Actual build cost vs markup on US built off road trailers/teardrops.

[Martyn]

AT has been at this since 2002 and believe me when I say trailers are time consuming and expensive to build. There is some truth in what has been said about the free market and pricing being set by what the market will bare, but to be competitive you have to pricing your product in the realm of what other companies are charging.

Someone brought up the Walmart mentality here in the US, and I think it has some relevance, we haven’t been able to place a realistic worth on Overland products that allow small US based companies to thrive, pay their employees good wages, provide them with benefits, and have the company make a profit. They seem to have done that in Australia and Europe but not here.

Hopefully as the Overland market expands in the US products will be able to be priced so that the consumer gets the value they want, companies producing the product will be financially secure, and employees well compensated and provided with benefits like health insurance, retirement plans, and vacation pay, things many of us take for granted with our own jobs.

 

[Teardropper]

I think the markup on all of these US made top of the line off road teardrop style trailers must be astronmical.

I've built three teardrops. I have a well-equipped woodshop and weld the trailer frames myself. It takes me twelve weeks to build one and about $5,000 in materials. Assuming my labor is worth $25 an hour, that's $12,000 of labor. So without throwing in a shop fee, that's $17,000. Some would say that labor isn't considered profit.

And I'm not a commercial builder. (My sister got the second one and the third was a wedding present.)

An astronomical markup on a well-built teardrop? I don't think so.

T

 

[ArkansasDon]

I am interpreting this to mean "in competition" but it's a consideration either way (read: unfair PIA).

reminds me of a question I asked this morning regarding "codes" (i.e. regulations & standards):https://www.expeditionportal.com/forum/threads/built-to-code.196843/#post-2511044

not necessarily about competition, I have people who call my shop who likes the idea of custom firearm & the finishes but do not realize the cost in this. A legitimate business has overhead & this overhead has to be broke into the price of the product to make a profit or the business wont be open very long. Also a business likes to set himself different from their competitors by offering unique services to his product\products which separate him from his peer's in the industry. This is called enticement which I'm trying to explain. A customer can be lured into a product by it's distinctive design or performance & this is where the customers or potential customers do not understand in cost factor for this particular manufacture or business price. It all comes down to people not understanding or wanting to understand how a business is run & what it cost for a base line vs. all the bells & whistles that go into a product to make this product for what it is.
What I am trying to say is the individual who's complaining is "sticker shocked" because he didn't realize what the product truly is.

 

[s.e.charles]

I understand completely. everybody wants to go to heaven, but nobody wants to die.

my time is worth what I charge, but your time is too much!

heard that for 40 years.

 

[cneithardt]

I'd like to chime in here... I was determined to build one so I extensively priced, researched, designed (full 3D Model w/ drawings) exactly what I was going to make.

Parts came to ~$13k (frame welded by a local fab guy)
Then I figured ~200 hrs (12+ weeks just weekends) @ $25/hr (prob low) = $5000

And in reality, it would prob. turn into 6 months.

So ~$18k-23k and 3-6 months no family weekend time.

I came to the conclusion, my time with my family was more important than "building it myself" and that's where the value lies (in my opinion). And yes, working with Baltic birch is much different than aluminum w/ framing. There's something nice about the way Baltic birch warms the interior space.

I've attached my extensive parts list for those curious... all the little things add up quick!

FYI we purchased a lightly used Socal Teardrop and couldn't be happier... they are really well made (best part is we've already had 3 trips in less time than it would have taken to build one).

- Chris

 

[ottsville]

I'd like to chime in here... I was determined to build one so I extensively priced, researched, designed (full 3D Model w/ drawings) exactly what I was going to make.

Parts came to ~$13k (frame welded by a local fab guy)
Then I figured ~200 hrs (12+ weeks just weekends) @ $25/hr (prob low) = $5000

And in reality, it would prob. turn into 6 months.

So ~$18k-23k and 3-6 months no family weekend time.
s

Looking at your sheet(thanks for sharing), was your trailer aluminum? Camper all framed out in aluminum?

 

[cneithardt]

Looking at your sheet(thanks for sharing), was your trailer aluminum? Camper all framed out in aluminum?

The plan was baltic birch plywood skinned in anodized aluminum sheet (.063 or .040 thk).

Frame was to be .090 wall 2x3 tubing (.120 is typical but IMO overkill for a ~1200-1500lb trailer). Also, I wasn't planning on dragging it over rocks, just fire roads and mild trails.

In all reality, I ended up emulating socal teardrops in my design because I really liked they're aesthetics (when I crunched all the numbers, just buying one from them made way more sense logistically - finding used helped as well).

 

[Outside somewhere]

Two things:

Just because someone charges a premium price for their widget doesn't mean their widget is best. Example: 90% of the "overlanding" gear on the market.

Fads come and go. Before you spend the money ask yourself -be honest- will I be doing this in a year or two? Or search this fourm for people who have bought trailers etc and then sold it months later always at a loss because the fad didn't live up to the hype. This fad is responsible for a lot expensive mistakes.

 

[Martyn]

I've built three teardrops. I have a well-equipped woodshop and weld the trailer frames myself. It takes me twelve weeks to build one and about $5,000 in materials. Assuming my labor is worth $25 an hour, that's $12,000 of labor. So without throwing in a shop fee, that's $17,000. Some would say that labor isn't considered profit.

And I'm not a commercial builder. (My sister got the second one and the third was a wedding present.)

An astronomical markup on a well-built teardrop? I don't think so.

T

I really like it that people build there own trailers and vehicles, it’s a really innovative process that moves us all forward.

Costing a product when it’s built as a hobby and costing a product as a business are two different things.

The big three are materials, labor and overheads. Ordering in larger quantities provides some savings especially on the smaller parts like nuts bolts and washers, but sheet metal, specialized woods and composite don’t have huge discounts.

Labor is always a big one and most shops in our area charge $110 to $120 per hour for their work. $29.00 per hour will get you the employees hourly rate plus the taxes and insurance. In answer to your question we do not consider the $29.00 per hour to be profit, it is an expense. It’s only when you are doing this as a hobby that it would be considered a profit.

Depending on the business model the difference between the actual cost of labor and what the customer is charges can cover non-product producing staff, (shipping, sales, management), insurance, rent, utilities etc. If the business also manufactures some of the proceeds from sales will cover the afore mentioned costs, plus the cost of R&D, tooling, product liability insurance, prototyping, etc. In our case we are a hybrid shop so we are both getting income from direct labor and from the sale of product.

The other joy of being a business owner is that any profits the company makes during the year are considered personal income, S corporations and LLC’s, which can push you up into a higher tax bracket than you anticipated. Just another thing to worry about in the life of the entrepreneur ?

 

[battleaxe]

I'll chime in. I'm in the same boat, sometimes the pricing on things seems pretty insane to me.

However, I'm a construction estimator by trade. It's my job to dictate how much something costs to do, and recommend profit based on market conditions, competition, etc. As such, my industry is extremely competitive. Some multi million dollar contracts are procured by a matter of pennies at times.

Profit =/= Labor, regardless of what industry you work in. If I own/run a shop, and pay a guy $25/hr, that is a cost to the company. The company needs to have profit/overhead on top of that, otherwise why would you even bother?

When I work on contract doing design drawings for small contractors, I figure my time is worth $30 an hour. But I bill out at $75. My computer costs money, my utilities cost money, and my credentials/training cost money. At the end of the day I have a family to feed, and I'd rather not do it at all if I could only bill out my base rate.

Here's the other thing... These companies are selling a product that should have a strict QC/Inspection process. It likely varies from state to state, and in different countries, but the liability insurance is probably fairly costly. Just one mistake or poor product could have some astronomical consequences for the end user, and the manufacturer.

So at the end of the day, you're not paying for labor and materials. Anyone can tally that up and feel that it's unfair or unreasonable. But if you look at the whole picture, it's easy to see all the little things that contribute to the end price.

 

[s.e.charles]

Two things:

Just because someone charges a premium price for their widget doesn't mean their widget is best. Example: 90% of the "overlanding" gear on the market.

Fads come and go. Before you spend the money ask yourself -be honest- will I be doing this in a year or two? Or search this fourm for people who have bought trailers etc and then sold it months later always at a loss because the fad didn't live up to the hype. This fad is responsible for a lot expensive mistakes.

hah! anyone wanna buy a Nordic Trak? just like new!

 

[s.e.charles]

.. sometimes the pricing on things seems pretty insane … but if you look at the whole picture, it's easy to see all the little things that contribute to the end price.

I did that for about 6 years in the late '90s - early '00s. started with exactimate dos version and crept forward. the boss was always impressing upon me, and rightly so to a point, that I could not put enough $$$ in an estimate. sometimes we would go to contract six months in advance of start of construction so it could be a dance to make numbers work when red cedar went sky high or one of the lead carpenters gave a job to one of his smokin' & drinkin' buddies at our full budget number (what a coincidence; right to the dollar. huh. how did he arrive at that? I dunno).

anyway, why does my Goose Gear plate cost 700$ plus shipping? I can buy a sheet of OSB flakeboard for $18 and I think my uncle has some paint left over from when he built the dog's new house . . . . .

 

[battleaxe]

It is one of the most stressful professions that I can think of. No matter how meticulous or detail oriented you are, mistakes can and will happen. You'll misread something, or have a calculation error, or outside of that... Fuel costs will jump 20% overnight. (Canada sucks for that).

There are some projects out there that you quite literally cannot get paid enough to do. So when you can grab them for an obscene markup, it's a nice touch.

 

[s.e.charles]

 

[opp]

It go's to what they want to sell for .Is there house paid for. Try to sale one of are 1372 by2744 fiberglass 100 year trailers for $3500 could not sale went to $5000.00 US gone the next day