Predatory Profit Margins

Unless you can provide an example of price fixing, I can't see how pricing can be "predatory".

If I think something is an unfair price I don't purchase it, and I look for another vendor. It happens all the time. Sellers have a right to determine what price they deem fair for a good or service. Buyers have a right to choose what and who they buy from. Sellers who can't meet the demands of the buyers simply lose.

Perhaps you can provide an example of how OSH can be predatory, which is different from the way the rest of the market works?

The rest of the market is even more fair and provides essential products for reasonable costs. My friend Mark who owns the local hardware store, bought the property ten years ago, because he believed in his community. He didn't want to see an empty building in his home town. I can go their and buy a pound of drywall screws for a couple bucks. Look at this https://www.lulzbot.com/?q=products/budaschnozzle-20-nozzle-075mm. You can't tell me that's worth 5 pounds of drywall screws.

I don't disagree that the part from lulzbot is pretty expensive. But what you're asking for is the market to have a morality, when in fact there isn't. If people are willing to pay lulzbot $24 to make that part (as opposed to making it themselves or buying it somewhere else), the lulzbot is not doing anything wrong.

The pricing isn't predatory. I can choose not to buy that item, just like I can choose not to buy a $2500 laptop from Apple.

I sure am glad I am a plain old capitalist just trying to make an honest buck!

Oh, I'm not knocking capitalism. Capitalism is the American way. I believe in my country and I believe in my community. But I also understand conflict theory and the plight of the middle class. I believe in the middle road of responsible capitalism. Also, screw apple. Android all the way!!!

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ddseeker

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greghoge.com

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iquizzle
I don't disagree that the part from lulzbot is pretty expensive. But what you're asking for is the market to have a morality, when in fact there isn't. If people are willing to pay lulzbot $24 to make that part (as opposed to making it themselves or buying it somewhere else), the lulzbot is not doing anything wrong.

The pricing isn't predatory. I can choose not to buy that item, just like I can choose not to buy a $2500 laptop from Apple.

wait what no body ever told me i didnt have to buy that $2500 laptop from apple. i was scammed..lol

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[mike-mack.blogspot.com]

Apples and oranges my friend. Get it? Apples? Come on, that was a good one. Anyway your comparing a notoriously closed source product to an open source one.

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ohioplastics
Apples and oranges my friend. Get it? Apples? Come on, that was a good one. Anyway your comparing a notoriously closed source product to an open source one.

Open source just makes capitalism easier! If you think you can do better than their pricing, then shut up and use the fact it is open source to do so!

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

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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

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I think I remember ohioplastics complaining about chinese copycats because they were so cheap. Now the wind has gone another way it seems.

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Most of my technical comments should be correct, but is THIS one ?
Anyway, as a rule of thumb, always double check what people write.

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.

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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.

how on earth do you get through a day?, if it weren't for quite a number of chinese inventions we would be living in a very different world today , but there's probably no telling you, you do after all live on the bible belt.

while the chinese government has it's issues so do the western world governments, i don't see the chinese government fostering this idea of "the free market" which is probably the most damaging repressive idea ever born into existance and applying it to almost every espect of life especially housing , i live in Australia where people can come in from overseas on a plane walk into a realeastate office buy a house put it up for rent and then leave again with no further contribution to society other than the measly profit from the cup of coffee he/she might buy at Macdonalds on the way back to the airport, people here are allowed to buy a house 1 year and sell it the next for double the price ... with no consideration as to the impact on society ... wtf? and it's the same in America and England hence one of the reasons we have a global financial ticking bomb, the healthcare systems are a joke to say the least with dental care being classed as "elective" even if it stops you from eating , our politicians seem to have this idea that they can cut the welfare budget justifying that are some jobs out there, even though the unemployed to suiatble employment ratio is around 1:16 ,

you have no idea what you are talking about .. at least google how to eat frogs legs

sales must have been down for January......

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kitkatkurl
but there's probably no telling you, you do after all live on the bible belt.

First off, Ohio is a blue collar state, not part of the bible belt and I'm a non practicing catholic.
Second, The free market is the only saving grace of China, and I respect them for their business model.
Third, January is a crappy month for everybody, except the southern hemisphere, where winter is summer.

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ohioplastics

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kitkatkurl
but there's probably no telling you, you do after all live on the bible belt.

First off, Ohio is a blue collar state, not part of the bible belt and I'm a non practicing catholic.
Second, The free market is the only saving grace of China, and I respect them for their business model.
Third, January is a crappy month for everybody, except the southern hemisphere, where winter is summer.

ah yes because the free market has served us middle and lower class people so well over the years china really needs saving, i'm sure the chinese people are itching to turn themselves into slaves to property investors and speculators, China today is no more repressive than America if anything they have more freedom, the sooner the American English and Australian economies hit hyperinflation and collapse in a big mess the better what the free market bs has done to this planet and the human race makes hitler and sadam look like angels by comparison.

Two pages in and Godwin's Law has already been invoked. That's quick, even for here...

Preditory margins are artificially low margins or selling at a loss to drive the competition out so one take take the market and eventully raise prices. Excessive margins are in the eye of the beholder. The market will determine what a particular piece is worth. In this case many see value in buying hot ends that are more expensive than the OPs lower cost option. There are other factors as well, familiarity with the vendor and brand recognitiion. I prefer to pay a bit more from a known source for a proven product than to buy on price alone not knowing exactly what I'm getting. There is a difference between low cost and good value.

For a full time, for profit business it's essential to include markup for all costs. In our case, a full time fab shop, our nut is just under two grand a month not counting cost of goods or labor. Rent, utilities, insurance, licenses and taxes all add to the cost of doing business. Those that are home based, under the radar single person operations don't have that overhead. In the case of a hot end, if one were to go to a contract shop and have one made it would likely be a few hundred dollars. If you can even find one in your area to do one off or small batch work. They aren't charging just material and labor, There are setup charges, handling charges and material is marked up quite a bit in small batch. In many cases they will not allow the use of material the client sources without an additional fee as they make money on the material. If a person is a tinkerer or maker the best bet is to join a maker shop and use the tools and knowledge in that group.

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kitkatkurl
the sooner the American English and Australian economies hit hyperinflation and collapse in a big mess the better what the free market bs has done to this planet and the human race makes hitler and sadam look like angels by comparison.

I have no idea what you're talking about. China has better living standards today because of capitalism. What Hitler and Saddam have to do with anything, I don't know.

This has gone off on a tangent. The bottom line is second generation open source (generic) products should be cheaper. Just like the pharmaceutical industry. And don't take this on another tangent about health care or anything else. That's the only point I'm trying to make.

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ohioplastics

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kitkatkurl
the sooner the American English and Australian economies hit hyperinflation and collapse in a big mess the better what the free market bs has done to this planet and the human race makes hitler and sadam look like angels by comparison.

I have no idea what you're talking about. China has better living standards today because of capitalism. What Hitler and Saddam have to do with anything, I don't know.

This has gone off on a tangent. The bottom line is second generation open source (generic) products should be cheaper. Just like the pharmaceutical industry. And don't take this on another tangent about health care or anything else. That's the only point I'm trying to make.

from what i've read your version of cheaper is material cost with nothing else factored in

The price of an item includes material cost, overhead, labor, cost of R&D (IP) and profit. What percentage of the sale of each item should be allocated to recovering the cost of the IP? What percentage do you think should be taken as profit? Keeping in mind that profit also goes to reinvesting in tools, additional labor, and other costs associated with growing the business. If 10% goes to IP, then the 2nd gen thing should cost 10% less. So for a given product you have in mind, what was the cost to the original developer? How many sales should that cost be spread across, making how much of a discount per item?

The original price set by the original developer sets a precedent for market price. Maybe that person was a one-man shop, and the online store selling the same thing has additional expenses requiring a higher price, and they aren't even including the R&D they didn't have to do?

What actual thing out there has you mad because it is over priced, and how much less do you think it should be? What percentage of the margin above labor material and overhead is represented by IP? If we shouldn't price according to market, then what margin is everyone's right, and what margin is too much, and why?

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IanJohnson
The price of an item includes material cost, overhead, labor, cost of R&D (IP) and profit. What percentage of the sale of each item should be allocated to recovering the cost of the IP? What percentage do you think should be taken as profit? Keeping in mind that profit also goes to reinvesting in tools, additional labor, and other costs associated with growing the business. If 10% goes to IP, then the 2nd gen thing should cost 10% less. So for a given product you have in mind, what was the cost to the original developer? How many sales should that cost be spread across, making how much of a discount per item?

The original price set by the original developer sets a precedent for market price. Maybe that person was a one-man shop, and the online store selling the same thing has additional expenses requiring a higher price, and they aren't even including the R&D they didn't have to do?

What actual thing out there has you mad because it is over priced, and how much less do you think it should be? What percentage of the margin above labor material and overhead is represented by IP? If we shouldn't price according to market, then what margin is everyone's right, and what margin is too much, and why?

he's got a bee in his bonnet about Lulzbot and them charging what they are for nozzles, so he's on this hell bent campaign of trolling trying to play the world price police for opensource projects

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kitkatkurl
he's got a bee in his bonnet about Lulzbot and them charging what they are for nozzles, so he's on this hell bent campaign of trolling trying to play the world price police for opensource projects

He's also got personal problems with Lulzbot from another thread. Something about an email or something, idk.

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greghoge.com

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From Wiki:

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???..........

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ohioplastics
China has better living standards today because of capitalism.

[en.wikipedia.org]

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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.

With the thermistor and resistor, a "J-Head Lite" weighs 33 grams.

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

Edited 1 time(s). Last edit at 02/03/2014 11:49AM by reifsnyderb.

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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.

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.

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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

Edited 1 time(s). Last edit at 02/03/2014 06:59PM by thejollygrimreaper.

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