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

[vintageracer]

The VAST majority of people in this country that WORK for a living DRAW A PAYCHECK! Nothing wrong with that just the reality of our workforce. Dare I say that number could be 99% of the people who work for a living in this country "Draw a Paycheck"? That includes Congress, Mary who runs GM and most everyone on this board that works for a living.

What's the remaining 1% do?

THEY MAKE A PAYROLL!

They EMPLOY People!

Why is this important?

All the economists continue to tell us that almost 70% of the business's in the USA are SMALL BUSINESS'S! This is the backbone of our economy and who employ's most of the workers in the USA. It's not GM, GE or Google! It's that Mom and Pop coffee shop, independent toy store, fast food franchisee and on and on.

Those of us who are or have been "Responsible For Making A Payroll" (Small Business Owner's) know all too well the cost of inventory (materials to assemble your product or the product you resell) and our efforts to reduce that cost. That's just one of many COST'S to consider and usually NOT anywhere near the biggest expense for the business.

What's even More Important is "Small Business Owner's" also know all to well the FIXED DAILY COST of Running A Business!

The cost of worker's comp insurance, unemployment insurance, employee health insurance, facilities rent, facilities maintenance, business licenses, EMPLOYEE PAYROLL, the toilet paper, pens and all the other stuff the employee's take home with them that feel entitle to (Stealing). At the end of the week the "Employee" really does not give 2 schidts if the company sold anything or made any money at all. All they know is that they put in "Their 40" and they want their money!

In most situations the folks "Who draw a paycheck" have no idea what it takes to "Make a Payroll".

The LARGEST and most HATED group of OUR EMPLOYEE'S that do not understand this concept is the Congress of the United States of America!

 

[GkraneTX]

If there are all of these costs factored into the final price then why do a large portion of these manufacturers want 5-10k deposits? To me it sounds like they are expecting the buyers to float their cost of doing business. I had my entire kitchen and bathrooms redone by small local companies which totaled over 35k. Signed a contract and paid upon completion. I am sure the custom cabinetry and tile work was done by skilled laborers who needed expensive tools.

 

[ottsville]

If there are all of these costs factored into the final price then why do a large portion of these manufacturers want 5-10k deposits?

Because they can
Because people will pay it
Because they put time and labor into emailing/phone calls/meeting that customer's specific requests before deposit
Because you're not dealing with a Thor or a Forest River that has working capital and lines of credit
Because you slap "Expo" or "OFFROAD" on it and people will pay more



There's multiple posts in this thread that have answered your questions. I get that you look at something like a tiny teardrop and say "why does this cost as much as a 30' camper with amenities?" But different products, different markets.

If you want to change the industry start a company and do it.

Or opt out.

 

[GkraneTX]

Because they can
Because people will pay it
Because they put time and labor into emailing/phone calls/meeting that customer's specific requests before deposit
Because you're not dealing with a Thor or a Forest River that has working capital and lines of credit
Because you slap "Expo" or "OFFROAD" on it and people will pay more



There's multiple posts in this thread that have answered your questions. I get that you look at something like a tiny teardrop and say "why does this cost as much as a 30' camper with amenities?" But different products, different markets.

If you want to change the industry start a company and do it.

Or opt out.

Because they can (Most Likely)
Because people will pay it(Most Likely)
Because they put time and labor into emailing/phone calls/meeting that customer's specific requests before deposit(Absolutely Ridiculous)
Because you're not dealing with a Thor or a Forest River that has working capital and lines of credit(If you have hung your entire business success or failure on customers fronting your basic cost of doing business month after month you are already starting off on the wrong foot.)
Because you slap "Expo" or "OFFROAD" on it and people will pay more (Possibly)


So basically you are validating my original question that the mark up is astronomical.

 

[Louisd75]

If there are all of these costs factored into the final price then why do a large portion of these manufacturers want 5-10k deposits? To me it sounds like they are expecting the buyers to float their cost of doing business.

This is a very valid point and it doesn't seem to be limited to just the trailer portion of our hobby. I speculate that the large deposits have a bit to do with the custom nature of the builds. The more custom options you add, the less likely it is that you'll find another customer should the first back out. I'm not saying that's right or wrong, I'd imagine it would depend on which side of the counter you stand.

I do wonder why it seems like there are few batch makers of trailers. Make 'em in batches of 10 with no options that couldn't be easily added after the fact. You would get the economies of scale and efficiencies of assembly line production, albeit on a rather small assembly line. Limit your options to things that would take no more than a few hours to install to avoid getting bogged down. When you get down to 5 trailers on hand, build another 10. The downside is that a plan like that is capital intensive...you've got a lot of your funds tied up in trailers that may or may not sell. The upside for the consumer is a fast turnaround. If you've always got trailers built and ready to customize with your established options, and have those options on hand, you could cut down on the wait times while being able to meet a lower price point which may lead to more business. The trick is what do people want? Your wants are different than mine, which are different than Teardropper's which are different than Ottsville's, which are different from... you get the idea.

I see one of five things happening in your case: 1, you're going to have to pay someone more than you want to build what you want; 2, you're going to have to clear a spot in the garage and pick up some tools to build what you want; 3 you're going to have to compromise and go with something that checks off 75% or more of your needs; 4, you're going to keep coming onto ExPo bemoaning the state of the industry while delaying the inevitable start of option 1, 2 or 3; 5, you're going to just say ****** it and find a new hobby (have you priced out a set of golf clubs lately? They don't even have moving parts).

Good luck!

 

[GkraneTX]

I have pretty much decided I am going to go with option 3. No golf clubs needed, already have fishing gear.

 

[Hillbilly Heaven]

I work at a very specialized automotive aftermarket part manufacturing company. Small company that most times only has 4 employees counting the owner. I see it daily!! Boss spends 90% of his day on the phone, and answering emails. He has very little time to spend on the shop floor other than early or late in the day. He is the master when it comes to actually making our product work!!! Each product is hand fitted, assembled, and tested by him before going out the door. While overall our yearly production is small, less than 5000 new pieces, but there are times of the year that we are truly overwhelmed with new orders as well as doing annual check ups, rebuilds and testing for customers. The owner has recently decided to hire someone with excellent eye hand coordination with fine motor skills to take the load off of him hand fitting before assembly. Granted we could invest millions in to more modern CNC machines and make parts that do not require as much hand work but the volume for our target market is not there. We have no desire to be a consumer quality aftermarket part company. The quality of our product speaks for itself. Customers would rather pay 4k to 10K for our part rather than go to our closest competitor whose is a consumer grade producer that gives away his parts for free to the right people. He lacks the years of tech knowledge to offer the product support that we do.

Expo and Offroad Campers are niche markets. Not everyone is willing to give up the leisures of home to go camping. Expo and Offroad Campers are a different breed of camping people. They are very specialized and each has their own needs and requirements. Parts commonality and assembly line techniques are not going to work unless you want to limit your customer base even more. Someone is not going to like your choice in electrical controls. Someone is going to want a diesel cooktop instead of propane. Perhaps they just want an induction cooktop opps there goes changes in the electrical system. They do not want a black water tank to empty and would rather use a cassette toilet. Maybe you could standaradize on the chassis between models and blank exterior walls. Walls would still be custom according to where cutouts are.

Face it!! Even though Expo and Offroad Campers maybe built with off the shelf components each and everyone has to be custom unless you wish for an even smaller market.

 

[Hillbilly Heaven]

The Samuel Colt and Henry Ford methods will not work for Expo and Offroad Campers.

 

[opp]

every day there more builders cost will come down those that build the same old tired ways will be gone Moby,Ie outdoor

 

[john61ct]

Lots of industries require at least some payment up front.

Have to weed out the time wasting tire kickers somehow.

In any case, as a customer, the profit margin of your supplier is irrelevant. If they've found a niche where their profit is 90% of the selling price, that's all fine and good.

Go look at other sellers if you think you can do better, that's what a free market is all about.

 

[ottsville]

So basically you are validating my original question that the mark up is astronomical.

LOL, no. And that is a statement not a question.

I'll agree that the price is high and I believe the markup is less than many people think.

Do you complain about the markup when you go out to eat breakfast? About profits your car manufacturer makes? What any company you own stock in earns in profits?

But who cares what the markup is? Either you can or can't afford it. Stop begrudging those who are out there doing, risking their time, money, credit(and yeah, I know you want to come back with something about deposits financing other builds) and reputations.

 

[opp]

This has open my eyes .Are little composite trailer that we sell for $5000 trying to bring down the cost by doing in house doors. Now 15,000 $10,000 up front and 2 year to start a build

 

[GkraneTX]

LOL, no. And that is a statement not a question.

I'll agree that the price is high and I believe the markup is less than many people think.

Do you complain about the markup when you go out to eat breakfast? About profits your car manufacturer makes? What any company you own stock in earns in profits?

But who cares what the markup is? Either you can or can't afford it. Stop begrudging those who are out there doing, risking their time, money, credit(and yeah, I know you want to come back with something about deposits financing other builds) and reputations.

Maybe you ought to take a breath and read the very first post in the thread. You dont seem to answer any of the questions in the original question with anything pertinent. It wasn't too long after I asked that Moby 1 went under. I would question the price of my breakfast if I paid 50% up front and it was served to me cold on a piece of plywood, and my coffee was in an empty coconut shell. I imagine these small eateries have overhead, payroll, equipment, utilities, and rent as well. Comparing these very small trailer operations to a car manufacturer is ludicrous. When an investor purchases a financial instrument such as a stock, bond, ETF, mutual fund etc, there is an implied risk that one accepts the fact that they could very easily lose money as well, so I don't see the relevance. Right now Off Grid is offering like 8 or 10k off of some 2018 inventory with an aggressive marketing campaign so I guess the supply is higher than the demand at their original price point. Also, you have no idea of what I can or can't afford and making a blanket statement like that is pointless.

 

[flipmachine]

every day there more builders cost will come down those that build the same old tired ways will be gone Moby,Ie outdoor

Moby could still be here if they did it right, the orders were there.

 

[john61ct]

yes sales & marketing can build demand and keep price profitable

but Operations must deliver as well

in the end it all comes down to the people involved, most important in a small outfit