The last 2 years in the self-build ESK8 industry has been very exciting, we have seen lots of innovations & several “beta-style” products have become available to esk8 builders of the world.
Products such as; HUB MOTORS, VESC, CARBON FIBER DECKS & CUSTOM MADE BATTERY DESIGNS
There are a few forum members & (vendors themselves) who seem to promote the concept of paying/charging only cost price for the awesome esk8 innovations, they justify this mentality by saying that if it’s a new product it might have an unforeseen fault and therefore the products should be sold at cost price only because they have not been thoroughly tested & may fail prematurely.
Other forum members will argue that innovators & vendors need to actually make some profits allowing them to offer service & warranty… & to cover any unforeseeable issues that arise, such as parts being made incorrectly or missing shipments… or maybe they just want to invest in larger quantities to improve the manufacturing process, improve quality & ultimately strive to lower retail prices due to bulk discounts from suppliers… Some countries also require income tax to be paid by law and this must be added to the cost of goods sold to ensure they can pay the bill at the end of the year. Some people just want profitable businesses that will be able to grow larger & eventually achieve much greater things due to their profitability.
So what do you think?
Should ESK8 Innovators & Vendors give away their time & efforts for zero gain?
I like the way hummies doing it, where he’s not making anything on his motors. When they are perfected and actually know to be a good, he’ll charge more for them. You let everyone be your businesses Ginny pigs, which is the same thing hummie is doing. But the difference is you want to profit on said Ginny pigs, instead of profiting once you know the quality is there.
Yeah I really like how the entire community is taking advantage of @Hummie … congratulations to everyone ripping him off.
He’s business is likely to fail due to the greed of the masses. The end result is there may never be a finished product, there will be no further developments and there won’t be any warranty or service…
Unless of course he is willing to go into around 10K debt to fund his improved “steel” model and continue to feed the greed of the masses.
The true retail value of his product is about $499, expect him to increase his price or expect failure.
I dont feel taken advantage of, I offered cheap prices. My business strategy is to make everyone happy by getting them the cheapest most durable thing I can. Word will spread and in the meantime I get feedback and I can make sure I’m doing things right.
My business is making these as good as I can and keeping the customers I get. Maybe if I had a bigger bank account I would be in a different situation and not relying on the community so much and it would be different but I need the community to make these. I rounded up the paypal bucks early for products that were unmade. Thats asking a lot. People here helped me get it going and I’m happy.
People running a legit business should make money on all they do as this covers cost of things outlined above. People like me should be doing things at cost. After all, they cover the cost of me playing with cool new stuff!
There are many people and many different preferences. The business and the customer don’t owe each other nothing. as for your question, I think the best model for a business is what you are already doing. give the customer both options (and 2 different prices), because than you have bigger market, and it isn’t cost more to give 2 options (maybe little more).
the business that will make the most money is the one that will know the most how to serve the customers (and the most efficient), and the more competition there is, it is truer.
Well. Nice we are going to have this conversation :-).
I think every vendor should make a profit but if you are developing a product and is not 100% market ready it is unethical to try to make 150% profit.
after all the customer is participating in the development of this product and is FOOTING the bill.
The vendors benefit from this community in more ways than profits, even this conversation we are having right now it can be consider a MARKE STUDY that otherwise a company would have to commission and pay and you will get it for free with better detail and market integration as well.
In regards to the taxes, you can deduct all prototype and development expenses so that is not a big problem in the contrary it can benefit the vendor at the end.
In the end a SMALL company needs patience and should be concerns with the mid/long term objectives and product. Profitability will get to you if your product are good and you back them 100%. But for that they need to be 110% market ready.
I would gladly pay 30% more for piece of mind that a part works as it’s advertised. As the industry is right now parts fail left and right and people are supposed to just ignore severe manufacturing errors. If you sell a part that may fail on arrival it better be cheap as hell. If you sell a part of quality people will pay more.
This is basic economics, set whatever price you require to manufacture a reliable part. @chaka is doing it right, his vescs are more expensive but are also one of the most popular because they are RELIABLE. This is an expensive hobby, most of us want quality over price.
If you get flooded with orders and cant fullful-> raise your price
If you aren’t making profit with high sales volume -> raise your price
So true brother, it’s a great way to survey the market
So far the poll results would suggest that vendors (and wanna be vendors) should focus on innovating and trying to be profitable to ensure long-term viability. Let’s see how it goes over the next few days.
I think in most cases people are willing to pay more & would prefer to pay more to an entity that appears more trustworthy & seems more likely to offer great warranty & service, quality products and has a long term vision of growth.
I have no idea what his current price is or what his cost is, all i know is he has said he sells them at cost price??. Maybe he is making a profit and just telling everyone he’s selling at cost price because he thinks its a great marketing strategy.
I really hope he is making a profit & can use the revenues to help him rework & resolve the overheating problems in the next version… trying to be everyones buddy and sell at cost price only gets you so far… at some stage he will have to tool up & scale up or bow out.