Kicked out of Nitrox Class!!

[islandwheels]

JR: I have to reject most of your post as non-responsive.

Your competition is anyone else your potential customer is willing and able to buy from. Whether or not you CHOOSE to compete with anyone else your potential customer is willing and able to buy from - but they are still your competition, as far as the customer is concerned.

Right....so the products and services you offer will still be available if you go out of business, it's just a matter of who will be offering them.

If a customer offers you 10% over wholesale, when they can buy it at 5% over wholesale, I'd say the customer as advanced toward the middle ground. Now, if you want to argue where the middle is specifically - that's a different issue.

But I am! Globalization, baby!

On one hand, I understand volume discounts. Intuitively, it makes sense. On the other hand, I don't get it, and it doesn't make sense. If a manufacturer has the capacity to produce and deliver 1 million widgets per year, then it should not matter HOW the sales are distributed, let alone discount based on volume. If the world wide demand is 1 million widgets per year, and they can make $100/each without a discount and sell them all, they make $100M. If they discount half of them by 20% due to volume discounts, then they only make a fraction of that. This makes no sense. NOW - if the theory is that by selling such a high volume (through whatever means), then a dealer can INCREASE demand, and thereby improve manufacturer profits, a discount is merited - but ONLY if the discount encourages the dealer to do whatever it is doing to increase demand (in this context, probably selling at a lower price). As I write this, I'm seeing all kinds of ways for this to get more complicated though.

I think the oil people got it figured out ask them.

 

[themagni]

On one hand, I understand volume discounts. Intuitively, it makes sense. On the other hand, I don't get it, and it doesn't make sense. If a manufacturer has the capacity to produce and deliver 1 million widgets per year, then it should not matter HOW the sales are distributed, let alone discount based on volume. If the world wide demand is 1 million widgets per year, and they can make $100/each without a discount and sell them all, they make $100M. If they discount half of them by 20% due to volume discounts, then they only make a fraction of that. This makes no sense. NOW - if the theory is that by selling such a high volume (through whatever means), then a dealer can INCREASE demand, and thereby improve manufacturer profits, a discount is merited - but ONLY if the discount encourages the dealer to do whatever it is doing to increase demand (in this context, probably selling at a lower price). As I write this, I'm seeing all kinds of ways for this to get more complicated though.

It carries over from the component level.

I can make a light identical (actually, better) than the Princeton Tec LED Shockwave 9W light. It would cost me somewhere around $700 - $1000 to get it done compared to the $200 the light retails for. Why?

First, the lights cost me around $75 each for the 3W light when I'm buying 3 at a time. It's cheaper to buy them by the millions because you can lean on the parts distributors. "I'm going to buy a million units. Should I get them from you or from your competitor? Let me know your best price." Let's say they normally make $2 profit from each part. In this case, the manufacturer can choose to make $1 from each of the million parts or no money at all.

At the shop level, look at the ease of selling. "Hi Doug. I'd like to order 20 reg sets for my dive club. What's the best price you can give me?" Doug still makes money, less on each unit, but more profit overall. Because he doesn't have to pay staff for those hours that selling 19 extra sets of regs would take, then he'll do even better than it first appears.

The case would be exceedingly expensive for one unit, because I have to get the mold made and pay the design costs. If I pay $300 for that, I can either add the cost onto one unit or divide it by a million units.

Also, the time it takes to unpack, pack, ship, and store all those small orders adds up. I don't work for free and I certainly don't expect people working in stock and shipping rooms to do so either.

 

[NudeDiver]

Well look at this way, at least you got the first nitrox class for free! Some people are just on a high horse, I'd like to tell how my 13 yr old son after completing successfully all the OW skill sets, even dealing successfully some unexpected situations was, denied c card, due to what appears to me, a high horse mind set, but I've determined to put it behind me.

Oh, such a tease!!! Please tell.

 

[Hatul]

https://rabbit.he.net/~divesda/SDAnitrox.html

 

[Zman96]

This is funny. I have gear I bought so long ago that the Mfg, shop and the owners might all be dead by now. That could have really floored her. "Who did you buy that gear from?" "Moses"

Gary D.

 

[RJP]

Our LDC will usually try to meet or beat an online price or add something in if we talk to them first.

Thank goodness you resurrected a six-year old thread, since we almost never get a new "LDS vs online" discussion here on SB!

But seriously, how on earth did you even FIND it?

 

[NudeDiver]

Hey, if there is nothing wrong with diving in vintage gear, there shouldn't be anything wrong with posting in vintage threads

 

[Gary D.]

Hey, if there is nothing wrong with diving in vintage gear, there shouldn't be anything wrong with posting in vintage threads

Yeh, and by vintage divers. Where's my diving walker?

Gary D.

 

[J.R.]

JR: I have to reject most of your post as non-responsive.

Very responsive... I reject your rejection...

Your competition is anyone else your potential customer is willing and able to buy from. Whether or not you CHOOSE to compete with anyone else your potential customer is willing and able to buy from - but they are still your competition, as far as the customer is concerned.

Umm... what were we talking about again???

Right....so the products and services you offer will still be available if you go out of business, it's just a matter of who will be offering them.

Maybe... be will they be time and place convenient... as competition is thinned will they still be convenient at a convenient price (I'd cite automobiles, cable TV, cell phone, internet access and a whole host of other products who's price continues to spiral in the wrong direction...)

If a customer offers you 10% over wholesale, when they can buy it at 5% over wholesale, I'd say the customer as advanced toward the middle ground. Now, if you want to argue where the middle is specifically - that's a different issue.

... advancing, yes... near... no... negotiations should continue...

But I am! Globalization, baby!

Deep in our souls we all are...

On one hand, I understand volume discounts. Intuitively, it makes sense. On the other hand, I don't get it, and it doesn't make sense.

Humm... pen is running out of ink...

It isn't just about volume discounts... it's about managing the distribution stream... While it seems intuitively reasonable to flood the market with a million units (assuming you have the ability to produce a million units)... there ARE drawbacks to this approach... particularly when you're making a product that has a shelf life of... ummmm... a LOT of years. (See: Planned Obsolesence... an exercise in limited lifetime products to ensure an idealized manufacturing environment)... Flood the market and you potentially screw over not only your competators... but potentially yourself...

I'm not an expert on the manuf. end by any stretch but to make a million units you need the manpower, facilities, material and assets to do so... it doesn't make sense to do so if there isn't a market there to absorb that amount of product... so... product is manuf. to the level of demand... or just below... Maintaining demand is not only important for price supports... but to maintain the integrity of the industry.

... as islandwheels said... study the oil industry...

Darn dude... if we keep this up I'm gonna' need a refill for the pen... have to say I'm enjoying the discussion though... yer' fun to debate with... :cool2:

 

[NudeDiver]

I'm not an expert on the manuf. end by any stretch but to make a million units you need the manpower, facilities, material and assets to do so... it doesn't make sense to do so if there isn't a market there to absorb that amount of product... so... product is manuf. to the level of demand... or just below... Maintaining demand is not only important for price supports... but to maintain the integrity of the industry.

I think you missed something in there....i just picked a million. it could have been 50. Whatever the number is...I wasn't talking about flooding the market with more widgets than can be consumed in a year. I was talking about meeting the demand, whatever that demand is. Assuming the demand for YOUR product is 1M/year, and you can produce 1M/year, then why should you care who is selling your units, as long as the sum total sold is 1M/year.