Jim Lux wrote in
:

Roy Lewallen wrote:
Jim Lux wrote:

Bob John wrote:

Is Tarheel pricing their products out of the market? I had
consideration purchasing a little Tarheel II during our local
Hamfest last weekend in Aurora, IL. The dealer informed me the
price had once again gone up and they are now $289.99.


Seems a reasonable price for a retail thing. Someone has to buy the
parts, someone has to pay someone to assemble it, someone has to
store it in a warehouse, someone has to sit in a store to sell it,
etc. All those steps add up.

When I worked in product design, we used to figure that retail
selling price (w/o discounts) would be 5-10 times the raw parts
(Bill of Materials, BOM) cost.

So, based on that, the parts cost for that antenna would be
somewhere between $25-50. . .


It makes absolutely no sense to apply one rule of thumb for pricing
to all industries and situations.

This is true, but I figure that building small quantities of antennas
is comparable to what we did in my former employer, which made small
quantities of special effects equipment.



First, most rules of thumb are based on
what it takes for a given business to make a profit on an item, and
this varies tremendously on the volume, amount of R&D required for
development, and a large number of other factors. What do you think
the price of EZNEC is as a multiple of the cost of the CD -- or a
printer ink cartridge based on its parts cost? How about a $3.00
calculator? But this doesn't have anything to do with what a product
is worth, anyway. What a product is worth is what people are willing
to pay for it, no more, no less.

This is generally true.

It's senseless to spend time figuring out what a vendor
*should* charge based on some contrived rule based on only one of
many factors determining its manufacturing cost. Vote with your
pocketbook. If people find that the value of the item is worth the
price, they'll pay it. Otherwise, they won't. And anyone thinking an
item is overpriced should jump at the opportunity -- use the time you
would have spent grousing and make it yourself and sell it for less.
You'll be on your way to your first million. . . or, more likely, on
your way to learning a few basic rules about business.

which is why the 5-10x sorts of rules work.. they're based on the
realities of small scale manufacturing and retailing. If you had some
really nifty device that is in great demand AND nobody else can make
it (due to trade secrets needed (e.g. Coke) or patents) then you can
charge substantially more, and people willlingly pay for it, because
it has value. However, in the case of something like a screwdriver
antenna, where there's no "special sauce" nor patent protection, that
would leave the field open for a competitor to sell essentially the
same item at a cost closer to the basic cost of manufacture and sales.
So, in that sense, it's easier to figure out what a "fair" price
might be.

In the software business, one has a great advantage (and a curse too,
in some ways) because one can price it at what people perceive it's
worth, independent of the manufacturing cost (although, presumably,
one prices it at least high enough to recover the original development
cost). This, of course, fits in the "you can't build it yourself
cheaper" category (at least if you abide by copyright laws, etc.),
and, most good software has some unique "value added" that is
non-trivial to do in some competing software.

While we are on the subject, could someone post a comparison of the
Little Tarheel II vs. the High Sierra Sidekick?

I'm thinking of getting one or the other of these for my visegrip mount
out on the balcony, but could sure use some experienced advice.

--
Dave Oldridge+
ICQ 1800667