"DSK" wrote in message
...
Donal, I was not meaning to ignore your question. Got a bit distracted,
s'all.

Donal wrote:

12 years ago, I sold an American made product for $8000. Today, I can
sell
you the same (Chinese made) thing for $30.00. I can also afford to give
you
a free "lifetime guarantee" because I have total confidence in the cheap
product.


I'm a little cynical about the whole "quality" issue.

I can see why, if the above is true. How do you account for this
tremendous
change in price?

There are a coulple of reasons.
1) Reduced chip count. i.e. advances in technology means that only a few
components are now required. These components do not cost a lot to make.
The product that I sold 12 years ago had hundreds of chips, and many
hundreds of discrete components. (discrete = non integrated, or single
function. eg resistor). Each manufacturer had to spend many months on R&D.
The volumes were relatively low. So, the finished product had high
manufacturing, and high R&D costs.

Nowadays, the chip manufacturers have 90% of the functionality on a single
chip. Furthermore, they publish the entire circuitry and PCB layout that is
required for a finished product. The manufacturer only needs to add a power
supply, and a casing. This means that a modern Chinese factory can get into
production within days of a chip manufacturer releasing a new chip.

The Chinese approach to pricing seems rather primitive. They appear to
take their manufacturing costs, and add 20% (maybe less). They depend on
volume sales. A typical American, or European, manufacturer would need
about 60% gross margin to stay in business.

2) Labour costs are low.





If these sails have a
high labour cost, then the Hong Kong version might be very good value.
Of
course, if the material represents the bulk of the cost, then Hong Kong
Sails couldn't produce a good sail economically. Perhaps you could ask
your
sailmaking friends what the labour percentage is, in a set of sails?

I'll ask, but I don't know if we'll get a meaningful answer. I don't think
that
materials represents over 50% of costs, but I'm sure it's quite
significant.

Ok. So you can see that if the HK labour +freight costs, are less than
the US labour cost, then the HK sails might represent better value for
money.


And
the labor is still very expensive, enough that with all else being equal,
Hong
Kong (or other cheap labor place) sails could be a good value. With modern
communication & transportation being what it is, you could have a local
sailmaker come on board your boat, measure the rig and design your sails,
and
have them made more cheaply in Hong Kong (and split the difference)... hey
wait
a minute, isn't that what some saimakers do?!?

Sounds like a very good idea - if the labour cost is a high percentage of
the total cost of a sail.




Regards


Donal
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