How Not To Price

[Geof]

How many of you are old enough to remember the SeaBee? A little amphibious plane apparently built for the recreation market. I remembering seeing them years ago.

I was an an Airshow and there was one on display with a sign giving the history with some detial I did not know: They were sold at $3995 back in the late 1940s. One thousand were sold but then production was stopped. It seems someone finally did a production cost analysis and discovered each one was costing $13,000 to build.

If you have a spare nine million floating around somewhere I gues you can do things this way, but I think it is better to do the cost analysis before setting the selling price.

[LeeWay]

Unless you make all your money on accessories, parts, extended warranties and service contracts. This is how they give away cell phones and some satelite equipment.

I imagine there would be lots of work to be done after the sale of a small wet plane. Recovery mostly.

[dertsap]

do you think someone got fired over that or shot and built into the last production plane

[ironDigit]

maybe they made money of the laundering going on..... hmmpff a pilot can't fly without a neat crisp pilotsuit is what i actually means.

the funny thing is many starters wanting to make money of their cnc.And end up with a nice hobbyafter evaluations....not me off course !

[DareBee]

That is more or less the same reason ATS has removed the solar panel production.
They had decided to just make them for a "target" market price and then figure out later how to reduce manufacturing costs.

[Geof]

..... make them for a "target" market price and then figure out later how to reduce manufacturing costs.

This can work if you are lucky and in the correct field. I used to make scientific equipment and I designed a high pressure emulsifier that was used in research for drug delivery systems. The maximum amount that most university researchers could spend without getting competitive bids was $2500 per item; guess what my price was? The manufacturing cost was $750.00. And just in case anyone gets all steamed up about me overcharging; it was not patented, it was a simple device to build once designed, anyone could have gone into competition with me at a lower price. Nobody did.

[fizzissist]

The venerated 300SL Gullwings and Roadsters built by Mercedes started out at $4695 in '54, and ended at about $10,500 in '63.

It was such a prestigeous position to be in that division that workers took extra care with each car. One reason MBZ ended production was that they discovered it was costing in the neighborhood of $25k each to build. I guess the cars didn't buy 'em that much PR.

In 1989 I happened to get into a Nissan North America Dealers convention. Not open to the public. Dealers and top Nissan brass only.

I learned that +86% of dealer profits were parts and service. If a dealer GAVE you a car, their profits were you coming back to the service department.

Some years ago I was involved in audiophile stereo manufacture. 90% of the cost of manufacture was the dress plates, face, and knobs in typical commercial stereo components. Ironic....the biggest expense was looks...for something that's sold on the premise it sounds good...