Welcome to an explanation of what crowdfunding is in a Model Railway situation.
What is crowdfunding? Simply put its a group of like minded individuals who get together to fund / pay for a manufacturers (or indeed themselves)) to produce a model (locomotive, DMU, EMU, coaches or wagons in any gauge) that would have not necessarily been made by one of the current manufacturers as it was seen as too niche etc.
In this case, DJM, would get a quote for tooling and production units, where necessary add in Laser scanning, and some development costs, and says that a product will cost xxx amortised among , for example, 1000 customers.
On certain products it’s not feasible to ask for the total monies up front due to the overall price, and as such sometimes, the total will be split a number of ways, with each part payment due on or around certain milestones being reached in the products development. (usually 1)Development start, 2)Tooling start, 3)2nd EP tooling start and 4) production start and shipping to the crowdfunder).
During the development it is usual for cad/cams, laser scanning, 1st ep tooling, 2nd ep tooling, paint samples, testing videos and finally production samples to be shown to crowdfunders so they can keep up to date with progress.
However, Crowdfunding is not without its’ risks and you must be assured that the risks are worth taking before committing funds to such a project. And like shares or betting, you can win or lose. So please think about your joining a crowdfunding project, and only do so it you are totally ok with the possible negative ramifications.
Most model projects will not go ahead if the minimum amount of crowdfunders to make the project viable do not sign up, and indeed this is the case with DJModels Ltd, who were instigators of the worlds first 100% Crowdfunded Ready To Run mass produced Model Railway locomotive in the acclaimed OO gauge Class 71 electric.
There are circumstances in which a crowdfunding scheme will be started without the minimum amount of crowdfunders signed up and simply put that means when a project is funded to a bare few required sales. This will be a decision point and use the manufacturers knowledge in that there will always be new crowdfunders coming to the project once they see it has reached a certain point that ensures that the project, in all likelihood will go ahead.
DJM runs crowdfunding projects on the basis of all you read above, but will also have manufactured ‘spare’ models to act as replacement, or individual spares for each crowdfunding project.
To date DJM has successfully crowdfunded the OO gauge class 71, The OO gauge APT, the OO gauge 92 about to go into tooling, the N gauge Class 92 about to go into tooling and the N gauge King class steam locomotive, about to go into tooling. With the HUO wagon in both N and O very close to making the numbers to make both viable.