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

[TernOverland]

We deal with a lot of trailer and camper builders. I don't know of any that are getting rich gouging their customers. Companies that gouge their customers ALWAYS get undercut eventually by someone who sees the opportunity. I would guess that few are operating at a net profit of over 15 - 20%. Many of the people building these trailers could not even afford their own products because their income is too low. Many didn't make their first dollar for 2 or 3 years. Some are making a decent living, some are struggling, and some probably won't be here next year. Many builders ask for deposits because they have to buy components in the largest quantity possible so that they can give a customer a decent price on 2. That means carrying the cost of the other 98 on their books. The cost of just maintaining a business is staggering.

Mostly, the people doing this are doing it for the love of the pursuits we share, and they would rather starve than punch a time clock. Some do starve. I think a little appreciation is in order. We all have some pretty damn cool things to choose from because of their sacrifice, and no one is forcing us to buy anything.

Nothing is riskier, more painful, harder, or scarier than being in business. If you want something easier to do, become a Navy SEAL. For all of those who think they are being cheated by the people in this industry, I invite you to slide in and turn things around. If you are correct, then the great American opportunity is there for the picking. Check in with us in a couple of years, and tell us how glamorous and rich you are!

 

[s.e.charles]

I was under the impression that if you walk away with 4% clean, it is a successful operation. no one figures everything that it takes to "make a go" of it.

 

[john61ct]

4% of many millions per year in revenue maybe

This type of small industry, lower revenue throughputs means owner's take-home percentage has to be higher.

Most such owners probably net much less per hour overall than many employees.

 

[flipmachine]

We deal with a lot of trailer and camper builders. I don't know of any that are getting rich gouging their customers. Companies that gouge their customers ALWAYS get undercut eventually by someone who sees the opportunity. I would guess that few are operating at a net profit of over 15 - 20%. Many of the people building these trailers could not even afford their own products because their income is too low. Many didn't make their first dollar for 2 or 3 years. Some are making a decent living, some are struggling, and some probably won't be here next year. Many builders ask for deposits because they have to buy components in the largest quantity possible so that they can give a customer a decent price on 2. That means carrying the cost of the other 98 on their books. The cost of just maintaining a business is staggering.

Mostly, the people doing this are doing it for the love of the pursuits we share, and they would rather starve than punch a time clock. Some do starve. I think a little appreciation is in order. We all have some pretty damn cool things to choose from because of their sacrifice, and no one is forcing us to buy anything.

Nothing is riskier, more painful, harder, or scarier than being in business. If you want something easier to do, become a Navy SEAL. For all of those who think they are being cheated by the people in this industry, I invite you to slide in and turn things around. If you are correct, then the great American opportunity is there for the picking. Check in with us in a couple of years, and tell us how glamorous and rich you are!

nailed it on the head!!! ya building trailers is definitely not gonna make me rich... its just the love of the game.

 

[GkraneTX]

We deal with a lot of trailer and camper builders. I don't know of any that are getting rich gouging their customers. Companies that gouge their customers ALWAYS get undercut eventually by someone who sees the opportunity. I would guess that few are operating at a net profit of over 15 - 20%. Many of the people building these trailers could not even afford their own products because their income is too low. Many didn't make their first dollar for 2 or 3 years. Some are making a decent living, some are struggling, and some probably won't be here next year. Many builders ask for deposits because they have to buy components in the largest quantity possible so that they can give a customer a decent price on 2. That means carrying the cost of the other 98 on their books. The cost of just maintaining a business is staggering.

Mostly, the people doing this are doing it for the love of the pursuits we share, and they would rather starve than punch a time clock. Some do starve. I think a little appreciation is in order. We all have some pretty damn cool things to choose from because of their sacrifice, and no one is forcing us to buy anything.

Nothing is riskier, more painful, harder, or scarier than being in business. If you want something easier to do, become a Navy SEAL. For all of those who think they are being cheated by the people in this industry, I invite you to slide in and turn things around. If you are correct, then the great American opportunity is there for the picking. Check in with us in a couple of years, and tell us how glamorous and rich you are!

Parts of this leave me speechless. Ummm....no.

 

[crazysccrmd]

Parts of this leave me speechless. Ummm....no.

Becoming (and surviving as) a SEAL in harsh conditions around the world is a cakewalk compared to building trailers in a climate controlled shop and going home each night. Everyone knows that.

 

[flipmachine]

Climate controlled???? We can get that as trailer builders????

 

[Louisd75]

Climate controlled???? We can get that as trailer builders????

You mean to tell me your shop space isn't heated? You have no idea what you're missing out on

 

[NatersXJ6]

I’m considering this and similar questions as I consider a build versus buy on a simple M416 style trailer. Typically I build simply because I want things a certain way, and I either end up modding new stuff or completely overhauling and customizing very old stuff to meet my budget, but like most hobbyists, I don’t account for my time.

Since I agree with almost all of the posts in this thread explaining the costs of small manufacturing, and I recognize that very few come close to answering the OP question about what explains the differences between brands, I have to admit my curiosity. @GkraneTX , what is the price point and % of profit that you think is appropriate and fair? Surely you must have something in mind based on your research.

 

[s.e.charles]

We deal with a lot …

I don't think it's too unusual for any start-up company not to see a profit for the first 5 years. that's why so many "small fish" start out while they're still pulling a paycheck from 'da man' and wait until things get rolling before jumping ship.

those that cold start are simply trying to buy their job and hope it pans out. unless of course there's a trust fund check automatically deposited on the first of every month.

 

[Paddler Ed]

365 days in a year
104 weekend days
20 days annual leave
10 days public holidays
That leaves 231 days working

At 8hrs/day, that's only 1848hrs working.

How much do you think a company needs to earn before it can afford to pay the staff it needs to operate, based on that many working hours?

And if it's only a 2 or 3 man band, then one of them can write off 20-40% of their time to business management and operation, so all of a sudden one of them is on between 1100 and 1500hrs a year that is making a product that has value.

 

[GkraneTX]

I’m considering this and similar questions as I consider a build versus buy on a simple M416 style trailer. Typically I build simply because I want things a certain way, and I either end up modding new stuff or completely overhauling and customizing very old stuff to meet my budget, but like most hobbyists, I don’t account for my time.

Since I agree with almost all of the posts in this thread explaining the costs of small manufacturing, and I recognize that very few come close to answering the OP question about what explains the differences between brands, I have to admit my curiosity. @GkraneTX , what is the price point and % of profit that you think is appropriate and fair? Surely you must have something in mind based on your research.

I don't have a price point or a profit percentage that I think is appropriate or fair. That's not something I was even putting any thought into originally. The original question was one inquiring about the large price differences between companies that basically use the same overall design, same options, same aftermarket parts, and have wood framed cabins compared to the trailers that use an all aluminum frame. These questions generated quite a few negative responses from people lecturing me that builders deserve to make a good living on basically a startup company, defending these huge up front deposit amounts to pay for materials on a trailer that you may get in 6 months. If one gets down to brass tacks on this whole thing, as a consumer I really don't care about the companies overhead, whether they need to buy in bulk to get discounts, how much their employees cost, or what a pain it is to answer emails and phone calls to discuss their product to prospective buyers. Starting a small business requires sacrifice and carries significant risk. Starting with insufficient working capital to sustain the business for a period of time is asking for problems from the get go. As to Paddler Ed who thinks a new small business owner who is planning on only putting 40 hr work weeks in and taking 20 days of annual leave from the get go is entitled to some special wage considerations, I'm not sure many small business have had too much success using that particular formula. All of the small business owners I know put in 16-20 hour days, 6 days a weeks for years to build their brand. They sacrificed their personal time, family time, and finances. Many operated at a loss for years before they realized a profit. Now we have a new window maker Tern Overland telling us that appreciation is in order, and that manufacturing trailer windows and the stress that goes along with it is more difficult and requires more sacrifice than not only serving in the military, but being a SEAL. I would love to see a video of their stress level in BUDS or serving in theater overseas. As to their comment on that these some of these builders "would rather starve than punch a time clock", aren't the employees of these builders punching the dame time clock you so vehemently oppose? The whole post from TO sounds like entitlement issues on steroids.

Now for me, I will choose a trailer that I find is a cost effective solution for me to use for 20+ nights on the beach a year that won't leave me with a severe case of buyers remorse if it doesn't get used as much as I'd like to. I'm willing to pay a premium for things I need in South Texas like a good A/C unit, an all aluminum frame to deal with the salt and corrosion issues, and a composite, aluminum or fiberglass box. As far as the profit margin thing goes, I think the free market economy we enjoy will sort that out very quickly. Even TO stated that some of their customers probably wont be in business in a year. I'm not cheap by any means, just very thorough. I am willing to pay top dollar for top tier products, and have spent thousands on individual fishing reels and scuba components. That being said, they are backed by rock solid companies, have iron clad warranties where if an issue arises it will be taken care of immediately, and I wont have to drive my gear across country for service.

 

[NatersXJ6]

I think that your phrasing of the original post essentially buried the lead. If you meant it to be a serious question comparing options or construction methods between companies, and then asked why things cost what they do, it might have gone differently. However, you opened with the statement that markup must be astronomical. I, along with others, assumed you were just whining about prices. Thus, you received replies about reasons that cost might be high and markup low at those price points. Essentially, each company charges what they do because they can. They probably go into it thinking sales volume will be higher, production volume will be higher, prices will be low and margins high. Then they run into all of the things stated in this thread... plus customers. I wouldn’t go into business simply because of the state of customer expectations around service and customization. I will give you the point about deposits. Deposits on that level, more than 5-10% scream pyramid scheme to me. But look at crowdfunding... 100% prepay and customer assumes all risk has become a “thing” as they say. They do it because they can. Good luck with your trailer search. It will be interesting to see what you come up with.

 

[GkraneTX]

Naters, I think I am leaning towards and intech trailer. Either a pursue or a Luna. Has the aluminum structure I like and also has a good A/C unit, plus there are several places within 2 hours of me that I can pick one up and get it serviced if need be.

 

[john61ct]

Again, not your business. Price only has a very loose relationship to the maker's cost.

If you're not willing to pay X their price, keep looking for Y. If you decide X is the best value, the go back, hopefully not too much egg on your face.

Unless you're trying to haggle over the price?