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Posted: 5/8/2004 10:19:29 PM EDT
| if i had a CNC machine shop, i'd make good-looking, heavy-duty 30mm scope mounts and sell them for one-third of what the top ones are going for. |
Sure, you could cut out the distributor and dealer mark up if you sold factory direct. But after a while you would be so busy you would either have to add staff or sell through a distributor. Overhead would increase, the distributor would need his cut, and your prices would go up to the same as all the others  .
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| Gouging? I don't believe there's much profit margin for them to begin with. They're expensive for dealers to buy, therefore expensive to sell. This is a competetive market, some of us are willing to pay a little more to get top notch service, others will shop and potentially buy from unknown and shady outfits, it's all up to you if you have the time to deal with a purchase gone bad. For the rest of us that value our time (time = money), it's better not to be penny wise and pound foolish. |
| It's ironic that people continue to criticize this industry and yet they don't mind buying cars, fast food, and clothes. Did you know that the fountain drink you just bought at Taco Bell for $1.29 cost them about $.03? Unless you've owned a machining business, you probably have no idea what it costs to produce this stuff. Now quit yer bitchin' and go have a hamburger! |
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Quality, R&D and excellent enginrering don't come cheap, especially in a highly industrialized nations where skills required to execute and manufacture these things you menion are prohibitively expensive. I'd rather buy and support US designed and maufactured gears than the Chicom knock-off that are much cheaper. At the same time I'm sure you know why they're cheap, they spent no money on R&D, the material isn't up to specs, and they're made using cheap labor. Demand dictates the price too. If nobody bought and paid for these items, these company wouldn't have survived, except these companies didn't design and produce them for civilian consumption, they'd do quite well supplying their wares to Uncle Sam. There'll always be Mercedes and Bentleys for people that want them, there'll also be others for those that don't. Just a matter of what you want, and what it's worth to you. |
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The other question you have to ask yourself is: If it could be done, wouldn't someone be doing it already? I mean, the AR accessories market is huge, with lots of dollars to be had, and there are plenty of companies who are already in the market and have the equipment to do the manufacturing. The reality is that things like scope mounts are precision machined (or should be; the Cheap Chinese Crap usually isn't), and that means a lot of time must be spent with gauges ensuring tolerances are met, and products that don't must be rejected, which is expensive. The tighter the tolerances, the more units will likely fail to pass, and the higher the per-unit cost. The thing about an open market is that it is brutal. It will quickly decide if your product is viable or not at the price you sell it for. And even if it is viable today, something could come along that's either better or cheaper and knock your product out. The fact that a number of products have been around for years and remain top sellers despite their high sticker price should tell you that people continue to find value in those products. The fact that other products haven't replaced them, or that prices haven't come down, should tell you that no one has yet made a comparable product for less, and that lesser products haven't been found to be adequate for the job. None of us likes to spend the amount of money we do for things. We'd all like it if they cost less, and we'd probably buy less expensive products if they would give us the same level of performance. But many of us still buy those things because we understand the value in the product. You get what you pay for, and TANSTAAFL. -Troy |
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Trying to justify the greed margin is rediculous. I don't buy a brand new car (pay for an expensive car), the only reason I eat fast food is because of schedule issues. I don't buy into that crap about the distributor not having a profit margin. The reason they don't have a profit margin is because the manufacturer is selling the crap so high, period. And the ONLY reason these people sell the crap so high is because they can. IMHO, it all started with gov't contracts and the $50 toilet seat. And it has continued to feed on itself. Face it, when the big boys started selling to the peasants they did so at prices which reflected what they got from the gov't. And it as moved on like that. I don't hold the merchant responsible, I don't hold anyone responsible. I just don't pay those prices. Never have and never will. If more people REFUSED to pay those kinds of prices then they would come down. It is the law of economics. The old supply/demand cycle. Just my .02 and why I promote FAIRLY priced parts. |
| OK...let's look at it from a different perspective. I'd like all of the dissentors to go into work tomorrow and tell their bosses that they want an immediate paycut. After all, people all over the world are doing your job for a lot less money so you're obviously overpaid and a product of the American economy. You should be paid fair market value. |
 Nicely put Troy.Some people get it, some don't. Oh well, it's not my part to educate anyone on such things, if they are happy with low quality pos, live and let live. Myself, I see value in things like Mercedes and will always own one, I can't fault others that don't. |
Duffy, I'm sort of sorry you don't deem that we deserve your sage intelligence. I just don't agree with your rationale. And I certainly don't agree with your arrogance. It just attempts to justify its existence, (arrogance). I guess this ignorant peasant must continue to live in my squalor. Tisk, tisk, I just don't know enough to know what is good I guess. And for the record, I never said that I didn't want quality, I said it is overpriced by the system and perpetuated by the manufacters and gov't, and you know it. |
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I know. How DARE a business try to maximize its profits! The nerve! Once again: if someone else could offer the same quality and same features for less money (or survive on less profit), they would (and sometimes do), and will knock the higher priced competition out of the market. Very few of the people on this board bought anything because of government contracts, so that's a strawman arguement. I don't run an AimPoint QRP mount, which is what the military bought. The mount I have is more expensive (and has improved features) over that mount. I bought it after researching every other mount available. It didn't come cheap, and I had to save up to get it, but I'm happy with it and don't in any way feel I was ripped off. It's clear that many of you have never attempted to run a business. If you ever try, you're going to be in for a very rude awakening. -Troy |
| I said it's not my part to educate anyone on such things, because I deem other members are much more knowledgeable, but even were I as well versed in all the engineering and manufacturing aspects, it's not my place to tell you what to do. As to anyone deserving my wisdom, I think you took it the wrong way. I try to give back to a board where people are generous in giving without asking anything in return, and as to any experience I've shared, you may take it for what it's worth, or leave it as someone's ranting. |
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I have run a successful small business, and let me say right now, you charge what the market will bear. If you are trying to get market share, you undercut your competition. Don't ever believe that business school crap about companies' margin being a few (1-5) percentage points. You charge what people will pay, and typically your big clients (think large corporations and the government) get a good deal, as they are paying your fixed expenses to keep you afloat, and the smaller clients (small businesses, individuals) get the worse deals, as they are where you are making more profits. One of the ways to convince people to buy things at a large margin is the "snob appeal" factor. As in the Mercedes and Bentleys mentioned earlier. In those cases you pay more than you objectively get. As to the manufacturing tolerances, I thought the whole idea of CAD/CAM and CNC was to improve quality and lower manufacturing costs. As for R&D, how much of that can there be for 30 mm scope mounts, vs 1 inch, really? And you are spreading those fixed R&D costs over hundreds (thousands?) of units. Also, aren't these companies also producing other products so most of the equipment is a sunk cost (unless it was bought just to produce 30 mm scope mounts)? But don't rain on someone's parade, if they want to start a business to produce a better product at a lower cost, we should all encourage them. It's the American dream, and if they succeed, we all benefit. |
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K, here's the deal on close tolerance machine costs. Let me qualify this, as I have worked as an A & P helicopter mechanic for almost 20 years, and deal with very close tolerance items on a daily basis. CNC machiening does indeed produce tighter tolerances at lower costs. But, as end mills, blades, etc. wear from machining/cuting operations over and over, they loose their tolerance. At this point the machine must be recalibrated to allow for the small differences in cuting/milling demensions due to the wear of the cuting tool. The tighter the tolerance, the more rejects, and the more recalibrations that are required. The tighter the tolerance, the higher the cost, it's that simple. It isn't unusual for close tolerance items such as gas Turbin nozzles (nothing more than a disk with veins cut into it) to cost more than $20k, and a single rotor blade to cost more than $60k. So, $108 for a buis doesn't seem that out of line to me. As always YMMV. |
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