Shopsmith's new website is up....

[edma194]

P.S. They just forgot that the "printer", aka Mark 5/7/PP headstock, are supposed to be sold for less than material costs to entice customers to purchase.

I wonder what their actual costs are per machine. It seems they mostly buy completed parts or perform some finishing operations on parts made elsewhere. Nick Cupps has said they'll be looking to obtain parts ready to sell instead of manufacturing in-house. So even if they pay more for complete ready to sell parts they could eliminate the costs of maintaining a machine shop. That eliminates a fixed cost for them but still does nothing to provide components or whole machines at lower cost.

I do hope there's a considerable markup on the price of a 520 or 7 that they could cut out to boost sales. But the old adage of building a better mousetrap is fallacious. The world will not a beat a path to your door because you have a better mousetrap, they will only do that if you have an effective sales and marketing operation. Unfortunately you have to compete with poorer mousetraps being sold with better marketing also. Maybe if interest rates come down there would be a way to offer better long term financing.

I see the Mark 7 had a current sale price of $4995 and financing at $174 per month over 36 months. Not bad, but if they could swing $95 a month over 60 months it would be much more attractive, and if they could go further and knock another $1000 off the full price it could spur sales even if they make nothing on a new machine. The cost of marketing still has to be considered though. I doubt low cost internet 'influencing' alone will lead to those new sales, but it has potential to help.

I see SS's major problem is they are not really in manufacturing, but rather in assembly of externally procured parts. i.e. suppliers are already reaping potential profit.

Seems likely with the small volume they must be ordering. It's a big problem for dealing with parts, and largely behind the lack of availability for parts for many power tools. The major tool retailers are unwilling to reorder when their parts stock runs out because the cost will be too high at the low volumes matching demand.

For accessories and consumables they could run a big sale when they re-order. That way they get their cost down with more quantity, but don't really make any profit from those sale items. But they will have the products for the future at lower cost. Trouble is with any strategy they need demand for the products and that requires new customers.


All my comments here are based on minimal details of actual costs and internal operations so I could be way off on what the underlying issues are. Just throwing my opinions out there to contribute to the discussion.

[RFGuy]

I see the Mark 7 had a current sale price of $4995 and financing at $174 per month over 36 months. Not bad, but if they could swing $95 a month over 60 months it would be much more attractive, and if they could go further and knock another $1000 off the full price it could spur sales even if they make nothing on a new machine. The cost of marketing still has to be considered though. I doubt low cost internet 'influencing' alone will lead to those new sales, but it has potential to help.

Ed,

Thanks. WOW!!! I didn't realize Shopsmith offered financing. Are those the terms? With a principal of $4995 and a monthly payment of $174 for 3 years that works out to an interest rate of 15.3%. You would be paying an extra 25% above the principal after those 3 short years. Did they become a member of the Dayton mafia? I think I know some loan sharks that are cheaper than that!

For comparison, I can get a Sawstop at $129.05/month for 36 months which works out to a 9.9% interest rate. I am sure there are better deals out there, but even some rando site online is charging less than 10% interest for a Sawstop purchase.

https://www.shopabunda.com/products/saw ... 230-tgp252

[dusty]

I see the Mark 7 had a current sale price of $4995 and financing at $174 per month over 36 months. Not bad, but if they could swing $95 a month over 60 months it would be much more attractive, and if they could go further and knock another $1000 off the full price it could spur sales even if they make nothing on a new machine. The cost of marketing still has to be considered though. I doubt low cost internet 'influencing' alone will lead to those new sales, but it has potential to help.

Ed,

Thanks. WOW!!! I didn't realize Shopsmith offered financing. Are those the terms? With a principal of $4995 and a monthly payment of $174 for 3 years that works out to an interest rate of 15.3%. You would be paying an extra 25% above the principal after those 3 short years. Did they become a member of the Dayton mafia? I think I know some loan sharks that are cheaper than that!

For comparison, I can get a Sawstop at $129.05/month for 36 months which works out to a 9.9% interest rate. I am sure there are better deals out there, but even some rando site online is charging less than 10% interest for a Sawstop purchase.

https://www.shopabunda.com/products/saw ... 230-tgp252

I really do not understand why you ever log on here. You are so negative.

Yes, I know. You love your Shopsmith.

[RFGuy]

I really do not understand why you ever log on here. You are so negative.

Yes, I know. You love your Shopsmith.

Well, there was a poll for me to return to the forum that was favorable, but perhaps you didn't vote. Calling BS on outlandish finance terms is being negative?!?!? I guess we are supposed to sweep it under the rug and not discuss it, right? Good morning to you, too. I guess we can only discuss rainbows and butterflies on the forum now. Can't say anything that might offend anyone on the forum and their delicate sensibilities. I would add you to my foes list on the forum so you do NOT have to read my posts, but I can't because you are an Admin or Moderator here.

[HopefulSSer]

Not sure I'd call the finance terms "outlandish". High-ish maybe but still 1/2 - 2/3 of what you'd pay if you put it on a credit card

EDIT: I'd also like to add that I'd be very surprised if SS themselves are providing the financing. No doubt they have partnered with a finance company to do so. It'll be the finance company setting the final terms.

[dusty]

I really do not understand why you ever log on here. You are so negative.

Yes, I know. You love your Shopsmith.

Well, there was a poll for me to return to the forum that was favorable, but perhaps you didn't vote. Calling BS on outlandish finance terms is being negative?!?!? I guess we are supposed to sweep it under the rug and not discuss it, right? Good morning to you, too. I guess we can only discuss rainbows and butterflies on the forum now. Can't say anything that might offend anyone on the forum and their delicate sensibilities. I would add you to my foes list on the forum so you do NOT have to read my posts, but I can't because you are an Admin or Moderator here.

Feel free to discuss whatever you want. I don't stand in judgement on this forum. I simply have a few opinions of my own.

Yes, there was a poll for you and I agreed (even though I did not vote) with the results of the poll. You have every right to express yourself no matter what you feel.

[adrianpglover]

That kind of rate sounds like the financing you can get on purchases at Walmart through Affirm.

My view on this is that the initial price of a new MV or M7 leads this tool that seems to be priced for those who have quite a bit of disposable income to put into a hobby, while it is marketed at people who have very little space, which usually goes hand in hand with someone who doesn't have much disposable income (i.e. smaller house, no garage/basement space they're willing to devote to the hobby, etc). To me, this dichotomy makes this tool a very niche market tool and can't really be compared to Sawstop, Jet, Powermatic, Grizzly, or others. The other, more traditional tool vendors, are mostly designed, priced, and marketed towards the larger market, i.e. contractors, home builders, small to larger professional shops, etc.

On the pricing of parts, I think a lot of the points brought up previously can all be partially attributed to the recent rise in prices, but I think it's more telling that in an earlier post someone mentioned that the new owner stated in an interview that when he first joined the company no one could tell him what their cost was on specific parts. It seems to me, that since he made that comment, it matters to him. As such, they probably went through an analysis of their individual part and product costs. From there, the natural next step would be to adjust the pricing strategy such that each part and product at non-sales pricing will generate at least a small amount of profit.

On the subject of inflation and higher prices, unless we see deflation, we will not see pricing going down. You have to compound the inflation rates each month (for they are generated on a per month basis, by the CPI data) and then multiply by your prior price point. As for individual company profits, many companies are going to raise their prices less often than the CPI data gets updated, so they might update the price less often, initially have higher profits, and later let the continuing inflation eat into their profits. Also, we're in a free market economy, which means that the downward pricing pressure normally doesn't come from deflation, but rather from competition taking away market share through lower pricing and through lower demand due to your higher price. It takes a while for this to happen though, so if you think prices are high on a given product that has a competitive alternative in the market, then you'll likely just have to wait for the downward pressure to lower the price, or wait for your own salary to increase along with the market to be able to more easily afford it. All this being said, I in no way am making an argument in justification of higher profits for a given company, but just trying to throw in my 2 cents from what I remember about the first week or two of high school economic class. I do understand that the salary increasing tends to not happen, especially if you work at a company like I do here at big blue, but did have to mention it.

Acknowledging the risk of getting in the middle of a forum flame war here:
@rfguy/@dusty - I for one am glad that you are both here on the forum. Your insights and constant involvement in seemingly all threads here is welcome and highly sought after. You each bring unique viewpoints to the conversations at hand. However, there is no need for disparaging comments.
If you ever feel like posting one, please, for the sake of others who haven't been here that long or haven't been involved very much in the forums, take at least a moment or two to see if you really need to post that reply. Seeing forum members, especially long time members with high post counts, in a flame war or throwing barbs back and forth tends to lead people away from the forum altogether. I'm not asking "can everyone just get along", but rather for you to think of the larger consequences of your post before clicking submit.

Yes, I agree that rates of 15% seem high, but that seems more like an entry level financing plan offered by companies who don't really care about offering financing. It would be nice if they offered something like a 0% 12-month financing if paid in full at a 29.99% rate if not paid in full, like I've gotten in the past on mattresses, tires, furniture, etc, but those were all offered by large retail chains with a lot of sales on those promotional rates. On such a small niche product like this, I don't see the credit card companies looking at it as a very good deal.

[BuckeyeDennis]

Not sure I'd call the finance terms "outlandish". High-ish maybe but still 1/2 - 2/3 of what you'd pay if you put it on a credit card

EDIT: I'd also like to add that I'd be very surprised if SS themselves are providing the financing. No doubt they have partnered with a finance company to do so. It'll be the finance company setting the final terms.

I agree, and I doubt that Shopsmith gets a dime of the finance charges. But it’s in their best interest to make it easy for customers who want it to get financing, and to be paid for their goods up front by a finance company. As you point out, the rates are somewhat lower than a typical unsecured loan. I don’t know how those particular loans are structured, but rates typically reflect the finance company’s assessment of the residual value of the collateral. It’s up to the buyer to determine if the resulting finance charges make sense for them.

[dusty]

That kind of rate sounds like the financing you can get on purchases at Walmart through Affirm.

My view on this is that the initial price of a new MV or M7 leads this tool that seems to be priced for those who have quite a bit of disposable income to put into a hobby, while it is marketed at people who have very little space, which usually goes hand in hand with someone who doesn't have much disposable income (i.e. smaller house, no garage/basement space they're willing to devote to the hobby, etc). To me, this dichotomy makes this tool a very niche market tool and can't really be compared to Sawstop, Jet, Powermatic, Grizzly, or others. The other, more traditional tool vendors, are mostly designed, priced, and marketed towards the larger market, i.e. contractors, home builders, small to larger professional shops, etc.

On the pricing of parts, I think a lot of the points brought up previously can all be partially attributed to the recent rise in prices, but I think it's more telling that in an earlier post someone mentioned that the new owner stated in an interview that when he first joined the company no one could tell him what their cost was on specific parts. It seems to me, that since he made that comment, it matters to him. As such, they probably went through an analysis of their individual part and product costs. From there, the natural next step would be to adjust the pricing strategy such that each part and product at non-sales pricing will generate at least a small amount of profit.

On the subject of inflation and higher prices, unless we see deflation, we will not see pricing going down. You have to compound the inflation rates each month (for they are generated on a per month basis, by the CPI data) and then multiply by your prior price point. As for individual company profits, many companies are going to raise their prices less often than the CPI data gets updated, so they might update the price less often, initially have higher profits, and later let the continuing inflation eat into their profits. Also, we're in a free market economy, which means that the downward pricing pressure normally doesn't come from deflation, but rather from competition taking away market share through lower pricing and through lower demand due to your higher price. It takes a while for this to happen though, so if you think prices are high on a given product that has a competitive alternative in the market, then you'll likely just have to wait for the downward pressure to lower the price, or wait for your own salary to increase along with the market to be able to more easily afford it. All this being said, I in no way am making an argument in justification of higher profits for a given company, but just trying to throw in my 2 cents from what I remember about the first week or two of high school economic class. I do understand that the salary increasing tends to not happen, especially if you work at a company like I do here at big blue, but did have to mention it.

Acknowledging the risk of getting in the middle of a forum flame war here:
@rfguy/@dusty - I for one am glad that you are both here on the forum. Your insights and constant involvement in seemingly all threads here is welcome and highly sought after. You each bring unique viewpoints to the conversations at hand. However, there is no need for disparaging comments.
If you ever feel like posting one, please, for the sake of others who haven't been here that long or haven't been involved very much in the forums, take at least a moment or two to see if you really need to post that reply. Seeing forum members, especially long time members with high post counts, in a flame war or throwing barbs back and forth tends to lead people away from the forum altogether. I'm not asking "can everyone just get along", but rather for you to think of the larger consequences of your post before clicking submit.

Yes, I agree that rates of 15% seem high, but that seems more like an entry level financing plan offered by companies who don't really care about offering financing. It would be nice if they offered something like a 0% 12-month financing if paid in full at a 29.99% rate if not paid in full, like I've gotten in the past on mattresses, tires, furniture, etc, but those were all offered by large retail chains with a lot of sales on those promotional rates. On such a small niche product like this, I don't see the credit card companies looking at it as a very good deal.

Thank you, Adrian for the feedback. I will try real hard to behave myself.

Can anyone tell me what Thumper would advise?

[RFGuy]

Acknowledging the risk of getting in the middle of a forum flame war here:
@rfguy/@dusty - I for one am glad that you are both here on the forum. Your insights and constant involvement in seemingly all threads here is welcome and highly sought after. You each bring unique viewpoints to the conversations at hand. However, there is no need for disparaging comments.
If you ever feel like posting one, please, for the sake of others who haven't been here that long or haven't been involved very much in the forums, take at least a moment or two to see if you really need to post that reply. Seeing forum members, especially long time members with high post counts, in a flame war or throwing barbs back and forth tends to lead people away from the forum altogether. I'm not asking "can everyone just get along", but rather for you to think of the larger consequences of your post before clicking submit.

Adrian,

Thanks for the words of encouragement. I have held my tongue for years on this forum for exactly the reasons you stated, i.e. to not color the forum in a bad light for newcomers to the forum such as yourself. Not wanting to discourage others from joining and participating here. I have stepped away a few times from the forum in the past when a few members became too much to put up with. I was asked to come back to the forum recently and honestly I can't hold my tongue any more. IF I choose to participate here, sometimes my postings of truth will rub some the wrong way as I occasionally use sarcasm for effect to make a point.

FYI...there are many lurkers on the forum because of what I describe above...others who have reached out to me via private message and for similar reasons choose to be in read only mode on this forum 99% of the time. This has been the status quo for a long time and started well before I even joined this forum. Perhaps I should join them in lurker mode as well. I can certainly see why they chose to do this.

P.S. I NEVER thought calling out an unreasonable 15% loan interest rate would result in a new controversy on the forum.