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

[feralkid]

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

try it. learn.

 

[zephyrprime]

Also, they shaft you on the price of dryers. They often price those fancy SS driers and high as their washer counterparts and sell them as a pair. However, a dryer is actually much cheaper to make than a washer.

 

[Train]

...snip...

So what you are saying is, you completely missed my point, but argued away anyways.

 

[actuarial]

So what you are saying is, you completely missed my point, but argued away anyways.

No what I'm saying is you responded in criticism to my post, and said something that was inaccurate. I was arguing with the inaccurate portion.

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.

This is just not correct. And if that was not your point, there was really no reason to quote my post at all.

Here's a question: what in my original post that you quoted did you disagree with?

 

[Train]

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.

Still correct as it ever was.

 

[actuarial]

Still correct as it ever was.

So if the cost to produce something increases dramatically, it will still be sold for the same amount?

 

[Train]

So if the price to produce something increases dramatically, it will still be sold for the same amount?

The price could even go down. Hence, my point.

 

[actuarial]

The price could even go down. Hence, my point.

I'm not asking what it could do. I'm asking: in 100% of situations where the cost of production changes, it will have no impact on price at all (up or down).

You stated production cost has NOTHING to do with the final price of an item. Thus as production costs change the price of items should not move at all.

 

[CPA]

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.

That' what I found when I replaced everything. Had even a harder time because my cooktop is a 30" gas downdraft. Well only GE and Jenn-Aire make that type. Ignoring that, Kenmore, which is my frig, DW and built in oven, doesn't even make a SS built-in microwave.

 

[Train]

I'm not asking what it could do. I'm asking: in 100% of situations where the cost of production changes, it will have no impact on price at all (up or down).

You stated production cost has NOTHING to do with the final price of an item. Thus as production costs change the price of items should not move at all.

You are trying to force flawed logic on me, and I'm not biting.

If production cost changes, any of the following could happen:
A) Final cost stays the same
B) Final cost goes up (by any amount)
C) Final cost goes down (by any amount)

there is no "100% of the time".

The seller can TRY/HOPE/PRAY that the final price goes up proportionally, but the market does not give two shits about your production cost, only final cost. Hence, irrelevant.

 

[actuarial]

You are trying to force flawed logic on me, and I'm not biting.

If production cost changes, any of the following could happen:
A) Final cost stays the same
B) Final cost goes up (by any amount)
C) Final cost goes down (by any amount)

there is no "100% of the time".

The seller can TRY/HOPE/PRAY that the final price goes up proportionally, but the market does not give two shits about your production cost, only final cost. Hence, irrelevant.

I'm not forcing anything on you. You said it has NOTHING to do with it. That is a 100% of the time statement. If there is no 100% of the time statement, then don't make one.

I never said anything about it moving proportionally, or moving in all situations, or even moving upwards. All I said is the production costs are a contributor to the price of an item.

And I don't know why you keep bringing up buyer preferences. No one has put forth an argument that a buyer will pay more than they're willing. What we're talking about is the final price. Do all buyers pay the absolute maximum that they are willing to spend on something?

 

[Modelworks]

Cost for a sheet of stainless , enough to do a refrigerator: $196.00
cost for a sheet of steel, not stainless : $170.00
Price quoted was for 6/29/2011 from a local steel retailer for 24GA , 4x8 ft sheet
Hardly 30-40%

 

[Train]

I'm not forcing anything on you. You said it has NOTHING to do with it. That is a 100% of the time statement. If there is no 100% of the time statement, then don't make one.

I didnt make a 100% of the time statement. I said prod cost has nothing to do with final cost. That does NOT mean the price couldn't change, it means the two are unrelated. You are trying your damndest to get me to say it would NEVER change, which is flawed because that is not the definition of unrelated.

All I said is the production costs are a contributor to the price of an item.

And I am saying you could not be more wrong.

And I don't know why you keep bringing up buyer preferences.

Because that is an actual factor in the final cost?

No one has put forth an argument that a buyer will pay more than they're willing. What we're talking about is the final price. Do all buyers pay the absolute maximum that they are willing to spend on something?

No, they pay up to, and including, that amount, REGARDLESS of the production cost.

 

[silverpig]

And I am saying you could not be more wrong.

He's right. You're wrong.


Customer willingness to pay sets a price ceiling. Production cost + minimum desired margin sets a price floor. Production cost does matter. It matters as much as willingness to pay. If WTP drops below cost+, there is no market for the product and it doesn't get made or sold.

You need to consider pricing the object three ways:

1. Customer WTP
2. Cost+
3. Price of comparables

There's your crash course in pricing.

 

[Train]

He's right. You're wrong.


Customer willingness to pay sets a price ceiling. Production cost + minimum desired margin sets a price floor. Production cost does matter. It matters as much as willingness to pay. If WTP drops below cost+, there is no market for the product and it doesn't get made or sold.

You need to consider pricing the object three ways:

1. Customer WTP
2. Cost+
3. Price of comparables

There's your crash course in pricing.

The problem is your "desired margin" piece. The market does not care about your desires.

If you build a product for $100k, and the next day the market for that product crashes, you will take what you can get, even if it means selling your product for $20, because $20 is better than $0.

You: Bu bu bu but.. my production costs!
Buyers: ROFL

 

[Shawn]

Interesting coincidence that this be posted now. My wife and I have been appliance shopping for a while. We're going to put all new appliances in the house we just bought. We were debating whether to get SS for a while, but it's several hundred more to get everything in SS. We were going to do the range SS and the fridge black and the dishwasher either SS or black, but I think it will just match better if everything is black.

 

[silverpig]

The problem is your "desired margin" piece. The market does not care about your desires.

If you build a product for $100k, and the next day the market for that product crashes, you will take what you can get, even if it means selling your product for $20, because $20 is better than $0.

You: Bu bu bu but.. my production costs!
Buyers: ROFL

Yeah, because the market for refrigerators is going to drop to $20/unit overnight...

If a business can't make a margin on something, they won't make it.

 

[Train]

Yeah, because the market for refrigerators is going to drop to $20/unit overnight...

If a business can't make a margin on something, they won't make it.

Yet businesses still get stuck selling stuff below cost all the time due to unforseen circumstances. But that still doesn't show any forced correlation between production cost and final cost.

The inverse can also true, produce something for a penny, sell it for $100k:

Seller: Bu bu bu but... your production costs!
You: ROFL

The price is set by the market, NOT your costs (at all)

 

[HumblePie]

One thing to toss out is that demand can be manipulated. In the case of SS appliances it is being manipulated. Such is the same for all "luxury" items. Do you think it costs much for De Beers to produce jewelry grade diamonds for the market? Nope. If De Beers were to release all the jewelry grade diamonds on the market at once that they have stockpiled then diamonds would be a dime for a dozen. Literally. Instead the monopolized a market, prevent competition, force low supply by holding on to it and only letting X amount of diamonds enter the market per year, and manipulate demand with strategic advertising. They goad people into buying diamonds by pushing certain buttons in the human psyche, most notably in women, and have done it for decades.

There are plenty of luxury items done this way

 

[actuarial]

No, they pay up to, and including, that amount, REGARDLESS of the production cost.

So how do you determine the actual amount, between zero and the ceiling?

 

[actuarial]

Yet businesses still get stuck selling stuff below cost all the time due to unforseen circumstances. But that still doesn't show any forced correlation between production cost and final cost.

The inverse can also true, produce something for a penny, sell it for $100k:

Seller: Bu bu bu but... your production costs!
You: ROFL

The price is set by the market, NOT your costs (at all)

Because cost is not the ONLY factor. You do realize that there is a range between zero and perfect correlation right?

In some products, that correlation is very weak, in others it's very strong. And a lot of that has to do with the elasticity of the demand.

 

[Train]

So how do you determine the actual amount, between zero and the ceiling?

Any way you want.

p.s. Zero is not the floor.

 

[actuarial]

Any way you want.

Okay, so the final price is then determined by production costs.

Or are you actually going to attempt a real answer?

 

[Train]

"Any way you want"... meaning you can make a number up if you want. Roll some dice, throw darts. Or you can ask someone "How much would you be willing to pay for this?" there are entire books on determining price points. Wether someone will actually buy at that price is up to the market. Not selling enough? lower the price, cant keep up with demand? raise price. losing your shirt? bail.

Like I said before, you can PRAY/HOPE/TRY to ensure that final price is greater than your cost, by a decent enough margin. But the market price in itself is completely unaffected by your cost. Wether you get rich, or lose money, it doesn't make a difference.

 

[ProfJohn]

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.

Not completely true.

If you step up to the high end brands you can find complete lines that are all very nice.
Electrolux for example, it all looks good and it all matches and it all cost a TON