Predatory Profit Margins

WHO cares if they sell nozzles for $100? Not the only supplier out there, no one showed up at my door with a baseball bat for not buying from them. If you are far enough into 3d printing to be buying nozzles, you SHOULD have the intelligence to price shop.....

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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.

The budaschnozzle was based on the arcol. The prusa hot end was original, but didn't work well enough to justify the exorbitant cost.

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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.

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?

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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.

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.

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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.

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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

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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.

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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.

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

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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?

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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

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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.

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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

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greghoge.com

HUGE 3D PRINTER PARTS SALE!!!

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.

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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.

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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?

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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.

Know what? You win. I concede. Your eloquent use of logic and reasoning has made me see.

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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.

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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.

And just too further muddle the issue... start looking into product liability insurance.

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.

Edited 1 time(s). Last edit at 02/05/2014 03:53PM by Yvan.

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Yvan

Singularity Machine

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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]

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[regpye.com.au]
"Experience is the mother of all knowledge." --Leonardo da Vinci