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 Post subject: Re: How much do kites cost to manufacture?
PostPosted: Thu Nov 28, 2013 6:13 pm 
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Very astute! An overage factor is applied to most items consumed in the production process. There are also overage factors in the fabric consumption for 'dead' areas in the panel nesting for the computer cutting process. The reason for a BOM is to carefully track costs so all items are accounted for in the final price. :thumb:
Laughingman wrote:
"one pump valve" --> 10.5 units.... what are you going to do with a half of a valve?


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 Post subject: Re: How much do kites cost to manufacture?
PostPosted: Thu Nov 28, 2013 7:37 pm 
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UKSurf wrote:
Thanks for the Info on that Bill. I am sure there are a few people who are not entirely pleased you released those numbers :D .

Not too many, hopefully. If anything, those representations strike me as expensive, suggesting the kite business is more a labour of love than love of profits.

Cheers,
James


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 Post subject: Re: How much do kites cost to manufacture?
PostPosted: Thu Nov 28, 2013 10:07 pm 
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i´m a bit chocked to be honest, 250 USD of raw material w/o a bar

i just can´t "see" it

wonder if it is either by lack of volume for a better deal, lack of competition on the supplier base for the most expensive stuff, or any other reason


Last edited by Tiago1973 on Thu Nov 28, 2013 10:09 pm, edited 1 time in total.

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 Post subject: Re: How much do kites cost to manufacture?
PostPosted: Thu Nov 28, 2013 10:09 pm 
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JS wrote:
UKSurf wrote:
Thanks for the Info on that Bill. I am sure there are a few people who are not entirely pleased you released those numbers :D .

Not too many, hopefully. If anything, those representations strike me as expensive, suggesting the kite business is more a labour of love than love of profits.

Cheers,
James


Manufacturing costs of $500 for something that sells for $1500 is pretty good in my opinion and you can see how those margins have attracted business people to invest in the kitesurf industry purely for profit. Although when you take into account the number of people in the chain and the low volumes it is probably not that amazing.


Last edited by UKSurf on Thu Nov 28, 2013 10:12 pm, edited 1 time in total.

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 Post subject: Re: How much do kites cost to manufacture?
PostPosted: Thu Nov 28, 2013 10:12 pm 
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UKSurf wrote:
JS wrote:
UKSurf wrote:
Thanks for the Info on that Bill. I am sure there are a few people who are not entirely pleased you released those numbers :D .

Not too many, hopefully. If anything, those representations strike me as expensive, suggesting the kite business is more a labour of love than love of profits.

Cheers,
James


Manufacturing costs of $500 for something that sells for $1500 is pretty good in my opinion and you can see how those margins hava attracted business people to invest in the kitesurf industry purely for profit. Although when you take into account the number of people in the chain and the low volumes it is probably not that amazing.


do u think so? in automotive (components) u can use a factor of 10x and won´t be too far away from reality...


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 Post subject: Re: How much do kites cost to manufacture?
PostPosted: Thu Nov 28, 2013 10:16 pm 
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Tiago1973 wrote:
[do u think so? in automotive (components) u can use a factor of 10x and won´t be too far away from reality...


Does that 10x include amortization of the factory overhead or is it just material and labour? I would have thought in automotive the overhead of machinery would be large.

I think this $500 per unit is the total cost, factory, labour, materials, profit for factory owner - the actual production of the kite.You could technically go to the factory owner and buy it for $500 and he would be making his profit.


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 Post subject: Re: How much do kites cost to manufacture?
PostPosted: Thu Nov 28, 2013 10:25 pm 
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apples with apples

factor of ~10x, round number

(in the product lines i know)


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 Post subject: Re: How much do kites cost to manufacture?
PostPosted: Thu Nov 28, 2013 10:50 pm 
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UKSurf wrote:
Tiago1973 wrote:
[do u think so? in automotive (components) u can use a factor of 10x and won´t be too far away from reality...


Does that 10x include amortization of the factory overhead or is it just material and labour? I would have thought in automotive the overhead of machinery would be large.

I think this $500 per unit is the total cost, factory, labour, materials, profit for factory owner - the actual production of the kite.You could technically go to the factory owner and buy it for $500 and he would be making his profit.


Must say, that I am sure there are so little profit in the kite business, that it IS only because of passion, that almost everybody does it.

Even if it would cost NOTHING at all to produce something, you would not believe what the end cost is, to make it just reasonably for every part in the chain that has to exist :wink:

Most kite shops around here, do sell other products, mostly ski's - as their main income - and kitesurf simply because they love and feel for it - as it is almost impossible to earn anything, besides feeling good by helping others.

So the profit margin is close to zero these days...

8) Peter


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 Post subject: Re: How much do kites cost to manufacture?
PostPosted: Thu Nov 28, 2013 11:12 pm 
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Peter_Frank wrote:
Must say, that I am sure there are so little profit in the kite business, that it IS only because of passion, that almost everybody does it.

Even if it would cost NOTHING at all to produce something, you would not believe what the end cost is, to make it just reasonably for every part in the chain that has to exist :wink:

Most kite shops around here, do sell other products, mostly ski's - as their main income - and kitesurf simply because they love and feel for it - as it is almost impossible to earn anything, besides feeling good by helping others.

So the profit margin is close to zero these days...

8) Peter


I would agree that although there is quite a margin alot of this is absorbed by the supply chain. Shops have the worst of it in my opinion, they have big overheads and often end up having to sell kites at a big discount. If you told me most people who run kitesurf shops are making less than minimum wage I wouldnt be at all surprised.

With that margin over production you can see how Switch can undercut the market and still make a good profit by selling direct.


Last edited by UKSurf on Thu Nov 28, 2013 11:15 pm, edited 2 times in total.

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 Post subject: Re: How much do kites cost to manufacture?
PostPosted: Thu Nov 28, 2013 11:14 pm 
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at least around here that money is on a premium there is huge perception that there is a strong margin in the kite industry at different levels


i wonder how would work a model where costs are fully disclosed

whenever i bought new kites was like buying carpets in Morocco's- the guys said 100, i offered 50, the guy reduced 20, i raised to 60 and so on

there were times i had the feeling that if the guy had just show his costs and said i need X profit he would had sell the stuff for more


Last edited by Tiago1973 on Fri Nov 29, 2013 5:07 pm, edited 1 time in total.

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