Mark up?
post #16 of 170
2/19/10 at 10:21pm
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And one very important fact is that most of the Chinese companies are willing to operate at a smaller profit margin than the get rich quick mentality that prevails in the west.
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<< A teacher with "Yang" as surname in english.

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I bet most of it is related to the fact that they are built in China.
The fact that they sell directly to the end user helps keeping the cost down as well. Eliminating a distributor/dealer in between and shipping costs. The choice of materials probably play a role as well. |
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And one very important fact is that most of the Chinese companies are willing to operate at a smaller profit margin than the get rich quick mentality that prevails in the west.
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Not necessarily.
Cosmetics are not the big expense. What's expensive are transformers. If you want to poke your head into transformer design, you might learn why good ones cost more. For one, the metallurgy of the layers the transformer is built from gets complicated and more expensive the better you want to build it. There are a number of other factors (not worth getting into here) that also increase expense. If you take the cheapest transformers (also the ones most likely to fail and provide inconsistent power) then you can easily save $40 or $50 a unit. If you want to take that risk, fine. If you want a cheap amp, you build it with a transformer that has windings for both the B+ and filament on it. Be sure to get one from some factory that makes transformer cores out of pretty much any scrap metal they can find that marginally works. Then you pay some child labor to wind it as quickly as possible, probably getting a few cents for each one produced. So you can be sure the nine year old really did a careful job making sure it's perfectly wound just to quickly move on to the next one for a few cents and possibly avoid punishment. If you buy a transformer made this way, you'll spend $10 or $15. Here is a pricelist of some decent Hammond transformers, which are made to strict standards by adults. You'll see that prices start around $60 and go up to $160. If you bought in large quantities, you might be able to get prices down to $50-$55 for the least expensive ones. Next, you put diodes into the power supply. Four diodes can be had for $1 or $2. That's the cheap, nasty way of rectifying AC. Diodes don't always clean up the AC that well and they also throw off a lot of noise. Noise that works its way into the rest of the circuit. The next cheap way to build an amp is to put it on a PCB. PCBs are best used for solid state. Why? Because solid state is low voltage and tends not to get as hot as tubes. If you put tubes on a PCB, you're liable to get scorching, lifted traces, and you also flex the PCB every time you insert or remove tubes. That leads - eventually - to lifted traces and cracked solder joints. And if there is damage to the PCB, there's always a fair chance you'll either have to rebuild the entire thing or it might cost less to just trash it. The advantage of a PCB is that you can crank them out en masse for a few dollars each. Then you can have your child labor stuff them for pennies per piece and as quickly as possible. It's better to build tubes on a point-to-point chassis. But that takes additional chassis fabrication and significantly more labor. If you want to build a good tube amp, let's take a look at one over at Headwize that I'm working on, the Brute Force. The Brute Force uses two power transformers and a choke. That's a good setup - a choke does a much better job of filtering and smoothing DC than does some cheap design that omits it. The cost of iron for these three parts is about $170. If you were buying parts in the hundreds, then you might get it down to $150. Reasonable quality caps and resistors will cost about another $100. Figure $25 for a decent Alps pot and $20 for the RCA jacks. IEC, fuse, wire, and the rest are probably $25 for decent quality. Throw in another $20 for the terminal strips and points to build point-to-point. Eight tube sockets (at $5 each) will be $40. A halfway decent case from Par-Metal will run about $100, shipped. So, we're up to $500. You still need to buy the tubes, which can be had around $60-$75 if you look carefully. Let's just call it $600, since there are screws and lots of incidental bits you also have to buy. Can you tell me where the "get rich quick" part is in the list so far? I'm not seeing it. OK. Assuming you've already spent maybe $3,000 on tooling (various drills, hand tools, workbench, test equipment, etc.) you'll probably need to drop 5-10 hours into the case to get it ready to hold an amp. Let's assume five hours, on the very conservative side. How much would you have to pay someone to do this who isn't a complete idiot and won't fudge up a $100 case? Assuming the worker screws up the case, you'll be out $100 and have to buy another $100 case. Maybe $15 an hour? So five hours will be $75. No, actually, considering the payroll tax, it's going to cost you roughly $150. Just for the case. So now we're up to $750. Maybe another five hours to solder and test the thing. That's another $150 of labor. Now we're up to $900. Alright, how much do you want to make? Is $100 of profit OK? Assuming the state and fed tax you on that, your profit goes to around $60. How did you pay for the shop and tools? Do you have to pay rent? What are you setting aside to expand and grow the business? Are you going to invest in R&D to make better products? If you want to do things the right way, it costs money. If you want to have child labor put the cheapest parts available into a marginal product, then you get what you pay for. It's not about greed, it's not about ripping people off. It's the difference between cutting every possible corner and doing things the right way. Also, you should look at the long-term TCO on an amp. If you pay $500 for the whiz-bang "balanced" latest with the el discounto transformer made poorly by a little girl (working under threat of a beating if she works too slow) that eventually cooks off and scorches some traces, winding up a total loss, how well off are you? Sure, I dropped $1,900 on the Zana. But I can sell it for probably $1,700 or $1,800 any time I want. In that event, I'd about break even or go a couple hundred negative. You'd realize a loss of $500. Also, I feel much better buying a transformer from Jack at Electra-Print who is an adult voluntarily running a business than someone working under conditions that I have moral issues with. By the way, if you want to price out more amp parts, click on the Electra-Print link and price out the various amps offered. You'll see how easy it is get into four figures if you don't want something that's crap. |
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Not necessarily.
Cosmetics are not the big expense. What's expensive are transformers. If you want to poke your head into transformer design, you might learn why good ones cost more. For one, the metallurgy of the layers the transformer is built from gets complicated and more expensive the better you want to build it. There are a number of other factors (not worth getting into here) that also increase expense. If you take the cheapest transformers (also the ones most likely to fail and provide inconsistent power) then you can easily save $40 or $50 a unit. If you want to take that risk, fine. If you want a cheap amp, you build it with a transformer that has windings for both the B+ and filament on it. Be sure to get one from some factory that makes transformer cores out of pretty much any scrap metal they can find that marginally works. Then you pay some child labor to wind it as quickly as possible, probably getting a few cents for each one produced. So you can be sure the nine year old really did a careful job making sure it's perfectly wound just to quickly move on to the next one for a few cents and possibly avoid punishment. If you buy a transformer made this way, you'll spend $10 or $15. Here is a pricelist of some decent Hammond transformers, which are made to strict standards by adults. You'll see that prices start around $60 and go up to $160. If you bought in large quantities, you might be able to get prices down to $50-$55 for the least expensive ones. Next, you put diodes into the power supply. Four diodes can be had for $1 or $2. That's the cheap, nasty way of rectifying AC. Diodes don't always clean up the AC that well and they also throw off a lot of noise. Noise that works its way into the rest of the circuit. The next cheap way to build an amp is to put it on a PCB. PCBs are best used for solid state. Why? Because solid state is low voltage and tends not to get as hot as tubes. If you put tubes on a PCB, you're liable to get scorching, lifted traces, and you also flex the PCB every time you insert or remove tubes. That leads - eventually - to lifted traces and cracked solder joints. And if there is damage to the PCB, there's always a fair chance you'll either have to rebuild the entire thing or it might cost less to just trash it. The advantage of a PCB is that you can crank them out en masse for a few dollars each. Then you can have your child labor stuff them for pennies per piece and as quickly as possible. It's better to build tubes on a point-to-point chassis. But that takes additional chassis fabrication and significantly more labor. If you want to build a good tube amp, let's take a look at one over at Headwize that I'm working on, the Brute Force. The Brute Force uses two power transformers and a choke. That's a good setup - a choke does a much better job of filtering and smoothing DC than does some cheap design that omits it. The cost of iron for these three parts is about $170. If you were buying parts in the hundreds, then you might get it down to $150. Reasonable quality caps and resistors will cost about another $100. Figure $25 for a decent Alps pot and $20 for the RCA jacks. IEC, fuse, wire, and the rest are probably $25 for decent quality. Throw in another $20 for the terminal strips and points to build point-to-point. Eight tube sockets (at $5 each) will be $40. A halfway decent case from Par-Metal will run about $100, shipped. So, we're up to $500. You still need to buy the tubes, which can be had around $60-$75 if you look carefully. Let's just call it $600, since there are screws and lots of incidental bits you also have to buy. Can you tell me where the "get rich quick" part is in the list so far? I'm not seeing it. OK. Assuming you've already spent maybe $3,000 on tooling (various drills, hand tools, workbench, test equipment, etc.) you'll probably need to drop 5-10 hours into the case to get it ready to hold an amp. Let's assume five hours, on the very conservative side. How much would you have to pay someone to do this who isn't a complete idiot and won't fudge up a $100 case? Assuming the worker screws up the case, you'll be out $100 and have to buy another $100 case. Maybe $15 an hour? So five hours will be $75. No, actually, considering the payroll tax, it's going to cost you roughly $150. Just for the case. So now we're up to $750. Maybe another five hours to solder and test the thing. That's another $150 of labor. Now we're up to $900. Alright, how much do you want to make? Is $100 of profit OK? Assuming the state and fed tax you on that, your profit goes to around $60. How did you pay for the shop and tools? Do you have to pay rent? What are you setting aside to expand and grow the business? Are you going to invest in R&D to make better products? If you want to do things the right way, it costs money. If you want to have child labor put the cheapest parts available into a marginal product, then you get what you pay for. It's not about greed, it's not about ripping people off. It's the difference between cutting every possible corner and doing things the right way. Also, you should look at the long-term TCO on an amp. If you pay $500 for the whiz-bang "balanced" latest with the el discounto transformer made poorly by a little girl (working under threat of a beating if she works too slow) that eventually cooks off and scorches some traces, winding up a total loss, how well off are you? Sure, I dropped $1,900 on the Zana. But I can sell it for probably $1,700 or $1,800 any time I want. In that event, I'd about break even or go a couple hundred negative. You'd realize a loss of $500. Also, I feel much better buying a transformer from Jack at Electra-Print who is an adult voluntarily running a business than someone working under conditions that I have moral issues with. By the way, if you want to price out more amp parts, click on the Electra-Print link and price out the various amps offered. You'll see how easy it is get into four figures if you don't want something that's crap. |
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You are more than welcome to your opinions,kindly point me to an article that shows LD using child labour.
And after that tirade I guess that you have no goods in your house that are made in Asia. |







