david lang wrote:
wrote: in a recent thread "I expect the pppro is likely
to be an aggressively cost cut version with plasticine gears and coin cells,
so I'm more tempted by the Ryobi".

Lets look at the reality.

I'm a sales rep for a Danish high pressure cleaner manufacturer (at least
until next week). They have been around since 1962.

You can't make DIY pressure washers in Denmark, labour costs are simply too
high, so we bought in a badged range from FIAP in Italy. FIAP are highly
automated, very efficient and sell all over the world. We tested the kit,
based on 40 odd years in the game and by DIY standards it was pretty good.

So, Danish product manager negotiates a deal for container loads of machines
and multiplies delivered cost by 2.8 to allow for profit margin, marketing,
finance cost etc.

We sell product in UK, but because we have to offer a 40% discount to
resellers and cover our costs, we also mark up by multiplying by 2.8.

We now have a product that is shipped from Italy, to Denmark, to UK.
Everybody wants a mark up, so a machine that leaves the Italian factory at a
price of £50 has a UK list price of around £390.

Enter stage left - B&Q and Machine Mart. They negotiate with FIAP, not for
container loads, but for huge volumes - really huge volumes, so they get a
better price. The shipping costs are less for larger volumes and they go
straight from Italy to UK. Fewer mark ups, less costs.

The upshot? Exactly the same kit (different colour, but identical) sold for
half the price. Exactly the same kit. Exactly.

Not a cheaper spec - changing that would actually cost FIAP money through
loss of volume. Simply bulk purchase, lower shipping costs, fewer mark ups,
lower margins.

That's how it works in the real world. Lower price no longer necessarily
means lower quality. It means more efficient distribution channels, lower
margins and mass marketing.

Dave

I know it can be that way, but is it always? Or is there in reality a
lot of same case plasticine geared tools around? I thought there were,
but am open to correction if that isnt done.

Thinking about the ryobi/pppro choice, they'll cost me the same in the
end after transport.


NT

wrote:

I know it can be that way, but is it always? Or is there in reality a
lot of same case plasticine geared tools around? I thought there were,
but am open to correction if that isnt done.

There are tons of rebadged products about. That does not mean that all
rebadged products are neccasarily bad even if it is a marketing strategy
that is often employed in the "pile em high sell em low" end of the market.

The basic quality of the starting product dictates the final item
quality (although the "value" of the whole package can obviously be
changed by what is added later in the chain). The cost base of the
organisation doing the rebadging and where it chooses to position the
product will dictate the final price - as David said the ex works
purchase cost is only a small fraction of the consumer price.

David's description of the HPC did say "by DIY standards it was pretty
good"... I am sure he could have also sourced the same unit as gets a
power devil badge (and various others) and retails at 20 quid in the
shops - I expect the description would be less favourable!

--
Cheers,

John.

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