Bob and I were talking last night in between runs of the P-200s (BTW you guys had better have strong F-100s!). Since we don’t like being called liars and crooks we got to talking about pricing.

First, the price (in Europe) for a JetCat P-80 and P-120 has never changed since the products were introduced. The P-80 (introduced in Dec 1998) sold for 4930 DM (no euro back then, but now 2520 euros). The P-120 (introduced in Jan 1999) sold for 5867 DM (now 3000 euros). These are the same prices today, years later, no change at all.

So lets take the P-120 as an example. The last time Golden West sold one, I think they where charging $3695, back in 2000 (not sure when they sold the last one there). At the exchange rates at the time, the motor cost $3750 in Europe (remember, same 3000 euros)

When JetCat USA started in Sept 2001, the US price of a P-120 IMMEDIATELY DROPPED to $2795, as the euro had come on line and was weak. The price was the same in Europe, 3000 euros. So the equivalent price in Europe was $2700, so you were paying a grand total of $95 for all of the additional support we have with JetCat USA( but of course our European friends always pay massive VAT (tax) so their out the door price was MUCH more than you pay here).

Now go forward 2 years to today…the price in Europe is still 3000 euros….. no change. That is equivalent to US$3666. We are currently charging $3595 with the price going to $3695 in January.

If the euro drops we will drop the prices, if it goes up we might have to raise them more. But as you can see, this US price has always been tied to the European price. We made the immediate drop the first day JetCat USA opened, and price increases have come sporadically as the euro climbed and hurt our business. In the meantime all of the costs have gone up, spare parts, salaries, rent, equipment. We have new employees to help run the business and support the customers. We must find efficiencies of scale to succeed, that means expanding the market, developing new products (P-70, P-160, P-200, HP5), all the while maintaining very high levels of support. As Tam said, the expected support level in the hobby business is very high and companies are severely punished if they do not provide it.

As someone said earlier, it is really up to the marketplace to decide whether JetCat USA and the product are worth the money. In all honesty, RAM raised the bar with their service commitment…our chief competition helped mold us as a company. JetCats have been available for a long time, I had one of the first 5 in the US in 1998. But the sales were low…. RAM was a big competitor back then. When JetCat USA formed, we knew we had to provide a level of support and service at least on a par with them or we could not make any inroads.

So of course there are other business models in the turbine world that say “don’t worry, you do not need service cause the motor is so scary great”, or “it is OK to send the motor back to Timbuktu for a repair”, etc. We can actually_build_the motors in California, and believe me it takes more than screw driver and clearing off the kitchen table!

Like they say, you pays your money and you takes your chances!