High end kits disappearing...

[Caden_Hrabak]

You know if i had some sort of money to invest that would be a good idea very small time seller only a few kits but rare kits

 

[Smitty37]

Kit costs

If you look at the actual manufacturing cost of pen kits, it is, in my opinion, a very small part of the final retail price. US retailers buy F.O.B. Taiwan or China so there is Packing for Shipping, Air Transport, Customs clearance, Ground Transport costs getting them here. That alone can add 15% or more to the cost of the kits.

Having been involved in a manufacturing facility I have an idea of the added costs that go into a wholesale price before an item leaves the factory and they are legion. Sales & Marketing, Administration, Fixed Overhead, Variable Overhead, Quality Control, Engineering, Employee Benefits (and I suspect even the Chinese have some), Taxes, Cost of money. They just go on and on. Our actual manufacturing costs was usually no more than about 20/25% of the out the door costs.

My guess is that inventory turnover (or lack thereof) is the major reason sellers are discontinuing some lines. I know that is the reason I am considering dropping a number of items I sell. It is hard to justify having
dollars tied up in MOQ just gathering dust on the shelves regardless of the individual style and the exact dollar amount. Pen kits make mighty thin soup.

 

[Smitty37]

Yup

My conversatons (e-mails) so far, is that 500 piece mimimums is a "negotiating point". China's economy( yes, dayacom is China, too) ain't "all that" either.

In reality, you can direct buy at 250 piece minimums...AS LONG AS YOU BUY MORE THAN ONE PRODUCT. I have NO intention of becoming a "kit" seller,(too much unproductive time and too much loading language "translators"!) However, those of use who make a LOT of one or two "kits" would be stupid NOT to help out a fellow IAP member keep the product that we use. I miss the IMP and the Lotus, but as long as we are at it, might as well get some JR's..

A long know truth...when the US Economy gets a cold, the world sneezes.

 

[Willee]

Yes ... there is a wide price gap.
Look at the Slimline kit.
Chrome plated kits for less than $2 each per 100 piece order.
Now plate the same parts in something else and the price just about triples.
Is TN really that much more to plate per kit than Chrome?

I am asking cause I really dont know.

 

[Smitty37]

Small Seller

Given the proliferation of finishes (I think Fancy Slimlines are now available in close to 25 finishes if not that many) and given the cost of maintaining inventory I think many sellers are going to have to be selective about what kits they carry. They're caught between a rock and a hard place.If they buy in low quantities they can't price the item right to move and if they buy MOQ they have a high initial outlay and margins are squeezed. My own business plan reflects gradually moving to smaller gross sales of higher profit items and dropping a lot of slow moving things.

 

[Mapster]

My opinion, which may be totally off, is that we could find a way. We have over 9000 users on IAP. Lets say only 2000 make these higher end pens. Out of that, lets say only half actually use the site to it's potential. That is 1000 that probably want the same few pen kits. We have the power in numbers to organize the biggest group buy on IAP. If everyone put in as much as they want, some people buy 2 kits, some 200, and no one was looking for a profit, we could all benefit. The people looking for a profit, no offense intended, are the ones who kill the prices. With that buying power if we worked through one person directly with Dayacom, we could all get these pen kits we like at the absolute base cost. No one makes a profit, but we all get the best deal possible. It would be cost effective if we got a big enough group and everyone splits the price.

 

[Smitty37]

NO

Yes ... there is a wide price gap.
Look at the Slimline kit.
Chrome plated kits for less than $2 each per 100 piece order.
Now plate the same parts in something else and the price just about triples.
Is TN really that much more to plate per kit than Chrome?

I am asking cause I really dont know.

The short answer is no. Virtually all of the costs putting TI kits in the hands of the supplier except the actual cost of the plating material and process is the same. Costs except for some supplier inventory costs getting the item from the supplier to the retailer are the same. Price to the retailer is about 50 to 75% more for TI.

 

[Smitty37]

Poor assumption

My opinion, which may be totally off, is that we could find a way. We have over 9000 users on IAP. Lets say only 2000 make these higher end pens. Out of that, lets say only half actually use the site to it's potential. That is 1000 that probably want the same few pen kits. We have the power in numbers to organize the biggest group buy on IAP. If everyone put in as much as they want, some people buy 2 kits, some 200, and no one was looking for a profit, we could all benefit. The people looking for a profit, no offense intended, are the ones who kill the prices. With that buying power if we worked through one person directly with Dayacom, we could all get these pen kits we like at the absolute base cost. No one makes a profit, but we all get the best deal possible. It would be cost effective if we got a big enough group and everyone splits the price.

And the poor soul who spends hours and hours coordinating this super group buy....what does he/she get for their time. A group buy with 1000 members....at just 15 minutes for each buyer you're talking 400 hours, and my guess is that just packing for shipping after the kits are received could use that much time.

 

[Mapster]

Have it be a local chapter of poor souls who can all work together, and just to be nice, give those poor souls our immense gratitude and depending on the size of the order, maybe 20 free kits a piece. If we were all willing to pay these poor souls maybe 8 dollars for their services as a thank you, which would be worth it for the discount and kits we would get, I am sure they would be pretty happy. Any volunteers?

 

[Mapster]

By the way, if a group buy like this did happen, and if everyone bought enough pens to stock up for a while, we could expect to be ordering probably 2000-4000 kits which is well over the 500 minimum. We could theoretically get a quantity discount from Dayacom. It would take a lot of work and full cooperation of everone involved, but we could do it if we tried. Count me in and let me know if you are interested. Lets see how many people are interested to see if it is even plausible.

 

[Mapster]

Absolute worst case scenario, we can only group up about 50-100 people, we could still manage the 500 minimum order, get the kits we like, and save money at the same time.

 

[Greg O'Sherwood]

IF this happened, it may be easier to have one person in each area be the receiver/distributor for everone around them. For example, have everyone's kits in the Kansas City area go to one person and those folks all meet up to divy them out. This would make the job easier on the group buy organizer(s).

.

 

[Mapster]

Everyone interested or have any comments or concerns, visit my new thread on the subjet. Please let me know if you are interested.

http://www.penturners.org/forum/showthread.php?t=66482

Great idea by the way Greg, please add it to my thread if possible.

 

[ed4copies]

Absolute worst case scenario, we can only group up about 50-100 people, we could still manage the 500 minimum order, get the kits we like, and save money at the same time.

You need to order 500 OF ONE STYLE!!!
A FOUNTAIN PEN IS NOT A ROLLERBALL, FOR THIS DISCUSSION!!

An Emperor is not an Imperial or a JR. Emperor.

500 kits is easy, if you could use everything Dayacom makes----you CAN'T

And, yes, you can GET 300, but the total cost will be very close to the 500 cost.

Let's say 500 @ $25 per kit=$12,500
300 kits may cost you about $10,000, cost per kit is now $33.33

THEN, remember this all EXCLUDES shipping, customs, insurance (you are responsible for the kits, you paid in advance, you have no recourse!!)

WOULD I help you in such a purchase?? YES.
But you would NOT LIKE the contract you would have to sign before you would be included. ALL RISK is on YOU!! This is completely consistent with the way I have to purchase kits from overseas. If you want a deal where the vendor has nothing to gain (profit), you will find it's hard to find a vendor who will risk LOSING anything!!!

People who have the ability to GET loans to support small businesses have to be able to show the bank they have avoided LOSING money for some period of years, while running businesses with all their assets "at risk". Once you have that track record, every purchase you make is another RISK---we take that very seriously.



IT is neither SIMPLE nor PRETTY!!!

For this one time, let me sign: Ed (business consultant to Dawn)
Each of us has an investment in Exotics, but we BOTH have a track record with my real business--me since 1975 as founder and president of the corp, she has handled the billing and accounting since 1982. We, together, have a "steet cred" with the banks, as well as "hard assets" (own a house and "other" things). In today's economic climate, you will find banks have no interest in "startups".

 

[DCBluesman]

Popcorn's in the microwave and soda's on ice! :biggrin:

 

[witz1976]

Popcorn's in the microwave and soda's on ice! :biggrin:

Yea? Where's the Kool-Aid :biggrin::biggrin:

 

[Smitty37]

Agree

Absolute worst case scenario, we can only group up about 50-100 people, we could still manage the 500 minimum order, get the kits we like, and save money at the same time.

You need to order 500 OF ONE STYLE!!!
A FOUNTAIN PEN IS NOT A ROLLERBALL, FOR THIS DISCUSSION!!

An Emperor is not an Imperial or a JR. Emperor.

500 kits is easy, if you could use everything Dayacom makes----you CAN'T

And, yes, you can GET 300, but the total cost will be very close to the 500 cost.

Let's say 500 @ $25 per kit=$12,500
300 kits may cost you about $10,000, cost per kit is now $33.33

THEN, remember this all EXCLUDES shipping, customs, insurance (you are responsible for the kits, you paid in advance, you have no recourse!!)

WOULD I help you in such a purchase?? YES.
But you would NOT LIKE the contract you would have to sign before you would be included. ALL RISK is on YOU!! This is completely consistent with the way I have to purchase kits from overseas. If you want a deal where the vendor has nothing to gain (profit), you will find it's hard to find a vendor who will risk LOSING anything!!!

People who have the ability to GET loans to support small businesses have to be able to show the bank they have avoided LOSING money for some period of years, while running businesses with all their assets "at risk". Once you have that track record, every purchase you make is another RISK---we take that very seriously.



IT is neither SIMPLE nor PRETTY!!!

For this one time, let me sign: Ed (business consultant to Dawn)
Each of us has an investment in Exotics, but we BOTH have a track record with my real business--me since 1975 as founder and president of the corp, she has handled the billing and accounting since 1982. We, together, have a "steet cred" with the banks, as well as "hard assets" (own a house and "other" things). In today's economic climate, you will find banks have no interest in "startups".

This one Ed and I agree on. I'm an older man then Ed so I operate my business without borrowed funds but, otherwise my position is pretty much the same. Just think of this....the shipping cost is actually different for each style of kit that has a different weight. So who is going to figure out how to split the shipping costs for different weights or will the coordinator just make those who order lighter kits subsidize those who order heavier kits...in any case just about every different style, type and finish will have a different price which will also vary by quantity you'll get a better price for 1000 than for 500. Just the bookkeeping will be a nightmare. In my own business I try very hard to order only 1 style at a time in order to keep the shipping the same for all kits.

Don't let me discourage anyone but don't bite off more than you want to chew. You'll need to find someone with the energy off Superman, the wisdom of Soloman and the patience of Job to coordinate this. You are talking about a lot of work.

 

[Kaspar]

We have a couple of well respected Aussie Suppliers that will ship to USA
1. GPWWoodturning.com au Has Emperor, Etc
2. Timberbits.com has some High end pen kits also
Amos

Yes, and believe me I have taken note of that. I've already gotten some of Gary's Super Sedonas (as I call them.)

While we're at it, let's do a group buy on these. (Truthfully, I would be willing to shell out for a rose gold, and the gold and sterling silver.)

 

[PenMan1]

Could be because they have to import them by the thousands, and only a few of us are buying them 1 or 2 at a time.

Dead on!

Also, the one or two who are buying want different "flavors". To handle the Emperor, you need to stock gold and black ti, fountain and rollerball ---4 styles. BUT some want the SMALLER version---so you need to stock those same choices in the Jr. Emperor---4 more styles. Now you have 4000 pens---representing over $100,000. You will probably sell less than 1000 pens per year. So, your average cash in use is $50,000 for four years.

Takes VERY deep pockets. And very few who can AFFORD such a deal are dumb enough to BUY it.

But they will probably find SOMEONE!!!

Perhaps NOBODY will make that rather risky investment. I suspect that is why Dayacom has directly opened up to small quantity purchase option (20-30 units).

Ed, you are "dead on", my friend. Try explaining a $100,000 investment to make maybe 10 percent over 2-3 years to the typical small business banker! That "floor plan" simply will not fly in our current economy.

 

[Smitty37]

Or any other

Could be because they have to import them by the thousands, and only a few of us are buying them 1 or 2 at a time.

Dead on!

Also, the one or two who are buying want different "flavors". To handle the Emperor, you need to stock gold and black ti, fountain and rollerball ---4 styles. BUT some want the SMALLER version---so you need to stock those same choices in the Jr. Emperor---4 more styles. Now you have 4000 pens---representing over $100,000. You will probably sell less than 1000 pens per year. So, your average cash in use is $50,000 for four years.

Takes VERY deep pockets. And very few who can AFFORD such a deal are dumb enough to BUY it.

But they will probably find SOMEONE!!!

Perhaps NOBODY will make that rather risky investment. I suspect that is why Dayacom has directly opened up to small quantity purchase option (20-30 units).

Ed, you are "dead on", my friend. Try explaining a $100,000 investment to make maybe 10 percent over 2-3 years to the typical small business banker! That "floor plan" simply will not fly in our current economy.

No it won't fly...it also won't fly for most businessmen. Inventory costs are very real and even at low interest rates lost income and lost opportunity income can add up in a hurry. If I can invest $10,000 in inventory that I can turn over 3 times a year or in inventory that I can turn over once in two years, just which do you think I'm going to choose.

 

[Kaspar]

...IT is neither SIMPLE nor PRETTY!!! ....

Sounds like the voice of experience here. :wink:

... We, together, have a "steet cred" with the banks, as well as "hard assets" (own a house and "other" things). In today's economic climate, you will find banks have no interest in "startups".

Yes, but tomorrow we can start changing that. Vote early, vote often. :biggrin:

 

[Smitty37]

Which State

...IT is neither SIMPLE nor PRETTY!!! ....

Sounds like the voice of experience here. :wink:

... We, together, have a "steet cred" with the banks, as well as "hard assets" (own a house and "other" things). In today's economic climate, you will find banks have no interest in "startups".

Yes, but tomorrow we can start changing that. Vote early, vote often. :biggrin:

You sure that is Springfield, MO and not IL ... But then MO did give us Boss Pendergast.