Waukesha, WI
Hey Henrik -
The way you phrase this is interesting. It's actually totally backwards. This is the kind of questions that you need to ask yourself upfront, not at the end. The price you charge actually has NOTHING to do with most of that. In fact, most of those are spent (past) costs.
The price you charge is a balance of what the market will bear and what your expected volume will be at that price to maximize the profit. For example, let's say your production cost is $25 at 1000pc and $15 at 10000pc. Let's say you charge $300 and sell 1000, that's $275000 profit to recoup your NRE (this is a spent cost and has no bearing on quantities) plus profit. If you price it for $100 and sell 10000, that's $850,000 profit to recoup your NRE and profit. I know these numbers aren't realistic for this since this is pinball and no-one is going to sell those quantities. But, you get the idea.
I also know you're not new to business so I expect I'm not telling you something you don't already know. But, too many people (including large pinball parts suppliers who shall remain nameless), don't think this way. Ideally, you do the research up front to see what the market will bear for cost and projected volumes and then estimate your NRE. Then you decide whether it's even worth doing the damn thing in the first place.
Jaz
Quoted from Pinball-Dreams:Good morning everybody,
just some more words on that topic...fact is: yes - we're into pinball business and simply must earn some money for our efforts BUT I'm still more a pinball maniac - my passion for pinballs last now for 35 years, I've been a marketing guy before and made some good money but couldn't stand selling "hot air" any more. So I took the risk and started my company 5 years ago and we're still there but I'll never make a fortune out of this. I don't wanna make a fortune anyway, having fun when going to work, meeting some nice people from all over the world, sharing a passion - that is what is really rewarding and makes me happy when driving to work every single day...therefor I'm really grateful. And if the money I make is just enough to spend a humble life...here we go - I'm happy...
Concerning pricing of the holo.....let's play a little game - please fill out the following numbers and see where we go..
Let's assume that I had to order 250 items so just break down the common costs to one piece..
Price for a single holo repro consists of:
- aprox 200 hours of research
- costs for scanning the figure we finally found
- costs for the 3d artist (aprox 60 hours salary for a professor)
- costs for 3d printing
- cost per hologramm
- costs for developing the mounting plate
- production costs per mounting plate
- costs for assembling the holo
- sales taxes
- VAT
- licence fees
- worldwide insurances for the product (without them you cannot get any licence)
- costs for preinvestement (interest rate)
- common costs for the business
- salary for employees (assembling, packing, shippping, writing innvoices and so on)
So...please guess the above mentioned numbers and calculate them.
Agian: I really don't wanna complain - just want to give you guys a better idea why certain things simply cannot be cheap..
Have a great weekend - I'll be back to you in some days
Cheers
Henrik
