How to calculate a price for the Pyra

[WizardStan]

Just a thought, but If I was selling something at retail prices to the public and also to resellers at a discounted rate, I would make it part of the agreement that the reseller has to agree to to become a reseller not to undercut me...

Ssshhh, don't discourage him. I want to see this play out.

 

[SoniX]

Ed should sell for himself without resellers. He could take a bigger marge; instead 15% just say 30%. It would be cheaper for us and bring more money for him.

So think about it this way: ED takes 40% or whatever profit and gives 25% volume discount for resellers. If he had never mentioned resellers and just put up a 40% margin, would it had sounded better?

Yes, would "sound" better; but would not change anything to the price. 

If Ed wants so sell many Pyras, then the price also would be a big factor. For 400 Euro a bunch more people would buy it than for 500 Euros. Im not sure that resellers could catch up the quantitiy what Ed will loose because of the price. 

To remember: The Pandora was at 330 Euros... 

If we should pay 500 now plus delivery etc we are not far away from the double of the price of Pandora. 

Think also of following: You can buy a mobilephone for ie 600 Euros in some store here. But you also can buy it from asia for the half of the price. The companys dont hold the prices up because resellers also want to make money. They have a simple rule: Buy more and u will get it cheaper. So easy it is. So Ed should make. 

Should Thinkgeek buy 1000 Pyras and the price will drop. If they buy only 1 they have to pay the same as every other would pay. Thats just fairness. 

Ed is not responsible for thinkgeeks profit!!! 

 

[SoniX]

Just a thought, but If I was selling something at retail prices to the public and also to resellers at a discounted rate, I would make it part of the agreement that the reseller has to agree to to become a reseller not to undercut me...

Ssshhh, don't discourage him. I want to see this play out.

Well... its illegal here in Germany to do that. 

Yes, there is resale price maintenance for books, medication, magazines, tobacco, rental.. but this are exceptions. 

For all other things resale price maintenance is illegal. 

 

[WizardStan]

Should Thinkgeek buy 1000 Pyras and the price will drop. If they buy only 1 they have to pay the same as every other would pay. Thats just fairness.

Yup, that is exactly what is being discussed. Glad to see you finally understand and agree. Not sure what changed your mind but it doesn't matter, the important thing is that you aren't confused anymore. Moving on!

 

[SoniX]

Should Thinkgeek buy 1000 Pyras and the price will drop. If they buy only 1 they have to pay the same as every other would pay. Thats just fairness.

Yup, that is exactly what is being discussed. Glad to see you finally understand and agree. Not sure what changed your mind but it doesn't matter, the important thing is that you aren't confused anymore. Moving on!

Dont understand why you mean my mind was changed. My opinion is the same as before. 

The Pyra should cost the ~402 Euros (I know, its not the last price). 

If a reseller buys one piece he should pay 402 Euros like every other customer.

If they buy 1000 or maybe 5000 they should get a discount; for example 350 or even 300 Euros. 

Sure a reseller can get a small discount of for example 5% if they buy a few pieces only. Resellerdiscount. 

But its not correct to sell the Pyra with a 25% charge to everyone, just because Ed feels responsible for things he isnt responsible. 

Resellers are responsible for their prices. They have to buy more to get a better price and so earn more money with selling. 

 

[Caine]

If they buy 1000 or maybe 5000 they should get a discount; for example 350 or even 300 Euros.

That would require ED to sell the units to them against cost-price. That's madness. It will just not happen, give up on this.

 

[WizardStan]

Dont understand why you mean my mind was changed. My opinion is the same as before.

I was being sarcastic. What you said was just another way of saying what EvilDragon said but you seem incapable of realizing it. I'm making fun of you for it.

 

[Natsu]

Maybe if we are lucky, it will be 480.

 

[bzar]

If a reseller buys one piece he should pay 402 Euros like every other customer. If they buy 1000 or maybe 5000 they should get a discount; for example 350 or even 300 Euros.

If a reseller buys one piece, he pays ~500€ like every other customer. If they buy 1000 or maybe 5000 they get a discount; for example 402€ or even 400€.
The ~400€ is probably the absolute minimum price anyone will get them. Even retailers no matter how many they buy. Because it's the price that just about covers the costs and provides a modest profit.

 

[SoniX]

If they buy 1000 or maybe 5000 they should get a discount; for example 350 or even 300 Euros.

That would require ED to sell the units to them against cost-price. That's madness. It will just not happen, give up on this.

No. If a company really buys 5000 Units at once its a big deal and would lower the price. 

 

[SoniX]

If a reseller buys one piece he should pay 402 Euros like every other customer. If they buy 1000 or maybe 5000 they should get a discount; for example 350 or even 300 Euros.

If a reseller buys one piece, he pays ~500€ like every other customer. If they buy 1000 or maybe 5000 they get a discount; for example 402€ or even 400€.

The ~400€ is probably the absolute minimum price anyone will get them. Even retailers no matter how many they buy. Because it's the price that just about covers the costs and provides a modest profit.

I think you all didnt read the first post. You are not correct. 

Eds price is 402Euro so far in this calculation. All things are paid with it including a profit for Ed. 

The 500 comes only because of the resellers: 

So that would increase the price to 402,50 EUR   Then there are also distributors (like ThinkGeek, Ithic.com, GetDigital.de, etc.) They also want at least 15 - 20% profit (they've got huge shipping costs from Germany to US as well) - which leads to a price of about 500 EUR. Of course, they won't be happy if I sell it for a lower price as they do - so I would need to calculate with that price as well.

Look at the very last sentence: "Of course, they won't be happy if I sell it for a lower price as they do - so I would need to calculate with that price as well."

-> Ed does not want to annoy the resellers and so he wants to sell the Pyra also for 500 like the resellers will do. 

But thats not like companies work. Companies sell for a price; mosty fixed. Only if you buy more, a bunch of units, they will lower the price. And this difference is the amount how resellers get their profit. If they buy more, they will get a lower price and get more cash. If they buy only few they will not make much cash. 

Ed isnt responsible for resellers profit! So raising the prices for all other is just bad for us all. 

And also, If Ed sells to resellers for 402 Euros also if they only buy few units, there is no incentive for them to buy more. 

 

[bzar]

But thats not like companies work. Companies sell for a price; mosty fixed. Only if you buy more, a bunch of units, they will lower the price. And this difference is the amount how resellers get their profit. If they buy more, they will get a lower price and get more cash. If they buy only few they will not make much cash.

Yes. The difference here is ~400€ versus ~500€. The ~100€ in between is the discount for the retailer to make profit from. He can't really sell them to retailers at production cost, can he?

Ed isnt responsible for resellers profit! So raising the prices for all other is just bad for us all.

No, but if he wants their cooperation they need to have a motivation to carry pyra. And having a competing retailer that controls everything about the product with at-cost prices (relative to wholesale price) is not motivating at all.

And also, If Ed sells to resellers for 402 Euros also if they only buy few units, there is no incentive for them to buy more.

Where does it say he'd sell only a few units at wholesale price? Even if he did with the purpose of getting more retailers, that's just marketing.

Anyway, I'll let someone else explain this if it's still confusing.

 

[WizardStan]

Ed isnt responsible for resellers profit! So raising the prices for all other is just bad for us all.

Fine you want to continue to argue about it, here's this: he should have just said he was taking a 42% profit from the start and giving resellers a 25% discount. Would that make you happy? Because that is exactly what it works out to and exactly what everyone you're complaining to understood.Or do you honestly, genuinely believe that EvilDragon only deserves to make a 15% profit on his efforts?

 

[Natsu]

Maybe if you said 450 or 480, more people would be on your side... or not.

 

[Exophase]

Just a thought, but If I was selling something at retail prices to the public and also to resellers at a discounted rate, I would make it part of the agreement that the reseller has to agree to to become a reseller not to undercut me...

-Neelix

ED would need to be careful because this may be illegal in some jurisdictions. It could be deemed as price fixing and an antitrust violation, hence why things like MSRP are presented merely as suggestions.

Personally, I kind of agree with SoniX. Not because I think Pyra shouldn't cost 500 EUR (although that wouldn't hurt) but because I don't think retailers are worth it. I'd rather see that money go to ED and his investors. I simply don't think they bring enough added value to justify their markup.

Maybe some well known ones like Think Geek bring something to the table. Maybe. I'm not really convinced that Pandoras on Think Geek would have led to significantly more sales and I'm even less convinced for Pyra since it's a pretty expensive and niche device. Think Geek seems better for getting eyes on cheaper and more gimmicky sort of trinket items. High concept goods that are easy to convince people to want in a paragraph. Pyra doesn't fit that, the people who will want it are those that have learned about it, and if that isn't 100% the case I'd argue it should be.

But is Think Geek even guaranteed to list it? If so, for how long? Is there any confidence that they'll keep it in stock?

When it comes to customer support ED has demonstrated, at least in my eyes, a high level of service and reliability. I'd rather take my chances with him than any reseller who for many issues would just have to ship to ED anyway.

 

[SoniX]

Or do you honestly, genuinely believe that EvilDragon only deserves to make a 15% profit on his efforts?

Yes, thats exactly what I want to say. 

Look: 

Usually, to be able to work on future projects (successors, improvements, docking station, etc.) you need to make some profit as well. Often this is up to 50% for some huge smartphone companies, but I'm calculating with about 15%.

Ed himself wrote this! 

Fine you want to continue to argue about it, here's this: he should have just said he was taking a 42% profit from the start and giving resellers a 25% discount. Would that make you happy? Because that is exactly what it works out to and exactly what everyone you're complaining to understood.

 

I think you dont understand how massproduction works. 

I a company buys 5000 Pyras the productioncost will be lower, so they will get a better price. Just as simple. 

 

[SoniX]

ED would need to be careful because this may be illegal in some jurisdictions. It could be deemed as price fixing and an antitrust violation, hence why things like MSRP are presented merely as suggestions.

 

Yes. Thats another point of truth. Ed cant dictate the price for resellers. That would be illegal. 

If a reseller starts to sell the Pyra for ~420 Euros then they can make it and Ed cant do anything to stop this. 

Thats what I wanted to explain before. Nobody could stop me if I start beeing a reseller and sell them cheap. 

That would not be good for all except the customers, but Ed has to think about it. It could happen. 

Pyra doesn't fit that

Yes. I also think that. Thinkgeek is more a gadgetsite. I like it, but mostly they sell overpriced useless items. The Pyra will not really fit there. 

 

[rygD]

So I just went and reread the first post, and recalculated based on 1000 units, so just the first run.  The price I got was close to 500 Euros per unit, and this is without taking into account changes in the financial landscape in the last year and a half.  My guess is that some other numbers would change, such as profit for ED, and if you include distributors at the same percentage as in the original post I think some people will be even more upset.

By the way, I am glad Ithic.com, and maybe ThinkGeek and others, will be there to provide Pyras to North America.

 

[SoniX]

Just a small calculation: 

10.000 units sold without reseller and 400 Euros. At 15% thats about 50Euros per unit. That would be 500.000 Euro profit. 

If he sells for 500euros, maybe 8000 (2000 more because of resellers) through resellers and 400 Euro for Ed and 4000 personally for 500 Euro that would be 1.000.000. 

Really, Ed is the godfather of Pyra and I wish him only the best. 

But stay on the ground. Half a Million should be enough profit. And all of us would benefit. 

Between 400 and 500 Euro theres a big difference! 

There will also be many customers who will not buy the Pyra if its too expensive. 

And look at other Consoles (Playstation, XBOX etc.) Look at their prices! 

Playstation 4 - 314 Euro; XBOX One - 319 Euro; Wii-U starting at 220. 

A Pyra is a special thing. 400 Euro worth. But 500 Euro? No. 

We have the calculation; we know what it does cost.

We know that Ed need to make money. 

But thats all included with 400 Euros. 

 

[SoniX]

By the way, I am glad Ithic.com, and maybe ThinkGeek and others, will be there to provide Pyras to North America.

 

Whats the problem for sending it from Germany to USA? 

I just looked from Austria (Im living here; its near Germany) to USA and it will cost ~25Euros. Not that much. Needs about 10-15days. 

Or are there other problems with export?