craigm wrote:

"starman" wrote in message
...

This is a common tactic in the consumer product parts industry. I once
priced a replacement case for a Panasonic RF-3100 shortwave radio that
cost about $330 new. They wanted $150 for the case! It couldn't have
cost them more than $20 to make it.



So, it may have cost $20 to make it.
Then it had to be boxed and shipped to a warehouse in the US. $10
The part had to be set up in an inventory control system . $2
The part had to be received and put on a shelf. $4
The shelf space had to be paid for. $5 x 5 years.
The part was probably inventoried yearly. $2 x 5 years
The inventory was probably taxed. $1 x 5 years
There is cost for money tied up in inventory that could
be used elsewhere. $ 2 x 5 years.
When you order it,
The order is taken by someone. $ 1
The part is pulled from a shelf and shipped. $ 4
There is some profit for doing all the above. $ 59

Now if the turnover of the part is several thousand units a year, then some
of these costs become quite low on a per unit basis. But if you may only
sell 10 over the life of the product, then some of the high cost items don't
amortize well.

Also if they stock too many, then they may have to scrap the excess at the
end of the product life.

There are a lot of business costs that go into making a specialty part
available. If you don't pay for it when you buy the part, then costs must be
added to the original price of the product.

...and everyone wants the initial cost to be as low as possible.

Fill in the blanks and let us know what an appropriate price would be.

craigm


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