In reply to:
If we are talking about a run of 500 units at a factory gate cost of USD 80 to USD 100 I am prepared, in principle, to fund the manufacturing run and deal with the shipping to individual buyers
I am quite certain that funding is the one thing that hasn't been a problem for Rob & co. in their pursuit of a second tuner run. I could write a check today for 50,000 pounds if need be to fund a tuner run, though more likely I'd go in with a couple of my empeg owning co-workers, who could do likewise.,. and I politely let Rob know that a while ago. The impression that I got back was that I was by no means the first to make such an offer.
Don't take that statement as one-upmanship- I'm thrilled to see another person making such an offer to help, and expect that if it ever happens, It'll be a consortium of empeg owners backing the deal.
When talking about such an endeavor though, a few things quickly are noted:
#1) The Pricing would need to be set so that the backers could shoot to make a small return on investment, say 10 to 20%. (* off the top of my head – numbers would need to be crunched)
Now before you all get up in arms over such a capitalist statement, consider these points:
* In an operation such as this, there will be additional operating expenses not predicted ahead of time. This is just a fact of life.
* There will be a small percentage of people who don't follow through on their order.
* Units tested before shipment and found to be DOA/Flawed. These will just have to be eaten.
* A small percentage of tuners will need to be held back as replacement units (exchange) for possible problem units.
Given all that, by shooting for a small profit in the initial business plan, the backers may just even break even - assuming their labor and efforts are basically given for free and everything else goes well.
Also, they can still deliver the goods at the original promised price, and not piss anyone off by having to raise the price (even by a small amount) when the tuners are ready to be shipped and the final numbers can be tallied. People get annoyed if they think they smell bait & switch, even if it is unfounded.
Speaking of the price, we need to know how sensitive prospective buyers would be to small fluctuations in the final price. If shipping, merchant charges, materials and other secondary costs brought the total to $125 per tuner, would everyone still buy? Or would enough people drop to change the feasibility of doing it in the first place?
Just because someone can write the check, it doesn't mean they are in the business of throwing money away. And with that kind of money involved, everyone has to be serious and realistic about costs, commitments, and the amount of sweat that it’s going to take. And you really can’t ask anyone to knowingly take a loss for other people and expect a yes answer.
The upside, of course, is doing it because one has the means by tying up some of their capital for a while to really help out a community and a product that they believe in, and that they consider to be unique, worthwhile, and not likely to be seen again.
And everything just goes better than planned, what’s wrong with the people who helped make it happen being rewarded to a small extent for all the effort they put in?
Also, there is the tax side of things. If it’s going to be run like a business, and reported like a business to the IRS (or the UK counterpart), it sure as heck better be able to show that there was intent to make money or any losses claimed for deduction will be denied – with penalties and interest – in an audit.
Just some things to muse over.. Further discussion and thoughts is always welcome.
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