"John Rumm" wrote in message
...
Magician wrote:

Having been in the industrial equipment market for 30 odd years, can I
make a few points about 'cheap' power tools and just why our Chinese
friends can make them so cheap.

snip background info

Yup go along with that.

Now look at the Chinese. They only make copies of other peoples
products. No product development, no market development, no huge
investment whilst waiting for the return, no marketing to create a
brand.

To be fair they will also OEM good for big name makers to their spec as
well.

They don't make original items, they make 'me too' products - often
passed on by European manufacturer's who have moved on.

Add to that the huge difference in labour rates; monthly wage that
compares to a European hourly wage and no wonder they can make stuff
cheaply! They don't have to cut material quality to cut costs!

You are right, you don't *have* to, but that does not mean that you won't.

It is also important to remember that for most manufactured products,
the lions share of the price you pay in the shops accounts for the
distribution an marketing costs and not the cost of making it. Hence
even if you far east OEM can slash the production costs by 80%, you may
only see a reduction is purchase price of 15%

Another factor comes in, the rise of the huge retailers and especially
the 'hard discounters' like Aldi, Lidl, Netto. These people have major

This is where you start to make real inroads into the overall cost - the
distribution part of the deal.

market shares in Europe, but struggle in the UK because of our high
brand awareness (read snobbery).

How long have Aldi, Lidl et al been in the UK though? I certainly have
only become aware of them in recent years.

Aldi and Lidl are huge. Look at the Aldi web site. There are in most Euro
countries, USA, Aus, etc. They have "big" buying power. Have a look at the
wines. £3 for an award winning wine.




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