hotchkis suffering from economy

[msc66]

Re: hotchkis suffering from economy

Back to the topic at hand. The only way I see the economy turning around is if those that still have jobs loosen the belt a little and start spending again. It a vicious cycle. Folks hearing about companies closing down and people losing jobs so they get scared and stop spending which causes more companies to lay off or close and on and on. How do you turn that around?

[realsteelfreak]

Re: hotchkis suffering from economy

It all comes down to this, if your cost of operations is 22%(payroll,cost of goods,rent,etc..)you sell some items for 15% and some for 40% you need to as a business ,at the end of the month to be profitable, have a margin at least close to 32% or higher.
But if your a one man operation at the flea market you dont look at those cost,its more like a yard sale,like WOW look what I made!
I just hope if Hotchkiss laid off workers it took some out of the office,because thats where a lot of overhead is.

[Monk]

Re: hotchkis suffering from economy

Back to the topic at hand. The only way I see the economy turning around is if those that still have jobs loosen the belt a little and start spending again. It a vicious cycle. Folks hearing about companies closing down and people losing jobs so they get scared and stop spending which causes more companies to lay off or close and on and on. How do you turn that around?

Partly......consumer confidence

When people who have jobs and money start to spend again

[realsteelfreak]

Re: hotchkis suffering from economy

Dont you think if our American companies woud bring back manufacturing jobs back to the States and took less of a profit things would be better.
From day one. company xyz rents or buys building, hires local contractors to upfit,brings supplies in,puts people to work, wow seems so simple, but corporate wants an extra nickle per share.

[MOPARS RULE]

Re: hotchkis suffering from economy

After 9/11 Mr. Bush said to go out and spend money, as in "go shopping."

[jordanmorningstar]

Re: hotchkis suffering from economy

anyone that says its dumb to make more of something ,and get the same "net profit per item" ..
needs to do the math again

I didn't say "net profit per ITEM." I said "Net profit" period.

There is a formula that tells you where the maximum number of units made intersects the best cost-per-unit, intersects profitability.

There is a point where even if you can make them cheaper per item, you don't make as much money on the bottom line.

-Brad

There were lots of charts in the Economic's class I took in college, I vaguely remember one like that. I'm sure any community college Econ class can give the jist of it.

There's more to pricing as well-for example, if something is really high priced--like Hotchkiss' parts--people automatically think it is better. Sad but true, suckers.

Speaking of charts, I think this one summarizes this entire thread quite nicely:

[TheSilverBuick]

Re: hotchkis suffering from economy

I will keep spending (T/A Performance and my local parts store probably likes me lots ;D) until I lose my job (not in the forecast). With out going into too much detail, but I put $400-$600 per month in savings and spend at least that if not double per month between eating out (supports local economy), car stuff and random impulse buys. Now if Summit would re-stock the Lakewood Bellhousing I need I'd buy it....I should check Jegs....

And I think 15%-20% profit margin (after all costs are paid out) is more normal.

[Monk]

Re: hotchkis suffering from economy

Speaking of spending on auto parts.
I went to O'Reillys yesterday and bought three items.
I was bitching at the counter about all the China shit etc

Turns out all three parts I bought were USA made!

[Freiburger]

Re: hotchkis suffering from economy

Guys, there are some other personal things going on at Hotchkis that could be part of the issue. I would not be jumping down their throats right now.

[nosnerd]

Re: hotchkis suffering from economy

If your making a 10-15% profit you need to close the doors. Sure the R&D cost money, but after a few years you end up making your money back on that. As for profit, I'd say that the retailer buys it at about 1/2 the retail price maybe a little more, and I'm sure the manufacturer is making a 100+% markup. So on a $6000 Procharger kit, they have about 1000-1500 into it.

Well, as long as we're going to just pull numbers out of our ass and apply it to a bunch of accounting most of us know nothing about, I'll play too!
I say they have $124.92 in each and every ProCharger kit they build, and while they're laughing at all the stupid people who pay that huge inflated retail price, they're drinking 50 year old Scotch, smoking Cuban cigars and passing around $1,000 per hour call girls.

Having actually spent the last ten years writing for car mags, and the last three years working for YearOne, I'm pretty confident when I say that a manufacturer sells it to the retailer for somewhere between 15-40-percent above their costs, depending on the item. If you're a manufacturer, it's often cheaper to deal with a limited number of middle men and let THEM deal with the buying public. Complicated and expensive to manufacture Pro Charger? Not as much mark-up. Bumper bolt? Yeah, there will be a really decent mark up there. But 100-percent on sixty cents is no great shakes.

Conversely, if you're a middle man, it's cheaper to spread your operating costs over a bunch of product lines and offerings, expanding your market.

I can't imagine how you think that a $6000 ProCharger kit only has $1,000-$1,500 in it. You seem to have a really, really limited view of what it takes to bring a product to market. R&D and Marketing are only a small cost of manufacturing an item. Casting the housings, machining them (remember, the machines cost money), sacrificial tooling (since cutters and drill bits don't last forever), tumbling or polishing, internals, making the impellers (they certainly aren't cheap to make), assembly, bracket manufacturing, hardware, and the list goes on.
Obviously, what you're also not taking into account is labor costs (unless you'd like to see it shipped to China), health insurance costs, labor taxes, etc. etc.
How about the cost of the boxes? You've also got to hire someone to create the box art. You have to pay someone an hourly rate to create the instructions, and then print them off.
Marketing, overhead on the building, electric bill, transporting the parts, office supplies, phone bills, computers for everyone who has a desk, the desks, the chairs to sit at the desks, etc. etc. etc.

I seriously doubt ProCharger is making a 100-150 percent profit on all their kits. If they were, the company would be a helluva lot bigger.
Or, we'd have all heard about those scotch, cigar and hooker meetings, because you can't keep that kind of stuff quiet this long.

-Brad

i couldn't of said it better myself,brad....great explanation...i am too lazy to write that much right now.....


kudos

[nosnerd]

Re: hotchkis suffering from economy

it cost MR gasket 1 MILLION dollars to print their catalogs....

[SpiderGearsMan]

Re: hotchkis suffering from economy

the solution to the problem is more of what caused the problem

it may never come back
anyone care to barter ?

[dhondagod]

Re: hotchkis suffering from economy

Anybody that is spouting off in this thread ever HAVE a business of their own? Ever start a business out of your own pocket and make it fly?


If you think you can do it better than Hotchis or ProCharger or anybody else then step up to the plate with your money and go for it.


Chris 8)

[Brad54]

Re: hotchkis suffering from economy

Anybody that is spouting off in this thread ever HAVE a business of their own? Ever start a business out of your own pocket and make it fly?


If you think you can do it better than Hotchis or ProCharger or anybody else then step up to the plate with your money and go for it.


Chris 8)

Yeah. It ain't big, but my swap meet is going into its 5th year, and now I'm freelancing full time, producing magazine stories to feed my family. Freelancing isn't totally the same, but I have assets (project cars), and a lot of expenses to keep track of. The product I'm selling is magazine stories. The swap meet has a lot of expenses and things to deal with too--advertising, insurance, etc. etc.
If my plan for building a '54 Buick Century to run in the 2010 La Carrera Pan Americana comes to fruition, I'll run it as though it were a professional race team, too. That one probably won't be profitable though! :
-Brad

[BangShiftChad]

Re: hotchkis suffering from economy

Guys, there are some other personal things going on at Hotchkis that could be part of the issue. I would not be jumping down their throats right now.

Pay attention to this statement by Freiburger. John Hotchkis and his team have always represented themselves and their products well in my experience. Yes, they are expensive, but they have always worked for me with no installation issues. Instead of bashing, why don't we support them.