Predatory Profit Margins Let me propose a hypothesis, and you may call me crazy. Many have. But I'd say, that no second generation open source product is worth > 3-10 times material cost. Now, this isn't the standard operating procedure for post-industrial America, where people are happy to pay obscene amounts of money for "intellectual" property. Although I admit, One's time and effort is worth as much as solid products. However, when One's super-ego is attached to an open source product in perpetuity, and yes I did learn that word from Kevin O'Leary, then that product can not be deemed as a second generation open source product. What do I mean by second generation open source product? I believe that any generic product, no matter how complex, should not be priced on the basis of design. It should be based on material cost. The work of design is absorbed already. The business model should be like that of any machining company that bases price on material cost, or a retail business that buys product and sells it at a markup. I see companies charging $20 for a $0.50 piece of metal and I wonder; How can they wave the Open Source flag? https://reprap.org/forum/read.php?1,303683,303683#msg-303683 Sat, 12 Sep 2026 19:08:12 -0400 Phorum 5.2.23 https://reprap.org/forum/read.php?1,303683,308311#msg-308311 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,308311#msg-308311
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ohioplastics
I said that the Chinese lack innovation and out-of-the-box thinking because they live in a repressive society, not that their prices are too low. So suck frog legs.

Before you go bagging the Chinese, do some real research, watch the video on youtube to start with, it may open your eyes a little.
[www.youtube.com]]]> regpye General Sat, 08 Feb 2014 19:49:19 -0500 https://reprap.org/forum/read.php?1,303683,306782#msg-306782 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306782#msg-306782
Anything that you fabricate and sell can fail or cause harm to someone. In some cases you will be taken to court and you will lose. Either your corperation(what you don't have a corporation? Add that to the cost of making stuff then...) or you personally will have to pay for damages and court costs.

Making and selling good stuff at a good price is a constant battle.]]> Yvan General Wed, 05 Feb 2014 15:53:34 -0500 https://reprap.org/forum/read.php?1,303683,306759#msg-306759 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306759#msg-306759
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gmh39
Does this mean the for profit company should be make almost no money off their design, absolutely not. But making a design open source gives them a few things:

-it can be a selling point
-easy/cheap R&D for a future version

I think an advantage with more impact by using or developing an open source design is that you have more eyes on the product in terms of design and application. There are a lot of smart people out there and you can't afford to hire them all. By using an open source design you are able to share the IP and leverage the combined experience and knowledge of the community. We did this with much success during the first Internet boom and new technology startups still continue with that today. There is still the misconception that open source is about being free as in no cost. The original geneisis of ope source is about the product being open for all to use it or modify it as they see fit. I think many of the younger developers or persons new to open source would benefit from reading Eric Raymond's seminal work The Cathederal and the Bazzar.]]> vegasloki General Wed, 05 Feb 2014 15:04:06 -0500 https://reprap.org/forum/read.php?1,303683,306747#msg-306747 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306747#msg-306747
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Hazer


As Vegasloki said, a developer does invest into the design. If the developer is a company, the cost of the engineering of the design is rolled into the companies overhead. Its called overhead because the cost is not quantifiable by a 'per-unit' basis. THis is due to the fact that overhead will be absolved over the entire companies profit margin, regardless of product (laymans: whether the design is used or not, it is still paid for).

That's not an accurate depiction of how costs are itemized in a company. It absolutely can be and is factored in on a per unit basis with estimates on the number of sales be it over the life span of the product or over some period of time, yearly , quarterly, what have you. In a sucessful business overhead is not some unquantifiable number that just appears. It has to be predicted, dictated when possible and managed. That means proactively controlling as many of those costs as possible and minimizing any unexpected costs. One reason why most small business fail is they can not or do not control costs. This discussion about absorbing costs as an "investment" is hollow.]]> vegasloki General Wed, 05 Feb 2014 14:53:19 -0500 https://reprap.org/forum/read.php?1,303683,306741#msg-306741 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306741#msg-306741 Hazer General Wed, 05 Feb 2014 14:29:03 -0500 https://reprap.org/forum/read.php?1,303683,306692#msg-306692 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306692#msg-306692
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Hazer
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tjb1
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Hazer
I never said the engineering was costless. What I said was making that engineering open-source is the same as donating such said cost, which by terms of definition makes it 'free'.

If you would read clearly what I stated before, yes, for Lulz it was not free. But for everyone else it is.

For any company SELLING the product that they developed, there will be an engineering cost in the price. Like I have said every post, them making it open source just removes the engineering cost from anyone that can take the designs and do whatever. I'm sure you will find that it's cheaper to buy from developers/source than it is to have a shop make 1-2 of an item.

And what does that have to do with rebuttal to the discussion that open-source = free?

It isn't free.]]> tjb1 General Wed, 05 Feb 2014 13:02:44 -0500 https://reprap.org/forum/read.php?1,303683,306664#msg-306664 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306664#msg-306664
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tjb1
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Hazer
I never said the engineering was costless. What I said was making that engineering open-source is the same as donating such said cost, which by terms of definition makes it 'free'.

If you would read clearly what I stated before, yes, for Lulz it was not free. But for everyone else it is.

For any company SELLING the product that they developed, there will be an engineering cost in the price. Like I have said every post, them making it open source just removes the engineering cost from anyone that can take the designs and do whatever. I'm sure you will find that it's cheaper to buy from developers/source than it is to have a shop make 1-2 of an item.

And what does that have to do with rebuttal to the discussion that open-source = free?]]> Hazer General Wed, 05 Feb 2014 12:03:14 -0500 https://reprap.org/forum/read.php?1,303683,306653#msg-306653 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306653#msg-306653
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Hazer
I never said the engineering was costless. What I said was making that engineering open-source is the same as donating such said cost, which by terms of definition makes it 'free'.

If you would read clearly what I stated before, yes, for Lulz it was not free. But for everyone else it is.

For any company SELLING the product that they developed, there will be an engineering cost in the price. Like I have said every post, them making it open source just removes the engineering cost from anyone that can take the designs and do whatever. I'm sure you will find that it's cheaper to buy from developers/source than it is to have a shop make 1-2 of an item.]]> tjb1 General Wed, 05 Feb 2014 11:46:55 -0500 https://reprap.org/forum/read.php?1,303683,306644#msg-306644 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306644#msg-306644
If you would read clearly what I stated before, yes, for Lulz it was not free. But for everyone else it is.]]> Hazer General Wed, 05 Feb 2014 11:17:28 -0500 https://reprap.org/forum/read.php?1,303683,306578#msg-306578 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306578#msg-306578
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tjb1
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Hazer
This debate is a nuance on perspective.

From the perspective of any OTHER than the developer(s), the engineering of anything open-source is free. At least until they modify the design, which they then become classified developers.

As Vegasloki said, a developer does invest into the design. If the developer is a company, the cost of the engineering of the design is rolled into the companies overhead. Its called overhead because the cost is not quantifiable by a 'per-unit' basis. THis is due to the fact that overhead will be absolved over the entire companies profit margin, regardless of product (laymans: whether the design is used or not, it is still paid for).

Even if the developers are a community, time is still invested. This time is no less valuable than the time of a for-profit company.

But the moment the design is classified as open-source, those costs are essentially 'donated'. As in 'Free'.

Definition

Quote

o·pen-source
adjectiveCOMPUTING
1.
denoting software for which the original source code is made freely available and may be redistributed and modified.

So to further argue the point, are you saying that anything 'free' has no original value? Or are you saying that open-source is supposed to be charged and everyone who uses it is stealing?

You have a thick head. Lulzbot is the engineer of the Budaschnozzle....and they sell it...so you best believe there are some engineering costs inside of the price. "denoting software for which the original source code is made freely available and may be redistributed and modified" So no time was spent on the original? Time is money...so the original was made without time spent?

Anything made has an engineering cost. Get this through your thick head. Just because they make it opensource does not suddenly mean the engineering costs disappear. They are not apparent if you take the opensource DESIGNS and have them made by somebody else. You are taking the engineering for free...because it was made opensource and having it made somewhere else without the overhead of engineering. If you buy from the original source, there will most likely be an engineering cost included in the price.

You guys are talking about 2 different Open Source situations.

1. The community develops the product. You more than likely are donating your time. yes, technically time is still money, but in this situation you are not getting paid for your time. The only cost is that of the prototyping. Which is absorbed by the developers a lot of the time.

2. A for profit company develops a product and makes it open source. Here the company is going to have engineering/R&D cost. This cost is going to contribute to their overhead and in turn add to the retail cost of their product. Since they are FOR PROFIT, they need to make some money to pay their bills and will have a decent profit margin also included in the retail price. Now if someone were to take their design, which is Open Source, and make it themselves, it can often times come out to be cheaper. (eg. almost every retail reprap) Does this mean the for profit company should be make almost no money off their design, absolutely not. But making a design open source gives them a few things:

-it can be a selling point
-easy/cheap R&D for a future version]]> gmh39 General Wed, 05 Feb 2014 09:11:54 -0500 https://reprap.org/forum/read.php?1,303683,306543#msg-306543 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306543#msg-306543
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Hazer
This debate is a nuance on perspective.

From the perspective of any OTHER than the developer(s), the engineering of anything open-source is free. At least until they modify the design, which they then become classified developers.

As Vegasloki said, a developer does invest into the design. If the developer is a company, the cost of the engineering of the design is rolled into the companies overhead. Its called overhead because the cost is not quantifiable by a 'per-unit' basis. THis is due to the fact that overhead will be absolved over the entire companies profit margin, regardless of product (laymans: whether the design is used or not, it is still paid for).

Even if the developers are a community, time is still invested. This time is no less valuable than the time of a for-profit company.

But the moment the design is classified as open-source, those costs are essentially 'donated'. As in 'Free'.

Definition

Quote

o·pen-source
adjectiveCOMPUTING
1.
denoting software for which the original source code is made freely available and may be redistributed and modified.

So to further argue the point, are you saying that anything 'free' has no original value? Or are you saying that open-source is supposed to be charged and everyone who uses it is stealing?

You have a thick head. Lulzbot is the engineer of the Budaschnozzle....and they sell it...so you best believe there are some engineering costs inside of the price. "denoting software for which the original source code is made freely available and may be redistributed and modified" So no time was spent on the original? Time is money...so the original was made without time spent?

Anything made has an engineering cost. Get this through your thick head. Just because they make it opensource does not suddenly mean the engineering costs disappear. They are not apparent if you take the opensource DESIGNS and have them made by somebody else. You are taking the engineering for free...because it was made opensource and having it made somewhere else without the overhead of engineering. If you buy from the original source, there will most likely be an engineering cost included in the price.]]> tjb1 General Wed, 05 Feb 2014 07:59:53 -0500 https://reprap.org/forum/read.php?1,303683,306513#msg-306513 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306513#msg-306513
From the perspective of any OTHER than the developer(s), the engineering of anything open-source is free. At least until they modify the design, which they then become classified developers.

As Vegasloki said, a developer does invest into the design. If the developer is a company, the cost of the engineering of the design is rolled into the companies overhead. Its called overhead because the cost is not quantifiable by a 'per-unit' basis. THis is due to the fact that overhead will be absolved over the entire companies profit margin, regardless of product (laymans: whether the design is used or not, it is still paid for).

Even if the developers are a community, time is still invested. This time is no less valuable than the time of a for-profit company.

But the moment the design is classified as open-source, those costs are essentially 'donated'. As in 'Free'.

Definition

Quote

o·pen-source
adjectiveCOMPUTING
1.
denoting software for which the original source code is made freely available and may be redistributed and modified.

So to further argue the point, are you saying that anything 'free' has no original value? Or are you saying that open-source is supposed to be charged and everyone who uses it is stealing?]]> Hazer General Wed, 05 Feb 2014 07:20:37 -0500 https://reprap.org/forum/read.php?1,303683,306381#msg-306381 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306381#msg-306381
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vegasloki
One of the reasons marquee brands cost what they do is because often there is R&D and marketing costs added in the markup whereas generic or low cost copies don't have that overhead.

That just means companies who take the ideas of maerquee brands, then re-brand them with little to no effort, and charge as if they had developed the tech, are posers.]]> Anonymous User General Tue, 04 Feb 2014 23:59:41 -0500 https://reprap.org/forum/read.php?1,303683,306372#msg-306372 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306372#msg-306372
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ohioplastics
I've always viewed R&D as something absorbed by the manufacturer, in order to sell new product. It's kind of like an investment. After a certain number of sales, the cost of the development process is paid off, but the manufacturer should eat the startup cost.

That's not how it works. R&D is built into the cost of doing business and added to the cost of the product. A profitable business will amortize all costs associated with delivering the product or service. One of the reasons marquee brands cost what they do is because often there is R&D and marketing costs added in the markup whereas generic or low cost copies don't have that overhead. The startup cost of a small business can be tens or hundreds of thousands of dollars and not something that can be aborbed by a growing business.]]> vegasloki General Tue, 04 Feb 2014 22:35:33 -0500 https://reprap.org/forum/read.php?1,303683,306365#msg-306365 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306365#msg-306365
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ohioplastics
I've always viewed R&D as something absorbed by the manufacturer, in order to sell new product. It's kind of like an investment. After a certain number of sales, the cost of the development process is paid off, but the manufacturer should eat the startup cost.

Yes, absorbed when you sell hundreds of thousands... Not a few thousand]]> tjb1 General Tue, 04 Feb 2014 22:05:13 -0500 https://reprap.org/forum/read.php?1,303683,306364#msg-306364 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306364#msg-306364
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Hazer
By definition: Lulzbot released their engineering efforts as open-source. They gave it away. Which again is free. It is no different than any other open-source material. Time was spent by someone for the purpose of freely distributing technology. Or are you saying that all of the other people who contributed to the entire RepRap scene are worth nothing compared to one guy at Lulz?

Read what Vegas said.]]> tjb1 General Tue, 04 Feb 2014 22:04:13 -0500 https://reprap.org/forum/read.php?1,303683,306362#msg-306362 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306362#msg-306362 Anonymous User General Tue, 04 Feb 2014 21:59:01 -0500 https://reprap.org/forum/read.php?1,303683,306360#msg-306360 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306360#msg-306360
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Hazer
By definition: Lulzbot released their engineering efforts as open-source. They gave it away. Which again is free. It is no different than any other open-source material. Time was spent by someone for the purpose of freely distributing technology. Or are you saying that all of the other people who contributed to the entire RepRap scene are worth nothing compared to one guy at Lulz?

Open source hardware is free as in speech, not as in beer...

Anyone that develops or contributes has an investment in if nothinng else, time. Time is valuable, perhaps one of the most valuable resources available. Open source is just that. Open. It has nothing to do with costs. It allows for the users to use the product as they see fit. Free to make or modify it. Because someone opens a design doesn't mean there aren't cost associated with it. Particuarly a piece of hardware that may undergo many prototypes. While those designs may or may not cost the user any money, they most certainly have cost the developer time and money be they a business or individual. When an open hardware company is actively developing and manufacturing new designs there is an R&D cost and while the IP itself may not be charged as a line item, the cost of that development does impact the bottom line. It comes out of the margins of the business if nothing else.]]> vegasloki General Tue, 04 Feb 2014 21:46:39 -0500 https://reprap.org/forum/read.php?1,303683,306223#msg-306223 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306223#msg-306223 Hazer General Tue, 04 Feb 2014 16:27:07 -0500 https://reprap.org/forum/read.php?1,303683,306145#msg-306145 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306145#msg-306145
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ohioplastics
The budaschnozzle was based on the arcol. The prusa hot end was original, but didn't work well enough to justify the exorbitant cost.

Being based on something still means there was engineering time spent. The only cases in which there isn't any would be grabbing the opensource files, going to a shop and saying make this or making it yourself. If your engineering time is free, more power to you.]]> tjb1 General Tue, 04 Feb 2014 14:34:36 -0500 https://reprap.org/forum/read.php?1,303683,306143#msg-306143 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306143#msg-306143 Anonymous User General Tue, 04 Feb 2014 14:25:32 -0500 https://reprap.org/forum/read.php?1,303683,306134#msg-306134 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,306134#msg-306134
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Hazer
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tjb1


Engineering is free eh?

In open-source, it is.

The initial engineering of the product is not free. If you read the context, this was in reply to Lulzbot Budaschnozzle and Prusa hotends. The engineering they spent designing those are not free, it's relfected in the price. The choice of them to give away the engineering is a gift, that only makes it free for the people who take the design and make it for themselves or sell it.]]> tjb1 General Tue, 04 Feb 2014 14:12:45 -0500 https://reprap.org/forum/read.php?1,303683,305724#msg-305724 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,305724#msg-305724 Dirty Steve General Mon, 03 Feb 2014 20:19:19 -0500 https://reprap.org/forum/read.php?1,303683,305703#msg-305703 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,305703#msg-305703
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ohioplastics
That being said, if a distributor can't sell a product for a reasonable amount of money, even with the "intangibles," which I thought was another word for "not real," then the distributor shouldn't sell said product. It's an embarrassment to me, as an American machinist, that they would sell a product for such a ridiculous amount. Like, come on guys, your charging what? It gives us a bad reputation in the world to overcharge like that.

relative to the machinists we have here American machinists are dirt cheap and to be honest they take more pride in their work.. most of the time, my local shop for example when i went to get a quote for my nozzles , they wanted $23/piece and the MOQ was 500pcs ...... the heater blocks and heatsinks were worse and the thermal barriers they refused to even look at and this was pretty much the case with just about all the shops i rang/visited ..... and they have the hide to pay their workers peanuts and winge all their work is going to china]]> thejollygrimreaper General Mon, 03 Feb 2014 18:57:21 -0500 https://reprap.org/forum/read.php?1,303683,305701#msg-305701 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,305701#msg-305701 Anonymous User General Mon, 03 Feb 2014 18:35:08 -0500 https://reprap.org/forum/read.php?1,303683,305599#msg-305599 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,305599#msg-305599
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ohioplastics
A yes my evil plan to put lolzbot out of business, by comparing nozzles to drywall screws. And I would have gotten away with it to, if not for those meddling kids! Although I have declared vendetta on lolzbot, they're not the only offenders. This is a broader statement about the industry as a whole. It's like selling pet rocks. You take something dirt cheap (literally) and sell it for ridiculous profit margins to people that don't know any better. It's irresponsible.

The point you still miss is that manufacturing capability is not open source and regardless of any IP that is used to design the product the costs of manufacturing and the related margins are a separate issue. If you think it's so bad that would be the perfect climate for you to start a business where you address that issue. You know, capitalism. It's been brought up several times now that there is more to this than direct costs. Your view is unrealistic, naive and ignorant to what it takes to run a for profit business in the real world. By complaining about price and using hard costs as the justification you aren't counting any of the intangable issues that come into play such as reputation of the seller/product and the ability to support the product and the level of service provided. Those are a value add above and beyond what the hard costs might be and many are willing, in fact demand to pay for such things. The merit of your argument is outweighed by your inability to factor in all components of the transaction.]]> vegasloki General Mon, 03 Feb 2014 15:54:54 -0500 https://reprap.org/forum/read.php?1,303683,305422#msg-305422 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,305422#msg-305422
It's even heavier than the heaviest of true J-Heads. A Mk III-B weighed 30 grams. The current standard J-Head, a J-Head Mk V-BV weighs in at 20.5 grams. I have a table here: [reprap.org]

I must admit confusion as this "J-Head Lite" is neither light-weight nor even looks like a J-Head. I guess ohioplastics can name it whatever he wants, though.

Regards,

Brian


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thejollygrimreaper
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billyzelsnack
Why do you call your hotend design a j-head lite?

there is a bit of irony there... i wonder what it weighs
]]> reifsnyderb General Mon, 03 Feb 2014 11:48:16 -0500 https://reprap.org/forum/read.php?1,303683,305411#msg-305411 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,305411#msg-305411 Anonymous User General Mon, 03 Feb 2014 11:36:38 -0500 https://reprap.org/forum/read.php?1,303683,305410#msg-305410 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,305410#msg-305410
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ohioplastics
China has better living standards today because of capitalism.

[en.wikipedia.org]]]> akhlut General Mon, 03 Feb 2014 11:34:26 -0500 https://reprap.org/forum/read.php?1,303683,305352#msg-305352 Re: Predatory Profit Margins https://reprap.org/forum/read.php?1,303683,305352#msg-305352
Predatory pricing (also undercutting) is a pricing strategy where a product or service is set at a very low price, intending to drive competitors out of the market, or create barriers to entry for potential new competitors. If competitors or potential competitors cannot sustain equal or lower prices without losing money, they go out of business or choose not to enter the business. The predatory merchant then has fewer competitors or is even a de facto monopoly.

So where exactly is Lulzbot's $1.99 nozzles???..........]]> Dirty Steve General Mon, 03 Feb 2014 09:46:05 -0500