Seriously, $2400 for a cat back exhaust?
05-18-2010, 10:22 PM
#192
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My Ride: Current: '08 535i
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I own Columbia River Mandrel Bending. We do both manufacturing and R&D fabrication for production. We have 5 cnc mandrel benders and employ 17 right now. This is what we do. I don't get your attitude, I was only suggesting your costs are out of control. If you ran an ERP/MRP system on your actual cost, they should be far lower then that. In fact I manufacture exhausts for another M5 tuner, and his profit margin is insane.
Labor rates are maximum $30-50/hr, cost. Shops charge, $75+. OK, no problem. I have a hard time thinking that RPI actually dyno's every single one of their parts for retail. And although I agree, tooling costs are very expensive from the get go, after the first 100 or so units moved, costs should be covered. If they're not, I agree, mgmt needs to review COGS relative to net profit.
The question is, and this is of course an assumption, but could RPI sell more volume at a lower retail price that would make their business model more attractive? i.e., would it make their overall net profit increase vs charging a premium that may price them out of the market? I'm sure they've thought long and hard about this, and the truth may be that there is no volume in a 5 series exhaust product. ??
05-18-2010, 10:24 PM
#193
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and assuming that because one company that fabricates and has lower costs that a company that tools and buys the equipment should have the same cost is absolutely wrong
selling 100 exhausts should cover their tooling expenses? Where did you pull that lovely number out of besides your rear end?
RPI was selling their exhausts for around $1600 last time I checked
People want an exhuast for a niche market, so one is made and then they bitch about the price in a NICHE market. Fine get magnaflow and cheap out and be happy with the rasp
honestly if you keep pissing down the backs of companies like RPI eventually they wont produce anything for our little market because they simply wont want to deal with it or people like you, too much hassle and not enough money in the long run
05-19-2010, 10:34 AM
#195
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I seriously hope you arent talking about me with that comment. I have 1.4 million in benders alone without tooling. Average tools set is $7-10k each. Some as high as $20k for stacker tooling. I have 247 tool sets. I also own all of our buildings. I can afford lower production rates because we do VOLUME.
05-19-2010, 10:45 AM
#196
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My Ride: 2008 550I LOADED, all options except HUD and NV
This is where this original post started, and where I had to question margins. I've been a part of some of the largest manufacturing companies in the USA, and I'v also seen the smaller mfrs hard at work to maximize their margins. I'm all for maximizing margins, but $2400 is excessive IMHO. Regardless, RPI may have somewhat of a monopoly on the 5 series market so they feel they can get away with asking for these retail prices. Hey, all the better. I was just questioning it from the get go.
My only question: Who pays retail for anything?
I am in networking, and from the Cisco model a 24 port Gig switch (3750) MSRP is around $6k. However, anyone who's been in the business for more than an hour knows that their partners get 38% of list right off the top - which means anyone who pays $6k is a friggin fool. You negotiate with the vendor to get where it's feasible to do business for both of you.
Seriously any vendor can set the MSRP to over $1 mil if they wanted and then customers would think it's a killer deal when they get it for $2400. I don't know what RPI's margins are, nor is it any of my business, but throughout this forum we know they make a great product and are typically substantially less than the competition (example my 530 - RPI exhaust $799 vs Remus $1K, although another vendor *cough* Companion Shop *cough* was offering a generous 5% off - WOOT!!!!)
05-19-2010, 10:56 AM
#197
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There's the main issue in my opinion. Let me give you an example of what happened recently. My buddies over at iND were putting eight highly-modified M3's in a transport from IL to CA for Bimmerfest this week. I asked Anthony why there were only 3 series Bimmers and no 5's, etc? He said "that's our bread and butter, that's the market, you barely see any modified 5's out here."
And he's right.
I am glad that RPI makes great exhausts for a non-M 5 series because they're hard to find otherwise and very costly.
05-19-2010, 11:14 AM
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My Ride: 2010 550i jet black, Loaded
Model Year: 2010
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It's like Armani to Polo, and if that's the case, I gladly pay that extra few hundred to get the import, isn't that's why people buying LV, Gucci instead coach?
Just my 2 cents