PowerPro Demand Exceeding Supply?

[Ed in Tampa]

Be my guess Shopsmith has to buy a shipping container full. I have no idea how many fits in your everyday shipping container but I'm guessing it is a lot. Be my guess Shopsmith doesn't want to order that much until they have a certain number sold. It gets expensive having extra sitting around.

I don't know their target number but I will guess it is close to 1/4 of the total. If my pricing guess is correct 1/4 sold at current price will pay their cost for the rest.

You are kidding, of course. There is no way that Shopsmith is running at a 75% profit margin. Maybe the other way around.

If they were running at a 75% profit margin, there is no way they would allow themselves to be short on inventory required to build. Lost production time is much to valuable (especially at that margin).

JPG is right!
That is a 300% profit margin not 75% and no I was not kidding. That be my guess.
And what production time would be lost? They aren't producing the motors.

[dusty]

I don't think so, Ed. Go back and read what JPG said. It is a 300% markup.

Here is an online calculator to help.

https://www.business.qld.gov.au/busines ... it-margins

[algale]

Contrary to how my original post may have been interpreted/read, I have not placed an order for a Power Pro -- not that I haven't been tempted. Temptation is what led to my reading the note about demand outstripping supply of DVR motors.

If there's a shortage of the DVR motors, as the note says, it doesn't appear to be having a similar impact on sellers of NOVA DVR lathes because Home Depot's website tells me I can have a NOVA DVR lathe shipped to my local store for pickup by May 1. Rockler's website says they will deliver one in 1-2 weeks.

Anyhow, I sure hope Shopsmith got an unanticipated surge of orders -- that's good for business and I want to keep them in business so I can continue to buy parts and consumables from them. And maybe, someday, a brand new Mark 7.

[Ed in Tampa]

I don't think so, Ed. Go back and read what JPG said. It is a 300% markup.

Here is an online calculator to help.

https://www.business.qld.gov.au/busines ... it-margins

Okay I see we are having a symantecs problem.
Let me put this way. Let us use the number 1000. I say if SS sells 250 prower pro upgrades they have paid for all 1000. Which makes the other 750 all profit.

I see this as the first 250 pays all cost, then the second 250 is profit, as is the third 250, and also the fourth 250. .

Call it what you will. But the fact remains SS won't order a new supply of motors until they get 25 % of them committed by orders and on back order.

That be my guess.

[dusty]

This is not a semantics problem.

Yes, you are correct in your analogy and that is a 75% profit margin. Translated this means that 75% of the sales price is "profit" while 25% of the sales price is "cost of goods sold".

[JPG]

I don't think so, Ed. Go back and read what JPG said. It is a 300% markup.

Here is an online calculator to help.

https://www.business.qld.gov.au/busines ... it-margins

Okay I see we are having a Symantec problem.
Let me put this way. Let us use the number 1000. I say if SS sells 250 prower pro upgrades they have paid for all 1000. Which makes the other 750 all profit.

I see this as the first 250 pays all cost, second 250 is profit, third 250 is profit, fourth 250 is profit.

To me that looks like 300% profit. Not margin, markup, nothing but raw profit.

That be my guess.

Yep Markup yields net profit, but the syntax is indeed different.

Profit is $$$.
Markup is %%%.
Margin can be either . And if < 0 loss.

[dusty]

http://smallbusiness.chron.com/reasonab ... 17989.html