Alt-BEAM Archive

Message #03548



To: JVernonM@aol.com, richfile@rconnect.com
From: Dennison dennlill@buffnet.net
Date: Sat, 22 May 1999 23:24:59 -0400
Subject: [alt-beam] Re: Not exactly.Ya wanna lay off Solarbotics?




>Dave will never sell at Walmart or expand the ranks of BEAM with his
present
>methodology. Overpriced parts and kits actually limit access. It puts the
>"hobby" beyond the reach of many young folks who could benefit. Every
>business man knows that the way to open and expand a market is to drop
>prices, not raise them. 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. So, to say the kits need to cost more
because
>they sell less is a little backwards.


Actually, it's not. To build one kit costs heck of alot more than if you
were building ten thousand kits. Especially here. Things only get cheap when
large, large quantity comes in. While your examples are good ones, they
don't really apply to BEAM. Why? There's practically no demand. Kids want
video games and starwars parafanalia. Even if his kits droped to
'reasonable' prices to sell at Walmart, I bet no one would buy. Not many
people have hobbies anymore, likewise, not many people can make money
catering to hobbies. Your economics does work for Walmart, but not for
Solarbotics.


>What bothers me here is that this price structure is part of a monopoly.
That
>in itself makes the issue more pronounced. But, it would seem that many of
>you don't care that your only source of solar cells, motors, and other
parts
>is a little pricey. I've found this attitude rarely in other businesses.
>Usually the market dictates price through competition.

Do you know how much it cost's to get solarcells any other way? To buy
Dave's solarcells, in North America, without Dave requires purchases in the
quantity of THOUSANDS. Dave's the ONLY DISTRIBUTER in North America. This
just serves to emphasis the extreme lack of demand for these things. Sure I
don't like his solarcell prices either, but what can I do? there's no where
else to get such nice cells. And not only that, I don't know how much the
solarcell costs without a markup.
As for the caps, you pay heavilly for convenience. I can buy my caps
elsewhere. So I do. And the Pager motors? Sure we can get two dollar pager
motors every few months, but Dave's got to have his in steady supply. Have
you looked at how much Pager motor's cost New from Most places? OUCH! Much
more than what Dave's selling them for.
As of yet, there really is no competition to Dave, and you know why? Demands
not high enough. There isn't enough to gain by competing.

But, there's that
>monopoly thing. Never mind, he sits at the right hand of Tilden, correct?
And
>God can do whatever he likes. Weird.
>Jim

You know what, us calling him a monopoly is kinda unfair. Sure I know it's
the definition, but it's not like he put people out of buisness to get where
he is, or has a slew of dirty tactics. It simply is that no ones bothered to
chalange him. There just isn't anyone else.

Dennison


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