does it really cost them 30-40% more to make a stainless steel appliance?

[zinfamous]

I still enjoy watching HGTV and some poor ass goes into a $115k house they are looking to buy and lament its lack of stainless steel.

those home shows are a complete and utter scam. a circle jerk with the wide real estate world, colluding that every home must conform to:

granite
SS
god awful raised basin sinks
hardwood floors (Well, somewhat understandable)
certain dimensions for certain rooms (A BEDROOM IS FOR SLEEPING, GOD DAMN IT!)
staging.

seriously, the type of trends they push as absolutely essential is mind blowing. I honestly doubt that people are capable of thinking for themselves these days.

 

[Train]

Humans are human. If supply is low they will automatically pay more.

Then they were obviously willing to pay more.... shit man, this was the whole point.

 

[gorcorps]

Apart from all this economic stuff, which is of course applicable... please note that stainless steel does indeed cost more to make and therefore costs more for appliance manufacturers to buy. If you take a fridge made out of stainless steel right next to a fridge made of non-stainless painted white, the materials to make the SS fridge costs more. It's not a minor difference either, and that will always play a big part in final cost.

 

[actuarial]

Then they were obviously willing to pay more.... shit man, this was the whole point.

But that's not the WHOLE point. No one argued that what someone was willing to pay has NOTHING to do with the price, like you are doing trying to eliminate the supply side of the equation.

What you said was:

The production price has to do with how much you will profit or lose, it has nothig to do with final price to the buyer though.

The seller can TRY to assure he will make a profit, but in the end the buyer will only pay what the buyer is willing to pay, PERIOD.

Would the price of a SS fridge be the same if the cost to make it was $20K? Yes or No?

 

[Train]

But that's not the WHOLE point. No one argued that what someone was willing to pay has NOTHING to do with the price, like you are doing trying to eliminate the supply side of the equation.

What you said was:


Would the price of a SS fridge be the same if the cost to make it was $20K? Yes or No?

No, and my point still stands.

If no one is willing to pay $20k for said fridge... it won't be made. Get it?

Supply might be able to offer you a price LOWER than what you are willing to pay, but NEVER higher. (ever)

 

[spidey07]

No, and my point still stands.

If no one is willing to pay $20k for said fridge... it won't be made. Get it?

Supply might be able to offer you a price LOWER than what you are willing to pay, but NEVER higher. (ever)

I see your point, but you're neglecting demand. The buyer does indeed set the price based on demand as referenced in this very thread about stainless steel appliances. (demand high, supply unlimited = high price)

People are funny animals, best to learn how they operate.

And I can guarantee you there are 10k fridges out there with enough demand for them to be made. Hell, my demand for my kitchen appliances is 20k for the appliances alone. I want and demand restaurant quality/workability in my kitchen.

 

[ProfJohn]

I am sure they cost more to make.

If they didn't then someone would make an inexpensive SS fridge and under cut everyone on the market. The fact that no one does that suggests that cost to build is higher.

 

[CPA]

yup, and just to be safe, range and microwave above it are frigidaire gallery to minimize chance of mismatch.
fridge on the opposite of the kitchen is kitchenaid.
don't notice any difference at all, other than the 2 tone handle on the frigidaires.

My frig handles are SS as well, but the frig side is a different material.

 

[CPA]

those home shows are a complete and utter scam. a circle jerk with the wide real estate world, colluding that every home must conform to:

granite
SS
god awful raised basin sinks
hardwood floors (Well, somewhat understandable)
certain dimensions for certain rooms (A BEDROOM IS FOR SLEEPING, GOD DAMN IT!)
staging.

seriously, the type of trends they push as absolutely essential is mind blowing. I honestly doubt that people are capable of thinking for themselves these days.

home decorating shows are the sole reason I have struck the word "pop" from my vocabulary. The use of the word in decorating makes me want to puke.

That said I love Holmes on Homes, Holmes Inspection, Yard Crashers and House Crashers.

 

[Sureshot324]

Wrong. Period, srsly, WRONG.

What you are willing to pay is what you are willing to pay, PERIOD.

Yes, but not everyone is willing to pay the same as me. That's the key point you're not getting. Think of a hockey arena. If they set the ticket price at $100, 5000 are willing to pay that. If they set it at $50, 12000 are willing to pay. The arena is more profitable with a $50 price, even though plenty of people are willing to pay $100.

In a competitive market, the price should be slightly above what it costs to produce it, regardless of what people will pay, because the sellers will undercut each other to compete for customers.

 

[PimpJuice]

or are they capitalizing on the trend?

i mean, seriously. only the front facing pieces are SS. that's like only 20% of the exterior.

You could say the same thing about many things. You should take a business class. It would save everyone the trouble of explaining everything to you.

 

[DrPizza]

Can we go back to one point again though - I have NOT seen a "30 to 40% price increase" for stainless steel major appliances. At least not 3 or 4 years ago. I don't think any of my appliances had more than a 5 or 10% increase.

 

[foghorn67]

Can we go back to one point again though - I have NOT seen a "30 to 40% price increase" for stainless steel major appliances. At least not 3 or 4 years ago. I don't think any of my appliances had more than a 5 or 10% increase.

This. The guy is probably comparing a stainless steel Viking stove to a white Kenmore.

 

[Train]

Yes, but not everyone is willing to pay the same as me. That's the key point you're not getting. Think of a hockey arena. If they set the ticket price at $100, 5000 are willing to pay that. If they set it at $50, 12000 are willing to pay. The arena is more profitable with a $50 price, even though plenty of people are willing to pay $100.

In a competitive market, the price should be slightly above what it costs to produce it, regardless of what people will pay, because the sellers will undercut each other to compete for customers.

I already said the price could be lower than what you are willing to pay. You are not telling me anything new here.

And sellers don't HAVE to endlessly undercut competitors, some companies succeed by raising prices. hell look at Apple, very high markup, because PEOPLE ARE WILLING TO PAY!

 

[Sluggo]

those home shows are a complete and utter scam. a circle jerk with the wide real estate world, colluding that every home must conform to:

granite
SS
god awful raised basin sinks
hardwood floors (Well, somewhat understandable)
certain dimensions for certain rooms (A BEDROOM IS FOR SLEEPING, GOD DAMN IT!)
staging.

seriously, the type of trends they push as absolutely essential is mind blowing. I honestly doubt that people are capable of thinking for themselves these days.

I agree, but try building a house without the "essentials" you listed, even if you provide a viable alternative and watch it languish on the market for months.

A lot of people claim to want something "out of the ordinary" until they have an opportunity to have it, then they slink right back to what everyone else has.

 

[TheAdvocate]

I am sure they cost more to make.

If they didn't then someone would make an inexpensive SS fridge and under cut everyone on the market. The fact that no one does that suggests that cost to build is higher.

I just want to note the first time in the decade or so I've been lurking/posting here that I agree with ProfJohn... what a moment.

My biggest bitch about the whole SS thing, and I'm about to become the latest sucker, is that there isn't one manufacturer that makes all 4 of the common "package" appliances (Fridge/Range/MW/DW) that are all 4 worth a damn. They either make a great fridge (e.g. Samsung & LG) and a shit diswasher (samsung & LG), or over/range. Or vice versa. Can't find one mass production company that is dependable the whole way around.

 

[Bignate603]

Or a simple spray of Windex and wipe of a paper towel.

Eh, they still are harder to get clean than the enamel ones. Our stove always looks streaky.

 

[actuarial]

No, and my point still stands.

If no one is willing to pay $20k for said fridge... it won't be made. Get it?

Supply might be able to offer you a price LOWER than what you are willing to pay, but NEVER higher. (ever)

Right, but you're naive if you think there isn't some sucker willing to pay 25k for stainless steel. Thus to THAT buyer, the price has increased, and the only variable I changed was production cost.

Let's look at it another way: you yourself talked about supply curve and equilibrium. Why don't you educate us on what impacts said supply curve.

And again: I didn't argue that demand isn't a component of price equilibrium, so you don't need to remind me. All I said was it's not the ONLY component.

 

[Train]

Right, but you're naive if you think there isn't some sucker willing to pay 25k for stainless steel. Thus to THAT buyer, the price has increased, and the only variable I changed was production cost.

"other buyers" are irrelevant to what you are willing to pay. Same point, all along, seriously, get a clue.

Let's look at it another way: you yourself talked about supply curve and equilibrium. Why don't you educate us on what impacts said supply curve.

No I didnt.

And again: I didn't argue that demand isn't a component of price equilibrium, so you don't need to remind me. All I said was it's not the ONLY component.

I didn't say anything about equilibrium. Stop trying to put words in my mouth. Either you are just stubborn or need some reading comprehension.

My original point was that production cost has zero effect on what a buyer is willing to pay. This point is still undisputed.

 

[Capt Caveman]

Eh, they still are harder to get clean than the enamel ones. Our stove always looks streaky.

For the stove, you may need something that has a stronger degreaser in it.

 

[0roo0roo]

well mainly such products have their prices set to make their mid/lower range prices look more reasonable. always works.

 

[silverpig]

You're actually making his point here. He says it's all based on what people are willing to pay, and nothing to do with cost to produce. He's still wrong though. In reality it's based on both things.

I think we all agree that a SS fridge is more expensive than the equivalent white fridge, and we all agree that it doesn't cost much more to make. His reasons are all messed up though. The answer to all economics problems isn't "it has to do with supply and demand".

 

[silverpig]

True. But to deny the supply side is foolish if demand is high enough.

New game consoles are a prime example as are cars. Demand is strong enough, supply is low, price = high.

But that's a different discussion. Demand is high for SS appliances (people are truly stupid. OH! SHINY! WANT!), supply essentially unlimited = they can charge whatever they want up to what buyer will pay.

In this case you are correct, the buyer has set the price in an emotional decision of the shiny package being "better".

I've given home sellers my words on this "just because you have stainless steel appliances doesn't make me want to buy your house, I'm going to replace it all anyway. It's not a selling point."

New game consoles are only a good example if you are talking about resale on craigslist. The first people to get the $500 console can sell them for $2k because of constrained supply. BestBuy still sells them all for $500 regardless of if it's opening day when supply is low, or 6 weeks in when the shelves are fully stocked.

 

[silverpig]

Can we go back to one point again though - I have NOT seen a "30 to 40% price increase" for stainless steel major appliances. At least not 3 or 4 years ago. I don't think any of my appliances had more than a 5 or 10% increase.

Chalk it up to internet exaggeration.

 

[actuarial]

"other buyers" are irrelevant to what you are willing to pay. Same point, all along, seriously, get a clue.

Of course other buyers are irrelevant to what you are willing to pay, and I never argued otherwise. Production cost can still change the price of what a buyer is actually paying. Which was MY original point.

No I didnt.

I didn't say anything about equilibrium. Stop trying to put words in my mouth. Either you are just stubborn or need some reading comprehension.

Sorry I kept getting you and the original poster I quoted mixed up.

My original point was that production cost has zero effect on what a buyer is willing to pay. This point is still undisputed.

Just so you don't lose track while criticizing my reading comprehension, the order was:

You need to google for Supply, demand, and equilibrium.
Final cost of a product has NOTHING to do with its cost of production.

Thats why PS3's sell for less than they cost to make, and cars sell for 10 times what they cost to make.

Maybe you need to look it up. Cost of production very much has to do with the final price, it's just not the only component.

The production price has to do with how much you will profit or lose, it has nothig to do with final price to the buyer though.

The seller can TRY to assure he will make a profit, but in the end the buyer will only pay what the buyer is willing to pay, PERIOD.

See the bolded. If your original point was that production cost doesn't impact what a buyer is willing to pay, you probably shouldn't have stated in your post that it doesn't impact the price (which are two completely separate things). What someone is willing to pay sets a price ceiling for an individual buyer, but what something actually sells for is a whole different story.