jerry seys he doesn't sell rocket motors!

Prices are driven by cost to a degree, but to a far larger degree it is driven by "distribution costs".

The term really translates to three tiers of discounts. When you pay $24.95 retail for an AT SU G, the dealer is getting a deep discount (and making more money than anyone else) from their distributor, and the distributor pays a discounted price from Aerotech by RCS. In addition there are advertising, marketing and shipping costs all absorbed by the manufacturer.

When you get right down to it, if your product costs more than 1/7 of retail to produce and ship you are NOT making any money, or do not have access to wide distribution.

Of course to get costs that low on such a specialized and aerospace specification product, you have to make a lot at a time and have a good degree of automation to reduce the labor component.

I urge you to have a high degree of respect for the vendors that use traditional distribution channels. They love you.

Jerry

Yep, especially if you happen to have a lathe, mill, CNC machinery, etc. just sitting around with nothing to do (that makes money) and you happen to have the knowledge to run said machinery, if your time is of no value and you have plenty of that, you can get your materials for free, etc. etc. etc..

It's a civil fraud judgment, not a "debt".

The judgment is forever.

How long it takes to collect, is all up to jerry.

Well said.

'Cost of goods sold' is generally a very small component of the retail price of a product - 15 to 25 % is pretty much normal. The value of the raw materials in a single-use G motor is probably not more than $3.00, I would guess...

Just consider all the things that have been talked about here on r.m.r this week alone:

- Cost of liability insurance

- Agency certifications

- Government licensing

- UPC code registration

And that doesn't even begin to cover all the 'below the line' costs like corporate administration, research & development, and so on.

Gary R - are you free to chime in with any more specifics?

MJ

Fire! Fire! :)

OOOOOOOOOOOOOOOOOOHHHHHHHHHHHHHHHH!!!!!!!!!!!

David Erbas-White

You suck and you are rude.

The price of any materials used in leisure activities (defined as anything you don't absolutely need to stay alive in the first place) is always higher than it "should be" based simply on the cost of the individual pieces.

Recreational boating, sport aviation and model rockets all fall into the leisure realm and we pay through the wazoo for the stuff we need to pursue our hobby. We're small potatos in terms of gross tonnage of material consumed each year when compared to, say, toilet paper.

John

True, I have most of the above, my G-75 motors probably cost around $3 a piece, most of the time and money involved is making tools and equipement. I guess I just could not justify spending $25 - $35 can$ per flight, for a while I was satisfied with Estes motor, but with the big rockets I scratch build they just dont cut it. I would like to get a commercial G motor to compare to my own, but no local hobby shop will get them in, and the next closest is many hours away.

In article d3mgtb$55q$ snipped-for-privacy@news.lsil.com, Mark Johnson at snipped-for-privacy@engenio.com wrote on 4/14/05 1:39 PM:

I've gone over this before but here's another example of a product sold in a hobby shop through traditional distribution channels:

$10.00 Retail Price

-$5.75 Cost of distribution (discounts & shipping) ______ =$4.25 Gross margin

-$1.58 Materials

-$0.69 Direct labor ______ =$1.98 Gross profit

-$1.80-$2.20 Administrative expense (leases, utilities, insurance, fees, salaries, etc., etc., etc.) This percentage varies depending on volume of business, efficiency of employees, size of administrative staff and other factors. ______ You do the math.

Gary/RCS

In article BE845CE1.11344% snipped-for-privacy@powernet.net, Gary C. Rosenfield at snipped-for-privacy@powernet.net wrote on 4/14/05 5:46 PM:

Gross margin (I wish)- I meant net sales.

Gross profit = gross margin

Gary/RCS

It spells BK :)

There I thoought you were a graduate of the Jerry Irvine School of Economics. 8-)

jerry, Everyone here is well aware of your spelling deficiencies. No need to show off.