Originally Posted by tuxedocivic
But Craig emailed me after all this, likely to neutralize things, and stated to me Erich was making money and should act like an industry professional. [/B]
This bothers me a bit because he must not have followed what's going on with the site. As for profit, let's talk about this in a couple parts. The site might look like there's a lot of stuff and that the person must be paying himself. But I get it all from Parts Express as needed, so it's not like I'm stocking thousands of woofers.
I've gone over this many times, but will do it again. I add up all costs for the kit including Paypal fees, packaging material, custom boxes, QC, etc. I weigh the kit and try to calculate an average price to cover the FREE shipping.....these aren't light speakers. Parts Express gives me discounts on the components. Some kit parts are discounted more than others. I add up the discounts for a certain kit and use that discount to help cover the free shipping. If there is money left over, it goes to pay the designer fee, or I will add in extra to cover that. I'm sure Craig has a wholesale account and can easily.....easily add things up to see that the kits are priced at break even costs after the free shipping is covered and designer fees.For example: Let's look at the Fusion-12.
The wholesale versus retail price difference from is around $67. After I subtract free shipping and designer fees, guess what.....there was still $15 left over! Did I keep that? No, I actually listed the kit at $15 LESS than retail!
The wholesale versus retail price on the parts for the Fusion-10 is a difference of $37 when I last calculated it. That is used to cover the costs I just listed as well.
Some kits are so close that I might be losing money. And I would if there was any shipping damage (that's why I package things really good). I took down the Classix kit because of that, and the 15" Sentinel, and a couple others temporarily. I also had to change how the Amiga kit was offered because I did actually lose money on that one. My fault because I calculated wrong. I will need to recalculate those before the new price goes up. When MTG90 was here I added up the price on the Fusion-15 and I do believe I lost money on that one due to it's high shipping cost and expensive packaging material. That's one reason why it's temporarily removed. I need to recalculate it.Profit for other items:
Anyone that followed along with the SEOS thread knows how much all of that cost. I even posted estimates and gave prices for prototyping and things like that as the project went. The current price covers the mold making and the first 1000 that were ordered (still not sure it covered everything). If and when every one of those first 1000 are completely gone.......I break even. The next batch won't need to cover the injection mold price and would be cheaper. At that point I could make money on them, or drop the price. Who knows until that first 1000 are gone and I order more. But until those first are sold, no money has been made. If I made money on those, I wouldn't have sold a truck or two to help cover the costs on the SEOS10 and 15 that just got done. Profit for compression drivers:
This is barely worth talking about. The 350's were my own find, which is why they were so cheap. The 360's are OEM drivers with some custom diaphragms that make them so good. The diaphragms come from a different manufacturer. In the future I will be assembling all of them here in the US. The guy that helped me on these wanted a $9 royalty that was added in and he told me to add in a very small amount just in case there were any QC issues. But later he said not to send him the $9 and to just roll that into future group buy funding....which I have. I have not paid myself one penny from any of this. Any extra money saved from shipping fees, no QC issues or anything else has been rolled right back into the group buy funds.Profit from flat packs:
It was discussed early on that there would be a little extra added in on some of these due to the weight and needing help to package them up. I was also told to add in a little just in case there was shipping damage. I talked about that in the flat pack thread. Anyone that has received a 4cuft sub understands why help is needed for packaging them, and to cover packaging material. Why is money added in? At first I hoped my sister would help package some flat packs for about $5 each. So that was added in. But the bigger ones were just too heavy and she couldn't lift 70lb boxes. I now have a guy come here 1-2 days per week to package up the larger flat packs in his spare time. Again, this was discussed in the other thread. MTG90 was here for a couple weeks and can verify that someone does help package them up. That guy must be paid.AGAIN
If there is ANY money left over from what is set aside for QC issues, saved shipping, saved non damaged shipping, or whatever.....I have NOT paid myself a cent from that. It rolls back into the group buy funds.Edited by Erich H - 12/9/13 at 6:11pm