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Groups > sci.electronics.design > #453999 > unrolled thread

pricing

Started byJohn Larkin <jjlarkin@highlandtechnology.com>
First post2017-03-28 08:59 -0700
Last post2017-03-31 00:21 +0000
Articles 20 on this page of 63 — 26 participants

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Contents

  pricing John Larkin <jjlarkin@highlandtechnology.com> - 2017-03-28 08:59 -0700
    Re: pricing Taxed and Spent <nospamplease@nonospam.com> - 2017-03-28 09:11 -0700
    Re: pricing Lasse Langwadt Christensen <langwadt@fonz.dk> - 2017-03-28 09:34 -0700
    Re: pricing Tim Wescott <tim@seemywebsite.com> - 2017-03-28 12:05 -0500
      Re: pricing Phil Hobbs <pcdhSpamMeSenseless@electrooptical.net> - 2017-03-28 14:52 -0400
      Re: pricing David Brown <david.brown@hesbynett.no> - 2017-03-29 10:54 +0200
    Re: pricing Tim Wescott <tim@seemywebsite.com> - 2017-03-28 12:14 -0500
      Re: pricing bitrex <bitrex@de.lete.earthlink.net> - 2017-03-28 16:01 -0400
    Re: pricing Tom Gardner <spamjunk@blueyonder.co.uk> - 2017-03-28 18:19 +0100
    Re: pricing tabbypurr@gmail.com - 2017-03-28 11:58 -0700
    pricing klaus.kragelund@gmail.com - 2017-03-28 12:02 -0700
      Re: pricing John Robertson <spam@flippers.com> - 2017-03-28 12:24 -0700
      Re: pricing John Larkin <jjlarkinxyxy@highlandtechnology.com> - 2017-03-28 13:06 -0700
        Re: pricing Klaus Kragelund <klauskvik@hotmail.com> - 2017-03-28 14:15 -0700
          Re: pricing Klaus Kragelund <klauskvik@hotmail.com> - 2017-03-28 14:18 -0700
          Re: pricing John Larkin <jjlarkinxyxy@highlandtechnology.com> - 2017-03-28 15:44 -0700
            Re: pricing krw@notreal.com - 2017-03-28 22:39 -0400
              Re: pricing Piotr Wyderski <peter.pan@neverland.mil> - 2017-03-30 17:53 +0200
                Re: pricing Lasse Langwadt Christensen <langwadt@fonz.dk> - 2017-03-30 09:12 -0700
                  Re: pricing krw@notreal.com - 2017-03-30 20:29 -0400
                    Re: pricing Lasse Langwadt Christensen <langwadt@fonz.dk> - 2017-03-30 17:57 -0700
                      Re: pricing krw@notreal.com - 2017-03-30 21:11 -0400
                        Re: pricing bill.sloman@ieee.org - 2017-03-30 19:36 -0700
                  Re: pricing Piotr Wyderski <peter.pan@neverland.mil> - 2017-03-31 08:32 +0200
                    Re: pricing John Devereux <john@devereux.me.uk> - 2017-03-31 08:36 +0100
                      Re: pricing Piotr Wyderski <peter.pan@neverland.mil> - 2017-03-31 09:57 +0200
                        Re: pricing John Devereux <john@devereux.me.uk> - 2017-03-31 09:42 +0100
                      Re: pricing rickman <gnuarm@gmail.com> - 2017-03-31 05:30 -0400
                        Re: pricing John Devereux <john@devereux.me.uk> - 2017-03-31 12:04 +0100
                        Re: pricing Lasse Langwadt Christensen <langwadt@fonz.dk> - 2017-03-31 10:36 -0700
                Re: pricing krw@notreal.com - 2017-03-30 20:28 -0400
                  Re: pricing Piotr Wyderski <peter.pan@neverland.mil> - 2017-03-31 08:41 +0200
                    Re: pricing krw@notreal.com - 2017-03-31 20:20 -0400
      Re: pricing Larry Sheldon <lfsheldon@gmail.com> - 2017-03-28 21:21 -0500
    Re: pricing Don Y <blockedofcourse@foo.invalid> - 2017-03-28 12:39 -0700
    Re: pricing doh@yipee.com - 2017-03-29 12:31 -0700
    Re: pricing Piotr Wyderski <peter.pan@neverland.mil> - 2017-03-30 17:47 +0200
      Re: pricing Martin Brown <'''newspam'''@nezumi.demon.co.uk> - 2017-03-30 17:03 +0100
        Re: pricing krw@notreal.com - 2017-03-30 20:34 -0400
          Re: pricing Martin Brown <'''newspam'''@nezumi.demon.co.uk> - 2017-03-31 09:20 +0100
            Re: pricing krw@notreal.com - 2017-03-31 20:25 -0400
        Re: pricing bill.sloman@ieee.org - 2017-03-30 19:47 -0700
          Re: pricing rickman <gnuarm@gmail.com> - 2017-03-30 23:45 -0400
            Re: pricing bill.sloman@ieee.org - 2017-03-30 21:45 -0700
              Re: pricing Clifford Heath <no.spam@please.net> - 2017-03-31 15:55 +1100
              Re: pricing rickman <gnuarm@gmail.com> - 2017-03-31 01:30 -0400
                Re: pricing krw@notreal.com - 2017-03-31 22:30 -0400
            Re: pricing Clifford Heath <no.spam@please.net> - 2017-03-30 16:07 +1100
              Re: pricing Piotr Wyderski <peter.pan@neverland.mil> - 2017-03-31 10:11 +0200
              Re: pricing Tom Gardner <spamjunk@blueyonder.co.uk> - 2017-03-31 10:20 +0100
                Re: pricing Jasen Betts <jasen@xnet.co.nz> - 2017-03-31 20:41 +0000
              Re: pricing krw@notreal.com - 2017-03-31 22:27 -0400
                Re: pricing Clifford Heath <no.spam@please.net> - 2017-04-01 14:30 +1100
                  Re: pricing krw@notreal.com - 2017-03-31 23:43 -0400
                    Re: pricing Clifford Heath <no.spam@please.net> - 2017-04-01 18:15 +1100
                      Re: pricing krw@notreal.com - 2017-04-01 09:46 -0400
            Re: pricing "Michael A. Terrell" <mike.terrell@earthlink.net> - 2017-04-03 01:32 -0400
              Re: pricing krw@notreal.com - 2017-04-03 12:55 -0400
          Re: pricing Piotr Wyderski <peter.pan@neverland.mil> - 2017-03-31 10:05 +0200
            Re: pricing Tom Gardner <spamjunk@blueyonder.co.uk> - 2017-03-31 10:21 +0100
              Re: pricing krw@notreal.com - 2017-03-31 22:31 -0400
            Re: pricing Martin Brown <'''newspam'''@nezumi.demon.co.uk> - 2017-04-01 09:10 +0100
    Re: pricing Cydrome Leader <presence@MUNGEpanix.com> - 2017-03-31 00:21 +0000

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#454314

FromLasse Langwadt Christensen <langwadt@fonz.dk>
Date2017-03-30 17:57 -0700
Message-ID<38e8f796-5cd2-4a86-bc38-4cb99fe9c65a@googlegroups.com>
In reply to#454307
Den fredag den 31. marts 2017 kl. 02.29.33 UTC+2 skrev k...@notreal.com:
> On Thu, 30 Mar 2017 09:12:02 -0700 (PDT), Lasse Langwadt Christensen
> <langwadt@fonz.dk> wrote:
> 
> >Den torsdag den 30. marts 2017 kl. 17.53.22 UTC+2 skrev Piotr Wyderski:
> >> krw@notreal.com wrote:
> >> 
> >> > Do you think the manufacturer has a 1-piece price?
> >> 
> >> Microchip does, they run an on-line shop.
> >> 
> >
> >so does AD and ST tells you how many is available at each of their distributors and a single click takes you to the buy page 
> >I'm sure many others do to
> 
> That's not the AD or ST price.

no, but their listed +1000 price and the distributors price is atleast a 
place to start

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#454319

Fromkrw@notreal.com
Date2017-03-30 21:11 -0400
Message-ID<75brdct6hqat0lfqppqictabkuahrjpdss@4ax.com>
In reply to#454314
On Thu, 30 Mar 2017 17:57:28 -0700 (PDT), Lasse Langwadt Christensen
<langwadt@fonz.dk> wrote:

>Den fredag den 31. marts 2017 kl. 02.29.33 UTC+2 skrev k...@notreal.com:
>> On Thu, 30 Mar 2017 09:12:02 -0700 (PDT), Lasse Langwadt Christensen
>> <langwadt@fonz.dk> wrote:
>> 
>> >Den torsdag den 30. marts 2017 kl. 17.53.22 UTC+2 skrev Piotr Wyderski:
>> >> krw@notreal.com wrote:
>> >> 
>> >> > Do you think the manufacturer has a 1-piece price?
>> >> 
>> >> Microchip does, they run an on-line shop.
>> >> 
>> >
>> >so does AD and ST tells you how many is available at each of their distributors and a single click takes you to the buy page 
>> >I'm sure many others do to
>> 
>> That's not the AD or ST price.
>
>no, but their listed +1000 price and the distributors price is atleast a 
>place to start

Of course the above is irrelevant.

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#454326

Frombill.sloman@ieee.org
Date2017-03-30 19:36 -0700
Message-ID<72d993b0-98d2-4a40-afc2-6a3b4eb63722@googlegroups.com>
In reply to#454319
On Friday, March 31, 2017 at 12:11:48 PM UTC+11, k...@notreal.com wrote:
> On Thu, 30 Mar 2017 17:57:28 -0700 (PDT), Lasse Langwadt Christensen
> <langwadt@fonz.dk> wrote:
> 
> >Den fredag den 31. marts 2017 kl. 02.29.33 UTC+2 skrev k...@notreal.com:
> >> On Thu, 30 Mar 2017 09:12:02 -0700 (PDT), Lasse Langwadt Christensen
> >> <langwadt@fonz.dk> wrote:
> >> 
> >> >Den torsdag den 30. marts 2017 kl. 17.53.22 UTC+2 skrev Piotr Wyderski:
> >> >> krw@notreal.com wrote:
> >> >> 
> >> >> > Do you think the manufacturer has a 1-piece price?
> >> >> 
> >> >> Microchip does, they run an on-line shop.
> >> >> 
> >> >
> >> >so does AD and ST tells you how many is available at each of their distributors and a single click takes you to the buy page 
> >> >I'm sure many others do to
> >> 
> >> That's not the AD or ST price.
> >
> >no, but their listed +1000 price and the distributors price is atleast a 
> >place to start
> 
> Of course the above is irrelevant.

I'd wonder why krw thought that, if I were silly enough to think that krw could think.

-- 
Bill Sloman, Sydney

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#454346

FromPiotr Wyderski <peter.pan@neverland.mil>
Date2017-03-31 08:32 +0200
Message-ID<obkt6r$5e3$1@node2.news.atman.pl>
In reply to#454243
Lasse Langwadt Christensen wrote:

> so does AD and ST tells you how many is available at each of their distributors
 > and a single click takes you to the buy page I'm sure many others do to

The difference is that Microchip does that (or pretends they do)
directly, which is the closest approximation of what KRW wanted.

	Best regards, Piotr




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#454358

FromJohn Devereux <john@devereux.me.uk>
Date2017-03-31 08:36 +0100
Message-ID<87zig1q4nj.fsf@devereux.me.uk>
In reply to#454346
Piotr Wyderski <peter.pan@neverland.mil> writes:

> Lasse Langwadt Christensen wrote:
>
>> so does AD and ST tells you how many is available at each of their distributors
>> and a single click takes you to the buy page I'm sure many others do to
>
> The difference is that Microchip does that (or pretends they do)
> directly, which is the closest approximation of what KRW wanted.

You can buy directly from AD. And TI, and Maxim (ha). Many others I'm
sure. More of those that don't sell directly online are providing a
price guide, which is a welcome improvement.

It's still easier to use DK to shortlist parts IME (~few k production
quantities).



-- 

John Devereux

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#454363

FromPiotr Wyderski <peter.pan@neverland.mil>
Date2017-03-31 09:57 +0200
Message-ID<obl25m$ltq$1@node1.news.atman.pl>
In reply to#454358
John Devereux wrote:

> It's still easier to use DK to shortlist parts IME (~few k production
> quantities).

I also prefer Farnell (there is a tiny difference between
4 weeks and 24h shipment), but if you want the newest chip
or some exotica, there is no other option than go there
directly and wait.

	Best regards, Piotr


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#454371

FromJohn Devereux <john@devereux.me.uk>
Date2017-03-31 09:42 +0100
Message-ID<87vaqpq1lq.fsf@devereux.me.uk>
In reply to#454363
Piotr Wyderski <peter.pan@neverland.mil> writes:

> John Devereux wrote:
>
>> It's still easier to use DK to shortlist parts IME (~few k production
>> quantities).
>
> I also prefer Farnell (there is a tiny difference between
> 4 weeks and 24h shipment), but if you want the newest chip
> or some exotica, there is no other option than go there
> directly and wait.

Sure, for actually *buying* low quantities in the UK. But DK has the
best selection and search engine, anywhere, for design purposes.

DK are not that bad for shipment to the UK, I think it's ~12 UKP, and
free above $50 or so. Which is not hard to acheive. Shipping is only a
couple of days.



-- 

John Devereux

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#454382

Fromrickman <gnuarm@gmail.com>
Date2017-03-31 05:30 -0400
Message-ID<obl7f2$m6t$1@dont-email.me>
In reply to#454358
On 3/31/2017 3:36 AM, John Devereux wrote:
> Piotr Wyderski <peter.pan@neverland.mil> writes:
>
>> Lasse Langwadt Christensen wrote:
>>
>>> so does AD and ST tells you how many is available at each of their distributors
>>> and a single click takes you to the buy page I'm sure many others do to
>>
>> The difference is that Microchip does that (or pretends they do)
>> directly, which is the closest approximation of what KRW wanted.
>
> You can buy directly from AD. And TI, and Maxim (ha). Many others I'm
> sure. More of those that don't sell directly online are providing a
> price guide, which is a welcome improvement.
>
> It's still easier to use DK to shortlist parts IME (~few k production
> quantities).

You can't trust the prices manufacturers list.  I designed in an ADI 
part because it was cheaper than the Maxim equivalent.  In production 
the ADI part ended up just as expensive if not more so.

-- 

Rick C

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#454392

FromJohn Devereux <john@devereux.me.uk>
Date2017-03-31 12:04 +0100
Message-ID<87h929pv04.fsf@devereux.me.uk>
In reply to#454382
rickman <gnuarm@gmail.com> writes:

> On 3/31/2017 3:36 AM, John Devereux wrote:
>> Piotr Wyderski <peter.pan@neverland.mil> writes:
>>
>>> Lasse Langwadt Christensen wrote:
>>>
>>>> so does AD and ST tells you how many is available at each of their distributors
>>>> and a single click takes you to the buy page I'm sure many others do to
>>>
>>> The difference is that Microchip does that (or pretends they do)
>>> directly, which is the closest approximation of what KRW wanted.
>>
>> You can buy directly from AD. And TI, and Maxim (ha). Many others I'm
>> sure. More of those that don't sell directly online are providing a
>> price guide, which is a welcome improvement.
>>
>> It's still easier to use DK to shortlist parts IME (~few k production
>> quantities).
>
> You can't trust the prices manufacturers list.

Well you can if you can buy from them direct I suppose. When you can't,
I agree they are not totally reliable but it's better than nothing IME.

>I designed in an ADI part because it was cheaper than the Maxim
>equivalent.  In production the ADI part ended up just as expensive if
>not more so.

Yes I have had that a couple of times. I remember it with TI, none of
the distys were able to match their 1k "budget price". They have
recently enabled buying direct from their site, and the prices now
match. E.g. http://www.ti.com/product/ADS7946/samplebuy

You may be able to get "supported" pricing from distributors for some
parts, at the design-in stage. They register you with the manufacturer
in exchange for a discounted price as long as you buy from that
distributor, AIUI. We did it for a couple of parts and it seems to have
enabled the disty to undercut the others by perhaps 30%. Value was not
enormous, perhaps $5k/year.

-- 

John Devereux

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#454436

FromLasse Langwadt Christensen <langwadt@fonz.dk>
Date2017-03-31 10:36 -0700
Message-ID<38ac40c3-1f69-4d79-b4a6-60078b269c99@googlegroups.com>
In reply to#454382
Den fredag den 31. marts 2017 kl. 11.31.04 UTC+2 skrev rickman:
> On 3/31/2017 3:36 AM, John Devereux wrote:
> > Piotr Wyderski <peter.pan@neverland.mil> writes:
> >
> >> Lasse Langwadt Christensen wrote:
> >>
> >>> so does AD and ST tells you how many is available at each of their distributors
> >>> and a single click takes you to the buy page I'm sure many others do to
> >>
> >> The difference is that Microchip does that (or pretends they do)
> >> directly, which is the closest approximation of what KRW wanted.
> >
> > You can buy directly from AD. And TI, and Maxim (ha). Many others I'm
> > sure. More of those that don't sell directly online are providing a
> > price guide, which is a welcome improvement.
> >
> > It's still easier to use DK to shortlist parts IME (~few k production
> > quantities).
> 
> You can't trust the prices manufacturers list.  I designed in an ADI 
> part because it was cheaper than the Maxim equivalent.  In production 
> the ADI part ended up just as expensive if not more so.

ADI had do deliver the parts, Maxim just say they are out of stock


ducks ...

 

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#454306

Fromkrw@notreal.com
Date2017-03-30 20:28 -0400
Message-ID<ck8rdcdqngjqtpu3cs7losa5hqm22m6su9@4ax.com>
In reply to#454239
On Thu, 30 Mar 2017 17:53:19 +0200, Piotr Wyderski
<peter.pan@neverland.mil> wrote:

>krw@notreal.com wrote:
>
>> Do you think the manufacturer has a 1-piece price?
>
>Microchip does, they run an on-line shop.

Then I guess they reveal what it is.

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#454348

FromPiotr Wyderski <peter.pan@neverland.mil>
Date2017-03-31 08:41 +0200
Message-ID<obktnk$hal$1@node1.news.atman.pl>
In reply to#454306
krw@notreal.com wrote:

> Then I guess they reveal what it is.

Indeed:

https://www.microchipdirect.com/ProductSearch.aspx?keywords=pic16f1709

Quantity: 1-25, unit price 1.29EUR.

I believe that there is a subcontractor hidden behind
that shop to relieve Microchip from the need to interact
with the less-than-railway-carriage quantity people, but
the impression is very good.

I buy there every now and then, high quality service.
The main problem is that they ship from Malaysia, so
the delivery takes ~4 weeks. Not a solution for rapid
development if you need it.

	Best regards, Piotr

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#454523

Fromkrw@notreal.com
Date2017-03-31 20:20 -0400
Message-ID<kastdc50muqoitnbuca9dj5aahvl851a10@4ax.com>
In reply to#454348
On Fri, 31 Mar 2017 08:41:45 +0200, Piotr Wyderski
<peter.pan@neverland.mil> wrote:

>krw@notreal.com wrote:
>
>> Then I guess they reveal what it is.
>
>Indeed:
>
>https://www.microchipdirect.com/ProductSearch.aspx?keywords=pic16f1709
>
>Quantity: 1-25, unit price 1.29EUR.
>
>I believe that there is a subcontractor hidden behind
>that shop to relieve Microchip from the need to interact
>with the less-than-railway-carriage quantity people, but
>the impression is very good.
>
>I buy there every now and then, high quality service.
>The main problem is that they ship from Malaysia, so
>the delivery takes ~4 weeks. Not a solution for rapid
>development if you need it.
>
I just call the local (outside) sales guy and they send me whatever I
need (he took me out to lunch a couple of weeks ago and brought six
full reels of opamps and will be bringing three more in a week or so).
Some companies are a little more picky.  They want to know what
project I'm using the parts on before they'll send them.  

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#454092

FromLarry Sheldon <lfsheldon@gmail.com>
Date2017-03-28 21:21 -0500
Message-ID<ek0k19F38b4U1@mid.individual.net>
In reply to#454024
On 3/28/2017 14:02, klaus.kragelund@gmail.com wrote:
> Most companies won't deal with direct qouting on silly low quantities like yours probably are (no offence)
>
> They keep the low price of the parts by using distributors and you benefit from that. Meaning that the distributor can source parts in very high volume and distribute some of those to you
>
> In the daily work when you just buy stuff you will only be dealing with the distributor FAE
Then they ought to say "We are not interested in you.  Pleas see yourt 
local street-corner taco stand or where ever you fence your stuff.

-- 
quis custodiet ipsos custodes?
-- Juvenal

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#454032

FromDon Y <blockedofcourse@foo.invalid>
Date2017-03-28 12:39 -0700
Message-ID<obee10$vv5$1@dont-email.me>
In reply to#453999
On 3/28/2017 8:59 AM, John Larkin wrote:
> Some companies are determined to not give pricing for their products.
> They want to know what it will be used for, how many we'll need, when
> we'll need them. Then they say that someone else, maybe a rep, will
> contact us about pricing, and the silly dance starts over.
>
> I give up. If they don't want to sell stuff, that's OK with me.

Often, they want to get a feel for *possible* uses of their products
(so they know which other customers they can bring the product THAT
YOU HAVE IDENTIFIED to their attention).  I see this a lot with vaporware
products... "to be released RSN" (or, maybe NEVER)

Start the conversation by asking for their "rightmost column" price.
Then, asking them to identify the corresponding quantity and lead time.
Don't leave "contact" information (i.e., when this conversation is over,
*I* will decide if we have an ongoing relationship)

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#454144

Fromdoh@yipee.com
Date2017-03-29 12:31 -0700
Message-ID<kp2odc5ki7ppnec0kamf9ti7m4on0g2p9c@4ax.com>
In reply to#453999
On Tue, 28 Mar 2017 08:59:22 -0700, John Larkin
<jjlarkin@highlandtechnology.com> wrote:

>Some companies are determined to not give pricing for their products.
>They want to know what it will be used for, how many we'll need, when
>we'll need them. Then they say that someone else, maybe a rep, will
>contact us about pricing, and the silly dance starts over.
>
>I give up. If they don't want to sell stuff, that's OK with me.

If you end up in a voice menu system, does the computer get the sales
commission?

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#454236

FromPiotr Wyderski <peter.pan@neverland.mil>
Date2017-03-30 17:47 +0200
Message-ID<obj9al$src$1@node1.news.atman.pl>
In reply to#453999
John Larkin wrote:

> I give up. If they don't want to sell stuff, that's OK with me.

If somebody is shy about their prices, there usually is a good reason 
for that.

	Best regards, Piotr

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#454240

FromMartin Brown <'''newspam'''@nezumi.demon.co.uk>
Date2017-03-30 17:03 +0100
Message-ID<obja82$pa9$1@gioia.aioe.org>
In reply to#454236
On 30/03/2017 16:47, Piotr Wyderski wrote:
> John Larkin wrote:
>
>> I give up. If they don't want to sell stuff, that's OK with me.
>
> If somebody is shy about their prices, there usually is a good reason
> for that.

It is a common misconception that everything is based on materials cost 
plus pricing, but things are often priced on what the market will stand 
and how few alternatives are available. De facto not quite monopolies.

Good quality window glass in the past is a classic example. Or for some 
more modern examples the Apple iP*d, Levi Jeans or Nike trainers.

You are paying a lot extra for having the right badge on it...
(beyond what the engineering cost of manufacture entails)

Unusual components with a long lead time a bespoke maker wants to know 
if you will buy enough of them to be worth the effort of dealing with.

-- 
Regards,
Martin Brown

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#454309

Fromkrw@notreal.com
Date2017-03-30 20:34 -0400
Message-ID<vo8rdclet74rl9kp4gbfeaigg1if27io24@4ax.com>
In reply to#454240
On Thu, 30 Mar 2017 17:03:15 +0100, Martin Brown
<'''newspam'''@nezumi.demon.co.uk> wrote:

>On 30/03/2017 16:47, Piotr Wyderski wrote:
>> John Larkin wrote:
>>
>>> I give up. If they don't want to sell stuff, that's OK with me.
>>
>> If somebody is shy about their prices, there usually is a good reason
>> for that.
>
>It is a common misconception that everything is based on materials cost 
>plus pricing, but things are often priced on what the market will stand 
>and how few alternatives are available. De facto not quite monopolies.

Absolutely.  I have FAEs fighting this battle with their marketing
people all the time - "At $x we can sell zero volume but at $x/n we
can sell millions - can we sell the part for $x/n and still make
money?"  
>
>Good quality window glass in the past is a classic example. Or for some 
>more modern examples the Apple iP*d, Levi Jeans or Nike trainers.
>
>You are paying a lot extra for having the right badge on it...
>(beyond what the engineering cost of manufacture entails)
>
>Unusual components with a long lead time a bespoke maker wants to know 
>if you will buy enough of them to be worth the effort of dealing with.

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#454367

FromMartin Brown <'''newspam'''@nezumi.demon.co.uk>
Date2017-03-31 09:20 +0100
Message-ID<obl3fj$1en5$1@gioia.aioe.org>
In reply to#454309
On 31/03/2017 01:34, krw@notreal.com wrote:
> On Thu, 30 Mar 2017 17:03:15 +0100, Martin Brown
> <'''newspam'''@nezumi.demon.co.uk> wrote:
>
>> On 30/03/2017 16:47, Piotr Wyderski wrote:
>>> John Larkin wrote:
>>>
>>>> I give up. If they don't want to sell stuff, that's OK with me.
>>>
>>> If somebody is shy about their prices, there usually is a good reason
>>> for that.
>>
>> It is a common misconception that everything is based on materials cost
>> plus pricing, but things are often priced on what the market will stand
>> and how few alternatives are available. De facto not quite monopolies.
>
> Absolutely.  I have FAEs fighting this battle with their marketing
> people all the time - "At $x we can sell zero volume but at $x/n we
> can sell millions - can we sell the part for $x/n and still make
> money?"

FAE's ?

The scientific instrument company I worked for would not put anything 
into production unless the raw BOM cost was under 25% of selling price. 
This led to insane late stage cost cutting to shave off pennies to hit 
the rigid budget target (like switch stainless nuts and bolts for mild 
steel which quickly rusts and using a lower grade powder coat finish). 
It is actually a damn good heuristic for relatively low volume high end 
kit in a fast moving market but they applied it far too rigidly.

There was a story I was taught about this pricing distinction. Two or 
three major players shared all major contracts to supply cleaning 
products. A new start-up came in that hadn't done their market research 
properly and bid at materials plus 30% profit margin costing - 
undercutting all the existing players by about a factor of three. The 
won almost all of the contracts but didn't survive for very long.

The market encumbents took it in turns to corner the market in the key 
ingredients so that the newcomer could not make enough finished product 
to fulfil the contracts they had won. They quickly went bust.

A variant of this trick is how Pilkington/Chance wiped out all other 
competition in the UK window glass market during the Victorian era.
(you only have to corner the market in one key ingredient)

-- 
Regards,
Martin Brown

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