Casting kit buisness?

[bobh]

I see that the pattern, plans and rights are up for sale for the Galloway 1/3, 1/4, 1/6, 1/8 scales, the Little York, Little Brother, 1/4 Olds, 2 different Ball Hop Monitors, the Woodpecker and may be others are up for sale. The question for people that have gone down this business road before, in the current climate, with the supposed lack of interest in castings and material costs, is it possible to make a viable business out of them. I'm sure it's not a big money maker but break even plus coffee money? I know nothing about getting castings made but I know what I went through to find a ball top monitor set and would hate to see these patterns and plans fade into obscurity like so many others have. Gone is gone with this stuff. Bob

[Jo]

Running any type of Model Engineering Business is these days for the love of doing it: You meet lots of great people, you constantly have people phoning you up for a chat (and sometimes even to buy stuff), you get to run around chasing up foundries and other suppliers for stuff that is late, and you can spend many weekends at shows rather than with your own family and come back having just covered your costs. If you want to make money with less hassle then stack shelves in your local grocery store    .

It would make a great retirement hobby but don't expect time to make any model engines for yourself (which is a bit like running a model engine forum  ).

Jo

[GWRdriver]

Hello Bob,

I've never been an IC person but I know the engines you've listed have all been popular at one time or another with Farm IC builders.  Are these from the Paul Breisch line?

As a one-time dealer/supplier to the live steam trade, where like most other suppliers I repackaged materials and supplies for small scale live steamers and built custom boilers, I can attest that income, or should a I say profit, is sparse and time is consumed in large quantities, which is why I gave it up.  I never had any time to work on my own projects, which are many.  Now that I'm retired the circumstances might be a bit different but that market is now very well covered.

I never produced original castings but learned that when a model engineering business, especially one which supplies castings, changes hands one of the most critical aspects of the transaction is the relationship with the foundries.  I've seen the effect that changes in foundry relationships can have on such a business.  In the instances I have first-hand knowledge of, some of the foundries involved used the change of ownership to take care of their own interests, which is a fair and reasonable thing to do.  In some cases this was to withdraw from the arrangement, decline the work, or to modify an existing arrangement, which was no longer profitable, or profitable enough.  In one such case a foundry "modernized" by converting to a new match-plate system, forcing the customer to bear the costs of reconstructing the match-plates of a large percentage of their casting line, which (the costs) were prohibitive.  Changes of this sort invariably lead to increased production costs and subsequently consumer prices, thus upsetting the business model they assumed they would have.

All this is not say this would be a losing proposition, far from it, I'm sure the Marketplace would love to have these engines continue to be available, but IMHO a primary factor in your decision should be to have your foundry relationships firmly established and agreed upon before taking the leap.

Harry

[Jasonb]

There is a market for them but it is going to be quite limited, maybe a bit of a run at first if you were to bring them back to the market but then that would settle back to maybe 1 or 2 casting sets a year.

A lot will depend of what Minicastings are asking for the patterns and rights as to how many kits you would have to sell to break even and then hopefully go into profit.

You will then have to decide what to price the casting sets at, too low and you won't be getting much back for your efforts and too much will limit sales. Markup on castings from foundry probably 100% but out of that you have to consider time delivering patterns and collecting castings or courier costs, printing costs, adverts and general admin time. There is also the issue of lost or damaged patterns as well as any castings that have to be replaced due to defects, foundry may cover that but they won't cover the cost of taking it back and collecting the replacement.

You also need to think about inventory, cheaper to have a batch of each cast but that then ties up your capital and you need somewhere to store the castings etc. The other option would be to take a deposit with order and then have the model cast. really you don't want to be faffing about having just one cast unless foundry will store patterns and just cast when asked but you need to factor in it takes as much effort to collect 10 sets as it does a single set.

There are many casting kit suppliers that have packed up due to problems getting a good foundry so that would be a priority before buying the patterns and then finding you cant get them cast. People want good quality castings for their money so you want a foundry that will take care and produce good usable castings, ideally heat treated but that is going to add more cost.

[maury]

Bob, i'm glad to see you have an interest in these patterns.
I.m curious where you found them for sale? I know the guy who
has them, in fact one of the ball hopper Monitors was my design.

I see you don't have foundry knowledge. If you pick up some of
these patterns that will be your first learning curve. Do you have
a foundry you can use? If not the whole idea is a non-starter. You
will need a foundry interested in the work, and has a fellow
who will mentor you.

After all that, you will need several thousand $ for inventory.
even if you get the patterns for free profit is an illusion.

Back when I was selling kits, I could make enough to keep some
inventory and pay for my trips to 2 or 3 shows a year. It was
a lot of fun, and I thrive on creating new models, so that was
my reward.

maury
LoneStarEngineWorks Retired

[bobh]

Maury, He has the Woodpecker stuff on Ebay and the ad mentions the others. Some how I think $25,000 for the Woodpecker stuff alone makes this a non starter. Bob

[Jasonb]

I don't think you would ever get your investment back at that sort of price

https://www.ebay.com/itm/265714106801?hash=item3dddcb81b1:g:B1gAAOSwGzBilBGj

[maury]

Oh Wow! This has to be a mistake. $25,000 for all of them would be way too much.
If you had a professional pattern maker make new patterns from scratch the price would be in the ballpark.

maury

[Jasonb]

I seem to remember that the Woodpecker kit was around the $400 price so lets be generous and say you made $100 profit per kit that means you would have to sell 240 kits before you could call that net profit rather than gross and start making some money which simply is not going to happen. If you moved the decimal point one place to the left then allowing for the castings etc that are included then the resulting $1000 for the patterns and rights might be more like it.


The photos also bring up other things to consider if taking it on. You may have to use more than one foundry as the one for Iron may not do or be as good as one that does non ferrous so more traveling or transport issues.

Most of these kits were not just castings, many included things like gears, piston rings, etc so a decision will have to be made as to whether they can be made in house or farmed out, the later reducing possible profits and likely putting the kit price up higher

Looking at some of those match boards they are in a bit of a state and may need some work and that is assuming they are of a size that your foundry can make use of as they may not suit their box sizes.

[bobh]

Still here. Caught Covid and it's got me down. I haven't contacted the seller at all as I'm looking at these discussions as a feasibility study. What I've got so far centers on the foundry. First, finding one to do the work at all and then doing it at a acceptable price. My terminolgy sucks here but it sounds like the patterns must be mounted a backer board suitable for their flasks if not, can the patterns be removed and moved to a more suitable board? It sounds like the amount made will depend on their minimum order and how much money you want to tie up. Second is the other stock. Any truly specialty part must be sourced of course but how do you feel about a kit of castings and a material list to source the other metal yourself? There is a company in England that does that as an option to save money not only on the kit but on shipping as well. This is probably an exercise in futility as I haven't talked to the owner and his price looks to be in dream land but you never know and I REALLY hate to see these patterns go in the burn barrel. Bob

[Jo]

When I buy Castings, other than Stuarts here in the UK, they do not come with the necessary bar stock the builder has to supply their own. This is not a bad thing because Stuarts normally provide titchy short pieces which rarely allow for holding the piece and when you go wrong you still have more to try again 

To value these patterns: the patterns are worth very little, what you are buying is "good will" for the original business and the rights to market the models. This is assuming the seller owns the marketing rights.

Jo

[Jasonb]

A lot will depend on what the foundry wants to accept, The recent ones I have been involved with in conjunction with Graham of Alyn have not been mounted on boards, I did make some of the patterns for smaller parts as a "tree" where several are joined together which makes it a bit easier to handle. As the foundry tends to price on weight having them on boards would not be a significant price saver though it does indeed save time which a foundry may pass on by charging less.

It may well be possible to remove those patterns from the boards and fix to new ones complete with gates and runners.

I'm more than happy to buy just the basic castings in a set, infact I often feel some of the included castings could be omitted as they can easily be cut from bar stock. As your likely customers are not going to be beginners they will probably have a good stock or materials and fixings anyway and would prefer to work on the end of a decent length of bar rather than short lengths.

Hemmingway here in the UK offer the materials etc as a separate package as did Cotswold, Stuarts also do their larger kits as just castings. You are probably not going to make much out of supplying barstock and not a lot from things like gears unless they are specials but most hit & miss engines are just basic spur gears so if it were me I would not offer anything but the basic casting set.

Unless he is willing to knock a zero off the end of that asking price I can't see that you would ever get into profit. You should be able to get a rough idea of what the flywheel and head castings would cost, look at someone like Martin for similar flywheel size and then half the retain price to get close to foundry price. Then add that to what you feel the patterns and rights are worth and make him an offer.

[Jasonb]

It's interesting to look at the full kit that Ministeam used to supply

http://forest-classics.net/galloway_woodpecker.htm

You could easily omit the two gears and length of spring. Offer the ones included with the patterns as an option until stocks run out.

The iron liner could just as easily be cut from a length of readily available cast iron bar and you could probably also do away with the piston casting as well. The rest would have to be included.

[Alyn Foundry]

Running any type of Model Engineering Business is these days for the love of doing it: You meet lots of great people, you constantly have people phoning you up for a chat (and sometimes even to buy stuff), you get to run around chasing up foundries and other suppliers for stuff that is late, and you can spend many weekends at shows rather than with your own family and come back having just covered your costs. If you want to make money with less hassle then stack shelves in your local grocery store    .

It would make a great retirement hobby but don't expect time to make any model engines for yourself (which is a bit like running a model engine forum  ).

Jo

I have to totally agree with this post of Jo’s.

I ran Alyn Foundry for nearly 30 years, sold many a kit and made lots of friends and acquaintances along the way.
Thank goodness I also had a full time job that paid for the “ bread and butter “ Alyn put the odd bit of jam/jelly onto it.

Now looking back, the wonderful thing of providing pleasure to my customers becomes the greatest part of my efforts. It’s not often you see someone smiling as they part with their hard earned cash. But that’s how it was all those years ago.

Engine castings are definitely a niche market and you won’t get rich quick. Despite many efforts we never, ever made a profit but luckily broke even most years of trading.

One other thing that springs to mind is that without the Sterling efforts of my wife and former wife, the bookkeeping would have scuppered the entire enterprise from the beginning.

And finally, you can always end up with having to deal with this side of things too….

  Graham.

[Jasonb]

That does not look like the one from the foundry that had the hole in it, was that hiding just below the surface and the core needs shortening some more