Alt-BEAM Archive
Message #03541
To: hyndmanm@cadvision.com
From: JVernonM@aol.com
Date: Sat, 22 May 1999 18:00:52 EDT
Subject: [alt-beam] Re: Ya wanna lay off Solarbotics?
In a message dated 5/22/99 5:11:52 PM Eastern Daylight Time,
hyndmanm@cadvision.com writes:
> >Dave will never sell at Walmart or expand the ranks of BEAM with his
> >present
> >methodology. Overpriced parts and kits actually limit access.
>
> Over priced? First off, the capacitors he sells you can get from digikey,
> but at a higher price. He buys in mass quantities so that he can sell it to
> people at a cheaper price.
I don't know what your talking about here. The last time I checked Digikey
prices, even on their lowest quantities, they were well below Dave's price.
> >It puts the "hobby" beyond the reach of many young folks who could
> >benefit.
>
> Robotics as a hobby IS expensive. But I'de like to know how a $25 kit
> to build a solar robot, compares to a $500 microcontroller based robot.
Actually, that solar robot costs 60 dollars. The walker costs 300 dollars. A
microcontroller walker sells for 180 dollars at Lynxmotion with the infrared
add on. Yeah, I know they sell many more kits. The difference of opinion
arises when you start talking about why they sell so many more kits.
> >Every business man knows that the way to open and expand a market is to
> >drop prices, not raise them.
>
> I have not seen Solar botics raise prices.
Actually, not long ago we in the US did see a markup attributed to the
currency exchange. I was referring to the present structure.
> >The idea is that if you drop the price you will eventually make more
> profits >from the increase in orders than you lost when marking down.
> >It is why Walmart is so huge now. If your pricing is high, you
> >actually limit your own growth.
>
> Your talking about multi billion dollar companies. Solarbotics is a home
> based buisness, it doesn't take a genius to notice the difference.
Well, you are right, I'm no genius. But, I would venture to say that it will
remain at close to present levels of size and price until a true competitive
market begins to take shape. How do you think those million dollar businesses
got that way?
> >So, to say the kits need to cost more because they sell less is a little
> >backwards.
>
> Knowing the prices of parts, components he shells out, I can tell you their
> is not a huge profit. He's not making figures like 300% profits, which
> places
> like walmart get, things that they sell at rediculously low prices have
> rediculously low quality.
Again, you've lost me. He does make that and more on certain items. As to
Walmart, you couldn't be more wrong. I have dealt with them many times in my
own business, and I can tell you they only make a 50% markup. As a matter of
fact, it is extremely difficult to sell to them as a vendor because they
demand a low markup so they can maintain that 50% limit. That was my whole
point. If you are going to break into those markets, you had better lower
your markup and rely more on quantity. As for their stuff being cheap crap,
some is, but Lee jeans at Walmart are the same as the ones at the mall. Just
a lot less costly.
> >Usually the market dictates price through competition.
>
> uhm, What market?
EXACTLY! There isn't one. There is a monopoly based on long time
acquaintances. We call it a good ole boy network.
Jim
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