrari clients want/buy one? Hell no! The Ferrari client base wants the mystique and the prestige of the real thing, not some cheap knockoff that every joe-peasant can afford. The only people who'll buy the knockoffs are the wannabe wankers.

In a nutshell, FSS models are like filet mignon... Gunpla is more like Burger King, and as far as I'm concerned, recasts just cheapen FSS, so I don't buy them.
John F. Moscato

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Hydra Mirage
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Post by Hydra Mirage » Wed Jan 26, 2005 9:04 pm

Yes. I agree. It all comes down to exclusivity.

But this has also resulted in the increasingly thin fan base for FSS.

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Post by KOG » Wed Jan 26, 2005 9:05 pm

Hydra Mirage wrote:There are some good points.
But this is all mute if Volks are doing well.
Though it seems like the new fss kit market has all but dried up.
Well, I'd think the fact that Volks nearly quit the FSS business for good shows that they are, in fact, not doing well.

Of course there are costs. But cranking the price per unit up will not fix this.
They need to find a better equilibrium.
They are losing business to recasters, fact.
There is still a demand, fact.
Let's think about this for a moment. FSS kit prices have NOT skyrocketed. They have gone up, yes. Due to inflation. Inflation affects everything. Other than that though, FSS prices have no skyrocketed. The occassional deluxe kit may come out with an extra high price, but the average kit cost is not that different. Take the time to chart the prices for Volks kits over the years, and you'll see the gradual inflationary increase. You WON'T see giant jumps in price. OK, so if prices haven't gone up drastically... what's at fault?

Are customers poorer today than they were 10 years ago? I hardly think that's the case. Inflation is a reaction to increased customer buying power, among other things. And fans of FSS are only getting older, not younger... so I'd think there are more buyers out there with steady jobs and decent incomes now.

So let's see... what else has changed in the FSS market over the years? Oh yeah... recasters! Of course, recasts have been around a long time. But in years past, recasts were not of good quality, and were harder to obtain. Lots more of the cheap cold cast resin recasts... lots of shoddy workmanship... the stuff that gives recasts a bad name in the eyes of many who remember the 'old days'. And of course, places like hobbyfan and E2046 weren't around to facilitate recast distribution. Hell, in the early days of the FSS GK industry, the internet wasn't a big deal, period.

But now, things have changed. Anyone can get anything online. So it's no problem finding a source for recasts. And truly, recast quality is improving as the business becomes bigger and more efficient. So clearly it's the recast industry that is really changing the FSS marketplace right now.

The problem isn't really that people can't afford an original. The problem is that people can get 2 good recasts for the price of one original. And people, being what they are, would mostly rather go for the increased personal gratification of having 2 kits instead of one, and say to themselves 'screw the originals'. And well, this is what's leading to the death of the GK market.

They could easily re-release older kits at a reduced price, this would cost NOTHING extra in terms of sculpting time etc. (not sure about licensing, but they probably retain the license to sell older kits with the original negotiated percentage). As far as storage and factory space goes, recasters have the same issues.
Why would they get in the habit of re-issuing kits later at a reduced rate? Wouldn't this quite obviously lead to large numbers of people passing on the initial release, knowing that a cheaper version will be out in a year or two? Does this make good business sense for Volks or WSC? Not really. Not a sound plan to discourage people from buying new kits when they are first offered. And this is hardly fair to the folks willing to support the business by buying the kits during initial release. Why should some people pay full price to support the industry early on, only to have others swoop and get the same product for half as much later?

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Post by John F. Moscato » Wed Jan 26, 2005 9:07 pm

True, it has.

But who knows, maybe Nagano doesn't want to expand to the masses, maybe he likes FSS small and exclusive, just for his hardcore fans.
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Post by KOG » Wed Jan 26, 2005 9:13 pm

John F. Moscato wrote:True, it has.

But who knows, maybe Nagano doesn't want to expand to the masses, maybe he likes FSS small and exclusive, just for his hardcore fans.

Indeed. Nagano has always struck me as a guy who cares for quality over quantity. Something I really respect.

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Post by KOG » Wed Jan 26, 2005 9:16 pm

John F. Moscato wrote:ditto what KOG said.

Plus, don't forget that Volks can't necessarily package their kits in a baggie, even if they wanted to: they're a liscensee, and they have to do what the liscensor (Nagano/Toyspress) requests or approves.
Seriously. Given the high-quality format of the recent artbooks (Knight Flags and Smoke Walls), the seemingingly bad reaction on Nagano's part to the short-lived Kaiyodo 'action figure' series, and his unwillingness to license cheap anime/games based on FSS, it seems clear that Nagano is all about quality. If Volks were to release cheap copies of the kits in plastic baggies with plain cardboard boxes, it would be like putting a sign on their back which says "Nagano, please kick me. I'd like to lose my license".

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Post by KOG » Wed Jan 26, 2005 9:26 pm

Hydra Mirage wrote:Thanks for the excellent example KOG.
$75 manufacturing cost per kit ? That's the same as a recast to buy !
I would guess that a Volks recast by Volks would cost a lot less to manufacture. In fact this is crucial. If they reduced their manufacturing (ie. just sell a good kit from an existing mold in a plastic bag and cardboard box) they would make A LOT more money by reducing their price.

But I get your point.
Yes, the figure of $75 is a lot. But you have to remember that it's a combination of so many things. A share of the production cost, design and sculpt cost, materials cost, packaging cost, marketing cost, distribution cost, licensing cost.

A recast can sell at around $75-$100 exactly BECAUSE the cost is lower. They cut out licensing. They cut out the design and sculpt cost. They don't pay for any marketing. Not to mention, they also use cheaper materials, like lesser-grade resin. And don't always include things like metal parts, decals, and so on. All this reduces their cost, and makes a selling point of $75-$100 MUCH more profitable.

Volks and WSC can't cut costs like this, which makes a selling point of $75-$100 NOT profitable.

And you also have to remember... Volks and WSC don't make a lot of resins besides FSS. So most of their GK market profit has to come from the sale of FSS items. Recasters, on the other hand, can crank out recasts of anything they want to. So they can afford to make less profit per unit, since they sell such a huge variety of items, in great numbers.

And you know, I'd wager recast firms pay their staff a lot less per hour in terms of wages... another thing that saves them some money and increases the profitability of recasts.

Now, I still don't get the concept of Volks recasting itself. Why would they do this? It would cost them just as much to make a recast based on a mould taken from a cast, compared to an original mould. The only way they could cut costs is by using cheaper materials or skimping on extras like metal parts and decals. And I still don't see why Volks would want to hurt it's OWN business by offering cheaper versions of its premium items.

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Post by Hydra Mirage » Wed Jan 26, 2005 9:30 pm

Agreed.

Ah well.

I have supported Nagano by buying anything and everything fss I can get my hands on.

I will try and support volks by saving up for a Bang Doll off HLJ.

But I'm not going to pass on beautiful recast kits like the siren's.
My love of fss is too great....:0)

jinnai

Post by jinnai » Thu Jan 27, 2005 1:58 am

Happy Hopping wrote:
jinnai wrote:I will (and already do) have access to older kits.

We all need to start somewhere. I chose the Red Phantom because there's more of that in stock right now than any other kit (except for Kneeling B4's.. lot of them also right now..).

.
okay, so i can request any FSS GK original, and you can deliver?
Whatever is available in the warehouse. I can crosscheck at anytime, but I can't order until I fill a certain quota.

It's a shame the Phantoms are already ordered, otherwise I probably could have done something. But I put off the phantom ordering long enough.

elemental

Post by elemental » Thu Jan 27, 2005 2:39 am

Well... that discussion sure got very lively since yesterday. :) And a fair way off topic too, not that I am too worried about that.

A few things I'd like to add:

- "original" HK stuff is not cheap:

http://www.e2046.com/trade/productview/2803

Compared to the usual Volks/WSC offerings available on e2046, this is overpriced rubbish. Why is it expensive? Cos they produced it themselves.

- If anything, e2046 prices have gone up considerably over the past year or so. Yet you can still order the old and excellent WSC Schpeltor, Bang, KOG etc at the same prices as when they was released way back over 10 years ago. So who exactly is doing the price-gouging??

- I am certain I read either here or on waxtrax that Nagano LIKES the exclusive/expensive element of FSS kits.

- Volks and WSC don't directly target sales outside of Japan, which in itself would have helped kick off the recast market when it started out. But even so all of us fans outside of Japan can still buy most things FSS via HLJ etc, and in doing so support the industry that "ignores" us.

A big part of the recent problem is Volks' and WSC's core market (Japanese modellors) seem to be buying more HK recasts.

The simple fact is, if these companies can't make money out of FSS GK, then why should they bother? They are not charities. If you can't be bothered to support them, you can't whinge when they disappear for good.

If you want to support the industry and you want your Volks originals at slightly cheaper prices than HLJ, talk to Jinnai. :)

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Post by happy hopping » Thu Jan 27, 2005 9:53 am

Hellequin wrote: I thought it was because there were some complications over their reacquisition of the licence that forced them to put off FSS work for a bit. :?
Where did you hear this fairy tale?
If you buy a pet from pet stores , you are encouraging those breeders to breed more. This is the condition that they lives in:

http://uk.youtube.com/watch?v=Iu_JqNdp2As

when you buy a pet:

http://uk.youtube.com/watch?v=WCNr-VrkXl8

Adopt a pet

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happy hopping
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Post by happy hopping » Thu Jan 27, 2005 10:04 am

jinnai wrote: Whatever is available in the warehouse. I can crosscheck at anytime, but I can't order until I fill a certain quota.
.
But the Phantom is a new kit, if you order enough, you can always get discount.

THe ability to get new kits is mutually exclusive to the availability of old kits. So what's the scoop on the "old kits" and the "warehouse business"?

We are beating around the bush here.
If you buy a pet from pet stores , you are encouraging those breeders to breed more. This is the condition that they lives in:

http://uk.youtube.com/watch?v=Iu_JqNdp2As

when you buy a pet:

http://uk.youtube.com/watch?v=WCNr-VrkXl8

Adopt a pet

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