The whole pricing structure issue is less of a mystery for those who have run and owned their own businesses most of their life.
Firstly there is one simple rule in business that has to be understood to understand profit margins and what percentage is or isn't acceptable to a business owner. This margin or percentage is dependant on what you have spent in the first place and it doesn't decrease normally the more money you make.
Let me give you an example. (The following math is just approx and very rough to make it easy and is rounded off give or take a few hundred but you get the rough idea for realistic profit margins I have seen and used all my life).
If as a business owner I buy something for $1,000 (one thousand dollars) you would want to sell it at say $1250 and make a $250 profit or 25 percent.
Let's say I buy something and my cost is $6,000 (six thousand dollars) I am going to realistically sell it again with a 25 percent profit, so I am going to sell the item at $8,000 (eight thousand dollars).
Some people who have never run a business might ask or say, why not just sell it at a ten percent profit instead of a twenty five percent profit and sell more ? It doesn't work like this.
The more you pay out, the more money you risk as a business owner, the more money you WANT back as a profit margin. It gets down to effort versus return.
No one in the electronic security industry makes less than 25 percent. It's 25 percent minimum.
If you spend ten grand, you want your ten grand back plus 2500 on top.
If you spend 20 grand you want your money back plus five grand on top and so on.
There are industry margins for recommended retail for a reason. Profit makes industries keep the turn over going.
If the profit margins are too low, you don't get people buying the products for retail resale. Without retail profits, wholesalers don't exist. Big companies like Stern or jetski companies or luxury retailers want their wholesalers to make a healthy profit because if you can't make a healthy profit selling their product, you reshape your business and sell a different product.
No company wants you as a wholesale buyer to stop buying and then stop retailing their product.
This is why RRPricing is set at a usual 25 to 35 percent.
Drop the price down from Max retail with a 35 percent margin, make a 25 percent margin and the customer gets the discount they want, you still make a healthy profit and the company you buy your stock from keeps building the products.
If AMD isn't making a minimum of 20 to 25 percent profit, they would be insane to even bother importing the product.
If I buy a product for close to six grand landed with all my costs, I would want and require a 2 grand profit.
If anyone on this forum thinks buying a shipping container of say 40 machines which is going to cost you around $240,000, if you didn't get all your money back and make a 20 percent plus profit, you would be financially retarded.
Reward for risk and expenditure is the name of the game.
If you can't make the 20 plus percent on the pinball machine, you are going to stop importing pinballs and start buying and selling something else.
If AMD can't make a decent and worthwhile return on their outlay, then brand new in box pinballs into Australia will become extinct.
AMD deserve every cent profit they make. I couldn't care less if they make a grand, fifteen hundred or twenty five hundred off a pinball. That is their business.
All I care about is that the end price of the pinball machine still represents value for money to me.
The Pro is roughly $7800. Negotiating delivery and a shaker motor etc, still gives ME a price I am comfortable with.
This is a very personal choice.
I know some people who would not buy a BNIB machine even if it were only 4 grand.
Some people think buying a over rated late 1990,s Bally Williams for ten plus grand is value for money.
Some people think anything more than 2 grand for any pinball is a rip off. It's all personal.
I think the Australian dollar is 90 percent of the blame reallistically for BNIB pricing complaints.
We had the Aussie dollar too good for too long, then it sank quickly like the Titanic.
I have always loved Sterns Pro model. I have always thought and still do think they are excellent value for money.
I say this because I have played hundreds of DMD titles and have over 50 DMD machines in my collection to compare to.
The price of everything today is expensive.
Us Aussies are used to inexpensive white goods and new Televisions at great prices because of our proximity to Asia.
But us Aussies don't like paying too much for our other luxury items regardless of our incomes.
That's our unique Aussie way I guess.
The great thing about a BNIB pinball machine is that in a home environment it will last forever, unlike a brand new car we also pay a lot of money for but is worth nothing after 5 years.
The current prices of pinballs aren't the cheapest they have ever been I will grant that, but the Aussie dollar is the issue, not AMD over charging in my opinion.
Things could be worse, we could have no Stern importer.
I am grateful we do have AMD.
Making money in today's world is not easy.
AMD need to make a reasonable profit otherwise it ain't worth importing the machines.
Profit should not be a dirty word.
To a business owner, going broke is a much dirtier set of words.
Trading dollars for dollars and making fark all is just as bad.
You have to make a decent percentage to pay all the running costs.
Otherwise, why get out of bed ?
