Rule of thumb (Pricing)?

[mpm]

First - my boss is an asshole, so let's just put that out there.

Second, my question is:
He sells something at $300 that costs us every bit of $170 to make (if we have zero waste, and are damn near perfect on shipping costs, etc...)

He sells it to our customer,(a manufacturer).
Our box complements something they make.

Now, if you go to any of the distribution channels for the aforementioned manufacturer, that same exact box sells for $1150.

So to recap:
We build (with some effort, and significant risk) at $170.
We sell at $300.
The people we sell to, sell it through distribution channels at $1,150.

---
My boss is leaving money on the table? Right?
My boss is stupid for selling something at less than 1x markup. Right?

I pretty much decided this afternoon that I was going to start looking around for another place to work. I've had it with his bullshit.

He thinks he so fucking great (he's not), and successful (he's not), and that something I'm not doing something right when I say I need hours, and maybe first article boards, for a host of revisions he wants in this product.

His company has a long history of pissing off customers (er, I mean, "victims"). We have hardly any repeat business. I liken it to a horde of locusts that enter a project, fuck it up, and then more on. The company's reputation is shit, and frankly, I'm astounded they are still in business. (I'm astounded I even work there.)

Heretofore, I've put up with it because the money is actually rather good.
But I've reached my limit.

And look, getting back to the topic, I KNOW his sales price is too low.
I just want to know HOW LOW?
What should he have sold it at (er, rather, what would a COMPETENT, or even SEMI-COMPETENT person have negotiated for a sales price?)

OK. Rant over.
But appreciate the comments.

 

[Lasse Langwadt Christense]

tirsdag den 18. februar 2020 kl. 01.15.38 UTC+1 skrev John Larkin:

On Mon, 17 Feb 2020 15:38:28 -0800 (PST), mpm <mpmillard@aol.com
wrote:

First - my boss is an asshole, so let's just put that out there.

Second, my question is:
He sells something at $300 that costs us every bit of $170 to make (if we have zero waste, and are damn near perfect on shipping costs, etc...)

He sells it to our customer,(a manufacturer).
Our box complements something they make.

Now, if you go to any of the distribution channels for the aforementioned manufacturer, that same exact box sells for $1150.

So to recap:
We build (with some effort, and significant risk) at $170.
We sell at $300.
The people we sell to, sell it through distribution channels at $1,150.

---
My boss is leaving money on the table? Right?
My boss is stupid for selling something at less than 1x markup. Right?

I pretty much decided this afternoon that I was going to start looking around for another place to work. I've had it with his bullshit.

He thinks he so fucking great (he's not), and successful (he's not), and that something I'm not doing something right when I say I need hours, and maybe first article boards, for a host of revisions he wants in this product.

His company has a long history of pissing off customers (er, I mean, "victims"). We have hardly any repeat business. I liken it to a horde of locusts that enter a project, fuck it up, and then more on. The company's reputation is shit, and frankly, I'm astounded they are still in business. (I'm astounded I even work there.)

Heretofore, I've put up with it because the money is actually rather good.
But I've reached my limit.

And look, getting back to the topic, I KNOW his sales price is too low.
I just want to know HOW LOW?
What should he have sold it at (er, rather, what would a COMPETENT, or even SEMI-COMPETENT person have negotiated for a sales price?)

OK. Rant over.
But appreciate the comments.

We sell stuff at 3x (minimum, barely interesting) to as much as 10x
our direct cost. "Direct cost" is unburdened parts, assembly and test
cost, no engineering or one-time costs accounted for.

It would be tough for him to go back to the customer and double the
price now. Is there competition for the business? Is it hard to do?
There may not be room to increase the price.

If he's that big a jerk, quit. You should feel good about what you do.

Keeping good customers happy is key to long-term survival. We provide
loaners, free first articles, demo prototypes, support, special
versions. We listen. We admit when we're wrong. We fix our bugs and
mistakes for free, forever. All that is not only morally satisfying,
it pays.

We sometimes, rarely, argue with customers over price. More often than
not, they are concerned that we're not charging enough. One customer
wanted to pay us to fix our mistake; we refused.


We used to sell NMR gradient amps and temperature controllers to
Varian/Agilent. They charged their customers 6x what we sold it to
them for. I don't think that's unusual. Look at what car parts cost.

afaict, from the stuff I've seen on the interwebs, even Iphones are
3x the cost of making them and then sell a few 100 million of them
each year

 

[John Larkin]

On Mon, 17 Feb 2020 15:38:28 -0800 (PST), mpm <mpmillard@aol.com>
wrote:

First - my boss is an asshole, so let's just put that out there.

Second, my question is:
He sells something at $300 that costs us every bit of $170 to make (if we have zero waste, and are damn near perfect on shipping costs, etc...)

He sells it to our customer,(a manufacturer).
Our box complements something they make.

Now, if you go to any of the distribution channels for the aforementioned manufacturer, that same exact box sells for $1150.

So to recap:
We build (with some effort, and significant risk) at $170.
We sell at $300.
The people we sell to, sell it through distribution channels at $1,150.

---
My boss is leaving money on the table? Right?
My boss is stupid for selling something at less than 1x markup. Right?

I pretty much decided this afternoon that I was going to start looking around for another place to work. I've had it with his bullshit.

He thinks he so fucking great (he's not), and successful (he's not), and that something I'm not doing something right when I say I need hours, and maybe first article boards, for a host of revisions he wants in this product.

His company has a long history of pissing off customers (er, I mean, "victims"). We have hardly any repeat business. I liken it to a horde of locusts that enter a project, fuck it up, and then more on. The company's reputation is shit, and frankly, I'm astounded they are still in business. (I'm astounded I even work there.)

Heretofore, I've put up with it because the money is actually rather good.
But I've reached my limit.

And look, getting back to the topic, I KNOW his sales price is too low.
I just want to know HOW LOW?
What should he have sold it at (er, rather, what would a COMPETENT, or even SEMI-COMPETENT person have negotiated for a sales price?)

OK. Rant over.
But appreciate the comments.

We sell stuff at 3x (minimum, barely interesting) to as much as 10x
our direct cost. "Direct cost" is unburdened parts, assembly and test
cost, no engineering or one-time costs accounted for.

It would be tough for him to go back to the customer and double the
price now. Is there competition for the business? Is it hard to do?
There may not be room to increase the price.

If he's that big a jerk, quit. You should feel good about what you do.

Keeping good customers happy is key to long-term survival. We provide
loaners, free first articles, demo prototypes, support, special
versions. We listen. We admit when we're wrong. We fix our bugs and
mistakes for free, forever. All that is not only morally satisfying,
it pays.

We sometimes, rarely, argue with customers over price. More often than
not, they are concerned that we're not charging enough. One customer
wanted to pay us to fix our mistake; we refused.


We used to sell NMR gradient amps and temperature controllers to
Varian/Agilent. They charged their customers 6x what we sold it to
them for. I don't think that's unusual. Look at what car parts cost.

--

John Larkin Highland Technology, Inc
picosecond timing precision measurement

jlarkin att highlandtechnology dott com
http://www.highlandtechnology.com

 

[Bill Sloman]

On Tuesday, February 18, 2020 at 10:38:33 AM UTC+11, mpm wrote:

First - my boss is an asshole, so let's just put that out there.

Second, my question is:
He sells something at $300 that costs us every bit of $170 to make (if we have zero waste, and are damn near perfect on shipping costs, etc...)

He sells it to our customer,(a manufacturer).
Our box complements something they make.

Now, if you go to any of the distribution channels for the aforementioned manufacturer, that same exact box sells for $1150.

So to recap:
We build (with some effort, and significant risk) at $170.
We sell at $300.
The people we sell to, sell it through distribution channels at $1,150.

---
My boss is leaving money on the table? Right?
My boss is stupid for selling something at less than 1x markup. Right?

I pretty much decided this afternoon that I was going to start looking around for another place to work. I've had it with his bullshit.

He thinks he so fucking great (he's not), and successful (he's not), and that something I'm not doing something right when I say I need hours, and maybe first article boards, for a host of revisions he wants in this product..

His company has a long history of pissing off customers (er, I mean, "victims"). We have hardly any repeat business. I liken it to a horde of locusts that enter a project, fuck it up, and then more on. The company's reputation is shit, and frankly, I'm astounded they are still in business. (I'm astounded I even work there.)

Heretofore, I've put up with it because the money is actually rather good..
But I've reached my limit.

And look, getting back to the topic, I KNOW his sales price is too low.
I just want to know HOW LOW?
What should he have sold it at (er, rather, what would a COMPETENT, or even SEMI-COMPETENT person have negotiated for a sales price?)

OK. Rant over.
But appreciate the comments.

Selling directly to customers is more expensive than selling to a single supplier who sells to a number of customers - an OEM sale. The single supplier has to support a distribution network. IIRR from the [laces I worked, stuff that got sold through agents in other countries was priced - to the agent - to leave 30?% of what their customers paid them in the pockets of the agent. This paid the agent, their salesmen and their service engineers.

--
Bill Sloman, Sydney

 

[bitrex]

On 2/17/20 6:38 PM, mpm wrote:

First - my boss is an asshole, so let's just put that out there.

Second, my question is:
He sells something at $300 that costs us every bit of $170 to make (if we have zero waste, and are damn near perfect on shipping costs, etc...)

He sells it to our customer,(a manufacturer).
Our box complements something they make.

Now, if you go to any of the distribution channels for the aforementioned manufacturer, that same exact box sells for $1150.

So to recap:
We build (with some effort, and significant risk) at $170.
We sell at $300.
The people we sell to, sell it through distribution channels at $1,150.

---
My boss is leaving money on the table? Right?
My boss is stupid for selling something at less than 1x markup. Right?

I pretty much decided this afternoon that I was going to start looking around for another place to work. I've had it with his bullshit.

He thinks he so fucking great (he's not), and successful (he's not), and that something I'm not doing something right when I say I need hours, and maybe first article boards, for a host of revisions he wants in this product.

His company has a long history of pissing off customers (er, I mean, "victims"). We have hardly any repeat business. I liken it to a horde of locusts that enter a project, fuck it up, and then more on. The company's reputation is shit, and frankly, I'm astounded they are still in business. (I'm astounded I even work there.)

Heretofore, I've put up with it because the money is actually rather good.
But I've reached my limit.

And look, getting back to the topic, I KNOW his sales price is too low.
I just want to know HOW LOW?
What should he have sold it at (er, rather, what would a COMPETENT, or even SEMI-COMPETENT person have negotiated for a sales price?)

OK. Rant over.
But appreciate the comments.

From your description of the "work environment" such as it is I'd say
that you'd be wasting your breath offering any constructive criticism.
What are you hoping for, exactly?

Yes, the times I've found myself in this situation I just suck it up,
provide "service with a smile" and start looking for another job. When I
found one I give my two weeks notice and say blah blah blah it's been
nice working here great experience but I've got to move on at this point
for <insert reason.>

In the meantime so long as you're getting paid who gives a shit if he
know how to price his products not my fuckin' department, man. Not my
job to save your business or make you rich IRL I tend to save my advice
for people who ask for it because in general the reward for offering
unsolicited advice, particularly to asshole bosses, tends to be rather
low. I'd just assume he knew what he was doing such as it is and that
bringing the topic up was just going to make my life more unpleasant
than it is. Okay sell it at whatever so be it.

Even if one has to take a modest pay cut, every time I've known a friend
or family member who bailed on a toxic work environment and took say a
15-20% pay cut to work in a more pleasant one, once they did I never
heard them say they regretted the decision, never.

 

[bitrex]

On 2/17/20 6:38 PM, mpm wrote:

First - my boss is an asshole, so let's just put that out there.

Second, my question is:
He sells something at $300 that costs us every bit of $170 to make (if we have zero waste, and are damn near perfect on shipping costs, etc...)

He sells it to our customer,(a manufacturer).
Our box complements something they make.

Now, if you go to any of the distribution channels for the aforementioned manufacturer, that same exact box sells for $1150.

So to recap:
We build (with some effort, and significant risk) at $170.
We sell at $300.
The people we sell to, sell it through distribution channels at $1,150.

---
My boss is leaving money on the table? Right?
My boss is stupid for selling something at less than 1x markup. Right?

I pretty much decided this afternoon that I was going to start looking around for another place to work. I've had it with his bullshit.

He thinks he so fucking great (he's not), and successful (he's not), and that something I'm not doing something right when I say I need hours, and maybe first article boards, for a host of revisions he wants in this product.

His company has a long history of pissing off customers (er, I mean, "victims"). We have hardly any repeat business. I liken it to a horde of locusts that enter a project, fuck it up, and then more on. The company's reputation is shit, and frankly, I'm astounded they are still in business. (I'm astounded I even work there.)

Heretofore, I've put up with it because the money is actually rather good.
But I've reached my limit.

And look, getting back to the topic, I KNOW his sales price is too low.
I just want to know HOW LOW?
What should he have sold it at (er, rather, what would a COMPETENT, or even SEMI-COMPETENT person have negotiated for a sales price?)

OK. Rant over.
But appreciate the comments.

I understand that it's nice to have some external confirmation when
making major life decisions but if the situation is as you describe,
y'know, you don't need us to tell you what you probably need to be
thinking about doing right now you've got all the data laid out and know
the score better than we do.

 

[bitrex]

On 2/18/20 12:05 AM, jlarkin@highlandsniptechnology.com wrote:

On Mon, 17 Feb 2020 23:51:58 -0500, bitrex <user@example.net> wrote:

On 2/17/20 7:15 PM, John Larkin wrote:
On Mon, 17 Feb 2020 15:38:28 -0800 (PST), mpm <mpmillard@aol.com
wrote:

First - my boss is an asshole, so let's just put that out there.

Second, my question is:
He sells something at $300 that costs us every bit of $170 to make (if we have zero waste, and are damn near perfect on shipping costs, etc...)

He sells it to our customer,(a manufacturer).
Our box complements something they make.

Now, if you go to any of the distribution channels for the aforementioned manufacturer, that same exact box sells for $1150.

So to recap:
We build (with some effort, and significant risk) at $170.
We sell at $300.
The people we sell to, sell it through distribution channels at $1,150.

---
My boss is leaving money on the table? Right?
My boss is stupid for selling something at less than 1x markup. Right?

I pretty much decided this afternoon that I was going to start looking around for another place to work. I've had it with his bullshit.

He thinks he so fucking great (he's not), and successful (he's not), and that something I'm not doing something right when I say I need hours, and maybe first article boards, for a host of revisions he wants in this product.

His company has a long history of pissing off customers (er, I mean, "victims"). We have hardly any repeat business. I liken it to a horde of locusts that enter a project, fuck it up, and then more on. The company's reputation is shit, and frankly, I'm astounded they are still in business. (I'm astounded I even work there.)

Heretofore, I've put up with it because the money is actually rather good.
But I've reached my limit.

And look, getting back to the topic, I KNOW his sales price is too low.
I just want to know HOW LOW?
What should he have sold it at (er, rather, what would a COMPETENT, or even SEMI-COMPETENT person have negotiated for a sales price?)

OK. Rant over.
But appreciate the comments.

We sell stuff at 3x (minimum, barely interesting) to as much as 10x
our direct cost. "Direct cost" is unburdened parts, assembly and test
cost, no engineering or one-time costs accounted for.

It would be tough for him to go back to the customer and double the
price now. Is there competition for the business? Is it hard to do?
There may not be room to increase the price.

If he's that big a jerk, quit. You should feel good about what you do.

Keeping good customers happy is key to long-term survival. We provide
loaners, free first articles, demo prototypes, support, special
versions. We listen. We admit when we're wrong. We fix our bugs and
mistakes for free, forever. All that is not only morally satisfying,
it pays.

We sometimes, rarely, argue with customers over price. More often than
not, they are concerned that we're not charging enough. One customer
wanted to pay us to fix our mistake; we refused.


We used to sell NMR gradient amps and temperature controllers to
Varian/Agilent. They charged their customers 6x what we sold it to
them for. I don't think that's unusual. Look at what car parts cost.


OP should remember that clients in the 21st century flaking out
(particularly among the under-35 set) and having fewer repeat customers
than in days past is not necessarily indicate of a poorly-run business
but also a consequence of in lots of industries there being more easily
accessible other options than ever before.

Sort of like online dating - you're going to get stood up for second
dates a lot.

Wow, does that really happen?

For a man? To rephrase I mean, when I was single a woman just not
showing up when she said she would is pretty rare (but did happen a
couple times), but a woman saying via phone or text "Oh sure it'd be
great to get together again soon!" after a first date and then just
dropping off the face of the Earth and you never hear anything from her
again is common. The rule, not the exception.

No, bad choice of words for "stood up" I guess what I'm talking about is
just called just "flaking" nowadays. My experience in general was that
if a single woman agrees to a definite time and a definite place she
will be there about 95% chance, but if she never confirms it with you
like a dentist appointment, well...

 

On Mon, 17 Feb 2020 23:51:58 -0500, bitrex <user@example.net> wrote:

On 2/17/20 7:15 PM, John Larkin wrote:
On Mon, 17 Feb 2020 15:38:28 -0800 (PST), mpm <mpmillard@aol.com
wrote:

First - my boss is an asshole, so let's just put that out there.

Second, my question is:
He sells something at $300 that costs us every bit of $170 to make (if we have zero waste, and are damn near perfect on shipping costs, etc...)

He sells it to our customer,(a manufacturer).
Our box complements something they make.

Now, if you go to any of the distribution channels for the aforementioned manufacturer, that same exact box sells for $1150.

So to recap:
We build (with some effort, and significant risk) at $170.
We sell at $300.
The people we sell to, sell it through distribution channels at $1,150.

---
My boss is leaving money on the table? Right?
My boss is stupid for selling something at less than 1x markup. Right?

I pretty much decided this afternoon that I was going to start looking around for another place to work. I've had it with his bullshit.

He thinks he so fucking great (he's not), and successful (he's not), and that something I'm not doing something right when I say I need hours, and maybe first article boards, for a host of revisions he wants in this product.

His company has a long history of pissing off customers (er, I mean, "victims"). We have hardly any repeat business. I liken it to a horde of locusts that enter a project, fuck it up, and then more on. The company's reputation is shit, and frankly, I'm astounded they are still in business. (I'm astounded I even work there.)

Heretofore, I've put up with it because the money is actually rather good.
But I've reached my limit.

And look, getting back to the topic, I KNOW his sales price is too low.
I just want to know HOW LOW?
What should he have sold it at (er, rather, what would a COMPETENT, or even SEMI-COMPETENT person have negotiated for a sales price?)

OK. Rant over.
But appreciate the comments.

We sell stuff at 3x (minimum, barely interesting) to as much as 10x
our direct cost. "Direct cost" is unburdened parts, assembly and test
cost, no engineering or one-time costs accounted for.

It would be tough for him to go back to the customer and double the
price now. Is there competition for the business? Is it hard to do?
There may not be room to increase the price.

If he's that big a jerk, quit. You should feel good about what you do.

Keeping good customers happy is key to long-term survival. We provide
loaners, free first articles, demo prototypes, support, special
versions. We listen. We admit when we're wrong. We fix our bugs and
mistakes for free, forever. All that is not only morally satisfying,
it pays.

We sometimes, rarely, argue with customers over price. More often than
not, they are concerned that we're not charging enough. One customer
wanted to pay us to fix our mistake; we refused.


We used to sell NMR gradient amps and temperature controllers to
Varian/Agilent. They charged their customers 6x what we sold it to
them for. I don't think that's unusual. Look at what car parts cost.


OP should remember that clients in the 21st century flaking out
(particularly among the under-35 set) and having fewer repeat customers
than in days past is not necessarily indicate of a poorly-run business
but also a consequence of in lots of industries there being more easily
accessible other options than ever before.

Sort of like online dating - you're going to get stood up for second
dates a lot.

Wow, does that really happen?



--

John Larkin Highland Technology, Inc

The cork popped merrily, and Lord Peter rose to his feet.
"Bunter", he said, "I give you a toast. The triumph of Instinct over Reason"

 

[bitrex]

On 2/17/20 7:15 PM, John Larkin wrote:

On Mon, 17 Feb 2020 15:38:28 -0800 (PST), mpm <mpmillard@aol.com
wrote:

First - my boss is an asshole, so let's just put that out there.

Second, my question is:
He sells something at $300 that costs us every bit of $170 to make (if we have zero waste, and are damn near perfect on shipping costs, etc...)

He sells it to our customer,(a manufacturer).
Our box complements something they make.

Now, if you go to any of the distribution channels for the aforementioned manufacturer, that same exact box sells for $1150.

So to recap:
We build (with some effort, and significant risk) at $170.
We sell at $300.
The people we sell to, sell it through distribution channels at $1,150.

---
My boss is leaving money on the table? Right?
My boss is stupid for selling something at less than 1x markup. Right?

I pretty much decided this afternoon that I was going to start looking around for another place to work. I've had it with his bullshit.

He thinks he so fucking great (he's not), and successful (he's not), and that something I'm not doing something right when I say I need hours, and maybe first article boards, for a host of revisions he wants in this product.

His company has a long history of pissing off customers (er, I mean, "victims"). We have hardly any repeat business. I liken it to a horde of locusts that enter a project, fuck it up, and then more on. The company's reputation is shit, and frankly, I'm astounded they are still in business. (I'm astounded I even work there.)

Heretofore, I've put up with it because the money is actually rather good.
But I've reached my limit.

And look, getting back to the topic, I KNOW his sales price is too low.
I just want to know HOW LOW?
What should he have sold it at (er, rather, what would a COMPETENT, or even SEMI-COMPETENT person have negotiated for a sales price?)

OK. Rant over.
But appreciate the comments.

We sell stuff at 3x (minimum, barely interesting) to as much as 10x
our direct cost. "Direct cost" is unburdened parts, assembly and test
cost, no engineering or one-time costs accounted for.

It would be tough for him to go back to the customer and double the
price now. Is there competition for the business? Is it hard to do?
There may not be room to increase the price.

If he's that big a jerk, quit. You should feel good about what you do.

Keeping good customers happy is key to long-term survival. We provide
loaners, free first articles, demo prototypes, support, special
versions. We listen. We admit when we're wrong. We fix our bugs and
mistakes for free, forever. All that is not only morally satisfying,
it pays.

We sometimes, rarely, argue with customers over price. More often than
not, they are concerned that we're not charging enough. One customer
wanted to pay us to fix our mistake; we refused.


We used to sell NMR gradient amps and temperature controllers to
Varian/Agilent. They charged their customers 6x what we sold it to
them for. I don't think that's unusual. Look at what car parts cost.

OP should remember that clients in the 21st century flaking out
(particularly among the under-35 set) and having fewer repeat customers
than in days past is not necessarily indicate of a poorly-run business
but also a consequence of in lots of industries there being more easily
accessible other options than ever before.

Sort of like online dating - you're going to get stood up for second
dates a lot. That doesn't necessarily mean she thinks you're a "bad"
person but just that there are decent number of likely equally-good
options to choose from within easy reach and who would be glad to be a
part of her paradox-of-choice. Such is the free market I guess.

 

[Klaus Kragelund]

For a sale to end customers markup of 3 to 5 is standard

For OEM sale like it sounds like the OP described markup of less than 2 is standard. Even close to break even is also seen as long as it paves the way for end customers sales

 

mpm <mpmillard@aol.com> wrote in news:437a2a81-6eb0-4615-b2f6-
3e9bb7e351b7@googlegroups.com:

--
My boss is leaving money on the table? Right?

Absolutely.

He needs to TRUMP his ass.

Hey... there it is. The one thing we can declare a new moniker for.
Rememeber the "Ollie"? Have you "Ollie-d" any documents lately?

Now we have the Trump. Think yer gettin' a raw deal? TRUMP his ass.

 

mpm <mpmillard@aol.com> wrote in
news:437a2a81-6eb0-4615-b2f6-3e9bb7e351b7@googlegroups.com:

I pretty much decided this afternoon that I was going to start
looking around for another place to work. I've had it with his
bullshit.

Just start buying them and re-selling them yourself and thumb your
nose to the whole thing. Gold brick the joint till he shitcans you.

 

John Larkin <jlarkin@highland_atwork_technology.com> wrote in
news:9v9m4f9qn1ccokaoakkuiji1lf48lf1o2v@4ax.com:

We sell stuff at 3x (minimum, barely interesting) to as much as 10x
our direct cost. "Direct cost" is unburdened parts, assembly and test
cost, no engineering or one-time costs accounted for.

We bought an IRU (Inertial Reference Unit) straight from General
Electric at $50k each, and sold them, once integtrated into our systems
at $100k each. The are *real good* at helping your system keep a
satellite dish pointed at the bird from a moving platform. Essential,
in fact.

 

[speff]

On Tuesday, 18 February 2020 06:02:52 UTC-5, DecadentLinux...@decadence.org wrote:

John Larkin <jlarkin@highland_atwork_technology.com> wrote in
news:9v9m4f9qn1ccokaoakkuiji1lf48lf1o2v@4ax.com:


We sell stuff at 3x (minimum, barely interesting) to as much as 10x
our direct cost. "Direct cost" is unburdened parts, assembly and test
cost, no engineering or one-time costs accounted for.

We bought an IRU (Inertial Reference Unit) straight from General
Electric at $50k each, and sold them, once integtrated into our systems
at $100k each. The are *real good* at helping your system keep a
satellite dish pointed at the bird from a moving platform. Essential,
in fact.

The tactical grade IMUs from Northrop got marked up 5:1 or something like that in the nav system we were using.

Best regards,
Spehro Pefhany

 

[speff]

On Monday, 17 February 2020 18:38:33 UTC-5, mpm wrote:

First - my boss is an asshole, so let's just put that out there.

Second, my question is:
He sells something at $300 that costs us every bit of $170 to make (if we have zero waste, and are damn near perfect on shipping costs, etc...)

He sells it to our customer,(a manufacturer).
Our box complements something they make.

Now, if you go to any of the distribution channels for the aforementioned manufacturer, that same exact box sells for $1150.

So to recap:
We build (with some effort, and significant risk) at $170.
We sell at $300.
The people we sell to, sell it through distribution channels at $1,150.

---
My boss is leaving money on the table? Right?
My boss is stupid for selling something at less than 1x markup. Right?

I pretty much decided this afternoon that I was going to start looking around for another place to work. I've had it with his bullshit.

He thinks he so fucking great (he's not), and successful (he's not), and that something I'm not doing something right when I say I need hours, and maybe first article boards, for a host of revisions he wants in this product..

His company has a long history of pissing off customers (er, I mean, "victims"). We have hardly any repeat business. I liken it to a horde of locusts that enter a project, fuck it up, and then more on. The company's reputation is shit, and frankly, I'm astounded they are still in business. (I'm astounded I even work there.)

Heretofore, I've put up with it because the money is actually rather good..
But I've reached my limit.

And look, getting back to the topic, I KNOW his sales price is too low.
I just want to know HOW LOW?
What should he have sold it at (er, rather, what would a COMPETENT, or even SEMI-COMPETENT person have negotiated for a sales price?)

OK. Rant over.
But appreciate the comments.

Sounds too cheap unless there's some other way of 'getting well' on the sales.

If 1150 is the end user I would expect the customer to pay roughly about double what you're talking, which means 4x the margin.

When you have enough margin you don't need to piss customers off, you can do repairs for free (if you want), even if you know for a fact the idiots broke it because they're ham-fisted Neanderthals.

Of course different industries vary, and that's just one data point, but based on a lot of history in a few specific sectors.

Best regards,
Spehro Pefhany

 

[speff]

On Tuesday, 18 February 2020 00:16:26 UTC-5, bitrex wrote:

On 2/18/20 12:05 AM, jlarkin@highlandsniptechnology.com wrote:
On Mon, 17 Feb 2020 23:51:58 -0500, bitrex <user@example.net> wrote:

On 2/17/20 7:15 PM, John Larkin wrote:
On Mon, 17 Feb 2020 15:38:28 -0800 (PST), mpm <mpmillard@aol.com
wrote:

First - my boss is an asshole, so let's just put that out there.

Second, my question is:
He sells something at $300 that costs us every bit of $170 to make (if we have zero waste, and are damn near perfect on shipping costs, etc...)

He sells it to our customer,(a manufacturer).
Our box complements something they make.

Now, if you go to any of the distribution channels for the aforementioned manufacturer, that same exact box sells for $1150.

So to recap:
We build (with some effort, and significant risk) at $170.
We sell at $300.
The people we sell to, sell it through distribution channels at $1,150.

---
My boss is leaving money on the table? Right?
My boss is stupid for selling something at less than 1x markup. Right?

I pretty much decided this afternoon that I was going to start looking around for another place to work. I've had it with his bullshit.

He thinks he so fucking great (he's not), and successful (he's not), and that something I'm not doing something right when I say I need hours, and maybe first article boards, for a host of revisions he wants in this product.

His company has a long history of pissing off customers (er, I mean, "victims"). We have hardly any repeat business. I liken it to a horde of locusts that enter a project, fuck it up, and then more on. The company's reputation is shit, and frankly, I'm astounded they are still in business. (I'm astounded I even work there.)

Heretofore, I've put up with it because the money is actually rather good.
But I've reached my limit.

And look, getting back to the topic, I KNOW his sales price is too low.
I just want to know HOW LOW?
What should he have sold it at (er, rather, what would a COMPETENT, or even SEMI-COMPETENT person have negotiated for a sales price?)

OK. Rant over.
But appreciate the comments.

We sell stuff at 3x (minimum, barely interesting) to as much as 10x
our direct cost. "Direct cost" is unburdened parts, assembly and test
cost, no engineering or one-time costs accounted for.

It would be tough for him to go back to the customer and double the
price now. Is there competition for the business? Is it hard to do?
There may not be room to increase the price.

If he's that big a jerk, quit. You should feel good about what you do..

Keeping good customers happy is key to long-term survival. We provide
loaners, free first articles, demo prototypes, support, special
versions. We listen. We admit when we're wrong. We fix our bugs and
mistakes for free, forever. All that is not only morally satisfying,
it pays.

We sometimes, rarely, argue with customers over price. More often than
not, they are concerned that we're not charging enough. One customer
wanted to pay us to fix our mistake; we refused.


We used to sell NMR gradient amps and temperature controllers to
Varian/Agilent. They charged their customers 6x what we sold it to
them for. I don't think that's unusual. Look at what car parts cost.


OP should remember that clients in the 21st century flaking out
(particularly among the under-35 set) and having fewer repeat customers
than in days past is not necessarily indicate of a poorly-run business
but also a consequence of in lots of industries there being more easily
accessible other options than ever before.

Sort of like online dating - you're going to get stood up for second
dates a lot.

Wow, does that really happen?



For a man? To rephrase I mean, when I was single a woman just not
showing up when she said she would is pretty rare (but did happen a
couple times), but a woman saying via phone or text "Oh sure it'd be
great to get together again soon!" after a first date and then just
dropping off the face of the Earth and you never hear anything from her
again is common. The rule, not the exception.

No, bad choice of words for "stood up" I guess what I'm talking about is
just called just "flaking" nowadays. My experience in general was that
if a single woman agrees to a definite time and a definite place she
will be there about 95% chance, but if she never confirms it with you
like a dentist appointment, well...

That's a bit like "let's do lunch sometime".

https://www.thenational.ae/opinion/let-s-do-lunch-putting-a-name-to-an-insincere-phrase-1.320946

An American scholar from the same era, Sydney J Harris, offered a few phrops of his own. There was “I don’t like to boast …” before, invariably, a boast; “I am all for progress ...” when the speaker is about to advocate no such thing and “‘I’m only thinking of your interest ...” to precede a proposition of clear self-interest.

My favorite in the current era is "with all due respect" which always precedes a brutal slam.

Best regards,
Spehro Pefhany

 

[George Herold]

On Monday, February 17, 2020 at 6:38:33 PM UTC-5, mpm wrote:

First - my boss is an asshole, so let's just put that out there.

Second, my question is:
He sells something at $300 that costs us every bit of $170 to make (if we have zero waste, and are damn near perfect on shipping costs, etc...)

He sells it to our customer,(a manufacturer).
Our box complements something they make.

Now, if you go to any of the distribution channels for the aforementioned manufacturer, that same exact box sells for $1150.

So to recap:
We build (with some effort, and significant risk) at $170.
We sell at $300.
The people we sell to, sell it through distribution channels at $1,150.

---
My boss is leaving money on the table? Right?
My boss is stupid for selling something at less than 1x markup. Right?

I pretty much decided this afternoon that I was going to start looking around for another place to work. I've had it with his bullshit.

He thinks he so fucking great (he's not), and successful (he's not), and that something I'm not doing something right when I say I need hours, and maybe first article boards, for a host of revisions he wants in this product..

His company has a long history of pissing off customers (er, I mean, "victims"). We have hardly any repeat business. I liken it to a horde of locusts that enter a project, fuck it up, and then more on. The company's reputation is shit, and frankly, I'm astounded they are still in business. (I'm astounded I even work there.)

Heretofore, I've put up with it because the money is actually rather good..
But I've reached my limit.

And look, getting back to the topic, I KNOW his sales price is too low.
I just want to know HOW LOW?
What should he have sold it at (er, rather, what would a COMPETENT, or even SEMI-COMPETENT person have negotiated for a sales price?)

OK. Rant over.
But appreciate the comments.

Hi mpm, Is the company gaining some other benefit by selling it cheap?
(Like customer buys the spendy add-on module too..
or the (cheap) razor and lotsa razor blades model?)

at my PPoE we sold at about 3x cost, but could be more*.
(And sometimes less... prices set by capricious boss...
We had a counter thing that cost ~$600 to make and we sold for
<$1k... Instrument was mostly sold as part of a more
expensive apparatus.)

Sorry about your job situation,
George H.
*A rubidium lamp was sold for ~$3k, cost ~$400 to make, most of
that a Rb bulb ($250) We didn't sell very many. :^)

 

[Rick C]

On Tuesday, February 18, 2020 at 1:43:02 AM UTC-5, Klaus Kragelund wrote:

For a sale to end customers markup of 3 to 5 is standard

For OEM sale like it sounds like the OP described markup of less than 2 is standard. Even close to break even is also seen as long as it paves the way for end customers sales

With my present customer I started with a 2:1 price to cost. I quickly found cost reductions as we made more units. At one point the customer had paid for a board revision, but when they ordered units they insisted on the old part number. Then when they came back a couple of weeks before delivery to change it to the updated revision I asked for $35 each for the "conversion", even though I had actually built the new revision taking the chance they would change their minds. The next time they ordered they ordered with the higher price which I accepted. Later after changing middleman who gave me a pretty hard time with all manner of formalities, I hit them with an expedite fee for rushing an order. That fee also stuck in their system. There may have been one other price increase and a very large cost reduction from switching contract assemblers, so that now I am charging some five times my costs.

--

Rick C.

- Get 1,000 miles of free Supercharging
- Tesla referral code - https://ts.la/richard11209

 

[bitrex]

On 2/18/20 8:53 AM, speff wrote:

On Tuesday, 18 February 2020 06:02:52 UTC-5, DecadentLinux...@decadence.org wrote:
John Larkin <jlarkin@highland_atwork_technology.com> wrote in
news:9v9m4f9qn1ccokaoakkuiji1lf48lf1o2v@4ax.com:


We sell stuff at 3x (minimum, barely interesting) to as much as 10x
our direct cost. "Direct cost" is unburdened parts, assembly and test
cost, no engineering or one-time costs accounted for.

We bought an IRU (Inertial Reference Unit) straight from General
Electric at $50k each, and sold them, once integtrated into our systems
at $100k each. The are *real good* at helping your system keep a
satellite dish pointed at the bird from a moving platform. Essential,
in fact.

The tactical grade IMUs from Northrop got marked up 5:1 or something like that in the nav system we were using.

Best regards,
Spehro Pefhany

No one ever went broke selling weapons...

<https://youtu.be/6VhSm6G7cVk?t=41>

 

[Rick C]

On Tuesday, February 18, 2020 at 10:23:44 PM UTC-5, bitrex wrote:

On 2/18/20 8:53 AM, speff wrote:
On Tuesday, 18 February 2020 06:02:52 UTC-5, DecadentLinux...@decadence.org wrote:
John Larkin <jlarkin@highland_atwork_technology.com> wrote in
news:9v9m4f9qn1ccokaoakkuiji1lf48lf1o2v@4ax.com:


We sell stuff at 3x (minimum, barely interesting) to as much as 10x
our direct cost. "Direct cost" is unburdened parts, assembly and test
cost, no engineering or one-time costs accounted for.

We bought an IRU (Inertial Reference Unit) straight from General
Electric at $50k each, and sold them, once integtrated into our systems
at $100k each. The are *real good* at helping your system keep a
satellite dish pointed at the bird from a moving platform. Essential,
in fact.

The tactical grade IMUs from Northrop got marked up 5:1 or something like that in the nav system we were using.

Best regards,
Spehro Pefhany


No one ever went broke selling weapons...

https://youtu.be/6VhSm6G7cVk?t=41

Not unless you consider Winchester and a few dozen other companies...

https://en.wikipedia.org/wiki/Winchester_Repeating_Arms_Company#Failure_and_recovery

--

Rick C.

- Get 1,000 miles of free Supercharging
- Tesla referral code - https://ts.la/richard11209