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Re: Looper development and production costs?
I don't actually own one, so I can't say, but it seems like the EDP has
a pretty functional faceplate. If you're looking to cut corners, I
wouldn't worry about that. You can do a lot with a cool silk screen
design and a nice Logo. Figure about $3-5K would more than cover it.
Screw it, for loop kind, I'd do it for free.
(also a graphic designer)
On Saturday, October 13, 2001, at 06:18 PM, Kim Flint wrote:
> At 01:12 PM 10/13/2001, Doug Miller wrote:
>> Any $ put into design ALWAYS pays off big time on the bottom line.
>>> If Gibson cares about selling EDPs, they'd get an industrial designer
>>> to redesign the face plate. Graphic designer to redo the logo. Do
>>> any of these things make the EDP a better product? No, but extra
>>> sales would sure influence someone into throwing cash at an EDP 2
>> Doug Miller
>> Graphic Designer
> I guess it makes sense that a graphic designer would think so. I tend
> to agree. but again, let's look at numbers to do such a project. How
> much would it cost to for this design work, and how many more sales
> would it generate? Would the additional sales even be enough to cover
> the additional cost? I'll make some wild guess estimates. Since you
> want to redesign the faceplate, in addition to industrial designers and
> graphic designers that requires new engineering work to do the
> mechanical redesign of the metal, and then the electrical engineering
> and PCB layout of the front panel PCB that holds the parts. Then of
> course, the NRE charges for retooling the metal and PCB fabrication,
> and silkscreens for the paint, etc. Probably you need to redesign and
> reprint any marketing literature also. I guess you have to redesign the
> footpedal too, but I won't count that. So I'll estimate:
> Industrial design: $20,000 (that's much cheaper than ID estimates
> I've gotten for other things, but we'll find some cheap guy to do it..)
> Graphic design of new logo: $5000 (? not sure what that costs.)
> mechanical engineer for 1 week: $5000
> electrical engineer for 1 week: $5000
> PCB layout designer for 1 week: $5000
> NRE charges on PCB and metal tooling: $5,000
> prototype build and testing: $7500
> redesign, reprint marketing lit: $2500
> = $55,000
> How many extra units do we need to sell to break even on that?
> if list price is $1150, wholesale is probably half, $575.
> Probably 50% of wholesale price is COGS, so that leaves $287.50/unit
> after manufacturing costs.
> we have a corporate requirement to maintain 30% margin, which is not
> even that much for a low volume product, but .3 x 575 = 172.50, so that
> leaves us with $115. presumably the division has overhead costs
> to pay for office rent, salaries, etc., let's say that's 10% of income
> which is probably too low, or $57.50/unit, leaving us with $57.50. But
> let's say we tighten our belts somewhere and manage to devote $75/unit
> to pay for this redesign.
> $55,000 / $75 = 733 units needed to be sold just to pay off the cost of
> this redesign and break even. I guess these should be counted as
> additional sales beyond current figures to make it worthwhile. There
> have been very few years in the echoplex's history where that kind of
> volume was done, so we are talking about something on the order of
> doubling sales or more. Even if that is the wrong way to look at it,
> maybe we are optimistically talking about only a 50% increase in sales
> needed to cover the cost and take the rest out of existing sales. We
> will say that is 1/2 our number above, or 367 additional units sold.
> Now, is a new faceplate design for this product going to generate 367 -
> 733 more sales? is this project realistic? How many people base their
> decisions on buying rack mounted musical instrument gear on how it
> looks? My guess is, somewhere near 0. Even if just attracting more
> attention is all we hope to do, will we attract that much more
> attention just by changing the faceplate, and convert it into 367 more
> sales? I doubt it. You might even lose sales because people already
> recognize it as it is, and you will need to spend a lot of effort to
> reeducate the market.
> If you ever tried to design a 1U 19" rack faceplate, you would know
> that there just isn't a whole lot of room to do anything interesting in
> that space, with the constraints of the hardware mounting room behind
> it. You mostly attract attention just by looking different from other
> stuff, and the echoplex accomplishes that already just by being
> NotBlack. If you look at a rack with an EDP in it, you spot it
> instantly because of the contrast with all the surrounding stuff. Even
> if you thought it was ugly, you still saw it first.
> Right now, the echoplex faceplate is fairly low cost to make, just
> stamped sheet metal, painted and silk-screened. We don't want to
> increase the cost by doing this redesign, which would raise the list
> price. That would reduce sales, countering whatever effect our redesign
> gives. So we have to limit our poor designer to avoid any fancy molding
> or extrusions, custom knobs and buttons, etc. unless we are willing to
> raise the price. He can only work with stamped sheet metal and paint....
> If you ask me, that $55,000 is far better spent on advertising,
> in-store demos, endorsers, etc. That will bring a lot more sales than a
> different faceplate. Or you could spend it on new product development,
> Kim Flint | Looper's Delight
> firstname.lastname@example.org | http://www.loopers-delight.com