Why so Expencive?

[Don S]

Re: Why so Expencive?

One more reason, because it's "recreational". Most everything dealing with recreational activities is expensive. Why? Because when it comes to fun, people are willing to pay big bucks.

Simple answer....

Because people continue to pay it..

Above are 2 that basically shows what people think, but has nothing to do with the real world.

All of the manufacturers of outboards are in trouble and just squeeking buy, they have to design and manufacturer engine to meet the new US EPA standards that have been in the process for years, and it doesn't stop because the economy took a dump either. They still have to meet the deadlines of the EPA. Their dealers are going belly up, and people aren't buying near as many new toys.

We had to stop being a Yamaha dealer. The one in our area died this spring, we tried to take it over, but gave up this fall. The cost was just too much. Having to floor lots of new engines, send techs to school all over the US for school, stocking parts, and all the other requirements. Just too much in a very seasonal buisness.

The PUBLIC montra is this ............. "More, Better, Cheaper, Faster"

Boys, it aint's gonna happen.

 

[8hygro]

Re: Why so Expencive?

Its not an outboard manufacture thing...its a global corporation thing. None of these companies being spoke of exclusively manufacturer outboards. The same production environment that makes the outboards typically makes car parts, motorcyle parts, generator parts, lawn equipment parts, airplane parts, military parts, automation equipment, etc. etc.

Production schedules are based on many forcasted numbers that reflect the future market place. With modern just-in-time inventories they can and do adjust production rates and schedules quite quickly. This is done simply to limit exposure to risk and maximize profits for the company. The marine divisions are certainly realing from thier bottom lines being cut but the companies themselves are doing fine and some are recording decent profits. The North American market place is not the only game in town.

There are many products made by these manufacturers for other market places that are very profitable. As eluded to earlier some companies will just cease producing for the US if it is not profitable. They will chase other markets or avenues of profits.

The interesting scenario will be the US manufacturers that have relied on the imported technology and parts for thier own product lines. They will have a much tougher go in this market while trying to appease shareholders. It's global allright....and it is all about the R.O.I.

Revisiting the franchise talk...Franchises have become a neccesary evil that can be a double edge sward. Concerning Yamaha and Honda, they have increasingly made it difficult on purpose. The downside of a small ill-funded operation is far greater than the upside. Especially when increasingly the corporations themselves are playing a role in the financing. These companies are known for making tough decisions before they affect the bottom line.

 

[MTboatguy]

Re: Why so Expencive?

Well Don,

I disagree with you, being a part time employee at a company called Rocky Mountain Marine, I have a tendency to see people, just continue to "Pay the Price"

 

[dwco5051]

Re: Why so Expencive?

Parts on the shelf whether at the retailer, wholesaler, or manufacturer continue to increase the cost of doing business the longer they stay unsold. If money was borrowed to buy them they cost more to whoever has them as time goes by. If the money was not borrowed there still is a cost when you figure what is know as the internal rate of return. That is the money could have been invested is some instrument that pays interest. This has to be figured in the final cost of the product and a fine balance must be kept between inventories and the need to provide good service to the customer.

 

[ThePartsMan]

Re: Why so Expencive?

Parts on the shelf whether at the retailer, wholesaler, or manufacturer continue to increase the cost of doing business the longer they stay unsold. If money was borrowed to buy them they cost more to whoever has them as time goes by. If the money was not borrowed there still is a cost when you figure what is know as the internal rate of return. That is the money could have been invested is some instrument that pays interest. This has to be figured in the final cost of the product and a fine balance must be kept between inventories and the need to provide good service to the customer.

I get this one from my boss every month. Yet I know that the $500k he has invested in my parts stock returned over $30K last month. Keep in mind that Oct. is not a great month for tractor parts. No way you could reliably beat that in the markets.

The biggest problem these companies have is investors. The instant they went public it was all about the investors. No more taking care of the customer or employee.

 

[ondarvr]

Re: Why so Expencive?

I get this one from my boss every month. Yet I know that the $500k he has invested in my parts stock returned over $30K last month. Keep in mind that Oct. is not a great month for tractor parts. No way you could reliably beat that in the markets.

The biggest problem these companies have is investors. The instant they went public it was all about the investors. No more taking care of the customer or employee.

So he had to risk 500K to make a gross profit of 30K, now take out all of the salaries, benefits, taxes, rent, insurance, bad debts, etc out of that 30K and what kind of return did he get.

If you have any type of investments, 401K or anything else, you are one of those "investors" so the money comes back into the system.

 

[repomandan]

Re: Why so Expencive?

That's an easy one. U need it they have it. They have it u want it. Lol

 

[ThePartsMan]

Re: Why so Expencive?

So he had to risk 500K to make a gross profit of 30K, now take out all of the salaries, benefits, taxes, rent, insurance, bad debts, etc out of that 30K and what kind of return did he get.

If you have any type of investments, 401K or anything else, you are one of those "investors" so the money comes back into the system.

I understand there are expenses. (no rent and very little in loans because we are an 80 year old family business)
I was just giving you the rough numbers. They are so much better than many other investments.

Heck some years the old parts we return have gone up more in price than if the money had been in a savings account. Even after the 15% restock fee.