Quote:
Originally Posted by SfValley335i
Is Vargas or FFTEC pricing good? It is, if compared to other kits for other platforms. Is the Vargas or FFTEC pricing good for what you actually get, no.
Development, material and labor wise these kits are not worth $7k+. I'll leave it at that.
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So instead of calling you an idiot or ignoring you I'll honestly try to educate you, because it is VERY obvious you don't understand how business work and the guys who run them don't want to waste the time explaining it to you.
You are only accounting for Labor and parts, and severely underestimating R&D. That is so simple. Here is a list of just SOME things you're leaving out:
Overhead- BMS products are low cost and low labor. They don't have to make a decent profit on each item in order to stay ahead of his monthly bills. When your product cost in the thousands instead of hundreds you need to make more on each in order to stay ahead of monthly because you naturally will be selling less units. This is VERY fundamental to small business models. This is why walmart CRUSHES local business. They sell SO many more units they can afford to have lower prices.
Product Life Cycle- The first time you make a product you have to put the cost of research and design into the cost of the product. Additionally if you want to STAY in business you need to keep making new products, AND as you so elegentally point out, they need to be cheaper. Meaning you can't tag R&D cost into the product as much. The solution to this is making sure the profit on your first big hot item is large enough that it can cover not ONLY your first set of R&D cost, but the R&D cost for their next item. [Hint: it sounds like VTT is already building a kit for the N55 and I'm sure FFTEC is doing other development as well]. What this does is front loads the cost of your first hot product that people will higher for, in order to charge less for your second and third set of products because you are already mitigating R&D cost.
Product Support- A business is obviously different in a one off build because they need to keep selling units. If you don't support your product through warranties, phone calls, shop time, ect then you won't keep selling units. A one-off build doesn't have to worry about this. They can build your kit and move on. You come back 4 weeks later with an oil line issue or something, be ready to fork over more money. That wasn't built into the cost of the one-off kit, it was on the company built kit.
I'll leave it at that. Three things you are already leaving out. Any small business class even if you take it online/community college and you could expand that to dozens of smaller nickle and dime things that would add up. Ex: Shipping, insurance on shop to keep those more expensive things, machine/equipment upkeep (the cost to make DP/intake/controller unit pales to a turbo kit), Product performance results ect
Hopefully that will make you think a bit more of what goes into a production off the shelf kit. If not oh well it was a nice refresher for me.
