Do Xilinx Fix Their Prices?

[Steve]

"Nial Stewart" <nial@nialstewartdevelopments.co.uk> wrote in message news:<40276573$0$9043$fa0fcedb@lovejoy.zen.co.uk>...

It's an oligopoly, it's in both their interests to keep low volume
prices up.

If you're a small company trying to get a novel product out it
can be a very big issue, FPGA pricing is likely to dominate
your overall product cost, making the product viable or not.

Well summed up!


--
Steve

 

[Peter Alfke]

If you build something in small volume, everything is expensive: design
effort, pc-boards, most components, testing, marketing, advertising,
selling, servicing etc. You must have a really good product to absorb
all these high costs. That's life.
Peter Alfke
================================

Steve wrote:

My point is that unless you buy in large quantities then small or
start-up companies can't put Xilinx parts in their products because
they're too expensive.

--
Steve

 

[Rene Tschaggelar]

rickman wrote:

Rene Tschaggelar wrote:

Ok. My points. It may work the way you described where there are
plenty of big companies doing big projects. Over here, many big
companies are a mere shaddow of themselves after the new economy
took over and they were rationalized to death or near death.
Many new small businesses took over the lead in applying technology.
I'm lucky that my distributor, selling Altera parts (amongst others),
takes the time to provide me with, compared with my sales volume,
excessive support.
Yes, we may talk about who the project is for.


Ask your distributor how they will be compensated for the sales that go
into the product you are designing. If they are lucky, you have been
able to identify both the company you are doing this for as well as the
product name. I was told that this information is "registered" with the
manufacturer and they get credit for the sales no matter which
distributor actually makes the sale. But if the product can not be
tracked this way, they get nothing.

There is also some incentive on your part (or your customer's) to
provide this tracking info. If they quote you a better than list price
to get the design win, this better price will only be good through that
distributor since they get a price cut from the manufacturer. But other
distis who are not on the registered design win will not get the better
price and will likely have to charge a bit more.

At least this is how it was described to me.

I have some understanding for it. On the other hand I'm not
complaining about prices. 20 years ago we made fast electronics
with ECL. A few gates on a big board. Took a lot of power and
it had to be tweaked for nanoseconds. The whole job then took us
6 months for the two of us. I can do the same now with just one
small CPLD chip. With a doublesided layout. Say in 3 weeks.

We recently had some faster wishes. Spend 100k for an ASIC.
It didn't work out finally.

The current CPLDs and FPGAs are excellent value.

Rene

 

[Jan Panteltje]

On a sunny day (Mon, 09 Feb 2004 13:21:48 -0800) it happened Peter Alfke
<peter@xilinx.com> wrote in <4027F9ED.F7C82422@xilinx.com>:

If you build something in small volume, everything is expensive: design
effort, pc-boards, most components, testing, marketing, advertising,
selling, servicing etc. You must have a really good product to absorb
all these high costs. That's life.
Peter Alfke
Hey, of cause things are expensive.

Now log in to www.microchip.com
Find a PIC, you can enter a quantity and order right there.
Whats your problem?
Perfect for small business.
WYSIWYG

 

[rickman]

Jan Panteltje wrote:

On a sunny day (Mon, 09 Feb 2004 13:21:48 -0800) it happened Peter Alfke
peter@xilinx.com> wrote in <4027F9ED.F7C82422@xilinx.com>:

If you build something in small volume, everything is expensive: design
effort, pc-boards, most components, testing, marketing, advertising,
selling, servicing etc. You must have a really good product to absorb
all these high costs. That's life.
Peter Alfke
Hey, of cause things are expensive.
Now log in to www.microchip.com
Find a PIC, you can enter a quantity and order right there.
Whats your problem?
Perfect for small business.

And you will pay some 3 or 4 times what you would pay if you were buying
1000's. I know, I have looked.

--

Rick "rickman" Collins

rick.collins@XYarius.com
Ignore the reply address. To email me use the above address with the XY
removed.

Arius - A Signal Processing Solutions Company
Specializing in DSP and FPGA design URL http://www.arius.com
4 King Ave 301-682-7772 Voice
Frederick, MD 21701-3110 301-682-7666 FAX

 

[Andy Peters]

Mike Treseler <tres@fluke.com> wrote in message news:<40254829.5090400@fluke.com>...

Andy Peters wrote:

It's great if you have
a relationship with a distributor, but once they find out that you
only want to build a handful of prototypes or whatever, they're not
interested. There has to be a way for the small garage shop guys to
get parts.


try this: http://www.arrow.com/
(o) Part Description
enter "acex" in the box
click (Search)

On page two there are qty=1 parts for under $20 you can order Online.
Ground shipping is $8

I have never used acex or online ordering,
but it looks like a viable option not requiring
any relationship with a distributor.

Actually, Mike, Arrow is pretty good. They have much better prices
than DigiKey, even for small quantities, and the online ordering is
easy.

It's just that I chose a Xilinx CPLD for a project, and Brand X is not
in Arrow's line card. In retrospect, the EPM7128AE in 100-pin TQFP
would've done the job as well as the XCR3128 in the same package,
although the CoolRunner is almost half the (onesy-twosy) price. Too
bad the footprints aren't compatible.

--a

 

[Steve]

"John_H" <johnhandwork@mail.com> wrote in message news:<Q1PVb.3$sR4.6932@news-west.eli.net>...

"Steve" <steve41@totalise.co.uk> wrote in message
news:4d3ee211.0402090355.49f7aa40@posting.google.com...
So Xilinx /do/ fix their prices. Surely this is against competition laws??

If Xilinx colluded with other FPGA manufacturers to have a fixed price where
each competitor agrees not to undercut the other, they would be guilty of
price fixing -- this is not the case.

There's different forms of price-fixing; collusion with competing
companies is one form, like this:

http://www.guardian.co.uk/business/story/0,3604,899174,00.html

that's not the type of price-fixing I'm on about. This is the kind of
price-fixing I'm on about:

http://news.bbc.co.uk/1/hi/business/the_company_file/389962.stm

which is price-fixing by ordering distributors to charge certain
prices or face the consequences, such as loss of the right to sell
that car manufacturer's cars or worse trade terms.

When you go to the store to buy
Tostitos (a different form of chips) you often see the price is pre-marked
on the bag - surely this is a form of price fixing!

You have to look at each situation within the context in which it is
in. Crisps selling in a supermarket are hardly just one of two brands
that are available, and I have *never* seen a pre-priced packet of
anything in a supermarket that wasn't a decent price, and I used to
work in a supermarket.

In reality, this is
setting a suggested price; some stores have a different price sticker on top
of the pre-printed amount. Semiconductor manufacturers provide their
distributors and sales people with price books that give parts and grades
for what is available. There is no harm in this. Better prices can be had,
but only if you TALK with the people involved, either the Xilinx sales folks
or the distributor's sales people.

And what volume per annum would TALKING to the people start getting
you discounts? 50k per annum or some such ridiculously high figure
that start-ups cannot get to?


--
Steve

 

[Austin Lesea]

Steve,

If you never ask, you will never know (how many is 'enough').

I had an email from someone on this group, who asked, and was pleased
with the result. If you are going to order 25 a month, for the next
year, that is a lot more useful information than a single order of 25!

Austin

Steve wrote:

"John_H" <johnhandwork@mail.com> wrote in message news:<Q1PVb.3$sR4.6932@news-west.eli.net>...

"Steve" <steve41@totalise.co.uk> wrote in message
news:4d3ee211.0402090355.49f7aa40@posting.google.com...

So Xilinx /do/ fix their prices. Surely this is against competition laws??

If Xilinx colluded with other FPGA manufacturers to have a fixed price where
each competitor agrees not to undercut the other, they would be guilty of
price fixing -- this is not the case.



There's different forms of price-fixing; collusion with competing
companies is one form, like this:

http://www.guardian.co.uk/business/story/0,3604,899174,00.html

that's not the type of price-fixing I'm on about. This is the kind of
price-fixing I'm on about:

http://news.bbc.co.uk/1/hi/business/the_company_file/389962.stm

which is price-fixing by ordering distributors to charge certain
prices or face the consequences, such as loss of the right to sell
that car manufacturer's cars or worse trade terms.



When you go to the store to buy
Tostitos (a different form of chips) you often see the price is pre-marked
on the bag - surely this is a form of price fixing!



You have to look at each situation within the context in which it is
in. Crisps selling in a supermarket are hardly just one of two brands
that are available, and I have *never* seen a pre-priced packet of
anything in a supermarket that wasn't a decent price, and I used to
work in a supermarket.



In reality, this is
setting a suggested price; some stores have a different price sticker on top
of the pre-printed amount. Semiconductor manufacturers provide their
distributors and sales people with price books that give parts and grades
for what is available. There is no harm in this. Better prices can be had,
but only if you TALK with the people involved, either the Xilinx sales folks
or the distributor's sales people.



And what volume per annum would TALKING to the people start getting
you discounts? 50k per annum or some such ridiculously high figure
that start-ups cannot get to?


--
Steve

 

[Peter Alfke]

This is really simple, Capitalism 101:

Manufacturer invents and makes part.
Uses seval competing distributors to sell the part to the public.
Manufacturer optimizes his profit by charging distributor a certain
price, and also publishes a pricebook with "Manufacturer Recommended
Resale Price" MSRP.
Distributor can sell in any quantity and for any price he wants, high or
low, but he will try to optimize his profit.
Customer will buy at the lowest possible price consistent with the
desired level of service and support.
This is true for food, shirts, cars, and ICs. For Tiffany's, Nordstrom,
Safeway and CostCo.

But rest assured that we are seriously looking at ways to improve the
plight of the low-volume customer. Some of your complaints did not fall
on deaf ears.

Peter Alfke
===========================

Austin Lesea wrote:

Steve,

If you never ask, you will never know (how many is 'enough').

I had an email from someone on this group, who asked, and was pleased
with the result. If you are going to order 25 a month, for the next
year, that is a lot more useful information than a single order of 25!

Austin

Steve wrote:
"John_H" <johnhandwork@mail.com> wrote in message news:<Q1PVb.3$sR4.6932@news-west.eli.net>...

"Steve" <steve41@totalise.co.uk> wrote in message
news:4d3ee211.0402090355.49f7aa40@posting.google.com...

So Xilinx /do/ fix their prices. Surely this is against competition laws??

If Xilinx colluded with other FPGA manufacturers to have a fixed price where
each competitor agrees not to undercut the other, they would be guilty of
price fixing -- this is not the case.



There's different forms of price-fixing; collusion with competing
companies is one form, like this:

http://www.guardian.co.uk/business/story/0,3604,899174,00.html

that's not the type of price-fixing I'm on about. This is the kind of
price-fixing I'm on about:

http://news.bbc.co.uk/1/hi/business/the_company_file/389962.stm

which is price-fixing by ordering distributors to charge certain
prices or face the consequences, such as loss of the right to sell
that car manufacturer's cars or worse trade terms.



When you go to the store to buy
Tostitos (a different form of chips) you often see the price is pre-marked
on the bag - surely this is a form of price fixing!



You have to look at each situation within the context in which it is
in. Crisps selling in a supermarket are hardly just one of two brands
that are available, and I have *never* seen a pre-priced packet of
anything in a supermarket that wasn't a decent price, and I used to
work in a supermarket.



In reality, this is
setting a suggested price; some stores have a different price sticker on top
of the pre-printed amount. Semiconductor manufacturers provide their
distributors and sales people with price books that give parts and grades
for what is available. There is no harm in this. Better prices can be had,
but only if you TALK with the people involved, either the Xilinx sales folks
or the distributor's sales people.



And what volume per annum would TALKING to the people start getting
you discounts? 50k per annum or some such ridiculously high figure
that start-ups cannot get to?


--
Steve

 

[Peter Alfke]

This is really simple, Capitalism 101:

Manufacturer invents and makes part.
Uses seval competing distributors to sell the part to the public.
Manufacturer optimizes his profit by charging distributor a certain
price, and also publishes a pricebook with "Manufacturer Recommended
Resale Price" MSRP.
Distributor can sell in any quantity and for any price he wants, high or
low, but he will try to optimize his profit.
Customer will buy at the lowest possible price consistent with the
desired level of service and support.
This is true for food, shirts, cars, and ICs. For Tiffany's, Nordstrom,
Safeway and CostCo.

But rest assured that we are seriously looking at ways to improve the
plight of the low-volume customer. Some of your complaints did not fall
on deaf ears.

Peter Alfke
===========================

Austin Lesea wrote:

Steve,

If you never ask, you will never know (how many is 'enough').

I had an email from someone on this group, who asked, and was pleased
with the result. If you are going to order 25 a month, for the next
year, that is a lot more useful information than a single order of 25!

Austin

Steve wrote:
"John_H" <johnhandwork@mail.com> wrote in message news:<Q1PVb.3$sR4.6932@news-west.eli.net>...

"Steve" <steve41@totalise.co.uk> wrote in message
news:4d3ee211.0402090355.49f7aa40@posting.google.com...

So Xilinx /do/ fix their prices. Surely this is against competition laws??

If Xilinx colluded with other FPGA manufacturers to have a fixed price where
each competitor agrees not to undercut the other, they would be guilty of
price fixing -- this is not the case.



There's different forms of price-fixing; collusion with competing
companies is one form, like this:

http://www.guardian.co.uk/business/story/0,3604,899174,00.html

that's not the type of price-fixing I'm on about. This is the kind of
price-fixing I'm on about:

http://news.bbc.co.uk/1/hi/business/the_company_file/389962.stm

which is price-fixing by ordering distributors to charge certain
prices or face the consequences, such as loss of the right to sell
that car manufacturer's cars or worse trade terms.



When you go to the store to buy
Tostitos (a different form of chips) you often see the price is pre-marked
on the bag - surely this is a form of price fixing!



You have to look at each situation within the context in which it is
in. Crisps selling in a supermarket are hardly just one of two brands
that are available, and I have *never* seen a pre-priced packet of
anything in a supermarket that wasn't a decent price, and I used to
work in a supermarket.



In reality, this is
setting a suggested price; some stores have a different price sticker on top
of the pre-printed amount. Semiconductor manufacturers provide their
distributors and sales people with price books that give parts and grades
for what is available. There is no harm in this. Better prices can be had,
but only if you TALK with the people involved, either the Xilinx sales folks
or the distributor's sales people.



And what volume per annum would TALKING to the people start getting
you discounts? 50k per annum or some such ridiculously high figure
that start-ups cannot get to?


--
Steve

 

[rickman]

Steve wrote:

"John_H" <johnhandwork@mail.com> wrote in message news:<Q1PVb.3$sR4.6932@news-west.eli.net>...
In reality, this is
setting a suggested price; some stores have a different price sticker on top
of the pre-printed amount. Semiconductor manufacturers provide their
distributors and sales people with price books that give parts and grades
for what is available. There is no harm in this. Better prices can be had,
but only if you TALK with the people involved, either the Xilinx sales folks
or the distributor's sales people.

And what volume per annum would TALKING to the people start getting
you discounts? 50k per annum or some such ridiculously high figure
that start-ups cannot get to?

I have found that a 1k per year quantity will get you discounts.
Actually, I got a decent discount once when I was saying I would buy in
lots of 100 and I was quoted a price for 100 per year! That was on an
Altera part if I remember correctly.

In another case, I was given the qty 50,000 price when I was promising
1k per year.

Both Xilinx and Altera have lots of room to discount from the list
price. But if you are only buying 100 total, I don't see how the parts
cost you will get standard will affect your competitiveness. At low
volumes there are much larger costs that dominate your pricing; NRE
(design and prototyping), support, even the cost of sales. If you
aren't making 1000 or more of something the cost of the parts is not
going to break you.

--

Rick "rickman" Collins

rick.collins@XYarius.com
Ignore the reply address. To email me use the above address with the XY
removed.

Arius - A Signal Processing Solutions Company
Specializing in DSP and FPGA design URL http://www.arius.com
4 King Ave 301-682-7772 Voice
Frederick, MD 21701-3110 301-682-7666 FAX

 

[William Wallace]

steve41@totalise.co.uk (Steve) wrote in message

Xilinx have a revenue of $1.2bn according to this:

http://finance.yahoo.com/q/is?s=xlnx

Are you seriously trying to say that the cost of an FPGA
representative being asked questions has anything other than a
negligible effect on the prices of FPGAs?

In-state factory FAEs, Disty FAEs. Sales teams that must be incentivized
to drum up demand for new parts. Then customers who go out and convert
their FPGA to CGAs as soon as production ramps up.

FPGAs are not like CPUs. They are often prototype platforms.
Low volume, abandoned by the customer as soon as the design is
stable and can be converted to a CGA or ASIC.


Read the statements that the Xilinx suits say about ASICs vs FPGAs,
they say that ASICs are frequently being *replaced* by FPGAs.

In small volumes.

FPGAs are inexpensive in my view,


In large quantities, not in small quantities.

How much would it cost to design and build an ASIC with a total
production run of say 10? Versus and FPGA. FPGAs are much cheaper.

and the software tools are
amazing. It's a good time to be an engineer.


Do you work for a large company that buys FPGAs in large quantities by
any chance?

Actually, I buy them in very small volumes. Small company. Very
reasonable pricing, very good value for what you get.

In fact, I used to work at a large company, and based on that
experience, it is large companies that get raped. On one project I
worked on, we were being charged $400/fpga that was being sold to new
customers for $100. The lowered the price when we noticed, but did
not refund the money on the devices we purchased.

But if you know a way to bring the equivalent of a Xilinx offering
for 25% of the price, join the marketplace, please.


My point is that unless you buy in large quantities then small or
start-up companies can't put Xilinx parts in their products because
they're too expensive.

Sure they can. It is done all the time. You just need to find a
niche. Maybe you could start a company selling inexpensive FPGAs to
small start ups.

If you're having trouble coming to market with an FPGA based system,
you would probably have trouble coming to market with an ASIC.

 

[William Wallace]

rickman <spamgoeshere4@yahoo.com> wrote in message news:<40286B1C.8BD933C4@yahoo.com>...

Jan Panteltje wrote:

On a sunny day (Mon, 09 Feb 2004 13:21:48 -0800) it happened Peter Alfke
peter@xilinx.com> wrote in <4027F9ED.F7C82422@xilinx.com>:

If you build something in small volume, everything is expensive: design
effort, pc-boards, most components, testing, marketing, advertising,
selling, servicing etc. You must have a really good product to absorb
all these high costs. That's life.
Peter Alfke
Hey, of cause things are expensive.
Now log in to www.microchip.com
Find a PIC, you can enter a quantity and order right there.
Whats your problem?
Perfect for small business.

And you will pay some 3 or 4 times what you would pay if you were buying
1000's. I know, I have looked.

How is this any different than any other product? Resistors, for
example. Go to digikey and try to buy 3 0805 100 Ohm resistors. Your
price per resistor will be much higher than if you bought several
dozen reels from a distributor.

--

Rick "rickman" Collins

rick.collins@XYarius.com
Ignore the reply address. To email me use the above address with the XY
removed.

Arius - A Signal Processing Solutions Company
Specializing in DSP and FPGA design URL http://www.arius.com
4 King Ave 301-682-7772 Voice
Frederick, MD 21701-3110 301-682-7666 FAX

 

[William Wallace]

Rick Collins <spamgoeshere4@yahoo.com> wrote in message news:<402559B3.AFBBB736@yahoo.com>...

... And they will very much limit the
amount of support they give you if you are not a large customer.

Xilinx gives me good support. Great support. It might be that I
have found documentation errors, errors in unisim/simprim models,
and that my questions are usually (but not always) valid. I don't
call asking why my code is resulting in a latch, for example. I
sometimes ask a stupid question, but I try not to.

All this while I am a small customer. It might be that I have
worked in the past for large companies. It might be luck. The
Xilinx support web site sometimes bites in the performance
department, but I get great support when it is working, and
good support from local (factory and disty) FAEs if they aren't
swamped.

I have also received good support from Actel and Altera. I received
good support from Actel on a part that they new was going to be used
in test equipment, that they knew we would only buy 3 of their
devices for...

 

[Jim Granville]

William Wallace wrote:

rickman <spamgoeshere4@yahoo.com> wrote in message news:<40286B1C.8BD933C4@yahoo.com>...
snip

And you will pay some 3 or 4 times what you would pay if you were buying
1000's. I know, I have looked.



How is this any different than any other product? Resistors, for
example. Go to digikey and try to buy 3 0805 100 Ohm resistors. Your
price per resistor will be much higher than if you bought several
dozen reels from a distributor.

I don't think anyone expects a flat price curve ( except in the
promotion special case I mentioned earlier ).

What is at issue, is the lazy application of the jelly-bean-resistor
type price curves to much more expensive parts.

Each sales transacton has a cost, and each customer call has a cost,
but those costs do not scale with the device price.

eg
A price structure that has a 1 off price of $15, and volume price of $4
is probably OK to most users.
What's harder to justify, is a 1 off price of $150, and volume price of
$40.
In one case you are saying "it costs $11 more to handle small volumes"
- fine, but how can that possibly justify $110 extra on the larger
device - ?

-jg

 

[Martin Euredjian]

Interesting thread. I reply to the top message because of the many
tentacles the thread developed.

Yes, of course, we would all like to pay less. No question about it. And,
it does hurt to have serious doubts about whether or not a product might be
viable mainly due to the cost of the FPGA's you'll need in small quantities.
I understand this very well.

The error here might be a good-old standard in business: communication.
Talk to your sales rep. Contact Xilinx/Altera. Let them know what you are
doing. Explain what problems you have. There are real people behind the
emails, websites, brochures and chips. Make contact. You'd be surprised to
learn what can be achieved with a little bit of effort.

From the perspective of a small company I can tell you that I'm blown away
to see the effort put forth recently (and continuing) to support us. This
both by Xilinx and Avnet. Both of these companies could afford to loose our
business and they wouldn't even know it happened. However, like I said,
there are people behind it all. Never forget that.


--
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Martin Euredjian

To send private email:
0_0_0_0_@pacbell.net
where
"0_0_0_0_" = "martineu"



"Steve" <steve41@totalise.co.uk> wrote in message
news:4d3ee211.0402050950.69f50597@posting.google.com...

I've been looking for historical prices of FPGAs to try and get an
idea of what I might expect to get for a given price for small
quantities and came across this post:

http://tinyurl.com/36blb

which has a price table for small quantities (<=25) for January 2000:

Spartan
XCS05 3PC84C 10.00
XCS10 3PC84C 18.10
XCS20 3PQ208C 40.40
XCS30 3PQ208C 45.35
XCS40 3PQ208C 49.15

Virtex
XCV50 4PQ240C 55.40
XCV100 4PQ240C 104.00
XCV150 4PQ240C 128.00
XCV200 4PQ240C 157.00
XCV300 4PQ240C 244.00
XCV400 4HQ240C 344.00
XCV600 4HQ240C 581.00
XCV800 4HQ240C 860.00


I compared the above prices with the prices on these web pages, that I
assume are up to date because they stock up to date chips:

Spartan: http://www.plis.ru/price.html?ID=121
Virtex: http://www.plis.ru/price.html?ID=111

and all of the prices on the Russian website are exactly the same
price today as they were from a different supplier in January 2000.

Why are they exactly the same price?

Do Xilinx tell their resellers what to charge? And if so, isn't this
illegal?

Also, why is there such an enormous price difference per part between
massive quantities and smaller quantities? Xilinx make X million of
part Y, so why do they charge so many hundred percent higher prices
for small quantities than very large quantities?

As there is such a huge difference in prices between large and small
quantities, why isn't there a supplier that buys largish quantities to
sell in smaller quantities so that the supplier makes a profit and the
purchaser of small quantities gets chips cheaper?

Also, what does happen to FPGA prices over time? Do they just reach a
final value and they never get any cheaper? That would explain why
prices would be very similar in 2000 and 2004, but not why they're
identical. You can get a Spartan 2E XC2S150E-6PQ208C for $20.45 from
the above Russian website today. What might you expect to be able to
get for $20 in, say, 2 years' time?

--
Steve

 

[Rene Tschaggelar]

William Wallace wrote:

rickman <spamgoeshere4@yahoo.com> wrote in message news:<40286B1C.8BD933C4@yahoo.com>...

Jan Panteltje wrote:

On a sunny day (Mon, 09 Feb 2004 13:21:48 -0800) it happened Peter Alfke
peter@xilinx.com> wrote in <4027F9ED.F7C82422@xilinx.com>:


If you build something in small volume, everything is expensive: design
effort, pc-boards, most components, testing, marketing, advertising,
selling, servicing etc. You must have a really good product to absorb
all these high costs. That's life.
Peter Alfke

Hey, of cause things are expensive.
Now log in to www.microchip.com
Find a PIC, you can enter a quantity and order right there.
Whats your problem?
Perfect for small business.

And you will pay some 3 or 4 times what you would pay if you were buying
1000's. I know, I have looked.



How is this any different than any other product? Resistors, for
example. Go to digikey and try to buy 3 0805 100 Ohm resistors. Your
price per resistor will be much higher than if you bought several
dozen reels from a distributor.

Yes, then add 15$ for shipping the 3 resistors.
Or 30$ or so for express delivery.

Rene

 

[Steve]

Peter Alfke <peter@xilinx.com> wrote in message news:<4029259F.1BC8DDF6@xilinx.com>...

This is really simple, Capitalism 101:

Manufacturer invents and makes part.
Uses seval competing distributors to sell the part to the public.
Manufacturer optimizes his profit by charging distributor a certain
price, and also publishes a pricebook with "Manufacturer Recommended
Resale Price" MSRP.
Distributor can sell in any quantity and for any price he wants, high or
low, but he will try to optimize his profit.
Customer will buy at the lowest possible price consistent with the
desired level of service and support.
This is true for food, shirts, cars, and ICs. For Tiffany's, Nordstrom,
Safeway and CostCo.

This is really simple; Oligopoly 101:

Oligopolists value high order quantities highly and small order
quantities as not being worth the hassle.
Oligopolists watch competitors and are happy if all oligopolists in
the market view small order quantities as not being worth the hassle.
Certain oligopolists have a high vested interest in having smooth and
monotonic price vs size curves, which can be maintained by having few
distributors, and *possibly* a say on the prices they charge to
buyers, and *possibly* exert pressure on distributors to toe the line.
Oligopolists are happy.
Those wanting to buy small order quantities are screwed.

But rest assured that we are seriously looking at ways to improve the
plight of the low-volume customer. Some of your complaints did not fall
on deaf ears.

I'll quote the British phrase "the proof of the pudding is in the
eating", or in other words I'll believe that when small quantity
prices come down...


--
Steve

 

[Peter Alfke]

The Columbia Encyclopedia describes oligopoly as:
....the control of supply by a few producers...or by agreements among
members of an industry to restrain price competition...

Does that describe your impression of the relationship between X and A ?
Wow !
Peter Alfke
===========================
Steve wrote:

This is really simple; Oligopoly 101:

Oligopolists value high order quantities highly and small order
quantities as not being worth the hassle.
Oligopolists watch competitors and are happy if all oligopolists in
the market view small order quantities as not being worth the hassle.
Certain oligopolists have a high vested interest in having smooth and
monotonic price vs size curves, which can be maintained by having few
distributors, and *possibly* a say on the prices they charge to
buyers, and *possibly* exert pressure on distributors to toe the line.
Oligopolists are happy.
Those wanting to buy small order quantities are screwed.

But rest assured that we are seriously looking at ways to improve the
plight of the low-volume customer. Some of your complaints did not fall
on deaf ears.

I'll quote the British phrase "the proof of the pudding is in the
eating", or in other words I'll believe that when small quantity
prices come down...

--
Steve

 

[Ray Andraka]

When was the last time you asked for technical support on a resistor? Part of the pricing
pays for the tech support, which is more or less a per customer charge rather than a per piece
charge. Naturally, if you are buying a large quantity, the tech support per peice is going to
be considerably less. Tech support is one of the distributor's largest costs.

Jim Granville wrote:

William Wallace wrote:
rickman <spamgoeshere4@yahoo.com> wrote in message news:<40286B1C.8BD933C4@yahoo.com>...
snip

And you will pay some 3 or 4 times what you would pay if you were buying
1000's. I know, I have looked.



How is this any different than any other product? Resistors, for
example. Go to digikey and try to buy 3 0805 100 Ohm resistors. Your
price per resistor will be much higher than if you bought several
dozen reels from a distributor.

I don't think anyone expects a flat price curve ( except in the
promotion special case I mentioned earlier ).

What is at issue, is the lazy application of the jelly-bean-resistor
type price curves to much more expensive parts.

Each sales transacton has a cost, and each customer call has a cost,
but those costs do not scale with the device price.

eg
A price structure that has a 1 off price of $15, and volume price of $4
is probably OK to most users.
What's harder to justify, is a 1 off price of $150, and volume price of
$40.
In one case you are saying "it costs $11 more to handle small volumes"
- fine, but how can that possibly justify $110 extra on the larger
device - ?

-jg

--
--Ray Andraka, P.E.
President, the Andraka Consulting Group, Inc.
401/884-7930 Fax 401/884-7950
email ray@andraka.com
http://www.andraka.com

"They that give up essential liberty to obtain a little
temporary safety deserve neither liberty nor safety."
-Benjamin Franklin, 1759