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<DIV><FONT size=2>RE:</FONT></DIV>
<DIV>"P.S. in the APC example: I would think that they have to reset
the equipment that sets the pitch and diameter of the props. The time they
spend doing that costs them money, and the time spent makeing specialty
props where they could be making 10x6 props also costs them money so I can see
charging a premium. "</DIV>
<DIV> </DIV>
<DIV><FONT size=2>I am not sure of the reliability of my source, BUT it is my
understanding that the big cost in APC Props is in the cost of the manufacturing
equipment. I was told that cnc equipment produces the dies and the injection
molding equipment is the same on all setups. </FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>When a business takes the risk on a capital investment
there is a break even point, then there is a period where the only costs
are supplies and labor. It is not unusual to see a markup of five or ten times
the current cost of goods sold. </FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>It is generally accepted that the risk justifies the
reward. </FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV><FONT size=2>The question arises : "When is the reward
excessive?"</FONT></DIV>
<DIV><FONT size=2></FONT> </DIV>
<DIV>John Ferrell<BR>6241 Phillippi Rd<BR>Julian NC 27283<BR>Phone:
(336)685-9606<BR><A
href="mailto:johnferrell@earthlink.net">johnferrell@earthlink.net</A><BR>Dixie
Competition Products<BR>NSRCA 479 AMA 4190 W8CCW<BR>"My Competition is Not
My Enemy"<BR> <BR></DIV>
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<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B>
<A title=aabdu@sbcglobal.net href="mailto:aabdu@sbcglobal.net">Anthony
Abdullah</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=discussion@nsrca.org
href="mailto:discussion@nsrca.org">discussion@nsrca.org</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Wednesday, October 15, 2003 3:40
PM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> Re: Bearing prices, for
shame</DIV>
<DIV><FONT size=2></FONT><BR></DIV>
<DIV>I agree with you 100%. In fact, prospecting for margin, and plugging
profit leaks in our industrial chain is what I do professionally. As tight as
things have gotten, we have some account reps that would love to get an order
for two bearings at 35% margin, specially if it is a no labor order where
someone called in with a part number. We've done a whole lot more for less.
Like going out and measuring and identifying the failed part, picking it up
from the SC, and returning it to the customer within hours, all for 13% GP.
Yes that is a customer that buys a lot more than two a year, but there is very
little labor involved with turning a part number into a part and accepting
money. The staff is going to be at the service center anyway. In
addition, every unit we sell strengthens our buying position with the
manufacturer, and factors into our strategic marketing credits (rebate and
incentive program).</DIV>
<DIV>I manage my severely limited resources the way pattern builders manage
weight (except for Mike Darr (you know I live you bro <vbg>), I save a
gram at a time and in the end it adds up to a new engine, a digital servo, or
a new airplane. If I save five bucks a piece on bearings that I have to buy
anyway and can possibly help others do the same, why not.</DIV>
<DIV> </DIV>
<DIV>P.S. in the APC example: I would think that they have to reset
the equipment that sets the pitch and diameter of the props. The time
they spend doing that costs them money, and the time spent
makeing specialty props where they could be making 10x6 props also costs
them money so I can see charging a premium. But if NTN makes a million of the
same bearing and an SC hands you two of them out of a big drum or a box
without all the packaging then it makes sense to me that you should get to
enjoy a lower price. <BR><BR><B><I>Anthony Romano
<anthonyr105@hotmail.com></I></B> wrote:</DIV>
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