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Old 03-09-2010, 06:28 PM
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Default RE: mamba max vs. mamba max PRO

Volume production coupled with an inefficient distribution chain can mean that even a small change in the manufacturer's price can equate to a large one as seen by the end customer. For instance if a typical retail distribution path (+75%/+43%/+60%) might mean the manufacturer sells a $20. item to the distributor for $35.00, who then sells it to the retailer for $50., and then the retailer sells it to you for $80. If the next iteration of that product can be manufactured for $15., this $5. in cost saving can translate to a lot more in the price the end customer pays if you follow the same profile for the inefficiency in the distribution chain. In the above example, $15->26.25->$37.53->$60.05.

In short, a price cut of $5. by the manufacturer cut the price the consumer sees by almost $20. The other main factor is that as a company designs more and more products, if designed well those products can share common components so the overall pricing becomes cheaper. Due to volume buying and that manufacturing inefficiencies go down as volume goes up.